GM's Help From the Union

In order to balance the blasting I gave the unions the other day, I thought it only fair to give an alternative that might be considered by Delphi and GM workers, to temporarily help GM, and still maintain an advantage;

1) The biggest issue with GM and falling market share is that no one is buying the cars that they make - 2 reasons for this - first, the styling needs to be more radical (like the Cadillac turnaround, and Chrysler 300). Second, vehicle reliability needs to become #1 among the top 6. If vehicle reliability is better, then the price can be higher, and incentives less (take a page from Toyota). GM, your consumers will pay a higher price or ask for less incentives, if you have a good product!

2) Even if GM sticks with the current models over the next 2 years, the union should offer a cut in base wage, and move to an incentive system, which will pay more, if, GM hits #1 in reliability for a model or product. This would be financed by the increase in price (decrease in incentives), and would cost GM nothing. However, the plan would have to be set up to offer something for the union...if I had the numbers, I could crunch through them to see what they would be like, but even a reduction of $1000 in incentives paid per vehicle (assuming 4,000,000 vehicles a year - 25% market share), would give GM about $4 billion in extra cash every year...

The trend these days is to pay for performance...the union has to accept that, and if the employees are willing to sacrifice to improve performance, they should be rewarded for it. Something to consider, rather than just talking pay cuts. You need to offset the pay cut with an improvement in performance and to the bottom line, in order to make it worthwhile.

GM lacks a long term plan to bring the glory back to where it was, for any employee that works for them. If Rick Wagoner reads this, maybe he will understand that a long term plan has to include results to the bottom line, AND to product improvement, not only in styling, but reliability.

By the way, I do not work for any of the automakers...but I would be willing to talk with Jerome York, or anyone else at GM Detroit, next time I am in Windsor...;)