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...;)

GM Woes - Idled Workers Freeloading

I have always maintained that GM has bigger problems, than just with models that don't sell and sit well with the public. The issue at hand, when you see the article above (click title to take you to NYT article), is the sense of entitlement that GM workers have, especially within the rank and file in the Jobs Bank.

Faced with huge legacy costs, all these "laid off" workers, for the lack of a better term, feel it is their right to sit and collect a full pay, with no onus on them to move on to something else in their lives. The fact is, today workers have to prepare themselves for the worst that may come in their working lives.

It was a generation ago, that workers were still relying on sticking with a company until retirement. My generation has learned the lesson well -- the only person who will take care of yourself is you. No union is going to take care of you...an individual has to look out for themselves, and ensure that they are marketable, and if that means moving from company to company, so be it.

GM workers are a generation behind in their thinking, and this will not change the outlook for GM, even with the buyouts, until the workers take ownership for making the company profitable. Having a sense of entitlement with a company does not bode well in the economy these days, and surely will doom any company with ever-increasing legacy costs. The steel companies in the US learned the hard way, but the workers adapted, and finally came to the realization that in order to keep up with the global economy, changes were needed, and all the unions pushing for better benefits eventually crushed the livelihoods of many.

GM, continue on with your cutting and slashing...maybe the employees will eventually get the picture when you have to shed the legacy costs. There is no reason why you can't turn the corner and increase margins to 10% to at least compete with the foreign automakers...$65 a hour for "semi-skilled" labour is a thing of the past...and the union should be ashamed for even putting the company in this position of "better than middle class" lifestyle for uneducated line jobs.

The reality of it all, is that I am sure GM will fall further behind, until all the deadwood is removed. Maybe bankruptcy isn't such a bad thing, to finally make the unions open their eyes. You can't have everything.

Stay Away from Birds that Smoke

Interesting article at CNN...it seems that the bird flu virus is deep in their respiratory tract, which is one of the reasons why humans don't get it that easy...

I guess, as a precaution, I should watch out if I am hanging around birds that smoke, or birds that can hork up a nice lugee...

The Ultimate Commercial - Honda

Check out this link...the best commercial ever.

No Smoking Going Too Far

Being a smoker, it is very difficult these days to find a place to be able to sit and relax to have a smoke...this California city has gone too far, by banning smoking ANYWHERE, even outside in public places.

The advocates for no smoking may like the idea of banning smoking completely, even outside.

I have a question -- what will all the non-smokers say when their taxes have to be increased in order to fulfill the shortfall from tobacco taxes? We hear everyone bitch and complain about the price of gas...can you imagine if they replaced the tobacco tax with an increase in gas taxes? How about the health premium in Ontario? I am sure that once everyone has done their personal income taxes this year they will see that an increase in their premium isn't a nice surprise.

Tobacco taxes are a fundamental revenue stream that pays for some of the services that non-smokers come to rely. If we abolish smoking, the government will have no other choice but to raise the revenue somewhere else.

Next time you non-smokers get on the bandwagon to eliminate smoking, and go too far with it, remember that there will be a significant price to pay.