Rt.66: I don’t disagree that we (the US) have been sold down the river by our elected officials and I posted in another post that we’ve seen a considerable amount of our manufacturing sent overseas and allowed it to happen.
But, let’s look at that for a moment. Why did that happen? In the case of the auto industry and competitiveness, isn’t it fair to say that perhaps American workers were paid in excess of what was a competitive rate and largely because of the collective bargaining agreements that the AFL-CIO and UAW negotiated?
My dad was an aerospace engineer at Ford Aerospace. When I asked him once why Ford was in the aerospace business, he responded, “GM”. GM bought Hughes and Ford immediately followed suit. Why were either Ford or GM in the aerospace business? For that matter, why did GM buy EDS (Ross Perot’s Electronic Data Systems)?
My point on both topics (union concessions and the aerospace business): Is that neither the labor component nor the management component of either company was watching the ball anymore. Instead of focusing on “sticking to the knitting” and building good, reliable and, most importantly, well designed cars, GM and Ford were playing the role of globe trotting, “diversified” corporations and forgot what brought them success in the first place.
As to your comparing GM/Ford to Fiat, Toyota, Renault et al in the 1970s: I take your point, but it’s somewhat specious, in that Fiat, Toyota, Renault and Co. were nowhere near the mammoth size of GM or Ford, nor were they possessed of their commensurate economies of scale, supply chain capabilities or in-house engineering acumen. GM and Ford had all the tools in place to continue their domination, but their failure to push back regarding wages and benefits and their inability to keep pace with the times and economic conditions ultimately doomed them.
By the way, GM was making money a few years back largely due to having renegotiated wages and benefits and by offering what amounted to suicidal financing options (remember 0%?) in order to do so. They failed to follow up and continue their push on the unions, which would have vastly altered the calculus of this equation, and they finally just ran out of time before some of their newer and better designs came to market.
As to the advantages that foreign automakers enjoy while on America soil: Yes, it is bullshit and I’ve said so before.
I’m not trying to demonize GM or AFL-CIO/UAW, but the final judgment rests with GM’s management and the decisions of union leaders at AFL-CIO/UAW. It was a long time in coming (approx 30 years), but insular thinking and greed blew up GM.
