| Auto Industry Bail Out? Only after a really big think. Possibly an unpopular opinion. |
[Nov. 18th, 2008|10:52 pm] |
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In response to something ![[info]](http://www.insanejournal.com/img/userinfo.gif) idlerat brought up and this article from the New York Times: http://www.nytimes.com/2008/11/19/business/19auto.html?hp=&pagewanted=all, I would agree that the auto industry needs some kind of help, but not the help it's looking for. Quoting from the article: “We are asking for assistance for one reason,” Mr. Nardelli said, “to address the devastating automotive industry recession caused by our nations’ financial meltdown, and the current lack of consumer credit, which has resulted in the critical lack of liquidity within our industry”, but that's a bunch of hoo haw. The auto industry as a whole has been hanging by a thread ever since around the time Lee Iacocca retired from Chrysler (1992). A lot of the credit for that goes to foreign car makers making their cars on American soil. These cars were better made, offered more of what Americans wanted in a car, and were generally cheaper. Nothing about that has changed in the 15 years since then. People buy what they want, what gives them what they need. While somewhat successful convincing rednecks and people who don't think too much, the "Buy American" campaigns resurrected from the Depression Era and before by the Auto Industry in the 1970s just wasn't as successful with people who based their decisions on the state of their pocketbook. If Toyota manufactured a better-made car that got better gas mileage and did it for two grand less, that's what people bought. And since then, foreign market share has only increased.
So, if we really want to support the auto industry in America, what do we do? Loathe as I am to agree with anything a Republican says, Senator Richard Shelby's right to say, “We need to know what the firms are doing to enhance their ability to compete in the future. How do they plan to deal with current management, labor, cost and quality control, and product development shortfalls?”
Let's answer that: Automakers in America need to make a car that gets better gas mileage. They need to make cars that are not plagued with problems even before they're driven off the lot. They need to cut costs to stay competitive.
The solution? Hard as it is to swallow, Senator Michael B. Enzi cuts to the chase: “This is not the only reason why domestic auto industry is in trouble,” Mr. Enzi said. “Labor costs, enormous legacy liabilities, and inefficient production have also contributed to the current crisis in the auto industry.”
And he's right. I live in the Detroit area and I have lots of friends who work on the line for the Big Three. There are problems endemic to labor in the auto industry that have been entrenched for decades, for which there will be no easy fix. There is a mentality among the majority of people on the line that would cause failure in any industry. For lack of a better term to call it, I'll call it the culture of least effort. It's about never doing more than your neighbor and getting the most reward from the least amount of work. It causes people to sleep on the line, be high on the line, lie, cheat, lay blame elsewhere. It's only putting in three screws to hold a part in place when proper installation calls for six. It's spending more time bitching about your black neighbor on the line and how they're not doing their work and it's messing up your white-ass work. It's about filing frivolous grievances with the union. What it's NEVER about is making a quality product. For all the benefits employees get, it's all about getting more and nothing, I mean NOTHING about responsibility for their contribution, or even respect for it. It's behavior you'd slap a grounding on your kid for, or if you're smart, take them to counseling for, but you can't do it to an entire work force without making a major overhaul, and that just isn't going to happen with the UAW in place as it stands today.
If the American auto industry wants to stay competitive, it will have to demand that its workers own their work. They need to be responsible for their mistakes, and they need to rewarded when they do a good job. They need to be given a reason to care about the cars that they build. Work expectations need to be reasonable (you can't speed the line up to the point where the worker only has 30 seconds to accomplish a task that takes 47 seconds). When something goes wrong and the line stops, the first response can't be pointing fingers and laying blame. It has to be a concerted, group effort to locate the problem, fix it, and find a solution so it doesn't happen again. But that's hard when, maybe, four out of a hundred workers actually give a shit about making cars, and even then, those ones spend half their time resenting and bitching about the other 96 who don't give a damn.
With the union as it stands now, it is next to impossible to fire someone for fucking off on the job. I've heard tales of people who have gotten away with horrible mistakes, mistakes in production that could be potentially fatal for the consumer, and nothing has been done about it at all, because no one wants to spend the money dealing with the union and the lawsuit that's certain to be filed on the employee's behalf. Foremen know who can be trusted on the line to get things done, and those who can't aren't given as much to do. Which makes productivity decrease. Which makes management say things like "increase the speed of the line". Which causes more mistakes. It's a vicious cycle.
With the right to organize, workers should also be held responsible for their work. They should fix the system so that Unions, while protecting their members from unreasonable action, must also hold the worker to higher standards. And while it would be ideal to rely on intrinsic motivators, I don't think that will work at first with workers who know nothing but the culture of least effort. But there's no reason why extrinsic motivators like bonuses shouldn't be contingent on the level of quality in manufacturing. And promotions, too. And raises. Workers should be held accountable for frivolous grievances (assuming, of course, an independent monitoring board). In return, the union will fight for the best possible contract and protect workers from illegal actions by their employers, which is what the union is supposed to do.
This is the kind of reform that will halve labor costs by drastically increasing productivity and cutting unnecessary costs. But it's going to take a cultural change and probably a long, long legal battle with the UAW. I'd be willing to support any money spent on making this culture change work. Cutting labor costs by decreasing health and retirement benefits, in the long run, isn't going to cut it.
I'm not even going to tackle legacy liability, but I will say, they need to honor their agreements. That cheap shot GM did by yanking benefits from retirees? That's NOT ON. Where was the UAW in that debacle? Not where they needed to be.
I can sum up by saying that while the auto industry is quick to cite labor as one of the reasons they can't compete, and while my knee-jerk reaction to that is "WTFBBQ!" because their benefits have been decreased drastically and so many of them have been laid off, there is a grain of truth to it. But no one, the auto industry execs, the union heads or Congress is proposing a lasting means of cutting labor costs where the fat really is.
Sorry if this is rambly. I'm exhausted but really wanted to get this out there. |
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