Tuesday, October 02, 2007

Not all the UAW's fault

Jroosh notes, with some justification, his frustration with "American" automakers; certain parts of each car he's owned just simply don't hold up or operate like really they ought to. One common, and easy, target of blame is management. Another is the UAW.

Here, I'd like to enter a third, but probably the biggest, target for blame; the way the "Big Three" (or "U.S. Three") hire their engineers; on a contract basis.

This is a problem because both a company's profits and its quality problems overwhelmingly originate with those who design the product: engineers and engineering management. However, using contract labor makes it very difficult to reward engineers for their hard work with part of the profits, and engineers also know that the first cut of their wages goes not to them, but to the contractor.

As a result, top engineers know that it might be more profitable to work in Ohio, Mississippi, or Kentucky than in Michigan, and the Big 3 pay a heavy price for this.


Shawn said...

"top engineers"

...that's not an oxymoron?


pentamom said...

Don't contract employees -- at least high-skilled ones -- have something of a market edge, though? If the whole world knows that GM is going great guns, the contractors can up their rates at contract renewal time, and recruit contract employees from other contractors on the basis of higher wages. I'd think there'd be more mobility in this respect than for salaried corporate employees, who are a lot more tied into fixed salary structures and a lot more skittish about job hopping. Am I missing something?

Bike Bubba said...

A bit of one, but reality is that when I was looking at the listings, they were all just entry level. The guys who did well and wanted more had to go to Ohio and Kentucky, as far as I could tell.

jroosh said...

BB...its bigger than that.

the big three had dominant market share in the 50s and 60s and became arrogant. This lead to planned obsolescence and blunt-edge design and that probably lead to the de-enlisting of engineers and top designers. It wasn't until Japan (and to some extent Germany) stormed our beaches that a wake up call occurred. It was too little too late, plus hands are tied due to the previous obligations agreed to in headier times.

Bike Bubba said...

Too right; I'm just going for one "failure cause" at a time, pointing out that the things that ail GM & Ford don't begin & end with the UAW.