Monday, November 26, 2018

Is it becoming reality?

Back in 2009, I pointed out (as did Cold Fusion Guy) some big issues about the UAW bailout of 2009, starting with the fact that the bailout was not of GM and Chrysler, but was rather of the UAW and fat wage/pension/etc., payouts to unions that had helped put President Obama in office.  That agreement left systemic problems in place that I predicted might even result in Chapter 7 bankruptcy.

While thankfully that hasn't occurred, today GM announced workforce cuts of around 15% of workers, the closing of five plants, and that the Chevy Cruze, Chevy Impala, Chevy Volt, Buick Lacrosse, and Cadillac CT6 will no longer be produced.

The question, really, is whether this is the UAW tax or something else.  In this case, GM asked for 8000 workers to accept buyouts, but only 2250 did.  Going way out on a limb, I'm guessing that the huge pension cuts for salaried workers in 2009-2010 made them unwilling to take a buyout that might be snatched from them--and that has everything to do with Obama's UAW bailout, which maintained pay scales that cost GM $25 more per hour than Toyota and Honda pay in our country. 

Others might point out that this also has a lot to do with the fact that GM doesn't really have anything to compete with Honda or Toyota sedans, or frankly with Mercedes, BMW, Audi, and Lexus luxury vehicles, and while I'd agree, I'd also point out that engineers worried about being laid off, and who have seen former colleagues get screwed  ripped off by the Obama administration, just might have something getting in the way of top quality work.  Yes, we can, at least in part, blame the UAW bailout for the fact that GM doesn't have a Corolla or Accord in their stable. 

Sad to say--and I write this as the owner of two GM vehicles and the son-in-law of a UAW retiree--I don't foresee good things for them in the future unless this changes in a major way.


Mr. D said...

Agree with this 100%. I drive a Honda Accord, by the way. Built in Ohio. My old Chevy Lumina was made in the Canadian plant they are going to close.

Bike Bubba said...

Am considering the Accord myself when my 1997 Sierra finally bites the dust....hopefully they'll still offer the manual, since I love that "cheap theft insurance option". That or the Golf Sportwagen for the same reasons, plus I don't need a pickup anymore.

Along these lines, it strikes me that technically speaking, the biggest reason for GM's plunge here (and Ford's, really) is the failure of the "Detroit 3" to master multi-speed transmissions and high-revving engines, along with unibody construction. Really, there are no huge secrets to making an Accord or Camry. You just have to commit to doing it and doing it right.