last chance to save Detroit

[TheMann]

Yea buying a struggling company isn't buffets style

That's why I said they would have to bring the company private so they could break the unions because they wouldn't go along with a sales only oriented production schedule

Good luck breaking the UAW. Having the company go private won't allow them to break the unions, all three of the automakers tried to break the unions in the 1980s and failed miserably, and more to the point, if the UAW and its members are angry and militant, it is no help to the vehicle quality of the Big Three, a point they learned in the 1970s. Detroit was taught by the Japanese to treat their workers as part of the company's structure, because no matter how good the design of the vehicle is, if it isn't built well, it will rapidly become a problem for the company.

Further on top of that, a "sales only oriented production schedule" makes no sense at all considering the number of dealers that each of the automakers have. The production orders at the automakers are determined by the dealers themselves a lot of the time, because the dealers have to pay for the cars once they arrive on the truck, and they get their money back when the cars are sold.

 

[TheMann]

I didn't mean military vehicles but guns too

Still not enough orders to sustain the whole city.

 

[Dunning Kruger]

@TO91320 IDK how much the unions contributed to malaise of the 1970's.
Sure labor unrest was a factor, but the underlying economics of how cack-handed Ford, GM and Chrysler were run made labor problems a lot further down the list. They were too bloated and diffusely run.

In 2013 hindsight, the problem Big Three management had was that they had their factories, dealer networks and price points already doped out for a steady-state supply-demand model that ignored any other competitors
or technical or regulatory challenges.

The 1973 OPEC embargo changed the game. Also the Boomer kids were perfectly happy to drive foreign (VW's, Hondas, etc.)
Don't underestimate the effects of Nader's Unsafe At Any Speed and the effects it had on folks considering American cars unsafe gas hogs and how that altered American car buying patterns for two generations.

We've already mentioned how top-heavy GM and Ford were and how it led to paralysis (too many layers of mgmt means ideas good ideas get stuck in a swamp waiting for consensus) and too many brands to manage.
Plus, since there were so many autonomous units that a good idea say in Buick had little chance of spreading throughout GM.

IMO Bain Captial would've sliced and diced GM or Ford into several entities and marooned every retiree on the rolls with a joke kiss-off payment.
As wretched as the OTL slow fall of the Big Three has been, watching those ripoff artists kill off and dismember the dinosaurs ca 1985 would've been catastrophic. Robocop's Wretched Hive Detroit would've been a vacation spot by comparison.

TheMann's Transport America posits that GM was able to get the Corvair out of development hell, adopting some useful tweaks from Honda that would make American small cars far more competitive.
AMC would be more viable and get the Big three to be more nimble competitors etc.
The tech was there, they had the money and people to retool and make it happen.
TM's a train nut, so the USA also gets serious about updating and improving train networks (which GM and Chrysler massively benefit from in making locomotives and train cars) as well as building and tweaking mass transit networks (ditto) which IMO is both an enivronmental and employment win vs OTL.

We talk about Detroit's city government pulling its act together, which could've cushioned the fall a bit, but w/o the Big Three pulling head-from-anus maneuvers in implementing changes in what to make, how to make it, and properly marketing those products...Detroit's got some major challenges.

It is fair to say that a fair amount of the bloat was union created. Not all of it. Perhaps not even half of it. But definitely a material amount.

You guys keep saying if management had just operated more efficiently things would have worked out. More efficient operations almost by definition means fewer jobs. Would the union have agreed to that, particularly at their peak in the 70s? Hell no. Take inventory for an example. Let's assume I can cut 10% of inventory due to inefficiency. That's might be a whole warehouse is suddenly not being used and therefore means everyone in that warehouse is laid off.

Unions and management were equally guilty in the creating the demise of the automakers. They were like an old married couple arguing in the the car before driving off a cliff.

 

[TheMann]

@TO91320 IDK how much the unions contributed to malaise of the 1970's.
Sure labor unrest was a factor, but the underlying economics of how cack-handed Ford, GM and Chrysler were run made labor problems a lot further down the list. They were too bloated and diffusely run.

In 2013 hindsight, the problem Big Three management had was that they had their factories, dealer networks and price points already doped out for a steady-state supply-demand model that ignored any other competitors
or technical or regulatory challenges.

It does have to be said that the UAW was no help to Detroit's problems from WWII until the 1980s. Both the union and the management thought that the post-WWII boom and the enormous sheltered market would last forever, and the OPEC crisis and Japan's aggressive entry into the US market in the 1970s shattered that illusion. The UAW gave up the cost of living allowance during negotiations with Chrysler in 1978-80 (they had to - Chrysler was bankrupt and far beyond Chapter 11 reorganization by that point, they had debts in the billions) and subsequently gave it up with the other automakers. In return for that, the UAW and its members became active players in the way the company ran. When I did Streets of Detroit, I kicked that process forward a decade or so and had both sides get involved in ways to improve the other's abilities - GM wanted better quality cars and cost control, the UAW wanted better working conditions and more guys on the line, and both got their way in the end.

The 1973 OPEC embargo changed the game. Also the Boomer kids were perfectly happy to drive foreign (VW's, Hondas, etc.)
Don't underestimate the effects of Nader's Unsafe At Any Speed and the effects it had on folks considering American cars unsafe gas hogs and how that altered American car buying patterns for two generations.

What massively hit home with Unsafe At Any Speed was that it was published at a time when large corporate entities were regarded as being inherently wrong and evil by a sizable portion of American society, and the cars themselves were in some ways unsafe. GM unquestionably rush the Corvair out to owners, and a Corvair can be very difficult to drive if one does not pay close attention to how they do so, a characteristic well known to anyone who has ever driven a car with swing-axle rear suspension. What got it the most attention, however, was that GM attempted to destroy Nader's credibility by attacking everything else in his life and got caught red-handed in the process of doing so, which REALLY got attention. That book has such flaws in it that I could go on for weeks, but some of the criticisms are valid, and the combination of the book itself, several high-profile lawsuits over the Corvair's handling and the subsequent media mess GM caused themselves all led to the government mandating involvement in the auto industry, and they predictably in some areas went rather overboard themselves.

 

[BlairWitch749]

Good luck breaking the UAW. Having the company go private won't allow them to break the unions, all three of the automakers tried to break the unions in the 1980s and failed miserably, and more to the point, if the UAW and its members are angry and militant, it is no help to the vehicle quality of the Big Three, a point they learned in the 1970s. Detroit was taught by the Japanese to treat their workers as part of the company's structure, because no matter how good the design of the vehicle is, if it isn't built well, it will rapidly become a problem for the company.

Further on top of that, a "sales only oriented production schedule" makes no sense at all considering the number of dealers that each of the automakers have. The production orders at the automakers are determined by the dealers themselves a lot of the time, because the dealers have to pay for the cars once they arrive on the truck, and they get their money back when the cars are sold.

if they are private, buffet or romney could just announce they will be offering the next set of contracts at more reasonable wage scales with major cut backs to future pension obligations; and that if the UAW doesn't like it they can go fuck themselves and that they will scab them to death, and unemployment was high enough in the midwest to certainly do that

except the dealers couldn't sell the cars, which in turn made them turn the screws back on corporate to offer gigantic margin killing sales incentives back to the dealers either in the form of cash rebates or reduced/free financing (and financing is how GM et all actually make their money anyway); GM and to a lesser extent Ford are still having this problem today

 

[TheMann]

if they are private, buffet or romney could just announce they will be offering the next set of contracts at more reasonable wage scales with major cut backs to future pension obligations; and that if the UAW doesn't like it they can go fuck themselves and that they will scab them to death, and unemployment was high enough in the midwest to certainly do that

except the dealers couldn't sell the cars, which in turn made them turn the screws back on corporate to offer gigantic margin killing sales incentives back to the dealers either in the form of cash rebates or reduced/free financing (and financing is how GM et all actually make their money anyway); GM and to a lesser extent Ford are still having this problem today

You are nuts if you think you can scab the UAW out of existence. GM's workforce that worked for the UAW in the mid 80s was 500,000 plus, you won't find anything like that many competent people to replace them you aren't aware of the way the industry works. On top of that, the UAW's members will not accept that many jobs lost or massive pay cuts on that scale without an enormous fight. I can see three scenarios playing out here with that idea:

1) The UAW takes this to the NLRB and fights it in Congress, as well as mobilizing it's members and setting up very large protests. The NLRB cannot rule in favor of the companies on this one without questioning it's very existence and causing a political storm, both with the UAW and with every other industrial union in the country. If you want an American General Strike, this would be where you get it.

2) Option 2 is the UAW filing a lawsuit over this. Company has little chance of winning this suit, and on top of that the optics of wanting to massively and arbitrarily cut the wages of half a million people who work for a firm which is still profitable are horrible to say the least.

3) The worst option is that on top of these two options, any scab attempts are met by active resistance by the workforce. You don't want to know where this could end considering the problems of the early 1980s, but it could well end up in violence, at the very best it results in massive parts supply and logistics problems and quite possibly occupied plants.

None of these scenarios talk about a problem that will happen in all of these scenarios - a marked drop in vehicle quality that is inevitable when you have an angry, demoralized workforce that knows their employer is trying to screw with you. If the new owners go this route, they will regret it VERY quickly.

 

[Carl Schwamberger]

if they are private, buffet or romney could just announce they will be offering the next set of contracts at more reasonable wage scales with major cut backs to future pension obligations; and that if the UAW doesn't like it they can go fuck themselves and that they will scab them to death, and unemployment was high enough in the midwest to certainly do that

Here in my hometown a regional house manufactoring company (National Homes) tried that back circa 1978-79. Even in that employment enviroment they could not find enough sufficiently skilled workers to replace the 1,100+ production workers. They also found the highly skilled techs & supervisors, mostly non union, were jumping ship. About 15% a year decided they had better prospects elsewhere and the loss in terms of productivity (experience within the plant) could not be recovered fast enough out of the hiring pool. By 1982 the place was closed & the bulk of the former employees working elsewhere. Ironically a dozen or so started their own residential construction companies and replaced a large part of the manufactors output with their own products.

I myself had left long before, perceiving the management stagnation there & thinking of a better plan than production drone where wages were already falling short of the inflation of 1974.

Several other companies here near Lafayette tried assorted plans in the 1980s to shed the unions. I am having difficulty recalling if any survived the decade. Very likely one or two did, but that might still be only a 25-30 % sucess rate

 

[TxCoatl1970]

@TheMann- thanks for amplifying on the union aspects and Unsafe At Any Speed.
My take is that the unions weren't the worst problem GM or any automaker had, but were still a problem but IMO maybe sixth.


@TO93120
Getting serious about quality control during the redesigns of the 1970's-1980's was a colossal cluster-^%&$. Engineering, senior mgmt, marketing, and everyone else rearranged deck chairs and countermanded themselves so many times which left even dedicated line workers totally confused. Many tuned out.

One big reason Toyota and various other Japanese carmakers did so well was they adopted Walter Deming's ideas on continuous improvement and
letting the line workers, supervisors, and engineers troubleshoot issues/bottlenecks, and so forth and giving the workers bonuses for beating production and quality targets.

AIUI the UAW and Big Three management never went there systematically.
Sure Ford tried "Quality is Job 1" in the 1980's, and GM tried the Saturn initiative but those were a decade to fifteen years too late to salvage the situation.

Another issue folks tend to ignore is that OSHA and the EPA started getting far more serious about both workplace safety and pollution control in 1970, just as the market goes bonkers.

As TheMann said, GM's upper mgmt scored a dozen own goals in mishandling the Nader criticisms which caused an avalanche of changes that impacted the car industry in a variety of ways.
Joe Line Worker or his supervisor weren't the problems behind it. A little more attention to detail and intelligent workflow management would've solved many of the quality problems.

Did union bylaws and strikes impede that process? I'm sure they did.
Trying to rationalize production- consolidating and retooling plants was disruptive and made a lot of folks nervous about being out of jobs.
That's poor communication and negotitation with the union on management's part. Shop stewards probably weren't terribly helpful either.

LSS, blaming the unions for Detroit losing market dominance is misplaced.
They had their part in things not being turned around fast enough, but for me, upper-level management gets probably 90% of the blame.
YMMDV.