Speaking of Dumb Bosses: There Auto Be A Law

[John Brandt]

I open the Wall Street Journal this morning, turn to column 6, and learn that Ford will lay off up to 34,000 workers over the next 6 years. These poor sods are in addition, of course, to the 32,000 workers that GM has promised to furlough over the next few years. And nobody's talking about the all the dependents supported (with food, with shelter, with healthcare benefits) by these workers. Do the math: If each averages just one dependent, then 66,000 x 2 = 132,000 people without benefits. If each averages just 2 dependents, 66,000 x 3 =198,000 dispossessed.

198,000, for perspective's sake, is a city about the size of Des Moines, IA. Imagine a city the size of Des Moines suddenly learning that every single citizen would be out of a job and health benefits within the next several years. The investigations, the media circus, the finger-pointing would be unprecedented.

So, you might ask, what happened that in a single week good-sized city could lose its earning power and its healthcare?

Well, according to the visionary CEO talk and cutting edge analysis in the WSJ, it was simply the end of an era. Listen to Ford Chairman William Clay Ford Jr.: "We cannot play the game the old way." Listen to the WSJ reporters: "For years, Ford and GM relied on making a lot of money on a few products--mainly large pickup trucks and sport utility vehicles--to cover losses or bolster slim profits on small and midsize cars."

I love this. The underlying message from both company and press is that it wasn't the fault of 30 years of bad management making bonehead decisions to put ugly, unreliable cars on lots that nobody wanted--it wasn't doofus strategy that kept producing products on which the companies LOST MONEY--it was just that, gosh darn it, the competitive environment changed.

As if 30 years ago, losing money by making bad products nobody wanted was somehow an accepted business practice.

I know GM's and Ford's current execs inherited this mess. And I know it's more complicated than simple long-term, industrywide stupidity. Unions have played a role in the demise of American automakers, and their members will now pay dearly for their leaders' decades-long insistence on preserving jobs (for awhile, at least) at all costs. And yes, Ford and GM are being penalized for having their HQ's inside an economy that boasts what is both the world's most advanced and most bizarre healthcare system (Because healthcare in the U.S. is tied to employment, the largest, oldest companies bear a disproportionate part of the nation's healthcare costs. This is like asking your fat, elderly aunt to carry the fridge while she helps you move, simply because she has the most experience. Well, it's sort of like that. Anyway, those of you opposed to healthcare reform because you don't like paying for other people's problems better get used to digging deep, because a large percentage of those 200,000 dispossessed will be moving to other plans, some of which you'll pay for).

But even with the caveats, can we at least say that an industry that ignores its customers, produces products that LOSE money for decades, and has to wipe out nearly a third of its workers all at once, is--at least a little bit--the victim not of external forces, but its own dumb management?

And if it is, then just what does that sad line of executives owe to that 200,000-strong city that looks to a future without salaries or healthcare?

[Old_IW_Reader]

Good analysis. Like the analogy to Des Moines. Any possible solutions in sight--that we are capable of implementing?

[berlongroupie]

I always thought the little guy was to fault for bad management! What a surprise. Is there a coorelation between bad management and the US's status in the world?

[Wm Donnovan]

There is a saying that one reaps what one sows.

The UAW is a parasite which is killing the host. Not to say that the host did not do some silly things along the way, but for a company like GM, what management action could possibly overcome devoting 50% of the payroll dollars to people who don't work for the company any more? What management action can resolve the issue of hordes of unskilled people with lavish incomes doing small ammounts of menial work? Health care costs are out of control, but whose bright idea was it to give it to all hourly retirees for the rest of their lives? I thought unions were supposed to fight for reasonable working conditions and middle class pay; apparently the UAW's big fight is for things like cabins up north, 4,000 SF homes, lavish vacactions, six figure incomes, etc.

At a GM plant I used to work at, it was actually in the contract as to which newspaper vending machines would be at the employees' entrance...what bizzare alternate reality is this? Stroll through the plant and half the skilled tradesmen would literally be asleep, while work orders took months to complete, and while one of the stamping departments had 50% downtime. Some of them would only do work on the weekends on overtime pay...regular pay was for sleeping. There were a couple of tool and die makers that never did anything, period. They showed up, sat near their tool boxes reading novels all day, and then went home and got paid every Friday. Employees could only be fired for one reason: deliberate sabotage of the product--and that actually happened. And this was one of the better plants in the division! Before that experience I would only buy American...now I cringe at the thought of subsidizing sloth.

Sorry, can't muster one iota of sympathy for the union slugs making fantastic wages doing almost nothing, nothing except killing the US auto industry. They were paid more than my Father who was a college professor, they were paid more than an Uncle of mine who was a state trooper until he was killed in the line of duty, they were paid more than my Grandfather who was the foreman of a metal shop for thirty years. The UAW slugs were showered with money for almost no work and all they did was bitch and moan all day. Maybe they'll just have to actually work for a living like everyone else...poor babies.

Either the UAW returns to planet Earth, or GM goes ahead and dies and the assets are sold to a leaner and saner company that is not UAW infected. It is one or the other and there is no point to prolonging this slow death.

[Abogle]

I once heard an old saying that went something like this:

If it weren't for bad management, there would be no need for unions