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Originally posted by Fmr12B:
If you allowed the engineers to make finance decisions you would end up with a $30,000 Focus that no one would buy because it was priced too high.
The Finance Dept. has to keep costs in line with the exepcted Sales price of the car. Can't afford to make a car that continually loses money unless it pumps your CAFE ratings up.
I'm not saying that you should give anyone a totally free hand in designing the car and specing it. There must always be compromises, even on Jags and Benzs.
However, I feel that American car engineering gets a bum rap. People always blame the engineers for engineering a crappy car, and that just isn't the case. The beancounters win both ways. They do the easy thing when it comes to the Unions, and they cut costs on the cars to make money. They get the praise when the company even breaks even. When times are bad, they let the engineers take the [censored] and blame the loss on a substandard product.
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Once again!
How do you expect the Big 3 to comepte when they are saddled with an average of $3K per car in additional costs than the average Japanese/Korean company?
Thats $3K that must be cut in order for the American cars to compete at the given price point.
It's not the finance team in charge of these companies that is dooming them, its the Unions breaking their banks!
Have you seen what has gone on in the US Airline industry? That is where the US Automotive industry is headed!
Money doesn't always bring happiness. People with ten million dollars are no happier than people with nine million dollars ~ Hobart Brown
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And the reason they are saddled with such high costs are because instead of playing hardball with the Unions over the years and telling them they can't have what they want, the beancounters and comapny big-shots took the easy way out and let the Unions have what they wanted.
To provide an analogy, FORD AND GM are like the car buyer who goes into the dealer and pays full MSRP for the car because they don't want to spend 30 minutes haggling to save themselves a couple of hours. They screw themselves, plain and simple.
Please don't say the unions would refuse to work for a lesser wage and retirement. Even if the unions had refused to work because they weren't being given what they wanted, when they were starving and not able to pay the bills, they would have come back and accepted a reasonable wage and retirement package.
Toyota and Honda do have younger work forces, and fewer costs, but they will never have the costs like American car companies because they don't, and won't pay their workers the wages the UAW makes. This, coupled with quality products, and a good reputation will continue to keep Toyota and Honda competitive for years to come
Last edited by red99sesport; 03/03/05 07:20 PM.
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Originally posted by Viss1:
Originally posted by sigma:
Part of that exhorbitant sum of money from the company is so that you'll have a "decent way of living when they're done."
I agree with most of your post except this part. Workers get paid according to what their job is currently worth.
Workers don't get paid according to "what it's worth", if they did they wouldn't be making $32/hr to tighten a bolt. They get paid according to what is negotiated and agreed upon. And it takes two to tango, I realize that. I'm not blaming the UAW here.
Quote:
No part of a current salary is legally intended to be earmarked by the recipient for retirement. Salary and retirement benefits are two separate negotiation areas.
I know it's not legally intended to be earmarked. But I'm paid a salary with the assumption that a percentage of that is to be saved. The company figures it in to your offer package because they'll likely be matching a percentage of your 401(k) contributions.
Your money is yours to do with as you please. But if you don't personally save for your own retirement and instead bet on a company taking care of you, it's no one's fault but your own. I don't have to contribute to my 401(k), but I'd be living on Railroad Retirement (basically Social Security) if I didn't.
I can see people making $6/hr at McDonald's not being able to save, but if you're making $32+/hr there's no excuse for not saving enough to live "decently" on after 30+ years. You shouldn't need GM to pay you 60-90% of your wage in perpetuity.
When GM goes belly-up, and it will almost assuredly happen, we'll see how things come up. The government will have to step in and pay these people's pensions, we're talking about a half million people with GM alone. And Ford, Visteon, and Delphi would soon follow. That's a million citizens without their pensions. But you can be virtually assured that they won't be getting their UAW-negotiated pension payments. The government's just not likely to pay that much. That's why you should save for your own retirement. Not because it's "legally required" because of course it's not. But because [censored] happens. Betting on a pension payout that you expect to get in a few years so you can take that extra vacation is just fiscally irresponsible.
2003 Mazda6s 3.0L MTX
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Originally posted by sigma:
Workers don't get paid according to "what it's worth", if they did they wouldn't be making $32/hr to tighten a bolt.
Totally agree, but by "what their job is currently worth" I meant what the employer and union have agreed it's worth.
Quote:
I know it's not legally intended to be earmarked. But I'm paid a salary with the assumption that a percentage of that is to be saved. The company figures it in to your offer package because they'll likely be matching a percentage of your 401(k) contributions.
Employers have an idea of how much their employees at different wage levels will contribute to their 401k, but the employer contribution rate is separately negotiated. I guess I'll concede that an employer can use this likely contribution rate as secondary support when negotiating wages with the unions.
E0 #36
'95 Ranger
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When it comes down to it, whether you are union or not, the cost to have you on that assembly line tightening bolts is total employee compensation. TEC is the total of all wages and benefits the company pays to have you there, including taxes.
That said, I don't think it's the engineer's fault. I believe they are capable of creating a car second to none. It really is the fault of management playing it safe and conservative, and unions which have far too much power in the process. Dynamic leadership with vision and the guts to realize that vision would be able to overcome the other issues.
FWIW, the Focus is really one of the best small cars out there.
Brad "Diva": 2004 Mazda 6s 5-door, Volcanic Red
Rex: 1988 Mazda RX-7 Vert, Harbor Blue.
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Quote:
When it comes down to it, whether you are union or not, the cost to have you on that assembly line tightening bolts is total employee compensation. TEC is the total of all wages and benefits the company pays to have you there, including taxes.
Just as a bit of information, according to a recent story in the Detroit Free Press, the TEC for the average UAW worker is $130,000/year. The Big Three are paying 10,000 workers full pay to not work this year. That's $1.3 billion dollars that is 100% non-value-added cost.
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Excuse me? The Chrysler division of DaimlerChrysler just had their best year in a long time.
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I think we all agree that the beancounters are the main problem plaguing the American automakers today. I wonder how much more a Taurus, for example, would cost, if Ford would allow their suppliers to provide first class parts, instead of cutting costs to the bone. Much of Ford's quality problems are NOT the guys on the assembly line, but its the parts supplied by outside suppliers that fail. For example, I'm pretty sure Ford didn't actually built the infamous water pump used in the pre'99 Duratec engines. I doubt if Ford spec'd the type of impellar used, but they demanded costs be cut to the point that the supplier had to resort to a cheap plastic.
Like it was said earlier, American automakers expect customers to gravitate towards bigger and more expensive cars, and treat their smaller cars as strictly entry level models. I was looking at my Mystique's window sticker the other day, and the original list price, coupled with the sales tax I paid, came to almost $22,000. I probably could have bought a Taurus or Crown Vic for that kind of money, which is what Ford would have probably prefered I had done.
-Mark-
'99 Mystique LS, totally original (including the original water pump and the premium stereo)! Bought new in December 1998 for $21,000.
208,000 miles
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Originally posted by RoadiJeff:
Excuse me? The Chrysler division of DaimlerChrysler just had their best year in a long time.
Chrysler's not really a US company anymore.
For Sale:
- Sony PSP with a Baseball 2k6 and the movie Crash. $100
- 1973 Karmann Ghia Convertible w/ Auto-Stick. Needs Restoration. $1200 OBO
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