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Automotive News & Views Inside Line Article Comments Article Comments: Perception Is Reality
149 messages, Last post on Feb 12, 2007 at 1:54 PM
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Article comments for Perception Is Reality - Witness the tale of two companies Toyota and General Motors. Despite recalls and public relations woes, Toyota's image of bulletproof quality persists, and sales and market share rise. Despite concrete evidence to the contrary, GM's reputation for inferior quality remains, while sales and market share decline. (more)
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Replying to: explorerx4 (Sep 15, 2006 2:53 pm) "why are so many taxis all over the united states cv's, if they have such expensive engine repairs? the 4.6 has been around for almost 15 years in cv's." The repairs are just frequent enough that Ford engines are more expensive to repair than current Chevrolets. The mechanics at the local State facility that repairs police cars and other state vehicles tell me that. The repair cost difference average something like $30 per car more per year in a fleet with several hundred of each. Couple this with lower purchase price and departments buy Impalas even though the officers prefer RWD and larger cars. If you have ten taxis, the additional room in a CV can bring more revenue than the few dollars more in maintenance cost. I never said Fords were bad, or a poor choice, only that local departments find Chevys to more budget friendly. Harry I would have replied sooner, but I was away from computer access for a week. |
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GM needs to fix the union problem. They cannot afford to use quality materials or invest in R&D when all there cash goes to the ridiculously high union wages. Do you really think assembling an oil filter is a $25+/hour job? Unions should negotiate safety, work conditions, maybe some benefits. However, they should not extort money in the form of wages from a corporation. Up until the late 1990s, the BIG 3 enjoyed the majority of the market share. I know people who bought from them because they were patriotic Americans even when they knew the product was inferior. The BIG 3 should have used the cash from those sympathy buyers to invest in better material, R&D, and make a better product. They had the cash and the time to catch up to the Asian brands, but did not make much effort to do so. The BIG 3 were 10 years behind then and they have made very few improvements since. The American public is tired of sitting at the service department getting things worked on. Or in the case of my last GM, on the side of the road. GM complains about perception, they say their quality is better than its perceived. Well GM YOU created the negative perception and now you want us to take you on you word that you now have quality. You will need to spend the next 10 years erasing the perception you created. The problem is, you no longer have 10 years time. GM's new cars still look like they belong in the mid 80s. They even manage to ugly-up the re-badge Asian vehicles they sale. The brand new full size Tahoe is no different from the old one except for the sheet metal. Same weak transmission (GM are you ever going to put a good AT under your vehicles?) same weak motor. Bob Lutz put an "old people" Buick interior in the Tahoe. Bob, younger folks like modern designs. Still no independent rear suspension. Why? Where in the heck did you spend all that R&D money? Is rack and pinion steering that difficult to design? The only thing you really improved was the looks. Why did you make the Tahoe look so good then make the trucks so ugly? The extra storage spaces in the interior are nice, but not enough to keep up with the new Tundra. The Big 3 are doomed as soon as Toyota and/or Nissan start making 3/4 and 1 ton trucks with and without diesel engines. Ford is hardly a bump in the road for Toyota's rise to Number 1. Let us talk about missed opportunities. The Scion xB and the Honda Element, kids love these, they can afford them, they have lots of room for friends, and they can afford to pimp them. You can even buy them pimped of the showroom floor. (Bob Lutz, you will have to get a youngster to explain pimp to you). With all the pimped Cadillac's and Tahoe's out there GM should have seen this market long before Honda or Scion. The Big 3 need to realize there is a difference between Quality, Durability, and Reliability. You need ALL 3 to have a good product. Are you listening Rick Wagoneer. From Websters Quality The degree of excellence of a thing. Durability Lasting in spite of hard wear or frequent use. Reliability that can be relied on: dependable. GM has none of these, although the quality is getting better. JD Power has NO credibility. They have always said GM has the best initial quality, even though you were making junk. The public has been listening to that JD Power crap for so long that no one even notices the commercials anymore. Nobody cares how good a vehicle is 30 days from now. They want to know how good it will be for the next 10 years. The new 5 year/100,000 mile warranty tells me that GM still dont understand what people want. We are not interested in knowing that GM will fix it if it breaks. We want GM to build something that does not break. We do not want to be stuck on the side of the road at 1:00 AM waiting on a tow truck. What if we are out of town and its Sunday morning? Do you pay for for motel rooms? How about lost time? Its really nice of GM to pay for that $50.00 part and $75.00 labor but what about the $250.00 for a motel and gas for the return trip to pick-up the vehicle, and all the lost time. There is much more inconvenience in warranty repairs than the cost of the repair. kjessee
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Replying to: k2j (Dec 22, 2006 9:42 am) at various times since 2005'. You can believe the rhetoric or study up on the issue if your are that interested in it.  Dad, says his wage and benefits before he retired was somewhere between $45-50 bucks an hour. The reason why it was so high was because GM, never fully funded their pension fund leaving them legacy costs. Rocky
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Replying to: rockylee (Dec 22, 2006 10:02 am) Every job: white color, blue color, skilled, unskilled, professional, or management Has a "Market Value" a price you would expect to pay for a service. Union pay scales are way above "Market Value". All employees working for any company deserve a fair slice of the pie. "Market Value" determines what that fair slice is. At least for non-union. I do not like CEOs getting multi-million $$$ bonuses either, but there job also has market value. Athletes make mad money because people will pay $$$ to see them play. "Market Value" again. And lets say instead of giving the CEO a $10,000,000 bonus it gets split up among 50,000 employees instead. Thats $200.00/each, take out $5/ each for having to process 50,000 bonus checks, take out taxes and ya got about $120.00 or less than 6 cents per hour, not much for a year of hard work. Delphi agreeing to pay $12.50 for oil filter assembly sounds like "Market Value" I know lots of people here in the eastern US would love that job  $12.50. Lots of different number for hourly wages floating around. There are lots of expenses in running a business. Here is an example. Hourly $20.00/hr with 2080 hours in the year. Add in 40% for benefits thats $58,240.00 or $28.00/hour. Add in 120 hours paid vacation and 72 hours for holidays your up to $30.03 because you really only work 1888 hours. Lets say it cost $5,000/mth to heat and cool the building where 500 people work. Another $2,000/month for water & sewer. Another $2000/mth for cleaning and maintenance. Now its up to $30.13. so on and so on thats why there are so many numbers. I would love to have more facts on GM's problem where can I get the facts. Anything but a UAW link they are as far to one side as GM is to the other.
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Replying to: k2j (Dec 22, 2006 2:52 pm) I know some of them. Delphi, is so efficient at making fuel injectors at the Coopersville Mi. plant they can make them for as little as $0.04 a piece for Multec 3. Multec-2 which GM uses is made for as little as $0.06 a piece and is sold to GM, for $12.00 each. GM, then sells the part to the dealership at a very inflated price like $30 or $40 bucks and the dealership sells it to you for $120 bucks. When I worked for Johnson Controls we made GM headliners. Those also are marked way up. A fully assembled Tahoe headliner would be sold to GM for like $120 bucks. The headliner consisted of a fiberglass board and some thin carpet like padding stapled togeather and sent into a oven where the part would heat up and then be formed by a press. The part then would go to a Water Robot to be cut out. After the part was cut out the person would push out any sticking parts and glue any bad area's where the fabric might be seperated. The part would then go on a rack to be hung until the GMT assembly line got to it. Once they pulled the part of the rack they would glue the Delphi wirring harnesses on the back of the board and attatch the lights and other parts. After the part was assembled it would be transported to the shipping dock to be sent to GM's assembly plants to be installed into the SUV or Truck. I would love to see one though. I can believe your numbers for vehicle assembly. But what about all the purchased parts that are also union made. Believe it or not there isn't really that many parts to a car that is union made. Most of the interior is made by non-union employees of Johnson Controls, in Holland Michigan. All the mirrors are made by non-union Gentex, where my mother works. The radio components is assembled by unionized labor Delphi Delco Systems but the parts to those components are made oversea's. The steel is made here and Japan, to the best of my knowledge. Maybe "62" could help me out with facts. The steel is sent to unionized plants like Fischer Body (GM) metal stamping plant in Grand Rapids Mi. to be stamped out into doors. The engine, suspension, axel, and other parts and components are made by unionized and non-unionized Delphi plants along with other union and several non-union suppliers. So my overall point is many americans are under the impression that most of the vehical is union made. That couldn't be further from the truth. Sure many years ago that was the case but as you've seen Delphi, is shutting down 21 out of 29 plants and most of those parts will be assembled by non-union suppliers if not all of them be made in 2nd and 3rd world country's.  The steel, I think the steel workers are union. The parts bought from Delphi, they are union. I used $25 as an example because thats what I remember reading. That $25 excludes benefits. I don't know what the overall costs are for labor that is union and non-union per hour. Some of those parts are made by non-union people that are making $9.00-$15 an hour. However this is moot because GM, is not just paying for the actual cost per part because the company making the part is marking them way up to make a huge profit. (Remember the $0.04 and $0.06 actual cost per part I gave you at Delphi's fuel injector plant and GM paying $12.00 per part ?) Dad, often asked himself is GM really saving money by spinning off it parts plants and paying such a highly inflated price for a part. The funny thing is k2j, GM wanted to buy back some of the U.S. Delphi plants like the Injector plant and Valve lifter plant along with a few others because its so profitable. For example Dad's Coopersville plant made $143 million last year in profit after paying everybody. Con't.......
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Replying to: rockylee (Dec 22, 2006 11:44 pm) What is going to be the determining factor of the market value ? The threat of organizing a non-union plant often increases the blue collars market value. What if there were no unions to keep the market value for laborers high ? Would somebody at a non-union Toyota plant assembling a car still make $22 an hour ???? I think not !!!!! I think without the threat of unions the blue collar workers in america would be hosed. They would be paid slightly above somebody working at a fast food joint. White collar workers in lower-middle management would also lose some pay and benefits to adjust to the market. Does the "market value" include foreign labor like somebody in china making $0.40 an hour ??? If not then why ? You are gradually seeing "market value" labor being lowered for all americans because of global labor competition in both blue and white collar jobs. Lots of different number for hourly wages floating around. There are lots of expenses in running a business. Here is an example. Hourly $20.00/hr with 2080 hours in the year. Add in 40% for benefits thats $58,240.00 or $28.00/hour. That sounds about right. Then explain to me why the big 3 throw out numbers ranging from $45-90 bucks an hour for union labor ???? Even including the under funded pension doesn't add up to the hourly wage numbers they often quote in the paper. Add in 120 hours paid vacation and 72 hours for holidays your up to $30.03 because you really only work 1888 hours. True.....Throw in a pension fund contribution over 30 years and if invested properly the interest alone should cover a good chunk of the employees retirement. Look at General Electric..... There pension fund costs the company nothing today because they invested money into the fund back in the 1930's and now it has growin to nearly $30 Billion and makes enough money its self supporting and continues to grow each passing year. I'd say the actual cost per GM employee with benefits is somewhere between $45-$65 an hour. Not no $70, $80, $90, an hour. I think the number is much closer to $45 an hour than $65 an hour even with the legacy costs. the fact remains the company can spin the numbers to make them look good or bad. Lets say it cost $5,000/mth to heat and cool the building where 500 people work. Another $2,000/month for water & sewer. Another $2000/mth for cleaning and maintenance. Now its up to $30.13. so on and so on thats why there are so many numbers. Well when you start adding those factors to it then sure you can make the numbers look ugly. Maybe thats also what GM/Delphi did ? However does managements usage of the facility's decrease that number off the hourly ? I would love to have more facts on GM's problem where can I get the facts. Anything but a UAW link they are as far to one side as GM is to the other. It would be very hard to get a unbiased opinion from a independant source to crunch the numbers. Rocky
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Replying to: rockylee (Dec 22, 2006 11:54 pm) What is going to be the determining factor of the market value ? If I quit my current job I can get a new job in the same area making ~%90 of my current pay. I am close to "Local Market Value" I could move to a bigger city and make more but the additional money would be absorbed by the increase in the cost of living. If a certain job pays $10.00/hour and nobody is willing to do the job for that price the market value will go up. But if 50 people are willing do do the job for that price the market value will go down. Organizing a Union allows them to increase wages (a strike or threat of) but it has not increased the market value. If a union employee is making $25/hour and 50 unemployed folks are willing and able to do that job for $15/hour then $15 is the market value. But the company can't terminate the union employee and hire at market value. That sounds like extortion to me. The threat of organizing a non-union plant often increases the blue collars market value It increases the wages, not the market value. That is the problem. Does the "market value" include foreign labor like somebody in china making $0.40 an hour ??? Yes, but with oversea manufacturing you have to factor in tariffs, the cost of building a new plant, shipping back to the US. However does managements usage of the facility's decrease that number off the hourly ? No it increases the number. Management is probably considered an overhead expense. Example: I work for company X. Our skilled labor cost ~$30.00 hour. Add in benefits and it becomes. $42.00 We have a fleet of vehicles for our labor that adds $6.00/hour = $48.00. We use material to maintain equipment that adds $5.00/hour = $53.00. We have buildings for our labor that adds $2.00/hour = $55.00. Add in the accountants, lawyers, managers, human resources, IT, telecomm, etc. And the final wage comes to ~$85.00/hour. Everyone working for a company that is not actually making product is an overhead expense. Accountants, lawyers, managers, human resources, IT, telecomm are not making products but they are needed to run the business. So you can add one employee and your overhead may go down, but add 10 employees and you may need more building space, another manager, an extra accountant etc. White collar workers in lower-middle management would also lose some pay and benefits to adjust to the market. Yes, and overhead expenses would also go down. Then GM could build a Tahoe using better material for the same price and possibly compete with the Asians.
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Replying to: k2j (Dec 23, 2006 5:52 am) We only impose tariffs on steel in this country. pretty much everything else is "free" or should I say exempt of tariffs. Rocky |
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Replying to: phinneas519 (Sep 24, 2006 3:45 pm) The non-dealer has to set the low price to compete with the heavily discounted new car price. Otherwise why would anyone buy a used car? |
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