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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#143 of 149 Re: GM just don't get it. [rockylee] by k2j Dec 22, 2006 (2:52 pm)
Replying to: rockylee (Dec 22, 2006 10:02 am) I have never seen a break down on the $$$ for each part of building a vehicle. I would love to see one though. I can believe your numbers for vehicle assembly. But what about all the purchased parts that are also union made. The steel, I think the steel workers are union. The parts bought from Delphi, they are union. I used $25 as an example because thats what I remember reading. That $25 excludes benefits. Every job: white color, blue color, skilled, unskilled, professional, or management Has a "Market Value" a price you would expect to pay for a service. Union pay scales are way above "Market Value". All employees working for any company deserve a fair slice of the pie. "Market Value" determines what that fair slice is. At least for non-union. I do not like CEOs getting multi-million $$$ bonuses either, but there job also has market value. Athletes make mad money because people will pay $$$ to see them play. "Market Value" again. And lets say instead of giving the CEO a $10,000,000 bonus it gets split up among 50,000 employees instead. Thats $200.00/each, take out $5/ each for having to process 50,000 bonus checks, take out taxes and ya got about $120.00 or less than 6 cents per hour, not much for a year of hard work. Delphi agreeing to pay $12.50 for oil filter assembly sounds like "Market Value" I know lots of people here in the eastern US would love that job $12.50. Lots of different number for hourly wages floating around. There are lots of expenses in running a business. Here is an example. Hourly $20.00/hr with 2080 hours in the year. Add in 40% for benefits thats $58,240.00 or $28.00/hour. Add in 120 hours paid vacation and 72 hours for holidays your up to $30.03 because you really only work 1888 hours. Lets say it cost $5,000/mth to heat and cool the building where 500 people work. Another $2,000/month for water & sewer. Another $2000/mth for cleaning and maintenance. Now its up to $30.13. so on and so on thats why there are so many numbers. I would love to have more facts on GM's problem where can I get the facts. Anything but a UAW link they are as far to one side as GM is to the other. Replies to this message: rockylee (Dec 22, 2006 11:44 pm) rockylee (Dec 22, 2006 11:54 pm) k2j (Dec 23, 2006 5:52 am) and 1 more...
#144 of 149 Re: GM just don't get it. [k2j] by rockylee Dec 22, 2006 (11:44 pm)
Replying to: k2j (Dec 22, 2006 2:52 pm) I have never seen a break down on the $$$ for each part of building a vehicle. 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....... Replies to this message: rockylee (Dec 22, 2006 11:54 pm) k2j (Dec 23, 2006 5:52 am) rockylee (Dec 23, 2006 6:06 am)
#146 of 149 Re: GM just don't get it. [rockylee] by rockylee Dec 22, 2006 (11:54 pm)
Replying to: rockylee (Dec 22, 2006 11:44 pm) 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. 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 Replies to this message: k2j (Dec 23, 2006 5:52 am) rockylee (Dec 23, 2006 6:06 am)
#147 of 149 Re: GM just don't get it. [rockylee] by k2j Dec 23, 2006 (5:52 am)
Replying to: rockylee (Dec 22, 2006 11:54 pm) Before we get to far into this discussion, I am not in the auto industry, I simply want more knowledge about what is happening. 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. Replies to this message: rockylee (Dec 23, 2006 6:06 am)
#148 of 149 Re: GM just don't get it. [k2j] by rockylee Dec 23, 2006 (6:06 am)
Replying to: k2j (Dec 23, 2006 5:52 am) Yes, but with oversea manufacturing you have to factor in tariffs, the cost of building a new plant, shipping back to the US. We only impose tariffs on steel in this country. pretty much everything else is "free" or should I say exempt of tariffs. Rocky
#149 of 149 Re: moving standards [phinneas519] by chikoo Feb 12, 2007 (1:54 pm)
Replying to: phinneas519 (Sep 24, 2006 3:45 pm) What I find funny is that resale value is shaped more often by non-dealer used car sale prices. 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?