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GM Selling North America's Birthright to Mexico
by Barry Artiste | June 3, 2008 at 06:18 am | 466 views | 9 comments
Opinion
Barry Artiste, Now Public Contributor
Outsourcing North America's Manufacturing Birthright, has taken another turn for the worse, 2,600 General Motors jobs (not 1,000 as previously reported) are heading south to Mexico. Does this surprise anyone? Hell No!
Consumers drive the market, and when the Market has a "Big Yellow Smiley Face" where lowest price is the law,
Corporates needing to compete, have no choice in order to stay viable. One wonders if GM workers being Consumers took advantage as well of that Big Yellow Smiley Face of WalMart and other cheap imports, putting other Union and Non Union Brothers and Sisters out of work in North America, thinking it would not happen to them.
Well Surprise, Surprise, they were wrong, now their jobs are gone, and most likely yours will be next too!
In the Auction World, the Final Word is Going, Going Gone!
GM to halt production at Oshawa truck plant
General Motors said Tuesday it will halt production at its pickup truck plant in Oshawa, Ont., axing about 1,000 jobs in the process.
The Oshawa plant is expected to close in 2009, GM CEO Rick Wagoner said during a press conference in Wilmington, Del., prior to the company's annual meeting.
Three other GM plants that assemble pickups or sport utility vehicles are also scheduled to be closed — in Janesville, Wis., Moraine, Ohio, and Silao, Mexico.
In May, the CAW reached an agreement with GM to postpone a 900-worker layoff at the Oshawa truck plant until September 2009.
GM's Oshawa truck plant makes the Chevrolet Silverado and the GMC Sierra. U.S. sales of GM trucks were down 15 per cent in the first three months of the year. In March, its truck sales in both the U.S. and Canada plunged 22 per cent, as the rising price of gas cut into sales of trucks and SUVs worldwide.
Closure of the plant means GM will no longer produce trucks in Canada and will be reduced to one auto plant in Oshawa and a share of a joint-venture plant in Ingersoll, Ont.
Tuesday's news comes just weeks after the closure of a transmission plant in Windsor, Ont., which affected 1,400 workers.
GM said that closure was due to a market shift from the four-speed automatic transmissions made in Windsor to more fuel-efficient six-speed transmissions.
Detroit's Big Three automakers have cut tens of thousands of jobs in the last few years as they struggle to turn around their struggling operations amid market gains by their Asia-based rivals.
North American automakers have been slower to adjust their product lineups to include more smaller vehicles and fewer gas-guzzling SUVs.
With files from the Canadian Press
News Tools
June 3, 2008 at 06:18 am by Barry Artiste, 466 views, 9 comments
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Comments (9)
at 06:26 on June 3rd, 2008
If you keep making gas-guzzlers that end up in the used-car lot graveyards, what do you expect? Sorry, Canada, now you know how we feel in the US. And why Mexico? I thought they all moved up here.
at 06:32 on June 3rd, 2008
Actually I just heard on the news, the US which depends on Canada's trucks parts will also lose their jobs in the US as well. It is a domino effect, what affect us, affects you too. Hence my statement North American Birthright "Going, Going, Gone!" Oh yeah Texas makes the Caddilac Escalade, looks like their days are numbered too "Hola"!
You have to know something about economics Rene, one employed person supports 10 other employees elsewhere, everything from the grocery clerk to the school system and services everyone relies on. When that employee has no job and enters the exciting world of unemployment, everyone suffers. It is just not one it is tenfold.
at 06:53 on June 3rd, 2008
Oh, I totally understand. Just where are they going to get workers in Mexico when they are all up here?
at 07:07 on June 3rd, 2008
Well if the unemployed are desperate enough, maybe they'll jump the fence and go to Mexico.
Certainly a Dream Canadians finally woke up to, Finally figuring out it's a nightmare.
Thanks for the Comments Rene, certainly appreciated
at 15:54 on June 3rd, 2008
Barry I am going to take issue with your analysis. If the only cars that could be competitively manufactured were those made in countries with low comparative labour costs then the US and Canada would be losing out to cars made in China, India Brasil and Mexico. But that is not the case.
Can you say Toyota? North American auto manufacturers are losing ground in the low priced, mid priced and upper-middle priced market to the Japanese. Japan does not have lower labour rates than Canada or the US. Even Korea's labour rates are approaching North American costs. And at the upper price range (where nominal labour rates are not a relevent cost factor) the US auto giants are getting their heads handed to them by who? The Germans, the Brits and who? The Japanese again!
The fact is that the North American auto worker is less productive. That makes their labour cost per until of production too high to complete even with the Germans who have higher labour rates. Why is this? Are Canadians and Americans lazy? I don't know. But if they are it is not their fault; it is their union's. In Japan and Germany the unions work with the manufacturers to make their companies and products successful. Here we have a combative labour climate where the unions are only concerned about union dues and not about the health of the employer they depend on.
The final nail in this industry's coffin is that the NA auto companies are not making cars and trucks that we want to buy. Sure they have a few success stories (Ford F150, Chrysler 300 Chevy Corvette) but they make far more poorly designed, poorly engineered and poorly assembled vehicles (just look at relative resale values if you doubt me) that have to be discounted to move off the lot. When I bought my most recent vehicle I wanted to but something made here. You know what? We don't make anything that comes even close to what Land Rover makes in it's expensive UK plant.
People look at value when making a purchase. Not just price but what they are being offered for that price. The US makes vehicles in all but the very lowest and very highest price ranges. They just don't make many vehicles worth what they want to charge. So, do not blame the consumer. They should not be expected to drive crap just because their neighbour made it.
at 16:06 on June 3rd, 2008
Toyota, out-sourced to America! And who helped build those auto factories if not the American workers? And the American automakers had their chance to develop vehicles with higher gas mileage, what happened to that? If they had continued on that course, they wouldn't be having the problems of not selling.
at 16:50 on June 3rd, 2008
I am sorry rene but WWII reparations were generations ago. We cannot continue to play the blame game. And it has nothing to do with the poor overall quality of what comes out of Detroit and Oshawa. Want proof? Read this article from MSNBC and Consumer reports magazine (not known for US-bashing). This is for the 2006 year but I doubt much has changed.
By Roland Jones
Associate editor
MSNBC
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Japanese automakers achieved another milestone in the ongoing humiliation of their U.S. counterparts Wednesday as they captured the top positions in all 10 vehicle categories rated by influential Consumer Reports magazine.
It was the first time in the nine-year history of the respected annual survey that Asian nameplates swept the list of “best” automobiles, which the magazine selects from among a slate of more than 230 vehicle models based on a series of 150 tests, ranging from braking distance to crash ratings and fuel efficiency.
Historically, the Consumer Reports “Top Picks” list has been a blend of Japanese, European and domestic auto models. But this year the Honda Civic, the Infiniti M35 and the Honda Ridgeline all join the list as new entrants, while the fuel-efficient Toyota Highlander Hybrid, which was named the top midsized sport utility vehicle, became the second hybrid-engine vehicle to be featured as a top pick, joining the popular Toyota Prius, which was named the top vehicle in the green car category.
The Honda Civic was named the magazine’s top small sedan, while the Infiniti M35 was named the top luxury sedan. Vehicles from Nissan and Subaru round out the top picks in the magazine’s 10 auto categories.
The fact that Americans and canadians are buying Japanese cars and trucks is because they are simply better products. That is the fault of management who dreams up the crap that they make and the union and their workers who do a poor job of executing the weak designs. We used to be known as the innovators and the Japanese were the copiers. Now the tables ate turned. The Japanese are the ones bringing exciting new products and technologies to market and we struggle to find a way to sell a shoddy copy of it or none at all. Where are the proud US brands? It is time to see that the Emperor has no clothes, stop making excuses and get on with rebuilding a quality manufacturing base. We don't have to compete with China. Consumers don't want the cheapest products; they want value. I bet you don't drive the cheapest car available, wear the cheapest cloths or eat the cheapest food so let's stop pretending that we have to be able to compete with the 3rd world. Make quality products at fair prices and people will buy them happily. Try to complete with the 3rd world and you will become the 3rd world. They keys are investments in training and education, new productive capital, labour agreements that work for workers and their employers and learning what America is good at and specializing in being the best in the world at it.
at 17:25 on June 3rd, 2008
Thanks to you both for your excellent comments, I truly appreciate both your points of view.
North American Automakers have pissed off consumers somewhat when it comes to warranty issues, and that can be a sticking point. I bought a New Cadillac Escalade last year, recently the power steering pump grenaded all of a sudden as I was approaching a crosswalk with kids crossing at 20kmh. Normally that is not a problem, when the vehicle is moving you still have steering, until I realized GM in their infinite wisdom had tied the power steering into the power braking system as well.
Bottom line, I had severely limited braking and it is a good thing my horn was not tied into my power steering as well or there would be 5 dead children at that crosswalk, a crosswalk my Escalade crossed over by 10 feet even with my foot down on the floor on the brake. You would not believe the parents who were outraged at me. I got out of my Escalade apologised profusely, the parents saw the power steering fluid everywhere and though really, really pissed understood it was not intentional.
My vehicle was towed to a nearby garage , who informed of the General Motors power steering and braking symbiotic engineering disaster. The gear which fastens to the power steering shaft which is part of the power steering Pulley came off. It has been said the power steering assembly had been outsourced to Mexico and shipped to Texas where my Escalade is built and assembled.
A day later to the tune of close to $1400.00 I was back on the road. A GM mechanic the garage called informed the garage(they are friends apparently) why it failed is because GM use a light duty minivan power steering assembly instead of a heavy duty rated power steering assembly for a 1/2 ton truck, and verified this to me by the exact part numbers for both models. Now I cannot provide proof, but when I brought it to the attention of GM, after a series of voice mails, song and dances. I was told this is not so.
I counted that my vehicle had less than 60K on it, and they said sorry~~!
I do a lot of driving into the interior with high mountain winding roads with 3,000 foot drops, if this had failed during highway speeds, Barry Artiste would not be writing this story.As for Japanese Makes my wife at the time, went through hoops and whistles with Honda when he brand new Honda, blew a rod, due to a faulty oil filter from a Honda service centre, after 5 months or wrangling and writing Honda in Japan, she got a new engine. The Canadian Honda were no help what so ever.
So both have their detriments, and as for cheap labour, apparently there is a wage war between India and China on who can provide the cheapest labour and North American Manufacturers are gleefully awaiting to award to the Lowest bidder.
My Dad, always said, "You get what you pay for" , By the way Ford Canada is ramping up production and may hire on those GM workers let go, so that is a saving grace. Ford do not seem to be suffering in all this, just GM. Ford may soon be known as Ford is Job #1.
Again, I thank you both for your comments and points of view. I truly believe no one has ever compalined about Quality! Something I think you can both agree is sorely lacking in our North American Industry, and we need to get it back! Damn the competition, their lower quality makes North American industry follow suit, and last time I checked, we never took a back seat to any country when it came to innovation , Quality and Workmanship, until outsourcing and North American consumers looking for the lowest price forced us to !
at 18:01 on June 3rd, 2008
Valid points Barry but I disagree that "North American consumers looking for the lowest price forced us to !". That is not true. Some consumers who are not educated about the value of spending a little more for a quality products may buy the lowest price cars. That accounts for Kia and Hyundai but lots of our consumers are buying $40k Toyotas rather than $40k Buicks. Lots of expensive cars are being sold. They just aren't being made by GM, Ford and to a lesser extent Chrysler. Another exapmle that people will buy quality....the IPhone. A truly amazing piece of technology and one of the most expensive cell phone you can buy and they are selling like crazy! As a metter of fact Apple is one of the few American companies that can truly call itself a successful innovator. They sell top quality and people line up to pay more for it.
I don't tyhink you are being fair to the North American consumer. Yes, a small percentage will always bey cheap crap; they always have. But most consumers, once you show them the value built into the slightly more expensive product, will make the smart choice and pay a little more. Don't paint us all as Busch Lite drinking, Mc Nugget eating, KIA driving slaves to discounts.