Althouse: "Come the revolution, we'll own that place."

January 31, 2010

"Come the revolution, we'll own that place."

A union dream achieved... and turned to ashes.

111 comments:

Robin said...: And the moral of this story? When the heroes become the villains the rewards slip through your fingers. Oh, yeah--and power corrupts everyone.; 1/31/10, 9:29 AM
former law student said...: The moral of the story is that American labor unions are a spent force. Attempts in the wake of the Citizens United decision to equate corporate power to union power to sway hearts and minds are just farcical. Your Chevies are made in Mexico these days.; 1/31/10, 9:32 AM
AllenS said...: But today a "For Sale" sign hangs from the resort, which has required more than $25 million in subsidies from the union's depleted treasury over the past five years.

Sounds like they could use some stimulus money.; 1/31/10, 9:34 AM
KCFleming said...: This comment has been removed by the author.; 1/31/10, 9:34 AM
KCFleming said...: "A union dream achieved... and turned to ashes."

The epitaph for every collectivist utopia, where the Plato-Rousseau-Marxian ship of ideals crashes on the rocks of economic reality.

"For the UAW, the future looks particularly bleak. Manufacturing jobs continue to shrink. New factories are mostly locating in the right-to-work South, bypassing Michigan, Pennsylvania and other states where union influence is still disproportionate to its representation of the work force."

An object lesson in how to kill the goose that lays golden eggs.; 1/31/10, 9:36 AM
former law student said...: When assigning blame for Detroit's troubles, consider that GM management decided what cars should be built; the UAW members merely assembled them.; 1/31/10, 9:37 AM
KCFleming said...: "Your Chevies are made in Mexico these days."

But at least the unions were able to say no to wage concessions.; 1/31/10, 9:38 AM
AllenS said...: I wonder what fls drives.; 1/31/10, 9:38 AM
MayBee said...: Michigan needs that right to work law. They are only going to attract new manufacturing companies if the Federal government keeps intervening.; 1/31/10, 9:42 AM
KCFleming said...: "consider that GM management decided what cars should be built; the UAW members merely assembled them."

Merely assembled them at a prohibitive cost, and according to byzantine rules that obviated adopting lean production methods.

That is, the labor became uncompetitive, and they priced themselves out of the market.; 1/31/10, 9:46 AM
former law student said...: what fls drives

Until this summer, a 95 Saturn. It still ran great, but we needed a wagon, which Saturn no longer made.; 1/31/10, 9:47 AM
JAL said...: Errr ... MayBee?

They are only going to attract new manufacturing companies if the Federal government keeps intervening.

quits intervening?; 1/31/10, 9:48 AM
AllenS said...: I wonder what fls drives.; 1/31/10, 9:49 AM
former law student said...: Merely assembled them at a prohibitive cost, and according to byzantine rules that obviated adopting lean production methods.

Toyotas and Hondas are cheaper than Chevies? Where do you live?

And have you ever seen a car production line in the past thirty years?

At least do some rudimentary research before pontificating.; 1/31/10, 9:50 AM
KCFleming said...: Luckily, the smart new owners of GM, team Obama, are closing Saturn.

Heckuva job, Barry!; 1/31/10, 9:50 AM
Peter V. Bella said...: I guess Mr. Reuther was never a student of history. Revolutions are temporary. Once the goal is achieved they are supposed to die.

The Labor Movement is dying a too slow death. It's only goal is to keep the big bucks flowing into the hands of the leaders. It is only about the money.

wv:persh=cross breed between perch and shad. Used in fish tacos.; 1/31/10, 9:51 AM
former law student said...: A subcompact wagon. I wanted to buy either a Focus wagon or a Saturn wagon, but within the past five or so years Detroit management decided to discontinue them.; 1/31/10, 9:51 AM
The Drill SGT said...: ""Come the revolution, we'll own that place.""

Socialist Thugs then.

Socialist Thugs now.; 1/31/10, 9:53 AM
former law student said...: Luckily, the smart new owners of GM, team Obama, are closing Saturn.

The old owners turned Saturn into just another brand name. GM assembled Opels in the US and rebadged them as Saturns and Pontiacs. Planning to sell Opel meant there would be no product for Saturn.; 1/31/10, 9:54 AM
Peter V. Bella said...: Luckily, the smart new owners of GM, team Obama, are closing Saturn.

Yeah, heck of a a job. They are closing Saturn just when the company started producing decent cars.

wv:picalim=what the Souhtern doctor told an patient before amputation.; 1/31/10, 9:54 AM
KCFleming said...: "Toyotas and Hondas are cheaper than Chevies? Where do you live?
They are cheaper to own over the life of the car. Therefor they represent a greater value. The initial price is higher, the lifetime price is lower. That's why so many Japanese cars are sold, and why the US automakers have fallen behind.

"And have you ever seen a car production line in the past thirty years?"
Just the ubiquitous videos and narratives on manufacturing when learning about Deming and Lean and Six Sigma and The Toyota Way.
Why?; 1/31/10, 9:54 AM
AllenS said...: I wonder what fls drives.; 1/31/10, 9:55 AM
Jason (the commenter) said...: Robin: Oh, yeah--and power corrupts everyone.

I think it's more the case that power attracts the corruptible. That's why I'm always leery of politicians, no matter how populist and reform-minded they seem.; 1/31/10, 9:56 AM
Meade said...: former law student said...
what fls drives

Until this summer, a 95 Saturn. It still ran great, but we needed a wagon, which Saturn no longer made.

Darn! I coulda sold you my 2000 Saturn wagon.; 1/31/10, 9:57 AM
MayBee said...: JAL-"quits intervening?"

What? Are you saying you don't think the Federal government is intervening on behalf of unions right now, that they don't intend to in the future (card check, health care loopholes), or that they don't intend to stop?; 1/31/10, 9:58 AM
former law student said...: The initial price is higher, the lifetime price is lower.

The costs of assembly are captured in the initial price, not the lifetime price.; 1/31/10, 9:59 AM
ricpic said...: Come the revolution
We'll kill the golden goose:
First we'll deflesh it,
Then huddle in its caboose.; 1/31/10, 9:59 AM
former law student said...: Meade, I appreciate it, but here we buy new cars and drive them for a decade or so. Something already ten years old does not appeal. The 95 Saturn simply refused to die, requiring only normal maintenance.; 1/31/10, 10:02 AM
Anonymous said...: "consider that GM management decided what cars should be built; the UAW members merely assembled them."

Read an article last year(?) of an interview with some UAW members, one of whom said they all knew the cars they were building were junk and uncompetitive with imports, but instead of demanding that management design better cars, the union just demanded higher wages and benefits.

There is plenty of blame to go around for the carnage in the American automotive industry. Management sucked. Unions were uncooperative and greedy. Both were shortsighted.

Throw in a hostile us vs. them mentality underlying the entire relationship between labor and management and you get Detroit circa 2010.

What I find surprising isn't that the Big 3 failed, but that they survived as long as they did.; 1/31/10, 10:03 AM
jeff said...: So did everyone in the UAW have access to this place? I cant tell from the article. It just said it was a favorite retreat for high ranking union officials. When I lived in Mansfield Ohio, I watched the steelworkers do their absolute best to drive the only mill out of business. Back then steel was cheap and legacy costs were high. Didnt matter to the union.; 1/31/10, 10:04 AM
MayBee said...: Oh JAL- I see what you are asking.

No. I meant Michigan without a right to work law will only be able to attract new manufacturers if the Federal government continues to intervene.; 1/31/10, 10:05 AM
KCFleming said...: "The costs of assembly are captured in the initial price, not the lifetime price."

Only for the automaker.

My costs are incurred over the lifetime of the car, which explains why some things that seem more expensive initally are a better value in the long run.

But you are already aware of that, and are merely refusing to concede that unions screwed the pooch, or at least contributed to pooch-screwing.; 1/31/10, 10:07 AM
Meade said...: "drive them for a decade or so"

Exactly my approach, fls.

But come spring, some lucky buyer will own a great used car with only 100K miles on it, air, leather, and a nice bike roof rack.; 1/31/10, 10:09 AM
Ritmo Re-Animated said...: Thanks to Pogo, I've learned that one can draw a straight line from Plato to Marx, that "economic reality" in 2010 America had nothing to do with bad regulation of Wall Street, and that managers and directors at the Big Three bore no responsibility for the horrible quality of cars they decided to produce from the 1960s onward and the ensuing loss of market share they saw.

Have I missed anything, Pogo?; 1/31/10, 10:10 AM
KCFleming said...: "Have I missed anything, Pogo?"

Just everything, Ritmo, as usual.
Just everything.; 1/31/10, 10:14 AM
Ritmo Re-Animated said...: What I find surprising isn't that the Big 3 failed, but that they survived as long as they did.

No doubt.

The disconnect on this issue between Americans who have little connection to Detroit and those of use who've seen the devastation it wrought from the inside out is staggering.; 1/31/10, 10:14 AM
Big Mike said...: Like everybody else, the unions needed to evolve in the face of new competition. But they didn't. Perhaps they couldn't.

To compete in manufacturing in this century the workers and management both have to understand that both sides have to cooperate to produce a competitive product. And the firm has to be light on its feet. The workers have to be prepared to adjust and adapt, with little notice. Indeed, the workers have to cooperate with management to figure out how to adapt.

The old-line unions are always about us vs. them. Cooperate? Not in your life. The work rule books they have are inches thick, and take months of negotiation. And the union leadership can't even conceive of changing and adapting.

They were the Tyrannosaurs of their day. But their time is just as much past as the Cretaceous.

And, FLS, you're completely right that the union workers didn't do the design and marketing. But if you take a look at quality ratings, particularly if you find a way to get quality ratings from the 70's through the mid 1990's, you'll see that the union members assembled those cars in a crappy fashion. By the end of the 1990's the need for quality assembly had penetrated, and my 2000 Dodge is still going strong. But it's too late for them.; 1/31/10, 10:14 AM
Ritmo Re-Animated said...: Just everything.

Thanks for the rhetorical response, Pogo. I hope it really strengthens your case -- at least in your own mind. Which is important.; 1/31/10, 10:17 AM
KCFleming said...: It is passing strange that the auto workers actually assembling the vehicles magically "bore no responsibility for the horrible quality of cars [management] decided to produce".

At the Big three, they spelled "quality" with a capital K.; 1/31/10, 10:18 AM
KCFleming said...: "Thanks for the rhetorical response, Pogo."

Merely replying in kind, Ritmo.; 1/31/10, 10:19 AM
jeff said...: Ritmo, what are you expecting? You throw out what is either a straw man argument, or the result of a total lack of reading comprehension. Why do you think either is deserving of any other type of response?; 1/31/10, 10:20 AM
Ritmo Re-Animated said...: How many people have you known in management at the Big Three, Pogo?

You obviously seem to think you have personal connections throughout the entire labor force of that industry.

When you're interested in information you can't get through propaganda, let me know.; 1/31/10, 10:21 AM
KCFleming said...: Big Mike:
Spot on.

It was a shared delusion between automaker management and unions, a folie à deux.; 1/31/10, 10:22 AM
MayBee said...: The disconnect on this issue between Americans who have little connection to Detroit and those of use who've seen the devastation it wrought from the inside out is staggering.

I have close close close connections to Detroit, and used to work as a consultant to GM. What is it you are wanting to say in the above paragraph?; 1/31/10, 10:24 AM
chickelit said...: I'm finding a disconnect between the image of Walter Reuther projected here by Finely:

"Reuther, who made the place his personal retreat, died in a plane crash on his way to Black Lake in 1970. His ashes are scattered on the grounds."

and that by William Manchester:

"While other labor leaders tended to become voluptuaries, Walter was recognized as a true ascetic--a man who shrank from pleasures, sometimes from normal conviviality, and always from ostentation." The Glory and the Dream, page 390.

Surely this Reuther character deserves a more balanced historical presentation.; 1/31/10, 10:25 AM
Ritmo Re-Animated said...: Which part of Pogo's initial comment did I fail to comprehend, Jeff? He's the one who speaks of a "Plato-Rousseau-Marxian ship of ideals", which, if that's not a rather interesting if novel construction, I'd like to know where he got it. He's the one who complained incessantly (on every other thread) about the administration's moves as if "economic reality" in 2009 was entirely of their own making.

I'm just contextualizing all that in light of the ignorance regarding both sides that no one except maybe Mike and (thankfully) Dogwood care to provide correctives for.; 1/31/10, 10:26 AM
KCFleming said...: "How many people have you known in management at the Big Three, Pogo?"
Nonresponsive logical fallacy, Appeal to Authority.

"You obviously seem to think you have personal connections throughout the entire labor force of that industry."
Nonresponsive logical fallacy, Appeal to Ridicule.

"When you're interested in information you can't get through propaganda, let me know."
Ditto.; 1/31/10, 10:27 AM
traditionalguy said...: The Labor Unions are creatures of the abuse of one group of people by another, just like the Attorneys are a creature of that same tendency. Treat people with courtesy and fair compensation and no unions ever are voted into the workplace. Treat your neighbors with respect and honor your promises and no Attorneys will need to enter into your life. But people are not nice when money is there to be won. So both Unions and Attorneys have a role in balancing the system like the Constitution uses a system of checks and balances on use of political power. The end run around these balances in the system has been to get the labor shipped over to places with desperate poverty that will work for food. I am not a socialist, but I am a realist about the international flow of capital. The current posture will mean that this oligarch's resort will soon cater to Chinese oligarchs who will own it. Any body ready to drill here and drill now?; 1/31/10, 10:31 AM
Big Mike said...: @MayBee, I think he's trying to suggest that we should all go buy American-built cars out of pity for Detroit.; 1/31/10, 10:31 AM
Ritmo Re-Animated said...: I have close close close connections to Detroit, and used to work as a consultant to GM. What is it you are wanting to say in the above paragraph?

What I'm wanting to say is to ask if it was you, then, who advised directors to use machinery past their intended life. I'm wanting to ask if it was you who convinced someone I knew to buy a Toyota in 1968 because the GM dealer denied that the driver's side door panel wasn't actually a different shade of paint from the rest of the car.

Was that your doing, Maybee?; 1/31/10, 10:31 AM
KCFleming said...: "He's the one who speaks of a "Plato-Rousseau-Marxian ship of ideals", which, if that's not a rather interesting if novel construction, I'd like to know where he got it. "

Not my invention, Ritmo. Palladian spoke of it here only yesterday. It's rather well-known, and there are several books on the subject. Thomas Sowell's Vision of the Anointed is a useful starting point.; 1/31/10, 10:32 AM
Anonymous said...: the unions needed to evolve in the face of new competition.

Management and the unions needed to evolve together to save the industry but it didn't work out that way.

Management appeared to have its collective head in the sand until it was almost too late.

Unfortunately, once management had its "Oh Shit" moment, it then had to convince labor to get on board, which took years.

By the time management and labor were singing from the same hymnal (not sure they ever got on the same page) it was too late.

Adapt or die. The Big 4 (Ford, GM, Chrysler & UAW) couldn't, so they did. The amount of economic wealth and human lives destroyed as a result is simply staggering.; 1/31/10, 10:32 AM
Ritmo Re-Animated said...: Appeal to Authority.

Bullshit. Appeal to authority applies to the argument, not to the evidence that informs that argument.

If someone has access to facts, and they assert those facts as pertinent to the argument, they are not appealing to any authority that the other person should somehow be intentionally deprived of if only they chose to (or cared to) find out some of those facts on their own.

See the same with your accusation of appeal to ridicule.; 1/31/10, 10:36 AM
bagoh20 said...: All those jobs lost forever, all that American business, energy and innovation gone for the sake of union bosses and overpaid union employees. They voted in their own self interest.; 1/31/10, 10:36 AM
Anonymous said...: ...the GM dealer denied that the driver's side door panel wasn't actually a different shade of paint from the rest of the car.

LMAO! I remember sooo many stories like this while growing up in the 1970s and early 80s.; 1/31/10, 10:37 AM
Wince said...: former law student said...
what fls drives

Until this summer, a 95 Saturn. It still ran great, but we needed a wagon, which Saturn no longer made.

Reading between the lines, sounds like a "Whoop de do for my Subaru!"; 1/31/10, 10:38 AM
AllenS said...: EDH, I don't think he wants to talk about it.; 1/31/10, 10:39 AM
Big Mike said...: @Dogwood, you're three-quarters right. Ford actually posted a profit. (Mirable dictu!) Me, I'm kind of lusting after a Mustang myself.; 1/31/10, 10:40 AM
Ritmo Re-Animated said...: I actually found that thread from yesterday somewhat interesting. It was the first time I had seen an interest in the philosophical underpinnings of Western (political) thought discussed at length here. I felt proud of and happy for you guys.; 1/31/10, 10:40 AM
MayBee said...: Was that your doing, Maybee?

No.I worked with the guys on the line to try to develop a system to get their materials from suppliers in a faster way, to eliminate waste in the ordering and manufacturing process.
So now answer my question, please.
I'm only asking you to clarify what you said. I'm trying to figure out what you are trying to say about knowing people, and how devastating it is (I agree!), and what that has to do with this post and the comments.; 1/31/10, 10:40 AM
KCFleming said...: "I felt proud of and happy for you guys."

Aww, the Master approves!
Yet strangely you were unaware of the connection I posted?
Feh.

Your logical fallacies are a "best fit", owing to the fact that most of them are just evasive bullshit or ad hominem musings devoid of argument.; 1/31/10, 10:44 AM
ricpic said...: The trick has always been to buy a GM, Chrysler or Ford car made on Tuesday, Wednesday and Thursday, not drunk Monday or Friday. That's the trick. But how to work that trick has always been the impossible task.; 1/31/10, 10:45 AM
KCFleming said...: I mean, shit Ritmo, can't you even form a good logical fallacy? =); 1/31/10, 10:46 AM
ricpic said...: drunk and drugged. Wouldn't want to shortchange the noble woikers.; 1/31/10, 10:47 AM
Anonymous said...: @Dogwood, you're three-quarters right. Ford actually posted a profit. (Mirable dictu!) Me, I'm kind of lusting after a Mustang myself.

True, but they literally mortgaged the entire company to secure the necessary cash to continue operating and have enormous debt to work off.

While they still have a heart beat, they are not out of intensive care yet. They have to innovate, continue improving quality, and become less dependent on F-150 sales to secure long-term survival. All while reducing debt and restructuring their manufacturing processes and infrastructure.

And yeah, I hear you on the Mustang. Personally, I'm lusting after the new 400+ HP 5.0 engine. Yeehaa!; 1/31/10, 10:49 AM
Ritmo Re-Animated said...: I'm only asking you to clarify what you said. I'm trying to figure out what you are trying to say about knowing people, and how devastating it is (I agree!), and what that has to do with this post and the comments.

I hope my clarification was already sufficient. I don't have endless stories, but the stories I'd heard were enough to convince me that too many people had had enough experiences with poor quality to convince them to stay away from those brands and permanently harm market share. So, what it has to do with the post and these comments is the well-known but often denied understanding that management made just as many bad moves as did labor. Again, I'm not trying to deny anyone here an opportunity to claim that organized labor is and was just a conspiracy to bring down America and turn it into a Soviet satellite; but I do think this provides a constructive moment to be reminded that management in America makes bad decisions all the time, sometimes even on a scale seen at the Big Three.

Of course, such reminders have a tendency to make some people feel deprived of their master script, from which all other events in America and the world must be seen as mere subplots. But so be it.; 1/31/10, 10:50 AM
Ritmo Re-Animated said...: This comment has been removed by the author.; 1/31/10, 10:55 AM
KCFleming said...: "to be reminded that management in America makes bad decisions all the time, sometimes even on a scale seen at the Big Three"

That is what Joseph Schumpeter called "Creative Destruction", which is an important path to improved standards of living.

Union bullying, like government takeovers, kill creative destruction.; 1/31/10, 10:56 AM
Ritmo Re-Animated said...: Your logical fallacies are a "best fit", owing to the fact that most of them are just evasive bullshit or ad hominem musings devoid of argument.

I mean, shit Ritmo, can't you even form a good logical fallacy? =)

Ok, ok! I get the light humor. But Dogwood seems to have had similar experiences. How many people have to agree on what they've seen before they're all just appealing to nothing other than their own personal authority?

Do you wish to deny management's role and responsibility in decisions affecting quality at the Big Three? The consumers don't. The consumers didn't. The industry didn't.

Is management being absolved of something that you would never think to absolve labor of?; 1/31/10, 10:57 AM
KCFleming said...: "Do you wish to deny management's role and responsibility in decisions affecting quality at the Big Three?"

Not at all.
That's why those companies needed to die. There few good decisions could have survived in new companies.

Now we just have a big bloated zombie.; 1/31/10, 10:57 AM
Ritmo Re-Animated said...: Not at all.
That's why those companies needed to die. There few good decisions could have survived in new companies.

Now we just have a big bloated zombie.

And that zombie may yet continue to walk right back into its grave. The only question is how high you want unemployment to go in the meantime.; 1/31/10, 10:59 AM
kentuckyliz said...: Check the sticker inside the door panel.

I remember the 70s when the door panels routinely had beer bottles and ciggie butts in them.

"Come the revolution" is trickier with global capital and labor markets, JIT mfg, integrated supply chains, cheap telecoms and shipping.

We have regulated ourselves into oblivion, mfg wise. We're all service workers now.

Good luck trying to organize and trigger that GLOBAL revolution...across multiple national boundaries, language groups, governments and regulatory schemes.

Workers of the World, Untie!; 1/31/10, 11:00 AM
Phil 314 said...: What I don't get, with this talk about jobs, automotive jobs, why are these jobs so under-appreciated?; 1/31/10, 11:01 AM
kentuckyliz said...: My BIL's dad was a GM exec, locomotive division. BIL's BIL is management in the automotive mfg division. What do you want to know?; 1/31/10, 11:02 AM
Anonymous said...: I rode in a friend's fairly new Mustang the other day and my overall impression was plastic, plastic, plastic. It seemed more like a toy than a car. I was surprised, because from a distance it did look good.; 1/31/10, 11:03 AM
former law student said...: Pogo, you claim familiarity with Deming, yet he taught:

The supposition is prevalent the world over that there would be no problems in production or service if only our production workers would do their jobs in the way that they we taught. Pleasant dreams. The workers are handicapped by the system, and the system belongs to the management. From Out of the Crisis

Regarding the Reuther Family Education Center at Black Lake:

During the week and on weekends, lodging at the center is available to UAW members and UAW guests. For more information or for reservations, call toll-free 1-866-829-4653.

http://www.uaw.org/about/where/onaway.cfm; 1/31/10, 11:04 AM
MayBee said...: So, what it has to do with the post and these comments is the well-known but often denied understanding that management made just as many bad moves as did labor.

OK.
Is there anybody here saying GM was a terrific, well-run company?
What disconnect are you talking about?
I recognize that GM was poorly run. I also recognize that the unions were poorly run (as the story in this post illustrates), and union workers too often had the antiquated mindset that they owed their jobs to the UAW rather than GM. They felt themselves to be in a constant fight with "management", not part of a team.

So...
What do you think of a right to work law for Michigan?; 1/31/10, 11:05 AM
Anonymous said...: That is what Joseph Schumpeter called "Creative Destruction", which is an important path to improved standards of living.

Creative destruction is driven by innovation. The new overtakes the old and entrenched.

Incompetent management and uncooperative labor make companies susceptible to creative destruction, but their incompetence and uncooperative behavior is not the creative destruction Schumpeter talked about.; 1/31/10, 11:06 AM
KCFleming said...: Deming spoke of system change, fls, which needed to involve cooperation between mgmt and labor, not the same old adversarial approach.

All employees, from exec down to janitor, bear responsibility for the final product or service.

Not either, or but both, and.; 1/31/10, 11:07 AM
KCFleming said...: "their incompetence and uncooperative behavior is not the creative destruction Schumpeter talked about"

Not quite true. Failure to respond adequately to competition, a resistance to change, to innovation, involves all the usual human foibles, including managerial incompetence and uncooperative employee behavior.; 1/31/10, 11:11 AM
Ritmo Re-Animated said...: I think it's probably a good thing you recognize that an us-versus-them mentality between management and labor is almost always counter-productive, Maybee.

So...
What do you think of a right to work law for Michigan?

I think it would be too late to have much impact. At least on the auto industry. No one in Detroit who is motivated by anything other than nostalgia for the auto industry seems to see a revival on the horizon. Some seem to think that any remaining industrial labor force could be retrained to manufacture alternative energy products. But I tend to see that as a bit too simplistic as well. The problem is that the place is depopulated, it never evolved as a modern city should (complete with public transportation, that is), and... and.... well, the momentum is lost. Like the anti-socialists understand, these things can't be planned. There are too many human forces that would have to align right in order to bring about Detroit's actual renaissance, and I don't pretend to know them all.

If you want to change the laws so that they reflect those in place in the sunny sun-belt, I don't see much of a problem. They seem fair. And conducive to a stronger, more modern industry. But whether they will turn Detroit around, so to speak, is anyone's guess.

Only Detroit can turn itself around and I gave up on that place long ago.; 1/31/10, 11:16 AM
Ritmo Re-Animated said...: Plus, grey skies for half the year is a pretty tough selling point to overcome, but Chicago seems to have held up ok.; 1/31/10, 11:19 AM
Trooper York said...: Detroit was the never the same since Ty Cobb retired.; 1/31/10, 11:21 AM
Ritmo Re-Animated said...: Detroit was the never the same since Ty Cobb retired.

Yo, fo' real...

But 1984 wasn't so bad.; 1/31/10, 11:22 AM
Trooper York said...: The book or the baseball season?; 1/31/10, 11:27 AM
Anonymous said...: Not quite true. Failure to respond adequately to competition, a resistance to change, to innovation, involves all the usual human foibles, including managerial incompetence and uncooperative employee behavior.

True, all the above are reasons why companies fail, but the economic concept of "creative destruction" states that new, innovative products or processes destroy the old.

All of the characteristics you mentioned make a company susceptible to creative destruction, but if there is no innovation in product or processes, then even old, incompetent companies can cling to life for decades.

In other words, creative destruction is caused by something new being introduced into the system. In Detroit's case, it was new competitors with new products and innovative manufacturing processes.

If the new competitors didn't exist, then GM & Chrysler would be profitable businesses because consumers wouldn't have anywhere else to go.

Their incompetence set the stage, but it was the creativity of the competitors that ultimately pushed them over the edge.

In short, creative destruction.; 1/31/10, 11:29 AM
Steven said...: The "Detroit's management is incompetent" theory got a pretty thorough test already, when Daimler took over Chrysler. The same people who run Mercedes-Benz were making the decisions for Chrysler for almost a decade, and Chrysler continued to suck.

Truth is, a Big Three automaker could make a perfect clone of a Honda Accord LX (MSRP $21,055). The trouble is, they'd have to charge $24,000 for it, due to retirement obligations and to inefficiencies in production caused by work rules, both costs imposed by union contracts. Nobody is going to pay a three thousand dollar premium over a Honda for an identical car.

So the Big Three cut the price by cutting the quality, both in design and materials. But nobody's going to pay $21,055 for a car inferior to an Accord when they can buy an Accord. So the Big Three cut the quality even further, in design and materials, until they can undercut the Accord's price, because people on a tight budget will buy a lousy car if the price is low enough.

These cheap, compromised cars then develop a deservedly poor reputation—and the supporters of the UAW bellyache that it's management's fault for telling the UAW workers to assemble such lousy cars.; 1/31/10, 11:30 AM
MayBee said...: Thanks for your response.

I think it would be too late to have much impact. At least on the auto industry.

I agree. I'm thinking about new manufacturing companies moving in.

It is interesting that the automakers created, in a large part, the population of Detroit by bringing displaced workers from Appalachia to Detroit. For generations, this country grew by people moving to the new job centers from the old ones.
For whatever reason, and I see this in New Orleans too, politicians have recently decided they must intervene to keep people in certain geographic locations even as the jobs leave.

GM wasn't allowed to die a slow death- or downsize gracefully- in part because they had to hold on to more workers than they needed. In hindsight, those workers might have been better off losing their jobs in a better job (and housing) market. They could have relocated, and Detroit could have lost population gracefully.
Now it's a house of cards, each being propped up with help from the government. Help which could, justifiably, go to other people in other areas who are personally just as devastated as any worker in the auto industry.; 1/31/10, 11:32 AM
Ritmo Re-Animated said...: Both. (Ha - "wasn't so bad") I didn't read 1984 until sometime after 1990. We did read Animal Farm, though, as high school freshmen, and that was a good taste of Orwell to start with.

I remember the newscasters on New Year's Day in 1984 making a big deal out of the year... pretty interesting thing for a fourth-grader to hear about.

After the Tigers the Pistons did some interesting things - and gave the world Madonna's ex-boyfriend and Dr. Drew's Celebrity Rehab cast member, Dennis Rodman. Interesting times.

But really it comes down to the sun. You can't ever really replace a lack of sunlight. It's always sunny in Brooklyn too, I hear.; 1/31/10, 11:32 AM
former law student said...: Why did Parke-Davis and Upjohn get bought out and their Michigan operations closed? The UAW?; 1/31/10, 11:48 AM
Tibore said...: This is something the UAW spent its money on?

Personal story: When I was in college, I worked for the campus's music theater. This was student work-study and part time so the team wasn't unionized. Anyway: Occasionally, we'd get offers to help round out the crews for rock concerts in nearby big cities. Pay was pretty good. When I asked about the gig, they laid out the responsibilities, the pay, and the amount that was taken out as the Union fee.

Waitaminute, I said, I'm not part of the union. Doesn't matter, I was told, the fee gets deducted regardless.

If I remember correctly, the argument was that this was a "Union gig", and compensation was negotiated as such. Maybe stage electricians were used to that, but it bothered me that I would be paying a good amount of money to an organization I wasn't part of for benefits I wasn't eligible for. That soured me on the notion of joining the union, especially given that this was not my career path.

What really disturbs me is that such fees charged to nonmembers are not unheard of:
"State Union Agency Fee Irks Some State Employees".

"Starting this month, the state is going to start deducting what are called "Agency Fees" from employees who are not members of the State Employees Association.

These payments represent what the union calls the fair share of the costs of negotiating a contract with the state.

... Non-union workers have to pay the fee to the State Employees Association, or SEA, because of a provision in the union's contract with the state.

That contract says when 60 percent or more of state workers belong to SEA, New Hampshire agencies are obliged to collect a fee from all workers who benefit from the contract.

... And paying the fee does not mean the employee automatically becomes a union member."

I could even accept the notion, albeit reluctantly, if the fee were indeed a step towards union membership. But when it's not... it really, seriously bugs me.

So, what does that have to do with this story? Well, simply put: It's illustrative of arrogance and abuse. Membership is forced upon you if you want employment in a certain job, and the penalty for not being a member is imposed. There are plenty of good reasons to join a professional union, for example, stage electricians: You need a certain level of expertise to be a good stage worker, and the Union helps maintain that standard. That's a good carrot. There's no need for such a puntative stick, especially for grunt work not requiring special skills. But the union monopolizes the entire backstage anyway... and it seems as though in other trades, it wants to be the sole voice, regardless of whether the individual employee consents or not.

I can still deal with this - employees can be considered a single group, after all - but the union in turn must demonstrate a dedication to not abusing it's powers. And that is where unions fail. I see power being abused on both the small scale and the large. I see more parallels between my personal experience and the linked story than differences. Unions want to dominate. And they turn laudable purpose into a power trip. $25 million dollars worth of subsidies for a freakin' resort. Just out of curiosity, did the rank and file union membership have to pay to go to it? And did the union leadership?

Abuse of power. That's what's common to my experience as well as the linked story. I would've only been out $200 out of a $600+ check for two days work, but again: All fee, no benefits, and no choice. When an autoworker is in the same boat, would they in turn be happy to see that a $33 million resort is something the UAW spends their money on?; 1/31/10, 11:49 AM
Ritmo Re-Animated said...: I can't say that Labor is looking very good in all this. The thread allows the decisions on the part of management to look like inevitable reactions. But if you want the history of why labor organized, especially in relation to the auto industry that Henry Ford built right in Detroit, try here.

And also, at some point you may reach the inevitable conclusion that health care costs need to come into line with where they're at in the countries that these foreign companies are chartered in - assuming you want America to be able to compete with them.; 1/31/10, 11:55 AM
Anonymous said...: MayBee,

I think a right-to-work law is essential for Michigan's eventual recovery, but still no guarantee of a revival.

Manufacturing companies are very reluctant to locate in a city/state with strong unions. When scouting locations for new facilities, companies consider many factors, including the number of attempts unions made in the previous year or two to organize employees at existing companies.

Strong unions mean a hostile, combative relationship with employees, and the last thing companies want to do is fight with their employees while fighting off global competitors.

All that being said, even if Michigan approved a right-to-work law today, the unions are still strong enough to scare companies away.

The UAW will probably have to die, or lose substantially more influence than it has already, before manufacturers will view Michigan favorably.

A century's worth of antagonism between management and labor will take awhile to work off.; 1/31/10, 11:58 AM
save_the_rustbelt said...: So the editor of a Detroit paper is thrilled about the economic collapse in Michigan?

Finley gets paid to write right wing junk (way to the right of me).; 1/31/10, 12:07 PM
save_the_rustbelt said...: Forty years of bad management.

Forty years of overreaching unions pushing featherbedding and endorsing sabotage.; 1/31/10, 12:09 PM
EnigmatiCore said...: "consider that GM management decided what cars should be built; the UAW members merely assembled them"

Yes.

And the problem was not with what cars were being built.

The problem was with the quality of those cars (namely, how well they were assembled) and with the cost of them relative to foreign cars.

The foreign cars of the same price were of significantly higher quality. The foreign cars of the same quality were much cheaper.; 1/31/10, 12:25 PM
AllenS said...: I have a 1984 Chev 1/2 ton truck. Within 2 years the paint started to fall off of it. Eventually, there was no paint on the hood, cab, and the top of the box. That was not a management problem.; 1/31/10, 12:32 PM
MayBee said...: Dogwood -
Very good points.
Yes, I agree.
Sadly, I see this administration flirting with the idea of prolonging the ability of unions to wield power by creating a falsely competitive environment for them (at our expense).; 1/31/10, 12:39 PM
Automatic_Wing said...: Kind of pointless to try to divide up the blame between labor and management in Detroit. They both recieve an F- for their efforts.

The Wagner Act doesn't come out looking too great, either.; 1/31/10, 12:57 PM
chickelit said...: Levity time!; 1/31/10, 2:30 PM
Freder Frederson said...: Eventually, there was no paint on the hood, cab, and the top of the box. That was not a management problem.

And why isn't a management problem? Granted, it could be poorly applied paint. But it just as easily could be a decision to buy and use a paint that doesn't adhere properly or a process that does not allow for proper curing of the paint.

If the paint had faded--would you blame that on the unions too?; 1/31/10, 2:41 PM
Synova said...: "But if you want the history of why labor organized, especially in relation to the auto industry..."

Well, the problem there isn't that there wasn't real and vital cause to labor organization, but that once organized there can be no declaration of victory because a victory would make the union obsolete. There always has to be an enemy and a cause so once the abuses that lead workers to risk, often enough, being *shot* are taken care of, some new cause and new abuse has to be discovered.

It's the same with just about any social cause that addresses real injustice. Take feminism, or even the civil rights movement. Those goal posts have to be moved and people have to be rallied to something new. Because if anyone said... we accomplished our goals, we can vote, we have legal equality, we have forced safety measures and compensation for those injured on the job...

Then it's over.

With unions, particularly, there's just too much money involved. The unions have huge paid organizations and those workers would be out of a job if they can't justify their continued existence.

The right to work without being in a union is as important as the right to organize.

Perhaps unions would do better to down-size to provide what more workers would actually want (which is usually not to be forced to pay large union dues that are funneled into politics.); 1/31/10, 4:43 PM
Ritmo Re-Animated said...: As long as Taylorism is still alive and well then union over-reach will fully remain just as much in force as ever.; 1/31/10, 6:32 PM
Simon Kenton said...: You know, CAFE standards need to be acknowledged here. There are 3 things Detroit has done pretty well:

Pickups, esp big diesels
SUVs
Muscle cars

Instead of being allowed to do what they can do well, the big 3 have been forced at the cost of massive fines to do what they really suck at: making Subarus to try to bring their fleet average fuel economy up. As mentioned above re the Accord, nobody in their right mind would buy a faux-Accord or a faux-Subaru when you can get a real one, good for 200000 reasonably economical miles. Tilted playing field; how could they possibly win?; 1/31/10, 6:55 PM
EnigmatiCore said...: "If the paint had faded--would you blame that on the unions too?"

The big 3 were owned by different people.

However, their labor was from the same union.

All three had the same problematic results. I look for commonalities.

The union stands out.; 1/31/10, 7:17 PM
Michael McNeil said...: Folks who know Detroit and Michigan today might like to check out what perceptive French visitor to early America, Alexis de Tocqueville, saw and encountered at the city (and Michigan interior as far as Saginaw) 179 years ago in his “A Fortnight in the Wilds” (excerpted from Tocqueville's travel diary, published as Journey to America).; 1/31/10, 9:51 PM
former law student said...: I look for commonalities.

Why not look at the paint GM specified and ordered?

GM traditionally bought paint from DuPont, one of their major investors. GM's largest creditor in bankruptcy, the Wilmington Trust, was founded by T. Coleman DuPont.

DuPont Automotive OEM Coatings Named GM Supplier of the Year – Posted 6/24/08

June 24, 2008

General Motors (GM) recently presented a 2007 Supplier of the Year award to DuPont Automotive OEM Coatings, which provides coatings to major automotive manufacturers globally.

DuPont received a General Motors 2007 Supplier of the Year award for its "contributions to GM's global product and performance achievements." The award acknowledged DuPont for the successful introduction and commercialization of new globally approved technologies. DuPont has provided coatings systems to General Motors continuously for the last 99 years.; 1/31/10, 10:36 PM
Peter V. Bella said...: Thank you Simon Kenton. The government should not have the right to mandate any company to produce anything. CAFE standards, along with the UAW, were significant in the downfall of the Auto Industry.

The United States Government is the biggest enemy of the economy and business. It is time for business to fight back.; 1/31/10, 11:16 PM
Ritmo Re-Animated said...: I'm sure Chinese manufacturers of toys made of lead and milk containing melamine would be quick to agree with you, Peter!; 1/31/10, 11:47 PM
former law student said...: CAFE standards, along with the UAW, were significant in the downfall of the Auto Industry

But John McCain said we have to stop sending $700 billion a year to countries that don't like us very much. CAFE standards are patriotic.; 2/1/10, 12:36 AM
Anonymous said...: A quick glance at Google results indicates peeling paint on early 1980s GM trucks was apparently due to the company's decision to apply paint directly to the steel rather than to a primer coat.

A cost-cutting move that backfired, to say the least.; 2/1/10, 7:56 AM