This is what happens when you build a good product.

[Army_of_One]

Honda to Build New Plants in U.S., Canada
http://www.foxnews.com/story/0,2933,195778,00.html

AND...this is what happens when you don't...

GM Lays Off Several Hundred Employees

http://www.foxnews.com/story/0,2933,189310,00.html

And the unions wonder why jobs are going overseas????

[Outofdodge]

Originally Posted by Army_of_One

And the unions wonder why jobs are going overseas????

rant mode on.

Honda building a plant in Indiana/Ohio/even Ontario is not exactly going overseas. That is overseas jobs coming to America.

Attorneys representing Honda have options to purchase over 1,000 acres of land roughly 15 miles from where I now reside. Indiana's economy is heavily dependent upon manufactoring and there has been a significant loss of those jobs here that have not been made up in the service sector.

I agree somewhat, the United Auto Workers are not blameless in this ongoing market shift (Delphi and GM workers get somewhere around 8-10 paid holidays per year?) and have been unsuccessful in unionizing any foreign owned plant. Honda's US workers get essentially the same wages and benefits as workers in the Big 3 system.(AFL-CIO data btw)
Honda does not have the large committment to retired employees that the big three has.

Three of my sister hospitals are the middle of the Delphi battlefield, and one of those is in a community that has already lost a GM and Chrysler plant. GM just faced a choice and had an *out* to shun a good bit of it's pension and healthcare promises but it did not break it's promises. You might think it should but how do you think the retired military vets would feel if Congress suddenly decided that anyone retiring from the Army after 20+ years would be required to wait until they were 65 to collect that 1/2 pay? Or if you were a service member who retired in 1979 when 1/2 the E-8 pay was like 400/month and all of a sudden did not get cost of living adjustments?

Anyway enough background, while the tremendous committment to retired employees (most but not all union) does burdern Ford, GM, and Chrysler- the variable operating cost per unit is similar to Honda. If you've priced a Honda lately it's not signficantly under priced next to a similar sized GM product.

But pointing to the union as being the entire problem is just plain wrong. The continued decrease in sales has to be borne by the automaker's leadership, who after all these years of getting their asses whipped, continue to engineer automobiles that do not appeal to people. They're dependence on SUV's, pick-ups, and mini-vans left them unable to change gears when gas prices went up. They had the same issue in the 70's when fuel crisis' first appeared and here we are with history repeating itself.

People like to point to the unions for quality problems but the union did not engineer past unreliable engine parts and develop specs for ill fitting trim pieces. Even though US quality seems to be getting better per surveys, they are still unable to develop autos which compete with Honda, Toyota, Nissan etc. GM has lost me for a customer for life based on pass problems and treatment. That wasn't the union's *fault* but people who have been burned more than once don't go back.

Rant mode off.

[Highwayman]

I’ve spent almost thirty years being a union member and I do have my beefs with unions. With that said unions get blamed for keeping costs up and preventing companies from being completive. In reality US companies trying to compete with overseas have to deal with more government regulation and other expenses like unemployment insurance and workman’s comp that also drive up the cost of labor. On the other hand American workers are more productive than overseas workers offsetting the higher wages. It’s easy to blame unions because most folks don’t make the wages and benefits and class envy is used to pit one group against another. (Does tax the rich ring a bell here?) The real truth is that union wages vs. non-union wages doesn’t add a significant cost to the product. The reason is manufacturing has become so mechanized that labor has become an increasingly smaller part of the total cost.

It’s my opinion that companies make stupid decisions. I don’t have a big problem with CEO’s making obscene amounts of money for running a successful operation. Several million in compensation is chump change for multi-billion dollar companies. I do have a problem with CEO’s running a company into the ground and baling out with a golden parachute while the workers go down with the ship.

Something else to consider is many other countries have value-added requirements. You just can’t build something here and send it over there. You can build part of something here, but part of the process most be done in the country where the final product is sold.

[K C Muffin]

So....back to AOO's piece - the shame (as I read it) isn't that American jobs are going overseas--or even that Americans import high dollar products when they could be built here. What I took from there is that the US product itself is inferior. Whether it be because of unions or government intervention into the work place, their product is inferior. Period. I have a Ford truck in the garage and it's wonderful. But it's a gas hog and doesn't get driven very much as a result. My daily driver is a VW. It's old and has a few beauty marks, but it runs well (still) with 112,000 miles on it. I think the Ford won't probably still be running as reliably when it does manage to get to 112,000 miles (if it doesn't hit the car-crusher first). See what I mean? The government can force everything they want to force in the workplace, but I'm still free to buy something I believe is more reliable. Even if it's 15 years old.

So, are the GM workers lining up at Honda's door? Or are they just going to collect unemployment and complain about it?

[Highwayman]

Two things hit me while reading Muffin’s post.

Originally Posted by K C Muffin

....I think the Ford won't probably still be running as reliably when it does manage to get to 112,000 miles (if it doesn't hit the car-crusher first).....

My 1994 GMC K1500 is still looking good and going fine with 124,000 miles on it.

Then I remembered this piece by Walter Williams about manufacturing jobs;

How do we reconcile lower manufacturing employment with rising manufacturing output? In his April 3, 2006, BusinessWeek article, "The Case of the Missing Jobs," Huether says, "Since 2001, with the aid of computers, telecommunications advances, and ever more efficient plant operations, U.S. manufacturing productivity, or the amount of goods or services a worker produces in an hour, has soared a dizzying 24 percent. That's 72 percent faster than the average productivity advance during America's four most recent recession-recovery cycles dating back to the 1970s. In short: We're making more stuff with fewer people." That means rapid economic growth doesn't translate into the kind of manufacturing job creation of earlier periods.

How about the claim that our manufacturing jobs are going to China? The fact of business is, since 2000, China has lost 4.5 million manufacturing jobs, compared with the loss of 3.1 million in the U.S.

Job loss is the trend among the top 10 manufacturing countries who produce 75 percent of the world's manufacturing output (the U.S., Japan, Germany, China, Britain, France, Italy, Korea, Canada and Mexico). Only Italy has managed not to lose factory jobs since 2000.

Economist Joseph Schumpeter referred to this process witnessed in market economies as "creative destruction," where technology and innovation destroy some jobs while creating others. While the process works hardships on some, any attempt to impede the process will make all of us worse off.

http://www.townhall.com/opinion/colu...03/196039.html

[Outofdodge]

Originally Posted by K C Muffin

So, are the GM workers lining up at Honda's door? Or are they just going to collect unemployment and complain about it?

The state provided unemployment benefits only last so long so they can't be complaining too much. And of course Honda has not made it's announcement however Toyota is making a significant investment and Subaru seems to be doing OK up the road.

Looking at the Delphi thing tho, it seems to be bringing out all of the stereotypes for union and managment. I fear they are going to do an Eastern airlines and commit mutual suicide.

The union wants it $27/hour and all benefits and has authorized a strike. Management wants it all in one swell swoop, pay cuts to like 12/hour, layoffs, but have bonused most of it's management quite handsomely. Neither side wants to get to the business at hand which would be to make a decent product at a decent price within a cost structure that is substainable. All this at a company operating under bankruptcy court supervision.

To change the thread direction somewhat, I always wondered why the mid-west including Kansas in general and western Kansas in particular would not compete for those plants. Mercedes, BMW, and Hudai all built plants in AL and SC in the past decade or so. Those governors gave away the store in terms of tax breaks and such which I don't fully agree with but each plant has had problems with turnover and the employee aptitude due to the school systems. Even being non-union those jobs paid more than the going rate for similar jobs in those areas. The Midwest has a good work ethic, trainable and educated people and lots of available land. Plus it is more centrally located and transportation is available to move product. Seems to me like somebody's economic development group was really sleeping.

[Flying Dutchman]

My 1989 Chevy truck has over 200k miles on it and it still runs good. Had to replace the clutch a couple of times, the radiator, the alternator and little stuff, but thats about it. I also have an 1985 Cadi wich just now has 90k on it and the engine is still smooth. Both of these cars have been in the family from day one so I know they have been well cared for. These are exceptions and not the norm.
Most foriegn cars are built and designed on the concept that they will be owned and driven until the wheels fall off. American cars were designed to be driven and owned for a few years then traded for newer ones.