Remember when the press/GM shareholders were after Car Czar Bob Lutz to take a haircut on his salary given that The General was well on its way to the bailout buffet. “I gave at the office,” Maxium Bob didn’t joke. And then they took away his corporate jet and he quit. Just like that. NSFW this. I’m outta here. Obviously, Detroit News columnist Daniel Howes doesn’t enjoy Lutz-like perks. But today’s column echoes the Czar’s imperious indignation. Danny’s mad as hell at president Obama for suggesting that Motown should make [more] concessions after its next bailout bonanza. What’s the biggie? Did Daniel forget to notice the word “after”? Yup. That and the fact that Detroit’s woes are entirely self-inflicted.
Sacrifice? What, exactly, has this town and its investors been experiencing the past three-plus years? Spring break? This notion, aired during the congressional inquisitions late last year, picked up by Team Obama and wielded by whoever’s trying to score points, that Detroit Auto hasn’t yet “sacrificed” in a (losing?) effort to fix itself is absurd.
So what, you ask, has Detroit done to qualify for this cry of basta? Jump!
The union has helped usher many thousands into retirement, bargained down its wage and benefit scale for new hires and agreed to sharp reductions in company health-care obligations. Brands have been sold, dealers lost, bonuses eliminated, salaries cut, tens of thousands of jobs eliminated in wave after wave after wave of reductions.
Plants are going or gone in communities across the country. Local and state tax revenue started plunging long before home values in Manhattan and the Bay Area did. Michigan’s per-capita income, long among the nation’s highest, has been dropping like a stone this decade and soon will be lower than Republican Sen. Richard Shelby’s Alabama.
Yes, the North will rise again! OK, so Apologists R Us. Only . . . not.
Sacrifice? We’ve seen a few, even if it doesn’t look to be “enough” from the condescending heights of New York, Washington and San Francisco. And you know what? It isn’t enough, not now anyway, not when technically insolvent companies are petitioning the Treasury Department for aid because their credit ratings are destroyed and car and truck sales are trending at terrifyingly low levels.
On the other hand . . .
But sneering about sacrifice, as if there’s been none, is a towering insult to the tens of thousands of families, white-collar and blue-collar, who took buyouts and walked out into a collapsing economy; to the dealers whose businesses have collapsed; to the 7,631 UAW members — 53 percent of them in Michigan — who this week accepted comparatively meager packages to walk away from GM.
Jesus man! Pick a side!
Sacrifice? If there are two things this state and its bellwether industry understand, it’s sacrifice and recession — and the knowledge that there’s more of both to come.
Regrets? Detroit’s had a few. But then again, too few to mention. Apparently.
Lutz couldn’t see beyond his own towering ego. Yes he would have to get to Washington on hands and knees or sackcloth and ashes or a 03 pt cruiser(which ever was worse) along with Al and Chrysler Bob and bear the brunt of Congress’s outrage (which really has all the penalty of having been hit with a rotten tomato).
is a towering insult to the tens of thousands of families, white-collar and blue-collar, who took buyouts and walked out into a collapsing economy
I’m sorry, but am I supposed to feel sorry for someone who got payed to piss off? In the real world that the rest of us live in, you’re given a pink slip, not a buyout.
Yeah I bet they gave at the office. The Oval Office. The same way Monica Lewinsky gave at the Oval Office. How else do you think they walked (flew) outta Washington with $22 billion?
Sacrifice? What, exactly, has this town and its investors been experiencing the past three-plus years? Spring break? This notion, aired during the congressional inquisitions late last year, picked up by Team Obama and wielded by whoever’s trying to score points, that Detroit Auto hasn’t yet “sacrificed” in a (losing?) effort to fix itself is absurd.
If they’ve sacrificed so much and GM still loses billions, perhaps that should tell you something about the long term viability of the company.
I’m sorry they all have to take a beating but so do the rest of us. Everyone goes to work fearing for their job, our houses are gilded cages we can’t sell and barely can pay for, The government is running amok with spending our future.
Things are tough all over.
Customers are not buying these cars at prices that make a profit. Simple. And taking my tax dollars to make up the shortfall isn’t just wrong, it’s theft.
“In the real world that the rest of us live in, you’re given a pink slip, not a buyout.”
Exactly. This is the most egotistical thing I have ever heard of. I’d like to see someone like this work at a manual labor job like I had to do for 20 years. Get called in to work at all times of the night and day, be answerable to work no matter what, etc. This guy has NO IDEA what the regular working class goes through.
Angela
I feel bad for the Detroit area, but I do not think that should mean I have to send my tax dollars into the black hole that is GM & Chrysler.
Robert,
How many more pounds of flesh do you think will be sufficient? Frankly, there’s not much flesh left, the cuts are now into the bone. Michigan’s lost 400,000 manufacturing jobs since 2000. How many more plants do you want shut down before you think Detroit has paid enough penance? How many more people need to be laid off until you are satisfied that enough has been done?
I’m using religious terms because this all sounds like some kind of morality play. You want Detroit punished for its sins.
Fine.
But let’s be intellectually honest. Make a list of the plants shut down in North America by the domestic automakers over the past 5 years. Also include the number of hourly and salaried workers that have been terminated one way or another. If you can look at those figures and honestly say that Detroit hasn’t already made substantial sacrifices, well we must just have different standards.
Whether the restructuring plans are good plans or not is irrelevent to the question of sacrifice. When Detroiters hear people minimizing the real pain that’s been happening around here, our reaction is that Detroit critics are deliberately avoiding reality and being pretty damn callous. Detroit has its bubble and its tunnel vision. So do its critics.
When I suggested doing a story on the tragic end of a failing family owned dealership, where one brother died of a heart attack while torching the remaining cars and the other committed suicide a couple of months later, you were receptive. I wanted to write it to show people amid all the glib talk and shadenfreud some have towards the auto industry, that there are terrible human tragedies going on. The human cost is staggering.
Refusing to acknowledge that cost because Detroiters don’t feel like giving the caveat that our wounds are self-inflicted every time we mention that things are kinda bleak around here strikes me as petty.
Every time I get my teeth cleaned, the dental hygienist gives me a lecture. If you were a dentist or dental hygienist, nobody would ever get their teeth cleaned or fixed, because you’d still be lecturing them about not brushing and flossing.
Ronnie,
There is no amount that will be enough “to give” for those who gather in these hallowed cyber pages to heap scorn on Detroit. And when you peel back this onion, you’ll find the opinions of the editor are rooted in a complex psychological schism as to his own relationship with the industry (let the reader interpret — I don’ want to be accused of flaming here…it’s not meant as such).
You see, America hates the issues in Detroit and the Big Three because it hits a little too close to home. For most, it’s like looking at yourself in the mirror after waking up next to somebody you don’t know after a hard night of partying and getting that sick feeling of deep self-loathing. The desire is to quickly slip out of the hotel room and leave whoever it was back in bed and pretend like it didn’t happen as you return home to your wife and kids, convincing yourself that it was all a bad mistake that needs to be forgotten as fast as possible. The banks, politicians, media, ad agencies, lobbyists, commodity suppliers, global governments, dealers, communities, just about EVERYONE has been feeding off the engine of the Big Three for decades. This wasn’t just the unions and management that made this mess — they had a whole bunch of help. Admission is the first part of recovery. Dan Howes knows this well.
And now that it’s all hitting the wall and the gravy train has come to a halt for everyone who was benefitting, we hear the screams of righteous capitalistic indignation that the government now has to step in. Oh REALLY? Let me tell you something — the government is here because all the aforementioned piggies at the trough want it here — no other reason. If that wasn’t the case, no self-respecting politician would be doing this. While the wailing and gnashing of teeth goes on about “bailouts” and the “innocent” shake their fingers at Detroit for all its mistakes — deep down the reality is that they don’t want it to fail. Not even close (really, what would TTAC be if it didn’t have this issue to write on?).
So, go ahead folks…scream, wag the finger, stomp your feet, get it off your chest…we’re Detroit, we screwed up, let us “have it.” And then put back on your bibs, pull up to the trough once it’s been fixed and dive in. Oh, and pour yourselves another stiff drink…it’s going to be a long night….you’re going to need it. Just don’t be surprised who you wake up next to in the morning.
Ronnie and Thug,
I (and many others here) share RF’s indignation not for psychological reasons, but one whose generations of family was wallet-raped by the Big 3 with decomposing POS’s (we had a leper 1980 Citation… ’nuff said), or as shareholders.
Clearly, nobody WANTS to see GM or Chrysler fail. It’s maddening when you’re a gearhead, and you see a jackazzes like Lutz and Waggoner completely misread the tea leaves and repeatedly make the wrong decisions on product development [to wit, Lutz’ famous ‘Rich people don’t care about the price of gas’ while shooting the R&D wad on Tahoes]. Now, RF and others are calling out GM on firing its last silver bullet into the Volt, which no matter how ‘revolutionary’ its drive system will be uncompetitive with established hybrid products with reputations [Prius and Civic] which sell at half the price.
It’s almost like watching when Homer Simpson designed and built his car… but in real life, and now with our tax money.
One needs not an MBA to see the past, present and future business mistakes of Detroit. Just a love of cars, some common sense, and the average consumer’s understanding of value. This isn’t post-facto armchair quarterbacking… this is calling fouls before tipoff, then being pissed off about them when they occur, as predicted. Frustrating? Hell, yes! Question is, is anyone (GM mgmt, board, etc) listening?
Weak, myopic leadership at the top and in key middle positions was (is) responsible for the downfall. And when douchebags like Lutz walk with seven- or eight-figure parachutes for a “job well done,” esp. when WE are forking tens of billions to keep the bitch on life support, we have a responsibility to oppose that. Same holds true for AIG, BofA, the Macs or any other welfare queen.
Ronnie, it’d be great to see your proposed article here… you’re spot on in that there’s a huge human cost here, and it is all due to a colossal failure of leadership and the top and secondary tiers of GM.
Here’s hoping that those at Ford can still pull it out of the dive… again, nobody wants to see Detroit fail.
Ronnie Schrieber
You’re mistaking the symptoms for the disease.
GM’s management should have been sacrificed a LONG time ago. I reckon Rick’s mob should have received the old heave ho after the Fiatsco (yes them again), where he threw $4b thrown down the drain in a misbegotten alliance.
Actually, GM’s entire BOD should have been turfed out before they ever approved the GM lifer as CEO. Perhaps the bondholders are to blame there.
And the UAW’s power should have been sacrificed, only a long time ago. Obviously. Have you seen the telephone book that is their working rules? Have you heard the stories of corruption, theft and intransigence? ‘Nuff said.
As for the little guy? A willing pawn, bought off until he could be bought out.
MM,
I in no way mean to make a defense of the decisions that got us here…however, I think those decisions are overly simplified on these pages in light of the magnitude of the history that was dealt the current leadership team…but no question, there’s lots of blame and I share your’s and others frustration at why it is this way.
A lot of people are angry for a lot of reasons.
Here’s my take. I don’t hate the Big 3 or the UAW. What I hate is how incompetence, intransigence, and greed have ruined what were formerly three great companies and have brought Michigan and a lot of the Midwest to its knees.
Instead of owning up to their shortcomings (um, let’s see, inferior quality cars (I will give them credit for a lot of improvement in recent years), overemphasis on trucks and SUVs, poor marketing and customer service, etc.), all we hear are a list of excuses.
I don’t want to hear about the cheap Yen. If that was such an advantage, there wouldn’t be a single Japanese car made in the USA. I don’t want to hear about the tax breaks given to transplants, the Big 3 have received billions themselves. I could go on but those are just two examples.
I don’t feel so bad for all the people who took early retirement or buyouts. Who I feel sorry for are all the people who lost their jobs at suppliers. No jobs bank for you, no buyout, just a pink slip and some unemployment benefits. I have an aunt who works at an axle plant that has changed hands twice in the last few years. They are scraping by. I have a sister who works at a tool and die plant. They employ about a third of the people they did five years ago.
Yes, a lot of UAW’ers have lost their jobs, albeit with a soft landing. But I still chuckle a bit when I hear about concessions. The wage and benefit parity is being achieved by paying “new hires” about half of what current workers make. So much for solidarity.
GM is going to have a third try at a restructuring plan. News flash, folks. This is about their thirtieth plan. They have been running that place into the ground for a long time.
Offended by AIG? I am far more offended by what the Big 3 have done to far more people the last thirty years.
Clearly, nobody WANTS to see GM or Chrysler fail
Honestly, with all due respect to the folks here…I know that a LOT of people want Detroit to fail. Although they won’t come out and admit ir publicly. Starting with Richard Shelby.
Ronnie, Prthug and Derm81 make good points. First, comments here indicate there are many people who want, not only to see the B3 fail, but union people, and UAW people in particular, suffer. For reasons that escape me, unions are hated by a large portion of our population. I’ve read comments from people who think anyone without a college degree should work for poverty wages.
It seems perfectly logical to me for a young person to go to work in a UAW job after growing up in a union household and seeing generations of a good life. Should they have seen into the future? If so, how about the rest of us? Apparently the people who have ridden their investments down with he market, stayed in their houses as the market tanked instead of selling and renting for 3-4 years, weren’t so hot at crystal ball work either.
What would any of us do if we had 15-20 or more years in with a company, but see black clouds on the horizon, who see years of inept decisions by top management taking the company in the wrong direction? Bail out or hope the BOD would fix things? The B3 are by no means the only large companies that are poorly run. What do we do when we see years of inept decisions, and corruption, by our elected representatives? Of course, as long as they keep the earmarks coming and don’t get caught in bed with a young boy, we reelect them.
The party for whom I have little sympathy are the bond and stock holders. They could have gotten out or not gotten in. Yes they would taken some loss, but nothing like 20 years worth of pension. What the hell were they thinking?
IMO this society is like a house riddled by termites for years; rotten through and through. We might scrape by this mess, but we’ve got far bigger problems than our economy. Look at the idiot we elected TWICE before Obama. We’ve pissed away 8 years when we could have been fixing things; most importantly the now-irreversible damage to our environment.
Bad management hurts communities. It causes national damage, in terms of lost tax revenue. We knew this when Flint was harmed during the Roger Smith regime.
The outrage is that GM management was not killed off a long time ago. The US govt should have intervened, Michigan should have intervened. They should have been calling for new GM management a long time ago. And still they are silent.
“When asked by Fortune why GM10 was such a catastrophe, Roger Smith replied, “I don’t know. It’s a mysterious thing.”
I work for a clothing sales/rental company. Our average wage for a production worker is $11 per hour. What is the average wage for a production worker in the American auto industry? We have no “jobs bank”, no union and currently have everyone on a 35 hour work week due to the economy. My point?
The UNION has made almost zero concessions. They are to blame along with horrible long-term management. Do I feel sorry for greedy UNION jerks making, what…how much per hour? Screw them all. If they want to make it work, have them all go down to $20 bucks an hour. Have management reduce their pay by 50%. Then we can talk about tax dollars. F*ck all those people in Detroit that think they have made enough of a concession for the cause. Greedy bastards.
The debate over executive compensation has become overblown. Talent should be paid well for doing good work.
The problem isn’t with the pay, it’s with who is on the payroll. How Rick Wagoner keeps his job, I don’t know. He should have been part of the first round of layoffs, yet despite his ineptitude and obviously destructive nature, he remains.
How many more pounds of flesh do you think will be sufficient?
The Michiganders need to get out of denial — the chickens are coming home to roost. Decades of poor product and service are finally catching up with the companies who provided them.
It’s not a matter of justice, so much as it is destiny taking its course. Some of us warned you, but you scoffed and didn’t listen.
You have no reason to act surprised, as this has been many years and angry customers in the making. Had you mended your ways a long time ago, we wouldn’t be having this discussion.
“The debate over executive compensation has become overblown. Talent should be paid well for doing good work.”
That there is the rub. Talent. Good work. Show me the talent at GM and Chrysler.
Then there is the question of what constitutes being paid well. Is there no upper limit on the meaning of that phrase?
It isn’t the aggregate amount of ‘concessions’ or ‘suffering’ that brings things right: it is doing enough, well enough, to get back on your feet.
It’s only in fantasy land that after a certain amount of trouble the pot of gold is discovered. Here in Realityville there’s no pot of gold, you can suffer all you like, and if you can’t compete on your merits you die.
“…technically insolvent companies are petitioning the Treasury Department for aid.”
Technically? Technically? Those parrots are broke. Can they be brought back to viability? Maybe some pieces.
But Ronnie, I hear you.
I’d be sympathetic to the assembly line workers, engineers, truck drivers, accountants and executives at GM and Chrysler if this had happened overnight. However, I’ve watched this happen since I was old enough to wonder why the Buick Regal, Olds Cutlass, Chevy Monte Carlo were all functionally the same lousy car, and my local dealers were forced to engage in cutthroat business practices by the company that produced these lousy sleds.
That’s been over three decades, and I have a short memory. Now is a chance to stop the madness. These companies weren’t healthy then. Sorry folks. Walk away from the patients. They’re corpses.
I must be dense. I can’t figure out what Frank Sinatra has to do with this article.
Regardless, Detroit makes lousy cars nobody will buy at profitable prices and has a longtime deplorable reputation for maltreating customers. It boasts theirs are the world’s best but Consumer Reports and J. D. Power frequency of repair records put the lie to that confirming U.S. models lack quality, reliability, and durability. The market rewards producers of good looking, strong performers while the domestics grind out the same old crap. Accepting responsibility for product shortcomings with 10-year comprehensive warranties would be a good start.
Detroit makes expensive marketing errors including selling the same car under numerous brand names. Rather than adopting realistic residual values they abandoned leasing. All three force dealers to order poor sellers if they want hot models.
Nor does Detroit have a realistic business plan to make money, instead begging for government bailouts while blaming the recent economic slowdown and worker benefit costs notwithstanding labor is less than 10-percent of new car cost and other countries’ workers have health care and pensions too.
If you can look at those figures and honestly say that Detroit hasn’t already made substantial sacrifices, well we must just have different standards.
Despite all those sacrifices, GM continues to lose billions of dollars every year. So either all stakeholders (bondholders, management, white collar workers, blue collar workers, dealers) in GM have to sacrifice a LOT more or the company simply has no viable future.
Gardiner Westbound: “I can’t figure out what Frank Sinatra has to do with this article.”
Because, as the D3 and stakeholders look back, they can sing as Sinatra did–
“And now, the end is here
And so I face the final curtain
My friend, I’ll say it clear
I’ll state my case, of which I’m certain
I’ve lived a life that’s full
I traveled each and ev’ry highway
And more, much more than this, I did it my way
Regrets, I’ve had a few
But then again, too few to mention
I did what I had to do and saw it through without exemption
I planned each charted course, each careful step along the byway
And more, much more than this, I did it my way
Yes, there were times, I’m sure you knew
When I bit off more than I could chew
But through it all, when there was doubt
I ate it up and spit it out
I faced it all and I stood tall and did it my way”
Yes, they did it “their way.”
I’d restate “So either All stakeholders (bondholders, management, white collar workers, blue collar workers, dealers) in GM have to sacrifice a LOT more or and the company simply has no viable future.”
ESG says
The UNION has made almost zero concessions. They are to blame along with horrible long-term management. Do I feel sorry for greedy UNION jerks making, what…how much per hour? Screw them all. If they want to make it work, have them all go down to $20 bucks an hour. Have management reduce their pay by 50%. Then we can talk about tax dollars. F*ck all those people in Detroit that think they have made enough of a concession for the cause. Greedy bastards.
Folks, we have a winner
Show me the talent at GM and Chrysler
Jeep Wrangler, Wrangler Unlimited, Challenger, Ram, 300C, Caravan, Malibu, Corvette, Z06, ZR1, CTS, Silverado, Enclave, G8.
The problems in Detroit aren’t with the talent side of the picture. The designers and engineers can compete with the best in the world. It’s the business side that’s always been the problem.
Virtually every major wound at GM was the result of money people making design and engineering decisions.
derm81…if you are going to quote what I said, include the whole thing!!
Greedy Bass Turds.
I have a 2000 Nissan Maxima and a 2002 Ford Explorer. I mainly use the Explorer locally, but not as often as the Maxima. last summer the driver’s side window stopped working. I couldn’t bring the window up or down. A few months later the passenger side window stopped working. My Maxima is still in perfect condition, while the Ford is slowly falling apart. This tells me a lot about workmanship and attention to detail. Detroit needs to make cars that last.
Shed
Here’s the dilemma: The reason many American car companies are having these problems and transferring this to their employees is because of us car buyers. Every time an American buys a foreign vehicle they are basically voting out our own companies like Ford, and GM. It’s obvious how easy the solution is. Come on people, we can make cars that are just as good quality as China and other Countries.
Compaq 610