We had predicted early on that “the disaster in Japan could have a major impact” not just on the Japanese auto industry, but on the auto industry worldwide. If anyone had silently hoped (you can’t say these things aloud) that the disaster over there would provide breathing room for the car industry over here, then get ready for a disappointment. First automaker to be affected over here by the Japan syndrome is GM.
Reuters has it that GM will suspend production at its Shreveport Assembly plant in Louisiana next week. The reason: Parts missing due to the crisis in Japan.
In Shreveport, nearly 1,000 workers build the Chevrolet Colorado and GMC Canyon trucks.
GM says it has enough units in stock and hopes to resume production ASAP. According to Reuters, “all the automaker’s other North American plants are operating.” So far.
The Shreveport GM plant is scheduled to shutdown permanently by June of 2012. GM says the current closure is not permanent.
Marketwatch says that GM’s suspension of its Louisiana plant “could be just the beginning, considering the intricate web of shared components in the car business.”
Each year, Japan exports 2.5 million engines and 8.5 million transmissions, say Marketwatch. “But even more troublesome could be the electronics front. Japan accounts for a sizeable chunk of the technology in cars, including 20% of worldwide semiconductor production.”
According to the Houston Chronicle, GM won’t say which parts it’s short on, “but both pickups use a five-speed manual transmission made by Japanese supplier Aisin Seiki Co.” writes the paper.
Finally the UAW come to realize that there is a real world outside the forced-union states. You can’t build a 100% union and American-made truck without those foreigners.
Reality can be so humorous.
+1
Do you wonder if there will be a backlash against Japanese cars/parts/electronics from Japan — b/c of the fear of radiation?
Reports already are that people coming off flights from Japan to the US have elevated radiation levels.
I don’t wonder at all. While hundreds of thousands of Japanese are exposed to late fall/early spring weather conditions without adequate supplies, food, water, sanitation, etc, our news media is running around scaring the bejeesus out of us in the US regarding radiation. And yet, I haven’t seen a single news report that actually quantifies the radiation levels in Japan, let alone 5000 miles away on the left coast. Somewhere there probably is such a report, but it may just get the facts wrong, like the WSJ report that informed me that potassium iodide tablets absorb radioactive potassium isotopes. Really? Elevated radiation levels from travelers – what the hell does that mean? If a traveler trips 1 microSievert, it may just mean she has eaten ten bananas recently. Big whoop. Chest x-ray – 10 milliSieverts. Gimme some facts, will ya? Our news media is collectively as dumb as a sack of hammers.
But it won’t matter – there will be fears about !deadly! radioactive Japanese parts.
/rant
Are there any US car companies that do not use parts sourced from Japan?
I wonder if Hyundai/Kia use Japanese parts? They’re the only ones I can think of that might be free of them.
I would think Hyundai/Kia use a lot of Japanese parts since they’re so geographically close, but I might be wrong. I recently got a Kia Forte (say what you want about not buying American) and it said 89% Korean parts 5% U.S./Canadian parts, but it didn’t quantify the other 6% of the parts.
Oh no! A shortage of GM’s worst product! The horror, the horror.
In all seriousness, what’s happened in Japan is a tragedy that will have lasting economic repercussions. But shutting down the Colorado plant? It’s really hard not to chuckle at that.
The truck in the pic is an S10 or Blazer.
It would be expected. I guess Colorado/Canyon and Isuzu D-Max share a lot of parts. The plants in Thailand producing the Isuzu model must be facing parts shortages too.
My guess is that it’s actually an Isuzu Hombre in the picture.
Now where will the bug exterminator companies get their cheap fleet trucks ? The main article mentions manual transmissions being sourced from Japan, I thought only 10% if all vehicles sold in the US are manual shift ? Would that warrant halting production ? Perhaps GM could resurrect the manual transmission from the Vega for use in the Colorado. If GM is in trouble, I’d bet Ford (Mazda in disguise) is next.
Ooops, my mistake.
Reality can indeed be humorous! But what makes this so awkward is that GM, along with Ford and Chrysler, has found it more advantageous to produce parts (et al) outside of the US, just to get away from the UAW. Just another indication that the UAW has collectively bargained themselves out of jobs with their unrealistic demands. Is it any wonder then, that the farther away you get from Detroit, the fewer people care about the plight of the US auto industry? Think about this a second. The greatest nation on earth with the greatest industrial capacity during and after WWII, and the UAW’s employers decided to use parts manufacturers from outside the US to supply parts for the American cars and trucks. This is beyond LOL, and approaches ROTFLMAO.
and it also proves that outsourcing is not necessarily related to cheaper wages. I assume Japan (including transport) has more expensive labor. When companies out-source they also look for willingness to work and ability to do a good job – and Japanese likely excel in that, unlike UAW.
It starts with flexible work times, willingness to learn new things, having pride in the product (pride besides carrying a union sticker and slashing tires of Japanese cars).
I assume Japan has strong unions, relatively high wages, excellent work conditions – this proves that a union can work when it realizes that there is a real world and has to work with management and has to spend less time on class warfare. Obviously you couldn’t produce competitively with a Jobs bank and a system that protects bad workers from work.
And seeing the picture above, the guys are not even wearing a uniform or anything that resembles safe work clothes? He looks like he is doing his barbecue with a beer in his hand, but not like being at an assembly line. Shorts, really? Did the UAW vote OSHA away? And couldn’t the union brother show a little pride by wearing a piece of clothe that shows the company logo?
“ROTFLMAO” ???
WTHDTAM? (What the hell does that actually mean?)
at Phil
ROTFLMAO – Rolling on the floor, laughing my a$$ off
If you were being sarcastic, sorry, my meter is broken today. :)
“and it also proves that outsourcing is not necessarily related to cheaper wages”
I think you are right. But what I find scary is that outsourcing more than likely equates to better product, as in higher quality, longer lasting, greater value, and more reliable. Maybe even pride in workmanship. I recently installed a “Global” brand AC compressor (made in China) in the truck of a friend to replace the worn out York that was in there. We had initially replaced it with another new York and it was just not cooling enough using R-134. The Global was much better looking on the outside and much more efficient when pumping, cranking out 4 atmospheres compared to a new York that only pumps out 2 atmospheres. Got the airstream to 40-degrees in half the time! Maybe that’s what the American car makers like about outsourcing as well, besides the lower costs, and no UAW interference.
Phil, I find it hilarious that American industry, of any kind, has to look elsewhere to outsource. I find it equally sad. Somewhat akin of a bad Dramady (a comedic drama).
Sorry, but I wasn’t being sarcastic (and I wasn’t actually questioning the soundness of your comment highdesertcat). I honestly didn’t know what ROTFLMAO meant, so thanks.
@Phil
You are very welcome. Truth be told, the first time I saw that arrangement of letters I was confused too.
I think I speak for everybody when I say no problem. I always like to double check since in my house a person can be dead serious and we wouldn’t know it, or the reverse could be true where they could be fooling around and we wouldn’t know it. Makes it hard to properly calibrate the meter. :)
The 5 speed manual? Think again Houston. I think the take rate on the stick, especially since you can only get it with the 4cyl, is less than 5%. I imagine its something in the electronics.
BTW-According to a recent sidebar in Car & Driver about who makes what cars where, the Colorado/Canyon actually have more a=American content than just about any other truck on the market.
I don’t know what that is in the lead picture, but its not any Chevy truck I recognize
BTW-I would also suggest that maybe whatever part they are running low on is common across several vehicles, and they chose to shut down the Shreveport plant because the Colorado was not in much demand compared to an Impala, or Silverado or whatever else could use the same part.
This does smell of a re-allocation of whatever parts are common amongst perhaps larger margin vehicles – not necessarily a shortage unique to the dying GM compact pickups. They’ve got about a 60 day supply of these models, whereby newly launched Cruze is low on inventory, while the Equinox and Terrain have always been relatively scarce.
The problem I see is the relatively small volume of Colorado/Canyon, a whole year’s worth of them is not sufficient for one month’s Silverado.
Well considering GM sells like 10 Colorado’s a week to either fleets or people to dumb to cross shop I don’t think this is a really big impact.
About 3400 units last month for the Canyon/Colorado — that’s as many as the MKS and MKX in total, and equivalent to 50% of overall Lincoln sales.
And the last inventory numbers I saw put the supply at over 100 days – this isn’t a big issue, and considering how crappy the Colorado/Canyon is, and the Hummer H3 being killed months and months ago, it goes to show in your metapoint on how horrific overall Lincoln sales are.
Can’t argue with that!
… “the disaster in Japan could have a major impact”…
The major impact in that picture is coming from the employees red hammer. Years ago I toured the Boxwood Rd assembly plant in Elsmere DE (the press says it’s Wilmington, but we locals know better). It was the plants 50th anniversary and they were making Corsicas and Berettas at the time. I watched in fascination as line workers used these plastic mallets to bang on the car to align the doors, hood and trunk lid. One them told me they used these in all the plants, as did all the other makers. Maybe it was because they were being watched, but they were very meticulous, checking the alignment and making adjustments until it was right.
when the Trabant was made in communism, they used hammers. Nowadays all good manufacturers build the parts good enough to not need one.
good to see GM still has the old school production methods :-)
If you one of you experts could device a method to final fit fenders ,doors and hoods, without a hammmer get it licenced and copy righted.
Every car company in the world will buy it from you.
If you one of you experts could device a method to final fit fenders ,doors and hoods, without a hammmer get it licenced and copy righted.
Every car company in the world will buy it from you.
Thanks Mikey! You tell it like it is! Always good to hear from those who actually get their hands dirty.
When I was standing next to the line talking to this guy (he seemed to be the lead of about 3 others who were doing the same thing), he told me all the automakers did this, including Mercedes and Lexus. The hammers are made with a composite material. They were using them to strike the door hinges/mounting brackets. They didn’t beat the crap out of them, just hit it hard enough to get it to line up properly. Then sometimes they would tighten the bolts if they felt it needed it.
I wouldn’t be surprised if technology has replaced this (especially on some high end cars) but if Mikey says all the makers still do it then I believe it.
Thanks guys…..If you check out anywhere that a body panel bolts to another body panel you will find that some of the holes are slotted. Sometimes there is a whole bolt plate that floats. Usually door, to door hinge. Even with todays much improved technology,nothing is perfect. So the engineers designed some adjustment.
A good fitter, will back off a little tourqe in the bolts and gently tap the panel for a nice fit. Then re-tourqe the bolts.
Back when I was taught “hood fit” that would be 1976. If you were caught swinging a hammer without first backing off the bolts you were removed from the job. Hood fit, was a good job. There was five of us on hood fit. Five whole minutes to complete your job assignment…..heaven.
@HerKaleun…….Have you ever set foot inside a factory? Or did you ever try physical work wth the Humidex sitting around 110 degrees? ….Its hot man, really hot, the sweat pours off you, and runs down the cr…..Never mind, suffice to say ,thats why the guys wearing shorts.
Now I will grant you that tolerance’s and standards are a lot more strigent these days. However we didn’t stand back and throw parts on cars. As some of ,”the less informed” would have you believe.
mikey: I’ve toured several European car plants and worked at a VW/Bentley plant. All guys wear a full work suit with manufacturer logo etc. shorts would be illegal for safety reasons.
this might be anecdotal evidence, but stand next to any UAW car and look at how “even’ and small the gaps are and stand next to a VW, Lexus or other make and see how much smaller and even they are.
i don’t deny there is some final “hammering” (although i really don’t recall this and all old-school Trabant and now VW people pointed out all the time how that part completely disappeared) – but I’m not a body worker, so it might be true there is some minor hammering still in place. but sure less with better fitting parts.
i do realize better fitting parts are part of how good the stamping machine works, regardless of worker. but one reason why UAW manufacturers never got to modernize their plants is, because management even if they got more efficient (and precise) machines, they still have to pay the people int he job bank. so ti is kind of the UAW fault. Sort of.
According to the Vindicator, GM will shut Lordstown Saturday.
This post just goes to prove what bail-out advocates have said all along. If GM and Chrysler had been allowed to collapse then serious repercussions in the supply lines for ALL auto companies would have been seen. It would have made this supply issue seem trivial.
Do you think as Rome burned, Niro asked his slaves if the fire would effect the availability of grapes?
I don’t think De Niro was in Rome. That was a good show though.
The popular image of Nero fiddling while Rome burned is actually very incorrect (never mind the fiddle didn’t exist). Historically speaking, Nero’s actions probably saved Rome from larger disaster and countless lives. He was actually not in Rome when the fires broke out, but at a mountain villa outside of Rome. His advisors begged him not to return to the city, but he did to personally coordinate fire fighting efforts. He opened up the royal gardens and other facilites not typically open to commoners to get them into fire breaks (as we would call them in modern times) and green spaces to escape the flames. He coordinated the razing of sections of Rome to create fire breaks to stop the spread of the fires. Post Rome fire, Nero was as big a hero as George W. Bush was in the days and months after the 9/11 attacks (not meant to be a political statement – just a modern historical reference).
Where Nero failed was in his rebuilding plan for Rome. His vision was so grand the treasury could not afford it. With the concept of a federal reserve, paper money, and national deficit having not been created yet by modern society, he basically bankrupted Rome in his attempts to create his vision. When he sacked the temples of their sacred materials for the value of the gold and jewels within, it became too much for the common people. The rest is as they say, history.
Had Rome been on paper currency and Nero could have financed his vision, he could have potentially gone done as one of the greatest leaders in world history – and Italy would still be paying the interest and principal on his vision.
Reality can indeed be humorous! But what makes this so awkward is that GM, along with Ford and Chrysler, has found it more advantageous to produce parts (et al) outside of the US, just to get away from the UAW
That’s not the case here. These parts are sourced in Japan because only the Japanese companies seem to able to make them.
Many members of management, some time ago, decided that it wasn’t worth it to have a manufacturing or R&D base (generally because they didn’t want to commit to it) and just offshored, sold off or outsourced production and R&D. And did made out handsomely, in the short term, I might add . And we’re not talking union jobs, here, but things like microprocessor and electronics design that have never been unionized tasks.
The kind of management wunderkind that decided to do this kind of thing is probably wondering why we don’t have much of a middle class any longer, and why no one can afford to buy their good anymore, except on increasingly stretched lines of credit. Hey, here’s an idea, let’s just offshore production somewhere even cheaper! Yeah, that’s the ticket! Sustainability be damned, where’s my bonus?
I assume Japan has strong unions, relatively high wages, excellent work conditions – this proves that a union can work when it realizes that there is a real world and has to work with management and has to spend less time on class warfare.
I would point out that it really does take two to tango in management/labour relations, and that management very often gets the union it deserves. Japanese and European executives don’t automatically treat their own workforce as the enemy, and don’t engage in their own form of class warfare, squeezing and attacking on every front.
This is a real problem in the US; the situation in Wisconsin highlights it. The government probably could have gotten away with cutting benefits, wages and staff under the auspices of “austerity” without too much issue, and they would have been within their rights to do it. But they had to play union-busting hardball and went after the right to collectively bargain, which, really, isn’t fair** let alone necessary, unless you have some sort of hang-up about people having the gumption to negotiate in groups.
I see this attitude with some frequency—in both the private and public sector—and I think it has to do with American B-school and working management culture. Management and labour are opposing teams, and play a game where there’s only one winner. You see this with principals and board admins versus teachers, even, and it’s why American teachers unions are so militant. They have to be, because their bosses treat them like absolute crap otherwise.
Eventually the situation snowballs such that you have teachers, line-workers or whatever with a terrible attitude and some pretty good benefits that they’ve had to fight outrageously hard for, whereas in Europe or Japan there’s a far less combative attitude***, but workers know that management doesn’t actively despise them.
By the way, did you know that worker salary in western nations doesn’t really vary much country to country, but that, towards the end, Rick Wagoner made more money than the top twenty seven executives at Toyota? Do you think Mr. Wagoner is worth twenty-seven Toyota executives? Do you still think labour is the problem?
Obviously you couldn’t produce competitively with a Jobs bank and a system that protects bad workers from work.
GM had lower costs from than Toyota did either in Japan or in America. Cost was never the problem. Productivity was never the problem (GM Oshawa won internatrional-friggin’-awards for it). The problem was quality, desirable product and, as a result, the need to sell product (trucks excepted) for a transaction price well below the competition. When the bottom fell out of the truck cash cow, it fell out of the company as well.
That’s not labour’s fault, not by a country mile.
It’s all well and good the lambaste labour because it plays so well into, well, the class-warfare narrative that the well-to-do are spinning, but it wasn’t the reason these companies imploded.
** Why would it be illegal for working-class people to bargain collectively? Numbers are really the only equalizing factor they have. If you want to do that because collectivism is bad, fine, but we get to revoke corporate charters for the same reason.
*** Until you break the unwritten rules of the social contract, which is what happened vis a vis austerity measures in Greece. Working people are understandably upset that they’re being made to pay for the risk-taking of the financial sector’s B&B.
“That’s not the case here. These parts are sourced in Japan because only the Japanese companies seem to able to make them.”
Psar: That’s very interesting. Your account reminds me of a case when one of my friends worked for Carter Carburetor in the 1970’s. A German company wanted to know the smallest diameter hole Carter could drill and manufacture a drill bit to drill it. Carter made what they thought was the tiniest possible bit and they sent it to this potential customer. A couple of weeks later, the bit was returned with a hole bored all the through Carter’s bit, significantly smaller (can’t remember how small) than the bit they sent in the first place. Lost the customer, too!
psarhjinian – that is one of the best rants I’ve read here or anywhere for that matter. The collapse of the implied social contract between the middle class and the upper classes is THE most important story of our time. It is appalling how many members of the middle and lower income classes fall for the Rush storyline.
Governor Walker, facing a $3.6 billion dollar shortfall, pushed through legislation requiring most state workers to kick in 5.8% of wages for pensions and pay 12.6% of the cost of health insurance. Compared to private sector workers, those are great terms.
The new law limits collective bargaining to wages, prohibits bargaining on pensions and health insurance, limits the collection of dues through paychecks and requires unions to submit to annual recertification elections.
From thestreet.com
Few in the private sector would quibble with the pension and health insurance contributions. Maybe annual recertification is too frequent – how about every two years instead like our elected representatives?
I’d be glad to hear alternatives to some of these provisions that stop the cycle of corruption wherein the union political contributions go to the party predisposed to give the unions even more benefits and higher wages. It is a positive feedback loop – repeat and cycle. This is the first indication that the rest of the population has realized that it is unaffordable. I don’t see why any political contribution – corporate or union – should be expensible come tax time. Also, I don’t see why ‘education’ should be expensible either – that’s just lobbying. Further, I don’t see why Beck rights aren’t vigorously enforced and the default union dues set at only the amount necessary to fund negotiations with management.
Here’s a link to a NY Times opinion with some interesting observations from FDR and George Meany on collective bargaining by public employees. http://tinyurl.com/47u53dq
UAW: we have fat workers.