First off, I do appreciate a civil conversation, debate, whatever we call it. Most union threads would of already gone out of control by now
I've got a busy weekend, so this will likely be my last post on this topic.
TM7
There are many factors contributing to the Big 3's problems (honda is now having those same problems and toyota is likely to follow if the recession goes on for a few more years).
The biggest problem for the Big 3 was oil prices. For years, they prototyped new cars and tried to get back in the car market. The public made it very clear they wouldn't buy cars. They wanted trucks and SUVs. The auto makers had no choice but to make them.
So when oil went so high, the Big 3 had a very limited car line whereas the forgein makes ruled that roost.
I'm sure not going to be seen in a Ford Taurus or Focus
Now that they have some decent cars worth buying, we have gas back down to $2.00. Guess what, those people who are buying are buying trucks and SUVs again !
Same thing happened in 70's and 80's. Oil went higher so the auto makers came out with some fuel effiecent vehicles. Big oil saw this and intentionally dropped the price then AND NOW because they need Americans to drive large cars, vans, trucks, etcThe next problem is Toyota and Honda undermining America. Americans don't have any loyalty to America or their products anymore. Toyota intentionally set up shop and embraced the anti-union South knowing they could get away with paying less money. All of a sudden Toyota is so great because they are now an American company. They aren't passing any savings onto the American consumer though --- that money is going straight back overseas. So when American workers make less money (and UAW workers get laid off in the process), many different sectors of America are affected by less spending power on behalf of the consumer.
GM however decided they would expand GMAC into a bank.
Good in good times; bad in bad times
They really paid the price on that...but I don't believe it was a nail in the coffin by any means.
Now we can start looking into the smoke and mirrors.
To think GM is unable to operate is a bit neive. I believe they have so much cash sitting overseas and the company has done an excellant job hiding it. They want to bust the union and will go through bankruptcy to do it. They want to be just like Toyota --- cut employee costs 1/3 to a 1/2 and sell their products for the same price they always did.
Ford is not so worried about this because they don't need bankruptcy to harm the unions. They know their contracts expire last. With the UAW harmed through the restructure of GM and Chrysler, the UAW of ford isn't going to have a leg to stand on.
Not that the UAW is as strong as it used to be. As another poster said, they have got into politics and away from the struggle of the working and middle class.
All too often the UAW leader is in cahoots with the plant superintendent (many times even being related by blood, marriage, prior association, or just good ol' fashion wheelin and dealin).
To sum it up in the order of what has caused this mess
1. Oil prices - Without the oil spike and recession, the Big 3 would be thriving.
2. The infiltration of foreign makers into the US and failure of the American consumer to recognize the harm caused by it
3. The auto makers taking advantage of the mess, fudging numbers, and hiding money in effort to bust the union. I can't say they like Toyota being in the country, but so long as they are here they'll take whatever they can get out of it. If the unions are successfully "put in their place" (which I think will happen), then all 4 companies should be able to coexist and everyone (they) is happy again.
I think the harm caused by all of this is going to last a very very long time. Like them or not, unions dictate wages in non-union factories, salaried jobs in factories, and even retail stores. If the unions fail in the auto plants, then we have a huge mess. Manufacturing is such a large part of our economy. Wages of
$35,000-60,000 dollars a year drops down to $20,000-40,000 dollars a year. That affects every single person in the United States. And that's where we're at right now. I don't see anything changing in the near future.