Why The 'G' in GM Stands for Government
Share this Article
Twitter
Facebook
Delicious
Digg
Stumble
RedditAuthor:
Harrison
Tags:
alabama bmw GM government motors honda indiana kentucky mercedes-benz non-union ohio Orion Township saturn south carolina spring hill toyota Unions
Let's do it the government way!
In a story from this past month, June 2009, Government Motors, I mean General Motors, chose to build a new small car in Detroit not in Tennessee where Saturns had been built. Was the decision political (do I even need to ask?)?
General Motors is expected to formally announce today it has selected a plant in Orion Township, Mich., dashing the hopes of some 2,500 Spring Hill workers who are facing layoffs, buyouts and early retirements at the factory GM plans to idle later this year.
Many auto analysts believed that Spring Hill was the most logical selection. Built with great fanfare in the late 1980s to manufacture Saturn cars, the plant recently underwent a $600 million retooling to build the new Chevrolet Traverse.
When BMW was looking to build a plant in America (they chose South Carolina), Honda was looking (they chose Ohio), Toyota was looking (they chose Indiana and Kentucky) and Mercedes-Benz (they chose Alabama) politics played a heavy role in selection. You’d think these manufacturers would be flocking to Detroit where there are entire generations of families living who have done nothing but built cars. The problem: Michigan is a heavily Democratic and Union state. All of the foreign plants are non-Union and the cost of labor there is about 1/3rd what the Big Three pay in the U.S.
Check out what the local paper in Tennessee had to say about the non-selection of Spring Hill’s auto plant:
No, not “Do ya feel lucky?” although that question would also be apropos. What we should be asking ourselves is what Barack Obama is really about? Is he about business or is he about politics? Because if the answer is anything but business that idle plant in Spring Hill is fixing to stay that way.
On paper this “competition” shouldn’t even be one. The Spring Hill plant, built in 1990, is the newest of the three plants and just last year went through a 12-month retooling process to build the Chevy Traverse.
On the other hand, Janesville is GM’s oldest plant, having opened in 1919. The Orion plant was built in 1983 and while GM did spend $10 million dollars on the plant to upgrade the paint shop and more than $165 million to build the Chevy Malibu, it still has nowhere near the flexibility of Spring Hill.
The most interesting part of the whole equation is this little tidbit:
Tennessee’s advantage is that GM can build a whole car at one site at Spring Hill.
New GM-Democrat model for 2011.
Wow… so Government Motors chose the older of the two plants where it can’t even build the entire car in one process! With a business plan like this it is very difficult for me to see how they won’t suceed because who needs to build the entire car in one place?!?
Let’s also take a look at how efficient the U.S. government is at running companies:
Michigan politicians, meanwhile, strongly lobbied for the plant, going so far as to submit petitions with 20,000 signatures. They argued their state needed more help because seven of the 14 plants targeted for closure in the automaker’s bankruptcy were in Michigan.
Although I didn’t major in business I was under the naive impression that a company should pull their money out of what doesn’t work and put it into what does work. And people think the government is going to run the healthcare system any better than they run Government Motors?
Good luck on that one.
Did you like this article? Get new articles daily for free via RSS or Email.
8:57 AM
you seem to be under the impression that GM is being run by capitalists.
also, didn’t kia just settle on a town in georgia? i sense a trend here.
9:07 AM
I think Kia is owned by Ford and I think Ford had some language put in the contract that told the UAW to remains hands-off with that division.
11:01 AM
Harrison, Kia is owned for 40% South Korean Huyinda: Ford dont have shares anymore.
All the foreign car makers you mentioned are well know about their corporate social responsibility programs, its sustainable management style and its excellent relations with the labor unions in their countries of origin. They simple chose for the best places regarding cost related to investments climate instead of cities which infrastructure is outdated. Union related issues are not a problem for these foreign companies.
kindest
hans
.-= Hans´s last blog ..Recruiting police officers in Mosques =-.
11:06 AM
Unions aren’t a problem for them in the US because their factories are non-Union!
5:27 PM
So I take it you have a problem with the average blue-collar American earning enough to provide a home and a decent income for his family? If the Unions disappeared you wouldn’t see a labor job above minimum wage in this country. We can do better than that. If you think a Union wage salary of 40 to 50 thousand a year is excessive for the American worker, I’d say you’re a bit out of touch with what raising a family costs these days…
7:05 PM
Where did I say that? You mean to tell me that if a “blue collar” worker is not in a union they are not capable of supporting their family? In 2007 18.9% of American workers were in trade unions. Are the other 81.1% living below the poverty level?
At Honda in Ohio a non-union employee earns $42.95 per hour. I’d say that’s pretty damn high. At 40 hours per week for 52 weeks that’s nearly $90,000.00. Considering the average income in the U.S. is about $35,000.00 I’d say they were doing pretty well, wouldn’t you? And the people who assemble cars in a non-union workforce still have jobs vs. the union Big 3 membership that faces plant closing after plant closing.
If unions were so great then why in 1990 did membership decline from 40.9% to less than 19%?
Sources:
http://www.heritage.org/research/economy/images/wm2135_chart1.gif
http://www.theage.com.au/ffximage/2008/04/14/svMEMBERS_wideweb__470x425,0.jpg
1:28 PM
Union pay scale is the benchmark for industry earnings. If the union had not established the “top-end” wage it would be safe to say those folks who do earn a similar rate would not be getting it. Why would anyone pay it if they didn’t have to. A labor position is similar to that of an athlete. There are only so many years your body will allow you to do that kind of work. When you’ve put 25 to 30 years in your body will break down. Now that pensions are a thing of the past a labor worker needs to generate enough income while they are able to compensate for the physical ailments they will have later in life. There is no question that Corporations have spent a lot of time and money toward the anti-union campaign and with great success. The question is who really benefits from that? Time will tell that it’s not the working man.
2:02 PM
People are paid what they are worth. I’m not in a union and do okay but it’s from my efforts not from a union’s.
2:12 PM
You are fortunate to work for an employer that pays you accordingly…many aren’t. A level playing field and an equal voice is what it’s all about.
3:50 PM
I work in sales so I make my own fate.
4:07 AM
Harrison, the USA is a buyers market economy, not a sales market economy. Your faith is in the hands of how much people can buy.
.-= Hans´s last blog ..Day Opening – July 19 =-.