The Big Three – Dying a Death
Published in Financial Times Deutschland
(Germany) on 16 February 2009
by (link to original)
Like Faust, two hearts beat in Obama’s breast. Because of the crisis in the American automobile industry, the new president is now straddling the fence.
On one side, we have Obama the union member’s friend. After taking office he described union members as “part of the solution” and promised to support more rights for them. Then there’s the Obama faced with how many jobs he can save in the current crisis.
Nowhere is the conflict between these tasks as clearly defined as it is in the automobile industry. Obama can only justify further government assistance for General Motors and Chrysler, something unpopular with a majority of the public, if the companies can show how they intend to become competitive. And that’s something they can do only if they wring huge concessions from the United Auto Workers Union.
The figures the industry can present prior to the meeting in Washington on Tuesday are of little help to the government in justifying further fiscal assistance. One need only look at the sales figures for 2008 to know that the situation is catastrophic.
Whether the Big Three can survive is now dependent on their ability to quickly put a few of their environmentally friendly showpiece models into production. But the gas-guzzlers everyone thought had been rejected by the public have suddenly gained once more in popularity since gas prices have so dramatically decreased. More importantly, the companies have to show that they are capable of adjusting their operations to reflect lower consumer demand over the long run. All predictions point to demand remaining below pre-crisis levels for several years.
The linch-pin of any reorganization concept has to be that the manufacturers reduce their output and lower production costs. For the workers, dealers and suppliers affected that will be a painful process. But if Obama is serious about saving jobs, this is the path he must support.
On one side, we have Obama the union member’s friend. After taking office he described union members as “part of the solution” and promised to support more rights for them. Then there’s the Obama faced with how many jobs he can save in the current crisis.
Nowhere is the conflict between these tasks as clearly defined as it is in the automobile industry. Obama can only justify further government assistance for General Motors and Chrysler, something unpopular with a majority of the public, if the companies can show how they intend to become competitive. And that’s something they can do only if they wring huge concessions from the United Auto Workers Union.
The figures the industry can present prior to the meeting in Washington on Tuesday are of little help to the government in justifying further fiscal assistance. One need only look at the sales figures for 2008 to know that the situation is catastrophic.
Whether the Big Three can survive is now dependent on their ability to quickly put a few of their environmentally friendly showpiece models into production. But the gas-guzzlers everyone thought had been rejected by the public have suddenly gained once more in popularity since gas prices have so dramatically decreased. More importantly, the companies have to show that they are capable of adjusting their operations to reflect lower consumer demand over the long run. All predictions point to demand remaining below pre-crisis levels for several years.
The linch-pin of any reorganization concept has to be that the manufacturers reduce their output and lower production costs. For the workers, dealers and suppliers affected that will be a painful process. But if Obama is serious about saving jobs, this is the path he must support.
“And that’s something they can do only if they wring huge concessions from the United Auto Workers Union.”
you have completely missed the point.
it is not about huge conscessions but leadership. and the leadership at these big three is sorely lacking.
I know I used to be an international consultant and worked with many of this big three management. upper management needs much change.
let toyota management run GM for five years and then you would see the difference.
we keep blaming workers for a problem that is about a lack of leadership and understanding of deming’s teachings.
greed and arrogance has taken over american mentality.
you like the rest want to blame workers for systemic problems.
Please understand that I only translate the German text into English and do not editorialize. You can send comments to Financial Times Deutschland at the following email address:
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