Automotive News - December 1, 2008 - (Page 14) 14 • DECEMBER 1, 2008 Reviving Detroit must start with the UAW Jack Fitzgerald At their Nov. 20 press conference, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said they wanted to help the auto industry if the industry helps itself. They requested a plan for success from the Detroit 3 that would convince Congress that the domestic automakers can become and remain viable after the assistance. If the plan, due Tuesday, Dec. 2, shows that the Detroit 3 would be viable with whatever aid is necessary, Congress will reconvene. Pelosi and Reid may have to reach out to UAW President Ron Gettelfinger because there will be no success without strong leadership from the UAW — think of the Chrysler loan guarantees of 1979 and UAW President Doug Fraser leading the way. The Detroit 3 are in trouble because for more than 25 years, they built products that ranked poorly in Consumer Reports’ ratings, cost billions in warranty and recall expenses and caused extraordinary losses of market share. Detroit must produce competitive products to be viable. To do that, it has to start with a competitive overhead. That will require a huge change in the interaction between the UAW and the Detroit 3. EDITORIAL STAFF 313-446-0361 E-mail autonews@crain.com Web site www.autonews.com Keith E. Crain Publisher and Editor-in-Chief Peter Brown Associate Publisher and Editorial Director DETROIT 313-446-0361 Fax: 313-446-0383 1155 Gratiot Ave. Detroit, MI 48207-2997 David Sedgwick Editor dsedgwick@crain.com Edward Lapham Executive Editor elapham@crain.com Richard Johnson Managing Editor rjohnson@crain.com John K. 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Plus a competitive company offers real job security. Something that should not require additional action from Congress is the restoration and strengthening of the Detroit 3’s captive finance companies. Cerberus must sell GMAC back to GM, and Chrysler must own Chrysler Financial. I can’t get the front page of the Nov. 19 Baltimore Sun out of my mind. There is a picture of a man sitting in his kitchen wondering what’s going to happen to him after 32 years with GM. He’s 52 years old. On the same page is a picture of the Detroit CEOs, each one a millionaire, asking Congress for assistance. We must do all that we can to keep our people on the job. The UAW can and should lead the way. Management must design the vehicles and the production process with UAW input, but the UAW must lead the effort on the shop floor to produce the highest quality worldwide. cles and the production process with UAW input, but the UAW must lead the effort on the shop floor to produce the highest quality worldwide. Quality is better than it was but not what it needs to be. Management and the UAW must unite in a partnership dedicated to that goal, just as they did at General Motors’ Saturn plant in Spring Hill, Tenn., in 1990. For four years, Saturn produced cars with top reliability scores as measured by Consumer Reports. Unfortunately, the plant reverted to a standard UAW contract, and Saturn’s reliability scores suffered. By contrast, the New United Motor Manufacturing Inc. plant in Fremont, Calif., is a great success. It has been a GM-Toyota joint venture since 1984. Currently, it builds the Toyota Corolla and Tacoma and the Pontiac Vibe. GM, Toyota and the UAW produce high-quality products that are very competitive. The vehicles earn high marks in Consumer Reports every year. Cut pay and benefits Toyota is the No. 1 competitor worldwide. The Detroit 3 must benchmark Toyota. They must install the Toyota Production System, work rules and job classifications — which will eliminate the paid positions of union officials in the plants that do no productive work. The Detroit 3 must use Toyota’s pay scale for everyone from the CEO down. That will mean lower pay and reduced benefits for directors, officers, managers and active and retired employees. And there must be no Jobs Bank or make-work projects for UAW members, who must run the plant as if they owned it. Management must design the vehi- What do you think? We would like to hear from you. Send a letter to the editor via e-mail (autonews@crain.com) or to the Detroit address near the top of the box at right. Here’s what we need. No more than 250 words Your name and title, company name if we can print it, city and state; or tell us about your connection to the auto industry Your phone number or e-mail address Your permission to print it Get GMAC back Toyota, Honda and BMW export vehicles from American plants. Why can’t the Detroit 3 do that? Why can’t we make inexpensive cars here and ship them to emerging markets? Congress is offering to help if the industry will help itself. The UAW must seize this opportunity and run with it. Management will have no choice but to go along. Both will make considerably less in pay and benefits. But if they fulfill their responsibilities, they should do well Detroit 3 bailout is the better bet continued from Page 12 GOP has lost this Republican To the Editor: I have become a Democrat! Wow, who would have thought? It seems all right to bail out a bunch of bankers who made a bunch of loans nobody wants; $700 billion is a small price to pay. Couldn’t jam it through Congress fast enough. General Motors, Ford and Chrysler ask for $25 billion in loans, and suddenly saving our economy is not that important. Well, the Republican Party lost the presidency, and it lost this registered Republican. TIM WALTERS Dealer Principal Walters Elkland Chevrolet Elkland, Pa. To the Editor: What’s better: 1. A 50 percent chance of recovering a $50 billion bet in five years? 2. A 0 percent chance of recovering $156 billion over three years? That is what legislators should be asking themselves when debating the merits of extending loans to the domestic automakers. In choice No. 1, the $50 billion represents the aggregate loan amounts being considered for the three American automotive manufacturers. In choice No. 2, the $156 billion represents the cost (in lost tax revenues and increased transfer payments) of allowing one or more of the American automotive manufacturers to fail. (That’s according to the Center for Automotive Research.) The potential impact is actually worse because the center’s report ignored the impact of the Detroit 3 and supplier pensions being off- loaded to the Pension Benefit Guarantee Corp.; Delphi Corp.’s unfunded liabilities alone total more than $3.3 billion. Simple math says the loan to the Detroit 3 makes sense, but only if it favorably alters the course of the industry. That’s where the hard work comes in because it requires the federal government to change mentality regarding automotive regulation. It also requires intelligent and long-range investment decisions by the manufacturers. As a nation, we are at a tipping point because of poor regulation, overregulation, lax national energy policies and crushing legacy costs caused by union overreach (Jobs Bank) and management hubris (assuming the Jobs Bank would never be used). We’re dealing with an unprecedented global financial crisis that requires difficult decisions. We must set ideologies aside and look at the numbers. Betting on Detroit gives us a strong chance of preserving a national manufacturing base while making an investment with an expected return. Accepting failure costs the government three times as much, and that’s only the financial costs. ROBERT LAWRENCE Birmingham, Mich. Rome burns while pols fiddle To the Editor: House Speaker Nancy Pelosi, DCalif., and Sen. Harry Reid, D-Nev., are examples of our useless, donothing congressional leadership. They said the auto companies have an opportunity to show they would put the federal money to good use. Rome burns while they fiddle. By the way, did all of those public payrollers arrive via pu http://www.autonews.com http://www.autonews.com
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