A Plague On Both Your Houses

by BILL WADDELL

On April 26, 1995, a plane flying over the Cincinnati Reds opening day baseball game against the Chicago Cubs at Riverfront Stadium towed a banner that said, ""Owners and Players: To Hell With All of You".  This was a fairly widespread reaction to the baseball strike that began in mid-season the year before and resulted in the cancellation of the World Series - something even World War II had not done.

That fan's sentiment reflected popular disgust at a bunch of millionaire players fighting with a gang of billionaire owners over how they were going to split up the $100+ it cost the average Joe to take his kid to a big league ballgame to watch an increasingly boring game played by increasingly apathetic players.  The fans, when faced with a choice between siding with the owners and siding with the players opted for (C) None of the above.  They opted for the National Football League, the National Basketball Association and NASCAR.

The State of Michigan should take heed and learn from this.  Every post and every article concerning GM is met with a cacophony from Michigan based UAW sympathizers and GM management backers pointing fingers of blame at each other.  They haven't heard the message and we need that guy from Cincinnati to haul his banner out of mothballs and fly it over downtown Detroit.

GM management demands union concessions, blames retired worker legacy costs, still cries over unfair Japanese trade practices... and still pays ridiculous salaries to itself and churns through 16,000 company cars a year to keep management riding in style.

The UAW won't concede a dime.  Only under duress did they finally agree to wind down the jobs bank - the deal that had UAW members on full pay sitting around and doing nothing.  The hourly pay for a UAW member is obscene compared to the rest of American manufacturing.

But GM management and the UAW do agree on a couple of things.  First they jointly hammered us with years of attacking our patriotism.  We should continue to buy their products because "Buy American" was our patriotic duty.  That line doesn't cut it any more, so next we heard that the future of the American economy depends on keeping them going.  And now they have taken the tack of simply forcing us to keep their miserable ship afloat through force of law.

If the customers won't give them money any more, then they will get it from the government and take it from us through taxation.  And if Americans won't join labor unions any more of their own volition, they will ram through the absurd "card check" system that will empower the unions to try to strong arm potential members into joining in whatever dark alley they can find them.

American's are no longer interested in hearing from either side.  They overwhelminglyy opt for (C) 'None of the above' in the never ending bickering between old school management and outdated unions.  For 80 years GM and the UAW have fought over how to split up the big juicy profit pie they baked by abusing American car buyers.  The bickering should come to an end.  You have killed the goose that has been laying an endless stream of golden eggs.  Americans are sending you no more pie and no more eggs.

As Shakespeare put it, "A plague on both your houses." 

The guy from Cincinnati was even more direct: "To hell with all of you".

Toyota and Honda did not just give us a set of factory floor techniques.  They have demonstrated that the old bi-polar model of business being a massive struggle between capital and labor is false.  Lean demonstrates the business model that has everyone engaged in baking an ever-bigger pie.  The sooner all of us disengage from the old model the better we all are.

Comments

[Mark Graban]

I agree with "to hell with all of them", but it's not accurate to say the UAW hasn't given a dime back.

They've agreed to 2-tier wage systems, more flexible job classifications, higher co-pays for healthcare, etc.

It might not be much, but it's more than nothing.

Since Toyota pays just as much for U.S. wages, is that also "obscene"?

The "wage gap" is really a "retiree" gap. The $1500 in healthcare costs per GM vehicle and the $75/hr wage numbers that get thrown around are misleading since that includes all of the retiree benefits. GM has so many retirees mainly because their market share has fallen from 50% to 20% and GM management couldn't cope with competition and couldn't deliver good quality fast enough.

I'm hardly a UAW defender, but to say they're equally responsible is wrong, I think. Dr. Deming said responsibility starts at the top... why did short-sighted GM management agree to these contracts? They never had a gun to their heads. They were buying labor peace in a very expensive way.

[Rick Bohan]

If laid off workers who are put into the job bank and "sit around doing nothing", whose fault is that?

[Bill Waddell]

Rick - If adult A sits around and does nothing all day, and adult B gives him a paycheck for it, I say they are both irresponsible. When A loses that job and B runs out of money, neither can be classified as a 'victim'. 'Idiot' is a better descriptor for both of them.

Mark - I agree with all of your criticisms of GM's management, but those concessions you credit the UAW for giving came largely during their 2007 negotiations. Recall that at that time - less than one year before GM announced its impending insolvency - the UAW went out on strike to battle against cuts in wages and benefits. If they are crying 18 months later about losing their jobs and pointing a finger at management, I say the same thing you do. No one pointed a gun at your head, GM worker, and forced you to vote in favor of striking GM. And you get no sympathy from me for the consequences of your actions.

[Johnson]

uh...hmmmm...apparently you are not following the news to closely. Your beloved Toyota and Honda are also losing money in the good ol U.S. (as is every automaker at the moment) Uh...or maybe you didn't catch that buick edged out lexus for the first time in 13 years last week for the top quality award. I suppose it is possible the news last week that toyota asked the japanese government for loans to make up for their loss of business just after they announced they will cut their production in half this year slipped by you too. And, I guess that JD Power rated the GM Lansing Grand River plant as the top quality plant in North America in 2008 didn't shake your belief in poor union factories either. And perhaps you missed new CEO Fritz Henderson on the Meet The Press yesterday when asked if the President should encourage Americans, to buy american cars said no...saying that americans should buy the car that best fits their needs no matter who makes it but that it was GM's job to provide them. Look, there is no question toyota and honda are in better shape financially and that the U.S. automakers are struggling because of past bad choices, but while you may have been right in your asessment on the ability of the union and management to work together to build excellent cars 10, even 5 years ago, you are very wrong today. There's plenty of proof, all you have to do is look. A little use of google could be helpful next time....

Note from the author:

God love ya' Johnson. You gotta be the last guy left in America who believes this hype. The big difference is that Toyota and Honda ran into trouble when the banking system went in the tank and no one could get car loans. Before that they were riding high. GM, on the other hand, has been on a steady downhill slide for 20 years, and was losing money at a staggering rate throughout the last two years. The banking fiasco merely pushed them over the edge.

... and someone should tell Detroit that JD Power doesn't decide whether a car has value or not. Customers do. And customers have been screaming at GM for two decades, but no one has been listening. Instead GM has been content to live under the illusion that if JD Power tells them that all is well, then they are not responsible for the company's failings. GM is about to be the company with the highest JD Power ratings in the bankruptcy court.

Finally, Mr. Johnson,

I don't need a "little use of Google". I played baseball in the open park area on Moores River Drive across the Grand River from the vaunted GM plant you refer to - back when it was an Oldsmobile plant. In fact, my dad worked his way through college putting axles into Oldsmobiles in that plant. My grandfather did quite well selling fasteners to that plant back in the day.

Just maybe you ought to Google me and find a copy of my book and learn a bit about the auto industry.

[Rick Bohan]

Adult A gets laid off and sent to the job bank. Giant Multi-Gazillion Dollar Corporation B has no plan as to what to do with Adult A and, in effect, says "Sit there". But Adult A is an idiot.

BTW, do we know that Adult A, in fact, just sat there in spite of Corp B's poor planning? Do we know that he or she didn't sign up for courses at the local community college? Do we know he or she didn't use the opportunity to volunteer for something in the community? Do we know that he or she didn't use the time to help another family member with their start-up business? Or does it just suit the right wingnut mind set to assume that all union workers are lazy parasites? I'm thinking it's more the latter than any of the former.

[Todd Hudson]

This decades-long squabble between GM and the UAW only happened because the money was so good. Each side felt entitled to their cut and completely lost all connection to what created that money in the first place. Happy customers.

Each side defended its absurd demands (e.g., job bank) by pointing to an absurd practice by the other (e.g., executive cars). GM, as pointed out by a spot-on earlier comment, bought peace at a very high price. And the customer was completely forgotten. Over and over again.

Now, there are no customers and no money. All these practices seem totally insane. People ask "How did they get put in place?" Who cares? Finger pointing is pointless. It was greed and stupidity.

The only correct course of action is to recreate the company and union, based on today's reality, with a business model that's sustainable long term.

But, decades of greet and stupidity are hard to overcome quickly. I have little hope for GM's future.