It is amazing how little people know about basic economic matters, especially in relation to the announcement that General Motors is planning to close its Lordstown plant in Ohio and laying off 15% of its salaried workforce and some production workers with a total of 14,700 jobs lost from that northern Ohio community. Even from people who are supposed to understand these complicated matters I couldn’t find many news outlets that truly understood the problem that GM is facing so I’ll sum it up very easily. It has everything to do with bathrooms. But first, lets study a very interesting Forbes article that made a lot of attempts at pinpointing the problem only to miss in every circumstance. Here are a few of the highlights with a link to the original article presented below. The link to the MSN article is even worse. It is filled with so much socialist rantings that it would be otherwise unreadable if not for the way it reflects the average opinion on the General Motors matter.
General Motors said today it is ending production next year at five of its plants including its last remaining plant in Detroit and its Lordstown plant in Ohio. The reasons: they largely make sedans, which U.S. car buyers are increasingly rejecting in favor of SUVs; and Trump-era tariffs are creating headwinds and higher costs for the automaker.
–Higher costs, due in part to the Trump administration steel tariffs, have already cost GM $1 billion, and those costs will persist and rise as long as they are in place.
Of the plants targeted for an end of production, the Lordstown plant has the best chance to possibly stay open. GM will soon kick off negotiations with the UAW, and the union will likely lobby hard for a crossover vehicle to be located at the plant located east of Toledo on the Ohio turnpike. “General Motors’ decision today… will not go unchallenged by the UAW,” said Terry Dittes, the union’s vice president in charge of negotiations with GM.
Here is the basic problem, and I understand why Trump, Mike DeWine, Rob Portman and even the economic buffoon Sherrod Brown want to twist GM’s arm to keep the Lordstown plant open. After all, General Motors took money for a bailout and the government feels it has a right to help manage the affairs of the company. But that is more of an exasperation of the problem than a fix. General Motors is failing and continues to fail because they just don’t have good leadership and unlike the days of the Sloan Management system, do not have people in their organization that can step up and take over at the top CEO job. Everything has become politicized at General Motors and they have grown to feel they are entitled to exist rather than needing to compete in a harsh automotive maker’s market. General Motors main problem is they have weak management largely because their labor unions feel they have shared control of the company which means that the good managers that are out there want nothing to do with General Motors leaving behind a bunch of slack-jawed losers to run the company, because only a fool would want to work with a bunch of lazy, slow, and contemptuous union leaders who think they share the burden of running a company. Because of that General Motors top management have turned to politics for help and that has only made them worse. To hear their current CEO think that by directing the company’s resources toward electric cars and autonomous vehicles is the wave of the future, they have not done their value stream maps correctly. Americans don’t want vehicles that they can’t drive. They love the independence of driving themselves and they want bigger cars that use more gas. Tesla has carved out a notch for themselves, but not to the extent that a company the size of General Motors should follow. The fact that they don’t know how to think for themselves says everything.
The real problem is that the labor union has destroyed the American automaker market. The pensions are too expensive for a declining company. If auto sales from America were still dominating the global market, it wouldn’t be a problem. But when you lose market share, which all American auto companies have, there simply is not a way to pay for an expensive work force that can’t keep the company at the top of their game. The American worker has taken their jobs for granted, especially in relation to auto jobs and they are losing to much more competitive foreign markets. When you travel around the world and the only cars you see are Toyotas, Nissans, Hondas and the like, there is no way that General Motors can afford to compete with top-heavy labor costs and pension commitments that are projected to cripple them for the next 50 years. The socialist fantasy of the big labor unions running the auto companies with shared input has long been over. The government contributions have only prolonged the bleeding, the problem started when America no longer built the kind of cars the world wanted by people who really weren’t passionate about their work.
If you go right now to a typical Japanese factory, whether they are making cars, boats, copy machines, whatever you can think of and a worker on the line would want to use the restroom, they’d indicate they needed relief, a supervisor or co-worker would fill their spot while the worker would lightly jog to the restroom and back again as fast as they could safely. Urgency and passion are part of the Japanese culture in everything they do including simple transactions at fast food restaurants. When they ask to use the restroom, they get to it and return to their work promptly and without excuse as they fully invest themselves into their endeavor. Go to the typical General Motors Cruz manufacturing line and a worker needs to use the restroom, typically a person grossly overweight and dressed like they just rolled out of a trash can indicates they need to relieve themselves. Once their relief shows up to cover their spot, they don’t return for another 20 minutes. If you walk behind the fat slob you’ll find they take an extra five minutes walking to the bathroom, they spend at least 5 to 10 minutes going to the rest room playing on their phone and reading graffiti on the stall wall, then they spend at least 5 minutes walking back talking to anybody who they can manage to engage in a conversation stalling as long as possible before they get back to the imprisonment of their work detail. They don’t love their work and because of the mentality of their labor union they are always seeking to do the least amount of it because they think the vile management system is always trying to steal something from them, so they in turn are always looking to steal time from the company. Usually its obvious in their restroom habits, but if you track the employee throughout their work day you can see it everywhere in everything they do.
Management in these American companies don’t have any form of control of their operations so only the bad ones stick around. The false premise that all socialists have is that everyone is equal, the worker and the manager and that everyone through consensus determines the direction of the group is completely wrong. Nothing could be said worse—such a condition never exists anywhere. Leadership is not a collective endeavor, it’s a very lonely one. Getting buy-in to leadership decisions is a collective enterprise, but the role of management is not. The workers are not in a position to determine strategic relationships between the manufacturing process and the tactical need to implement them. It takes people good at that kind of thing and when unions take over shop management only the fools stick around. And when fools run a manufacturing facility through communist dreams of unity, people take 20 minutes to use the restroom and they build bad cars that the world doesn’t want that are too expensive. It has nothing to do with tariff wars or even changing gas prices, it’s all about bad management which GM even with lots of bail outs and help by the tax payer have shown they are lacking. The future of automobiles are not automated cars and electric-powered ones at that, it’s in independence on the open road of America’s vast expanses of land, and a foreign market that would like to pretend that they live in America. The failure of GM management to see that for themselves says everything that needs to be said about why General Motors is struggling and jobs are being lost. And no politician or any amount of money in the world can fix their lack of vision and leadership.
And if you have any doubts about what I’ve said, just watch the videos on this article. The proof is quite obvious, especially the last one.
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