It's hard to avoid a degree of schadenfreude here (or even schadenforder ...)
Ford and GM haven't exactly been at the forefront of sorting out the US's grotesquely expensive and hideously inefficient healthcare system, so they are saddled with their share of the massive costs of the privatised system.
Having benefitted ftom the US's low fuel taxes and pursued a loophole in the CAFE regulations to allow them to push crude and inefficient trucks onto the consumer, they are poorly placed to meet the demand for more efficient vehicles.
Effectively, the unique conditions of the highly-distorted US market have allowed Ford and GM to become like a protected industry, now reeling in the fabe of stiff competition from fitter businesses who've had to compete in the real world.
|
>>Ford and GM haven't exactly been at the forefront of sorting out the US's grotesquely expensive and hideously inefficient healthcare system
Unlike Rover who sorted ours out ?
More to the point, I see from the figures that sales of just about every SUV type vehicle have at best failed to grow and from most of the manufacturers actually dropped. (Figures from the WSJ). IIRC, the Sedan/Saloon has been the success of the last 12 months.
|
>>Ford and GM haven't exactly been at the forefront of sorting out the US's grotesquely expensive and hideously inefficient healthcare system Unlike Rover who sorted ours out ?
It wasn't costing Rover zillions a year to pay for private insurance for its workers instead. The UK system is far from perfect, but it costs about half the proportion of GDP that the US system costs, and doesn't leave a quarter of the population unprotected.
The big corporations in the US spend a fortune on lobbyists. Pity they didn't spend some of that on trying to encourage a more efficient way of providing the healthcare which, according to the reports, is one of their biggst costs.
More to the point, I see from the figures that sales of just about every SUV type vehicle have at best failed to grow and from most of the manufacturers actually dropped.
Exactly. That's one of the reasons why the SUV-dependant US manufacturers have been hit so hard.
|
they have to provide the healthcare as they dont have the nhs, the unions forced it on them and it was enforced by law, thats why so many companies in the usa have applied for chapter 22.
Also why they are now if you read between the lines probably going to make cars in china/se asia as the labour/healthcare costs are much lower and they can therefore compete on a level field again
|
"Also why they are now if you read between the lines probably going to make cars in china/se asia as the labour/healthcare costs are much lower and they can therefore compete on a level field again"
Meanwhile their competitors - BMW, Honda etc are manufacturing cars in.... the US.
The engineering successes of the US auto industry were legend: the selfstarter, the automatic gearbox, airconditioning.. and then they kind of stopped.
madf
|
Meanwhile their competitors - BMW, Honda etc are manufacturing cars in.... the US.
on better terms than ford/gm have as they are new in the usa and can dictate terms to their workers with no grandfather rights, just like the non union factories we have in this country now.
|
Meanwhile their competitors - BMW, Honda etc are manufacturing cars in.... the US. on better terms than ford/gm have as they are new in the usa and can dictate terms to their workers with no grandfather rights, just like the non union factories we have in this country now.
Ever heard of 'Saturn' cars? They were set up following deceisions in the 1980's to compete with the Japanese by producing low cost entry-level cars. Saturn is a GM brand made in Tennessee at a non-union plant with lower wages and benefits than GM's major plants. To be fair, Saturn has done 'OK' but hasn't been a spectacular success for GM. There is more to success than low costs. In any free market, only one supplier can have the lowest cost - everyone else has to charge more. If you charge more you have to justify it by having good design. If cost was the be-all and end-all we'd all be driving around in Lada's and Protons...
Incidentally, do you know that the US 'Big Three' had a policy of purposefully making their 'small cars' to be of inferior quality to their larger cars? The idea was to 'condition' their customers that small cars weren't as good, and therefore steer them away from small Japanese imports. Of course this policy played right into the hands of the Japanese.... and the rest is history.
|
|
|
|
I think its a case of 'you reap what you sow'. Big US companies have mercilessly lobbied to get their own way on fuel economy, emissions and safety legislation and attempted to tell consumers what they should buy. They wanted to manufacture 'high margin' but crudely designed vehicles that were inefficient in so many ways. You can only stand still for so long, and consumers have moved on to more efficient and better designed vehicles from Japan.
Moreover, the US companies have also manipulated social policy and worked hard to stop Bill Clinton from bringing in some form of NHS-type coverage. GM, for example, has highly profitable healthcare investments in the US. How ironic that the ferociously rising costs of healthcare have come back to visit themselves on the profitability of the car making division. US healthcare is horribly inefficient and I've seen estimates (in US newspapers) that it costs anything from 8-16x that of European social-insurance schemes on a per-capita basis. My elderly aunt and uncle in Arizona are paying over $2000 a month in premiums for fairly basic coverage!
Having worked in the US I also find that the Americans tend to 'talk a good story'. They are not that good at sorting out problems that require good people-management skills (as opposed to simple hire-and-fire). A good example was GM's Fremont, California plant. In the early-mid 1980's GM had so many labour problems (not just strikes, but absenteeism, drug and alcohol abuse) that they simply gave up and wanted to close the plant. Toyota came along and offered to manage it for them as part of a joint venture (Toyota run, but making Chevy Nova's and Corollas). 10 years later it was making Toyota pickups that won a JD Power gold award and Fremont won the JD Power Silver award for car production. It is one of Toyotas most profitable and productive plants.
I don't see a move to China as an easy way out in the long term. China is attractive to manufacturers because it is a totalitarian state with few workers rights, low pay and where dissent is outlawed and punishable by death. The economics of this sort of 'globalisation' only work because they are manufacturing at third world labour rates and selling at first world prices. It would be surprising if they *didn't* make a profit on this basis - make a pair of Nike's for £1 and sell for £70! However, it only keeps on working whilst we in the first world have incomes to pay these high prices. If incomes start to fall (because all our jobs are shipped off to the Far East) then their lucrative market soon dries up. 'Globalisation' is essentially about profitability arising through disparity of income - if that disparity cannot be maintained then it falls apart.
|
|
excellant post Aprilia, i have nothing to add.(and thats a first:)).
|
Aprilia
The other factor against shipping jobs abroad is what we found time and time again when I was working in aerospace and defence.
With the exception of some of the very basic machined components, we found that third world manufacturers often represented no better value for money than those based in the UK or europe.
Sometimes they were cheaper with quality compromised, but often they were no cheaper. Yes - no cheaper. The machined components procurement team I worked with found that they returned similar prices for doing the same sample parts as did UK and european suppliers.
The recommendations we were making to projects for subcontracting was to send the simple single axis machined components to the likes of China and India and keep the complex parts manufacture in this country. These recommendations were on cost alone. Obviously there are other so called "costs of ownership" that come with foreign sourcing.
|
|
It's not just US companies that are in trouble because of employee social costs - many British companies are drowning in pension commitments - British Airways, for example, has been described as a pensions company that runs an airline on the side.
|
Pensions are in a mess becuase companies took big pension holidays when times were fat, and the government has robbed the pension funds blind since.
Globalisation only works when there is someone or somewhere worse off to exploit by those who are better off. Sooner or later the world will run out of "exploitees"
------------------------------
TourVanMan TM < Ex RF >
|
And companies were advised to take those pension holidays or face big problems with the Revenue. If you fund was valued over 105% there was an expectation that you should take a pension holiday. The right thing then turns out to be the wrong thing now.
R (soon to be ex-pension trustee)
|
The other factor against shipping jobs abroad
>>
may have been true in the old days, but increasingly those who don't do so (like ford and gm and rover) are having to face reality.
let me quote just a few facts:
Thursday, December 15, 2005
The Chinese are coming
There's been a lot of speculation about if and when Chinese automakers will be selling cars in the United States. One of them, Geely, is taking an important step toward entering the U.S. market.
Organizers of the North American International Auto Show, to be held in January, announced today that Hangzhou-based Geely will become the first Chinese automaker to display vehicles at a North American show. The Detroit show is the largest, and considered the most prestigious, such event in the United States.
or
But the reality for the GM workers is even more complex: in fact, as part of a process initiated in the thirties, part of the GM business has been subcontracted to plants in Mexico. Delphi Automotive Services, with 72,000 workers, is the biggest private business in Mexico. We draw attention to some other facts referred to in the Italian newspaper «Manifesto»:
«In Mexico, the minimum guaranteed daily wage is $3.40. Therefore, when GM comes along and pays $1.36 an hour (the usual rate at Delphi) it appears as a benevolent employer. At the Flint plant, for the same duties, a unionised worker is paid $22 per hour, that is, an average of $984 per week plus overtime, a figure which for us is astronomical».
It is in the context of this contradictory situation that GM and the union are working towards lowering the cost of labour in the USA to Mexican and Asian levels. This confirms that the imperative of American capital, just like all capital, is to reduce salaries and increase productivity, i.e. exploitation. The goal of communists and all workers who have the interests of workers at heart is exactly the opposite: to defend living standards and working conditions, and to fight for wage increases - above all for the lowest paid -and proletarian internationalism.
or
Labor costs have weighed Delphi down since it spun off from GM in 1999. The company agreed to pay its workforce the same wages that workers on automotive assembly lines earn, which is twice what laborers at other automotive suppliers make. The union agreed last year that new hires would earn wages similar to competitors, but union brass told workers last week the company is now seeking to cut wages for everyone to $10 to $12 an hour, down from the $20 range.
or re. british airways from www.personneltoday.com/
BA's pension deficit grows to £2bn
19 January 2006 10:51
British Airways' pension deficit has reportedly grown to £2bn, doubling since its last valuation in March 2003.
The amount was revealed to unions yesterday in a meeting with management, signalling months of negotiations on pay and pensions, according to the Financial Times.
The newspaper said that if the scheme were to close and wind up, it would result in a debt of £3-4bn, compared to BA's market value of £3.6bn.
BA declined to comment on the details of the meeting, saying the talks were confidential, but a spokesman confirmed that the company has sought to inform the union representatives about the exact financial position.
"We did outline to them some of the challenges facing the company and the scale of the deficit," he said.
and there are many other british companies facing similar problems. at a conference 4 weks ago in birmingham, many ftse100 companies discussed plans to outsource huge portions of their operations (manufacturing as well as professional and back-office work )to the emerging eastern european companies. some have already started the process, some have even completed the process, many others are just beginning it.
|
Few points.
Main reason for problems at Ford and GM is that they are not making products that people want to buy. Pensions and healthcare have now become an issue because sales and hence profits are drying up. Delphi is in trouble because it has been incredibly badly managed since it was 'spun off' in 1999. All these companies are now pointing the finger at the unions and trying to blame them. The unions didn't design the cars.
I have recently done some work for a company which is manufacturing a machine to weld plastic components (trim etc). Not exactly high-tech. They want production runs of a few thousands. We got a quote a from a reputable Chinese manufacturer and also from a UK supplier. There wasn't much difference. The reason for this is that a lot of components have to be sourced from Europe and the US - plus there is additional shipping from China back to Europe. On many modern products, highly automated assembly means that labour is not a large proportion of cost (this is different to service industries where probably most of the cost is labour). In any case, the USA has its own 'China' in its back yard - Mexico - part of NAFTA. Lots of Ford products are built in Mexico, have been for years - Duratec petrol engines in Euro Mondeos come from Mexico, for example.
Honda has been producing the Jazz in China for a couple of years at CHAC (China-Honda Auto Company). I believe that most Jazz sold in Germany are sourced from CHAC. Their costs aren't notably lower than Honda Japan. The main reason for CHAC is to secure Honda a good foothold in the expanding Chinese market.
On the general theme of lowering wages and outsourcing jobs, well, ponder this exchange between Henry Ford and a union offical. Ford is praising the replacment of assembly workers by machines...
Henry Ford: This machine doesn?t take time off or demand higher wages.
Walter Reuther (union leader): And how many cars does it buy?
|
Want I have taken from this thread.
It is Ford's responsibility to reform the US health care system. And there was me thinking they made cars and the US had a democratically elected government to do such things, just shows how wrong you can be.
The fantastic sparklingly clean efficient hospital I was admitted to in Houston after a car accident is worse than the MRSA ridden hell hole that is my local NHS hospital. Oh well wrong again I guess. Still the NHS is 'free' if you discount the huge amounts we pay in taxes which could fund decent health care for all if the government let us spend our own money.
|
Want I have taken from this thread. It is Ford's responsibility to reform the US health care system. And there was me thinking they made cars and the US had a democratically elected government to do such things, just shows how wrong you can be.
US corporations don't hesitate to campaign for legal changes on countless other issues. I raised that one, because the US caramakers complain of the huge cost of healthcare -- but there is a solution available which could massively reduce that burden if only they didn't object to the notion of state provision.
The fantastic sparklingly clean efficient hospital I was admitted to in Houston after a car accident is worse than the MRSA ridden hell hole that is my local NHS hospital.
The Houston hospital has an easier ride to start with by not having to provide for the quarter of Texans who have no medical insurance, who tend to be the sickest ('cos they're the ones who have to pay most for insurance) ... and then it gets twice as much funding to treat the reduced intake of patients. With such a (comparatively) easy job to do, the US hospital would be a disgrace if it wasn't a fantastic sparklingly clean efficient hospital.
You may prefer a hospital system from which poor people are excluded and gleams nicely ... but I'm glad that despite the NHS's many failings, it's there for anyone who falls ill or is injured in an RTA, not just the rich.
|
NW,
This thread will get away from cars rapidly but I have seen inside the NHS as an auditor. It is run for the benefit of the employees not the patients and they waste money like it was water. Literally any other structure could provide better value for taxpayer money.
|
It seems to me that the americans can't be that daft, they buy cars that score highly on surveys. Unreliable car fail in the US market(anything from France or the UK) and the Germans have been losing ground ever since the 70's.
NoWheels your comments about the US medical system show just how little you know about it. If ours was so good then why do so many employers provide private medical care ? I wonder if the US hospitals charge for parking ? and I wonder if you can park when taking someone to A&E, because I know I couldn't earlier this month.
|
"It also said it wanted to cut the time it takes to develop new cars from 12 to six months - by copying the way its Japanese subsidiary Mazda does it."
I'm not convinced that this is a good long-term strategy. Trying to develop something as complex as a car in 6 months is just asking to have reliability problems.
--
L\'escargot.
|
"It also said it wanted to cut the time it takes to develop new cars from 12 to six months - by copying the way its Japanese subsidiary Mazda does it." I'm not convinced that this is a good long-term strategy. Trying to develop something as complex as a car in 6 months is just asking to have reliability problems.
Not sure thats true austin rover took 8 years to Develop the Princess!
|
I go back to the point of design.
How many mass produced (not niche ) American cars are exported in any volume to the rest of the world?
In Europe, most are too big, too fuel inefficient and have inadequate ride and handling. (Chrysler Neon excepted)
You cannot (as Aprilia commented) build an industry on inferior products.
madf
|
NW, This thread will get away from cars rapidly but I have seen inside the NHS as an auditor. It is run for the benefit of the employees not the patients and they waste money like it was water. Literally any other structure could provide better value for taxpayer money.
Thommo, as you know most large organisations have some degree of wastage or inefficiency, and private businsses have them too -- being run (by law) for the benefit of shareholders. But the OECD has consistently acknowledged the NHS as being one of the most cost-effective systems available, albeit experiencing growth pains at the moment.
If you really think that the US model provides better value, I'd not want you near my business: the US spends twice as much per capita and leaves one in 6 Americans completely uninsured (in Texas, it's 1 in 4), with many more people dangerously underinsured. That's not my idea of efficiency.
|
>>But the OECD has consistently acknowledged the NHS as being one of the most cost-effective systems available
I truly don't see how that can be. Aside from the truly awful customer service experience and the terrible lack of cleanliness, there is seemingly so much money wasted that regarding it as an efficient model can only be a reflection on the terrible state of the competition, rather than any compliment for the NHS.
In comparing it to the US are you truly capturing all costs and comparing like for like - e.g. govt. spend with govt. spend and personal spend with personal spend ?
|
Still the NHS is 'free' if you discount the huge amounts we pay in taxes which could fund decent health care for all if the government let us spend our own money.
LOL! What planet are you on matey? I have private health insurance - its not cheap and covers straightforward medial procedures only. Anything long-term or 'chronic' is not covered. If you want a private policy that covers everything the NHS covers (however 'inefficiently') then add a couple of zeros to your monthly premium!
|
I think the bottom line is that the US government (thanks to lots of expensive lobbying) has given the US motor industry pretty much everything it asked for in terms of business and legislative environment. Having got what they wanted, the industry failed to deliver the design or quality that the consumer wanted. Contrary to what was stated above the Germans have all done pretty well, going on to build production facilities in the US that pay good wages (equal or exceeding US maker's packages). The Japanese and Koreans have also done notably well. Its not rocket science, its basic stuff like giving the customer what he wants and not making stuff that people don't want to buy.
I was lucky enough to visit some Japanese car plants in October last year. They pay probably the highest wages in the world, with excellent working condition and lots of company benefits. They also 'throw' engineering resources at their products - they employ lots of engineers to get the product right (in contrast, it is said in the industry that both Ford and GM employ more accountants than they do engineers). The end result is a good product and consequent high sales and profits.
As to the US healthcare system - well, having lived and worked in the US for a year I can only say that there is definitely a 'dark underbelly' to US society and the proportion of the population that have comprehensive healthcare is rapidly shrinking as costs escalate. The country has an infant mortality rate higher than most developing countries, and way higher than Western Europe. Even relatively affluent retirees (like my aunt and uncle) find that they can't afford premiums as they get older. My uncle is now approaching 90 and reckons he will soon become more or less uninsurable.
In the UK you can buy private healthcare if you want (like I do) and if things do go pear-shaped then at least the NHS is there to pick up the pieces for you.
As to whether US hospitals charge for car parking - yes, of course they do, its added to the bill. As is every cup of coffee, glass of water, aspirin tablet ($10 a tablet) etc etc. Nothing is free.
|
>>If you want a private policy that covers everything the NHS covers then add a couple of zeros to your monthly premium!
Not really. I have worldwide private healthcare for my family which covers everything that the NHS covers. Well, actually somewhat more since it allows me to see a doctor within 3 weeks of being ill, allows me to see a doctor out of office hours and allows me to attend hospitals which don't add viruses to my list of problems.
And it costs less than my NI contributions here.
As for US health care, well their GP equivalents are no better than here and are also used by the insurance companies as gatekeepers - as indeed they are here. However, once you get to a hospital they are clean. That alone puts them in front of the UK.
On the other hand I would completely agree with the comments about the US Car industry - which isn't so far from where the British motorcycle industry was in the early 70s.
|
In comparing the NHS with the US system it is the 'free at the point of delivery' aspect of the NHS that is always heralded, with this in mind the two systems don't have directly comparable objectives and therefore cannot easily be compared in efficiency terms.
From a UK perspective while the benefits of private healthcare are clear it is also clear that the NHS is required to provide some services that make a comparison with PH difficult, for instance 24/7 emergency cover, A&E etc.
I pay for private healthcare though it will be an NHS ambulance and NHS A&E that will attend to me should I be unfortunate enough to need emergency medical treatment.
|
Well, actually somewhat more sinceit allows me to see a doctor within 3 weeks of being ill, allows me to see a doctor out of office hours and allows me to attend hospitals which don't add viruses to my list of problems.
The last time I visited my NHS GP was at 9pm with 45 minutes' notice. 90,000 people die from HAIs (Hospital Aquired Infections) every year in the USA. The NHS records about 100,000 infections, the vast majority of which are not fatal (figures range from 5000-20,000 fatalities depending on who you talk to). In any case the rate of infection (about 1 in 10 patients) is about the same in the UK and USA. This is possibly because many people are "carriers" of MRSA, including nurses, and those kind visitors who left the grapes by your bedside.
But this is to do with cars: the American companies focussed on truck-based cars which they sold mainly to Americans while Toyota mopped up the market everywhere else. Now that the American economy demands something more sophisticated they are struggling. Even biodiesel is taking off at state level and it is the European manufacturers who will benefit from that.
|
Not really. I have worldwide private healthcare for my family which covers everything that the NHS covers. Well, actually somewhat more since it allows me to see a doctor within 3 weeks of being ill, allows me to see a doctor out of office hours and allows me to attend hospitals which don't add viruses to my list of problems. And it costs less than my NI contributions here.
Really? Please post the name/link of the company that can provide this - I would be very interested. I have looked at many policies over the years and never found anything that covers long-term chronic or incurable conditions. All the policies I've seen are to cover acute (short-term curable) conditions.
My father had private health care for about 20 years with one of the big companies. When he hit 75 they hiked his premiums radically and sent him a letter which said something along the lines of "now you are getting very old we obviously have to restrict your cover and anything more serious than a cut finger is not covered" (I exaggerate, but you get the idea). No other company would offer cover even though he was very fit and healthy, so he packed it in. He's 84 now and just before Christmas he was diagnosed with cancer. Very grateful to the much-maligned NHS who got him seen, scanned, diagnosed and on chemotherapy within two weeks.
|
Mine is a Chile based insurance company. I have no idea whether they offer insurance to non-Chileans, but I will find out. I also don't know about age-related restrictions, which I shall find out for my own benefit.
My sister-in-law is a doctor. Her opinion of the NHS [and for that matter the US Health Service, she's married to an American] is that if you have something terminal and/or serious (along the lines of cancer or transplant sort of serious), then you will do very well with the NHS once it has been diagnosed and defined.
However, in her opinion, the less serious conditions, and the diagnosis, investigation and definition stages and the welfare side are extremely bad. Such experience as I have had would tend to suggest that is a reasonable opinion.
I'll let you know on the insurance.
|
>>I'll let you know on the insurance.
But not here on this motoring related site. Sorry Dave.
|
>>I'll let you know on the insurance. But not here on this motoring related site. Sorry Dave.
How about in IHAQ?
|
|
|
|
|
