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The success of America’s automakers is more important than a Wall Street bailout, so what’s standing in the way? I can’t understand politicians. They’re all ready to let GM, Ford, and Chrysler die a painful, gory death, while they seem to have no problem bailing out AIG, which gets to spend lavishly for executive getaways. Politicians and a lot of their constituents are mad as hornets at the auto industry, but the anger is misplaced. It’s like being mad at your own foot because you tripped over a crack in the sidewalk. US automakers have always specialized in large cars and trucks, while Asian manufacturers tend to build smaller versions. This is not some clandestined strategy, but a function of our different geographies, roads, and commuting habits. But when fuel costs go up, tastes in cars understandably change, as they should. To my analogy, blaming Detroit for making the cars and trucks that Americans want (or at least wanted six months ago) is a load of hooey. While driving home from work yesterday, I listened to a tirade by am radio talk show host, John Kobylt of the “John and Ken Show” on AM640 in Los Angeles. Using every last milliwatt of AM 640’s 50,000 watts, Kobylt lashed out angrily at Detroit’s engineers, product planners, and executives, as he banged on his paper-laden desk and screamed into his mic about how they’re just a bunch of out-of-touch, apathetic, square-headed cretins who don’t care about the products they’re making. What makes the tirade scary is that Kobylt is an unabashed conservative, who champions the cause of small, functional, and unobtrusive government—so to him, any government bailout is just politics as usual in Washington. Most conservatives in Washington would tend to sympathize with Kobylt. Why? Because the state of Michigan has largely spurned them. (Michigan hasn’t elected a Republican to Congress in almost a generation.) If congress passes a bailout bill for Detroit, it will have to be with the help of Republicans, and that’s not going to happen because the unions (read: Detroit) traditionally don’t support conservatives. It's payback time. If the Democrats can get it done on their own, it will be with a lot more strings attached than AIG got. (GM, for instance, might have to drop it’s lawsuits against California and other states over greenhouse gas legislation, and there would be fuel economy mandates as well.) I don’t give that scenario a lot of hope either, because as much as the Democrats love the unions, they dislike carrying the water for big business even more. So back to Kobylt. I see his argument as having two distinct lines of thought: one of them essentially correct, and the other one completely flawed. He argues that union workers—who on average cost $73 per hour compared to $48 for non-unionized auto workers—are sinking the big three. Through generations of political maneuvering, the unions have completely emasculated the big three with huge legacy costs including pensions, healthcare, and job banks that pay idle workers to sit in rooms doing crossword puzzles. My own experience echoes that sentiment. Two years ago, I toured GM’s Corvette plant in Bowling Green, KY. As you wind your way through the plant, you see work stations. At each work station is a crew, and a digital timer telling them the time remaining for the assigned job. For the most part, the plant was a model of automated efficiency, but a few stations, one in particular, stood out. Six workers sat at an aluminum picnic table as a car rolled up on a track. The timer had seven minutes on it, and began to count down. The workers completely ignored the car for the first five and a half minutes, happily chatting and having the time of their life. With a minute and a half left on the clock, they let out a belated sigh, shuffled to their feet, and started banging parts onto the car with rubber mallets. A quick check of the math shows that this job could’ve been done by just two of them. Folks, this is a big problem, and if it’s not fixed, the US auto industry is doomed. Notwithstanding, what a lot of people (Kobylt included) fail to realize is that a significant part of the white-collar engineering work load is devoted to reducing or eliminating assembly variances (the Monday/Friday syndrome) with automation, robotic welding, and supplier module pre-assembly. Where Kobylt is dead wrong is in his assessment of the ranks of white-collar workers: the development engineers, product planners, designers, test drivers, process engineers, finance people, and executives. In my 16 years in the business, I’ve gotten to know or have met many high-ranking execs, engineers, and designers at GM, Ford and Chrysler, and can tell you they are passionate about the products they design and build. If these people are out-of-touch, apathetic, or more greedy than the next guy, they’re hiding it really well. Some of these people would work for half what they’re getting paid—they love it so much. None of them work under contract, and unlike union workers, they are subject to losing their jobs at any time for any reason. And in the last few months, that’s exactly what’s happened by the tens of thousands. I say knock the unions off their gilded high-horse, and make them work under the same at-will agreement and with the same benefits as the rest of the universe (magazine editors, radio talk show hosts, engineers, auto executives, ditch diggers, etc.). If a worker looses his job, that’s part of life; he should work hard to find another one, and not get paid from the inflated price of my car (or a federal bailout) to sit at a job bank playing checkers. Renegotiate those costly union contracts as a condition of the bail-out so that everybody can keep their job, factory workers included. Everybody will get the car they want on equal terms (domestic or foreign), and we can get on with life.
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