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Discussion: (6 comments)

  1. Steve Owen

    From the HBS paper: “In this paper we argue that the conventional explanation for this decline-namely high legacy labor and health care costs-is seriously incomplete, and that GM’s share collapsed for many of the same reasons that many of the other highly successful American firms of the 50s, 60s, and 70s were forced from the market, including a failure to understand the nature of the competition they faced and an inability to respond effectively once they did.”

    This smells a classic attempt to dress something old up as something new to get published. High labor and healthcare costs can hardly be considered independently of the rest of the business, once a company is paying so much more than it’s competitors to make a car the difference has to be made up elsewhere. Naturally profits will be under pressure but so will every other cost, “understanding the competition” costs money and only pays out down the line, “responding effectively” is much the same.

    The UAW has shown time and time again it is willing to drive companies out of business to preserve member benefits and compensation in the short term. Forcing a pull back on R&D and market research is just another manifestation of the self destructive instinct that ensures union membership dwindles every year in America even as the unions spend millions on recruitment and lobbying.

  2. Steve, I agree with you. The problem is that our president is still trying to save the unions at whatever cost, without taking into account that what he is committed to save is the entire USA. The rest is dirty politics.

  3. Steve, I agree with you.

  4. Joe Berdaus

    I feel that both management and the Union are to blame for the distraction of GM.

    The union forgot the their business was to provide a premium worker for a premium wage. In my Dads day if a worker wasn’t doing their job the Union would correct the problem by taking appropriate actions up to pulling their card if they continued to shaft their Union brothers by not pulling their weight. In the 1970’s this concept had so deteriorated that a member could sabotage equipment bringing a line down and the Union would spend however much it took to keep them in their job.

    Management is as much to blame. When they were in negotiations they would constantly cave to Union demands because they thought that they could always pass the cost on to the consumer. They also came up with the concept of planned obsolencence and cars that kill people like the Corvair. It is obvious that they continue to prefer to still kill people to protect profits.

    The culture at GM hasn’t changed for either Union or Management and now they are merged. It is just a matter of time before they are back for another bailout or they collapse.

  5. joesmith

    When communists start running a capitalist business, the business has to fail. Giving away free stuff for little work, and promoting people for time spent instead of rewarding real hard work is not the same thing as building a car that never breaks down and works every time you turn the key.

    Doing cocaine on the bumpers as the cars go through the assembly plant is not helping either. (real report by real union members to me.)

    Communism cannot do anything but leach off of capitalism.

    A woman CEO is not really helping either. They want to be seen as equal to a man but then act like a girl.
    Go Get the job done, no one cares what your skin color or privates look like.

    Epic Failure 101 = GM.

  6. joesmith

    Hey Joe Berdaus,
    I met with the head engineer at Chrysler as an engineer for another company. During the conversation the Chrysler guy said Chrysler made cars to last one day after the warranted was over. I told him that is why I will never buy another American car.

    Of course he kicked me out of the building.

    planned obsolescence = stealing peoples money

    I can buy a used Mercedes for a fourth of the price, that looks better and gets twice the gas mileage.

    And I wont die if I get in wreck.

    America went from “better than everyone else”, to lets just get by and get a paycheck.

    They call that communism.

    Now the new CEOs explanation is that no one told her what was going on.

    Lady that’s your job to find out what is going on. Its your job to be a man and make everyone tell you everything or fire them.

    You have to put on your big boy pants and be the man.

    Maybe the phone book is a better head hunter. Just flip and pick and you would get a better CEO.

    And did not the unions just keep putting the same defective part in every car. Did they not drive them off the assembly line. Did they not o any quality control.

    unions are evil communism. companies that make products that dont last go out of business.

    If unions think they can run a car company, don’t infest one and get the president to take it over for you and run it out of business with your communism.

    Start your own CommieMotors. it will fail because communism always fails and kills a lot of people along the way.

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