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Help Wanted? Detroit?




Spend some time in Detroit and you’re bound to see a lot of “For Sale” signs. What you don’t see are many that read, “Help Wanted.” Not with the headlines filled with word of the latest layoffs and buyout offers.

But could things be ready to turn around? Just possibly, it seems.

As part of the new contracts between the United Auto Workers Union and the Big Three, the automakers have the right to not only cut way back on their high-cost U.S. workforce, but to replace many of those hourly employees with workers earning half as much. Suddenly, things start looking competitive again.

According to General Motors Vice Chairman Bob Lutz, the new contract brings labor costs down nearly to par with the likes of Toyota’s super-efficient “transplant” assembly lines. Better yet, it may now be possible to produce low-cost auto parts and components as efficiently as low-wage nations like Mexico, or even China, reports the Detroit Free Press.

“We are looking at every single part and every single plant and every single product,” the paper quotes Ford executive Joel Hinrichs, who suggests that Ford is giving serious consideration to insourcing – bringing back production of parts that had been farmed out to suppliers.

Ford isn't alone. The same strategy is being considered by GM and Chrysler -- and pushed by the UAW, the quid pro quo for the huge concessions the union accepted, last summer.

That could be good news in Detroit, which has seen nothing but cutbacks, in recent years. At least for the Big Three, anyway. The situation could be a lot tougher for suppliers, who have reaped the benefits of outsourcing. Dozens of automotive parts makers are already in bankruptcy, so industry sources tell TheCarConnection.com that the new development could push even more off the edge.
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Comments (5)
  1. Can the management of these companies pull this off? Very doubtful, first as soon as any profits start rolling in, the companies will give it all away to the CEO's. Isn't that what Exon and the other large US companies do? The Japanese are way smarter then the management in this country, they reinvest their profits right back into their own companies. Their top management doesn't make that much more then the guy on the line. It kind of looks to me that our companies are only trying to figure out a way to break all the unions in this country. As I see it, the auto companies are only trying to figure out a way to prolong going under, the cars we are building this year are still far behind anything coming out of Japan or Korea style wise...
     
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  2. "the cars we are building this year are still far behind anything coming out of Japan or Korea style wise…" Are you blind? It is a given that the Japanese and Koreans do a lot of things well but I would give them a B at best when it comes to styling. For the most part, the exteriors are dull and the interiors are boring.
     
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  3. Dang few gotta-haves in the Asian offerings. The G37 is the only one that floats my boat. They're OK as appliances.
     
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  4. Since Detroit became Motor City, the unions have demanded (and received) most any concessions that had asked for. Now, the chickens have returned to roost. We simply cannot compete with the world's competitors paying the wages and benefits, if there is not increased productivity to accompany these wages. The latest round of negotiations is the hangover to the largest party in manufacturing history. American cars are better than they have ever been. But their reputation for quality takes a long time to improve. And I am sick of hearing of the CEO's getting some astromical package when they leave after running the companies into demise. I don't know the answer.
     
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  5. The Imagery!. Nearly Comes across, only shy of what is being done.

    More Like, We have about as much money we can drain from the employee's,
    Now we need for you[the employee's] {too} do your les'miserable act, and as "Master's" of the LEGAL TENDER and Economics domains.

    Well!: we are Happy to Help you[employees] stay impoverished,[with the appearance] of a paycheck.

    As we {Money Leader's and MASTER's} Would LIKE TOO EXPEDITE: the Very Wealthy{us} and very many{poor-impoverished}workers[you]!

    OH! as the OLD WORLD TURNS!. {???????} same old same old I suppose!
     
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