1. I accept that I am under the control of a higher power (Muppet).

Ford's problem is expensive workers. Yah, sure...

http://kanban.blogspot.com/2007/03/why-you-can-never-be-satisfied.html

<quote>
    Ford acknowledges it rested on its laurels as the profits from its popular sport-utility vehicles and pickups masked underlying problems in its manufacturing systems. By 2000, GM and Chrysler began to gain on Ford. Last year, the Harbour Report estimated that Ford was two hours slower than GM and Chrysler, and also had slipped to six or seven hours behind the Japanese companies.

    "No question, we let others pass us on these things. We took our eye off the ball and got intoxicated with just making trucks," said Chris Bolen, a Ford director of manufacturing who started out as a Lima line worker. "Internally we ignored a lot of waste....We let manufacturing get in trouble, and now we've painted ourselves into a corner where without radical changes we could go out of business."
</quote>
Permalink son of parnas 
March 6th, 2007 1:11am
Of course, they'll now petition the government to bail them out, and the unions will apply pressure, too.

Meh.
Permalink Send private email Aaron F Stanton 
March 6th, 2007 1:29am
Two hours slower what? Per car? What percentage is that? Sheesh, a little context please.
Permalink Send private email ~~~x 
March 6th, 2007 1:58am
If you look at their numbers they are unprofitable because their sales have plummetted, not because their profit per unit is low.

Ford claims that the reason has nothing whatsoever to do with their recent years focus on 'muscle cars' in their lineup, that get 5-9mpg.
Permalink Practical Economist 
March 6th, 2007 6:53am
In 2006, Toyota could build an average car with just 29 hours' labour, while it took GM workers 33 hours - a big improvement from 1998.

http://news.bbc.co.uk/2/hi/business/6346315.stm
Permalink zed 
March 6th, 2007 9:52am
Maybe it's because they employ older workers who are less trainable. They employ older workers because workers are almost impossible to fire. And if you're going to be paying 60 cents on the dollar in pension to any worker you try to downsize, you can't afford to hire any new, quicker workers (for the remaining 40 cents).

Perhaps the safety crutch of pensions makes workers less trainable, not their age. Etc.

There are explanations. No one's shown that the lower productivity is not a function of more expensive, pensioned workers (in this case).
Permalink Send private email strawberry snowflake 
March 6th, 2007 10:19am
> No one's shown that the lower productivity is not a function of more expensive, pensioned workers

Nor has it been shown that it's not a function of pink unicorns.

But we do know Toyota is successful and they hire Americans, they make better decisions, and they have a better process. I might look there first.
Permalink son of parnas 
March 6th, 2007 10:29am
Actually Toyota's production system, based on kaisen, scales quite well to union labor. It is designed to, on one hand, utilize the individual expertise of long-time employees (anyone on the line can stop the conveyer, and anyone can suggest an improvement, and their idea will be given fair consideration), and on the other hand minimize the amount of damage any one person can do.

In fact Toyota corporate includes a consultancy that rather actively tries to sell their production system to the other manufacturers, including their competitors.
Permalink Send private email Flasher T 
March 6th, 2007 10:32am
> Nor has it been shown that it's not a function of pink unicorns.

This is a common way of debating without getting anywhere. Someone says X. I say X hasn't been shown because Y and Z could imply not X as well. The someone retorts that a falsity could imply X also and so not-X hasn't been shown either.

Well, so what? The non-existence of pink unicorns doesn't prove show that "Ford workers are not overpaid" does it?
Permalink Send private email strawberry snowflake 
March 6th, 2007 11:01am
The reason that the average age of the line workers is 55 has to do with not hiring younger replacement workers. So the average seniority of line workers is about 30 years. Both Ford and GM could save a fortune if they could dump their pensions. And Delphi, which used to be part of GM is trying to fire all their $25/hour workers and replace them with $7/hour workers. Or just pay the current ones 1/3 of what they used to get paid as well as dump their pensions and health care while paying the CEO and board members huge 8 and 9 digit bonuses.
Permalink Peter 
March 6th, 2007 11:23am
> This is a common way of debating without getting anywhere.

Actually it was just pointing out your common debate tactic. To say nothing has proven about X sounds good, but means little. As is easily seen when you replace X with something absurd.
Permalink son of parnas 
March 6th, 2007 11:26am
> But we do know Toyota is successful and they hire Americans, they make better decisions, and they have a better process.

I guess the disagreement is whether Toyota is paying the same amount as Ford or GM is for its workers. When Ford tells a third of its workforce that it would rather pay them $100,000 not to work there, I'm guessing it's because they are too expensive in one way or another (high cost, or low productivity).

Personally I'm thrilled to see the American companies down and out. Not for schadenfreude (sp?) but because the down and out have an exciting potential to innovate. What doesn't kill, etc, etc.

Ford - give me my flying car.
Permalink Send private email strawberry snowflake 
March 6th, 2007 11:28am
> I guess the disagreement is whether Toyota is paying the same amount as Ford or GM is for its workers.

It doesn't matter what you pay people if you make cars nobody wants and make the cars with an piss poor process. And Toyota has a substantially higher parts cost structure than Ford, so everything is not even in the comparison.
Permalink son of parnas 
March 6th, 2007 11:30am
Good point. The main drawback about buying a Japanese model used car (who pays for new car smell?) these days is also its main feature - a high resale value. 4-year old Camrys are so good and reliable that they almost price themselves out of the used car market (where a 4-year old Saturn is much more affordable).
Permalink Send private email strawberry snowflake 
March 6th, 2007 11:40am
Again, Ford is failing because no one is interested in their products, not because the products cost too much to make. Both companies charge about the same for 'comparable' cars. Yet Toyota sell more. Why? Because they make better cars, not because their cars cost less. They don't cost less. The workers thing is a big message Ford wants to send to Congress to bail them out with cash grants and protectionist legislation. Don't fall for it.
Permalink Practical Economist 
March 6th, 2007 1:51pm
> Because they make better cars, not because their cars cost less.

Um, better car for same amount of money => the car costs less.
Permalink Send private email strawberry snowflake 
March 6th, 2007 2:11pm
I'm looking for a small, reliable, economical, second-hand manual vehicle to replace a VW that sadly died just short of its 30th birthday (RIP). It's to be the second car / student runabout / shopping trolley so a WRX is not in the running - the insurance would kill us.

Based on experience neither Mazda nor their Ford variants is contemplated.

Should I be looking beyond a Corolla? Maybe a small Honda?
Permalink trollop 
March 6th, 2007 4:31pm
Toyota, Honda, Nissan are your options for reliability. Hondas can be a good deal since they have a bad reputation in Japan, yet are comparable to Toyota in quality despite this, so sometimes this translates into savings.
Permalink Practical Economist 
March 6th, 2007 10:38pm
Thanks. They're on the list.
Permalink trollop 
March 7th, 2007 2:46am
Used Mercedes used to be great college cars. First hand owners wouldn't care what they got paid when they sold them, so you could get a good deal. And a Mercedes engine will easily run 400,000 miles. So used to be you can get a Mercedes with 100k miles on it and pay like $3500 for it, and it's good for another 300k.

I am not sure if they are still well made, but you could check into it.
Permalink Practical Economist 
March 7th, 2007 3:17am
>> And a Mercedes engine will easily run 400,000 miles. <<

Mercedes diesels, yes.  (assuming proper maintenance)  The gas/petrol engines are only good for 200k or so.

Mercedes quality nose-dived around 1997, and has only just recovered.  The 1999 ML-320 I leased had something break on it every 8.5 weeks on average.  While the dealership was great, and really took care of me, it didn't solve the problem that I spent a lot of time in a service loaner (usually a Honda.  Guess what I drive now?)

So in looking for a used Merc, buy pre-1997, or post-2005.
Permalink xampl 
March 7th, 2007 10:29am
WRT Ford, their problem is indeed their product design and the product mix.

In my opinion, Ford should:
1. Close the Mercury division
2. Rename the Five Hundred to Taurus (they've already done this), and add safety features like a stability system (still waiting on them to do this)
3. Create a new RWD sedan (about the size of the departed Lincoln LS) with a small V8 or turbocharged V6.
4. Make big efforts to improve the quality of the interiors (this is what's going to kill the new Edge crossover - outside: nice.  inside: OMG what happened?)
5. Simplify each of their product offerings.  Instead of what is essentially build-to-order, they should offer 3 trim levels in each vehicle.
Permalink xampl 
March 7th, 2007 10:34am

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