Great article regarding the U.S. auto industry and why they are where they are. Puts blame on both management and workers.
<a href="http://www.cnbc.com/id/27892525">http://www.cnbc.com/id/27892525</a>
"It has been proven that the only sure thing in long-term investing is diversification, a concept the Detroit 3 have yet to catch onto, even though a company like GM has 8 brands. There is no diversification between a GMC Envoy and a Chevy Trailblazer, or a GMC Sierra and a Chevy Silverado. The Detroit 3 have failed to see the need to right size their own operations. They work off of a business model where they have to sell more and more vehicles in order to cover their overhead structure due to their previously negotiated contracts. Big problem--sales volumes aren't coming back, and they're losing more of their own market share."
"There is a sense of entitlement that resonates within the auto industry, in which a lot of people feel they are owed all of these luxurious benefits, and nothing can, or should, be taken away. The UAW contract is the most lucrative deal in America, one where a worker who is laid off retains 90% to 95% of his or her pay. Name another industry that has such rights? When customers cut back on production at my facility, and I lay off workers, those workers have to file for unemployment benefits which are usually much less than what they were previously paid."
"One of the new great divides I see developing in this new crisis is the gap between mid- and high-level managers and the executive level management. Just recently, due to the crisis, a company laid off all salaried employees who had exhausted their allotted vacation time. Although we are in unprecedented times, I saw this as a horrible method of trying to save costs. These are typically the employees working beyond standard requirements in order to propel the company forward, or at least keep it on pace. The company loses valuable assets this way."
