WILLisms.com: Trivia Tidbit Of The Day: Part 403 -- American Companies Can't Win The Auto Wars Without Big Structural Changes.

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Trivia Tidbit Of The Day: Part 403 -- American Companies Can't Win The Auto Wars Without Big Structural Changes.

GM & TOYOTA-

Fact: General Motors stock is down roughly 56% (nearly 41 points) since the beginning of the decade. Toyota stock is up more than 35% over the same time period. Honda stock is up more than 107% over the same time period. Nissan stock is up more than 215% over the same time period.

In the meantime, American car company GM is laying off American workers, while the major Japanese car companies are hiring American workers.

Something is very wrong with GM.

Toyota, et al., meanwhile, are cashing in on General Motors' failures.

Mickey Kaus has some answers:

GM pays $31.35 an hour. Toyota pays $27 an hour. Not such a big difference. But--thanks in part to union work rules that prevent the thousands of little changes that boost productivity--it takes GM, on average, 34.3 hours to build a car, while it takes Toyota only 27.9 hours. ** Multiply those two numbers together and it comes out that GM spends 43% more on labor per car. And that's before health care costs (where GM has a $1,300/vehicle disadvantage).

Indeed, NPR has an informative comparison chart, indicating that the trajectories of GM and Toyota are diverging. An important difference:

Other fascinating numbers...

Profitability per vehicle (2005 numbers)-
GM: Negative 2331 dollars.
Toyota: 1488 dollars.

Improvement in production time per vehicle (2003 to 2005)-
GM: 2.5%
Toyota: 5.5%

Average labor cost per American hourly worker-
GM: $73.73
Toyota: $48

Global market share in 2005-
GM: 14.2%, down from 14.6% in 2002
Toyota: 12%, up from 10.6% in 2002

Ironically, these numbers are a lot like the regular comparisons on this website between red and blue states. Or between America and Europe (Toyota being red states and America; GM being blue states and Europe). The new crop of legislators in Congress wants America-- and not just auto companies-- to follow the blue state/Europe/GM plan. We cannot let them succeed, if America is to succeed.

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Previous Trivia Tidbit: Abortion.

Posted by Will Franklin · 23 January 2007 10:04 PM

Comments

Do the Japanese car companies have unions?...

Posted by: zsa zsa at January 24, 2007 08:15 AM

These statistics still do not excuse their attempt to use the "foreign asset" loophole to break a contract by bankruptcy of the domestic division. Again, GM's Chinese divisions would do quite well even if they had cover for Detroit, but GM just wants to finish off organized labor in one stroke. Fine if they're not held in high regard here, but the Far East in my book is just a nice way of saying "loophole country".

As for the increasing "loophole country" content in domestic vehicles and the end-run that other countries use, I'd say 49 U.S.C. 323 needs a nice, large overhaul to account for it. Such overhaul would end up outing Honda, Toyota, Nissan, and other Far Eastern manufacturers as non-US due to parent company location. It would also include domestic models that for some reason are just relabels, or made in "loophole countries" such as Mexico, China, South Korea, Brazil, and Japan. Painful, yes, but it puts truth about that Honda or Ford in plain sight.

Fine if you want Far Eastern vehicles- but I'll end up being one of the last customers of the traditional(read: France/Germany/Pre-Thatcher UK/Pre-Reagan US) Big Three. I just want to see quality in a car not found in underpowered, undersized Asian models(of those made for/in the US to get around labelling).

If that sounds a bit too much nationalist, fine. If it also means that the vehicle was made for quality, so be it. I'd rather drive a Buick or a European BMW than a Toyota until those countries start adding in performace and not just shoddy electronics to distract from the undesirable aspects of the car. In short, performance and quality combined mean something, and GM, Ford, DaimlerChrysler still get it.

As for Zsa Zsa's comment on Japanese cars having unions, here's this one from that 2005 NPR piece on GM vs Toyota:

Toyota:
12, three unionized in Long Beach, Calif., Fremont, Calif., and Tijuana, Mexico.

Source: "NPR: GM vs. Toyota: By the Numbers" December 19, 2005, NPR. http://www.npr.org/news/specials/gmvstoyota/

Posted by: sethstorm at January 24, 2007 08:48 AM