Wednesday, November 19, 2008

Save the jobs; sell the walnut desks

Louis XIV was dying for weeks of gangrene, and no one thought to amputate. An article in this week's Time gives specifics on the ripple effect if GM is allowed to go under.
"Although the Detroit Three directly employed about 240,000 people last year, according to the industry-allied Center for Automotive Research (CAR) in Ann Arbor, Mich., the multiplier effect is large, which is typical in manufacturing. Throw in the partsmakers and other suppliers, and you have an additional 974,000 jobs. Together, says CAR, these 1.2 million workers spend enough to keep 1.7 million more people employed."
I'm not sure Time helps its cause by inserting a link to photographs of the "50 worst cars of all time"! The same article quotes Peter Schrager, of the University of Chicago's Booth School of Business, saying that GM's management needs to be dismissed and the company broken up into three separate units: Chevy, Buick-Pontiac-GMC and Cadillac-Saab-Saturn. Whatever else they do, I hope they at least keep making Saturns!

Henry Payne, of the Detroit News, writing in National Review Online, also notes the shortcomings of GM as presently constituted.
"It is an open secret in the Motor City that — even leaving aside its high labor costs, surplus of brands, and bloated dealer network — GM’s manufacturing culture is inefficient compared to foreign rivals Toyota and Honda. Conversations with numerous supplier reps confirm an antiquated Detroit culture that does not thoroughly engineer products before contracting production with suppliers. As a result, production runs for Detroit automakers like GM are frequently interrupted to change specifications. Those interruptions add costs — costs that Japanese manufacturers rarely incur. The problem is so prevalent that employees for JCI — major international supplier Johnson Controls, Inc. — often joke that their acronym stands for 'Just Change It' because its American clients routinely run up unnecessary costs by altering production contracts.

"Can a $25 billion taxpayer bailout help General Motors change its culture? 'No,' says one supplier executive. 'You have to burn them down and start over.'”

I wondered if I had received my own bailout, or at least its first installment, when I opened my mail last night and found a check drawn on Wilburton State Bank of Oklahoma for nearly $5,000, accompanied by a letter from Bravo Services telling me I had won a quarter of a million dollars in an international lottery. The letter was obviously a scam, but the check looked real. The first order of business was to find out if there really is a Wilburton, Oklahoma, and there is. Next, I wondered if there really was a Wilburton State Bank and yes, that is real as well, as is the prominently displayed banner, one of the first things you see on their web site, warning you that checks from Bravo Services are fraudulent. If Saturn goes under, it looks like it will be a while before I replace my Ion with a Bentley.

An ad from Hewlett-Packard in my e-mail this morning made me blink; it said "Experience the Freedom of Wireless Printing," and I thought it said wireless painting! I wondered if there will come a time where we can't do anything unsupported by technology.

© Michael Huggins, 2008. All rights reserved.

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