Is GM finished?

[Furcifer]

It won't be 3rd worlders it'll be robots.

Read Marshalls vision of the future here:
http://www.marshallbrain.com/manna1.htm

I thought it was entertaining anyway.

I'm only on chapter 2, but that's essentially how the Big 3 work. Instead of doing multiple tasks you a relegated to things that take 40 or 45 seconds. The lines cycles every 48 seconds say, so you get a few seconds here and there. No thinking, constant repetition. Human robots. It ain't pretty, but they pay you well.

 

[Furcifer]

This cannot possibly be true.

You include wages, but not benefits. Wasn't it GM complaining that for every car sold they have $2,000 just in employee and retiree medical costs?

So clearly, your percentages are based on fudged numbers.

Legacy costs are said to be x3. For each person working there are 3 retirees. A vehicle runs about $1500 in wages to produce, on the line. Start doing the math and $2000 is about right.

These are expenses the company pays out of the other 93%. The VEBA is an insurance that pays for these expenses out of a maturing fund. They still contribute to the economy though.

 

[Furcifer]

The only person I've known who worked at Walmart made 6 figures, he was in human resources. Their pharmacists all make 6 figures also.

Not everyone is working the cash register or stocking shelves.

True, but can you give me a number? I was making 6 figures and the company had approximately 25 hourly to every salary employees. My employees were making 60-75K a year. What do you think that is in ratio to Wal Mart? What do they pay out in benefits? And I thought the pharms were independent contractors, not actual Wal Mart employees drawing a check from Wal Mart. Perhaps it's different in the US.

It's hard to argue without an average year income. I'll bet the average salary for a Wal Mart employee is 1/5th. On average. And I'll bet the are way more people that recieve indirect compensation from the Big 3 than there are from Wal Mart. At least within North America.

 

[Furcifer]

Maybe the unions should stop championing illegal immigration then. But they're so desperate for new members they can't help themselves.

This is a non issue in the heart of Union country. I've never heard of it, but it wouldn't surprise me in the south western US. I don't think there is a Union member in Detroit that would support this. Nor anywhere in Canada. If it's a simple matter of stopping illegal immigration it's easy to make happen.

I will personally speak with Ken Lewenza about this the next time I see him. I'm curious if this is true or not. That makes the whole Union look bad to have a couple locals promoting something like illegal immigration.

 

[NewtonTrino]

True, but can you give me a number? I was making 6 figures and the company had approximately 25 hourly to every salary employees. My employees were making 60-75K a year. What do you think that is in ratio to Wal Mart? What do they pay out in benefits? And I thought the pharms were independent contractors, not actual Wal Mart employees drawing a check from Wal Mart. Perhaps it's different in the US.

It's hard to argue without an average year income. I'll bet the average salary for a Wal Mart employee is 1/5th. On average. And I'll bet the are way more people that recieve indirect compensation from the Big 3 than there are from Wal Mart. At least within North America.

There are plenty of non manufacturing jobs that pay well.

I just calculated the mean/median salary not including bonuses or healthcare for my company. We are make software.
Mean: US$104,667 per annum
Median: US$100,000 per annum

This is because we can make it once and make many copies for very little money. Eventually (IMHO) hard goods are going to become a lot like software as our manufacturing prowess increases.

 

[WildCat]

Legacy costs are said to be x3. For each person working there are 3 retirees. A vehicle runs about $1500 in wages to produce, on the line. Start doing the math and $2000 is about right.

These are expenses the company pays out of the other 93%. The VEBA is an insurance that pays for these expenses out of a maturing fund. They still contribute to the economy though.

So what is the total labor cost per car produced? And yes, you must include everyone who's drawing a paycheck or benefits or both, whether working or retired or in the job bank.

True, but can you give me a number? I was making 6 figures and the company had approximately 25 hourly to every salary employees. My employees were making 60-75K a year. What do you think that is in ratio to Wal Mart? What do they pay out in benefits? And I thought the pharms were independent contractors, not actual Wal Mart employees drawing a check from Wal Mart. Perhaps it's different in the US.

It's hard to argue without an average year income. I'll bet the average salary for a Wal Mart employee is 1/5th. On average. And I'll bet the are way more people that recieve indirect compensation from the Big 3 than there are from Wal Mart. At least within North America.

Maybe, maybe not. But I note that now you want to compare a single company to an entire industry.

 

[Furcifer]

There are plenty of non manufacturing jobs that pay well.

I just calculated the mean/median salary not including bonuses or healthcare for my company. We are make software.
Mean: US$104,667 per annum
Median: US$100,000 per annum

This is because we can make it once and make many copies for very little money. Eventually (IMHO) hard goods are going to become a lot like software as our manufacturing prowess increases.

Absolutely. But how many of these jobs currently exist? How many are currently attainable by the middle class? I'm all for making software and 6 figures, but there just aren't as many, and the growth is limited. If it were 2.5 million software engineers out of work I'd say let's put money into that. It's purely a numbers thing.

 

[Furcifer]

So what is the total labor cost per car produced? And yes, you must include everyone who's drawing a paycheck or benefits or both, whether working or retired or in the job bank.

That is the labor cost. What you are talking about a portion of the other 49% or so. Based on current figures that's about $4500. What the company should have done is put the money into a separate fund. Unfortunately most companies invest that money back into themselves. There was a time when this paid dividends and it made sense. Hindsight is 20/20.

Maybe, maybe not. But I note that now you want to compare a single company to an entire industry.

Just the automotive industry, that includes the supplier plants, the advertising, the transportation etc. That's what this was about. GM in relation to Wal Mart. You can easily consider the exact same things, total contribution related to the industry. I worked at Chrysler, GM wasn't that much different.

 

[NewtonTrino]

Absolutely. But how many of these jobs currently exist? How many are currently attainable by the middle class? I'm all for making software and 6 figures, but there just aren't as many, and the growth is limited. If it were 2.5 million software engineers out of work I'd say let's put money into that. It's purely a numbers thing.

Your missing the point. Automation is going to do the same thing to physical goods. Putting together cars with your hands is just not going to be done a century from now.

 

[Furcifer]

Your missing the point. Automation is going to do the same thing to physical goods. Putting together cars with your hands is just not going to be done a century from now.

Probably true. But it represents a significant advancement. There is an advantage in the current method in that cars need a certain amount of flex in order to operate properly. Too rigid a frame means a stiff ride. The tolerances needed to have a continuous operation of robots means a very rigid vehicle. In essence they would need to produce some random variation in assembly or incorporate some mechanism to function as currently designed.

It's not impossible to imagine a fully robotic line, with little or no human workers, but the cost may continue to make it prohibitive. Every car maker was implementing robots as much as they could for years. How many jobs were replaced by robots in that time? Probably 20%, based on the number of robots I saw in any given plant. There is a finite limit to the number that can be used or more importantly can be used and function cheaper than a human.

The car as we know it will probably cease to exist well before automation gets to the level you are referring to. I hope that when the first vehicle built completely by automation rolls off the line it's in North America. This won't happen if the industry moves off shore. It's just too large to start back up again.

 

[WildCat]

That is the labor cost. What you are talking about a portion of the other 49% or so. Based on current figures that's about $4500. What the company should have done is put the money into a separate fund. Unfortunately most companies invest that money back into themselves. There was a time when this paid dividends and it made sense. Hindsight is 20/20.

So now the "7%" grows to nearly 25% of the cost of a $20,000 car.

Just the automotive industry, that includes the supplier plants, the advertising, the transportation etc. That's what this was about. GM in relation to Wal Mart. You can easily consider the exact same things, total contribution related to the industry. I worked at Chrysler, GM wasn't that much different.

And Walmart doesn't have suppliers? People don't eat at nearby restaurants when they shop at Walmart? Walmart employees don't spend their paychecks anywhere else?

 

[Furcifer]

So now the "7%" grows to nearly 25% of the cost of a $20,000 car.

I don't know. These back of the napkin calculations are based on company wide vehicles costs. It's hard to say for sure, but it's not unreasonable to assume the labour and legacy costs ate up a large portion of any profit on cheaper vehicles. That's the reason the SUV market needed to be exploited. More profit. You're still trying to roll up the "cost of doing business" with wages however. Can you name me another business that freely admits how much they pay an employee based on not only contributions to pensions and health care and then adds on the cost of retirees?

And Walmart doesn't have suppliers? People don't eat at nearby restaurants when they shop at Walmart? Walmart employees don't spend their paychecks anywhere else?

Certainly. I'm just saying it's no where near the same level as automotive. There's just not as much money exchanging hands, even with the numerous extra hands Wal Mart may employ. That's on top of the fact that much of what Wal Mart sells are imported goods. Wal Mart grossed 100 Billion in 2008, but where did that money come from? There own employees? Wal Mart represents a concentration of wealth and a movement of funds out of the country due to their import nature. That concentration of wealth comes at a price, namely poor benefits and health care for the people responsible for the success of the company. Wal Mart employees should be paid much better than they are. There's a point where Capitalism becomes just plain greedy. Maybe you don't see it as such.

 

[drkitten]

Certainly. I'm just saying it's no where near the same level as automotive. There's just not as much money exchanging hands, even with the numerous extra hands Wal Mart may employ.

That's simply wrong. Wal*Mart has more customers and they spend more in any given time period. A $20,000 car every five years doesn't come close to $100/week that people routinely spend on food and clothing at Wal*Mart.

That's on top of the fact that much of what Wal Mart sells are imported goods. Wal Mart grossed 100 Billion in 2008, but where did that money come from?

Where did their gross sales come from? It came from their customers, you fool.

Of course, the products that they sold came from all over, including imports, but the actual money they made came from the markup, which of course stays with the seller. It's easily possible to have more than 100% markup on goods.

 

[Furcifer]

That's simply wrong. Wal*Mart has more customers and they spend more in any given time period. A $20,000 car every five years doesn't come close to $100/week that people routinely spend on food and clothing at Wal*Mart.



Where did their gross sales come from? It came from their customers, you fool.

Of course, the products that they sold came from all over, including imports, but the actual money they made came from the markup, which of course stays with the seller. It's easily possible to have more than 100% markup on goods.

It came from the working middle class you fool, a whole class created by the automotive industry

 

[drkitten]

It came from the working middle class you fool, a whole class created by the automotive industry

Created by -- but no longer sustained by. I'd like to point out that Thomas Jefferson created the University of Virginia, but no one cares what his descendants think when they're figuring out how best to run the university.

75% of the working middle class works in services now.

In other news, did you hear that President Nixon may be thinking of resigning?

 

[Furcifer]

Created by -- but no longer sustained by. I'd like to point out that Thomas Jefferson created the University of Virginia, but no one cares what his descendants think when they're figuring out how best to run the university.

75% of the working middle class works in services now.

In other news, did you hear that President Nixon may be thinking of resigning?

Yes, I've heard

It certainly is sustained by. You don't really think the US economy works by Wal Mart importing things from China do you? What foolish notion. Unlike the automotive industry Wal Mart cannot provide for anything beyond American consumerism. Insatiable as it is, it needs a primary economic source to feed it. You run what is called a trade "deficit" without a healthy manufacturing sector. Trade deficit "bad". Productivity "good".

Did you ever wonder why, when they try to portray a strong US economy they show an assembly line with workers welding panels on doors and sparks flying, instead of chicks in moo moo's pushing shopping carts through fully stocked aisles

 

[drkitten]

It certainly is sustained by. You don't really think the US economy works by Wal Mart importing things from China do you?

Not only do I think that, but so does every actual economist who's looked at the issue.

 

[Furcifer]

Not only do I think that, but so does every actual economist who's looked at the issue.

Except the ones advising the bail out to GM and Chrysler? I don't want to assume but you seem to be implying this.

I suppose those economists took at look at GM's 67% increase in sales in China last year, up to almost 2 million units or 14% of the market share in the fastest growing market on the planet?

How's the US service market fairing over there in China? Up 67% to almost $40 Billion with a projected increase again in 2010?

Yeah, the Chinese are just eating up those US "services". They obviously don't want quality American engineered automobiles. What do they want again? Financial advice,iPods and fried chicken? I see KFC did $211 Million in sales. For every 100 buckets of chicken KFC sells, GM sells a car.

You aren't an economist are you?

 

[WildCat]

Except the ones advising the bail out to GM and Chrysler? I don't want to assume but you seem to be implying this.

I suppose those economists took at look at GM's 67% increase in sales in China last year, up to almost 2 million units or 14% of the market share in the fastest growing market on the planet?

How's the US service market fairing over there in China? Up 67% to almost $40 Billion with a projected increase again in 2010?

Yeah, the Chinese are just eating up those US "services". They obviously don't want quality American engineered automobiles. What do they want again? Financial advice,iPods and fried chicken? I see KFC did $211 Million in sales. For every 100 buckets of chicken KFC sells, GM sells a car.

You aren't an economist are you?

Where are the cars GM sells in China built? If they're built in China, isn't GM exporting services, and not cars?

 

[Furcifer]

Where are the cars GM sells in China built? If they're built in China, isn't GM exporting services, and not cars?

I'm gladly the irony wasn't entirely lost on some.

I'm not sure why so many Americans don't see how important this industry is. There's not much else Americans have to export but their automotive expertise. I don't see how they can continue to do this without a strong automotive sector. They're leading the way towards practical electric vehicles. They need to keep on top of that because other countries will follow with their reverse engineered knock offs. Perfecting the assembly line, increasing productivity and advancing automation are all very much American. The only way too keep exporting these services is to make sure the at home industry keeps leading the way. Isn't it? The World needs Hyundai's, but they want Chevy's. Can they continue to sell them to the World as a service bankrupt and then behind the curve? I don't know maybe I'm missing something here.