Friday, January 12, 2007
Over my Christmas break, I rented a Ford Taurus, which I was rather pleased with overall. At some point during the Florida leg of my holiday visits, I was surprised to learn from my father-in-law that Ford was discontinuing the Taurus. I replied something to the effect of, "I like this car, although I probably wouldn't buy one for myself." I am a Honda man, after all.
And then I added, "Hmmm. I guess that's the problem." We got a good chuckle out of that.
I am not the only one, and customer preference itself has causes. Why, after all, do so many Americans prefer foreign cars now?
Blame the unions.
When [Pontiac G-6 road tester R.] Kuttner says "Japanese total labor costs are comparable, even with Detroit's higher health insurance costs," he is -- as is so often the case -- talking through his hat. Look at this chart. 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).Mickey Kaus goes on to note that this very problem is plainly evident in the new Ford Five Hundred, which is one of the three models slated to replace the Taurus.
If you're GM or Ford, how do you make up for a 43% disadvantage? Well, you concentrate on vehicle types where you don't have competition from Toyota -- e.g. big SUVs in the 1980s and 1990s. Or you build cars that strike an iconic, patriotic chord -- like pickup trucks, or the Mustang and Camaro. Or -- and this is the most common technique -- you skimp on the quality and expense of materials.
That's too bad.
Today: A reader notes the following off-topic -- but very important and very bad -- news.
Oil major Exxon Mobil Corp. is engaging in industry talks on possible U.S. greenhouse gas emissions regulations and has stopped funding groups skeptical of global warming claims -- moves that some say could indicate a change in stance from the long-time foe of limits on heat-trapping gases.A "change in stance"? From fighting one's enemies for survival to helping them kill you, although perhaps more slowly?
I guess some companies don't even need union thugs to bring them down. Threatening mail from Congress and the whining of hippies will be enough to make Exxon fold like a cheap lawn chair.