Filed under: Trends
Toyota avoiding unions
If Governor Jennifer Granholm has done her job, Toyota Motor Company will build an engine-transmission plant
in Michigan. Unfortunately for Detroit, it will be as far away from UAW strongholds as possible, which means that the
manufacturing jobs Detroit so desperately needs won't be arriving.
As one of the finalists in the race for the plant, Michigan is only as strong as its least union-friendly location, which excludes the UAW's hometown. What Michigan does have going for it, however, is its high unemployment rate (that's not something you hear every day!). It's Toyota's hope that the United States would see Toyota's choice of Michigan as a charitable act in order to reduce trade friction -- maybe if the company is considered to be throwing the U.S. a bone, the government won't be as likely to get pissy as Toyota poises itself to beat the home team and become the world's #1 automaker.
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Reader Comments (Page 1 of 2)
klaatu 10:43AM (12/29/2005)
I hope that the town of Greenville, about 20 miles northeast of Grand Rapids in the southeastern side of the lower peninsula of Michigan, gets the nod from Toyota.
Electrolux of Sweden owns a refrigerator factory there, which has made "iceboxes" or refrigerators for over 100 years and which was profitable for them (including their Fridgidaire brand, which they bought from GM, ironically). Well, about a year ago, the Swedes said they were moving all the (several thousand) jobs to Mexico and closing the (profitable) factory. The state of Michigan offered to build the Swedes a new factory for free, in the Greenville area; the workforce and union agreed to pay cuts from $14 to about $11 per hour, the local government agreed to a tax-free zone, etc., etc., and Electrolux said "nope, we're still moving all production to Mexico."
So out of a town of 8400 (including children, obviously) something like 7000 jobs are going away, in a county of 53,000 population - many of whom commute to Grand Rapids. I think another factory closed in Greenville, too - several hundred more jobs moved overseas.
Remember Electrolux / Fridgidaire next time you need to buy a 'fridge - you may as well buy an LG 'fridge from South Korea, at least they're honest about making their products in a foreign country, and like Hyundai and Kia, if their sales go up enough, I'd bet they put a factory in the US.
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used cars 10:55AM (12/29/2005)
Toyota wants a non-union workforce, and Michigan is a union state. I predict Toyota will find a friendlier environment to do business. The Governor is clueless.
They're too smart to come to the place where $73.00 per hour(with legacy costs) is edging GM and Ford to the edge of bankruptcy.
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Rene Curry 11:05AM (12/29/2005)
Michigan should welcome it. It's all about "point of manufacturing & investment" that creates jobs and furthers the economy.
That is why GM, Ford, & Chrysler are important to the US economy at this time.
That is why China is now an economic powerhouse.
As far as the profits returning to the home country, it only matters where the funds are redeployed. In theory if profits return to the big two they will invest in local R&D and manufacturing that will help the economy. But plow that money into offshore operations and it does nothing for our economy, only shareholders.
This is true with all the multi-national companies, not just the auto industry. That is where our politicians need to turn their focus. I give Granholm credit for recognizing this and working for our future. Our Washington group needs to be flushed out, both parties.
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Lithous 11:21AM (12/29/2005)
I'd rather support an American brand like Whirlpool (from Michigan right?) and they will own Maytag soon so I will buy one of the two thank you very much.
#1 why sell out Michigan (Benton Harbor) by telling everyone to buy a Korean brand all because a Swedish company sends some U.S. jobs to Mexico? Not very smart. That is why America has no chance any longer: fuzzy logic.
Here is some more fuzzy logic: http://www.whirlpoolcorp.com/news/releases/release.asp?rid=319 the mere fact that there is a single thought of anti-trust in this merger. I mean, there is LG, Fridgidaire, Bosch, GE etc., a handful of competition yet the gov't and others are sitting there acting like there is no rush, Maytag can just play games and not completely go under if this merger works or not. They need to know now and get with Whirlpool now.
Yet Microsoft isn't a monopoly (not enough to break them up or anything) but Whirlpool with at least a handful of competitors could be.
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klaatu 11:26AM (12/29/2005)
Did anyone take notice of the wage differencs between southeastern Michigan ($14 an hour, offering to go down to $11 per hour to save the jobs) and southwestern Michigan ($27 an hour, plus huge legacy costs, plus no deductible on medical, plus plus plus). Just goes to show how spoiled the southwestern Michigan workforce has become after 1/2 century of getting better and better deals from the "big 3" - and of course, very few of us would turn down the higher wages if we could get it - apparently, this situation is not for long, though.
Maybe Delphi should close their southwestern Michigan plants and move some work to the old Electrolux plant in Greenville, huh? Oh, whoops, the UAW would turn that down.... oh well, their loss. So, Delphi, when are these southwestern Michigan and Ohio jobs moving to China?
It's also interesting that southeastern Michigan's pay scales are about the same as the south's, where most of the Toyota, Hyundai, soon Kia, Nissan, etc., car plant jobs have gone.
Another factor is that life in southeastern Michigan is much more calm and small-town like, and less urban-dangerous than urban southwestern Michigan. For a lot of people, "staying alive is better than making twice the money."
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Lithous 11:31AM (12/29/2005)
#3 I agree with some of the stuff you are saying. Adam Smith is a good read and I believe some people think he is out of date but I don't.
When you buy a Chinese made electronic device the box is made in China and the manual states printed in China. If it is assembled here then the box is usually form Oklahoma or somewhere and the manual will have "Printed in U.S.A." on it. And as Adam Smith would think: the Chinese workers are eating food from Chinese farmers and not from American farmers. It is a cycle.
Throw a few hundred jobs away and many more are affected.
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Craig 12:04PM (12/29/2005)
This is a huge catch22 for the Fembot (ie Granholm). If she somehow whores herself out even more to the Japanese and Toyota lands in Michigan, she alienates the Unions and is considered bad for the state.
Conversely, if she fails to bring Toyota in to create more jobs, she'll be nailed as being bad for the state.
The Michigan economy is in the toilet. Let's not forget the pharma pull out of Kalamazoo not too long ago either. Our greatest hope moving towards the future is to bite the bullet and find the sources to re-educate our workforce to compete in a more technologically savvy environment.
Now THAT was a Granholmish statement.
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klaatu 12:42PM (12/29/2005)
Lithous, I agree with Whirlpool being a good way to go - in fact, most of the white goods in my house is made by them, and I've previously had Maytag, which is also good stuff. I was kind of making a point which relates back to the auto industry with the crack about LG and the commentary about South Koreans bringing jobs into the country.
So I stand humbly corrected - white goods are something Americans can make well and let's support Michigan where we can and buy Whirlpool - if the product is suitable to your requirements of course.
It's a pity to see Maytag company so sick, I am really not aware of why this is, but it surely is not lack of good products since I've never had any problems with their stuff.
I'm kind of a car-guy and don't pay much attention to the white-goods industry, except that Greenville was so blatantly bad and in-yer-face that it got my attention. And I kind of put two and two together and came up with four by actually taking the trouble to write to Toyota (twice) and encourage them to move a plant into Greenville, and no, I don't live anywhere near Greenville, either.
Craig, you're right, Granholm's future is about as bright as GM's. No matter what she does, she's wrong in someone's eyes.
Maybe we could convince the southwestern Michigan counties to become the State of Huron so that the rest of us in Michigan can actually have an economy, and show our "true colors" in the next election without interference from the UAW demanding that rank & file vote for a certain political party.
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Dave in MI 1:16PM (12/29/2005)
Klaatu - I think you have your easts and wests mixed.
Craig - I'm not crazy about Granholm, but to say she is a fembot or a whore says more about you than her.
I'd be careful to put your allegiance in any company, foreign or domestic. They are only working for their own benefit. "Buy American" is really a misnomer in today's world. Any attempt by an Automaker to employ Americans should be applauded.
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EdwoodCA 1:42PM (12/29/2005)
I hope Toyota decides to build the plant there. Maybe putting what will be a terrifically run and very profitable foreign plant close to "home" will help show the workforce [can't expect the big 3 to get it, that'd be wishful thinking] that union shops should be a thing of the past.
A little something called a "free market economy" dictates that all things being equal... companies that produce for less cost, gain market share, and are more profitable. Very hard to do with white collar wages for a blue collar job. [Never mind the inferior products, overall. Some are getting better, though.]
Unions did tremendous things for America, and all of us, back in their day. And the workforce benefits to this day. But, that is no reason to continue to run a business in a way that isn't competitive. It's a sure-fire way to get your butt kick in the market place and on the bottom line. [Labor laws that in big part came from unions' actions are now in place to protect from the abuses of the past. So, the unions have done their work. Time to go the way of the buggy whip mfg's.]
Higher production costs = cars priced too high compared to the competition; lower sales; lower profits; which all lead to plant closings and lower profits or even losses.
News article I saw today re: GM's shares just dropped below a 20 year low and are down about 50% for 2005. Ouch. http://news.yahoo.com/s/nm/20051229/bs_nm/autos_gm_stocks_shares_dc
Eh... just my two cents. [About what it's worth. But, truth is still truth.]
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EdwoodCA 1:46PM (12/29/2005)
doh! [can't expect the big 3 to get it, that'd be wishful thinking]
should be: ...can't expect the big 3's unions to get it, that'd be wishful thinking.
The big 3 would love to be free from union demands/costs.
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used cars 1:46PM (12/29/2005)
klaatu,
I think you have your geography turned around. It is Souteastern Michigan that is more dangerous, less livable, and highest percentage UAW controlled part of Michigan. Lake Huron is on the Eastern edge of Michigan ;)
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Pinkerton 1:58PM (12/29/2005)
#5 - Even tho you switched around SE and SW Michigan, your point is well taken. There is no parity in wages thru the state of Michigan. Rural Michigan has taken some big hits in agriculture and manufacturing.
The cold fact is that 90% of Michigan's population (voters) live within 90 miles of Detroit. The rest of us have to look out for our own communities. Many smaller areas are trying to squeak a living out on the tourism trade (trickle-down-economics, Michigan style). For example, Mackinac County has a 21.7% unemployment rate after the tourists go home, yet no state tax free "renaissance zone" to spur decent year-round employment.
I don't believe that state programs are going to solve all the problems. What bothers me is that all of rural Michigan (including UP residents) support this state financially, but get little support back. Politicians love to talk about Yoopers, pasties, snow, and nature with a gleem in their eye, but economics, not very often.
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JimS 2:48PM (12/29/2005)
Governor Jenny is looking a lot more like Alotta Fagina then a fembot in that kimono. I would drink some sake with her in a hot tub.
She has a nice MILF look going for her.
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Lithous 3:18PM (12/29/2005)
JimS, utterly terrible what you are saying. It is "than a fembot" not "then a fembot".
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jeff 4:11PM (12/29/2005)
I am a FIRM believer that the UAW is ruining employment for our country. At one time the UAW was a wonderful help to american employees, now the UAW just protect the lazy worker and ensures that workers are highy over-paid and grossly underworked. I was placed in a situation where my factory was considering moving to Mexico and we employees were offered to keep our jobs with a benefit and pay cut. I wanted to keep my job, but the rest of the bastards choose un-employment, and a few years later a few of them still work at McDonalds. Serves them right. You cannot be that greedy. Wake UP America and keep jobs here. Wake UP union workers, and get the lead out of your lazy asses.
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stratojet 6:32PM (12/29/2005)
Interesting thread; USA wants to not only evacuate what is left of their manufacturing know-how, but also wants the invador to establish factories in the homeland.
This is an excerpt of "Principles of war" by Clausewitz , written in the 1800. Stunning similarities with what is going on between USA and Asia (Japan and Korea in particular).
1. General Principles
I. Warfare has three main objects:
(a) To conquer and destroy the armed power of the enemy;
(b) To take possession of his material and other sources of strength, and
(c) To gain public opinion.
2. To accomplish the first purpose, we should always direct our principal operation against the main body of the enemy army or at least against an important portion of his forces. For only after defeating these can we pursue the other two objects successfully.
(Michigan and Detroit)
3. In order to seize the enemy's material forces we should direct our operations against the places where most of these resources are concentrated: principal cities, storehouses, and large fortresses. On the way to these objectives we shall encounter the enemy's main force or at least a considerable part of it.
(Again, Michigan and Detroit)
4. Public opinion is won through great victories and the occupation of the enemy's capital.
(Blogs, Consumer reports, medias, LA Times, auto reporters, Edmunds etc)
5. The first and most important rule to observe in order to accomplish these purposes, is to use our entire forces with the utmost energy. Any moderation shown would leave us short of our aim. Even with everything in our favor, we should be unwise not to make the greatest effort in order to make the result perfectly certain. For such effort can never produce negative results. Suppose the country suffers greatly from this, no lasting dis- advantage will arise; for the greater the effort, the sooner the suffering will cease.
(This is why Toyota is increasing dramatically their manufacturing capabilities in USA and Canada)
The moral impression created by these actions is of infinite importance. They make everyone confident of success, which is the best means for suddenly raising the nation's morale.
(In this case, interesting enough, the US citizens are glad to be defeated and even celebrate and cheer the invaders)
6. The second rule is to concentrate our power as much as possible against that section where the chief blows are to be delivered and to incur disadvantages elsewhere, so that our chances of success may increase at the decisive point. This will compensate for all other disadvantages.
7. The third rule is never to waste time. Unless important advantages are to be gained from hesitation, it is necessary to set to work at once. By this speed a hundred enemy measures are nipped in the bud, and public opinion is won most rapidly.
8. Finally, the fourth rule is to follow up our successes with the utmost energy. Only pursuit of the beaten enemy gives the fruits of victory.
(For this remark, US does not need Asia; their cohort of medias and journalists are doing it themselves)
9. The first of these rules serves as a basis for the other three. If we have observed it, we can be as daring as possible with the last three, and yet not risk our all. For it provides us with the means of constantly creating new forces in our rear, and with fresh forces any misfortune can be remedied.
Therein lies the caution which deserves to be called wise, and not in taking each step forward with timidity.
USA claims they never lost a war ; the first, second, Korea, Irak, etc. Fact is you don't need bombers, huge battleships or nuclear weapons to win a war. USA citizens have the proof of this looking at their devastated Michigan.
I hope that this country will get themselves together. If not, they might as well elect a Chinese or Japanese government. USA used to be the envy of the world ; it is very sad to see that they have lost their honor and their pride.
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Lithous 7:27PM (12/29/2005)
Definitely not a post by me. But I like it.
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Lithous 7:35PM (12/29/2005)
Saw something on the history channel about a major contribution to Rome falling is that the guards around the borders weren't getting paid timely and they had more in common with the people they lived near outside the borders (they married them and such). They lost their allegiance basically.
That is the U.S. for sure. But from the inside out instead of the outside in.
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mpeng 12:26AM (12/30/2005)
Hrm...Toyota doesn't want to pay all the overhead for union labor...live better work union...but that is obviously not compatible in a global economy...kill the union...make people earn their keep
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