Agreed- they should cancel the union contracts and fire all the managers that signed them now. GM has 96000 workers paying the inflated health care costs of over 1M people. That just doesn't provide any competitive possibilities.
Still, it's far deeper than wages and costs.
What about the costs to the company for the warranty repairs? The big 3 were offering some very long term warranties for a while. If the sort of quality you are talking about is durability, that could end up increasing costs.
The big 3 approach to reducing costs has been inferior to the Toyota approach. The restrictive UAW work rules limit the flexibility of the work force and devalue overall productivity. They should compare the throughput and excess inventory of the manufacturers. You will see that GM makes too much too slowly, and thus can't respond to demand in a pull based manner as well as Toyota.
The money should go to startup car companies. BYD is valued at 2.5B and they have a huge cell phone battery business. For 15B we could easily start 10 car companies. Invest in the real future.
Oh I would never suggest that the wages are the only Union-induced problems. There's a whole laundry list of them. It's just the easiest one to tackle.
They wish. The UAW has a complete monopoly over their labor resources. In the case of a bankruptcy, the courts would have trashed those idiotic work contracts and brought in something more in line with their competitors. Bankruptcy would have also gotten rid of the dealer safeguards the are currently preventing the 3 from downsizing (shutting down a dealership usually means that said dealership needs to be bought out -- very expensive but the fact that GM has been doing this for the last several years shows how desperate they are to downsize their US operation).
With the bailout, all that pressure is gone. The only real way GM et al. have a way of pressuring the UAW now is to convince the UAW that they are willing to go out of business to turn a profit... no longer a credible threat because the next congress will happily bail out the UAW for the chance to waste more money on "green cars" (Ie. overpriced cars that nobody wants).
Toyota and the other foreign manufacturers were careful never to become too dependent on unions and they are also not subject to the two fleet requirements (too much, they are careful to skirt them) of the CAFE regulations thus giving them a credible bargaining chip against unions like the UAW when negotiations are necessary. For more info, see http://online.wsj.com/article/SB122584326266699163.html
Still, it's far deeper than wages and costs.
What about the costs to the company for the warranty repairs? The big 3 were offering some very long term warranties for a while. If the sort of quality you are talking about is durability, that could end up increasing costs.
The big 3 approach to reducing costs has been inferior to the Toyota approach. The restrictive UAW work rules limit the flexibility of the work force and devalue overall productivity. They should compare the throughput and excess inventory of the manufacturers. You will see that GM makes too much too slowly, and thus can't respond to demand in a pull based manner as well as Toyota.
The money should go to startup car companies. BYD is valued at 2.5B and they have a huge cell phone battery business. For 15B we could easily start 10 car companies. Invest in the real future.