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Toyota Frees Itself from UAW, Union Has a Fit

NUMMI_plant It’s almost like a battle between good and evil, and Toyota has just blown up the union’s Death Star.

With Toyota’s decision to close its California plant, known as New United Motor Manufacturing Inc. (NUMMI), comes an added bonus: The company no longer has to deal with the UAW.

Toyota plans to close the plant, which has built Corollas and Tacomas, in March. That’s a major setback to the UAW, which desperately wants to spread its empire and organize labor at other Asian automakers.

If I were an exec at Toyota, I would’ve been singing songs of praise as the joint venture with GM came to a close and the opportunity to sever union labor by closing the plant presented itself.

NUMMI, created 25 years ago, was an attempt for GM and Toyota to work together and learn from each other. Toyota’s lean manufacturing process was of interest to GM, while an American plant for Toyota helped boost its presence here. A win-win all around, right?

Toyota gets away from the union

Sort of. According to a Detroit Free Press article, most of what GM learned ended up in the Saturn division… an ironic outcome, considering Saturn’s fate. Toyota had to pay union rates at the plant, which are usually higher than what it pays employees at other plants.

That same article says Toyota is admitting that it has expanded too quickly and needs to reduce the capacity of vehicles it is able to produce by 700,000 each year. In addition to severing union ties, closing NUMMI also accounts for over half of those reductions and will help the company remain as lean as possible.

Yes, the closing sucks for the employees, maddens union reps, and hurts the fragile California economy. But as a business decision, closing NUMMI is the best move Toyota could’ve made.

Let’s hope the UAW stays away from foreign automakers and continues to loosen its stranglehold on the domestics. Agreed?

-tgriffith

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Cash for Clunkers Will End Monday

Only for one more weekend!

Regardless of how it will be remembered, the already infamous Cash For Clunkers plan will end on Monday.

The program was launched with $1 billion in funding, which was blown through in the first week of the program, creating a tense on-again off-again couple of days. Congress then refilled it with $2 billion more, which is expected to be gone by Labor Day.

While the program sent hundreds of thousands of people flocking to dealerships with their trade-ins ready and their wallets open, dealers are complaining that they’re not getting reimbursed quickly enough. Even the National Auto Dealers Association (NADA) spoke up and asked for a resolution to the program. (You know things aren’t working when the NADA asks to end a program that’s sending people to dealers!)

Cash for Clunkers is largely responsible for increasing production at Ford, GM, and Chrysler, but what happens now that the program is ending will be interesting. I’m watching for a drastic drop in demand, resulting in more overstock at dealers and then production slowdowns at manufacturers’ plants. Again.

If you’re at all considering taking the government up on its $4,500 offer on your car, this is your weekend to act.

Did you, or will you, take advantage of Cash for Clunkers before it’s history?

-tgriffith

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Does the Vice Chairman of GM Even Care About the Volt?

Chevy Volt: Just a symbol or hope for real change?

A June 7 article in the Washington Post makes a pretty bold statement, arguing that GM exec Bob Lutz is “ambivalent” about the Chevy Volt, a car that many have pinned their hopes on to bring GM out of bankruptcy and move the company forward environmentally and fiscally.

The story goes on to claim that Lutz is a lover of gas-guzzling V8 engines and says that the 2010 Camaro is a tribute to him and his enduring hope that the glory days of fast and powerful muscle cars can be resurrected, even though GM is a ward of the government and needs to emerge from bankruptcy as a leaner, greener company.

Yup, pretty bold claims by the Post. I’ve decided there are two reasons they published the story:

1. Because it’s true.

2. To get auto bloggers the world over discussing the story and linking back to their Web site. (Guilty.)

Even in bankruptcy GM doesn’t seem to be admitting to their problems and resolving them. They either look the other way or place blame in other places when they should be accepting at least some fault for their fate. Cars like the Camaro are proof of that, and cars like the Volt are nothing more than a symbol GM hopes will eventually change its image.

In fairness to Lutz, he has denied the Post’s claims and called the Volt

The most exciting program I have worked on in my entire career.

I don’t believe it for a second. There’s no way he’s more excited about the Volt project than the development of an all-new Corvette. That’s just not GM’s way, and until guys like Lutz have exited the building, nothing will change.

Do you think Bob Lutz cares more about the Volt or the Camaro? Which are you more excited about?

-tgriffith

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Politics as Usual: Dealers Protest Closings

It’s common knowledge that for the auto companies to survive, some dealers have to go. That’s fine, unless you’re one of the dealers. Thus the long faces above. At hearings yesterday before Sen. Jay Rockefeller’s (D-W.Va.) Committee on Commerce, Science, and Transportation, dealers found a lot of sympathy. More than three dozen House and Senate members have already asked the Obama administration to help them.

Chrysler gave its dealers very short notice and plans to close nearly 800 of them next week. By the end of next year, GM wants to cut its number of dealers from 6,000 to 3,500; it told 1,000 of them that, if they agree by June 12, they could get life support until October 2010. The companies are playing hardball because time is of the essence if they are to achieve reorganization.

Senators of both parties were very sympathetic to the dealers. They are, after all, prime constituents, and there was much talk of Little League support, consequences to communities, and apple-pie fairness.

Peter Lopez, who owns Chrysler and G.M. dealerships in Spencer, W.Va., and Russell A. Whatley III, who has a Chrysler dealership in Mineral Wells, Tex., said they had paid the auto companies for vehicles and parts, as well as other fixed costs, like the right to hang the manufacturer’s sign.
Both men also bought additional inventory from Chrysler this year after Mr. Press [Chrysler president] told Chrysler dealers it would help the company remain viable. They were told months later that their franchises would be closed.

Sen. Carl Levin (D-Mi.) announced that Congress would not stand idly by: “We’re going to do what every other representative and member of the Senate will do from these states and districts,” Levin told reporters June 1. “There’ll be plenty of jawboning, persuasion.”

I’ll bet that means more input and interference from Congress than from the Obama administration in the operations of GM and Chrysler. Levin also suggested that more money might be forthcoming to ease dealer and community pain.

Well, should Congress just butt out, or do they have oversight in this situation? Leave us a comment.

—jgoods

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The great (and not-so-great) cars of America

Now that the deadline has arrived for GM and Chrysler to prove their viability to the government, I’m torn on what I think should, or will, happen.

While I think it’s callous and downright unpatriotic to WANT either of these companies to fail, I have to stay realistic and look at the situation as objectively as possible.

That’s why I recently looked in-depth at the cars GM and Chrysler are currently offering. I wanted to find reasons why they should continue making cars; to find excitement about their products. While some cars are great arguments for the quality of both companies, others are great reasons for the companies to fade into history.

The cars that dissapoint:

cobalt1

It’s a rattle-trap with a dead spot in the steering a mile wide.
Instead, get a: MAZDA3

patriot1

Lego cars are built with less plastic.
Instead, get a: Nissan Rogue

aveo1

It’s cheap and not in the good way.
Instead, get a: Honda Fit

colorado1

It looks cool. On the outside.
Instead, get a: Suzuki Equator

sebring1

It’s the brown paper bag of American cars.
Instead, get a: Chevy Malibu

avenger1

It’s ironic when outdated cars have macho names.
Instead, get a: Ford Fusion

Now, here’s what America does right:

corvette1

Many people would take one over a Ferrari. Go Chevy!

camaro1

No one does cool like the United States does cool.

acadia1

A great American competitor to the Honda Pilot.

2009 Chevrolet Silverado LTZ Extended Cab

American trucks kick butt. Period.

cherokee1

challenger1

American muscle still captivates us.

viper1

It’s about as close to exotic as America gets. Sit behind and you’ll know why it made this list.

While it’s not any big surprise, the cars America currently does best are one of two things: big or fast. When it comes to economical or practical, which is where the demand is now, American automakers falter like a Britney Spears comeback.

Now GM is considering bankruptcy as an option to create a new company. That’s a great idea, as doing so would enable them to start over, eliminate the products that hold them back, and start producing the cars we all know they’re capable of making.

What are some of the best and worst American cars you’ve owned?

-tgriffith

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