Saturday, October 25, 2008

Speaking of "demand destruction"

From the Wall Street Journal: "How Detroit drove into a ditch." It's not just that Honda and Toyota produce more fuel-efficient cars; it's that they've forged a new relationship with workers while the UAW tries to hold onto policies forged a half-century ago. From the concluding graf:

But to thrive, instead of just survive, Detroit will have to use the brains of its workers instead of just their bodies, and the UAW will have to allow it. Two weeks ago some automation equipment broke down at the Honda factory in Marysville, Ohio, but employees rushed to the scene and devised a temporary solution. There were no negotiations with shop stewards, no parsing of job descriptions. Instead of losing an entire shift of production, Honda lost just 150 cars. The person overseeing Marysville's assembly operations is Brad Alty, still with Honda after nearly 30 years. These days, instead of a Gremlin, he's driving a Honda Pilot -- made at a Honda factory in Alabama.
George Will once pointed out that the typical General Motors car includes "more health care than steel." Every worker likes company-sponsored health care, but General Motors provides for its pensioned workers and families at coverage rates that adds $1500 to the cost of every GM car.

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