“Monkey Businessmen” Redux (Corner Office by Jeffrey Wood)
by January 1, 2009 12:00 am 66 views
Wise guys, eh?
Ford, Chrysler and GM are the Three Stooges of manufacturing, and the United Auto Workers union is Shemp.
It’s only fitting that we give them a billion-dollar meringue to throw back in our face. Right?
Remember Shemp. The fourth Stooge. The one who was more irritating than entertaining but you just kind of tolerated him.
Shemp sucked the chemistry out of the comedy team, at least on stage. (He was both Moe and Curly’s real-life brother, but wound up a solo vaudeville act.)
It’s hard to remember an episode, in fact, in which Shemp’s performance made the guy likeable. Despite being a founding member of the troupe, he was eventually sent packing.
UAW President Ron Gettelfinger has seemed a lot like Shemp lately on nightly news clips. Either Shemp or Nathan Thurm – the perspiring, chain-smoking and ever-defensive lawyer (“I’m not being defensive, you’re the one who’s being defensive!”) played by Martin Short on “Saturday Night Live.”
Shemp seems like the lesser nose tweak though, so we’ll go with that.
Ever since Detroit’s “Big Three” automakers – Ford Motor Co., General Motors Corp. and Daimler A.G. (Chrysler) – went panhandling down Pennsylvania Avenue, the idea of bailing out their knuckle headedness has seemed like a double eye-poke to the American public.
With the inevitability of some form of socialized backing recently looming, too much of the blame shuffle hung on current automaker liquidity and strategies.
It’s a lot more productive to look at how we got to a point that could be a scene from “Monkey Businessmen,” Larry, Curly and Moe’s 1946 short take produced by Columbia Pictures.
It was appropriately set in a sanitarium.
According to Reuters, the total hourly labor cost for a UAW worker employed at Ford until 2007 was $71 per hour, or $147,680 annually (assuming a 2,080-hour work year). That includes wages, benefits, off-time and holidays and retirement plans.
Worker pay is similar at GM and Chrysler.
Shemp would give us two slaps and a head bonk for using those numbers, however. The UAW gave a complex labor concession in 2007 that dilutes the number down to about $58 per hour, or $120,640 annually.
Most would agree even half that amount is a decent living. That’s not to say anyone’s getting rich even at the $147,000 level, but my guess is most Americans would think Shemp should just “shaddup.”
By comparison, foreign auto makers that have plants in the United States pay on average $49 total per hour, or $101,920.
So until last year, labor for Detriot’s “Gents Without Cents” was 45 percent higher than their competitors. Forget everything else, but that alone is enough to “moider” your margins.
If for the last 30 years in which Detroit’s labor costs considerably climbed it had also been making some uniquely positioned vehicles, then this entire argument would be, well, silly.
But for the most part, the American automobile – other than some fine accoutrements – is the same as it was 30 years ago. In many cases, it’s less efficient.
Shemp’s not the only fool.
CEO Richard Wagoner ($3.36 million) entered 2008 as one of five executives at GM with seven-figure pay (excluding stock options). He and his team are now following the lead of Ford CEO Allan Mulally and Chrysler CEO Robert Nardelli, who slashed their pay to $1 and cut other exec salaries by 50 percent.
It’s a general misconception that executives make too much money. They, like professional athletes, doctors and everyone from arbitrageurs to actors, earn what the market will bear.
Talent costs, and when it’s right it’s worth every penny. The problem up in Michigan has been the lack of entrepreneurial and managerial talent, which hasn’t had a game-changing idea since the 1970s.
It’s been humorous, or sad, to watch these “3 Dumb Clucks” act heroic by doing in the eleventh hour what they should have done in the first place – rethink everything.
“Soitenly,” there’s a credit crunch. Of course, the economy is down.
The problem fellas, is you’ve had about a two-decade warning that you needed to engineer new, more efficient and cost effective vehicles. Now, because of a domino tumble of factors, we all have to pay for your incompetence and act like we like it.
To quote Curly, “We’re not ordinary people. We’re morons.”