View Full Version : GM Plant closings
Jay Zeno
11-25-2005, 11:36 AM
Sure, Mel, I agree that more regulation means higher cost. But still, isn't this specific example speculation, perhaps to beat up on the environmental straw man?
The GM cars had engines and trannies from Western Europe. So what proportion of the car is Delphi pumping into it?
The Honda cars had engines and trannies from Ohio. What proportion of the car has nasty foreign parts in it?
The Honda is more expensive than the GM - but the GM can't be competitive because it's costlier.
I submit that there's more than environmental regulations. If this speculation is fact, it's a very small piece of the pie - if the speculation doesn't hold up, it's a negligible factor.
Here's my speculation: Labor demands that kill the golden-egg goose are unreasonable. Reluctance to adjust to shifting markets. Less efficient manufacturing processes. Less efficient management practices. Less efficient money management. Less productive engineering. Overall, bad analysis of where they are, where the consumers are, and what the manufacturer has to do to meet the consumer demands.
My previous Escalade had a sticker on the inside drivers door that said "Proudly Assembled in Texas" superimposed on a map of Texas. My present Escalade (EXT) was assembled in Mexico. Its enough to give you a headache trying to buy an American vehicle.
FBR
montythegeek
11-25-2005, 01:20 PM
FBR,
What you thought was an American vehicle was never an American vehicle. There has been this little thing called the NA Auto agreement since the early 1960s. Almost every "american car you ever owned" was about 1/3 Canadian--long before NAFTA was a dream(about 30 years before NAFTA).
Not to be considered nitpicking, but I googled "Honda pistons" and it appears they are made in the US by Boretech of Batavia Ohio (20 miles from where I grew up). Although I am not accutely aware of forging, I do not believe it is an environmentally undesireable process with the exception of the amount of solvents they use to cut grease. On that scale, a paint coating line would be less desireable because it propduces more evaporated solvents.
Batavia Ohio (county seat of Clermont county) is where Ford makes a lot of its transmissions in a plant surrounded by cornfields. IT is just outside the farthest edges of suburbia but is connected by a major highway to both east-west and north-south highways. It is also 15-20 miles from Adams country Ohio which chronically runs 30% unemployment. Point--corn does not complain about the neighbors.
Melonie
11-25-2005, 06:29 PM
From what I'm told, Aluminum die casting is a fairly nasty process utilizing molten aluminum metal being poured into molds. However it is nowhere near as nasty as the forging process, where red hot parts are struck by hammer blows to shape them, and then ground/machined to precise dimensions, and then heat treated/coated in red hot ovens.
BoreTech actually appears to be an aftermarket performance part company which supplies high priced 'performance pistons' i.e. forged pistons with enhanced strength and design features for use by 'street racers' - and undoubtedly some of these pistons do find their way into a small percentage of Honda car and motorcycle engines. However, I highly doubt that 100% of the pistons used to assemble new Hondas in Ohio are coming from BoreTech - but maybe I'm wrong. Honda has a reputation for spending more money to provide closer tolerance higher strength parts, which contributes to Honda's quality/performance mystique that justifies Honda charging higher retail prices for its cars than Toyota, GM etc.
So the real answer to "The Honda cars had engines and trannies from Ohio. What proportion of the car has nasty foreign parts in it?" is directly related to the actual source of the pistons, crankshafts, gears, rods and other components used to assemble those engines and trannies in Ohio. Perhaps someone who actually works at the Ohio Honda plant can tell us what the box markings are on the crates these components are shipped in. In terms of cost, the die cast aluminum engine block or transmission case is a small fraction of the 'value' of the entire engine or transmission assembly with the precision moving parts assembled inside it. However, the engine block and transmission case do represent a fair share of the overall size/weight, and do not require super-precise dimensions or super-high strength, so it makes sense that Honda might want to avoid shipping costs and cast these locally. There's also the 'holy grail' of 51% North American content, which allows Honda to avoid having to pay import duties. I'm not sure how 51% content is precisely defined, but it certainly leaves more room for internal components from foreign sources if US aluminum castings are used for the block/casing.
I submit that there's more than environmental regulations
Agreed ... there is also the issue of quality versus price. It is my understanding that Honda in fact supplies many of their cars' precision parts i.e. pistons, crankshafts, gears etc. from Japan than Toyota or Nissan does in order to control quality better than if these components were purchased from countries farther down the 'economic ladder'. Japanese workers obviously require higher pay rates than Korean or Chinese workers - although still less than US workers - but the Japanese do provide closer tolerance higher strength parts which directly contribute to the enhanced feel / performance / reliability / useful lifespan of Honda vehicles which enables Honda to charge more for a vehicle with given features than Toyota, GM etc. Delphi/Visteon arguably provides the worst of both worlds to GM/Ford, Korean quality parts at top dollar prices. Thus the 'work ethic' and 'quality commitment' of Delphi/Visteon workers is indeed a large factor in the equation.
BoreTech at least provides top quality parts in exchange for top dollar prices ! But again I highly doubt that BoreTech is a primary Honda supplier rather than an aftermarket specialty supplier to 'street racer' engine shops building Honda 'racing' engines.
Batavia Ohio (county seat of Clermont county) is where Ford makes a lot of its transmissions in a plant surrounded by cornfields. IT is just outside the farthest edges of suburbia but is connected by a major highway to both east-west and north-south highways. It is also 15-20 miles from Adams country Ohio which chronically runs 30% unemployment. Point--corn does not complain about the neighbors
good point ! I can't vouch for Ohio in particular, but I do know for a fact that EPA enforcement procedures are far from uniform on a state by state basis !
~
big_daddy
11-25-2005, 07:29 PM
I expected Ford to come out with the same announcement, so far so good. There are too many farmers etc for the truck makers to go under. Ford, Chevy and Dodge trucks will never disappear.
Melonie
11-25-2005, 10:09 PM
I expected Ford to come out with the same announcement, so far so good. There are too many farmers etc for the truck makers to go under. Ford, Chevy and Dodge trucks will never disappear.
Visteon isn't in much better shape than Delphi, so I suspect that you are correct in that it's simply a matter of time. You're also correct that full sized trucks and (until the last couple of years at least) SUV's have been the vehicles that US automakers have been making decent profit margins on ... due in no large part to the (until the last couple of years at least) lack of effective foreign competition in these areas. Of course, the SUV market has been under 'assault' for about 3 years now, and the full sized truck 'assault' is just beginning i.e. Nissan Titan. More recently, both the SUV and full sized truck segments have felt the greatest impact from rising gasoline prices, and this was probably the 'straw that broke the camel's back' re US automakers losing billions of dollars in the last quarter of 2005 thus announcing drastic cutbacks.
montythegeek
11-26-2005, 08:25 AM
I realize that people's views of the cleanliness and "niceness" of certain industries are subjective but neither forging or aluminum melting would be considered dirty businesses so long as it did not occur in downtown big-city USA. Al. (unalloyed) has a melting point just over 1200 degrees Fahrenheit and does not give off especially toxic gasses. A household match would burn at about half this heat.
Forging takes place at the "recrystalization temperature" of the metal. Remember the scene from the original Terminator movie at the end- that was a forging plant. It was not dirty, aluminum and steel do not smell bad, and there are no toxic gasses given off since nothing "melts"--it is just made hot, then pounded on. A beer manufacturing facility produces more pollution, and an airport 7-10 miles away is noisier.
Parts manufacturers had an especially bad third quarter because it was in the third quarter of a major inventory correction of vehicles, especially trucks and big-ass SUV's. Such events happen every 2-3 years, but expose other systemic weaknesses because they show high fixed costs spread over a weak volume.
To put the trade deficit in perspective, in the first nine months of 2005 we had a trade deficit in motor vehicle parts of $28.3 billion dollars. In the same 9 mos., we imported $41.7 billion dollars worth of pharmaceuticals.
http://www.census.gov/foreign-trade/Press-Release/current_press_release/press.html
exhibits 8 and 18.
Sarcasm below.
Those "sick bastards" are 1.5 times the problem of car and truck parts and ought to be happy with good old fashioned American drugs, or ought to just curl up and die.
It seems GM is pulling out all the stops and betting the farm on the new '07 GMT900 large SUV's (Tahoes, Surburbans, Escalades etc) which will be available within the next few months. The large SUV's have been their cash cow as they struggle to build smaller vehicles that will ultimately sell in big numbers. The reviews that Ive read in Car and Driver and Motortrend magazines have been very positive. But the editorial staffs are also saying that even with all the attention to build detail and quality along with cylinder de-activation (read significantly better mileage) and hybrids in the pipeline, it may be too late for the General. It seems as though they are waiting for the other shoe to drop, wringing thier hands as they recognize that the majority of their subscribers are US car guys rather than import fans. If the domestic manufacturers go south, a large percentage of their readership (including me) will follow.
Admittedly, its a business issue for me. I dont do a ton of business with GM direct but many of my largest customers are 2nd and 3rd tier suppliers. And the Japanese havent lessened their ruthlessness and protectionism, using their employment of local (serf?) labor to mask the fact that they mandate the majority of their high dollar US factory tooling and automation come from Japan rather than being designed and builit in the US using US components.
Whew...I got that rant out LOL But seriously, do you think GM (and by inference the other domestic manufacturers) has a prayer? The 900 vehicles seem to be top notch and should stand up to any Asian or European same class vehicle. But with what seems to be a sadly typical mindset amongst US consumers, Im fearful that many buyers will drive past the GM dealer and buy a Sequoia which offers no advantage in mileage or quality. If its Japanese it has to be better, right?
FBR