Quick Thought: GM Considers Moving
Finally. We as Americans need to realize that we can’t have our cake and eat it too.
It’s either stop having the UAW make autos or stop having American owned car companies. Now many are quick to go to the Union made, American born car argument, however, in the rise of Supply Chain rationalization, Toyota cars have as much, if not more American parts in their cars.
A large reason Toyota has done so well, besides their PHENOMINAL evolution of Supply Chain Management, Rationalization, Utilization, Optimization, etc etc etc, is that they manufacture their cars away from Detroit in states such as Indiana, Kentucky, and Texas. They don’t have to succumb to the preposterous demands of Union heads.
Regardless of this decision, over the next 5 years, extreme changes are going to have to come to the auto industry globally. For most manufacturing industries, plants run between ~70 to ~80 percent capacity. This allows for growth, or spikes in demand, while keeping the processes in the plant moving. However, globally, the auto industry is working at about 30% of their plants capacity. The result will be only the best of breed companies surviving the next five years. What makes this even more concerning for Detroit is that even if they wish to close down plants for a temporary time, is they will still have to pay labor costs to the Unions.
My prediction: One of the big three will close down or be foreign owned in the next ten years, unless they get out of bed with the UAW.
Story Here: http://www.cnbc.com/id/30682967
