Saturday, August 11, 2007
Toyota's lithium battery of choice uses cobalt oxide, much like the problematic batteries that were catching fire in Sony laptops. GM's iron phosphate-based battery is said to be more chemically stable. ...
Why do I completely lack confidence that GM will capitalize successfully on any technological lead it has? Because where GM has had a technological edge in the past it has been unable to translate it into cars customers like me would rather buy than Toyotas.
A large part of that inability has to do with GM's dramatically higher labor costs--apparently the total labor cost for a GM hourly worker (including health, pensions etc.) is about $146,000 per year. They're competing against Toyota and Honda who pay $96,000 per year--on equally American workers in American factories. Much of this disparity is in health care costs, something that would be fixed if the government took over that burden. But, according to CNN (citing Harbour-Felex data) $630 per vehicle is for union-negotiated "issues like work rules, line relief and holiday pay," while "paying UAW members for not working when plants are shut costs another $350 per vehicle."
That's about $1,000 per vehicle not related to health care (or "legacy" pensions, for that matter). I don't begrudge Detroit auto workers six-digit pay packages--unlike some professors, I don't think it odd that they make more than professors. It's harder work! But I also don't see why they should necessarily make more than Toyota's hard-working American autoworkers. And as a car consumer, every time I see a nice Detroit vehicle I might want to buy--the Ford Mustang and Pontiac Solstice come to mind--and then I see the tacky materials used in the interior, I think about how much more appealing the car would be if I didn't have to pay $1,000/vehicle in extra costs to finance the UAW's work rules, etc. (with the grand going to buy higher quality plastics or to lower the price). Toyotas don't have this problem--I'm more confident the money I spend will efficiently go into the car I buy. ...
Update: This better-than-MSM Automotive News article--free at the moment, with registration--argues that the coming UAW-Detroit negotiations will actually start the process of bringing GM, Ford, and Chrysler's labor costs down a notch to Toyota's level. In effect, argues David Sedgwick, we still have "pattern bargaining," it's just that non-union Toyota sets the pattern. ... But isn't it just as likely that, in the toothpulling process by which the UAW is forced to climb down from above-Toyota labor costs, the concessions will be too little, too late--or rather, just enough to keep current workers employed but not enough to actually let GM make significant anti-Toyota inroads? You could argue that the UAW would in fact be serving its older, near-retirement workers well if it merely allowed GM to limp along and shrink with the shrinking UAW membership, making just enough money to cover pensions. ... That's one problem with Wagner Act unionism--even the most democratic unions, like the UAW, represent a fatally underinclusive constituency. One group that's not included is Americans now in elementary school who might benefit from having GM around in 20 years. Another group is communities that would benefit if GM actually capitalized on technologocial breakthroughs and took some market share back. .... 3:12 P.M. link
Friday, August 10, 2007
Hmm. Should the campaign of John Edwards be accusing other candidates of exploiting tragedy? 2:36 P.M.