General Motors Oshawa to Close

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I was about to say it's a circle, but I would have been wrong. It's more of a spiral. The truck starts out costing $500, but the guys making it are making a few dimes a day and they can't afford to buy the truck. So they vote in a union and demand a better wage. To compensate for the higher wage, the truck gets more expensive, now the guys are making a few dollars a day, but the truck costs $1500. The guys demand a better wage, and some benefits to keep their wages in their pocket so they can buy the truck they made. But then the truck creeps up to $3500 and so the spiral continues to rise and the worker continues to chase it. Fast forward to 2018 and the truck is getting close to six figures, the worker still can't buy it without taking on crippling debt, especially considering the rest of the debt he needs to carry with the rising costs of keeping up with the Joneses. But wait, those workers to the south, they don't care about keeping up with neighbors, they just want to feed their families and are willing to do anything for a few dollars, they don't even know what a JHSC is or right to refuse etc. We can make the same truck for pesos instead of dollars, North Americans are used to paying $80k for a truck now, so they'll continue, and banks are happy af to write mortgages on vehicles to support the market, so we can keep the prices the same.

The spriral is now a slinky, enjoy the trip down the stairs.

(I'm a USW welder making $30.07+benefits and defined pension, During the last strike, my employer began construction of a plant in Alabama, where he would have hired comparable labor for $12/hr, lucky for us it all fell to pieces)
 
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JTR said:
(I'm a USW welder making $30.07+benefits and defined pension, During the last strike, my employer began construction of a plant in Alabama, where he would have hired comparable labor for $12/hr, lucky for us it all fell to pieces)
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Until they were arrested in the US on fraud charges and the banks took over the Alabama facility and leased it to a competitor.

I don’t disagree with your thoughts on globalization and free trade, but another aspect to consider is the stagnation of middle class wages while VP level compensation continues to climb far faster than inflation.
 
It may be because a VP today has to understand a global marketplace, foreign competition , the marketable opportunities which today include e-com, multiple distribution channels and vendor relations. Corporate tax obligations, regulation specific to the industry and the well being of 100's? 1000's of employees.

The line guy used to bolt a bolt in a door using a ratchet and had to know when it was tight, now he steers the jig that bolts the door on and an el/ pnuematic tool torques it, It even shuts off with no snap so no carpel tunnel.

The VP is planning the next phase of the business expansion , the line guy is thinking about a bass boat.

Maybe the VP salaries have gone up with the complexities of the job.
 
JTR said:
Fast forward to 2018 and the truck is getting close to six figures, the worker still can't buy it without taking on crippling debt
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A pickup truck doesn't cost $80-$90+K because of the workers making $30+/hour. A pickup truck costs that much because manufacturers will charge what the market will bear, and it's been proven that even $80K pickup trucks sell quite well and the profit margins are gleefully enormous.

Because consumers are stupid. If the person who bought it keeps it...that pickup truck will have lost around 90% of it's value at 10 years of age. That is a TERRIBLE investment.

If you *need* a pickup truck for work and it's an essential tool for you, then fine...but I will NEVER understand people that buy an $80K pickup truck just to use it to pickup beer and groceries.

I used to have a 3500 1-Ton Dually long box pickup truck. Because I had a use for it - hauling our horse trailer and our 5th wheel camper. When both of those went away, the truck followed in VERY short order.

Anyhow, it's off topic to the thread, but it's not a good argument for why the trucks coming out of any high-wage plant cost so much. They don't NEED to - remember, GM built the Impala and other small vehicles at Oshawa for many, many years, and they were reasonably low-cost vehicles to purchase, and GM made money on every one of them they sold. They just didn't make stupid Scrooge McDuck "money pool" type money...which is the reason manufacturers are getting away from cars all together, IE Ford.

It's a decision I think will come back to bite them in the future when gas prices inevitable spike again and the SUV & pickup truck market falls apart again like it has done before - the Big3, if they keep going down their current road, will not be in a position to actually have smaller now in-demand vehicles to sell again.
 
I'm not sure gas pricing really affects the market for trucks. The only guys I ever hear talk about mileage are those that actually use a truck for a truck. My current F150 was a breath of fresh air compared to my Range Rover that was half the size, and the BMW 750 used premium and got mileage like a Boeing product.

Trucks cost what they cost because they sell all they make. The market will bear it.
 
Look back at the 2008 era when gas prices were nearing $1.50/L what happened to truck sales.

It does, eventually, take a toll on sales.

And when gas is cheap again, as it is now, dealers can’t keep them on the lots.
 
gsxr guy said:
Exactly, huge $ for a general labourer. Maybe the union should look at fast food and get all those workers grossly over paid. lol
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Wynne took care of that already.

Sent from my purple G4 using Tapatalk
 
JTR said:
I was about to say it's a circle, but I would have been wrong. It's more of a spiral. The truck starts out costing $500, but the guys making it are making a few dimes a day and they can't afford to buy the truck. So they vote in a union and demand a better wage. To compensate for the higher wage, the truck gets more expensive, now the guys are making a few dollars a day, but the truck costs $1500. The guys demand a better wage, and some benefits to keep their wages in their pocket so they can buy the truck they made. But then the truck creeps up to $3500 and so the spiral continues to rise and the worker continues to chase it. Fast forward to 2018 and the truck is getting close to six figures, the worker still can't buy it without taking on crippling debt, especially considering the rest of the debt he needs to carry with the rising costs of keeping up with the Joneses. But wait, those workers to the south, they don't care about keeping up with neighbors, they just want to feed their families and are willing to do anything for a few dollars, they don't even know what a JHSC is or right to refuse etc. We can make the same truck for pesos instead of dollars, North Americans are used to paying $80k for a truck now, so they'll continue, and banks are happy af to write mortgages on vehicles to support the market, so we can keep the prices the same.

The spriral is now a slinky, enjoy the trip down the stairs.

(I'm a USW welder making $30.07+benefits and defined pension, During the last strike, my employer began construction of a plant in Alabama, where he would have hired comparable labor for $12/hr, lucky for us it all fell to pieces)
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A base model car today has more stuff than a Cadillac had 50 years ago. My brand new F-100 in 1978 cost $5000. Six cylinder and three on the tree. A base model is now six times the price but better equipped than most 1970's cars. If I had continued to work the same job I don't think I would be making six times as much.
 
PrivatePilot said:
Look back at the 2008 era when gas prices were nearing $1.50/L what happened to truck sales.

It does, eventually, take a toll on sales.

And when gas is cheap again, as it is now, dealers can’t keep them on the lots.
Click to expand...

Remember your previous statement about what the market will bear. In 2008 the problem wasn't the gas price. The problem is that most people couldn't buy much more than a Grom for cash, so if the banks aren't giving out credit, then people can't buy.

Maybe CAW should buy the plant and make it a co-op. People have done it with other companies in other industries and been successful. They'll still need an office building full of expensive people though. Design team, engineering, legal, accounting, marketing, HR, payroll, logistics, purchasing, someone to manage all those departments... crap it's a corporation again.
 
I'm sure this is a dumb question (I know nothing about the car industry) but since we already have this fully equipped plant and 2500 skilled workers, couldn't we just continue building our own cars without GM? Change it just enough so it doesn't infringe on any of GM's patents.
 
danp said:
I'm sure this is a dumb question (I know nothing about the car industry) but since we already have this fully equipped plant and 2500 skilled workers, couldn't we just continue building our own cars without GM? Change it just enough so it doesn't infringe on any of GM's patents.
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Changing a bit requires new tooling. New tooling requires a giant investment. Nobody in north america will buy knockoff GM cars for the same price (or more) than legit GM cars.
 
nobbie48 said:
A base model car today has more stuff than a Cadillac had 50 years ago. My brand new F-100 in 1978 cost $5000. Six cylinder and three on the tree. A base model is now six times the price but better equipped than most 1970's cars. If I had continued to work the same job I don't think I would be making six times as much.
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You also paid a lot less in taxes back then as well, on income and consumer goods.

I always believe this upward trend in ever increase cost of living is unsustainable. But somehow we all manage. Maybe that is the problem we've become so repressed by it and pressured to work harder, or take on a second income, and they all keep taking advantage of it by keep increasing stuff we need or want. Maybe the breaking point is starting to show with the next generation not being able to afford homes, it's not even on most of their radars.

Anyhow I am sure the workers of the phyamids had the same conversations of the Pharaohs of the day.
 
PrivatePilot said:
A pickup truck doesn't cost $80-$90+K because of the workers making $30+/hour. A pickup truck costs that much because manufacturers will charge what the market will bear, and it's been proven that even $80K pickup trucks sell quite well and the profit margins are gleefully enormous.

Because consumers are stupid. If the person who bought it keeps it...that pickup truck will have lost around 90% of it's value at 10 years of age. That is a TERRIBLE investment.
If you *need* a pickup truck for work and it's an essential tool for you, then fine...but I will NEVER understand people that buy an $80K pickup truck just to use it to pickup beer and groceries.

I used to have a 3500 1-Ton Dually long box pickup truck. Because I had a use for it - hauling our horse trailer and our 5th wheel camper. When both of those went away, the truck followed in VERY short order.
Click to expand...
Pickups are not "investments" any more than motorcycles, fashion clothes, and whiskey -- all typically purchased for reasons other than necessity, all pretty much worthless after a few years.
PrivatePilot said:
Anyhow, it's off topic to the thread, but it's not a good argument for why the trucks coming out of any high-wage plant cost so much. They don't NEED to - remember, GM built the Impala and other small vehicles at Oshawa for many, many years, and they were reasonably low-cost vehicles to purchase, and GM made money on every one of them they sold. They just didn't make stupid Scrooge McDuck "money pool" type money...which is the reason manufacturers are getting away from cars all together, IE Ford.

It's a decision I think will come back to bite them in the future when gas prices inevitable spike again and the SUV & pickup truck market falls apart again like it has done before - the Big3, if they keep going down their current road, will not be in a position to actually have smaller now in-demand vehicles to sell again.
Click to expand...
I think this is just the natural evolution that most industries and business go through - specialization. All business focus on what they do best, what makes them the most profit.

North American manufactures are good with truck and heavy vehicles, they find it hard to compete with Asian makers at the entry and mid range of cars - each is specializing to some degree. I don't see people crying that Audi, Hyundai, Nissan or Toyota have nothing to little in the pickup a heavy utility markets.
 
Mad Mike said:
Pickups are not "investments" any more than motorcycles, fashion clothes, and whiskey -- all typically purchased for reasons other than necessity, all pretty much worthless after a few years. I think this is just the natural evolution that most industries and business go through - specialization. All business focus on what they do best, what makes them the most profit.

North American manufactures are good with truck and heavy vehicles, they find it hard to compete with Asian makers at the entry and mid range of cars - each is specializing to some degree. I don't see people crying that Audi, Hyundai, Nissan or Toyota have nothing to little in the pickup a heavy utility markets.
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So what would happen if the Japaneses start to go after the pickup market. They have already proven they can make great cars. And if what you are saying the Americans are backing away from cars because of it, then what is left for them, closing up shop?
 
sburns said:
So what would happen if the Japaneses start to go after the pickup market. They have already proven they can make great cars.
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They've been at it for quite a while. Ya got your tundras, frontiers, B series, ridgeline, tacomas, etc.
I own one. It's definitely not for everyone, (ridgeline) but I prefer it to the f150 I had, and way better than the gmc pick up i once had.
 
sburns said:
So what would happen if the Japaneses start to go after the pickup market. They have already proven they can make great cars. And if what you are saying the Americans are backing away from cars because of it, then what is left for them, closing up shop?
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Japanese have been there for decades, they just haven't made much progress. Sure they sell a few, and sure there are folks loyal to their brands -- Japanese share is tiny, furthermore they tend to compete with themselves not GM, FC, or Ford -- when Tacoma's numbers go up, it's at the expense of Tundras.

I doubt Japanese and Korean makers see too many cracks in the truck market my guess I they get focused to fight for the car sales GM, Ford an FCM are leaving for them -- it would be silly to launch an offensive into the truck market right when the NA makers are doubling-down.
 
Mad Mike said:
Japanese have been there for decades, they just haven't made much progress. Sure they sell a few, and sure there are folks loyal to their brands -- Japanese share is tiny, furthermore they tend to compete with themselves not GM, FC, or Ford -- when Tacoma's numbers go up, it's at the expense of Tundras.
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Really? In 2018, the Tacoma had 45% market share. The second place pickup, the Colorado had 27%.

http://www.trucktrend.com/news/1807-midsize-truck-market-share-breakdown/

Third place? Nissan Frontier with 16%.
 
I like Honda, but they turned me off with the Ridgeline. When the first generation came out as a very lazy attempt, small unibody copy of an Avalanche with the front end of an Element. It's like they went to a Chinese design firm and said we want something to compete with a popular American truck, and they just did what they do best.
 
danp said:
I'm sure this is a dumb question (I know nothing about the car industry) but since we already have this fully equipped plant and 2500 skilled workers, couldn't we just continue building our own cars without GM? Change it just enough so it doesn't infringe on any of GM's patents.
Click to expand...

Sorting out the intellectual property rights would be a nightmare. In today's auto industry, the final assembly plant usually doesn't actually build all that many parts (generally outer-skin sheet metal), almost everything is brought in from suppliers, and those are under contractual obligations. Even if that were to be sorted out somehow, it doesn't solve the fundamental problem that the GM Oshawa plant has been left producing odds and ends that are on the fringes of consumer demand, which has shifted wholescale away from trunk full-sized sedans to CUVs and SUVs. There's currently no foreseeable threat to the Ingersoll plant, which produces the Chevrolet Equinox (in huge numbers).

No one would buy a GM car that isn't backed by the GM dealer network, warranty coverage, sales infrastructure, etc.
 
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