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Should the Big Three become the Big Two?
by Steve Williams
December 18, 2008

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A couple of months ago I communicated my displeasure with the financial bailout, wondering where will we draw the line. That line in the sand has been covered up as the Big Three seek financial help. This money is just the tip of the iceberg; they are seeking a short-term band aid that will get them through the next few months and allow them to lobby the new administration for a long-term bailout that will dwarf any package seen to date.

The collapse of the U.S. auto market would have such catastrophic implications that it cannot be allowed—I get it. However, I believe that any bailout monies should be contingent upon a number of conditions, such as:

1. The Big Three should be reduced to the Big Two, whether it be Chrysler merging with GM, or some other permutation;
2. The CEOs should lose their jobs;
3. Redundant divisions and models should be consolidated and downsized (i.e., Chevy/GMC, Silverado/Sierra). Take the most profitable/popular of each and eliminate the other;
4. Get rid of the unions—they served their purpose and have long since outlived their usefulness; and
5. Mandated performance expectations that cut off funding immediately if not met.


Steve Williams
steve.williams@plexus.com
Steven Williams is the Printed Circuit Board Commodity Manager for Plexus Corp (Neenah, WI), where he is responsible for strategic materials management and tactical support of the printed circuit board supply base. Prior to joining Plexus, Steven spent 22 years in senior management positions in the PCB fabrication industry. He holds a BA in Organizational Management from Concordia University and a MBA from Cardinal Stritch University.

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While I do not necessarily agree with Steve that two is better than three in this case, Steve's items two through five are the obvious things to do.

The unions have boasted over and over again of how productive their workers are, yet I know of no one that agrees (I do not know many union workers). Advances in technology and higher levels of completed schooling have been the main drivers of productively increases for many decades. Many American factories lag those of Japan and Europe because the unions have opposed automation, and with union demands for wages higher than what many older college graduates receive, they are likely one cause of recent declines in the number of high school graduates and in those seeking higher education. America is for the first time lagging former third world countries in the yearly number of college graduates.

From my experience, unions simply mean lowest common denominator: "why break a sweat when we all get the same pay increase?" When will we stop allowing a few to disrupt millions of peoples lives with strikes that are nothing more than adult tantrums? We have OHSA, component and equipment safety standards, Federally mandated work laws, and state laws that fill in the blanks, along with mandated employer sponsored health care. Yes, the unions have outlived their original purpose for several decades.

The unions have been able to make a case for themselves, however, with the exorbitant CEO pay most companies now dole out without real merit. This practice must stop, and Steve's second suggestion is a good first step. Whatever happened to the concept of earning your keep? No one has a God given right to a job at GM, Ford, or any other company. You have a job because you contribute to the profitability of a company, not to its notoriety, and this applies to the CEO on down.


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