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GM Drops WJ & KJ?
- Thread starter Nunz
- Start date
Johnny Mopar
Nitro Member
General Motors just announced a $600,000,000.00 cut in their marketing budget for 2009. That story was reported to the Radio industry in a newsletter this morning.
Radio Sales Today for Monday, December 8, 2008
They probably look at it from the yearly profits and if they end up in a lose then they will have to cut spending to gain profit .
Someone sent me an article a while back about the differences between american car manufacturers and japanese car manufacturers . Don't take this the wrong way or anything because I love american cars but they compared the whole thing to a rowing race and they used toyota and ford as an example . So that I don't have to explain it I will copy and past the article .
A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River
Both teams practiced long and hard to reach their peak performance before the race.
QUOTE:"On the big day, the Japanese won by a mile.
The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.
Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.
Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.
They advised, of course, that too many people were steering the boat, while not enough people were rowing.
Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.
They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to 'equal the competition' and some of the resultant savings were channeled into morale boosting programs and teamwork posters.
The next year the Japanese won by two miles.
Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.
The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year's racing team was out-sourced to India .
Sadly, the End.
Here's something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can't make money paying American wages.
TOYOTA has spent the last thirty years building more than a dozen plants inside the US The last quarter's results:
TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.
Ford folks are still scratching their heads, and collecting bonuses..." QUOTE
I know we are talking about general motors but I just thought that I should post that .
Nitrohaulic
Nitro Member
The benefit they could get from a government bailout might outweigh the return on investment they get from motorsports marketing?
Maybe they'll just chuck motorsports until AFTER they get their bailout money like AIG did! They could then reinstate sponsorships with raises!
Tim5636sc
Nitro Member
I have to say that i am not suprised by this. However if they really want to make some serious cuts, they may want to start with nascar. They invest SERIOUS $ in needless marketing. Trying to convince a die hard ford guy to switch to the other brand is like trying to convince a die hard john force fan to cheer for the "dark side".
Personally i hope the agent is wrong about this. These Johnson's have done alot for GM motor sports
Personally i hope the agent is wrong about this. These Johnson's have done alot for GM motor sports
TF CREW
Nitro Member
In the big picture here alot has to do with the amount paid out in retirement pensions. The big three have been manufacturing cars in the USA for about 100 years and have a very large work force that has retired.
The Japeness U.S. based work force has nowhere near the amount of retired work force. thus they havent had to pay the amount of pensions that our beloved automakers have. This has a tremendous effect on the bottom line.
The Japeness sales have been just as bad or worst the the big three.
The Japeness U.S. based work force has nowhere near the amount of retired work force. thus they havent had to pay the amount of pensions that our beloved automakers have. This has a tremendous effect on the bottom line.
The Japeness sales have been just as bad or worst the the big three.
The Counterfeiter
Nitro Member
This just the start of a motorsports disaster. Inbev announced 1400 job cuts
at Anheuser-Busch today - 75% of those jobs are at A-B corporate headquarters. The Belgian brewer is well known for very aggressive cost cutting. If there is someone left at A-B who can show an ROI on motorsports sponsorships, there may be some hope. If not . . .
at Anheuser-Busch today - 75% of those jobs are at A-B corporate headquarters. The Belgian brewer is well known for very aggressive cost cutting. If there is someone left at A-B who can show an ROI on motorsports sponsorships, there may be some hope. If not . . .
ramblerjay
Nitro Member
this needed to happen. the big 3 need to latch on to the government's mammary gland, so they do not deserve to be on the side of any racecar.
it's a shame that warren and kurt will lose their sponsors, but in the end, i can't say that i'm surprised based on the products that the big 3 have put out lately.
it's a shame that warren and kurt will lose their sponsors, but in the end, i can't say that i'm surprised based on the products that the big 3 have put out lately.
clwill
Nitro Member
I'm betting that anyone with a big 3 deal is in trouble -- perhaps even JFR... but he probably has a pretty solid contract.
Wonder if someone like Toyota, who's been dipping their toe in the NHRA water will see this as a chance to get more involved? I know they're hurting as well but to paraphrase Mr. Potter from It's a Wonderful Life, "the time to start buying is when everybody else is losing their heads".
Wonder if someone like Toyota, who's been dipping their toe in the NHRA water will see this as a chance to get more involved? I know they're hurting as well but to paraphrase Mr. Potter from It's a Wonderful Life, "the time to start buying is when everybody else is losing their heads".
The overall Customer Satifaction Index (CSI) indicates only a 1-2 point seperation between the BIG 3 and the Asian/European makers.
I would attribute their financial problems to the extremely high salaries paid to their executives, their bonuses and the $70/hr salaries paid to the people on the lines. The UNIONS have totally screwed them up. The Asian/European makers do not have union workers in their plants.
Jim
Nitro Member
Unless they make some racer the "Car Czar", we can expect to see more of this.
Detroit is gonna' sell their soul for some short-term oxygen. Why they would want to get in to bed with Chris Dodd or Barney Frank (Don't go there) is beyond me. Their idea of long term planning is about 12 months for Congressman and 3 years for Senator (if the're not intent in knocking off the current President - then - they don't even show up for work - just talk)
Still shoulda' taken their chances with a Chapter 11 re-structuring. At least there might be a business purpose going forward - Now, who knows??
There may be a foreign car in my future.
Detroit is gonna' sell their soul for some short-term oxygen. Why they would want to get in to bed with Chris Dodd or Barney Frank (Don't go there) is beyond me. Their idea of long term planning is about 12 months for Congressman and 3 years for Senator (if the're not intent in knocking off the current President - then - they don't even show up for work - just talk)
Still shoulda' taken their chances with a Chapter 11 re-structuring. At least there might be a business purpose going forward - Now, who knows??
There may be a foreign car in my future.
Johnny Mopar
Nitro Member
The difference in labor costs are $1,500.00 per vehicle. If you're making 500,000 vehicles per year, that's a HUGE number...$750,000,000.00. If you're selling 1.5 million units (like GM) per year, the labor difference alone is $1.5 BILLION dollars per year. That is a huge advantage for the Asian manufacturers here in the states.
Do that math and you see where the problem is.
dave
Nitro Member
I worked at a GM/Delphi plant for 15 years and I can honestly tell you we did not make $70 an hour, even if you count benifits etc which never seems to be taken into account when speaking of any other interest. Yes the unions did cause some problems on some issues, but these companys do not need any help screwing things up. When they shut our plant down they came in a threw millions of $$$ in stuff away. 2 weeks before it was shut down they came in and put 30,000 in computer upgrades on the line I ran alone. It never even was put into service... I can go on for hours with stories like this. I am not trying to start something, just providing an inside perspective on car companies.
I got the $70/hr from a report that I read the other day outlining some of the problems with the big 3. I totally agre that they don't need any help screwing themselves up! The practice of rewarding those who don't do a damn thing has lead to a bunch of companies downfall. I also understand all about the throwing millions of $$$ of perfectly useable stuff away, or auctioning it off for pennies on the dollar, I work for a public school district.
We didn't get a pay raise this year because the state changed the way school districts are funded and that supposedly led to a budget shortfall. But then the school board voted a couple of weeks ago to give the superintendant of the district an $8000/yr pay raise. I have made the comment many times that if our school district were a private company they would have filed for bancruptcy a long time ago.
JL
Nitro Member
It was $3 million to the Sugar Hill gang and $597 to Jimmie and Jeff...
This sucks. Hopefully Warren and Kurt will get back out there on more than a part time basis. Warren has done a lot of R&D for GM. I would think they would do better than this, but I guess with the economy this way they had no choice. I hope once they are able to sponsor again, they will go back to WJ Enterprises.
