A Brief Note On The Auto Industry And The Automobile Industry

Detroit, Michigan grew up around the automobile industry. At its peak, Detroit was the fifth-largest city in the United States, becoming the home to over 1.8 million people by 1950 (Davey, Monica 2013). The prolific population was due greatly to the success of the auto industry in the city. At that time, Detroit was flying high, its name coined “The Motor City” (americaslibrary.gov), and automobiles greatly impacted commercialization. From transporting goods to hastening production, to selling parts, to manufacturing and selling new automobiles, the auto industry completely transformed Detroit. Things seemed

General Motors is the biggest supplier of automobiles the United States and the second largest publicly owned company in the world. General Motors has been overwhelmed in recent years with declining profits and increasing costs. "General Motors product mix in the United States, heavily weighted toward trucks, pickups, and SUVs, is on the wrong side of gas prices. It is up against a formidable and sometimes militant union whose ability to accept the full reality of General Motors problems is not assured and gravely, it is burdened by health costs, which it supplies for a population bigger than Detroit's that is, for a total of 1.1 million employees, retirees, and dependents" (Loomis, 2006). Employees and the Union are reluctant to change their rewards benefit packages. General Motors is looking for a new and better way to change the company's total rewards packages so the company can be profitability and keep employee moral high in order to produce a quality product. These changes need to be in order with keeping the union happy while being financially beneficial.

I have worked at Metform for the past three summers in a variety of departments: maintenance, engineering, quality, shipping, and human resources. All of the ideas below are my own beliefs. I did speak with the Human Resource department through the course to gather information for my paper; however, I did not perform an interview. This paper focuses on hourly employees because Metform is responsible for hourly employees’ wages and training, not corporate. Metform, a division of MacLean-Fogg Component Solutions (MFCS), is a manufacturing business located in Savanna, Illinois. In 1929, four years into the company’s history, MacLean-Fogg engineered a water-tight bolt which started the family’s legacy. Metform, the Hot Forging division of MFCS, specializes in forging steel, light machining, and light assembly of parts for the transportation industry (SITE 2). Metform’s largest clients include Chrysler, ZF, Ford and Caterpillar. During the last four-years, Metform has over doubled its production and workforce. Consequently, the organization is in a strategic business transition which includes revamping Human Resources. Metform promotes a differentiation competitive business strategy founded on innovation. John MacLean Sr. said, “Help the industry… and we will help ourselves. Solve the customer’s problems, at a fair price, and on time” (SITE). The company’s mind set is to create or modify a product to better fit demands without compromising quality. Other points of emphasis are

As with [[aviation and airline mechanics]], automotive technicians will find hourly pay rates tied to a supply and demand ratio. In some parts of the country finding a person willing to put up with the pain and suffering of working outside on heavy equipment becomes an impossible task. The few and the proud willing to step up and take these positions can demand a pay rate

INDUSTRY ANALYSIS ago” (Warnica, 2012). The fact that wages in the industry are high means workers have the

The UAW is facing a Sept. 14 deadline to negotiate contracts for more than 140,000 workers at Ford, General Motors and Fiat Chrysler Automobiles. After a decade of no raises for some workers, lower wages and benefits for others, the union has said it’s payback time for helping the automakers

challenges, however, are the most difficult ones to face and overcome. Some environmental issues that

The United Auto Workers Union (UAW) negotiated a golden-parachute of a contract for 40,000 auto workers and future employees. After intense negotiations, a strike was staved off by Chrysler’s agreeing to meet the demands of the UAW. The specific demand in particular that initially prompted the rejection of the labor contract was the two-tier wage structure. In the new agreement, Chrysler agreed to omit that verbiage in the contract and agreed to a higher starting hourly wage, and a signing bonus. In addition to the victory over the wage structure, employees also walked away from the table with the pay raises that was included in the original labor contract. It appears that the negotiations were profitable in the United Auto Workers Union’s

The action of raising the federal minimum wage has been cast as a necessary change for the United States, and would result in ensuring that America’s workers are able to receive a reasonable living.Though the controversial issue has turned more complex, with many implications beyond just those who bag groceries, flip burgers, and clean offices. The issue is believed to have various pros and cons, and consequently sparking the ongoing debate on to, or to not change to wage.

As difficult times tend to loosen these binds, many employers find that reminding employees of the dollars and cents value of that relationship can provide a little fresh glue (HRO Today - Human Resource Outsourcing Today).” Employees have to consider not looking at just the base salary if there are non-monetary benefits, perks and extras to consider as well. Unions have a significant effect on those who are in unions and those who aren’t in unions in relation to total compensation plans and benefits. Unions in their bargaining for the employees can potentially increase the salaries, increase the benefits as well as encourage or help an organization offer up additional perks. Unions allow for equality within the lower and middle class sector, those who work in more labor intensive careers and those who are limited in the degree they hold by fighting for those workers to ensure some amount of fairness. Unions can impact the salaries of an industry that doesn’t have a union in a particular building because the unions are in the industry the worker would be paid a more because of that even though the union may not be physically in the building. The biggest impact that a union has on a total compensation package is the perks or additional benefits of employees by bargaining for leave with pay, which ends up

Car manufacturing and production factories pay their employees very well. At a minimum, employees of car manufacturing and production factories will make thirty two dollars an hour. This is almost three times minimum wage in Ontario. For every job that is created in a factory that makes cars, another seven and a half jobs are created elsewhere in the economy at companies that make the parts that go in a car such as: doors, bumpers, tires, mirrors, carpets, etc. With more jobs being created, the economy flourished as more people were in work and had extra funds to afford extra expenses. There are a total of 155,000 people employed in auto manufacturing. If those employed in the sales and aftermarket service were including then close to a million Canadians work in the auto industry.

“Paying your employees well is not only the right thing to do, but it makes for good business”-Jim Sinegal, CEO of Costco. Many of America’s employees are not being paid well, however, for the annual income of a full-time employee who works year-round is less than $16,000 (about $15, 080) according to the current federal minimum wage (Rebuilding). To put into retrospect how out-dated the federal minimum wage is, consider that the minimum wage of 1956 amounted to exactly $7.93 in 2009 (Henderson). How progressive is it that our nation’s workers being paid less today than workers from the 50’s? The federal minimum wage should be raised in order to assist families out of poverty, to ensure the effort and loyalty of workers, and

The automobile industry is a capital intensive industry, the players in the industry need high capital expenditure in order to maintain their market position, but the expected returns in the future is quite high. The industry analysis can be carried out under the following heads:

In 2010, Joe Biozich, CEO of Knights Apparel reopened the Alta Gracia factory with a vision to do something extraordinary that would make his business more meaningful and that’ll impact the daily lives of workers. Working closely with the Workers Rights Consortium, Biozich made the decision to pay his employees premium wages at the Alta Gracia factory. (Insert) Most apparel factories pay the minimum wage of 15 cents to 85 cents an hour, these wages is barely enough to remove families from poverty(Insert book). Knights Apparel made the commitment to pay Alta Gracia factory workers $2.83 an hour, making a monthly income earning of $500 a month. (Insert)

When the “Sub-Prime Mortgage Crisis” began in 2008, it triggered a global recession. Demand decreased across all industries, but the auto industry was hit especially hard due to vehicles being big ticket items. Even prior to the recession, the high prices of raw materials and fuels, as well as increased pressure from the government and consumers for automakers to build “greener” cars meant trouble for automakers. Within the industry, Canadian and the American auto makers were hurt the most. The strong presence of unions meant that they had a much higher labour cost than their competitors. Also General Motors, Ford and Chrysler, known as the “Big Three” primarily focused on manufacturing pickup trucks and SUVs because of