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Detroit [MI] Economic Club 3/13/92 [OA 7570] [3]
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323153954
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Detroit [MI] Economic Club 3/13/92 [OA 7570] [3]
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Records of the White House Office of Speechwriting (George H. W. Bush Administration)
Speech Backup Chronological Files
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Originally Processed With FOIA(s):
FOIA Number:
S
S
FOIA
MARKER
This is not a textual record. This is used as an
administrative marker by the George Bush Presidential
Library Staff.
Record Group/Collection:
George H.W. Bush Presidential Records
Collection/Office of Origin:
Speechwriting, White House Office of
Series:
Speech File Backup Files
Subseries:
Chron File, 1989-1993
OA/ID Number:
13803
Folder ID Number:
13803-008
Folder Title:
Detroit [MI] Economic Club 3/13/92 [OA 7570] [3]
Stack:
Row:
Section:
Shelf:
Position:
G
26
22
3
7
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Services of Mead Data Central, Inc.
PAGE
2
2ND STORY of Level 1 printed in FULL format.
Copyright 1992 Southam Inc.
The Ottawa Citizen
March 1, 1992, Sunday, FINAL EDITION
SECTION: ECONOMY; (BUSINESS); Pg. E5
LENGTH: 941 words
HEADLINE: Ford Taurus plant in Atlanta so efficient that the Japanese tour
it for hints
BYLINE: DON MELVIN; FORT LAUDERDALE NEWS & SUN-SENTINEL
DATELINE: ATLANTA
BODY:
If American workers are unproductive and unmotivated, as Japanese
politicians seem to believe, why do so many Japanese automakers visit the Ford
Taurus factory in Atlanta?
To learn about efficiency, that's why.
Welcome to the auto plant that has been rated the most efficient in North
America, one of the most efficient in the world. Here, a new car rolls off the
line for every 17.6 hours of work, according to a study by the Massachusetts
Institute of Technology. That's about half the labor it took to produce
full-sized Fords and Fairmonts at the same factory in 1978.
By contrast, the study found that an average General Motors plant produced a
car with 27 hours of labor. An average Japanese plant in Japan takes about 17
hours of labor to build a car, but the Japanese have not transferred that
success to the United States. The average Japanese-owned plant in the United
States uses 21 hours of labor to assemble a car.
So Japanese auto executives visit the Atlanta plant in droves to find out
how the efficiency has been achieved. In the past two years, delegations from
Nissan, Yamaha, Honda and Mazda have toured the factory, some of them several
times.
They 522 a plant where robots attack car frames like awkward, long-necked
birds to weld the side panels in place. They see an assembly line that brings
the car to some workers in the air, so it's easier to reach and workers don't
hurt their backs.
They see management-union co-operation unheard of a few years ago. And they
see workers motivated both by pride in their work and fear of joblessness -- and
deeply resentful of Japanese attacks on their abilities.
"I tell you, I really get angry about it," says Fred Bates, a 26-year
employee, as he paints stripes on the sides of cars. "I think we're really
hard-working people."
"Their politicians are probably like ours -- they don't know what they're
talking about," says Freddie Say, a repairman who checks the cars at the end
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The Ottawa Citizen, March 1, 1992
of the assembly line.
Say, a 27-year employee, says working conditions in the factory have changed
in the last few years. "Management does listen to us now. There's good
co-operation -- that's the key to what we got going here."
Things were not always this way. As late as 1986, it took almost 26 hours of
labor to build a Ford Taurus here. And even that represented an improvement
over earlier times.
The roots of the change are in 1979, when the second shift was laid off. Half
the plant's 3,800 workers lost their jobs. It would be 1984 before most were
rehired, and that, according to management and union officials, made employees
understand the seriousness of the competition.
"They realized we're under threat," says plant manager Bob Anderson.
"We realized, to be competitive, we had to reduce our role," says J.C.
Phillips, chairman of local 882 of the United Auto Workers.
The plant never again employed as many people. Yet productivity increased.
In 1979, with 3,800 hourly employees and 500 salaried people, the factory
produced 50 cars an hour. Now, with 2,450 hourly and 218 salaried employees, it
produces 65 cars an hour.
Part of that is the result of a $ 250-million modernization in 1985, when 100
robots were added to the existing 13. Other efficiencies were added, as well.
Cars are painted with their doors on, then the doors are removed as the car
moves through most of the rest of the assembly line. Workers can reach inside
more easily, and the doors get dinged less often. The doors are mated with the
same cars near the end of the assembly process.
But robots and plant design are only part of the story. Another is the new
relationship between management and workers.
When Anderson became plant manager in 1987, he eliminated the management
dining hall; managers now share the workers' cafeteria. He declined to wear a
tie. He spent more time in the plant than in his office. The moves were designed
to break what he called "that invisible glass wall" between workers and
managers.
Specific groups of workers are now responsible for specific parts of the car;
the sheet metal, for example, or the paint, or the glass, or the interior trim.
When complaints and suggestions come in from customers, they are routed to those
workers. When those workers suggest solutions to problems, management listens.
For example, the plant used to have to refit a number of tailgates on station
wagons, and managers didn't know why. A worker suggested that the tailgates be
held in place by a heavier gauge aluminum as they went through the body process
that makes them rigid.
It worked. The Atlanta plant adopted the process, as did the Taurus plant
in Chicago. The worker was awarded $ 1,300.
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The Ottawa Citizen, March 1, 1992
That is a dramatic change from the old worker-management relationship, says
Phillips, the union chairman. The attitude used to be, "You work for me, you do
like you're told," he says.
Union and management officials say the quality has improved as dramatically
as the productivity.
For his part, Phillips acknowledges that in earlier days the union did not
trouble itself about quality.
"As little as 10 years ago, if you mentioned quality at the union meeting,
they'd have run you out," he says. Now, quality is discussed at every meeting.
Workers even go to dealerships to interview customers about what they like
and dislike. And they are fiercely proud of what they are accomplishing.
"We might be fat but, as you can see, we're not lazy," says Bearl Hand, a
24-year employee, as he performs welds on a series of cars moving past. "We
build this car with pride at this plant. We build the best car in the country
right here."
GRAPHIC: 17.6 hours to roll off line
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PAGE 5
4TH STORY of Level 1 printed in FULL format.
Copyright 1992 American Broadcasting Companies, Inc., All
rights reserved.
ABC NEWS
SHOW: BUSINESS WORLD
February 9, 1992
LENGTH: 4013 words
BODY:
STEPHEN AUG, ABC News: Welcome to Business World. I'm Stephen Aug and here's
what's on this week's agenda. [voice-over] Productivity: are the Japanese really
better workers than their U.S. counterparts, or is that just a myth? What does
it mean to the bottom line? And "Buy American": is there a backlash against
Japan? Are the Japanese becoming the best salesmen for American cars? And on
Capitol Hill, the tax talk heats up. This week's Business World guest, Senate
Majority Leader George Mitchell. And buying foreclosed homes: if the deal sounds
too good to be true, it probably is.
ANNOUNCER: From ABC News, this is Business World. Now, from New York, here's
Stephen Aug.
AUG: In this election year, politics and economics are virtually inseparable.
This week, more evidence of economic stagnation. The January unemployment rate
continued at 7.1 percent. The political battle is already underway over how
best to stimulate the economy and put Americans back to work. On Capitol Hill,
duelling tax cut plans. Republicans are lining up behind President Bush's call
for a capital gains tax cut. And for the Democrats' agenda, we turn to this
week's Business World guest, Senate Majority Leader George Mitchell of Maine,
who joins us from our studios in Washington. Senator, economists on both sides,
both Democrats and Republicans, question why we need a tax cut now. They say
the economy might even be hurt by one, 50 why go ahead with it?
Sen. GEORGE MITCHELL, Senate Majority Leader: I think it ought to be included as
part of a more comprehensive economic recovery program. I think there's been a
mistake in focusing entirely just on a tax bill as the only component for
recovery. That's a short-term view. We ought to be looking also toward the
investment necessary for sustained long-term growth in the future.
AUG: Well, let's talk about investment for a minute. The administration has its
own idea of an investment tax plan. A lot of industry wants an investment tax
credit. How do you feel about that?
Sen. MITCHELL: I favor that. I spoke in favor of that last year and again this
year. I think it ought to be temporary, but it will, I believe, encourage
investment in new plant and equipment and therefore, I believe, should and will
be adopted.
AUG: What's the likelihood of the capital gains tax cut?
Sen. MITCHELL: The President's plan certainly won't be approved. A very
interesting thing has happened, Steve. In his speech, the President said he
favored a tax cut for the middle class. But the President's bill, as introduced
by the Republicans in the House and Senate, doesn't include a tax cut for the
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ABC NEWS, February 9, 1992
middle class, and 50 we have a real question now. Should we consider the
President's speech or the President's bill, because they're different? I think
that it has to be part of a broader approach on taxes that must include tax
reduction for the middle class, because if we don't have that component, then
this would be further skewing the tax system in favor of those at the very top
of the income scale.
AUG: You've opposed capital gains tax cuts consistently in the past. The
middle-class tax cut we keep hearing is maybe a $500 credit of some kind, which
doesn't seem like very much you're talking about around a dollar a day or
something, and hardly anybody's going to notice that.
Sen. MITCHELL: Well, $500 might not seem like much to you or to me, but I think
it is quite a bit to people who are working Americans who would benefit from it.
Secondly, if I might just correct something, I haven't always opposed a capital
gains tax cut. Indeed, in 1986, when the major tax bill was being considered, I
offered an amendment to the tax bill to retain the capital gains tax
differential, and the Reagan-Bush administration were opposed to it. That is,
they wanted to abolish the capital gains tax differential, and Republican
senators then criticized the capital gains differential as wrong, unfair for the
economy. Their position now is a complete reversal. I said then, I say now, we
should have a differential provided. It meets certain criteria. It ought to be
part of a fair and balanced and progressive tax structure. It ought to be
properly targeted to create jobs, and it ought not to bust the federal budget
deficit.
AUG: All right. Briefly, if you were to agree to some kind of capital gains
differential, very briefly, what would it be and what would the payment be for
it, essentially?
Sen. MITCHELL: I'm sorry, what would the payment-
AUG: And what would the payment be to get it?
Sen. MITCHELL: Oh, I think that there ought to be an increase in the maximum
marginal rate on those at the very top of the income scale those making more
than $200, 000 a year, who would be the principal beneficiaries of such a cut.
That's what I think, and I think we should have a differential between taxation
on capital gains and taxation on ordinary income.
AUG: All right. Now there's an old saw called the law of unintended
consequences, and people say that- We interviewed an industrialist out in the
middle west who said he did a survey of his customers, who said they're waiting
for an investment tax credit to come along, and then they'll have orders. So
the longer Congress talks about it, the longer we stay in this recession. What
about a deadline on behalf of the Democrats?
Sen. MITCHELL: We're going to act promptly because it's the right thing to do.
If you talk about delay, I would point out that for 18 months, President Bush
denied that there was a recession. He said, "There's no problem, so there's no
need for a solution." When he finally agreed that there was a problem it was
then obvious to everyone else in America, of course he then asked that we in
the country wait three months while he figured out what to say. We've now had
the President's bill actually introduced just a day or so ago, 50 we're going to
act very promptly. The committees are going to have hearings and mark the
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PAGE 7
ABC NEWS, February 9, 1992
bill up next week. We expect to be acting in the House a week or two after
that, and in the Senate thereafter. This is very prompt action. The long delay
has been caused almost entirely by the President's first denial of the problem,
and then lengthy delay in trying to figure out what to say.
AUG: Well, Senator, thank you very much. We'll leave it right there.
Sen. MITCHELL: Thank you.
AUG: And in a minute, turning the tables on productivity. New evidence puts U.S.
workers ahead of the Japanese.
[Commercial break]
AUG: Almost every day, it seems that another Japanese politician bad-mouths
American workers and American productivity. But on Friday, Japan's own labor
ministry reported that by some measures, U.S. workers are more productive than
their Japanese counterparts, and some U.S. firms have been hard at work to make
sure they can stay ahead. [voice-over] This may look like the winners at Family
Feud, but it's really more like The Price is Right, because their ideas to
improve productivity at Motorola won them the company's gold medal. They were
selected from 3,000 teams of employees worldwide. It's one part of Motorola's
drive to improve productivity, and it's been paying off big since 1987.
RICHARD BUETOW, Senior Vice President, Motorola: Reducing those defects by
150-fold over the five-year period has resulted in a manufacturing cost savings
within Motorola of $2.2 billion.
AUG: [voice- over] That's not exactly an example of a company whose workers are,
as Japanese Prime Minister Kiichi Miyazawa recently said, "lazy, and who've lost
their work ethic."
Mr. BUETOW: It's a false statement, and it's incredible that one would insult
their customer base that buys 40 percent of their exports.
AUG: [voice-over] In fact, American workers are the most productive in the
world. The Bureau of Labor Statistics says by contrast, Japanese workers are 77
percent as productive as Americans. They ranked fifth, behind France, Italy and
Germany. But the Japanese are increasing their productivity far faster than
American workers, and could catch up within a few years. One reason is that
many American factories still use turn-of-the- century management techniques -
basically that workers are simply extensions of their machines.
HOWARD SAMUEL, President, Industrial Union AFL-CIO: To not use their minds, not
use their experience, not use their creativity, simply their muscles and their
finger dexterity.
L. JOSEPH THOMAS, Johnson School of Management, Cornell: There is still this
negative labor management attitude that we had 15 years ago. It's getting
better, but I believe that managers have more control, and it is more a
management problem than it is workers on the floor.
MIKE STAHL, University of Tennessee Business School: A few decades ago, in the
absence of competition, the name of the game seemed to be the Lone Ranger or the
Marlboro Man- the person who was hired and reinforced for solving problems and
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8
ABC NEWS, February 9, 1992
putting out fires.
AUG: [voice-over] So now, American managers are looking at Japanese production
lines, like the Honda plant in Marysville, Ohio, where workers get together to
solve production problems, and where any worker can stop the production line.
Those ideas were adopted by Saturn, the new General Motors division based in
Tennessee. Ironically, the Japanese production techniques were developed by
Arthur Deming, of the University of Tennessee.
Mr. STAHL: We could cite a recent example from the Saturn corporation, in which
rank and file in the UAW, in concert with management, voted to extend the work
week from four ten-hour shifts to five ten-hour shifts per week.
AUG: [voice-over] And despite the recent rhetoric from Japan about American
inefficiency, some of the most efficient factories are in the United States,
like this Ford Motor Company plant in Atlanta.
BOB ANDERSON, Manager, Ford Motor Company: I have had every Japanese automobile
manufacturer in this plant in the last three years, for that same reason. They
know we are competitive with them, and that's why they've been here to visit us.
AUG: [voice-over] So how do American manufacturers have to change? Cornell's
Thomas says two ways, one of them too much management.
Mr. THOMAS: Too many layers, which leads to too slow a style of decision making
and looking at only financial measures to determine if a factory is doing well
are things that we could change, and some companies are changing those.
AUG: [voice-over] But that's not happening often enough. Samuel recalls a study
by a commission on work force skills, of which he was a member.
Mr. SAMUEL: They found that something like 85 to 90 percent of American
workplaces were still anchored in the manufacturing processes of the past. Only
10 to 15 percent had really moved into what we might say now is the 21st
century.
AUG: [voice-over] But for those companies, like Motorola, that have changed the
way they operate - more worker involvement, which leads to higher productivity
and quality the payoff can be huge. The Motorola people figure the $2.2
billion they've saved over the past five years does not even include the cost of
factories they did not have to build.
Mr. BUETOW: You can say, "Well, you know, this cost jobs and things like that,"
but let me tell you, that is the criterion for survival and becoming the best in
class. If someone else did it, we would put our 102,000 employees at risk. We
can't let that happen.
AUG: But manufacturing accounts for only about one quarter of the American
economy. The rest is services, and many economists remain stumped when it comes
to measuring productivity improvements for people like teachers, bank tellers,
physicians and government clerks, and nowadays it's services that constitute the
bulk of what America produces. When we come back, Japan-bashing - is it paying
of for U.S. car makers on the bottom line?
[Commercial break]
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ABC NEWS, February 9, 1992
AUG: Did President Bush's trip to Japan and those negative remarks by Japanese
politicians set off a wave of "Buy American" sentiment? Not if you look at the
total January auto sales figures, which show further erosion of the market share
held by the U.S. big three. But if you look behind the numbers, there are some
indications that things really may be looking up for the beleaguered U.S. auto
industry. [voice-over] In Tomball, Texas, outside of Houston, four domestic
automobile dealers are sponsoring a "Buy American" ad that uses clips of the
Japanese attack on Pearl Harbor.
ANNOUNCER: [TV commercial] Fifty years ago, Americans woke up to the bombing of
Pearl Harbor-
MARK McCOLLUM, President, Parkway Chevrolet: We decided to get aggressive after
the Japanese prime minister said that the American workers were lazy and stupid,
because that hit home with all of us. We're all an American worker and, you
know, we're all very proud that we sell American cars and trucks, 50 we decided
that we ought to hit back a little bit.
AUG: [voice-over] Nationally, it's difficult to tell if the "Buy American"
campaign is having results. Overall, cars with Japanese nameplates increased
from 27 percent of the market a year ago to 30 percent. At the Chicago auto show
this week, Ford officials say the numbers do not yet reflect the "Buy American"
trend that their dealers are reporting.
ROBERT REWEY, Sales Director, Ford, North America: A lot of the dealers report
that it's happening. A lot of dealers are promoting it, either individually or
through their associations, and we'll 522 what happens.
AUG: [voice-over] In northern New Jersey, mega-dealer Don Warnock sells 12
different kinds of cars. He sells Fords and Nissans side-by- side.
DON WARNOCK, Auto Dealer: There are people that are saying, "I will only- I want
to buy a domestic product," and I can tell you that this month we sold just
about double the amount of Fords we did versus what we sold in Nissan.
AUG: [voice-over] Such sales reversals may be disguised in the January auto
numbers. One reason - fleet sales. Sales to rental car agencies, government
and big business have been cut back, at dealer's request, from three shipments
to just two. Even so, Ford had a modest sales gain.
Mr. REWEY: That is adversely impacting our sales reporting this year versus a
year ago, because we had high daily rental sales a year ago. As we report in
the month of January, if you exclude sales to major commercial accounts, our
retail car sales were up eight percent.
AUG: [voice-over] At Chrysler, the decline in fleet sales turned a gain into a
loss. At last year's fleet level, an additional 20,000 cars would have been
sold. Chrysler would have had a nine percent increase instead of a 24.6 percent
decline in January car sales. That means whatever sales strength there was -
and Ford was up 3.5 percent - came from the retail buyer, and even fleet buyers
seem to be jumping on the "Buy American" bandwagon.
MILTON TEMPEL, Promark, Incorporated: Well, I'm making my living from Americans,
and I don't have a Japanese, German, any type automobile other than American
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ABC NEWS, February 9, 1992
cars in our fleet.
AUG: [voice-over] And it may be that the Japanese themselves are concerned about
"Buy American" sentiments. Some analysts think the increase in Japanese car
sales incentives late in January may have blunted any "Buy American" backlash.
While incentives on domestic cars declined in January, incentives on Japanese
and Korean cars increased. Toyota's increased the most, and sales jumped over
21 percent. Honda had a 38.4 percent increase, helped by a remarkable leasing
incentive.
ANNOUNCER: [TV commercial] Announcing a very special Accord lease program.
AUG: [voice-over] In fact, Ford blames that incentive for hurting sales of its
popular Taurus.
Mr. REWEY: I think Taurus would have been in the number one sales position had
it not been for the car that beat it introduced an extremely aggressive
incentive program.
AUG: [voice-over] In the meantime, they continue to be aggressive in Tomball,
Texas.
ANNOUNCER: [TV commercial] We sell only American cars and trucks in Tomball.
AUG: Interested in buying a foreclosed property? When we return, why the buyer
should beware.
[Commercial break]
AUG: At a time when mortgage rates are at their lowest in more than a decade and
real estate prices are depressed in many parts of the country, foreclosed real
estate might seem like a great bargain. But before you sit down at a sheriff's
auction, there are some precautions you might want to take so you won't get
hammered.
AUCTIONEER: Second time. One hundred dollars on behalf of the plaintiff.
Plaintiff's house for $100.
AUG: [voice-over] What are the odds of getting a house for $100? Pretty good
for a bank that already holds the paper, but almost impossible for the ordinary
home buyer, who's lured to sheriff's auctions by the dream of buying a house for
a bargain price. The bank may well bid up the price against the buyer, 50 that
the buyer ends up paying off part, if not all, of the remaining mortgage. The
purchaser faces the responsibility for any known or unknown liens - unpaid
taxes, second mortgage, mechanics liens.
ROBERT DONAHUE, Coventry Agency: I haven't seen a steal at a sheriff's sale in
10 years. I've seen some good buys.
AUG: [voice- over] And agents like Bob Donahue, who specializes in selling
foreclosed property, warn about the risks for buyers.
Mr. DONAHUE: That's a- buying a pig and a poke, because you have not been inside
the house, you don't know the title, you don't know who's in there or how you
will get them out, and there are a lot of unknowns.
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ABC NEWS, February 9, 1992
AUG: [voice-over] The key is knowing the risks, and it's always safer to buy
foreclosed property after a bank has taken back the title and handed it over to
a real estate concern or an auctioneer. At this auction in Texas, the sellers
are the banks, who've already bought back the properties at sheriff's auctions.
By some estimates, more than half the bidders on residential properties want to
live in what they buy. One advantage of this kind of auction is that auction
companies often guarantee the title.
JOHN DIXON, CEO, Hudson and Marshall: The contract reads that they do get clear
title. With a title check, any liens would show up. If liens do show up, they
are immediately refunded their earnest money and they don't have to close on the
house.
AUG: [voice-over] Also, the buyer can inspect a property before he bids.
Mr. DIXON: A buyer doesn't really have any risk if he does his due diligence- if
he inspects the properties prior to the auction. If he comes, and if he sets a
price in mind, you know, nobody should come bidding at an auction with reckless
abandonment.
RANDY QUALLS, Home Buyer: I was $9,000 over my limit, actually. I figured to
stop at $170,000; I went $179,000.
AUG: [voice-over] And this property was appraised for $234,000. Auction
companies say that properties usually sell for 85 percent of retail prices. But
auctions are not for everyone.
PAUL ZELVIS, Home Buyer: I thought about auctions, but like I wasn't too
familiar with auctions, though, and also with those, you really don't have a
chance to make a decision. It's- you've got to put your bid in, and you've got
to give them the five grand or the 10 grand or whatever it is, and you've got to
come up with the money within 21 days or 30 days, and it's kind of, you know,
that quick of a transaction's kind of scary.
AUG: [voice-over] First-time home buyers Paul Zelvis and Kristen Conrad bought
their foreclosed house through the showroom of Bank Owned Real Estate in Boston,
which, unlike most real estate agencies, lists only foreclosures.
TIM HARRINGTON, Bank Owned Real Estate: If you're interested in buying a
single-family home, for instance, from a bank, instead of calling 50 different
banks, you only have to make one phone call.
AUG: [voice-over] The showroom lists more than 3,000 bank-owned properties. For
a $15 registration fee, prospective buyers can plug in elements like location,
size, style and price, and a computer scans the listings.
RICHARD KWEI, Prospective Home Buyer: I can actually come and look at properties
in various areas throughout the greater Boston area and actually see what they
look like, and also get a property display or fact sheet on the properties that
I might be interested in.
DENNIS KUNION, Bank Owned Real Estate: The banks need to rid themselves of these
properties. The banks are cutting good deals. They're not giving away
properties, but they are cutting good deals.
LEXIS'NEXIS'LEXIS'NEXIS
Services of Mead Data Central, Inc.
PAGE 12
ABC NEWS, February 9, 1992
AUG: [voice-over] And while they're dealing with motivated sellers, the showroom
admits the process is not always easy.
Mr. HARRINGTON: Sometimes these things take weeks two weeks, three weeks - to
even get a response from the bank, because in many cases these things are done
by committee. So it's a different type of process, and you have to be willing
to be patient and work through it and be persistent.
AUG: [voice-over] And according to the showroom, 95 percent of the properties
listed come with attractive financing packages from the banks. Paul and Kristen
believe they saved $20,000 from their appraisal of the house.
KRISTEN CONRAD, Home Buyer: Do you think we would have bought this house?
Mr. ZELVIS: I don't think we would have got something that compares to it,
actually, with a private sale. I think people would have been wanting more
money for it. I think one of the reasons why it was selling for such a low
price was the bank didn't want to have it on its books any longer.
AUG: Turning to the week on Wall Street, at Friday's closing bell, the Dow Jones
Industrial Average finished the week up by just over two points. Last week, our
panel of stock market experts from around the country predicted a down week. Our
panel's consensus is for a down week ahead. Panelist Lou Holland, a
Chicago-based money manager, says the market is still where the money is going.
LOUIS HOLLAND, Investment Adviser: Currently, we're getting about $2 billion a
month into equity mutual funds, which is at all-time record levels, so I think
this will continue. That, coupled with the weak economy, where in fact interest
rates are likely to stay low or possibly even decline- I would expect with these
two factors that the market is going to continue. The only risk here is
valuation levels and overspeculation, in that sentiment at this point, less than
20 percent of the investment advisers in this country are bearish, and
historically that's been a harbinger of trouble.
AUG: We'll be right back.
[Commercial break]
AUG: Finally, this week's winners and losers. In the winning column, Federated
Department Stores, which emerged from bankruptcy. On the losing side, the U.S.
taxpayer, who once again has taken it on the chin in the savings and loan
debacle. Congressional auditors say the government has collected only $365,000
out of the almost $84 million in restitutions and fines ordered in savings and
loan fraud cases. To spare you the long division, that amounts to a recovery
rate of less than one half of one percent. And that's it for this week.
Whatever business you're in, we hope the week ahead is a prosperous one. I'm
Stephen Aug. On behalf of everyone here at Business World, thanks for being
with us.
LEXIS'NEXIS LEXIS'NEXIS
Services of Mead Data Central, Inc.
PAGE 13
7TH STORY of Level 1 printed in FULL format.
Copyright 1992 Crain Communications, Inc.
Automotive News
January 27, 1992
SECTION: PRODUCTION; Pg. 37
LENGTH: 2961 words
HEADLINE: Output up despite holiday
BYLINE: ANNE E. WRIGHT, Chief Statistician
BODY:
Despite the holiday-shortened work week, estimated U.S. car and truck
production rose 9.6 percent over the prior week and 16.6 percent over the
year-ago week.
All U.S. assembly plants were closed last Monday in observance of Martin
Luther King Day. Estimated car production was up 6.0 percent over the prior
week and 11.1 percent over the 1991 week.
Last week's estimated truck production was up 15.8 percent over the prior
week and was 26.1 percent over the year-ago week.
Car and truck production in Canada fell 7.7 percent from the prior week but
rose 43.0 percent over the same week in 1991.
Canadian carmakers' estimated production last week was 14.7 percent below the
prior week but was 6.2 percent above the 1991 week.
Last week's estimated truck production in Canada slipped 1.6 percent from the
prior week but topped last year by 93.7 percent.
U.S. and Canadian automakers' daily build rate was 54,538 last week, an
increase of 31.8 percent over the prior five-day week. The year-ago work week
was also four days with a daily rate of 44,965.
Last week's estimated car production in the United States was split as
follows: General Motors, 40.9 percent; Ford Motor Co., 23.0; Chrysler Corp.,
10.3 percent; Honda of America Manufacturing Inc., 9.8 percent; Toyota Motor
Manufacturing U.S.A. Inc., 4.4 percent; New United Motor Manufacturing Inc., 3.3
percent; Nissan Motor Manufacturing Corp. U.S.A., 2.8 percent; Diamond-Star
Motors Corp., 2.7 percent; Mazda Motor Manufacturing (USA) Corp., 1.7 percent
and Subaru-Isuzu Automotive Inc., 1.1 percent.
GM scheduled overtime last Saturday at the Scarborough, Ontario; Oshawa,
Ontario, and Baltimore truck facilities. The postal line at the Moraine, Ohio,
truck facility was scheduled to work one shift of Saturday overtime.
At GM's Janesville, Wis., truck facility, two shifts of Friday overtime and
one shift on Saturday were scheduled last week for all lines except the
medium-duty truck line, which was scheduled for just one shift on Saturday.
LEXIS NEXIS'LEXIS'NEXIS
Services of Mead Data Central, Inc.
PAGE 14
1992 Automotive News, January 27, 1992
The company extended the downtime for one week on the Allante line at the
Detroit-Hamtramck, Mich., plant. Production is scheduled to resume Feb. 10.
Ford scheduled daily and Saturday overtime last week at the Louisville, Ky.,
and Kansas City, Mo. truck plants.
Chrysler's St. Louis plant in Fenton, Mo., was scheduled to work three shifts
of overtime last Saturday. The Dodge City (Warren, Mich.) truck facility worked
daily overtime in addition to two shifts on Saturday.
Chrysler's Toledo, Ohio, Jeep facility was scheduled to work five hours of
overtime last Saturday to make up production that was lost due to a heavy
snowfall the previous week.
Note: This table may be divided, and additional information on a particular
entry may appear on more than one screen.
U.S. AND CANADA CAR AND TRUCK PRODUCTION
Vehicles are domestic unless noted.
Vehicles are cars unless noted.
Est.
Actual
1/20-
1/13-
1/1-
1/25/92
1/18/92
1/25/92
LeBaron J
1,040
0
2,641
New Yorker
800
767
1,567
Fifth Avenue
700
632
1,332
Imperial
240
238
478
Town & Country (trk.)
120
102
275
Total Chrysler
2,900
1,739
6,293
Sundance
900
0
900
Acclaim
1,600
0
3,702
Voyager (trk.)
800
728
1,955
Voyager (Can. trk.)
2,868
1,905
8,739
Total Plymouth
6,168
2,633
15,296
Daytona
500
0
500
Shadow
1,800
0
1,800
Dynasty
2,000
2,150
4,150
Spirit
1,200
0
4,112
Viper
0
0
0
Monaco (Can.)
0
0
0
Caravan (trk.)
1,375
1,063
3,035
Caravan (Can. trk.)
3,570
3,412
12,641
Caravan C/V (trk.)
14
12
37
Caravan C/V (Can. trk.)
162
177
492
Dakota (trk.)
2,200
1,628
3,863
Ram pickups (trk.)
1,100
807
1,907
Ram Wagon (Can. trk.)
0
585
1,410
Ram Van (Can. trk.)
0
1,211
3,148
Total Dodge
13,921
11,045
37,095
Premier (Can.)
0
0
0
Cherokee (trk.)
3,900
2,696
6,596
Comanche (trk.)
120
79
199
Grand Cherokee (trk.)
28
31
59
Wagoneer (trk.)
16
16
32
Wrangler (Can. trk.)
1,600
1,545
5,360
Total Jeep-Eagle
5,664
4,367
12,246
LEXIS®
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Services of Mead Data Central, Inc.
PAGE 15
1992 Automotive News, January 27, 1992
Total U.S. car
10,780
3,787
21,182
Total Can. car
0
0
0
Total U.S. truck
6,673
7,162
17,958
Total Can. truck
8,200
8,835
31,790
CHRYSLER CORP
28,653
19,784
70,930
Escort
4,599
0
4,599
Mustang
2,203
0
2,203
Tempo
2,639
3,007
5,646
Tempo (Can.)
3,823
3,333
7,156
Taurus
6,140
7,469
24,413
Thunderbird
1,199
951
2,150
Crown Victoria (Can.)
0
2,031
2,031
Aerostar (trk.)
3,130
4,025
7,155
Bronco (trk.)
564
512
1,076
Explorer/Bronco II (trk.)
5,287
6,214
19,983
Navajo (trk.)
58
62
234
Econoline (trk.)
3,569
2,023
9,514
Heavies (trk.)
832
1,033
1,865
Light trucks (trk.)
9,322
9,034
25,161
Light trucks (Can. trk.)
9,322
9,034
18,356
Ranger (trk.)
5,799
1,714
9,823
Total Ford Div
58,486
50,442
141,275
Topaz
881
1,111
1,992
Topaz (Can.)
938
925
1,863
Cougar
809
632
1,441
Sable
2,2511
2,752
8,973
Grand Marquis (Can.)
0
2,082
2,082
Total Mercury
4,879
7,502
16,351
Continental
787
7933
1,580
Mark VII
164
99
263
Town Car
2,377
2,390
4,767
Total Lincoln
3,33288
3,282
6,610
Total L-M Div.
8,207
10,784
22,961,
Total U.S. car
24,049
19,204
58,027
Total Can. car
4,76,11
8,371
13,132
Total U.S. truck
28,561
24,617
74,721
Total Can. truck
9,322
9,034
18,356
FORD MOTOR CO.
66,693
61,226
164,236
Skylark
908
981
3,645
Century
1,269
1,558
2,827
Regal (Can.)
2,200
2,236
4,436
Riviera
169
123
711
Park Ave./Electra
1,533
1,769
3,302
LeSabre
2,791
2,733
9,837
Roadmaster Sedan ***
1,027
1,259
4,048
Roadmaster Wagon [ + ]
297
297
850
Reatta
0
0
0
Total Buick
10,194
10,956
29,656
Eldorado
794
645
2,558
Seville
810
653
2664
Brougham
440
539
1,741
Deville
0
0
0
Allante
0
0
0
Total Cadillac
2,044
1,837
6,963
Cavalier
3,540
4,296
11,855
R
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Services of Mead Data Central, Inc.
PAGE
16
1992 Automotive News, January 27, 1992
Camaro
1,098
1,223
4,241
Corsica/Beretta
3,904
4,653
15,126
Lumina (Can.)
6,250
6,340
12,590
Caprice
1,802
1,855
5,820
Corvette
0
0
0
Astro (trk.)
2,622
3,110
10,669
Blazer (trk.)
252
157
885
Lumina APV (trk.)
1,280
0
1,20
Mediums (trk.)
99
118
485
P-Models (trk.)
379
353
732
Pickups (trk.)
2,790
146
3,101
Pickups (Can. trk.)
3,600
3,629
12,895
S10 (trk.)
4,276
4,086
10,069
S10 Blazer (trk.)
2,551
2,912
8,329
Sportsvan (trk.)
574
889
2,695
Sportsvan (Can. trk.)
900
869
3,517
Suburban (trk.)
498
833
2,366
Total Chevrolet
36,415
35,469
106,655
Achieva/Calais
2,256
2,293
7,607
Cutlass Ciera
2,686
3,307
0
Cutlass Ciera (Can.)
0
0
1,890
Cutlass Supreme
2,259
4,149
114
Toronado
84
445
1,578
Eighty Eight
1,598
5,114
119
Custom Cruiser Wag. [++]
108
341
0
Ninety Eight
0
0
492
Silhouette (trk.)
0
492
349
Bravada (trk.)
376
1,138
9,484
Total Oldsmobile
10,025
25,279
1,708
Sunbird
2,098
5,748
3,912
Grand Am
4,695
14,915
496
Firebird
537
1,868
2,680
Grand Prix
3,196
5,876
0
Pontiac 6000
0
0
0
Bonneville
2,332
2,920
5,252
Trans Sport (trk.)
584
0
584
Total Pontiac
11,712
13,446
32,243
Yukon/Jimmy (trk.)
100
108
342
Mediums (trk.)
372
454
1,485
P-Models (trk.)
35
36
71
Pickups (trk.)
790
71
966
Pickups (Can. trk.)
1,500
1,538
5,076
Scylone/Sonoma (trk.)
570
1,766
2,510
Typhoon/S15 Jimmy (trk.)
674
883
2,374
Safari (trk.)
877
1,052
3,5033
Suburban (trk.)
399
119
902
Vandura (trk.)
736
737
2,490
Vandura (Can. trk.)
1,000
1,083
3,126
Total GMC
7,053
7,847
22,845
Total Saturn ***
2,388
2,948
9,464
Total U.S. car
42,541
48,627
135,997
Total Can. car
8,450
8,576
17,026
Total U.S. truck
21,299
18,206
57,468
Total Can. truck
7,000
7,119
24,614
GENERAL MOTORS
79,290
82,528
235,105
R
LEXIS
LEXIS®
NEXIS®
Services of Mead Data Central, Inc.
PAGE 17
1992 Automotive News, January 27, 1992
Can. car
2,300
2,300
7,939
Can. trk.
1,400
1,400
4,865
CAMI *
3,700
3,700
12,804
DIAMOND-STAR *
2,796
3,113
9,932
Civic
1,800
1,486
5,823
Civic (Can.)
2,420
1,968
7,398
Accord
8,465
6,616
26,026
Total U.S. car
10,265
8,102
31,849
Total U.S. truck
2,420
1,968
7,398
HONDA
112,685
10,070
39,247
HYUNDAI Sonata (Can.)
320
407
1,096
MAZDA *
1,785
1,764
6,572
U.S. truck
1,695
1,454
5,428
Can. truck
165
130
516
NAVISTAR
1,860
1,584
5,944
Sentra
2,930
2,849
10,198
Pickup (trk.)
2,816
2,787
9,905
NISSAN
5,746
5,636
20,103
Geo Prizm
1,600
2,063
6,401
Toyota Corolla
1,840
2,531
7,689
Toyota Hilux (trk.)
360
480
1,465
NUMMI
3,800
5,074
15,555
Legacy
1,184
997
3,927
Pickup (trk.)
518
471
1,696
Rodeo (trk.)
852
774
2,983
Total U.S. car
1,184
997
3,927
Total U.S. truck
1,370
1,245
4,679
SUBARU-ISUZU
2,554
2,242
8,606
Camry
4,600
5,462
16,566
Corolla (Can.)
1,300
1,337
4,211
TOYOTA
5,900
6,799
20,777
VOLVO 740,940 (Can.)
150
150
494
AM GENERAL (trk.)
300
375
1,200
MISCELLANEOUS (trk.)
1,920
2,400
7,680
Total U.S. car
104,370
98,499
308,340
Total Canada car
19,701
23,109
51,296
Total U.S.-Canada car
124,071
121,068
359,636
Total U.S. truck
67,994
58,726
180,504
Total Canada truck
26,087
26,518
80,141
Total U.S.-Canada truck
94,081
85,244
260,645
TOTAL U.S.
172,364
157,225
488,844
TOTAL CANADA
45,788
49,627
131,437
TOTAL U.S.-CANADA
CAR & TRUCK
218,152
206,852
620,281
Year
Year
1/1-
1/1-
1/25/92
1/26/92
LeBaron J
2,641
900
N. Yorker
1,567
1,066
Fifth Avenue
1,332
2,855
Imperial
478
866
Town & Country (trk.)
275
102
Total Chrysler
6,293
5,789
Sundance
900
0
Acclaim
3,702
8,264
Voyager (trk.)
1,955
6,014
LEXIS'NEXIS®
NEXIS
Services of Mead Data Central, Inc.
PAGE 18
1992 Automotive News, January 27, 1992
Voyager (Can. trk.)
8,739
8,246
Total Plymouth
15,296
22,524
Daytona
500
300
Shadow
1,800
0
Dynasty
4,150
11,715
Spirit
4,112
8,274
Viper
0
0
Monaco (Can.)
0
0
Caravan (trk.)
3,035
7,017
Caravan (Can. trk.)
12,641
10,684
Caravan C/V (trk.)
37
184
Caravan C/V (Can. trk.)
492
326
Dakota (trk.)
3,863
3,109
Ram pickups (trk.)
1,907
3,127
Ram Wagon (Can. trk.)
1,410
0
Ram Van (Can. trk.)
3,148
0
Total Dodge
37,095
44,736
Premier (Can.)
0
0
Cherokee (trk.)
6,596
0
Comanche (trk.)
199
0
Grand Cherokee (trk.)
59
0
Wagoneer (trk.)
32
0
Wrangler (Can. trk.)
5,360
2,507
Total Jeep-Eagle
12,246
2,507
Total U.S. car
21,182
32,240
Total Can. car
0
0
Total U.S. truck
17,958
19,553
Total Can. truck
31,790
21,763
CHRYSLER CORP
70,930
75,556
Escort
4,599
13,005
Mustang
2,203
2,190
Tempo
5,646
7,656
Tempo (Can.)
7,156
5,373
Taurus
24,413
16,330
Thunderbird
2,150
1,344
Crown Victoria (Can.)
2,031
2,560
Aerostar (trk.)
7,155
9,592
Bronco (trk.)
1,076
572
Explorer/Bronco II (trk.)
19,893
17,308
Navajo (trk.)
234
1,359
Econoline (trk.)
9,514
5,110
Heavies (trk.)
1,865
2,694
Light trucks (trk.)
25,161
14,081
Light trucks (Can. trk.)
18,356
4,597
Ranger (trk.)
9,823
15,823
Total Ford Div
141,275
119,594
Topaz
1,992
2,904
Topaz (Can.)
1,863
1,638
Cougar
1,441
2,031
Sable
8,973
4,653
Grand Marquis (Can.)
2,082
0
Total Mercury
16,351
11,226
Continental
1,580
4,101
Mark VII
263
713
Town Car
4,767
9,666
LEXIS'NEXIS'LEXIS'NEXIS
.Services of Mead Data Central, Inc.
PAGE 19
1992 Automotive News, January 27, 1992
Total Lincoln
6,610
14,480
Total L-M Div.
22,961
25,706
Total U.S. car
58,027
64,593
Total Can. car
13,132
9,571
Total U.S. truck
74,721
66,539
Total Can. truck
18,356
4,597
FORD MOTOR CO.
164,236
145,300
Skylark
3,645
8,494
Century
2,827
3,094
Regal (Can.)
4,436
9,759
Riviera
711
442
Park Ave./Electra
3,302
6,906
LeSabre
9,837
13,549
Roadmaster Sedan ***
4,048
0
Roadmaster Wagon [ + ]
850
0
Reatta
0
0
Total Buick
29,656
42,244
Eldorado
2,588
528
Seville
2,664
1,054
Brougham
1,741
1,811
Deville
0
10,654
Allante
0
218
Total Cadillac
6,963
14,265
Cavalier
11,855
19,371
Camaro
4,241
4,132
Corsica/Beretta
15,126
14,987
Lumina (Can.)
12,590
14,355
Caprice
5,820
8,215
Corvette
0
1,624
Astro (trk.)
10,669
5,878
Blazer (trk.)
885
361
Lumina APV (trk.)
1,280
2,395
Mediums (trk.)
485
685
P-Models (trk.)
732
677
Pickups (trk.)
3,101
11,582
Pickups (Can. trk.)
12,895
10,831
S10 (trk.)
10,069
20,982
S10 Blazer (trk.)
8,329
2,967
Sportsvan (trk.)
2,695
1,793
Sportsvan (Can. trk.)
3,517
547
Suburban (trk.)
2,366
1,282
Total Chevrolet
106,655
122,664
Achieva/Calais
7,607
6,045
Cutlass Ciera
5,993
3,254
Cutlass Ciera (Can.)
0
6,082
Cutlass Supreme
4,149
7,272
Toronado
445
246
Eight Eight
5,114
6,182
Custom Cruiser Wag. [++]
341
0
Ninety Eight
0
6,313
Silhouette (trk.)
492
625
Bravada (trk.)
1,138
1,557
Total Oldsmobile
25,279
37,576
Sunbird
5,748
8,330
Grand Am
14,915
8,632
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1992 Automotive News, January 27, 1992
Firebird
1,868
918
Grand Prix
5,876
5,702
Pontiac 6000
0
2,217
Bonneville
5,252
3,054
Trans Sport (trk.)
584
1,320
Total Pontiac
34,243
30,173
Yukan/Jimmy (trk.)
342
125
Mediums (trk.)
1,485
1,260
P-Models (trk.)
71
181
Pickups (trk.)
966
4,072
Pickups (Can. trk.)
5,076
4,172
Scylone/Sonoma (trk.)
2,510
4,996
Typhoon/S15 Jimmy (trk.)
2,374
1,973
Safari (trk.)
3,503
2,503
Suburban (trk.)
902
699
Vandura (trk.)
2,490
385
Vandura (Can. trk.)
3,126
353
Total GMC
22,845
20,719
Total Saturn ***
9,464
2,300
Total U.S. car
135,997
155,544
Total Can. car
17,026
30,196
Total U.S. truck
57,468
69,298
Total Can. truck
24,614
15,903
GENERAL MOTORS
235,106
269,941
Can. car
7,939
9,339
Can. trk.
4,865
4,032
CAMI *
12,804
13,371
DIAMOND-STAR *
9,932
11,118
Civic
5,823
5,881
Civic (Can.)
7,398
7,628
Accord
26,026
25,556
Total U.S. car
331,849
31,4337
Total U.S. truck
7,398
7,628
HONDA
39,2477
39,065
HYUNDAI Sonata (Can.)
1,096
3,370
MAZDA *
6,572
9,62
U.S. truck
5,428
4,598
Can. truck
516
497
NAVISTAR
5,944
5,095
Sentra
10,198
11,138
Pickup (trk.)
9,905
10,689
NISSAN
20,103
21,827
Geo Prizm
6,401
7,333
Toyota Corolla
7,689
7,258
Toyota Hilux (trk.)
1,465
0
NUMMI
15,555
14,591
Legacy
3,927
3,836
Pickup (trk.)
1,696
0
Rodeo (trk.)
2,983
0
Total U.S. car
3,927
3,836
Total U.S. truck
4,679
3,701
SUBARU-ISUZU
8,606
7,537
Camry
16,566
16,287
Corolla (Can.)
4,211
4,876
TOYOTA
20,777
21,163
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1992 Automotive News, January 27, 1992
VOLVO 740,940 (Can.)
494
629
AM GENERAL (trk.)
1,200
1,650
MISCELLANEOUS (trk.)
7,680
10,950
Total U.S. car
308,340
352,646
Total Canada car
51,296
65,609
Total U.S.-Canada car
359,636
418,255
Total U.S. truck
180,504
185,978
Total Canada truck
80,141
46,792
Total U.S.-Canada truck
260,645
232,770
TOTAL U.S.
488,844
538,624
TOTAL CANADA
131,437
112,401
TOTAL U.S.-CANADA
CAR & TRUCK
620,281
651,025
* CAMI includes Geo Metro and Suzuki Swift cars and Geo Tracker and Suzuki
Sidekick trucks; Diamond-Star includes Eagle Summit and Talon, Mitsubishi
Eclipse and Mirage and Plymouth Laser; Mazda includes MX-6, 626 and Ford Probe.
** Estimates for Mack, Volvo-White, Kenworth, Peterbilt, Freightliner,
Mercedes-Benz.
*** Estimate
[ + ] 1990 totals reflect LeSabre (rwd)
[++] 1990 totals reflect Olds. 88 (rwd)
May contain error of one or two units due to rounding.
SCHEDULED
PLANT CLOSINGS
Units/
Weeks lost/
Plant
down
week
CHRYSLER
Bramalea, Ontario
[+]
Toledo, Ohio
1/27
Jeep Cherokee
4,250
Jeep Comanche
125
Jeep Grand Cherokee
5
FORD MOTOR CO.
Atlanta
1/27 5,200
Ford Taurus
Mercury Sable
Chicago
1/27 5,200
Ford Taurus
Mercury Sable
Michigan Truck
1/27, 2/3 2,900
Ford Bronco
Ford F-series pickup
Wixom, Mich.
1/27 4,200
lincoln continental
Lincoln Mark VII
Lincoln Town Car
GENERAL MOTORS
Hamtramck, Mich. (V line)
1/27, 2/3
Cadillac Allante
60
Wentzville, Mo.
1/27
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1992 Automotive News, January 27, 1992
Buick Park Ave.
1,900
Oldsmobile Eighty Eight
1,700
Pontiac Bonneville
2,900
Van Nuys, Calif.
1/27, 2/3
Chevrolet Camaro
1,300
Pontiac Firebird
600
Oshawa, Ontario (No. 1)
1/27, 2/3
Chevrolet Lumina
3,000
Oshawa, Ontario (No. 2)
1/27, 2/3
Chevrolet Lumina
3,000
Buick Regal
3,000
Total U.S. car
23,060
Total U.S. truck
7,280
Total Canadian car
90,000
Total units lost week of 1/27
39,340
[ + ] Plant closed for retooling until spring 1992.
Source: Automotive News Data Center
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9TH STORY of Level 1 printed in FULL format.
Copyright (c) 1992 Federal Information Systems Corporation;
Federal News Service
JANUARY 21, 1992, TUESDAY
SECTION: IN THE NEWS
LENGTH: 1218 words
HEADLINE: PRESS AVAILABILITY
WITH SENATOR WYCHE FOWLER, JR (D-GA)
SENATE RADIO/TV GALLERY
WASHINGTON, DC
KEYWORD:
NEWS CONF FOWLER
BODY:
Q Senator, can we just begin with your reaction to the Japanese criticism of
American workers?
SEN. FOWLER: Well, first of all, I think it's certainly unfortunate, because it
was inaccurate. In the latest Harper (sp) study of last year of major American
automobile manufacturers, in the 10-year period from 1979 to 1989, two plants in
Georgia received were in the top five of most efficient of all automobile
manufacturing plants in the United States. The Ford plant in Atlanta that
makes the Taurus and Sable was number one in the United States, according to
the MIT study, in efficiency and productivity.
What's come to be known as a transplant plant, an American plant using American
workers that makes a product for the Japanese name, the Nissan plant in Smyrna,
Georgia, was number four in efficiency in the entire United States. So I think
that the facts belie what was obviously a political comment made by the Japanese
speaker for domestic political consumption in Japan. We're familiar with that
kind of tactic every once in a while by an American politician. It basically
should have been ignored, but since it was not ignored, then I'm happy to lay
out the facts of the evidence of extreme efficiency and productivity --
continuing to improve, by the way -- in the American automobile industry by its
workers.
Q Well, you just did a comparison, just an intra-American comparison. That --
I'm not sure that response is used comapring America to Japan.
SEN. FOWLER: Well, I don't know whether it was or not. What I read reported was
mostly hyperbole, very short on facts, saying that somehow Americans were second
class citizens because they did not work hard.
Q But that doesn't have anything to do with how efficient one American plant is
compared to another American plant.
SEN. FOWLER: Well, neither did his statement. I'd be delighted to see that, but
that was not part of his suggestions. So at least on that, until we have some
kind of charge, I will not take the bait.
Q Does President Bush gain anything -
SEN. FOWLER: By the way, may I, just while I'm here, give my answer to the way
you deal with trade imbalances for anybody interested? I think it's very, very
difficult -- and I think this will probably an answer to what Andy was about to
ask me, though I didn't mean to preempt that.
It seems to me that I don't -- we have a great debate in Washington from the
White House, also from our major trade partners, as to what is fair trade and
what is free trade. And everyone seems to have a different definition, which
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(c) 1992 Federal Information Systems Corporation, January 21, 1992
is part of the problem of having the right kind of policy. I can't tell you
what other people's definition of fair trade and free trade, but I know what
equal trade is.
And what I would hope would be the policy of the United States of America, as
expounded by the President of the United States, is to demand of all of our
bilateral trading partners, including the Japanese and the Koreans and the
Taiwanese and others, that if Americans are going to purchase 100 or 150
billion, whatever it is of Japanese goods and services and products in a given
year, then we expect the people of Japan and the government of Japan to purchase
an equal amount of American goods and services and products by the end of the
year.
That is equal trade. We are not going to tell you what to buy. If you would
rather have wheat, Mr. Japanese, than our cars, or if you'd rather have our cars
than our soybeans, then that is your business. But if you are going to be an
equal bilateral trading partner with the people and government of the United
States of America, than at the end of the year there will be no deficit. What
is sauce for the goose will be sauce for the gander. That is the position I had
hoped that the President of the United States would take. I think it is not
only understandable but it is fair and even if the first couple of years there
seems to be some imbalance, over the long run that approach is achievable in my
opinion.
Q Do you favor putting that into law?
SEN. FOWLER: Yes. I don't - if we made the proposal I honestly believe -- and
made it -- know that we meant it at the highest levels of the government, I
don't think you would have to have a law. I think this can be an understanding
between two bilateral partners that have bilateral trading agreements and - but
until you do that, if you try to pick at one industry or another, say "You must
by this or you must buy that," ultimately that in my opinion will not succeed,
and for that reason I oppose most efforts to pick out on an industry by industry
basis and mandate purchases by trading partners.
You had something?
Q If you're done on trade could we ask you to comment on the Georgia
redistricting plan and the Justice Department decision?
SEN. FOWLER: Well, that is a -- I understand that the Justice Department denied
the Georgia plan today. That puts it back in the hands of the state. The state
now has two options. I remember from having been in the middle of it 10 years
ago. One is to appeal through the courts the Justice Department's decision, the
other is to try through legislative action in the coming days to meet Justice
Department criticisms and improve the plan.
I do not know, I have just heard of its rejection, I do not know what the
state's plans are but the ball is in their court and at this juncture there is
no federal involvement.
Q Are we pass the time, Senator, when the Justice Department should be judging
the state of Georgia's redistricting plan?
SEN. FOWLER: Well, obviously, I think there's a semblance, certainly, of
unfairness that only 15 states are scrutinized under the Voting Rights Act of
1965. There have been such massive changes in demography involving minorities
in the 27 years since 1965, I believe that it's time to make any review
universal, meaning covering all 50 states. But in the meantime, it is a state
decision as to how to proceed in any state where the Justice Department has said
--- has disapproved the plan, and I await their decision.
Q Senator, from what you told us, are you in favor for Congressman Gephardt's
bill to reduce (inaudible) --
SEN. FOWLER: I favor the Fowler bill, or the Fowler concept, which I said should
not -- has not yet been necessary, I think, to put into law.
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As far as the other proposals concerning trade, I have of Mr. Gephardt's to
basically protect, I believe, patents of US manufacturers --- I'm studying that
and the Reigle approach. I understand Senator Levin and Specter are trying to
revive Super 301 trade status. I had a little bit to do with that law and
supported it when I was on the Ways and Means Committee in the House. But at
this juncture, I'm not prepared to --
Q May I ask --
SEN. FOWLER: - give it my support. Yes?
Q Are you studying any action to challenge the speaker's comment -- the Japanese
speaker's comment on US workers?
SEN. FOWLER: Am I considering any what?
Q Any actions or any sort of --
SEN. FOWLER: No. I don't think it's necessary. I treat it simply as a --
basically a political statement for his constituency that we shouldn't get very
rattled about it ----- especially when the facts belie that statement on the
productivity of US auto workers.
Thank you all very much.
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DATE: MARCH 6, 1992
CLIENT:
LIBRARY: NEXIS
FILE: CURRNT
YOUR SEARCH REQUEST IS:
GENERAL MOTORS AND SATURN W/10 PLANT W/20 SUCCESS
NUMBER OF STORIES FOUND WITH YOUR REQUEST THROUGH:
LEVEL 1
14
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1ST STORY of Level 1 printed in FULL format.
Copyright 1992 Gannett Company, Inc.
GANNETT NEWS SERVICE
January 29, 1992, Wednesday
LENGTH: 579 words
HEADLINE: SATURN TO GO TO 50-HOUR WEEK TO MEET PRODUCTION GOALS
BYLINE: ADAM TANNER; The Nashville Tennessean
DATELINE: SPRING HILL, Tenn.
KEYWORD: SATURN
BODY:
Saturn employees will work an extra day a week until late 1992 to boost
lagging output and meet customer demand, company officials announced Wednesday.
The decision to add 10 hours to the current 40-hour work week comes one month
after Saturn parent General Motors announced dramatic company-wide plans to
eliminate more than 70,000 jobs over the next few years.
''If you consider that they're closing plants at this time, to have a plant
that's actually increasing its workload is just an excellent sign,' said
William Steele, an auto analyst with Dean Witter Reynolds in San Francisco. ' ' It
shows the demand for Saturn is better than expected.''
Of Saturn's 5,000 unionized workers, 89 percent ratified a plan last week to
add the extra day after management presented several strategies to increase
output, said Mike Bennett, president of the local United Auto Workers' union.
''There's a great deal of people that did not want to work the overtime ...
but they see the need, and that's how an organization reaches consensus,''
Bennett said. ''That's the difference between how this company operates versus
what happened at GM, being told what you're going to do.''
Under Saturn's unique labor-management agreement, union and management
officials must reach a consensus on most major issues affecting the workplace.
Most line workers interviewed in the new $ 1.9 million plant said they
accepted the decision because it was necessary to bring success to Saturn.
''It's fine with me; if that's what the company needs, I'm willing to do
it,'' said Jim Sayre, who works on Saturn's engines.
A few workers complained.
''I don't like it because I travel home every weekend to Cincinnati to my
family,' said Glenn Faulkner.
Added Michele Valentine: ''It sucks because when I was hired they said it was
a four and 10,'' referring to the numbers of days a week and hours a day.
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GANNETT NEWS SERVICE, January 29, 1992
'That was four months ago, and now everything has changed.'
The extra day, which begins next week, will bring in an additional income of
$ 233.55 to $ 268.65 a week for each worker and will cost Saturn millions in
overtime wages. Some Saturn workers, a number of whom had sizeable debts before
moving to Tennessee to work at Saturn, said these extra earnings are a key part
of their willingness to put in the overtime.
The additional labor costs to Saturn should be offset by the increase in the
number of cars sold, according to spokesman Bill Betts. Company officials said
all the vehicles produced in Spring Hill are selling.
''Our retail outlets will be increasing and we need to keep pace with that
and produce enough to satisfy that demand,' Betts said. ''The whole thing is a
net benefit to Saturn.
The expansion of the work week addresses the major problem that has plagued
Saturn since their first cars rolled off the assembly line in 1990. Although
many reviewers have given high marks to the car, production has lagged far
behind original goals.
The company has been producing about 12,000 cars a month since fall, compared
to a capacity goal of 20,000, officials said.
That low output translated into an $ 800 million loss for Saturn in 1991,
analysts say, and before the expanded work week was announced, some had
predicted a similar loss could result in 1992 unless output increased.
The extended hours should allow Saturn to reach full production of 240,000
cars a year, which will be met by strong public demand, Saturn officials
predicted Friday.
SUBJECT: AUTOMOBILE; INDUSTRY; SATURN:WORK WEEK
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29
2ND STORY of Level 1 printed in FULL format.
Copyright (c) 1991 The Financial Times Limited;
Financial Times
September 11, 1991, Wednesday
SECTION: SURVEY; Pg. X
LENGTH: 937 words
HEADLINE: World Car Industry 10;
On the road to clawing back market share - General Motors
BYLINE: MARTIN DICKSON
A REMARKABLE new vigour is shaking up General Motors, the largest car
manufacturer in the world, which spent much of the 1980s in seemingly inexorable
decline.
Under Mr Robert Stempel, who took over as chairman in July last year, the
company has been clawing back US market share and moving faster to cut costs and
reduce its heavy burden of excess manufacturing capacity.
Mr Stempel should not get all the credit for this. Many of the programmes
from which the group is starting to benefit were put in place under his
predecessor, the controversial Mr Roger Smith, who tried to force change on the
sprawling group by throwing money at its problems.
And the severe impact of the US recession over the past 12 months has forced
the group to accelerate change, whether or not it likes it. In the first six
months of this year GM lost Dollars 1.2bn and Wall Street expects it to remain
in the red for the year as a whole, in spite of signs of a gradual recovery in
the US economy and vehicle market. However, Mr Stempel so far seems much more
successful than his predecessor in gaining the support of GM's workforce for
belt-tightening and new working methods. This is partly because of his
down-to-earth personality, and partly because he made clear early on that all
GM's employees - managers included - were going to share in its pain.
That is a distinct contrast to the 1980s when the group gained a reputation
for demanding sacrifices from the rank and file while top executives continued
to reap generous pay and perks. Yet it was during that decade that the once
arrogant GM got its comeuppance. Unprepared for the Japanese onslaught against
the US market, it saw its share of the car market drop from some 46 per cent at
the start of the decade to around 35 per cent at the end.
However, GM seems to have drawn a line, decided it would defend the 35 per
cent floor at any cost, and over the past year it has started to win back
customers. In the first six months of 1991 it held 36.7 per cent of the car
market and aims to take this to 40 per cent over the next couple of years.
That is going to be tough, given the immense competition from US and Japanese
rivals. GM's first challenge is to produce quality vehicles that excite
customers, and this it may now be starting to do, with a very full programme of
new model launches.
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(c) 1991 Financial Times, September 11, 1991
One of the group's first successes is a new luxury sedan, the Park Avenue,
which has been a big hit for GM's Buick division, bucking the recessionary
downturn. Buick has been gaining market share, thanks to a thorough revamp of
its product line and marketing philosophy.
However, GM remains the high cost producer of the US industry, with its
factories on average taking far longer than those of its rivals to turn out
vehicles. The group is working hard to improve this. One example is the way it
is cutting the number of parts that go into its cars and standardising those
that remain. It also wants to change relations with suppliers, using fewer of
them and getting them to cut prices over the life of a contract. Another example
is an upheaval in the product development operations at the
Chevrolet-Pontiac-Canada group, GM's largest North American car-making business.
These have been re-organised along the more efficient lines found at rival
Japanese companies.
And the group has experimented with an entirely new approach to car building
at the plant in Tennessee which builds its new Saturn small car a model
conceived in the early 1980s as an all-out US attempt to beat the Japanese in
the small car market.
Saturn vehicles went on sale for the first time last autumn but so far the
project has been far from a resounding success. The Saturn plant has a
production capacity of 1,200 cars a day but production glitches - notably
problems with the car's plastic body mean that output has been running at
about half that level.
Those consumers who have managed to buy the cars seem pretty pleased with
them, but Saturn's shaky start has not enhanced GM's image and it will be years
- if ever before the much-hyped project reaches profitability.
A second big problem for GM is that its manufacturing capacity far exceeds
demand for its products. The company took a Dollars 2.1bn write-off last year to
cover the cost of closing seven North American factories and Mr Stempel pledged
to be running all its plants at full capacity by the end of next year. More
recently, however, there has been a slight retreat from that goal, with company
officials saying slow growth in the US means it may be some time in 1993 before
full capacity is achieved.
The cost savings that will flow from these closures are also limited by a
three-year labour agreement Mr Stempel signed last autumn with the United Auto
Workers Union, which guarantees employees most of their pay, whether or not they
work.
Still, the new relationship with the union essentially trading job security
for workplace flexibility has enabled the company to reach a potentially
important agreement allowing an Ohio assembly plant to be operated with three
assembly crews a strategy GM has already used in its highly successful
European operations. The European business, which made Dollars 1.9bn last year,
is playing a vital role offsetting the red ink in North America, and it will
need to do 50 for a considerable time yet.
GM officials acknowledge that, in spite of all the upheaval and cost-cutting,
the North American operations are unlikely to be profitable again until the US
market for cars and trucks rises to 15m vehicles a year. And that is not
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(c) 1991 Financial Times, September 11, 1991
likely until 1993 at the earliest.
GRAPHIC: Picture, Saturn interior, GM's all-out attempt to match the Japanesein
the small car market
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3RD STORY of Level 1 printed in FULL format.
Copyright 1991 Crain Communications, Inc.
Automotive News
July 15, 1991
SECTION: LESSONS OF SATURN; Pg. 3
LENGTH: 2999 words
HEADLINE: THE SATURN DEBATE;
The experiment in import fighting is well along the road now, but the question
still lingers: 'What's in it for GM'
BYLINE: By Phil Frame and Lindsay Chappell, AUTOMOTIVE NEWS STAFF REPORTERS
DATELINE: SPRING HILL, Tenn.
BODY:
"The Saturn concept" is beginning to spread like a new gospel through the old
offices and engineering rooms of General Motors.
A year after Saturn's first commercial car was assembled, GM is showing that
former Chairman Roger Smith may have been correct back in 1983 when he claimed
that the Saturn experiment would serve as an idea laboratory for the giant old
automaker.
But while many ideas flowing from Saturn the lab are being applied elsewhere
at GM, Saturn the company has not been able to staunch the immense flow of money
heading out.
Saturn the lab started courtesy of a $ 3.5 billion GM investment. Now,
Saturn the car company is costing its parent hundreds of millions of dollars in
operating losses, in part because of initial production screw-ups that cut
output.
"If you want to measure just the volume of the plant and say we're not
successful, then OK, we weren't successful," said Saturn President Richard G.
"Skip" LeFauve. "But look at all the other successes we've had so far. We've
successfully relocated thousands of families. We've integrated people and
processes and product by giving people a voice in how they structure their job.
We've introduced lost-foam casting technology to automotive mass production.
We've made innovations in plastic injection-molding.
"In the eyes of GM, our greatest success will be if we can always serve as a
place where new ideas can be tested and made to work."
Ronald Glantz, senior vice president and auto analyst at Dean Witter Reynolds
Inc., said he's heard that kind of company line before when GM entered into an
experiment in small-car making with Toyota Motor Co.
New United Motor Manufacturing Inc. in Fremont, Calif., down Route 101 and
across the Dumbarton Bridge from Glantz's office in San Francisco, has not lived
up to its billing as a learning tool for GM, Glantz said. He said he will wait
to see more solid results before jumping on or off the Saturn bandwagon.
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1991 Automotive News, July 15, 1991
"I don't 522 how you can judge Saturn until a couple more years have passed,"
said Glantz. "I am disappointed that the NUMMI experience hasn't had more of an
impact. I just can't believe that after having had NUMMI in operation for so
many years, we haven't seen the benefits."
Glantz acknowledges that outsiders like himself are hard-pressed to see how
members of the Saturn "team" are filtering out of the Spring Hill production
plant into positions of influence at GM. The Saturn people are taking seats on
committees that will determine what future cars and trucks will look like, how
they will be built, how new plants will be constructed and how labor relations
will be handled.
Saturn designers and engineers have moved on to new positions at other
new-car projects such as GM's ground-breaking electric car program. Guy Briggs,
who served as Saturn's vice president of manufacturing during the crucial plant
launch, was named vice president and director of operations at GM's Truck & Bus
Group earlier this year.
GM President Lloyd Reuss said the talked to a supplier earlier this year who
told him, "I could tell you within two weeks I saw some of the same ideas that
were implemented at Saturn happening at Truck & Bus as a result of Guy Briggs
moving over there."
"So, sure," Reuss said, "as those various individuals move back into the
other parts of General Motors, they're a key part of the transfer of ideas and
technology."
The machine-tool supplier said Briggs brought his Truck & Bus team to the
supplier's facility to look at a process being applied to a future project,
Reuss said. Briggs then placed some of his employees at the supplier's facility
to offer technical assistance.
It is that gospel of give and take, a partnership attitude with suppliers,
that Briggs preached at Saturn and is transferring to his new job.
Other GM top managers have rotated through Saturn for a dose of the
experiment's philosophy, including John Middlebrook, now Pontiac general manager
and GM vice president, and William Hoglund, executive vice president in charge
of the Automotive Components Group. Middlebrook was vice president of Saturn
sales and service, while Hoglund preceded LeFauve as Saturn president.
Hot bed for ideas
The electric car project is drawing heavily on Saturn innovations, say GM
officials. Although the electric car will be much different from a Saturn, the
manufacturing processes used to build the vehicle at the Lansing, Mich., Craft
Center may closely resemble those used in Spring Hill - if the electric vehicle
is built as planned in mid-decade.
Manufacturing engineers from the GM Tech Center already are combing the $
1.9-billion Saturn factory for ideas to use in Lansing. For example, the
electric car plant will use the same assembly-line adaptation that Saturn
pioneered, which features "skillets" that move cars sideways down the line and
allow workers to alter the car's height for greater working comfort.
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"Everybody's interested in the skillets," says LeFauve. "You'll be seeing
that idea a lot in the future as GM retools plants and builds new ones."
Also, GM is planning to use the Saturn system to select dealers for the
electric car, by soliciting only dealers with high customer-satisfaction ratings
at their existing dealerships. Other GM dealer bodies are studying Saturn's
dealer-relations procedures, including Pontiac and Oldsmobile.
Saturn personnel also are affecting GM's design and engineering psyche.
Every design committee and task force in the corporation now has a Saturn
representative sitting on it, said John "Jay" Wetzel III, Saturn's chief
engineer.
Switch in attitude
The embrace is interesting in light of the "hands-off" attitude GM's various
divisions took toward Saturn during the past five years. Design engineers from
other divisions, including key GM component makers such as Saginaw Division, are
doing stints at the Saturn factory, learning Saturn's new methods and taking the
lessons home.
GM's manufacturing technical committee -- a corporate-wide think-tank that
guides the carmaker on industrial matters -- has shown considerable interest in
Saturn. As new models come on line throughout GM, says Robert Boruff, who
replaced Briggs as vice president of manufacturing, factory tooling will look
more like Saturn's.
For example, Saturn uses no press welders, the very expensive tools that
clamp parts together for welding. GM assembly lines of the future will replace
the welders with series robots - more flexible creatures costing a fraction as
much.
"Saturn's acceptance is really growing," Wetzel said, "not just within GM but
in the industry at large. That will make the technology flow a lot better."
Not so novel lessons
But NUMMI was supposed to breathe new life into GM, too, infusing the
carmaker with new technological tricks from Japan and sharing Toyota's gentle
philosophy with the General's Detroit-hardened managers.
Even though many in the GM organization circulated through NUMMI -- including
many who now reside at Saturn -- the general feeling toward NUMMI appears to be
that its lessons were interesting, but they weren't GM lessons.
"I went to NUMMI," LeFauve said. "There's really nothing there that I would
call 'new.' What they're doing has already been done in the industry, either in
Japan or here. But what we're doing at Saturn is what I would call new and
different."
Still, LeFauve acknowledges, corporations the size of GM take years to adopt
and implement new ways of doing things.
"Our influence will come in bits and pieces, and it will take a long time,"
says LeFauve, a 35-year GM manufacturing executive who spent most of his
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career working at component divisions before moving to Chevrolet in 1983, then
Buick-Oldsmobile-Cadillac Group the following year.
"You have to keep it in perspective," he says. "Until you really start
selling cars, you haven't proven anything to anybody. Before people will change
what they're doing, they've got to be certain about what they're changing into."
What role model?
What Saturn is, in fact, is still being debated by the industry. The Saturn
cars comprise a small sedan and a small sporty coupe, both just upmarket from
the Honda Civic.
As a corporation, Saturn is a start-up car company birthed, financed and
peopled by GM, but largely independent in its manufacturing decisions,
administrative policies and sales strategies.
As a car-selling entity, Saturn is 25th in sales out of 38 car lines in the
United States through the first six months of 1991, just behind Lexus and just
ahead of BMW.
Saturn sold 6,666 cars in June. Less than a year after selling its first
car, Saturn is outselling Isuzu in cars, as well as Saab, Suzuki, Peugeot, Audi
and the once-stellar Yugo.
By year-end, promises GM Chairman Robert Stempel, Saturn's Spring Hill
factory will be building about 20,000 cars a month, at an annualized rate of
250,000 cars a year. If the car sells at the full rate of production, it would
jump from 25th place into the top 10.
Still, what's the point? The experiment has cost GM billions of dollars at a
crucial time in automotive history, and the car's sales are arguably sucking
sales away from other GM units. About four in 10 Saturn buyers already owned GM
cars, according to R. L. Polk & Co. -- meaning that Chevrolet or Pontiac or
somebody may have lost as many as 8,000 sales so far to Saturn.
Saturn built only 42,325 cars through June of the 1991 model year, less than
half of the 86,072 in the original production plan for the same period. If
Saturn meets revised production plans for July, it will end the model year with
a total build of 50,910 cars -- 49 percent below the 99,272 originally planned
for model year 1991.
Model year sales through June totaled only 27,201 units, just 0.4 percent of
a depressed U.S. car market.
If quality is the gauge by which Saturn is measured, the company has suffered
there, too. It has had two recalls, including one in which more than 1,800
replacement cars were handed out, and then scored a worse-than-average 151
problems per 100 cars in the 1991 J. D. Power and Associates' Initial Quality
Survey.
The 151 score made Saturn the 16th-best of 34 brands surveyed, significantly
worse than two arch rivals Toyota with 90 and Honda with 111 -- but better
than its other prime target, Nissan, which had 160.
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The industry average was 140.
Three GM divisions - Buick, Oldsmobile and Cadillac had fewer problems.
In at least one statistic, Saturn is doing well. Its 108 dealers sold an
average of 62 cars per dealer in June, good for second place behind the average
of 69 sold by Honda dealers, according to the Automotive News monthly
sales-per-dealer calculation. The average Toyota dealer sold four more vehicles
in June, but that included 18 trucks.
Next closest behind Saturn in cars were Lexus dealers with a June average of
53 per dealer.
High price tag
Financial concerns resulting from the recession reportedly are fueling
internal GM debate that the "Saturn experiment" is becoming too costly to bear
at a time when the U.S. vehicle market is in the toilet.
GM spent $ 3.5 billion developing the small car and its factory at a time
when the company was getting beaten up in the intermediate market by Ford Taurus
and Honda Accord, and also fighting for space in the profitable minivan market.
Besides that, GM already had a supply of small cars coming from its Japanese
partners: Isuzu, Suzuki and Toyota.
Saturn has had its share of setbacks. Start-up kinks in the plant's hailed
technology - -- such as some unexpected trouble in making doors and trim fit
together . kept factory volume below expectations for months during the car's
crucial sales launch, which began Oct. 25.
In its first eight months of sales, it had two recalls: one a minor issue
with a seat bracket, and the other an engine coolant mix-up that prompted the
company to replace more than 1,800 cars, 1,200 of which were in customers'
hands.
But Saturn critics have been consistently rebuffed from the top. Reuss says
it is way too early to judge Saturn as a car manufacturer. Saturn will be
called to account for its profitability, eventually.
"We're here for the long term," Reuss says. "We've got a tremendous
investment, and we are determined to make sure that a large part of our volume
is plus business and that we end up with customers who are satisfied with the
total ownership experience."
What GM is looking at now, and what Saturn is succeeding at, Reuss says, is
"how much of the new and different approaches that Saturn has incorporated
are actually moving into other parts of General Motors. =
Cross pollination
Reuss says many ideas are already moving from Saturn to the parent company.
* GM's Oklahoma City assembly plant, which makes Oldsmobile Cutlass Cieras and
Buick Centurys, is adopting a synchronous manufacturing process similar to
Saturn's.
* The new GM Powertrain Division is adopting new quality control programs
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similar to those used at Saturn, and also instigating Saturn-style "partnership"
approaches to component suppliers. The approaches force the outside firms to
share more of the development costs, and potentially more of the risks, in a
given project.
The April recall of 1,800 Saturns reveals the extent of Saturn's supplier
philosophy. Saturn opted to replace all 1,800 cars. Texaco Refining and
Marketing Inc., the supplier of the faulty engine coolant, will pay for the
cars.
* GM is using Saturn's lost-foam casting process to make the cylinder heads for
its 2.2-liter, four-cylinder engines, which are made in Tonawanda, N.Y. That
engine will use a lost-foam casting process similar to the one Saturn developed
for its internally produced engine blocks and heads.
Lost-foam casting involves using a polystyrene foam patter for the shape of
the engine part to be cast in metal. When the molten metal is poured into a box
containing the foam patter, the foam vaporizes and is replaced by metal.
The process allows for more accurate, detailed and complex castings that can
result in fewer parts, easier assembly and greater long-term reliability.
* Saturn's use of composite materials for body panels will also make its way
into other car lines, Reuss says without specifying which ones.
* The 1990 GM franchise agreement "has a lot of the Saturn franchise flavor in
it," Reuss says. "Many of the dealers that helped develop the Saturn franchise
agreement were also part of the team that worked on the new agreement for all of
our General Motors franchises."
The new agreement includes the Saturn system of greater dealer involvement in
franchise and distribution decisions.
* On a manufacturing level, GM also hopes to incorporate at other plants the
teamwork concept developed by Saturn management and the UAW. The concept
encompasses not just teamwork in a single area, but the whole manufacturing
complex working as a team "so that the team that's working on the engine (feels)
just as concerned about the appearance and the paint finish as the people over
in the paint shop," Reuss says.
* GM management and the UAW are studying ways to incorporate Saturn's innovative
labor relations practices.
The car was designed to be an import-fighter, but the company was founded to
incorporate the best of the Japanese sense of harmony in the workplace. Work
rules were minimized and blue-collar and white-collar employees are thrown
together in every aspect of the company.
Line workers participate in the car's design by making suggestions and
approving design ideas, by determining the tooling, and choosing component
suppliers.
Employee participation is nothing new. GM already had access to modern labor
relations through its North American joint ventures with Japanese carmakers:
CAMI Automotive Inc. with Suzuki Motors Ltd., and NUMMI.
But Saturn goes further than the joint ventures, says Michael Bennett,
president of Saturn's UAW local.
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"The workers at NUMMI and CAMI have a voice in their immediate workplace
surroundings," said Bennett, referring to the joint ventures. "But that doesn't
go far enough. Labor and management are at a crossroads for the 21st century,
and Saturn is the bold step forward. A lot of what we've created here will be
copied by others."
Bennett says Saturn has been visited regularly by UAW leaders, including the
union's board of directors and President Owen Bieber.
"People are leaving here astounded and excited," says Bennett. "I think they
want a little more time to see it in action."
Taking root
Saturn's training of workers and their involvement in manufacturing are
paying off in ways that will be noticed both inside and outside GM, LeFauve
says.
LeFauve recalled a day last year when the plant was shut down for a quality
problem with the door header, a piece of the door assembly that goes around the
top of the door and holds the glass in place.
"The team had found an impression at two points on the top of the door and
shut the line down," LeFauve says. "I went over to look at it and couldn't see
it. They said, 'You've got to hold it up to the light and you have to hold it
just right and you can see it.' So I held it up and I think I saw what they
meant.
"We traced it down to a clamping fixture in the fabrication operation, where
they clamp the header in place while they weld the header to the door frame,"
LeFauve added. "They had too much pressure there, so they got to the team and
they relieved the pressure - -- and we don't have any more problem."
The assembly line workers detected an imperfection that most people would
never see.
"They said, 'What should we do with something like this?'" LeFauve says. "I
said, 'You're doing exactly right.' It may be costing us production today, but
it won't ever cost us production in the future. That's what this is all about."
GRAPHIC: Picture 1, Saturn President Richard G. "Skip" LeFauve admits that the
automaker's assembly volumes have not been successful, but points to other
successes such as teamwork practices and technologies such as lost-foam casting
and plastic injection-molding. AUTOMOTIVE NEWS/JOE WILSSENS; Picture 2, Briggs:
implements ideas; Picture 3, Boruff: tooling leadership; Picture 4, Saturn's
dealers sold an average of 62 cars per dealer in June, good for second place
behind Honda.; Chart, Saturn plan VS. production, Chart compares Saturn Corp.
planned monthly production (as of June 1990) with actual production, in
thousands of units. Source: Saturn Corp., Automotive News Data Center,
AUTOMOTIVE NEWS/CHARLOTTE WINTER; Picture 5, Saturn utilizes lost-foam casting
for its engine blocks and heads, GM will adapt the process for cylinder heads
for its 2.2-liter, four-cylinder engines.
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39
5TH STORY of Level 1 printed in FULL format.
Copyright (c) 1991 President and Fellows of Harvard College;
Harvard Business Review
May 1991 / June 1991
PAGE: Pg. 30
LENGTH: 6589 words
HEADLINE: What Should Unions Do?
BYLINE: John Hoerr
ABSTRACT:
Unions can make a pivotal contribution to competitiveness. In a world where
business success increasingly depends on creating more flexible, team-based work
organizations, unions can be a surprisingly effective means to integrate
employees into managerial decision making. In order for U.S. unions to act in
this capacity, they must reinvent themselves much as companies are trying to do.
BODY:
By any standard, the 1980s have been a difficult decade for the American worker.
When inflation is taken into account, average weekly earnings have dropped more
than 30% since 1969. Dislocations caused by takeovers, shutdowns, and
downsizings have pushed mistrust of corporations to new heights. Disgruntled
employees are filing record numbers of wrongful discharge suits and
job-discrimination and unfair-labor-practice complaints. And in the workplace,
employees are demanding more challenging work, a voice in decision making, and
greater job security.
In the past, turmoil on this scale would have driven workers into unions. Not
today. Only 20 years ago, nearly 30% of private-sector workers belonged to
unions. By 1990, union membership in private industry had dropped to 12.1% of
the work force, reducing organized labor to what Harvard economist Richard B.
Freeman has recently labeled ghetto unionism. If this trend continues, by the
year 2000, the union share of the private-sector work force will shrink to 5%.
Ask a manager to explain this seeming paradox between worker discontent and
union decline and it's likely he or she will say something like the following:
the rules of the economic game have changed. Competition is global,
technological innovation continuous, the work force increasingly professional.
In such an economic environment, unions are ill-suited to meeting the needs of
either workers or companies. At best, they are an irrelevance -- a leftover from
a previous industrial era. At worst, they are an obstacle to making companies
and countries competitive. Little wonder, then, that unions are on the wane.
What this perspective overlooks, however, is that radical union decline is a
peculiarly American phenomenon. After all, companies around the world have been
going through the same sea change brought on by new technologies and global
competition. But while U.S. union membership (measured as a percentage of all
nonfarm employees, including those in the public sector) has declined by nearly
50% during the past two decades, in other industrial countries, it has dropped
only slightly (from 58% to 50% in the United Kingdom, from 32% to 28% in Japan)
or stayed steady (at roughly 43% in Germany and 36% in Canada) or even increased
considerably (for example, from 79% to 96% in Sweden). The most competitive
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national economies in particular, Germany and Japan seem to combine
technologically advanced and highly competitive companies with far higher levels
of unionization than in the United States.
This suggests that while a particular kind of unionism may be obsolete,
unionism per se is not. Instead of speculating whether U.S. unions will -- or
should -- survive, it is more interesting to ask: What kind of unionism makes
social and economic sense given the new realities of global competition? In
1984, Freeman and his Harvard colleague James L. Medoff published their now
classic study, What Do Unions Do? Today the question is: What should unions do?
The materials discussed here (see insert, page 32) offer a powerful answer to
that question. Taken together, they represent a new way of thinking about unions
and their place in the new economy. On the one hand, they challenge the widely
held view that unions are irrelevant. On the other, they are equally critical of
"business as usual" as it exists at many U.S. unions today. Finally, they
suggest lessons that both companies and unions in the United States can learn
from unionism as practiced elsewhere.
Three themes in particular emerge from this research:
1. U.S. unions face the same crisis as U.S. management: dealing with the new
realities of global competition.
Unions don't exist in isolation. They are part of an entire industrial
relations system the network of interlocking institutions of management, labor,
and government that grew up in the era of the mass-production economy. In the
last decade, economic and technological changes have rendered many aspects of
these institutions obsolete. Now companies and unions must jointly reform the
system they jointly built.
2. Unions aren't necessarily an obstacle to competitiveness; indeed, under
the right circumstances, they can make a pivotal contribution to it.
Much as companies are struggling to define new ways of managing, a new model
of unionism is emerging that puts unions at the very center of companies'
efforts to improve their competitiveness. In a world where success in the
marketplace increasingly depends on creating more flexible, team-based work
organizations, unions can be a surprisingly effective means to integrate
employees into managerial decision making. Similarly, the lack of an institution
that gives voice to workers' interests and perspectives can block companies'
efforts to adapt to change. Put simply, strong unions can make stronger
companies.
3. To act in this capacity, however, U.S. unions must reinvent themselves
much as some companies are trying to do.
The U.S. industrial-relations system cannot be reinvigorated unless unions
carve out a new role for themselves. They must develop a vision of how workers
should help shape the technological and social revolution that is transforming
the workplace. They must identify new "leverage points" for union influence.
Finally, they must improve their own human resources to help put labor's new
vision into practice.
Unions and the Corporate "Governance Gap".
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Managers unconcerned or gleeful about the growing weakness of U.S. unions
should remember one thing. Industrial relations, like nature, abhors a vacuum.
As traditional unions decline, new institutions and practices will take their
place. They won't necessarily be better for companies or for the economy.
This is the important implication of Governing the Workplace by Harvard law
professor Paul C. Weiler. According to Weiler, the decline of unions has created
a political and legal vacuum -- a "governance gap" -- that can only damage
relationships between managers and workers and the ability of the U.S. economy
to compete. Weiler explains what's wrong with recent alternatives to traditional
collective bargaining and why "union representation is as attractive a form of
governance as we have yet been able to devise."
As traditional collective bargaining has declined, argues Weiler, two
alternatives have risen to take its place. The first is government regulation.
During the past 15 years, legal challenges have systematically eroded the
traditional concept of "employment at will," which held that managers could fire
workers at any time for any reason. In over 40 states, courts now allow
employees to sue companies for wrongful discharge; plaintiffs' attorneys are
doing a thriving business. State and federal laws regulating work relationships
such as restrictions on polygraph testing - have also proliferated.
The second alternative is the development of more professional human resource
programs at companies. In effect, these programs are meant to fill a unionlike
role and convince employees that they don't need an independent union. They
include mechanisms like quality circles to involve employees in decisions on the
job and nonunion grievance procedures for dispensing workplace justice.
Both these systems have their virtues - and their drawbacks. Government
regulation, for example, has the advantage of protecting the interests of all
employees, not just union members. But regulation is a blunt axe and can often
produce requirements in the law that bear little resemblance to workplace
reality from both workers' and managers' perspectives. Laws tend to work best
where unions are present to make sure the laws are enforced. The fact is,
nonunion employees are at greater risk of suffering from employer abuses no
matter what the letter of the law may say. At the same time, a panoply of
standardized government-imposed rules administered by government agencies is
likely to be a greater obstacle to managerial flexibility than unions ever were.
The human resource alternative to unions also has positive aspects,
especially where the HR staff conceives of its role as the "neutral"
representative of employees. But there's the rub. In the end, no company will
put the interests of employees over the interests of shareholders in a direct
conflict -- if the stakes are high enough. Thus the human resource approach
tends to break down precisely where companies need it most: in situations of
severe conflict. The very best HR systems recognize this fact by going to great
lengths to build fairness into nonunion grievance procedures. But only a small
handful -- probably less than a half dozen -take the ultimate step of allowing
for outside arbitration as a last resort.
The trouble with both alternatives, argues Weiler, is that neither provides
workers with an independent source of power inside the company. Laws that define
workers' basic legal rights don't necessarily assure that workers can exercise
these rights free of coercion. And too much regulation from outside impedes
efficiency. Human resource programs, on the other hand, give workers some
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influence inside the company, but they are not an independent source of power.
Collective bargaining is the only American institution that gives workers the
ability to claim both kinds of protection from outside and inside.
For managers who know their history, Weiler's governance gap should sound
familiar: the previous system of U.S. industrial relations went through a
similar crisis in the early decades of this century. For a brief period in the
late 1800s, U.S. unions had a firm foothold in factories organized around
production by skilled artisans, such as moulders and puddlers in the early iron
industry. But in the first quarter of the twentieth century, corporations
shifted to mass-production systems based on mass markets, standardized products,
unskilled labor and the "scientific management" of work as articulated by
Frederick W. Taylor. As a result, the artisan-dominated craft unions became
increasingly obsolete. For the better part of 40 years, the craft unions all but
ignored this development as well as the growing numbers of unskilled immigrants
working in the new factories. Meanwhile, antiunion companies tried to create
their own institutions company unions or Ford's Sociological Department to
regulate labor-management relations.
It took the enormous social dislocation of the Great Depression and the
bitter labor conflicts of the 1930s to create a new system of industrial
relations. The new "industrial unions" broke definitively with the traditional
craft model to organize all workers - skilled and unskilled alike - in an
entire industry.
Seen from the vantage point of today, it is easy to forget just how
successful industrial unionism was and not just for union members but for the
economy as a whole. The new industrial unions created procedures to protect
workers from arbitrary treatment on the job. But the labor-relations system that
grew up around industrial unionism did far more than that. By organizing all the
major companies in steel, auto, rubber, and other mass-production industries,
industrial unions successfully took wages out of competition. This put a stop to
the destructive wage cutting among companies that had often taken place during
downturns. And by raising living standards for a broad segment of society,
industrial unionism made possible the mass consumption on which a healthy
mass-production economy depended. In the postwar era, U.S. companies and unions
thrived on the rapid growth in productivity and output made possible by mass
production and its economies of scale.
But the very success of industrial unionism also sowed the seeds of its
eventual decline. In order to defend workers against the abuses of scientific
management, the new industrial unions accepted, even embraced, all that went
with it in particular, the rigid separation of thinking from doing, "managing
from working." Cut off from decision-making responsibilities, unions focused on
protecting workers from exploitation by using Taylorism as a base of shop-floor
power. They negotiated multiple job classifications, linked wage rates to the
job instead of a worker's skills, and established seniority as the basis for
promotion. This "job control unionism" gave unions a negative power to hamstring
management but not a positive power to influence operations. Rules bred more
rules, eventually straitjacketing the production system and creating
unproductive hierarchies in both companies and unions.
The costs of this system were obscured as long as the U.S. mass-production
economy dominated the world. But since the late 1960s, changes in the world
economy have threatened to leave both U.S. companies and unions behind. In a
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global economy, wage competition is also global. And under the impact of
changing markets and technologies, companies around the world are scrapping the
old mass-production systems and converting to flexible manufacturing, flattening
hierarchies, blurring the boundaries among functions and jobs, and encouraging
indeed, demanding that workers make critical decisions on the factory floor.
Neither traditional American management nor American unionism fits in well
with this new economic environment -- a fact that even strong union supporters
now recognize. Unions and Economic Competitiveness, a collection of essays by
labor economists and industrial-relations specialists sympathetic to unions,
focuses on the difficulty that both companies and unions have had in adapting to
the new rules of global competition. In the absence of strong foreign
competition, argues Richard Freeman in one essay, unions could safely bargain
for a share of the "monopoly rents" charged by U.S. companies. By the 1970s,
however, this was no longer economically feasible. "What worked for unions in
the 1950s and 1960s did not work in the 1970s and 1980s," concludes Freeman,
"and it took too much time for labor and management to realize this."
Former Secretary of Labor Ray Marshall makes a similar point about the 1990s
in another essay in Unions and Economic Competitiveness. Because mass production
was more entrenched in the United States than it was in any other nation in the
world, both managers and unionists are "more reluctant to abandon the
adversarial and authoritarian systems that it produced." As a result, genuine
worker participation is a great deal less pervasive in the United States than it
is elsewhere.
Germany's Dynamic Unionism.
In other countries, unions have followed a very different trajectory.
Instead of being excluded, they have been integrated into managerial decision
making. In Japan, with its generally peaceful labor relations, management
invites union involvement to improve productivity and quality. In Germany and
Scandinavia, on the other hand, laws require participation. In either case, the
entrenched position of unions allows them not only to withstand the winds of
economic change but also to make a positive contribution to corporate
restructuring.
For an idea of what this more dynamic form of unionism looks like, consider
the example of Germany, as described in Democracy at Work by Cornell professor
Lowell Turner. That country's "code termination" law, which mandates
representation for unions and salaried employees on the supervisory boards of
all large companies, is well-known. Far more significant for managerial decision
making are the plant-level "works councils," elected bodies of employees also
required by law at every work site.
Although legally independent of both management and union, works councils are
usually dominated by union activists, who imbue them with the philosophy and
policies of their national union. The influence of the works councils varies
from company to company. But in many workplaces, they play an extremely active
role sometimes amounting to veto power in all matters involving hiring, firing,
training, and reassignment in the event of reorganization and technological
change.
This is especially true in Germany's vast metalworking sector, where some 2.6
million workers belong to IG Metall, the nation's largest union. Like other
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German unions, it negotiates guidelines for pay levels, hours, and working
conditions on a regional basis. Works councils at each plant then translate the
guidelines into local agreements.
Turner's study focuses particularly on Volkswagen's huge plant at Wolfsburg
(in Lower Saxony near the former border of East Germany), which employs some
62, people. Like auto factories the world over, Wolfsburg must adjust to
rapid changes in the international car market. Management is cutting costs and
employment levels and wants to install more efficient work practices. Instead of
waiting to be consulted, the 69-member works council 62 seats are held by IG
Metall members --- is taking the initiative to make sure the plant restructuring
also works to the benefit of employees and conforms to union philosophy.
Take the example of team-based manufacturing, a strategy recently adopted by
German auto companies as one means of competing with the Japanese. As VW and
other producers began moving in this direction, IG Metall developed its own set
of "group work" concepts designed to protect workers from layoff or transfer to
lower paying jobs. The program emphasizes retraining and a work organization
that gives employees real decision-making power. In 1988, works councillors from
all VW plants adopted the union program. Now VW management must negotiate on
that agenda if it wishes to install teamwork.
IG Metall's interest in work reorganization illustrates how a union can take
the lead on important issues instead of merely reacting to a company proposal
and in the process force management to change its own thinking. The union's
group-work policies are the product of nearly two decades of research and
activism. In the early 1970s, the union's national staff of "work humanization"
specialists began research on work reforms to address rising discontention auto
assembly lines. Despite management's lack of interest at the time, the union
kept track of changing technologies and promoted its own vision of what the
content and shape of work should be. And now that the companies too want to
reorganize work, the union, with its strong influence in the works councils, has
the power to turn its vision into reality.
Turner argues that this system is a potent mechanism for smoothing the
company's adaptation to new competitive realities. Partly because of a strong
union and active works councils, VW weathered the demise of the Beetle in the
mid-1970s, various market crises, and recessions in the 1980s without major
disruptions. Unlike auto producers in most other countries, VW did not lay off
workers or demand wage concessions in the early 1980s.
Of course, strong unions like IG Metall also impose constraints on management
that make managing harder. But in certain situations, such constraints can be
enabling. The pressure that IG Metall puts on German companies forces them to
keep and retrain workers, use labor more flexibly, and move into diversified,
quality, high-volume production. And in the long run, VW is likely to have a
work force that is much more committed to a new way of working than would be the
case in a nonunion enterprise.
Turner's book compares the IG Metall experience with that of its U.S.
counterpart, the United Auto Workers (UAW). While the UAW is involved in some
very advanced worker participation efforts especially, what amounts to
comanagement with General Motors of the Saturn plant in Spring Hill, Tennessee
-- it has had only scattered successes. According to Turner, this is largely
because authoritarian traditions persist at many auto plants. Even when
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managers introduce more participatory organizational structures, they usually do
so unilaterally sometimes pressuring the local union to accept them under the
threat of a plant shutdown.
Turner suggests that lack of an active union role in company decision making
goes a long way toward explaining the crisis of the U.S. auto industry. In the
absence of institutional mechanisms such as those provided by works councils,
there is no sure way for companies to integrate employees into the change
process. Instead of defeating or marginalizing unions, Turner argues, U.S.
companies need to accept them as legitimate partners in participation. And
unions, in the interest of their own survival," need to jettison their
traditional passivity and start making positive contributions to company
performance in the areas of productivity, product quality, and process
flexibility.
To that end, many of the authors of the texts cited here argue for laws
mandating worker participation along the lines of those in Germany and other
European nations. Weiler, for example, says that every workplace with 25
employees or more should have an Employee Participation Committee (EPC) with
members elected by all employees. Modeled on the German works council, the EPC
would have to be consulted on all decisions affecting the work force and would
have a voice on a far broader range of subjects than provided by traditional
collective bargaining.
Weiler concedes that mandatory participation laws have no chance of being
enacted in the near future. Companies, not without reason, would regard the EPC
as a precursor to a union. Unions would view the EPC as a company union,
designed to keep "real" unions out of the workplace. Without such a legal
mandate, participation may never become as pervasive in the United States as it
is in Germany. Still, some U.S. companies have voluntarily installed highly
participative work systems. As other essays in Unions and Economic
Competitiveness indicate, America-style worker participation - with unions ---
can work very well indeed.
Worker Participation, American-Style.
Since the 1960s, when team-based production began on a very small scale in
the United States, the most publicized examples generally have come from
nonunion plants. As a result, managers have commonly assumed that nonunion
companies are better at worker participation and employee involvement than,
union companies are. But according to recent research reported in Unions and
Economic Competitiveness, this is no longer the case.
For example, economists Adrienne E. Eaton of Rutgers and Paula B. Voos of the
University of Wisconsin have recently analyzed an extensive 1987 survey of
innovative practices at large nonunion and union companies, conducted by the
federal government's General Accounting Office. Nonunion companies led in only
one such practice - the use of profit-sharing plans. But profit sharing does not
require a fundamental restructuring of a company and is a weak motivator unless
accompanied by employee participation.
On the other hand, a production system organized around self-managing teams
forces the most deep-seated changes and produces the best results in terms of
productivity and quality. The General Accounting Office data show that by 1987
unionized companies reported more use of teamwork than nonunion companies.
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"The nonunion sector is no longer more innovative than the union sector," write
Eaton and Voos, "if in fact it ever was."
In a similar study, Maryellen R. Kelley of Carnegie-Mellon and Bennett
Harrison of MIT examine the experience of more than 1,000 manufacturing plants
that used labor-management problem-solving committees in the 1980s. The nonunion
workplaces were not only less likely to provide workers with real protections
such as job security but were also significantly less efficient than the
unionized plants.
What explains such findings? According to Eaton and Voos, most team-based
work systems in a unionized setting are the product of a formal quid pro quo.
The union agrees to eliminate old work rules to make way for team production. In
exchange, it usually wins improved job security, gain-sharing, or higher wages.
Because "unions have more to trade," they can bargain better than nonunion
workers [who] have no institutions to represent them.' And since most joint
programs in unionized plants emphasize the quality-of-worklife goals of workers
as well as the productivity goals of management, these programs tend to have
greater legitimacy. Thus they are more likely to survive. "Ironically," write
Eaton and Voos, "it is precisely because unionized workers can say 'no' as a
group that they can also collectively say yes.'"
One company that is realizing the benefits of union participation in work
redesign is Corning. The company is converting all of its 28 U.S. factories to
team-based production in partnership with the American Flint Glass Workers union
(AFGW). The company decided a few years ago it could remain competitive only by
giving line workers more responsibility in decisions about production. Corning
is now in the midst of rooting out old production lines and retraining virtually
all of its 20,000 employees to work in the new systems. About two-thirds of
these workers need remedial education in reading and math.
Corning's initial decision to shift to self-managing work teams was made by
management alone. But it wasn't until the AFGW, which represents most of
Corning's hourly workers, became actively involved or, in the intriguing
metaphor used by both managers and unionists, "bought ownership" that the
restructuring surged ahead. Eventually, the two sides articulated an
extraordinary new relationship in a short, clearly worded philosophical
statement called "A Partnership in the Workplace." Among six Ressential values"
listed in the agreement are: "recognition of the rights of workers to
participate in decisions that affect their working lives" and "a work
environment free of arbitrary and authoritarian attitudes."
At Corning, the union has influence over the content and administration of
all company training programs. At about a dozen plants, plant redesign
committees, including shop-floor workers, are now devising plans for
restructuring jobs. Self-managing teams have been installed in sections of more
than 20 plants, and company and union officials are starting the redesign
process in the others. As part of the new partnership, employees cannot work
themselves out of a job through this massive involvement effort. If more
efficient practices enable Corning to reduce the work force, it will do so by
attrition.
Unfortunately, initiatives like that of Corning and the AFGW are exceptions.
Just as striking as Eaton and Voos's finding that teamwork is more prevalent at
union plants is the fact that team-based work systems are still 50 rare in
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both union and non-union sectors in the United States. For the most part,
managers remain unwilling to part with authority or to manage the social
revolution that's needed to change a company's culture. AS a consequence, it
appears that unions will have to transform themselves and, in the process,
hasten the transformation of the entire U.S. industrial relations system.
New Leverage Points of Union Influence.
If a new kind of unionism can contribute to competitiveness, how should U.S.
unions reorganize to bring it about? Put another way, what are the leverage poi
nts for redefining union influence in the new economy? Consider four: training,
work redesign, employee ownership, and the new work force.
The training dilemma facing most U.S. corporations is by now thoroughly
familiar. Global competition requires a skilled work force. And yet, most
companies devote few resources to training line workers because they fear that
other companies will snap them up. Similarly, most workers lack incentives to
buy training for themselves.
With the exception of the building trades, unions have traditionally left
training to management. But in recent years, some unions have begun to play a
more active role in employee training --- largely in response to shifts in
markets or to rapid technological change. For example, the UAW jointly runs
training institutes with the Big Three auto makers. So does the Communications
Workers of America (CWA) with AT&T. And the United Steelworkers (USW) will soon
start a Career Development Institute funded by major steel producers. All these
programs are designed to ensure that workers can acquire the skills they need to
remain employable in a more competitive economy.
Providing workers with training through joint labor-management programs is an
especially attractive role for unions to play. Training is one area where the
overlap between labor's concerns for social justice and companies' concerns
about competitiveness is great. In a provocative paper entitled "Industrial
Restructuring and Vocational Training: A Strategic Role for Unions?," University
of Wisconsin sociologist Wolfgang Streeck argues that union involvement in
"skill formation" will play the equivalent role in the new economy that wage
formation played in the mass-production era.
A related leverage point, as the Volkswagen and Corning examples make clear,
is work redesign. It may be a long time before most U.S. companies have works
councils. But local unions can begin today to represent employee interests and
concerns on work-restructuring projects. New Forms of Work Organization by
Canadian labor consultant Tom Rankin provides a rich portrait of how a new-model
local union operates. His book is an extensive study of an advanced work system
at Shell Canada's Sarnia, Ontario chemical plant. For more than a decade,
workers have been running the Shell plant through a network of semiautonomous
work teams designed jointly by the company and the Energy and Chemical Workers
Union (ECWU).
Like the team plants at Corning and other companies, the Sarnia system has no
resemblance either to Taylorism or to job-control unionism. There are only two
work classifications -- process operators and maintenance technicians. One
process team runs the entire plant on each shift. The average team member can
perform 70% of the tasks required to run the plant. Pay is linked to skill and
knowledge, rather than to the job itself or to seniority.
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There is little rule making at Sarnia; instead, labor and management make
decisions based on values expressed in a philosophical statement. Conditions of
employment are continually renegotiated as circumstances dictate. For instance,
managers and workers jointly agreed to switch from an 8-hour to a 12-hour shift
by majority vote a change that in a traditional union setting would have
required amending the formal labor contract. Team members train one another,
participate in hiring new workers, and settle most grievances on their own. From
the local union's perspective, its efforts at Sarnia are an attempt to shape the
work organization "in a direction consistent with a democratic vision of the
workplace," writes Rankin. At the same time, intense worker involvement has also
made the plant extremely efficient; output has gone as high as of 195% of design
capacity.
Union influence over training and work redesign makes sense where unions
already exist. But there are also leverage points for unions even where they do
not have the formal right to represent workers. In particular, two long-term
social trends may constitute the union equivalent of growth markets: employee
ownership and the expanding presence of women and minorities in the workplace.
In The New Owners, Joseph R. Blasi and Douglass L. Kruse of Rutgers
University chart the startling rise in employee ownership at publicly traded
U.S. corporations. This trend extends well beyond equity stakes granted to
workers in Employee Stock Ownership Plans (ESOPs), which are usually at
privately held companies. Public corporations have also been transferring large
quantities of stock to their employees through 401(k) savings plans, in which
both employee and employer contributions are invested in the company's stock,
profit-sharing payments made in the form of stock, employee stock-purchase
plans, equity reimbursements in return for salary and benefit cuts, and stock
options programs.
Blasi and Kruse calculate that 10.8 million workers own an average of 12.1%
of the stock in 1,000 public companies. By the year 2000, they estimate, more
than a quarter of publicly traded companies will be at least 15% owned by their
employees. These employee-owners could exceed the total membership of the entire
union movement. What will happen when employees discover the degree to which
they own their companies, and, in particular, the extent to which their life
savings and retirement funds are tied up in a single company's stock? Like other
constituencies, they may want to organize to demand more voice as owners.
This development should challenge unions to rethink their traditional
opposition to employee ownership. Unionists are generally skeptical about
employee ownership because they think that relying on stock ownership as a
retirement benefit (which is the normal practice in many ESOP companies) is not
a good idea. But as employee ownership spreads, some kind of institution will
have to give voice to the interests of employee-owners. It is not inconceivable
that unions could play such a role in the future.
One union that has overcome its skepticism and learned how to increase its
strength and influence through ESOPs is the Steelworkers. The severe recessions
of the 1980s left scores of metalworking companies on the verge of bankruptcy.
To avoid shutdowns, the USW began using ESOPs to mount worker buyouts. It also
has formed ESOP partnerships with management in healthy companies. As of early
1991, the union was involved in ESOPs at 25 companies, many of which are
majority worker-owned. The companies range in size from fewer than 50 to 4,000
workers.
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The USW in no sense "runs" these companies, but it stamps its influence on
them. To make sure workers aren't dependent on the price of the company stock
for their retirement benefits, the union demands a pension plan along with stock
ownership. It also requires that the company pass through full stock-voting
rights to employees and set up an extensive worker-participation program thus
guaranteeing an employee role in work restructuring. Finally, the USW demands
board representation in companies substantially owned by an ESOP. Workers and
their representatives now sit on the boards of 17 companies.
The idea of labor sitting on the board is highly unpopular with most managers
-- and with not a small number of unionists. Still, if unions really want a
voice in managerial decision making, then they must be prepared to take
responsibility at the highest strategic levels of a company. Union
representation on the board has worked out well in the USW companies, though the
union has had to invent a set of procedures to govern the practice. Typically,
the board of an ESOP company includes one or more members of thelocal union, as
well as one member nominated by the USW president. The outside representatives
usually are either technical experts --- for example, ESOP lawyers or ecnonomists
-- or prominent retired union officials from the Steelworkers or other unions.
Wary of possible conflicts of interest, the national union does not try to
influence how they vote. At most, the union directors are expected to bring
employees' perspectives to decision making.
Finally, just as corporate managers are confronting the challenge of managing
diversity, unions are struggling to find ways to meet the needs of new social
groups entering the workplace. In "American Unions and the Future of Worker
Representation," MIT's Thomas A. Kochan and Northeastern University's Kirsten R.
Wever cite the much quoted statistic that four-fifths of new entrants to the
work force between now and the year 2000 will be women, immigrants, or members
of a minority group. They traditionally have had trouble getting jobs with a
promise of high pay and career status. According to Kochan and Wever, the
challenge for unions in the 1990s is to do for this new work force what they did
for industrial workers half a century ago: "improve low-wage jobs held by people
with little labor market power who are outside the realm of traditional union
constituencies."
Some of the most creative union organizing efforts are aimed at these groups.
Consider two examples (both reported in Economic Notes, the bimonthly newsletter
of the nonprofit Labor Research Association).
In California, 18 locals of the Communications Workers of America have
sponsored an Association for Workplace Justice. Aimed at educating nonunion
employees about their rights on the job, the association operates a toll-free
Workplace Rights Hotline and conducts workshops on employment law.
The International Ladies Garment Workers Union (ILGWU) is using unorthodox
organizing techniques to reach the more than 100,000 immigrants who work in
garment shops in Los Angeles, El Paso, and New York City. They speak little
English, usually do not understand their legal rights, and are afraid to
jeopardize their jobs. Working with community groups, the ILGWU counsels these
people on their rights under immigration and labor law and teaches them English
as a second language. The union takes them in as "associate members" at dues
often as low as $1 a month. In some cases, these associate members go on to win
formal union representation at their shops. Here, the union role may be a
combination of old and new-style unionism: gaining jobs and justice for the
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unorganized and helping to train and stabilize the new work force.
Of course, if unions are to make a serious contribution in any of these new
areas, perhaps the biggest challenge of all will be an internal one: developing
their own human resources. As the global economy becomes more complex and the
efforts of companies to respond to it more diverse, unions are going to have to
learn new skills and develop new kinds of expertise. The union leader of the
future will, most likely, have to combine the political instincts of the
traditional organizer with the business savvy of the best global manager. During
the past few years, a small but dynamic cottage industry of "prounion"
investment bankers, pension analysts, MBA-trained management consultants,
work-organization specialists, and the like has grown up to help unions
represent their members at a time of constant company restructuring. This may
represent the first step in developing the broad managerial and organizational
skills that unions increasingly need.
If unions can develop these skills, all the while staying true to their basic
social vision, the economy as a whole will benefit. In the end, the challenge
facing organized labor is not 50 different from that facing business -- to
reinvent the institutions on which a sustainable, competitive economy depends.
BIBLIOGRAPHY: Governing the Workplace: The Future of Labor and Employment Law.
by Paul C. Weiler. Cambridge, Massachusetts: Harvard University Press, 1990.
Unions and Economic Competitiveness. Edited by Lawrence Mishel and Paula B.
Voos. New York, New York: M.E. Sharpe, 1991.
Democracy at Work: Changing World Markets and the Future of Labor Unions by
Lowell Turner. Ithaca, New York: Cornell University Press, 1991.
A Partnership in the Workplace. A joint agreement between Corning, Inc., and the
American Flint Glass Workers Union, January 1989.
"Industrial Restructuring and Vocational Training: A Strategic Role for
Unions?". By Wolfgang Streeck. Unpublished paper. Madison, Wisconsin: University
of Wisconsin-Madison, July 1990.
New Forms of Work Organization: The Challenge for North American Unions by Tom
Rankin. Toronto, Canada: University of Toronto Press, 1990.
The New Owners: The Mass Emergence of Employee Ownership in Public Companies and
What It Means to American Business. By Joseph R. Blasi and Douglass L. Kruse.
New York, New York: Harper Business, 1991.
"American Unions and the Future of Worker Representation". By Thomas A. Kochan
and Kirsten R. Wever. In The State of the Unions, edited by George Strauss, Jack
Fiorito, and Daniel Gallagher. Madison, Wisconsin: Industrial Relations Research
Association, 1991.
Economic Notes. New York, New York: Labor Research Association.
November-December 1990.
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THE WHITE HOUSE
Office of the Press Secretary
(Miami, Florida)
For Immediate Release
March 4, 1992
REMARKS BY THE PRESIDENT
AT BUSH-QUAYLE '92 FUNDRAISING DINNER
The Radisson Mart Plaza Hotel
Miami, Florida
8:30 P.M. EST
THE PRESIDENT: Thank you all. Please be seated. And
Zach, Dr. Zachariah, thank you, sir, for that wonderful introduction,
for all you do; and I am very, very grateful to you. I want to thank
Father Murphy for his thoughtful invocation. The National Finance
Chairman -- you met Bobby Holt -- but the National Finance Co-
Chairman, my old friend Alec Courtelis and another good longtime Jack
Laughery. To our campaign manager in Florida, no nepotism involved,
I just chose the best, Jeb Bush. (Laughter and applause.)
And may I salute one who gives us so much support --
gives me so much support in Washington, Congresswoman Ileana Ross-
Lehtinen. Where is she? Right here. (Applause.) And State Senator
Lincoln Diaz-Balart who we just met over here. Thank you, sir.
(Applause.) And Van Poole, our State Chairman. Where's Van? He's
right down here somewhere at the end. (Applause.) I salute him.
And, of course, our Dade County Chairman, our masterful Master of
Ceremonies, Armando Codina. Thank you, Armando. (Applause.)
It is a pleasure to be here tonight. And we have much
to do these next few months, because we've much to do in these next
few years. Together, we can finish what we've started and we can
move this country forward. And to do that, I need your support. And
help me win the presidency for four more years. (Applause.)
I ask your support for the simplest reason: We believe
in the same things -- jobs, family, peace -- the fundamentally
important things. And, Zach, thank you for your very kind words
about my grasp of and leadership in the field of foreign affairs.
We know that taxes are too high in this country, because
the government is too big and it spends too much. (Applause.) And
we believe in a strong defense. We believe in family and faith --
responsibility and respect -- community and country. And we know
that we put America first when we put America's families first.
The National League of Cities' mayors came to me and
they said the major problem in the cities is the dissolution, the
diminution of the American family, and we've got to do something
about that.
So often today's politicians do the easy thing -- the
popular thing. But it's the tough decisions that tell you something
important about character and principle. For I believe in things
that don't change from one election to the next. Things that guide
each one of us every single day of the year.
During my Presidency I've been blessed to take part in a
new era in America's history. And let's face it my friends, the Cold
War is over -- and America won. (Applause.) And we are the leader
of the entire world. (Applause.) And the Soviet Union collapsed,
and imperial communism is dead. (Applause.)
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- 2 -
Last week marked a special birthday: The battle of
Grito de Baire in Cuba's war of independence. (Applause.) We
support independence. We want freedom and prosperity for the Cuban
people and an end to Castro's totalitarian regime. (Applause.)
But look around the world. Castro has become an outcast
even among the dictators. And his beaches are not borders, they're
the confines of freedom. For years, the Cuban community -- and I
salute Jorge Mas and SO many others here tonight. (Applause.) The
Cuban community has energized Miami. And someday freedom-loving
people will change that island for the better -- just like America
has changed the world. It's going to happen, you can bet on it. It
is inevitable. (Applause.)
And now tonight, I want to talk about how Republican
leadership is changing America. We're changing it by setting right
what is simply on the wrong track in our country.
Take our courts, for example. There's something wrong
when the rights of the criminal are more important than the rights of
the victim. And I am proud of our tough stand on crime. (Applause.)
Although if Congress passed my crime bill, we could be doing a lot
better. We could be a lot tougher. And I'm proud of our judicial
appointments -- judges who interpret and do not legislate from the
Federal Bench. (Applause.)
And there are other things that are wrong. When
kids can't say a voluntary prayer in school or when fathers stop
coaching little league because they're afraid of liability suits,
that, too, is wrong. (Applause.) And the same when people stop
volunteering to help each other because they fear ambulance-chasers.
This isn't the way the America we want, this isn't the way it's
supposed to be, all these lawsuits out there. (Applause.)
These days a sharp lawyer would tell the Good Samaritan,
keep on walking. I want to change that, so I've proposed reforms to
our system to reduce the number of frivolous lawsuits.
Now, I don't want to get in trouble with the Bar
Association, but I once quoted to someone that line, "An apple a day
keeps the doctor away." And he said, "What works for lawyers?"
(Laughter.) Legal reform will help our legal process work. But, you
know, the real answer for solving problems is to be more concerned
with helping each other than suing each other. (Applause.)
We're going to try to correct that from this legal
reform bill I have before the Congress. Can't stop there though, not
until we reform our health care system. Not because it doesn't
offer the world's highest quality of health care, it does. I think
everybody would agree on that. But we've got to reform it because
too many people simply don't have access to health insurance. Too
many people worry that they'll lose their insurance if they change
jobs; or, worse still, if they lose their job. And anybody who's had
even minor surgery knows that health care costs are going through the
roof.
What's the solution? Not to go down the road of
socialized medicine. (Applause.) All that means is long lines and
impersonal service. And as I said at lunch, we can get that -- long
lines, impersonal service -- at the Department of Motor Vehicles.
(Laughter.) My idea, and we've got a good plan to do this, is to
make insurance available to all, rich and poor alike, availability,
keep the quality high, the bureaucracy low and preserve choice. The
last thing we want is the government assigning you a doctor.
(Applause.)
And I want you to know I'd written this before I knew
there were going to be 200 doctors here tonight. (Laughter.) But
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- 3 -
since I have your attention I have an ache in my shoulder and a small
headache and I'd like to know what to do about it. (Laughter.)
Health care reform means improving the system. And
there's another area where reform means changing the system. And I'm
talking about welfare. Let's face it: Too often welfare encourages
dependency instead of personal responsibility and the dignity of a
job. And so we've asked all the departments and agencies to make it
easier through the waiver process for state and local government to
reform policies and help broken families. We need to help make
families whole, help bring dignity back into their lives. And, yes,
that means going after the deadbeat fathers who run out on their
children and leave some struggling mother to take care of the
responsibility. (Applause.)
There are so many issues out here. But this leads me,
then, to the number one issue on the minds of all Americans: the
economy jobs. People out of jobs are looking for jobs, people who
have jobs are worried they might lose it tomorrow, worried about
their jobs, providing for their families, meeting the challenges of
paying the bills, buying a home, setting aside for retirement.
The American people want this, economy to grow -- to
create and preserve jobs. So in January, some of you may remember it
in the State of the Union, I unveiled a two-part plan. The first
part gets business moving again, upgrading plant and equipment,
hiring workers again. It uses incentives like an investment tax
allowance that speeds up the depreciation, calls for Congress to wake
up and understand how jobs are created, and to cut the tax on capital
gains (Applause.) which will create a lot of new small business jobs.
Housing and real estate have led us out of recessions in
slow times before. So to get housing back on its feet I unveiled
several common-sense proposals to get people buying and building
homes. These proposals will create in Florida alone an estimated
26,500 additional housing starts and 51,000 new construction jobs.
Now, perhaps the most easily understood proposal is a $5,000 tax
credit for first-time homebuyers, that young family together that
needs just a little more to own their first home. (Applause.)
People almost able to buy that first home could do it with that extra
$5,000 in their pocket.
Two hundred and three years ago on this very date the
United States Congress met for the first time, this very date 203
years ago. I wonder what they would think today about the House
Democrats' so-called plan. Here's the deal: 25 cents a day in
temporary tax relief for two years, paid for -- typical of them --
by a large permanent tax increase. Now, over in the Senate, the bill
the Democrats are working on is not much better than the one that's
in the House. And its centerpiece is a huge tax increase. The last
thing our economy needs now is a $100-billion tax hike, and they are
not going to get it. (Applause.)
Zach alluded to this -- we drew a line in the sand in
the Persian Gulf and we kept our word. So I'll draw another line in
the sand right now. If the Democrats send me nonsense like the bill
passed through the House, I will send it right back. I will veto it
the minute it hits my desk. (Applause.) We are not going to
inflict\ this on the American people. (Applause.) Instead of their
crazy political maneuvers, Congress ought to pass my plan to make
America more competitive. Here's the deadline: March 20th, the
first day of spring. Here's the challenge: Give American workers a
spring break. No more games, no more empty gestures. Just pass my
plan and get this economy moving. (Applause.)
Some question the need to act now. Well, let me
repeat the story of a little boy who asked why his friend's
grandmother read the Bible so much. "I'm not sure," said his friend,
"but I. think it's because she's cramming for her finals." Urgency
counts in any world. And so I'm asking Congress to also pass the
- 4 -
second part of my plan this year. It's a road map to make us
competitive.
Our plan revolutionizes America's education system.
I was reading that the average 8th-grader spends four times as much
of his time watching TV as doing homework. TV should not be
America's baby-sitter. We can change that (applause) by making
our schools accountable, and demand excellence. Our plan will get
the billions of dollars of government research and development more
quickly to private sector businesses and workers. Good education,
and then use our know-how to move our technology from the government
labs out into the competitive world.
We have a commitment to children and strong
families and our plan provides tax relief to strengthen the
family. We want to raise the tax deduction for children by $500.
Make no mistake, I want this entire plan passed this year. I want it
passed now.
Behind all of this is an idea vital to America: To
succeed economically at home, we have to lead economically abroad.
Zach put his finger on the importance of America's leadership around
the world. Some don't want us to lead -- they think we ought to just
shut out the rest of the world. And they're dead wrong. More than
200,000 jobs in Florida stem from manufactured exports. And last
year, more than $13 billion in exports went out through the Miami
Customs District.
You know that the way to create jobs is not to cut
and run not to pull back in some isolationistic sphere of
protection; rather to open markets for our exports everywhere in the
world. And I am going to fight hard in every foreign market to do
just that. It is exports that have saved us in these rough times,
and it is exports that will lead us into the most prosperous decade
that lies ahead. (Applause.) And it's working -- our overall trade
imbalance is down. Look at the figures: In 1988 the trade deficit
stood at $119 billion. Today it's dropped to $66 billion -- a 44%
drop in that relatively short period of time.
Now, I believe the American people want to hear
about how we're going to address all these challenges, our country's
challenges. And they want to hear solutions, not just a lot of
tearing this country down and telling America how bad everything is.
We have an awful lot to be grateful for in this country. (Applause.)
They want to hear about the solutions that will keep inflation low,
get our confidence high, protect the savings of our elderly.
Solutions that will win the war on drugs -- and we are making great
headway. And I salute Miami's heroic efforts in this battle against
narcotics. We are winning. (Applause.) Witness the massive
seizure of drugs in South Florida over the past several months.
Witness the fact that drug use amongst teenagers is down by 60
percent in the last couple of years.
We've got a lot to do in this country - a lot to
do. But I am absolutely confident that we will get the job done.
And I'm going to fight hard in the Florida Primary for these
people fight for what is right, and good. I saw in the eight
years my friend Ronald Reagan led America how leadership matters.
Last year, as Zach mentioned, we saw America stand tall again in the
Persian Gulf. And I believe the next five years are just too
important to entrust to the inexperienced. so I ask for your help
to keep our party strong, united so that we can win this fall.
And, yes, we have many challenges before u. But
when haven't we? We're America. We're on the move. We're a country
of change. And I guarantee you, we will meet every single challenge
-- each and every one of them -- and meet them from the great
Panhandle to the tip of the Florida Keys.
MORE
- 5 -
And, yes, there's an important primary next
Tuesday, and then there's another election in November. And I
guarantee you, I have never felt more confident about winning the
primary and winning the general election. (Applause.) I've got to
be a little careful; my mother's living up the coast here in Florida,
so I've got to be careful. But I think I've been a good president,
and I want to be your president for another four years. And I will
give you my level-best and work my heart out for the greatest, freest
country on the face of the Earth. Thank you, and may God bless
America. Thank you all very, very much. What a great evening, and a
great day in Florida. (Applause.)
END
8:50 P.M. EST
1
Every election year it seems a new expression or catch
phrase is injected into the public debate. One of this year's
favorite subjects is the notion of America First, and it is to
that topic I would like to address myself this afternoon.
As you know, some of our critics argue that putting America
first means concentrating all of our attention on internal
domestic issues, as if America can truly stand in isolation.
Well history proves that approach is dead wrong.
This great state of Michigan was once called the Arsenal of
Democracy. Industries centered here had no peers and practically
no competitors anywhere on the planet. Today, though, things are
different. Michigan's manufacturers are not just competing with
a few out-gunned adversaries. They are up against tough, hard-
nosed competitors in practically every developed country.
That's why putting America first means taking actions both
at home and abroad that will give our job creators -- especially
our manufacturers -- the tools they need to win. And that's what
we are doing.
America first means spreading freedom and democratic
capitalism throughout the world. Creating more markets an more
trading partners. Defending our friends and thwarting those who
would undermine freedom. That is why, when Saddam Hussein
grabbed Kuwait and threatened Saudi Arabia it was necessary for
us to act. We could not allow Saddam to plunge the Middle East
and perhaps the world into a prolonged war. We could not allow
one of our allies and trade partners to be subjugated. Nor could
2
we permit a terrorist like Saddam to place a hammer lock on a
huge percentage of the world's energy supply.
Just imagine where we would be today if we had listened to
those whose idea of putting America first was to let Saddam have
his way.
The middle east would be at war instead of at the peace
table. More plants would be closing, gas lines would be endless
and the cost of a barrel of oil would be XXXXX. That's not my
idea of putting America first.
Putting America first also means cutting taxes and the
federal deficit and refocusing our assets and technological
skills on making better cars and computers and other products.
But doing that has been difficult because too many of this
nation's resources have been devoted to its security. This
choice had been a tough one. But both President Reagan and I
believed that putting America first meant building a strong
national defense. And we did. We also believed that such a
commitment would change the world and, ultimately, permit us to
reorder our priorities. And it has.
Because of our resolve, communism collapsed in Eastern
Europe and in the Soviet Union. And now, for the first time in
fifty years, we are talking about shifting our resources away
from national defense, into the pockets of taxpayers and to
address other domestic priorities.
We can also talk about shifting our creative genius to more
productive aims. I firmly believe America's manufacturing might
3
can be just as dominant as our military might an now we have the
opportunity to prove it. That is my idea of putting America
first.
Manufacturing is and always will be the foundation of this
country's economy and we will not permit our manufacturing
industries to fail.
I don't care what any observer, foreign or domestic says,
America's workers are the best workers in the world and we owe
them our total dedication and support. We will keep
manufacturing jobs in America, and we will give our workers a
decent standard of living.
Now that we no longer have to devote so many of our
resources to the defense of the free world, we will make sure
that our competitors clearly understand that when America
dedicates herself to a challenge we will succeed.
But there is much to do. For three successive years, I have
sent Congress a blue print for action. Action that would
strengthen our economy, make us more competitive and put
Americans to work. But for three years Congress has played
political games.
Our capital gains tax cut proposal, which would help build
business and create jobs, has been stopped by the Democrats.
They say it isn't fair. Well their failure to act had put people
out of work and there is nothing fair about that. Ladies and
gentlemen, we need a cut in the capital gains tax to stimulate
4
this economy, create jobs, and make America more competitive, and
I ask for your help to convince Congress to give us that tax cut.
Instead of a job creation tax cut, the Democrats have
offered us class war warfare. They want to raise taxes.
Sound familiar?
In 1990, in an effort to cut out federal spending, I made
the mistake of giving the Democrats the tax hike they wanted.
And thanks to that tax increase Americans lost jobs.
I will never make that mistake again.
Last week Congressional Democrats passed another tax hike
proposal. Well, I have news for them. I learned my lesson in
1990. I will veto any tax increase legislation the Democrats
send to my desk this year, or next year or any other year.
As for their so-called tax relief proposal, even they admit
it won't create jobs or stimulate the economy. Nor will it
really provide much relief. In fact, it will provide exactly 25
cents, one quarter, per day for those who qualify.
Now, I know you folks in Michigan are very familiar with a
recent, similar Democratic proposal. If offered a nickel a week
of tax relief. Well, I assure you to people who really need a
job and the restoration of hope, there is not much difference
between a nickel a week or a quarter a day.
In fact, I'd like the Democrats to explain how, in good
conscience, they can offer Americans a quarter a day, instead of
new jobs and opportunities. You know the Democrats say they
5
oppose trickle down economics. I say: If a quarter a day isn't
trickle, tell me what is.
Our program will make a difference. And so will the other
things we want to do for this country. To me putting America
first means training our workers to meet the challenges of a new
century. And our America 2000 Program is right on target. That
plan will train our children and retrain our workers to meet the
demands of the high tech world in which they will compete.
Putting America first also means breaking the cycle of
dependency that has marred our society. In this state your
Governor and my good friend John Angler had taken a dramatic and
important step to break the cycle. He wants to give people more
hope, not more welfare. And I completely agree, That's why I
support John's program and why our administration will be doing
everything we can to overcome Congress' resistance to
substituting workfare for dependency and hopelessness.
Above all, though, putting America first means rebuilding
our manufacturing base. That is why we have again sent a growth
package to Congress and why we are continuing to move decisively,
where possible, by executive order. We believe our plan provides
the indispensable building blocks to a stronger economy --
especially in the manufacturing sector.
There are several parts of our plan that are of special
importance here in Michigan.
6
Through the efforts of Vice President Quayle, we will
continue to fight those who would regulate our industries out of
existence. Today I am happy to announce XXXXX.
Our fight to help industry also include another key plank:
civil justice reform. Too many businesses can't start up or keep
going because too many lawyers and too much red tape got in the
way. WE believe it is time to reform the product liability laws,
reform the tort laws, and replace the explosion of mindless
litigation with a little common sense.
I gave the Democrats a March 20th deadline to pass the first
parts of our program and that deadline is fast approaching. We
need action today and I promise you that if the Democrats don't
act by March 20th we will carry the battle to them. We will let
their constituents know they are losing jobs because the
Democrats would rather win elections and play politics than help
America.
America first also means not doing things that will set
America back.
To make America competitive, our goals must be to sell
American products throughout the world, not recede behind our
borders and hope our competitors go away. They won't. That is
not the way the world works today.
Today's market is a world market and isolationism will not
succeed. Nor will inconsistent policies.
7
We can't support a free trade agreement with Canada and
Mexico that allows us to fully compete in their countries and
then practice isolationism here at home.
By the same token, we cannot and will not permit other
countries to employ a double standard either. We will not
tolerate unfair practices on the part of any of our trading
partners and we are prepared to enforce that position through the
use of all the legal tools we have at our disposal, including
Super 301 power.
Now I realize that many people in this community, especially
those int eh auto industry, feel that we have not been tough
enough on our competitors. To you I make a pledge. If you focus
your energy and attention on developing new technologies and a
better product, I will focus my energy and attention on giving
you the level playing field you deserve in order to make sure
that America's auto industry is first in the world.
I believe we made a good start in January during our trip to
Japan. But it was only a start. The work must and will
continue. And I promise you that there is no higher priority in
my office today than putting U.S. industry, especially the auto
industry, back on its feet [wheels - ha ha].
To those whose siren song of doom and gloom about America,
is based on political expediency, I say this: stop complaining,
stop playing on fears and stop driving foreign cars.
Now I realize there are some politicians who think a
Mercedes is superior to a Cadillac. In fact here in Michigan,
8
not too long ago, there was a politician who thought that a jet
copter was superior to an automobile. Well ladies and gentlemen,
John Angler crossed the finish line first in his trusty
Oldsmobile and I intend to make sure that America crosses the
finish line first behind the wheels of our Oldsmobiles,
Chryslers, Fords and Chevys.
There is one last thing I want to say about the notion of
America first. I recognize that in an election year it is a
common tactic of those seeking high office to try to create the
illusion that America would be a better nation if only they were
given the chance to govern.
But I have to tell you that I feel a certain amount of
resentment and disgust when I hear people suggest that this
country is first. To those who doubt America is first, I say ask
the thousands of immigrants who try to cross our borders every
day, what they think of America.
Ask the citizens of Eastern Europe and the former Soviet
Union who visit this country seeking guidance as they develop new
democracies based on our promise of liberty, what they think of
America.
Ask the men and women who I was with last December 7th at
Pearl Harbour. The people who survived that struggle and the
second world war; the people who helped defeat totalitarianism.
Ask them whether they think America is first.
Finally, ask the men and women who last year fought in the
deserts of the Middle East to help us achieve such a stunning
9
victory over Saddam Hussein. Ask them whether or not they think
America is first.
Ladies and gentlemen, America is first in the eyes of all
freedom loving people. I am proud of this country, I will fight
for her and do everything necessary to make sure that America is
always first.
###
3/10/92
7:25p
To: JIM PINKERTON
FROM: DAN McGROARTY
8 pages tot.
Pay. 336-7117
McGroarty/Bunton
March 10, 1992
7:30 pm
[DET.2]
PRESIDENTIAL REMARKS: DETROIT ECONOMIC CLUB
DETROIT, MICHIGAN
MARCH 7, 1992
xx:00 A.M.??
[Introductory acknowledgements.]
My thanks for that warm Michigan welcome. I want to talk to
you today about the most important issue facing Michigan, the
auto industry -- and this country. It's my number one priority:
the state of our domestic economy -- especially, the
manufacturing sector.
Manufacturing in general and the automobile industry in
particular have been the greatest generator of good jobs of any
industry in American history. I'm speaking not simply about the
jobs created in the industry itself -- but the thousands upon
thousands of jobs in supplier and spin-off businesses.
We've seen the beginning of the globalization of the service
sector -- and each day brings new frontiers in the information
economy. But manufacturing is and always will be the engine-
house of this country's economy. No nation will ever lead the
world without a strong manufacturing base.
Michigan and our country have been through some tough times.
It's time for straight talk. / Before I focus on some of the
specific problems we see facing the manufacturing sector, let me
mention some of the things in our economy we can't afford to
overlook. Interest rates are lower now than at any point in the
past twenty years. Inflation -- the stealth tax that hits every
2
American in the pocketbook -- inflation is under control. For
all our troubles, America is still the world's dominant economy:
the one market other countries want to crack -- the economy
producing goods in demand in every country, every corner of the
world. // Right now, we're in the middle of a record export
boom -- one that's narrowed the trade deficit from 119 billion to
66 billion dollars in the past four years alone. Not only are we
number one in the world today -- but we've been gaining ground,
not losing it, to our competitors. [STATS/EXAMPLES.] These are
fundamentals we can build on -- the raw material to manufacture
the solid, strong recovery we know we'll see.
There's no sense pretending things are better than they are
-- but there's also no sense underestimating our strengths or
exaggerating our weaknesses. The simple fact is, we face a
future with both challenges and opportunities. In the past three
years, we've helped bring about change that has reshaped our
world for the better.
I don't think there's anyone in this room who doesn't
believe that the key to America's economic future is our ability
to lead -- to succeed in the world economically, as we have
politically. That's what my economic plan is all about.
Back in January, I sent Congress a specific short-term
action plan to stimulate our economy -- to spark a recovery as
early as this spring. When I sent that plan to Capitol Hill -- I
set a deadline. One short week from now: March 20. You know
the story. Congress barely gave my plan a glance before they got
3
busy on their own agenda: a $90 billion dollar tax increase that
will cripple this economy. You can count on this: I will veto
any tax increase the Democrats send my way -- the minute it hits
my desk.
At the same time, I sent Congress a broader, long-term plan
to help make America more competitive. When I say competitive
here's what I mean:
We must provide our children with a 21st Century education -
- today. That's the idea at the heart of our America 2000
strategy: our plan to revolutionize -- to literally re-invent -
- America's schools.
We've got to move forward on civil justice reform. Too many
businesses can't start up or keep going because too many lawyers
and too much red tape get in the way. Frivolous lawsuits sap our
economy and strain our patience. It's time for reform -- time to
replace the explosion of mindless litigation with a little common
sense. //
We've got to reform our welfare system -- break the cycle of
dependency that holds down so many in our society. Here in
Michigan, your Governor John Engler has taken a dramatic and
important step to replace despair with dignity. He wants to give
people something more than a welfare check -- he wants to give
them a way out. That's why I support John's program. Our
administration is determined to overcome Congressional
resistance. We will push forward on welfare reform.
4
And we've got to work to open markets around the world to
American goods. // Earlier this year, I took some of the people
here today with me to Japan. We all took a little flack in the
press for that trip -- but the fact is, that trip was a
successful mission, the beginning of a new push to open markets
that for too long have been closed to quality American goods.
We've already seen results: new markets for American
computers, glass and timber. That trip marked the beginning of
an important process -- a process that is key to this country's
economic future and one I will do all I can as President to
advance. It signalled to our trade partners that America is
serious about free and fair trade. Level the playing field, and
American workers and American business can compete with anyone.
//
So far today, I've talked about my plan -- my plan to get
this economy growing again and to get this country ready for the
challenges of a new century. But I want to make sure that when
you walk out of this room today -- you know exactly where I stand
regarding the future of this country's manufacturing base.
Let me tell you what I can do -- and I'll give it to you
straight:
I will not allow the federal government to contribute to any
deterioration in America's manufacturing base.
I will stop counter-productive regulations that cripple your
freedom of action and cost this country jobs. And I will veto
any CAFE legislation that costs a single American job. //
5
I will veto mandates that pass the buck to business and hurt
competitiveness.
I will veto job-destroying tax increases.
I will fight for job-creating incentives.
I will fight on your behalf, to open markets around the
world to American products -- and I will fight against
protectionism.
I will champion education reform -- to train the kind of
skilled workforce you'll need to compete in the 21st Century.
That's what I will do. You have my word on it. And now,
here's what you in the business community must do. Some of the
things I'm going to say may strike a nerve. But it's got to be
said.
You've got to invest in your future: See past the next
quarter's balance sheet -- look to the long-term.
You've got to train your workers -- give them the skills
they'll need to cope with a changing workplace -- take a stake in
our schools and help our kids take a shot at excellence.
You've got to continue to build on recent progress that has
labor and management working as allies -- not adversaries. No
company can compete when it's at war with itself.
You've got to fight for foreign markets -- make the
commitment for the long-haul. Don't expect government to ride in
to the rescue: Because there's one thing I won't do: and that's
give one industry a leg up on all the others. Government can't
- second-guess the marketplace by picking winners and losers.
6
All this week I've been speaking about responsibilities --
about the responsibilities of each individual American citizen,
about the government's responsibilities to the people. So let me
add a word today about responsibility in corporate America --
about a practice that's managed to raise the blood-pressure of
every working American, and fuel a cynicism about business this
country just cannot afford. I think you know what I'm talking
about. How many millions of people here in Michigan and across
the country must have asked themselves how a company can lose
money, lay off workers -- while its executives pull down these 7-
and 8-figure pay packages? //
If responsibility has any meaning in the business world, it
starts by linking pay to performance. Performance measured means
performance improved: People back to work. Assembly lines up
and running. Putting out a superior product -- and bringing in a
profit: do that, and any executive can lay claim to a legitimate
bonus.
The last thing I want to see is the government setting
salaries. But when it comes to executive pay, there's nothing
wrong with a little shareholder democracy. That's why I've asked
the SEC to expand shareholders' access to information -- to give
them a stronger voice in corporate councils. //
Let me say in closing: I recognize that it's an election
year. When the rhetoric heats up, it gets a little tough
separating fact from fiction.
7
But I sincerely believe: If we want to succeed economically
at home -- we've got to compete economically abroad. I bring the
same approach to the economic challenge we face today that I've
brought to every challenge we've met -- and mastered. I want
people to say: If you've got a fight you must win, if you've got
a hell of a problem -- George Bush is the right man to tackle it.
George Bush will get the job done. //
Thank you -- and may God bless the United States of America.
# # #