Are U.S. Automakers Out of Gas?
LINDA WERTHEIMER, host:
This week Bill Ford, the chairman of the Ford Motor Company, announced that he will forgo all compensation until Ford is profitable again. He may have to wait awhile. Ford and General Motors are facing increasingly difficult financial reversals. Their debt ratings are at or near junk bond status on more than one index. Both companies are trimming costs, mostly through attrition. In Baltimore this week, GM closed its van factory, a plant that had been open since 1935. We're going to talk about what has happened to the industry in recent years, and, perhaps, what might fix the problem. But, first, we're gonna talk about company morale.
Bob Cebina has worked for Ford for 32 years. He heads UAW Local 723 in Monroe, Michigan, and he joins us from there.
Welcome, Mr. Cebina.
Mr. BOB CEBINA (Ford Employee): Thank you.
WERTHEIMER: How do--how are people feeling where you work?
Mr. CEBINA: Well, they're concerned about the economy, of course, and health care, jobs going overseas and the pension plan. They're concerned that they're gonna have a future with this company, especially the workers that got less than 15 years seniority. We employ, just on our plant alone--counting salary and hourly, we're over 2,000 members.
WERTHEIMER: So what are people doing, not shopping, not going out to dinner and not sending their kids to college?
Mr. CEBINA: Not buying as much--exactly--not going out to eat as much, watching how they drive their vehicles so far as gas consumption goes, worrying about if they got enough money to send their children to college, retirement--how they're gonna retire, if there's going to be enough money there.
WERTHEIMER: What do you think it would take for Ford to come back?
Mr. CEBINA: A great PR system to let the public know that we have viable products. I believe our products are just as good as the competition's out there, from Europe or Japan.
WERTHEIMER: What do you think about those foreign vehicles like the Japanese cars, for example? Do you think they really do things, some things, better than Ford does?
Mr. CEBINA: I think their quality control systems are better than ours.
WERTHEIMER: I wonder if there's something that you think that the workers and UAW can do. What about taking some hits on pensions, on health care, on some of the big programs that the UAW has over the years succeeded in getting for its workers?
Mr. CEBINA: I think they should stay. Health care's not going to be solved by--at the bargaining table, through negotiations. This is much bigger than that.
WERTHEIMER: What about the product? Anything to be done there? Anything that could help Ford?
Mr. CEBINA: Buy Ford Motor Company products. Both management and hourly, we've been preaching that message to our managers on the salary side for quite a while now, because we have managers that are buying non-Ford products and driving non-Ford products, so that doesn't set well with us on the union side.
WERTHEIMER: Have you ever considered a foreign car?
Mr. CEBINA: No. Never. That's my pension and my paycheck.
WERTHEIMER: What about you? Are you looking forward to your retirement?
Mr. CEBINA: One thousand, one hundred and 20 days.
WERTHEIMER: But you're not paying much attention to it.
Mr. CEBINA: No.
WERTHEIMER: So when you get to the 1,121st day or whatever it is, do you think Ford will have recovered some ground by then?
Mr. CEBINA: Yes, I do. They have to. They have no choice.
WERTHEIMER: Bob Cebina is president of the UAW Local 723 in Monroe, Michigan.
Mr. Cebina, thank you.
Mr. CEBINA: Thank you.
WERTHEIMER: Micheline Maynard is a New York Times reporter and the author of "The End of Detroit." She joins us from the studios of WUOM in Ann Arbor, Michigan.
Micheline Maynard, welcome.
Ms. MICHELINE MAYNARD (Author, "The End of Detroit"): It's my pleasure. Thank you, Linda.
WERTHEIMER: Could you first of all help us to prioritize what's ailing Ford and GM? We know that on the list would be gas prices, production costs, health care, debt, pensions, and, of course, cars that are not selling. Could you tell us which are the most important of those?
Ms. MAYNARD: Well, I think the last shall be first. I think the basic problem that Detroit has is that it's out of touch with the American car market. I think there are a few exceptions. General Motors has done well with Cadillac. Chrysler's had some cars that are selling pretty well. But, by and large, I don't think that Detroit is in touch with the American consumer anymore.
WERTHEIMER: But still Ford is doing better than GM is doing. I mean, what does Ford have going for it that GM does not?
Ms. MAYNARD: Well, a couple of things. First of all, Ford has real financial stability. Their debt rating, even though it's down, is better than General Motors'. They have global operations that are doing better than those of General Motors. And they also have some vehicles that have done pretty well. Their Ford F-Series pickup truck is the best-selling vehicle in the country. And even as gas prices go up, people need pickup trucks who own businesses and so they're able to sell millions of those pickup trucks. I think another issue with Ford is when you're a smaller company you can fix things more quickly, and Ford has actually been on a drive to fix its problems for the last few years.
WERTHEIMER: Is there some kind of a prescription for these big American companies, something that might fix both of them or either one of them?
Ms. MAYNARD: Actually, I think there are a couple of things that they can do. One of the things that they have to do is get really, really real about quality. They can't just introduce cars that are competitive in the first year of ownership. Some of the surveys that I've seen show that after three years, and especially after five years, the number of defects in American cars and trucks are still higher than those of the Japanese. I think the second thing is they've really got to get real about the environment. And another thing that has to happen is there's really got to be an effort with the United Auto Workers Union. I think that the UAW is a very lucky union. When you look at what's happened to unions in the airline industry, when you look at 25 percent pay cuts, the UAW is basically the--dare I say it--Cadillac of labor unions these days. You know, they're going to have to come to the table at some point, literally, because this is not a problem that the Detroit companies can fix on their own.
WERTHEIMER: Could Detroit sink without a trace? Do you think there could be a day when the US has no major automakers?
Ms. MAYNARD: No. They're too much a part of our structure in the United States. But I think there could be a day when one of them disappears, and I think there could be a day that they're much smaller than they are today.
WERTHEIMER: Micheline Maynard is a New York Times reporter and the author of "The End of Detroit." She was speaking to us from the studios of WUOM in Ann Arbor. Micheline Maynard, thank you very much.
Ms. MAYNARD: Thank you very much, Linda.
WERTHEIMER: And you're listening to WEEKEND EDITION from NPR News.