Surprise: Obama Administration Telling General Motors How To Operate Plants

• December 23, 2009

Back in November, in the midst of the auto bailout circus, Obama assured the public that “we are not in the business of running a car company. We’re not getting involved in day-to-day management.” But according to the Wall Street Journal today, it appears as though the Obama administration is involved in the day-to-day running of the car companies.

Starting Jan. 4, General Motors Co. plans to do something unprecedented in the U.S. car industry: It will run its assembly line here around the clock on a permanent basis.
While common in other industries, not even car-efficiency benchmark Toyota Motor Corp. operates its plants routinely with more than two shifts. Car-assembly lines need too much scheduled maintenance and restocking for such intensive production to make sense, many industry experts say. …
The Obama administration auto task force that oversaw GM’s reorganization last spring was startled to learn that the industry standard for plants to be considered at 100% capacity was two shifts working about 250 days a year. In recommending that the government invest about $50 billion in GM, the task force urged the company to strive toward operating at 120% capacity by traditional standards.
But industry manufacturing experts are skeptical, noting that the federal task force had limited automotive experience. “Do those guys understand the business?” asked Ron Harbour, whose Harbour Report is a widely followed analysis of auto-plant efficiency.

So, the Obama administration has pressured General Motors into what industry experts are viewing as an absurd level of operation. And make no mistake about it, this wasn’t an “urging.” The federal government now owns General Motors. GM is now Obama Motors, and Obama has decided he wants the company’s plants running at 120% capacity.
But rest assured that the government isn’t involved in day-to-day management.

Tags: Asshats, Domestic Issues, Politics

http://Array sayanything-5371

People who can’t figure out how to microwave popcorn telling others how to run a huge corporation. What a country.
11B40

Greetings:

I spent my work life in the printing industry. Even though it’s a custom manufacturing industry as opposed to the mass manufacturing of the auto industry, two full shifts were always considered optimal primarily because it always allowed for supplemental overtime in the case of a demand surge. If you’re running three full shifts, there no access to additional capacity.

Overall, this anecdote sounds like a version of what happens when the owner’s progeny get out of college and come into the business. It’s kind of he went from son of the owner to vice president of operations in just one year.
RW

This is great news!! GM must have a huge back log of orders. The auto industry is recovering, we just haven’t heard the news. I bet there waiting till next year so Obama can make the anouncement in a BIG prime time speach.
calriz

The basic reason they are bleeding is because: their heavily paid union workers make inferior cars that no one wants to buy. Now the governement steps in and says ‘let’s go out and make more of them’!! Sounds alot like “spending your way out of Bankruptcy”
sayanything-43

I’m sure that Obama is putting forth all the skill that he exhibited when he brought the Olympics home to Chicago.
http://proof-proofpositive.blogspot.com/ proof_positive

Operate at 120% of capacity? That brings to mind the stories of people who didn’t want to buy a car made on a Friday afternoon or a Monday morning! Would “quality” still be “job one”? Oh, wait! That’s those other guys!
Dr. Rick

They’ll be operating at a loss, but make it up in volume?
jimmypop

its not about work…….. its not about production worries if the plant shuts down because of a line repair…… its about paying three shifts of union people. period.
ghHorse

Maybe they should put something in the death care bill that requires Americans to buy a Chevy. No one should buy anything from Government Motors.
http://SayAnythingBlog.com The_Whistler_ofnd

Working at 120% capacity makes no sense. How do you hire two tenths of a
shift.

I suppose you could increase your labor costs 50% and require overtime.

That sure wouldn’t make you profitable.
Nobama

Only 9% of Obama’s cabinet has any experience in the business world – the lowest percentage by far of any president. (Most cabinets have about a 60% business makeup).
david

Who would wnt to buy a car that had doors ( ears ) from the front to the back bumper???
sayanything-15427

Perhaps they are going to overproduce *greencars* which will drive down the price so more people can afford them… and Yes, even after bankruptcy and restructuring there were almost NO changes to labor contracts at all.

Thats what happens when you have Unions running the business, they will figure out quickly that being the boss is much harder than going on strike. Just ask Barry, he has no clue how to do anything but fight the MAN, and now he is the MAN.
PHILIP

I’D LIKE TO HEAR AN EXPLANATION FROM ANYONE THAT VOTED FOR THAT GUY!!
Rock

I can remember a time when you never bought a car that came off the assembly line on a Friday, or Monday. Friday built cars where rush jobs in anticipation of the weekend, Monday cars where put together by many with weekend hangover’s. A uncle from the line clued me in. No way I buy Government Made Cars. Suspect that many will have some sort of snoop devise, such as On-Star but more intrusive.
http://proof-proofpositive.blogspot.com/ proof_positive

Will there be a market for the extra cars built with the extra capacity, or will a possible oversupply cause the price (and profits) to go down on what they make?
sayanything-15427

There is only one reason to run at 120% capacity, Union Jobs.
sayanything-7775

Did GM go bankrupt because they couldnâ€™t build enough vehicles? I donâ€™t remember hearing about any shortages. I thought they went bankrupt because they had too much of their capital tied up in wages, operating costs, and expensive paperweights.

The industry considers 2 shifts as 100% capacity. In 2 shifts with X number of people, they can build the quantity they require. The quantity that they can sell, no more and no less, while allowing time to be used as needed (maintenance and/or overtime).

In order to work at 120% capacity, one of two things would have to happen. They could produce 20% more product than they need (tying up their capital in unmovable inventory). Or they could produce the same amount they need, with 20% more labor (intentionally lower productivity). Either approach to achieve 120% capacity (20% more than needed) ends in lower efficiency and higher costs.

But industry manufacturing experts are skeptical, noting that the federal task force had limited automotive experience.
They donâ€™t need experience. Barrack Obama broke that barrier. And besides, heâ€™s the President and he knows these guys, just trust him.
sayanything-32786

lol…”quality,” why bubba, whatever do you mean? You remember that great government produced car…the Yugo!
caldwell58

It is easy, number of plants X avg. no of workers = a whole crap load of saved/created jobs.
sayanything-32786

Well Kevin, I see you haven’t had your ration of Kool-aid today…
http://sayanythingblog.com robport

Well, at least going back to Teddy, anyway.
sayanything-32786

I’m tellin’ ya, you just don’t understand. As soon as the “One” makes nice with Akmadinanutjob and we’re great friends (remember how they would sit down and talk thru all our differences), GM will have a huge market in Iran! lol
Woody_UMO_82

If they took over the shoe lace industry, they would be doing the same thing. There is no better way to drive the price of, and the profit from, than increasing supply while demand remains low. Alfred B. Sloan is spinning like the Whitehouse electric meter with all the Christmas lights on.
sayanything-3444

This absolutely has nothing to do with anything more than getting a few more union goons on the gravy train. Interestingly though, if the geniuses at GM were so good at running an auto company, why did the US taxpayers have to bail them out to begin with?
sayanything-32786

Oh come on fellas, they really know how to run things…like, for example, ugh, like, oh yeah…ACORN.
sayanything-32786

Hey Jo, easy on the coffee, ok?
sayanything-2361

“and it’s horrific that the “geniuses” now running GM are not aware of this basic quality principle.”
We’ve got a whole administration that has never held a job, never worked on the line. I’m regretting my over exuberant naivete in thinking Obama was another Carter. Carter atleast held jobs before going to govt.
johanngutenberg

Yes you can: put the “CSMF” out of office. Stop wasting your time commenting on a “Chicago Scumbag” who hasn’t even ran a “Convenience Store”! Make sure you take out Emanuel, Axelrod, and that pos Gibbs.Those three are the “Geppetto” running Barry. I am in the process of running the “End Game” on them! Remember, only “Coward’s” set on blogs and complain!! Real Humans take care of the Problem!!!!!!
sayanything-101

Obama wants to destroy industry, so he can remake it in his twisted image.
http://sayanythingblog.com robport

This administration has less private sector experience than any administration before it.

http://sayanythingblog.com/entry/the_obama_administrations_lack_of_private_sector_experience_in_visual_forma/
sayanything-4253

You took the words right out of my mouth. Why in the world work more shifts producing products which aren’t selling?

That makes no sense at all.

Usually if you aren’t selling enough you are scaling back production so you can eliminate overhead.
sayanything-6955

Not sure the reasoning behind running a plant at that pace, being GM is still bleeding.
somewhereingeorgia

heck, it only took Nobama one year to triple the debt, democrats are useless , with little or no education in the area of economics. The revolution is coming, I’m glad im not democrat.
bikebubba

One of the biggest reasons very few industries run 24/7, beyond the reality that plants need maintenance, is that people make a LOT of mistakes at 3am. Obama is forcing GM to take a nasty poison pill to their quality control.

Even groups that NEED to have something running at that hour–power generation and steel mills–tend to cut as much back as possible in the wee hours of the night to prevent this. Very little good happens between 2am and 6am, to put it mildly, and it’s horrific that the “geniuses” now running GM are not aware of this basic quality principle.
http://sayanythingblog.com robport

Very little good happens between 2am and 6am, to put it mildly, and it’s horrific that the “geniuses” now running GM are not aware of this basic quality principle.

Well we’re talking about bureaucrats, which generally means people who start at nine, take a two hour lunch, and knock off at 4.
sayanything-4416

A lot of good it did bush.

Did his “businessman’s cabinet” advise him to double the debt in six years?

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Surprise: Obama Administration Telling General Motors How To Operate Plants

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