Episode 880 – Battle of the Plugs, Workers Declare War, R&D = Reduction and Dismissal

May 1st, 2012 at 12:06pm

Runtime: 9:27

Automakers and other organizations are fighting a battle that’s reminiscent of the clash between Westinghouse and Edison.  There’s lots of labor strife going on in the automotive world today.  GM is laying off a huge number of workers at its tech center in Warren, Michigan.  All that and more, plus a test drive of the 2012 Toyota Yaris.

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Welcome to Autoline Daily for the first of May.  I’m John McElroy and here’s the news.

BATTLE OF THE PLUGS (subscription required)
In a battle reminiscent of the fight between George Westinghouse and Thomas Edison over alternating current and direct current, automakers and other organizations are quarreling over what type of plug to use for EVs.  WardsAuto.com reports there are three different quick-charge connectors in the running – one from Japan, another advocated by European OEMs and a third proposed by the SAE.  While they all argue, governments and businesses are already installing different types of public chargers, meaning EV owners could soon run into problems trying to plug-in their cars.

Lots of labor strife in the news today. In the U.S., Caterpillar workers that manufacture hydraulic parts rejected concessions on health care and the use of temporary employees and are planning to go on strike.  In Canada, Chrysler temporarily shut down its minivan assembly plant due to a supplier strike with the Canadian Auto Workers Union. And in Germany, IG Metal workers walked off the job at Daimler’s Rastatt plant. Porsche and Audi will soon face problems too. German workers want a 6.5 percent raise and better treatment for apprentices and temporary employees. Of course none of this should surprise management. You can’t go around bragging about big profits, then turn around and tell workers they need to cough up more concessions.

Honda is developing technology to smooth out traffic jams. The system analyzes the driving pattern of a vehicle to monitor how it accelerates and decelerates. A display on the dashboard helps the driver accelerate and brake more smoothly to prevent trailing cars from bunching up or stretching out behind it. The idea is to get all the cars travelling at a constant speed. Initial tests show that the average speed of the vehicle was increased by nearly 25 percent and fuel efficiency of the trailing vehicles was increased by 8 percent. The company says even more improvement is possible if cloud servers and adaptive cruise control is used. Honda will conduct its first public road tests starting this month in Italy and Indonesia.


And speaking of technology designed to make driving less of a hassle, autonomous vehicles keep moving closer to reality. Last week Google said it’s ready to partner with an automaker to develop the technology and now Cadillac is showing off its own driverless system called Super Cruise. It’s not fully autonomous but it can steer, brake and keep the vehicle centered in the lane while on the highway. As of now, it can only work during good weather conditions. The system is comprised of radar, ultrasonic sensors, cameras and GPS data. Super Cruise is currently being tested in an SRX and the company says it could be ready for production by the middle of the decade.

At a time when automakers are worried they can’t get the technical talent they need, General Motors is laying off one quarter of its R&D workers at its Tech Center in Warren, Michigan. GM says those 100 layoffs are part of a larger R&D restructuring that will also close an R&D center in India, which opened in 2003. Here’s my Autoline Insight, GM has quietly been moving more and more R&D work to China, where it has opened three tech centers and hired hundreds of engineers in the last decade. This is a disturbing development. The word we get from insiders at the Warren Tech Center is that morale is bad, management is mad, and that it should come as no surprise that the company is laying off scientists, engineers and technicians in the United States.

At a conference sponsored by the Wall Street Journal yesterday, GM CEO Dan Akerson said the company’s executive in charge of product development, Mary Barra, is clearly a candidate to replace him. And that brings us to this week’s series of looking at who will win the race to replace Dan Akerson. Since he was saying Mary Barra is in the race, let’s take a look at her background. Mary Barra is 50 years old and largely came up on the engineering and manufacturing side of the business. She started with GM in 1980 at the Pontiac division as a co-op student from Kettering University. But it was especially in the last decade that her career really took off. She became executive director of vehicle manufacturing engineering in 2004 and promoted to vice president in that position in 2008. In 2009 she was name vice president of Global Human Resources, and in 2011 became senior vice president of product development. She is also on Opel’s supervisory board. It would be a real coup for GM’s board to name Mary Barra as the first female CEO in the automotive industry. But she faces some formidable competition, and we’ll be introducing you to them the rest of this week.

Coming up next, a look at the Toyota Yaris.

(Our review of the 2012 Toyota Yaris is only available in the video version of today’s program.)

In the first quarter of this year, sales of the Toyota Yaris were up nearly 50 percent in the American market.

That wraps up today’s report, thanks for watching, we’ll see you tomorrow.

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36 Comments to “Episode 880 – Battle of the Plugs, Workers Declare War, R&D = Reduction and Dismissal”

  1. David Sprowl Says:

    Wait-a-Minute!!! What salaried help is now complaining about upper management and moral is bad?! All because their jobs are going over seas! Hmmmmmmm me thinks the shoe is now on the other foot. Rank and file have been warning us all for well over 30 years that this is bad.

  2. Chuck Grenci Says:

    As long as the power being supplied to the electric charging port is uniform then adapters can be added to overcome the differences of end-plugs. But really, it would/should be easy enough to produce a single-type plug (throughout the industry); I’m guessing egos at work here.

    I don’t have a problem with a woman CEO (but am against an appointment for the sake of an affirmative action or as John said, “It would be a real coup for GM’s board”), that’s a wrong decision on so many levels; let the best person win.

  3. HtG Says:

    IBM, HP, IMF, Xerox. Et tu, GM?

  4. Lex Says:

    How ridiculous of Honda to waste time and resources developing technology to smooth out traffic jams. “The system analyzes the driving pattern of a vehicle to monitor how it accelerates and decelerates.” What about the joker who jumps in when you leave atleast one car lenght infront of yourself and the car you are following? Will it prevent him/her from doing this maneuver? Will it report your driving habits to the local police also?
    We all know that John McElroy love’s the idea of autonomous vehicles, where this type of engineering would integrate very well. We do not live in Japan where people follow the rules of the road and common courtesy! I realize that the most important nut in a vehicle is the one behind the wheel! We have plenty of nuts out on the road today. Driving is not a “Right” it is a “Privilege”. It allows us to navigate our own destiny. If we let the machines become our nursemaids what’s next “The Terminator”?

  5. pedro fernandez Says:

    So, we bail out GM and they lay off American engineers and hire Chinese ones, why didn’t China bail them out instead? BTW re the Yaris, despite its poor showing against others in the segment, it’s got one thing he others can’t even claim, reliability and high resale value, I know someone who was looking to buy a used one and ended up buying new.

  6. pedro fernandez Says:

    Let’s hear from all the GM apologists on this one, please! there has to be a reason for this, are the Chinese engineers better than the American counterparts or do they work cheaper and more efficiently? or will GM eventually move there and make Beijing their new headquarters? While some of the “foreign’ brands are building research and manufacturing here, GM moves to China, NICE!

  7. C-Tech Says:

    Since EV’s are now in their infancy, the “common plug” issue is the least of their concerns. Most automakers will adapt their designs to the local market and few if any owners will take their EV’s with them as they move from continent to continent.

    We will see if bonuses will quell the masses at the auto suppliers and auto companies.

    Cadillac’s supercruise looks interesting, we see how takers and at what price?

    Don’t think the Honda traffic solution will work well in the U.S. because there are too many bad and immature drivers, but for the rest of the world, they could have useful technology.

    The layoff of engineers and scientists at GM is more troubling than the investment in Isuzu. I can only hope that these “laid-off” workers can unleash their talents outside of GM, but still inside the U.S.

  8. Jonathan Brown Says:

    Unacceptable that american workers are losing thier research and development jobs in america and being replaced by chinese workers..

    Very disappointed.


  9. C-Tech Says:

    It appears the Yaris is one Toyota that sells on the Toyota reputation from other vehicles only. It may only be a matter of time before it is overtaken by the competition.

  10. dcars Says:

    I think GM needs to take John’s recommendations and replace Ackerson soon. Laying off Good paying R&D people is a terrible. Especially when they just gave Ackerson a raise and their latest sales numbers were not good.

  11. Lex Says:

    GM is laying off American Engineers to hire more Chinese Engineers. This is why we have a lack of interest in the Engineering Profession here in the US. If you can not find or keep a well paying job in engineering why go to college for it.
    Pepsi is doing the same with it’s American Information Technology Jobs. The Pepsi CEO is sending these jobs to India. If we as American Consumers do not voice our opinion or displeasure with these jobs going overseas by not buying their products then we are the fools! Shame on GM for this practice after they took US Taypayer money to bail themselves out. The board of directors on these companies are UnAmerican to say the least! Let them fail, boycott GM & Pepsi!!!

  12. HtG Says:

    Better start looking at those ankles, Pedro. GM is an international corporation, needs to align its spending with consumer and govt needs, and we in the US aren’t the biggest deal anymore. I notice a lot of jobs in India are also going to Ganesh.

    Now, who haven’t I offended yet, today? Ben, I will understand if you have to click on your light saber.

  13. pedro fernandez Says:

    During Carter’s malaise era, Chrysler let go of their best engineers and researchers and soon after, they dropped to the bottom of quality and reliability just about all over the world, and look how long it has taken them to start a comeback.

  14. pedro fernandez Says:

    #12 but htg they were only too happy to take OUR bail out dollars, not the Chinese Yuan.

  15. HtG Says:

    14 and the cash for clunkers money went overseas as well. The article John linked to says GM is realigning its research jobs, and that some laid off people may find other jobs within GM. GM needs the right mix of skills, and what do you think happened to the management types Lutz showed the “GM Way” out the door?

    The sun rises in the east.

  16. Kit Gerhart Says:

    When I was working for GM/Delphi, we had some Chinese engineers, but they came here for the jobs. Are there American engineers going to China for jobs?

  17. pedro fernandez Says:

    16 I doubt it, they’re looking for cheap labor unless they can get the engineers who move there to work for less $$. I, for one, would not go along with that crap. Leave my country to go work for less money in a commie country? NO WAY. I’d rather become a bartender or a barista.

  18. Kit Gerhart Says:

    I was not being serious in #16. Most of our Chinese engineers came here for school, especially grad school, and got jobs in the U.S. if they could. Most that I knew stayed here, but a few went back home after a couple years.

  19. pedro fernandez Says:

    TTAC reports on April sales and the Detroit 3 had lower sales than April 2011 and Toyota and VW were the best performers, VW by a big margin, these VW buyers are crazy! Exception was Chrysler pushed up by Fiat sales

  20. Jim Thykeson Says:

    Your absolutely right John; the unions have given up half their wages & benefits, so I sympathize with the last good union standing; that being the Germans. From a workers standpoint they were viewed as (pardon the pun) the Mercedes standard of the world in labor-management relations, so this is indeed…sad. If this keeps up we’ll have auto-workers making what field workers make. Whats next?, trailer housing at the plant?

  21. pedro fernandez Says:

    #20 Welcome to the world of corporate greed, if the workers ask for more, there is good ole Mexico just south of the border with millions of workers willing to take them jobs at lower salaries and benefits. Or in the case of white collar work, you got China and India.

  22. Buzzerd Says:

    Pedro – once again with the reliability, ALL the manufacturers can claim it, get out of the 90′s already.

  23. pedro fernandez Says:

    No thanks, when I have to replace mine I’ll get something else from the 90′s as well, with less miles, of course!

  24. Buzzerd Says:

    Earlier in the Year Caterpillar demanded a 50% pay cut from employees at there Ontario locomotive plant. After a short strike the closed the plant for good. The year before the Ontario gov. gave the plant a subsidy after assurance from Caterpillar that they were going to keep the plant open. But I guess cuts have to be made when you only made 5 BILLION dollars the year before. http://www.guardian.co.uk/business/2012/feb/15/caterpillar-canada-anger-emd-rail-factory

  25. Buzzerd Says:

    well pedro at least you have an open mind.

  26. Jim Thykeson Says:

    Pedro should know that the ‘maliquedoras’ were a big thing for a few yrs. before the majors ran to China for even cheaper labor. Hell, before we really benefitted from NAFTA they had moved to the far east cutting Notre Americana out of the loop altogether! Ole!

  27. XA351GT Says:

    Does this mean that GM intends to just copy other manufacturers designs now that they are hiring Chinese engineers? That seems to be what they do best. Usually not even good copies at that. Csn you hear that? It’s the sound of GM stock crashing.

  28. pedro fernandez Says:

    Excellent point, XA.

  29. jesse Says:

    IT SEEMS THAT ANYONE AND EVERYONE WHO TAKES THE HELM AT GM IS SIGNING THEIR CAREER’S OBITUARY.NOBODY SEEMS TO LAST IN THAT POSITION.GM shipping jobs to China…well,well.Who was it that bailed their butt out…oh that’s right..it was ME AND EVERY TAXPAYER LIKE ME!Now they are shipping jobs overseas to perhaps save a buck or two and add it to the botton line??They should choke on it!

  30. cwolf Says:

    T.Bejma: If’n yer here,what can you report about the engr. jobs going to China? I think GM’s Euro situation really hurts,US sales are,perhaps,not as strong as anticipated and now that new models are out,cutting R&D is a quick way to reduce overhead.

  31. Jon M Says:

    GM is cutting jobs and opening up tech centers in China. There are those undeserved tax payers funded bailout funds at work.

    As for the Yaris, if I want something well built and engineered for dependability and decades of reliable use, then the Yaris over the Fiesta, Sonic, and Accent it is.

  32. EdK Says:

    Nitpick for the day: torque is measured in lb-ft, not ft-lbs, ft-lbs is the measure for work.

  33. EdK Says:

    When I got laid off from GM in April of 2006 supposedly my design/release engineering job went to Mexico, but the reason wasn’t cost, it was that GM wanted to lay off all the old timers who made the most money but the only way to avoid an age discrimination lawsuit was to lay off a little of everybody else, and I happen to be in the wrong group at the wrong time. GM never ceases to amaze me at how badly they treat their employees, especially the ones that actually know about and care about cars.

  34. T. Bejma Says:

    Don’t know the story on layoffs. Been in California the last few days promoting the Volt. Will see what I can find out.

    Remember, this was ust John’s interpretation, there a
    is no confirmation that these jobs are moving anywhere.

  35. NannyState Says:

    Isn’t GM the company we bailed out with “OUR” United States Tax Dollars!!!???

  36. HilD Says:

    VW/Audi increased sales, just goes to show what a few good turbo diesels in the line up can do. Americans love thier torque.