Saturday, October 06, 2007

GM: Market Share Falling, But "Job Share" Rising?

The chart above is from the Level Field Institute's 2007 report, in which it says:

"Our car-by-car analysis also accounts for differences in market share. In other words, an automaker with 15% market share that employs 20% of U.S. autoworkers is overperforming on jobs, while an automaker with 15% market share that employs just 10% of autoworkers is underperforming."

That's a very interesting definition of "overperforming and underperforming on jobs," isn't it?

GM has a 23% market share and 29% of the autoworkers and is "overperforming on jobs?" That sounds a lot more like "ineffiency" to me. And Toyota has a 17% market share and 9% job share and is "underperforming on jobs?" That seems more like "efficiency" to me.

After all, corporations don't exist to create the maximum number of jobs, they exist to serve consumers and shareholders by producing output with the least number of employees.


At 10/07/2007 1:15 AM, Anonymous Anonymous said...

Where's Walt? He'll clarify this union-induced market disequilibrium for us.


At 10/07/2007 10:24 AM, Anonymous Anonymous said...

You have to consider the source and purpose of the article before you make a conclusion such as Professor Perry made. The perspective was spelled out clearly in the article, that is, for those who took time to read the article: “Level Field believes the most accurate way to test an automaker’s contribution to the U.S. economy is to examine the number of jobs that a company supports on a car-by-car basis.”

Although I am sure that taking a stockholder’s or an MBA’s approach would yield completely different results, I consider the article’s conclusion valid because it measured what it sought to measure.

As a GM stockholder I am not sure that I want to see more employees than necessary to do the job efficiently; however, GM employees have the means to purchase a GM product. Anyone familiar with Henry Ford knows that he created the $5-per-day wage to sell cars and not to benefit his employees. Is that really such a strange concept to “grow your own market”?

At 10/07/2007 9:33 PM, Anonymous Anonymous said...

This, perhaps, speaks more to the degree of automation than it does efficiency of employees.

At 10/08/2007 6:52 AM, Blogger holeydonut said...

I agree that the damn lies of statistics usually lends itself to abuse. I don't really know what Level Field is attempting to prove here; other than repeating the same tired appeal to the public that American jobs are lost when those crazy foreigners make inroads into the American Market.

Do everything you can to buy something you value less today so you can save some American Jobs in the future. So rather than identify a rational way to keep those jobs around, they simply want buyers to behave irrationally to support the USA.

We aren't living in the early 1900s where sweatshops persisted and American Workers were getting beat upside the head. I can imagine there is a genuine fear that that America will suffer a fallback to those evil times; except while so many Americans look backwards everyone else in the world evolves without looking back. $5 a day proved to be too little and the labor force fought to fix that. about $75 a hour for labor at Detroit Auto is at the other end of the spectrum and the free market is going to fix this situation as well.

There is an interesting example of a Rust-Belt company that staved of extinction and still competes with those crazy foreigners. Lincoln Electric operates with no Labor Union and does a piecework pay system. The group of talented and motivated workers that does their job efficiently gets the most money. But I'm guessing this type of job and working environment is bad for Americans as well.


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