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Prosock Machine Shop Talk

June 9, 2009

Machine Shops Forgotten?

Filed under: — admin @ 10:51 am

There is much debate swarming in virtual every circle concerning the bailout of big auto.  Some feel its time for business attrition and natural selection to deem the big auto dinosaur no longer suitable for life in the business evolutionary life change. There is a reason for survival of the fittest – let nature take its course. It served its purpose.  Have we not evolved passed big union bosses, endless inefficiencies of middle management and a business model lost in port and perks?  Have we not learned a lesson from Bethlehem Steel?  The company imploded from within.  The world changed, they didn’t evolve - extinction was inevitable.

On the other hand, many feel that a government bailout is necessary for the good of the country.  Not just a hand out with no strings, but a bail out, complete with a swift kick in the corporate butt for their complete irresponsibility.  Believe it or not the government can help in ways that are responsible.  As long as this administration understands they can’t mandate day to day operations or have in had in the lasted contour aesthetics of a corvette, it can work.  The government can should provide accountability and set standards that will make them squeal.  When Kennedy challenged US industry to put a man and the moon by the end or the decade, it was deemed impossible by many at the time.  Necessity was the mother of invention.  His vision became reality. The auto industry finds itself in a similar situation and to succeed it will have to create more fuel efficient cars that are affordable.  The government must hold their feet to the fire and insist on these results.  Personally, I think this could be a great moment for big auto.  We all need to be humbled from time to time.

And for the sake of us all, I hope I’m right.  Hundreds of Tier 1 and Tier 2 supplies depend on an optimistic scenario.  Our machine shop isn’t heavily vested in the automotive industry, but many are.  We are often left out of the mix.  The news will speak of the 80,000 GM workers loosing their jobs, but neglect to mention the thousands of other jobs that will be lost if there is a collapse in big auto.  Jobs like mine and yours.

The Precision Metalforming Association (PMA) and the National Tooling & Machining Association (NTMA) have raised their voice on this issue.

“Tier 1 and Tier 2 suppliers need relief and a crucial element is for the government and courts to provide a ’safe passage’ mechanism for our tooling receivables through the Tier 1 suppliers during this bankruptcy,” said NTMA Chief Operating Officer Rob Akers. “Bankruptcy protection for GM must not be confined to guarantees for GM and its Tier 1 suppliers. The fate of tens of thousands of workers spread throughout the supply chain – and throughout thousands of communities across the United States – depends on fair treatment by GM, the U.S. government and bankruptcy courts.”

“Tier 1 and Tier 2 suppliers need relief and a crucial element is for the government and courts to provide a ’safe passage’ mechanism for our tooling receivables through the Tier 1 suppliers during this bankruptcy,” said NTMA Chief Operating Officer Rob Akers. “Bankruptcy protection for GM must not be confined to guarantees for GM and its Tier 1 suppliers. The fate of tens of thousands of workers spread throughout the supply chain – and throughout thousands of communities across the United States – depends on fair treatment by GM, the U.S. government and bankruptcy courts.”

“The federal government has spent hundreds of billions of dollars extending support to financial institutions, General Motors, Chrysler and large Tier 1 companies, but the benefits have yet to trickle down to the Tier 2 and Tier 3 supply chain companies,” said PMA President William Gaskin. “We are not asking for a bailout. We are only asking that the government and the courts ensure that GM and its Tier 1 suppliers pay the money that is owed to Tier 2 and 3 companies.

Machine shops and small size manufactures are vital links for the recovery plan of GM.  They cannot succeed without us.  “A recovery plan for GM is simply not viable unless the entire automotive supply chain not just the Big 3 and the Tier 1 supplier’s is taken into account.” said Gaskin.

I don’t think anyone in the precision machining industry is looking for a “hand out,” but a well planned and implemented “hand up” is not only appropriate but the right thing to do.  Don’t’ you think?

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