Wednesday, December 3, 2008

Reviving Detroit must start with the UAW

By: Jack Fitzgerald
December 2, 2008

At their Nov. 20 press conference, House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said they wanted to help the auto industry if the industry helps itself.

They requested a plan for success from the Detroit 3 that would convince Congress that the domestic automakers can become and remain viable after the assistance. If the plan, due Tuesday, Dec. 2, shows that the Detroit 3 would be viable with whatever aid is necessary, Congress will reconvene.

Pelosi and Reid may have to reach out to UAW President Ron Gettelfinger because there will be no success without strong leadership from the UAW — think of the Chrysler loan guarantees of 1979 and UAW President Doug Fraser leading the way.

The Detroit 3 are in trouble because for more than 25 years, they built products that ranked poorly in Consumer Reports' ratings, cost billions in warranty and recall expenses and caused extraordinary losses of market share.

Detroit must produce competitive products to be viable. To do that, it has to start with a competitive overhead. That will require a huge change in the interaction between the UAW and the Detroit 3.

Cut pay and benefits

Toyota is the No. 1 competitor worldwide. The Detroit 3 must benchmark Toyota. They must install the Toyota Production System, work rules and job classifications — which will eliminate the paid positions of union officials in the plants that do no productive work. The Detroit 3 must use Toyota's pay scale for everyone from the CEO down.

That will mean lower pay and reduced benefits for directors, officers, managers and active and retired employees. And there must be no Jobs Bank or make-work projects for UAW members, who must run the plant as if they owned it.

Management must design the vehicles and the production process with UAW input, but the UAW must lead the effort on the shop floor to produce the highest quality worldwide. Quality is better than it was but not what it needs to be. Management and the UAW must unite in a partnership dedicated to that goal, just as they did at General Motors' Saturn plant in Spring Hill, Tenn., in 1990.

For four years, Saturn produced cars with top reliability scores as measured by Consumer Reports. Unfortunately, the plant reverted to a standard UAW contract, and Saturn's reliability scores suffered.

By contrast, the New United Motor Manufacturing Inc. plant in Fremont, Calif., is a great success. It has been a GM-Toyota joint venture since 1984. Currently, it builds the Toyota Corolla and Tacoma and the Pontiac Vibe. GM, Toyota and the UAW produce high-quality products that are very competitive. The vehicles earn high marks in Consumer Reports every year.

Get GMAC back

Toyota, Honda and BMW export vehicles from American plants. Why can't the Detroit 3 do that? Why can't we make inexpensive cars here and ship them to emerging markets?

Congress is offering to help if the industry will help itself. The UAW must seize this opportunity and run with it. Management will have no choice but to go along. Both will make considerably less in pay and benefits. But if they fulfill their responsibilities, they should do well and make more in profit-sharing. Plus a competitive company offers real job security.

Something that should not require additional action from Congress is the restoration and strengthening of the Detroit 3's captive finance companies. Cerberus must sell GMAC back to GM, and Chrysler must own Chrysler Financial.

I can't get the front page of the Nov. 19 Baltimore Sun out of my mind. There is a picture of a man sitting in his kitchen wondering what's going to happen to him after 32 years with GM. He's 52 years old. On the same page is a picture of the Detroit CEOs, each one a millionaire, asking Congress for assistance.

We must do all that we can to keep our people on the job. The UAW can and should lead the way.

Tuesday, November 4, 2008

What’s the buzz on green cars?

By Jack Fitzgerald

What’s the buzz on green cars?

One of the frequent questions I’m asked about as a car salesman is what my thoughts are about the changes in the automobile business; in particular, I’m often asked “what do you think about electric cars?”

Electricity is one of the least expensive alternative fuels that are capable of powering vehicles. In addition, you don’t have to convert every gas station to handle a new kind of fuel; you can plug your vehicle in at your home. We’ve done this in our organization by offering the A123 conversion kit to create a plug-in Prius. The results from our customers have been amazing; some of them have said they’re getting more than 100 mpg. A writer for Edmunds recently made some observations about where these can be installed on the Green Car Advisor. Here’s the link:

We’re just trying to do our part to meet the needs of customers. What’s the next generation of fuel technology? There’s so much going on, it’s hard to predict, but we believe it is right to listen to the customers and provide them with choices.

Beware of Misleading Addendum Labels!

What’s a “Misleading Addendum Label”? These are labels added by car dealers usually very near the Factory Installed Price label that shows the Manufacturers Suggested Retail Price (M.S.R.P.). If the label looks like a Factory Label with a picture of a gas pump, for example, it can be used to mislead. We have never done that at Fitzgerald Auto Malls, because we believe consumers need to be able to shop and compare honestly, using the “PTA” whole deal shopping form for example, in order to get the best deal.

Have you ever encountered a misleading addendum label? Tell us about your experience?
Sign up as a follower to the FitzWay Blog.

Sunday, October 5, 2008

Price, Terms and Add Ons

When we first mention PTA to people, they automatically think of their school organization and volunteer hours. When you’re buying a car, you need to think of the PTA because it means: Price, Terms and Add Ons.

Shopping for a car can seem overwhelming, but when you break it down into smaller chunks, it’s a lot easier. The trap that consumers need to be aware of is to make sure you’re shopping the WHOLE DEAL, not just one part of the deal.

PTA is the whole deal. The price of the car is one of the best ways to make comparisons. Start by comparing the MSRP or sticker price of the car, so that you know if you’re comparing two dealerships, that the vehicle and equipment are the SAME. The MSRP is the only price that can assure you that you’re comparing apples to apples when it comes to equipment.

“P” in PTA stands for Price. Insist that your sales associate at any dealership give you a firm price that you can pay for the car. Don’t get caught up into ONLY getting payments, or getting a “difference” price between your trade and the price of the new vehicle. Get a firm price that you can pay for the new or used vehicle separate from other parts of the deal. We have an easy to fill out worksheet that you can use at any dealership to make comparisons easy.

“T” in PTA stands for Terms. What are terms? Terms mean the Interest rate AND the number of payments. This is such an important area for you to compare. Too often consumers can believe they’re getting a better price because they’re getting a lower payment, when in fact it might be over a longer period of time. Consumers have a right to a “good faith estimate” when buying a vehicle just like when buying a home. Using the worksheet to compare the terms, the interest rate (which can vary based on individual credit history, financial institution and the length of the car loan), and the number of payments is the only way to assure you’re getting the best deal possible.

“A” in PTA stands for Add-on charges. We’ve heard from many consumers over the years who were provided with an “under-price” for a vehicle, only to be overcharged for add-ons to make up for the difference the low price they quoted. At Fitzgerald, all of the add-ons, many of which are very valuable, are quoted at everyday low prices, spelled out separately for easy comparisons. No hidden fees, no surprise charges.

Remember, if you’re shopping for a whole car, shop the whole deal, including the Price, Terms and Add-ons, the PTA, and you won’t be taken for a ride.

For more information, visit the Consumer Publications tab at

Sharing thoughts and Ideas

Welcome to the FitzMall Blog!

When I first started selling cars, I never could have imagined that I’d have the opportunity to communicate with my customers through a blog on the Internet. I’ve always been a yellow legal pad kind of person.

I think blogs are a great way to get closer to customers, and I’m interested in sharing thoughts and ideas with you about how to improve your experience and the industry as a whole.

Thanks for visiting, save us in your favorites and check back for automotive topics.

Jack Fitzgerald