Should the American automakers...

[j2k4]

...receive a government (read taxpayer-funded) bailout.

[j2k4]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

[pentomato]

Not the auto makers not Wall ST shpuld receive a cent of any money, that is socialism at its best.
Where is my money? I should get some money too

[pentomato]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

Should they make less?
CEO from Wall st make millions a year, so nobody should get anything, just me a few millions.

[2slick4u]

I would buy now Ford stocks $ 1.87 per share not bad just wait and it will go up couple months but it will that is the insider information, and American Gov won,t let them go out of business why over 3 mil people would be out of work and much more but that is my opinion

[Skiz]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

Only the ones up North are making that much and as you're likely aware, it's as a result of the unions.

The auto plants in the South w/o the union presence are all still profitable and the employees still earn a respectable wage along with comparable benefit plans.

We shouldn't be bailing out companies with tax dollars b/c their union has been raping them for decades. Let them go bankrupt and get out of their union obligations and start anew.

[clocker]

We shouldn't be bailing out companies with tax dollars b/c their union has been raping them for decades. Let them go bankrupt and get out of their union obligations and start anew.
I think it's simplistic to blame the US auto industry's woes on union "rape".

The Big Three were almost happy to grant absurd concessions to labor because at the time they were granting themselves even more ridiculous bonuses and perks.
Seemed like the good times would never end and what was the problem anyway? Any increased costs would just get passed on to the consumer, who, having been trained like a circus seal, was supposed to buy a new (preferably more expensive) model every three years.

Life was good until the Japanese (and later, the Koreans) had the temerity to enter the arena and foreign oil producers realized what they were actually sitting on.

Contrary to popular misconceptions, Big Oil and the automotive industry were NOT in bed together...the entire US car business was predicated on cheap, abundant gasoline- no need to worry about efficiency or quality when gas was 50 cents a gallon.
Starting with the Arab oil embargo of 1973, the US manufacturers started to bury their heads in the sand and just kept burrowing till we get to our position today.

I say, "Fuck em".
No company is "too big to fail" and if they seem to be, then now's the time to cut them down to size.
Look at the product they have in the pipeline...Detroit's fondest dream is to reboot the golden days of the Sixties- we have "new" Mustangs, Camaros and GTOs.
We have "hybrid" Escalades- possibly the most egregious rejection of a reality that demands small, efficient transportation instead of dinosaurs draped in pseudo-green technology.

The Big Three have been horribly managed since the Fifties and, completely of their own volition and solely for their own benefit, have tried to craft an America that doesn't correspond to reality.
The government and the people were complicit in the fantasy and now it's time to reap the whirlwind, painful as it may be.

So, once again....fuck 'em.

[IdolEyes787]

I agree. Whose to say the automobile industry as it exists is even a viable entity?

Will this be the first of a endless number of bailouts.

Or might it be time to determine what the sustainable level really is.

[j2k4]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

Only the ones up North are making that much and as you're likely aware, it's as a result of the unions.

The auto plants in the South w/o the union presence are all still profitable and the employees still earn a respectable wage along with comparable benefit plans.

We shouldn't be bailing out companies with tax dollars b/c their union has been raping them for decades. Let them go bankrupt and get out of their union obligations and start anew.

Our southern auto industry is populated by such as Toyota, Honda, etc., whose workers still make in the neighborhood of 90-100K/year.

However, they are relative paradigms of efficiency when compared to the clowns at the Big Three.

Those who beg that we "not allow the U.S. auto industry to die" do not acknowledge these (by comparison) thriving endeavors.




We shouldn't be bailing out companies with tax dollars b/c their union has been raping them for decades. Let them go bankrupt and get out of their union obligations and start anew.
I think it's simplistic to blame the US auto industry's woes on union "rape".

The Big Three were almost happy to grant absurd concessions to labor because at the time they were granting themselves even more ridiculous bonuses and perks.
Seemed like the good times would never end and what was the problem anyway? Any increased costs would just get passed on to the consumer, who, having been trained like a circus seal, was supposed to buy a new (preferably more expensive) model every three years.

Life was good until the Japanese (and later, the Koreans) had the temerity to enter the arena and foreign oil producers realized what they were actually sitting on.

Contrary to popular misconceptions, Big Oil and the automotive industry were NOT in bed together...the entire US car business was predicated on cheap, abundant gasoline- no need to worry about efficiency or quality when gas was 50 cents a gallon.
Starting with the Arab oil embargo of 1973, the US manufacturers started to bury their heads in the sand and just kept burrowing till we get to our position today.

I say, "Fuck em".
No company is "too big to fail" and if they seem to be, then now's the time to cut them down to size.
Look at the product they have in the pipeline...Detroit's fondest dream is to reboot the golden days of the Sixties- we have "new" Mustangs, Camaros and GTOs.
We have "hybrid" Escalades- possibly the most egregious rejection of a reality that demands small, efficient transportation instead of dinosaurs draped in pseudo-green technology.

The Big Three have been horribly managed since the Fifties and, completely of their own volition and solely for their own benefit, have tried to craft an America that doesn't correspond to reality.
The government and the people were complicit in the fantasy and now it's time to reap the whirlwind, painful as it may be.

So, once again....fuck 'em.

I totally agree, great post.

That's a great book, isn't it? ;)

[clocker]

As you can tell, I finished the book*.

The Reckoning by David Halberstam is an amazing look at the American auto industry.
Highly recommended.



*Just about went blind from the small type.

[j2k4]

As you can tell, I finished the book*.

The Reckoning by David Halberstam is an amazing look at the American auto industry.
Highly recommended.

I give it my highest compliment, which is to say it does what a book is supposed to do, and to the nines.

It is especially and fortuitously relevant at the moment, as the "American Auto Industry" (their italics, not mine) begs unfettered access to the government trough as if that vessel is replenished by magic, in order to subtract the taxpayer from the equation.

I think it would be perfectly polite of me (in my presumptive editorial pose) to say they ought to file chapter 11, hope for the best, and get the survivors back to work.

The rest can do as so many of us have done:



















START THE FUCK OVER!

Most of the the rest of us have done it a few times, and believe me, there's nothing at all special about any of you, so get on with it.

[clocker]

GM is emailing Saturn owners, begging them to contact their reps and plead for GM's bailout.
Full text here (http://jalopnik.com/5092260/gm-spam-campaign-begs-saturn-owners-for-help) (along with some hilarious responses).

The line that absolutely jumped off the page at me was this....

GM has closed the quality gap with the imports...
So, let's see...
The largest carmaker in the world, from the country that created the industry, thinks that it's to their credit that they've finally (and I would consider this very debatable) "closed the quality gap" with cars from a country that was in ruins after WWII? That didn't even start making cars till the fifties and didn't have the product to export until the late sixties/early seventies?

Oh yeah, I'd be bragging about that.

[j2k4]

GM is emailing Saturn owners, begging them to contact their reps and plead for GM's bailout.
Full text here (http://jalopnik.com/5092260/gm-spam-campaign-begs-saturn-owners-for-help) (along with some hilarious responses).

The line that absolutely jumped off the page at me was this....

GM has closed the quality gap with the imports...
So, let's see...
The largest carmaker in the world, from the country that created the industry, thinks that it's to their credit that they've finally (and I would consider this very debatable) "closed the quality gap" with cars from a country that was in ruins after WWII? That didn't even start making cars till the fifties and didn't have the product to export until the late sixties/early seventies?

Oh yeah, I'd be bragging about that.

Right.

I remember vaguely that Saturn was created so as to exemplify GM's interpretation of the best possible melding of the American and Japanese manufacturing models.

One might argue that GM managed to wreck Saturn in a fraction of the expected time, and so deserves a uniquely and oddly colloquial type of kudos (in the shape of a bailout) for their efforts. :whistling

[devilsadvocate]

In answer , no bailout.




Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

Can you tell me where you get this figure from please?

Because I've come up with this


The base pay is about $28 an hour. If health care cost per worker average $12,000 per year, that adds in another $6 an hour. If the pension payment takes up 25 percent of base pay (an extremely high pension), that gets you another $7 an hour, bringing the total to $41 an hour. That's decent pay, but still a long way from $70 an hour.

How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs.

[clocker]

I remember vaguely that Saturn was created so as to exemplify GM's interpretation of the best possible melding of the American and Japanese manufacturing models.

Ah, the Saturn.
An acquaintance purchased one of the very first for his (then) 16 year old daughter.
The main sell point was the plastic body panels- the better to survive the expected "oopsies!" of a new driver.
Seemed reasonable till winter set in and the fender cracked when hit by a shopping cart.
Sigh.

Saturn always struck me as vaguely cultish...much like Apple, but without the quality to back it up.
Of course, Saturn's big claim to fame- "The price on the sticker is the price you pay!"- just points up how ridiculously the rest of the industry was playing the game.
That's how we ended up with thousands of Jerry Lundegaards- "Well, we've never done this before. But seeing as it's special circumstances and all, he says I can knock a hundred dollars off that Trucoat".

[j2k4]

In answer , no bailout.





Can you tell me where you get this figure from please?

Because I've come up with this


The base pay is about $28 an hour. If health care cost per worker average $12,000 per year, that adds in another $6 an hour. If the pension payment takes up 25 percent of base pay (an extremely high pension), that gets you another $7 an hour, bringing the total to $41 an hour. That's decent pay, but still a long way from $70 an hour.

How does the NYT get from $41 to $70? Well the trick is to add in GM's legacy costs, the pension and health care costs for retired workers. These legacy costs are a serious expense for GM, but this is not money being paid to current workers. The person on the line in 2008 is not benefiting from these legacy costs.


The $28/hr. figure you've cited I have seen mentioned relative to janitorial positions; I hope you can live with this, however:

According to Forbes:

Labor cost per hour, wages and benefits for hourly workers, 2006.

Ford: $70.51 ($141,020 per year)

GM: $73.26 ($146,520 per year)

Chrysler: $75.86 ($151,720 per year)

Toyota, Honda, Nissan (in U.S.): $48.00 ($96,000 per year)

According to AAUP and IES, the average annual compensation for a college professor in 2006 was $92,973 (average salary nationally of $73,207 + 27% benefits).

Bottom Line: The average UAW worker with a high school degree earns 57.6% more compensation than the average university professor with a Ph.D. (see graph above, click to enlarge), and 52.6% more than the average worker at Toyota, Honda or Nissan.

Many industry analysts say the Detroit Three, and especially Ford, must be on par with Toyota and Honda to survive. This year's contract, they say, must be "transformational" in reducing pension and health care costs.

What would "transformational" mean? One way to think about: "transformational" would mean that UAW workers, most with a high school degree, would have to accept compensation equal to that of the average university professor with a Ph.D.

[clocker]

Some marginally interesting news...
The representatives for the Big Three flew to Washington to beg for money in a Ford corporate jet.

Really neither here nor there in the greater scheme of things but a stunningly poor move media-relations-wise.
They should have driven down from Detroit in a Chevy Volt.
Oh, wait...

[devilsadvocate]

@j2k4

That's labor cost per hour, which is different from wage received and seems to include the legacy costs.

[j2k4]

@j2k4

That's labor cost per hour, which is different from wage received and seems to include the legacy costs.

Yup, and the worth of the contract accruing to the employee equates rather precisely with the cost to the corporation.

What's your point?

[devilsadvocate]

The point is it is a figure that is padded up as a propaganda tool instead of an accurate take home. We don't subtract non employer supplied health insurance or pension costs from hourly wage statements.

I object to bonuses being paid when the companies fail, especially when the payments are to be funded with bailout money. I have no objections to the good wage made by the workers, I don't even object to CEO's getting 6-7-8 whatever million annually. Sometimes I feel they don't earn that money, but When the companies were making the money to fund it that was fine. I do believe now they need to restructure.
Personally I think this starts with losing the management that made the bad product choices, replacing them with good management, then trimming downwards through the grades. The pain should be felt across the board and not just the workers.

This should be done under chapter 11, but I can see how in their case that would make it almost impossible to sell their product as customers like to know their warranty is worth the paper it's written on.

[clocker]

Personally I think this starts with losing the management that made the bad product choices, replacing them with good management, then trimming downwards through the grades. The pain should be felt across the board and not just the workers.
Of even more importance than "losing the management that made the bad product choices" would be changing the type of management they employ.

For at least the past 30 years, Detroit has been run by accountants instead of "car/manufacturing" guys.
Engineers and manufacturing specialists have been at the mercy of beancounters who routinely overrode requests for improvements because they would impact the bottom line.

A good case in point would be the electrolytic application of rust protection to unibodies.
You've probably seen pictures of car bodies being dipped in tanks of sealant to completely coat the metal...this process was invented by Ford and yet Ford was the last major manufacturer to actually deploy the technology because it cost @$5 million dollars per plant to install.
The accountants figured it was cheaper to repair warranty claims than to prevent them from the get-go.

The primary focus of the US car makers was on producing a mediocre car and then making it even more cheaply over the course of it's product life.

This same mindset was also responsible for the industry claiming that any/all increases in safety/fuel economy would lead to their downfall...such technology would cost money and was therefore "impossible".
Naturally, they lobbied themselves a sweet exemption for "light trucks" which lead to the era of the SUV. Since SUVs were classified as light trucks, they were exempt from CAFE requirements and meant you could take a pickup truck chassis, throw some leather and a sound system at it and then market it to soccer moms as being "safer".
The real reasoning of course, was that they made a shit ton of money on each sale and it didn't count against their CAFE limit. The Big Three claim they were only building what their customer wanted which of course is total bullshit...they conditioned their market to accept what they wanted to sell, not the other way around.
Ironically, as the size of the average American family has been shrinking, Detroit has been pushing them to buy ever larger cars/SUVs. This trend has also been mirrored in the housing sector...smaller families, larger houses.

Meanwhile, development of actual cars that were more efficient and safer was completely sidetracked because why spend money you didn't have to?
The profit margin on a SUV was enormous and the margin on a small car- where you're competing against all those pesky foreign builders- was tiny.

So today we're being asked to bailout these same cynical accountants because they're indispensable to the health of our country.
Functionally, these guys are no different than their Wall Street brothers...cars were only an incidental byproduct of the quest to increase the productivity of the money held by the corporation. It could have been widgets or cat food, these guys knew nothing about and couldn't care less about the product (i,e., cars).

I think it would be much more productive- and far more interesting- to bypass these creatures of commerce and start talking to the engineers and designers- you know, the guys who actually get their hands on metal- and ask them how to move forward.
Hopefully there are still a few smart guys left in an industry which has prized financial acumen over technological innovation for the last three decades.
If not, then let's import some Japanese/Korean/Indian guys to show us how it's done.

[j2k4]

The point is it is a figure that is padded up as a propaganda tool instead of an accurate take home. We don't subtract non employer supplied health insurance or pension costs from hourly wage statements.

An odd view, considering how these figures impact the quality of the begging going on in D.C. just now.

The real figures are most likely much higher.

BTW-

Would you like to get into what the idiotic "job-bank" costs them?

Paying idled workers their full wages? :whistling

[devilsadvocate]

http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler.html




6 Myths About GM, Ford, and Chrysler

November 20, 2008 12:42 PM ET | Rick Newman (http://www.usnews.com/Topics/tag/Author/r/rick_newman/index.html) | Permanent Link (http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler.html) | Print (http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler_print.htm)
Memo to CEOs: Ask for a bailout, and your company will be reduced to a caricature.
Recent congressional hearings on the plight of GM, Ford, and Chrysler have illuminated a few important issues—like how the Detroit executives travel when on business. Populist politicians and gotcha journalists delighted at the prospect of rich CEOs riding corporate jets to ask for taxpayer money. There was a little talk about jobs and cars and the foundering economy, too. But you might have missed that part, or gotten confused by a welter of misperceptions that emerged from the spectacle of supplicant CEOs trying last-ditch tactics to save their companies.
As the automakers careen toward bankruptcy, here are some of the myths complicating the debate over the future of the Detroit Three:
They don't build small cars. The Detroit Three build plenty of small cars—they're just not very good. In the U.S.News rankings (http://www.rankingsandreviews.com/) of affordable small cars (http://usnews.rankingsandreviews.com/cars-trucks/rankings/Affordable-Small-Cars/), for instance, seven out of 34 models are domestics. But the highest ranked—the Chevrolet Cobalt (http://usnews.rankingsandreviews.com/cars-trucks/2009-Chevrolet-Cobalt/)—lands at No. 20, while the top three are all Hondas. So, CEO Rick Wagoner (http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=50449) is telling the truth when he says that in 2009 GM will offer 20 models (including a few mid-sized cars, a couple small sports cars, and a few others) that will get 30 mpg on the highway. The question is whether anybody will want to buy them—and if not, is it the government's job to subsidize uncompetitive products.
They don't build any desirable cars. A few recent Detroit models have been hits, like the Ford Fusion (http://usnews.rankingsandreviews.com/cars-trucks/2009-Ford-Fusion/), Chevrolet Malibu (http://usnews.rankingsandreviews.com/cars-trucks/2008-Chevrolet-Malibu/), Cadillac CTS (http://usnews.rankingsandreviews.com/cars-trucks/2009-Cadillac-CTS/), and Saturn Outlook (http://usnews.rankingsandreviews.com/cars-trucks/2008-Saturn-Outlook/). And even Consumer Reports, which has mercilessly trashed Detroit's shoddier vehicles, recently issued a statement saying, "We've seen some progress among the domestic automakers lately, with improved reliability and performance in certain models."
The problem is that the domestics are strong in a few segments, while weak—or nonexistent—in many others. So when soaring gas prices and a stumbling economy torpedoed their flagship vehicles—trucks and SUVs—there wasn't much else to balance out the portfolio. Neither GM nor Ford offers a competitive minivan, for instance. Their small crossovers and SUVs haven't kept pace with the best offerings from Honda and Toyota. And a puny "B car" that's actually fun, like the Mini Cooper (http://usnews.rankingsandreviews.com/cars-trucks/2009-MINI-Cooper/) or Honda Fit (http://usnews.rankingsandreviews.com/cars-trucks/2009-Honda-Fit/)? Does not compute. And it's pretty hard to survive as a global car company when you simply write off a big chunk of the market.
The same guys asking for handouts are the ones who caused the problems. Not really. Chrysler CEO Bob Nardelli and Ford CEO Alan Mulally are new arrivals recruited from outside the auto industry. Their boards offered them a lot of money because of their expertise fixing huge, messed-up organizations. Wagoner has been on the job longer, and he bears more responsibility for some of GM's problems. But he wasn't in charge in the 1980s and 1990s, when GM built sprawling factories that are approaching obsolescence, let quality slip, and short-shrifted cars in favor of SUVs. And since becoming CEO in 2000, Wagoner has overseen many improvements at GM, like an improved car lineup, more efficient factories, and success in China and other overseas markets. He may still get the boot, but he's probably done more to fix GM than the three or four CEOs who preceded him.
The CEOs should fly coach. At about the same time the Detroit 3 CEOs were boarding corporate jets to head to Washington for recent congressional hearings, Northwest Flight 234 (on-time percentage: 77 percent) was backing away from the gate at Detroit Metro, headed for Reagan National Airport, across the river from the Capitol building. Obviously, the CEOs should have been on that flight instead of a Gulfstream, relaxing with some free coffee and reading the morning paper before huddling with aides (please remain seated, with your seatbelts fastened) to discuss emergency measures like which division to sell off or which supplier to stop paying. They'd have to speak in whispers, since a couple dozen reporters looking for a scoop would no doubt be sitting in nearby rows—but at least that way nobody would disturb other passengers trying to catch a nap. And if there were any urgent calls from outposts in Shanghai or Dubai, United Arab Emirates, or São Paolo, Brazil, somebody back at HQ with a reliable phone connection could just handle it.
Sure, these are complex global companies with command decisions that need to be made every hour. But if the CEOs are going to ask for the people's money, they should take the people's transportation! Come to think of it, instead of flying, they should have pooled their money and chartered a bus for the trip to Washington.
It's all the unions' fault. Generous union protections clearly pumped up Detroit's costs in the past and added to bloat, but recent concessions have solved many of those problems. Many other factors now weigh more heavily on Detroit: Soaring healthcare costs, especially for retirees the automakers are still responsible for; poor strategic planning; and buyers who can't get loans. The biggest problem with the unions might be unrealistic expectations fostered by leaders like Ron Gettelfinger—because many of the job and wage protections of the past are no longer there.
They've done nothing to help themselves. All three Detroit automakers have slashed costs and closed factories over the past few years, in aggressive but methodical efforts to become profitable once again. If we still had the 2006 economy, they might make it by 2010 or 2012. But obviously we don't. What the Detroit Three haven't done is something dramatic that would send the silverware flying, like killing off overlapping divisions such as Mercury, Pontiac, and Saturn, closing redundant dealerships, or demanding universal healthcare to help manage soaring medical costs. If the government coughs up some "bridge" money to tide them over for a few months, there's no reason to think much would change. But if the automakers land in bankruptcy, plenty will change—and self-help will no longer be an option

[j2k4]

http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler.html




6 Myths About GM, Ford, and Chrysler

November 20, 2008 12:42 PM ET | Rick Newman (http://www.usnews.com/Topics/tag/Author/r/rick_newman/index.html) | Permanent Link (http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler.html) | Print (http://www.usnews.com/blogs/flowchart/2008/11/20/6-myths-about-gm-ford-and-chrysler_print.htm)
Memo to CEOs: Ask for a bailout, and your company will be reduced to a caricature.
Recent congressional hearings on the plight of GM, Ford, and Chrysler have illuminated a few important issues—like how the Detroit executives travel when on business. Populist politicians and gotcha journalists delighted at the prospect of rich CEOs riding corporate jets to ask for taxpayer money. There was a little talk about jobs and cars and the foundering economy, too. But you might have missed that part, or gotten confused by a welter of misperceptions that emerged from the spectacle of supplicant CEOs trying last-ditch tactics to save their companies.
As the automakers careen toward bankruptcy, here are some of the myths complicating the debate over the future of the Detroit Three:
They don't build small cars. The Detroit Three build plenty of small cars—they're just not very good. In the U.S.News rankings (http://www.rankingsandreviews.com/) of affordable small cars (http://usnews.rankingsandreviews.com/cars-trucks/rankings/Affordable-Small-Cars/), for instance, seven out of 34 models are domestics. But the highest ranked—the Chevrolet Cobalt (http://usnews.rankingsandreviews.com/cars-trucks/2009-Chevrolet-Cobalt/)—lands at No. 20, while the top three are all Hondas. So, CEO Rick Wagoner (http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewmonthlyreleasedetail.do?domain=74&docid=50449) is telling the truth when he says that in 2009 GM will offer 20 models (including a few mid-sized cars, a couple small sports cars, and a few others) that will get 30 mpg on the highway. The question is whether anybody will want to buy them—and if not, is it the government's job to subsidize uncompetitive products.
They don't build any desirable cars. A few recent Detroit models have been hits, like the Ford Fusion (http://usnews.rankingsandreviews.com/cars-trucks/2009-Ford-Fusion/), Chevrolet Malibu (http://usnews.rankingsandreviews.com/cars-trucks/2008-Chevrolet-Malibu/), Cadillac CTS (http://usnews.rankingsandreviews.com/cars-trucks/2009-Cadillac-CTS/), and Saturn Outlook (http://usnews.rankingsandreviews.com/cars-trucks/2008-Saturn-Outlook/). And even Consumer Reports, which has mercilessly trashed Detroit's shoddier vehicles, recently issued a statement saying, "We've seen some progress among the domestic automakers lately, with improved reliability and performance in certain models."
The problem is that the domestics are strong in a few segments, while weak—or nonexistent—in many others. So when soaring gas prices and a stumbling economy torpedoed their flagship vehicles—trucks and SUVs—there wasn't much else to balance out the portfolio. Neither GM nor Ford offers a competitive minivan, for instance. Their small crossovers and SUVs haven't kept pace with the best offerings from Honda and Toyota. And a puny "B car" that's actually fun, like the Mini Cooper (http://usnews.rankingsandreviews.com/cars-trucks/2009-MINI-Cooper/) or Honda Fit (http://usnews.rankingsandreviews.com/cars-trucks/2009-Honda-Fit/)? Does not compute. And it's pretty hard to survive as a global car company when you simply write off a big chunk of the market.


The same guys asking for handouts are the ones who caused the problems. Not really. Chrysler CEO Bob Nardelli and Ford CEO Alan Mulally are new arrivals recruited from outside the auto industry. Their boards offered them a lot of money because of their expertise fixing huge, messed-up organizations. Wagoner has been on the job longer, and he bears more responsibility for some of GM's problems. But he wasn't in charge in the 1980s and 1990s, when GM built sprawling factories that are approaching obsolescence, let quality slip, and short-shrifted cars in favor of SUVs. And since becoming CEO in 2000, Wagoner has overseen many improvements at GM, like an improved car lineup, more efficient factories, and success in China and other overseas markets. He may still get the boot, but he's probably done more to fix GM than the three or four CEOs who preceded him.
The CEOs should fly coach. At about the same time the Detroit 3 CEOs were boarding corporate jets to head to Washington for recent congressional hearings, Northwest Flight 234 (on-time percentage: 77 percent) was backing away from the gate at Detroit Metro, headed for Reagan National Airport, across the river from the Capitol building. Obviously, the CEOs should have been on that flight instead of a Gulfstream, relaxing with some free coffee and reading the morning paper before huddling with aides (please remain seated, with your seatbelts fastened) to discuss emergency measures like which division to sell off or which supplier to stop paying. They'd have to speak in whispers, since a couple dozen reporters looking for a scoop would no doubt be sitting in nearby rows—but at least that way nobody would disturb other passengers trying to catch a nap. And if there were any urgent calls from outposts in Shanghai or Dubai, United Arab Emirates, or São Paolo, Brazil, somebody back at HQ with a reliable phone connection could just handle it.
Sure, these are complex global companies with command decisions that need to be made every hour. But if the CEOs are going to ask for the people's money, they should take the people's transportation! Come to think of it, instead of flying, they should have pooled their money and chartered a bus for the trip to Washington.
It's all the unions' fault. Generous union protections clearly pumped up Detroit's costs in the past and added to bloat, but recent concessions have solved many of those problems. Many other factors now weigh more heavily on Detroit: Soaring healthcare costs, especially for retirees the automakers are still responsible for; poor strategic planning; and buyers who can't get loans. The biggest problem with the unions might be unrealistic expectations fostered by leaders like Ron Gettelfinger—because many of the job and wage protections of the past are no longer there.
They've done nothing to help themselves. All three Detroit automakers have slashed costs and closed factories over the past few years, in aggressive but methodical efforts to become profitable once again. If we still had the 2006 economy, they might make it by 2010 or 2012. But obviously we don't. What the Detroit Three haven't done is something dramatic that would send the silverware flying, like killing off overlapping divisions such as Mercury, Pontiac, and Saturn, closing redundant dealerships, or demanding universal healthcare to help manage soaring medical costs. If the government coughs up some "bridge" money to tide them over for a few months, there's no reason to think much would change. But if the automakers land in bankruptcy, plenty will change—and self-help will no longer be an option

Oh.

Then perhaps your facility with Google will reveal precisely what-the-fuck their problem actually is.

Say what you like about the economy, now, then, Clinton, Bush, whatever, the health of the auto industry idea-wise and/or economically, has been in the dumper for decades.

Forget for a moment your impulse to oppose me, and actually look at the situation, ffs.

[devilsadvocate]

Oh.

Then perhaps your facility with Google will reveal precisely what-the-fuck their problem actually is.
It had nothing to do with google, it was a newsite and it points out many problems
Say what you like about the economy, now, then, Clinton, Bush, whatever, the health of the auto industry idea-wise and/or economically, has been in the dumper for decades.
Can't say I disagree

Forget for a moment your impulse to oppose me, and actually look at the situation, ffs.I am looking at the situation and I'm doing it without prejudice instead of talking points, misrepresentations and favorite ideological punching bags. :whistling

[j2k4]

Oh.

Then perhaps your facility with Google will reveal precisely what-the-fuck their problem actually is.
It had nothing to do with google, it was a newsite and it points out many problems
Say what you like about the economy, now, then, Clinton, Bush, whatever, the health of the auto industry idea-wise and/or economically, has been in the dumper for decades.
Can't say I disagree

Forget for a moment your impulse to oppose me, and actually look at the situation, ffs.I am looking at the situation and I'm doing it without prejudice instead of talking points, misrepresentations and favorite ideological punching bags. :whistling

As to your first, I disagree.

As to your second, perhaps the ideological punching bags should change their stripes, then. :whistling

[j2k4]

A related item...

http://www.youtube.com/watch?v=ufexZnViDiU&ref=patrick.net

[thewizeard]

...receive a government (read taxpayer-funded) bailout.

Only if they are developing water powered cars or working in a similar way to conserve our enviroment.:)

[j2k4]

...receive a government (read taxpayer-funded) bailout.

Only if they are developing water powered cars or working in a similar way to conserve our enviroment.:)

None of that is being contemplated, I promise you. :whistling

[clocker]

I've been reading quite a bit of "push-back" on car sites regarding Washington's insistence that the Big Three come back with more detailed plans before given access to the trough.

The two main points seems to be-
-It should be obvious by now what they plan on doing, labor contracts have been being renegotiated for the last three years and they've shown the models they're working on (see: Chevy Volt).

-Exposing their detailed plans to the world will give their competitors an unfair advantage.

I think both arguments are bullshit.
Any supplicant to a bank looking for a loan is required to be clinically detailed about their business model/plan- they can't just say it's obvious that they are worthy and "Trust me". Furthermore, after the initial bailout of the banks/insurance industry, Congress is not willing to withstand the PR nightmare associated with handing money over to executives with such a longstanding history of entitlement...the "burn me once, shame on you, burn me twice, shame on me" truism made real.

The only way Nissan or Honda might benefit from a look at GM's future plans would be as a roadmap to What Not To Do. The idea that the Big Three have anything that Japan or Korea would find useful is ludicrous- akin to the class dunce claiming that the smart guys are cribbing from him.

An interesting sidenote occurred at the LA Car Show this week...the Volkswagon Jetta TDI was named the "Green Car of the Year". Without using any exotic technology, the Jetta is 50 state legal and gets 41mpg (highway).
One of my brothers just bought one and says it's a blast to drive.
Without prior notice, he says you'd never know it was a diesel...it's quiet, fast and handles great in the snow. He has been averaging close to 40mpg in combined city/highway driving so far.
Both Ford and GM make diesels in Europe but haven't brought any to the States. GM is considering doing it sometime in 2010 but only in V-8 form for trucks.
This shows more starkly than anything why the BIG Three deserve the big nut-kicking they are currently getting.
Volksawagon can't keep the TDI in stock and GM is considering bringing the same same technology to our market...in two years and in truck form.
Now, tell me again why these dunces deserve a bailout?

[ilw]

An interesting sidenote occurred at the LA Car Show this week...the Volkswagon Jetta TDI was named the "Green Car of the Year". Without using any exotic technology, the Jetta is 50 state legal and gets 41mpg (highway).
One of my brothers just bought one and says it's a blast to drive.
Without prior notice, he says you'd never know it was a diesel...it's quiet, fast and handles great in the snow. He has been averaging close to 40mpg in combined city/highway driving so far.
Both Ford and GM make diesels in Europe but haven't brought any to the States. GM is considering doing it sometime in 2010 but only in V-8 form for trucks.
This shows more starkly than anything why the BIG Three deserve the big nut-kicking they are currently getting.
Volksawagon can't keep the TDI in stock and GM is considering bringing the same same technology to our market...in two years and in truck form.
Now, tell me again why these dunces deserve a bailout?

but surely this says more about the american car buyer than the american car makers. They were just supplying what the market wanted, which was pointlessly large and inefficient SUVs. Now that you're suddenly willing to consider smaller cars, or smaller engines, or diesel technology which has been around for the best part of a decade, you can't just blame them for taking a couple of years to retool their factories, as you've just completely changed what you're asking for.

Bottom line is that the American car market has suddenly shifted from having a unique set of requirements (fulfilled, and admittedly nurtured, by the big 3), to a generic set of requirements which match what every other car maker on the planet produces and doesn't match what your own industry produces.

[clocker]

but surely this says more about the american car buyer than the american car makers. They were just supplying what the market wanted...
A "market" they created.
Sure, the American public ( and a witless government) were complicit, but it was the manufacturers who created the SUV and then sold the concept to the public.
But that's a "chicken/egg" debate that we could both argue endlessly.

Instead, let's consider another angle.
Starting in the mid-sixties (long before the first OPEC embargo of 1973) there were industry analysts predicting the end of cheap, easily obtained gasoline and also pointing out the growing reduction in quality that had begun to manifest in American manufacturing.
Did you know that by 1950- only five years after WWII- the Japanese had already overtaken the US as the #1 steelmaker in the world?
A country in ruins, with no natural resources to speak of, outperformed the US and killed one of the largest heavy manufacturing industries we had.

These two points are not unrelated.
The men who predicted the fuel crisis and the men who foretold the death of the steel industry were completely ignored in the US and so they turned to Japan where people in charge were eager to listen to them.
This leads to today's highly ironic situation where US automakers want to emulate the Japanese business model- a model in large part developed by Americans who went unheeded here in the first place.

Finally, to tie all this up (yeah, I could go on forever), let's talk about CEOs a bit.
These guys make the big bucks not because they are exceptionally skilled at designing or assembling the product they sell- in fact, traditionally they don't even know much about the product they sell- rather, they are supposed to be skilled at guiding their companies into a murky future- interpreting trends and events to ensure their corporation is well placed to exploit markets that don't even exist yet.
Yet, for the past thirty odd years, the CEOs of Detroit have willfully ignored current events and guided their companies based on what they wanted to happen rather than what was actually going on.
They were no more prescient or astute than the assembly line workers they employed.
Today's current situation is apparently as big a surprise to them as the guys who sweep the factory floor.
Today's CEOs are creatures of very same mindset that lead to this problem...have we seen any evidence whatsoever that they have changed and are suddenly capable of the leadership necessary to guide their companies through these troubles?

ilw, when you say the American car makers must now match "set of requirements which match what every other car maker on the planet produces and doesn't match what your own industry produces", you imply that there is a difference between US and foreign car makers. This is for the most part, not true.
Both Ford and GM have had a significant presence in Europe for decades.
All of the technology that is available in Europe and Japan has been there for the taking...the US arms of these multinational corporations simply refused to avail themselves of it. It was easier and cheaper to exploit holes in US law (think CAFE here) and build/market inefficient trucks (SUVs) than to build interesting and desirable small cars.
Look at US car magazines for the last 15 years and you'll see a steady stream of complaints about why Ford/GM products that are available worldwide are not brought into the States.

For years now the US auto industry has lobbied to keep US safety regulations separate/different from those of Europe and Japan.
Even areas as seemingly minor as lighting were battleground issues. Halogen headlights- available for years in Europe- were illegal in the US till Sylvania had the time to catch up and produce their version.
This meant that a European car had to undergo major revisions and significant change to be allowed in the US market. And that was fine by the Big Three...they effectively sandboxed their foreign product from the US market.
Now of course, they are clamoring to change the very rules they created and exploited for so long.
They can't just import the cars they make in Europe because they don't pass our safety standards and would be prohibitively expensive to retool.

The US auto makers are slowly (well, not so slowly anymore) being strangled by the very same "catch-22" laws they themselves engineered.
Talk about being hoisted on one's own petard.

[j2k4]

but surely this says more about the american car buyer than the american car makers. They were just supplying what the market wanted...
A "market" they created.
Sure, the American public ( and a witless government) were complicit, but it was the manufacturers who created the SUV and then sold the concept to the public.
But that's a "chicken/egg" debate that we could both argue endlessly.

Instead, let's consider another angle.
Starting in the mid-sixties (long before the first OPEC embargo of 1973) there were industry analysts predicting the end of cheap, easily obtained gasoline and also pointing out the growing reduction in quality that had begun to manifest in American manufacturing.
Did you know that by 1950- only five years after WWII- the Japanese had already overtaken the US as the #1 steelmaker in the world?
A country in ruins, with no natural resources to speak of, outperformed the US and killed one of the largest heavy manufacturing industries we had.

These two points are not unrelated.
The men who predicted the fuel crisis and the men who foretold the death of the steel industry were completely ignored in the US and so they turned to Japan where people in charge were eager to listen to them.
This leads to today's highly ironic situation where US automakers want to emulate the Japanese business model- a model in large part developed by Americans who went unheeded here in the first place.

Finally, to tie all this up (yeah, I could go on forever), let's talk about CEOs a bit.
These guys make the big bucks not because they are exceptionally skilled at designing or assembling the product they sell- in fact, traditionally they don't even know much about the product they sell- rather, they are supposed to be skilled at guiding their companies into a murky future- interpreting trends and events to ensure their corporation is well placed to exploit markets that don't even exist yet.
Yet, for the past thirty odd years, the CEOs of Detroit have willfully ignored current events and guided their companies based on what they wanted to happen rather than what was actually going on.
They were no more prescient or astute than the assembly line workers they employed.
Today's current situation is apparently as big a surprise to them as the guys who sweep the factory floor.
Today's CEOs are creatures of very same mindset that lead to this problem...have we seen any evidence whatsoever that they have changed and are suddenly capable of the leadership necessary to guide their companies through these troubles?

ilw, when you say the American car makers must now match "set of requirements which match what every other car maker on the planet produces and doesn't match what your own industry produces", you imply that there is a difference between US and foreign car makers. This is for the most part, not true.
Both Ford and GM have had a significant presence in Europe for decades.
All of the technology that is available in Europe and Japan has been there for the taking...the US arms of these multinational corporations simply refused to avail themselves of it. It was easier and cheaper to exploit holes in US law (think CAFE here) and build/market inefficient trucks (SUVs) than to build interesting and desirable small cars.
Look at US car magazines for the last 15 years and you'll see a steady stream of complaints about why Ford/GM products that are available worldwide are not brought into the States.

For years now the US auto industry has lobbied to keep US safety regulations separate/different from those of Europe and Japan.
Even areas as seemingly minor as lighting were battleground issues. Halogen headlights- available for years in Europe- were illegal in the US till Sylvania had the time to catch up and produce their version.
This meant that a European car had to undergo major revisions and significant change to be allowed in the US market. And that was fine by the Big Three...they effectively sandboxed their foreign product from the US market.
Now of course, they are clamoring to change the very rules they created and exploited for so long.
They can't just import the cars they make in Europe because they don't pass our safety standards and would be prohibitively expensive to retool.

The US auto makers are slowly (well, not so slowly anymore) being strangled by the very same "catch-22" laws they themselves engineered.
Talk about being hoisted on one's own petard.


And that pretty much fills the nutshell, you see.

In typically American fashion, even our fuck-ups inspire "Shock and Awe". :whistling

[clocker]

One might say that only our mistakes inspire shock and awe.

[DannyGnXz]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

The auto workers do not actually make $73.50 per hour for the most part.... this number incorporates health benefits and pension contributions into that number. ie they may actually make $51 / hour which goes towards their check and then you add $14 which goes to their pension & $8.50 which goes towards their health benefits. My Numbers are just an example. But the $73.50 is what it cost the company to employ that person.

There check would be $51 x 40 hours = $2040 - taxes = take home pay.

My opinion is for NO BAILOUT. Bankruptcy - Its the only way for this failing industry to re-organize themselves and try to get the ship righted again.

[j2k4]

Oh, I forgot to mention-

The average employee at GM Ford and Chrysler makes $73.50 an hour, which translates to about $150,000 per year, assuming no overtime.

The auto workers do not actually make $73.50 per hour for the most part.... this number incorporates health benefits and pension contributions into that number. ie they may actually make $51 / hour which goes towards their check and then you add $14 which goes to their pension & $8.50 which goes towards their health benefits. My Numbers are just an example. But the $73.50 is what it cost the company to employ that person.

There check would be $51 x 40 hours = $2040 - taxes = take home pay.

Yes, yes, well-

I tend to make a case for management, thinking in terms of cost.


My opinion is for NO BAILOUT. Bankruptcy - Its the only way for this failing industry to re-organize themselves and try to get the ship righted again.

True enough.

There will surely be some suffering, but bankruptcy doesn't mean the big three (and all associated industry likewise) go wanting, job-wise.

This hasn't been adequately pointed up.

[Detale]

One might say that only our mistakes inspire shock and awe.

And others might say that NOT only our mistakes inspire shock and awe.
http://img354.imageshack.us/img354/3895/gousalogoop800x76238624bf5.jpg

[callas]

Each CEO went to capital by the private airplane.

[j2k4]

Here's something to consider when weighing the health of the Big Three on the domestic front:

http://info.detnews.com/video/index.cfm?id=1189

[devilsadvocate]

The harsh reality of technological advances is that machines replace humans and companies that use said technology have a cost advantage over their competitors.

I wonder at what point humans will become unable to support the robots existence. When will enough humans be displaced to be unable to financially sustain industrial output (buy the products).

The plant in question created jobs because of it's location. Build one here and it would remove jobs.

Also the product would need to change to make it work. A product that could be exported to those product efficiency demanding foreign markets

[Busyman]

...receive a government (read taxpayer-funded) bailout.

Hell no.

If a company is having a horrible downturn, the workers can't continue to make the same boatload of money. If the unions are going to continue to push for the same pay then the company will go bankrupt.

I'm pro-union but in this case they are fools.

American cars, for the most part, suck. American styling, for the most part, has sucked ass for years. I remember seeing cars that looked like it had window blinds for the grill. The car otherwise looked okay (Ford Five-Hundred or Focus maybe).

One thing is that individual American car companies have brands that compete with others under the same parent company. There are also too many body swaps. I get tired of seeing a Mercury truck and it's the same as a Ford truck with minor cosmetic differences and almost the same price tag.

Today I heard Nancy Pelosi talking about some appointment of Car Czar for this bailout.

Howz telling the bailout to fuck off along with Czar?

These companies should go bankrupt if necessary and then reorganize with a solid plan. A bailout makes the incentive for the plan to be solid unnecessary in the near term.

Ford has sucked for years. Their stock has been $10 for years. I even have well running Ford made product partly because I wanted to buy American. The boneheads at Ford decided to stop making the model car I own

http://static.howstuffworks.com/gif/autoreview/400x266/2006-Lincoln-LS-05115201990002.jpg

with some body swapped Mercury Milan/Lincoln MKZ shit

http://www.carbuyersnotebook.com/archives/07LincolnMKZ.jpg

I liked my car so much, I was ready to buy the same car again and it has had
a loyal following.

Nice going.

[clocker]

Ford has sucked for years. Their stock has been $10 for years.


Ironic then that Ford is probably the healthiest of the Big Three, isn't it?

Chrysler, having already once enjoyed government largesse (yes, I know- they paid it back...big deal), immediately went back to their old ways, apparently having learned nothing from their first near-death experience.
They can just wither up and die.

My problem with GM is the arrogance.
Having been king of the hill for decades, GM has actually come to believe the "What's good for GM is good for America" meme and seems to consider itself almost an extension of the government.
No company should be allowed to assume that sort of leverage and for that reason alone I think they should suffer.

I don't really understand the reverence with which we treat the auto industry.
We let the steel industry wither away with hardly a peep.
We let the dotcom bubble burst and I don't recall anyone offering to bailout Pets.com.

Either the American economic template works or it doesn't...if free enterprise is going to be the model then the consequences have to be part of it.
If we're going to nationalize big business, then so be it but this hybrid of the two is just absurd.

We constantly hear about the resilience of the American spirit and the excellence of the American worker, yet when push comes to shove, no one seems confident enough in either to just let them show what they can do.

How are we supposed to encourage a whole new approach while simultaneously propping up the dominant "old school" player?

Why is it that during this whole fiasco we haven't seen any young visionaries from the Big Three, just the same old suits who have fought tooth and nail for decades to preserve a clearly disfunctional business model?

[j2k4]

Ford has sucked for years. Their stock has been $10 for years.


Ironic then that Ford is probably the healthiest of the Big Three, isn't it?

Chrysler, having already once enjoyed government largesse (yes, I know- they paid it back...big deal), immediately went back to their old ways, apparently having learned nothing from their first near-death experience.
They can just wither up and die.

My problem with GM is the arrogance.
Having been king of the hill for decades, GM has actually come to believe the "What's good for GM is good for America" meme and seems to consider itself almost an extension of the government.
No company should be allowed to assume that sort of leverage and for that reason alone I think they should suffer.

I don't really understand the reverence with which we treat the auto industry.
We let the steel industry wither away with hardly a peep.
We let the dotcom bubble burst and I don't recall anyone offering to bailout Pets.com.

Either the American economic template works or it doesn't...if free enterprise is going to be the model then the consequences have to be part of it.
If we're going to nationalize big business, then so be it but this hybrid of the two is just absurd.

We constantly hear about the resilience of the American spirit and the excellence of the American worker, yet when push comes to shove, no one seems confident enough in either to just let them show what they can do.

How are we supposed to encourage a whole new approach while simultaneously propping up the dominant "old school" player?

Why is it that during this whole fiasco we haven't seen any young visionaries from the Big Three, just the same old suits who have fought tooth and nail for decades to preserve a clearly disfunctional business model?

Boy, you are on a tear, man. :D

[clocker]

I have an agenda.

My theory is that the bankruptcy of the Big Three will be the death knell for NASCAR.

[j2k4]

I have an agenda.

My theory is that the bankruptcy of the Big Three will be the death knell for NASCAR.

A fine idea, but nah.

No factory parts in those things anyway, and there's too much cash flowing from other sources.

[clocker]

We'll see.
I think the major sponsorship money flows from the Big Three.
Even Toyota is hurtin...bet they scale way back also.

After NASCAR, I need to figure out how to destroy Harley-Davidson.

[j2k4]

We'll see.
I think the major sponsorship money flows from the Big Three.
Even Toyota is hurtin...bet they scale way back also.

After NASCAR, I need to figure out how to destroy Harley-Davidson.

Harley-Davidson?

Don't they make tractors?

How's about we end farm subsidies - that oughta do it. ;)

Did you see the numbers released today.

GM and Toyota sold almost precisely the same number of vehicles world-wide this past year - something on the order of 9.37 million units each.

GM lost over 37 billion dollars, while Toyota was over 17 billion in the black...:whistling

[Busyman]

Ford has sucked for years. Their stock has been $10 for years.


Ironic then that Ford is probably the healthiest of the Big Three, isn't it?

Chrysler, having already once enjoyed government largesse (yes, I know- they paid it back...big deal), immediately went back to their old ways, apparently having learned nothing from their first near-death experience.
They can just wither up and die.

My problem with GM is the arrogance.
Having been king of the hill for decades, GM has actually come to believe the "What's good for GM is good for America" meme and seems to consider itself almost an extension of the government.
No company should be allowed to assume that sort of leverage and for that reason alone I think they should suffer.

I don't really understand the reverence with which we treat the auto industry.
We let the steel industry wither away with hardly a peep.
We let the dotcom bubble burst and I don't recall anyone offering to bailout Pets.com.

Either the American economic template works or it doesn't...if free enterprise is going to be the model then the consequences have to be part of it.
If we're going to nationalize big business, then so be it but this hybrid of the two is just absurd.

We constantly hear about the resilience of the American spirit and the excellence of the American worker, yet when push comes to shove, no one seems confident enough in either to just let them show what they can do.

How are we supposed to encourage a whole new approach while simultaneously propping up the dominant "old school" player?

Why is it that during this whole fiasco we haven't seen any young visionaries from the Big Three, just the same old suits who have fought tooth and nail for decades to preserve a clearly disfunctional business model?

Great post.

I remember Ford's Motor Credit division propping Ford up. After I sold my stock I remember hearing that it was to be spun off.

One thing that killed the American car industry was it's stupifying truck glut. Not that Toyota didn't up it's truck selection too but it at least made better vehicles as a whole.

As a slight aside, this E85 crap needs to be canned as well. Alternative fuel that basically costs the same as our current standard of fuel, gets worse mileage, and drives up corn costs in other industries needs to go.

The car companies have been fighting for years to not have to make more fuel efficient cars. Now their lack of foresight is biting them in the ass among other factors.

"Hey instead of making cars more fuel efficient, lets put R&D into making them run on different fuel that is no better."

Nice going.

[Busyman]

I have an agenda.

My theory is that the bankruptcy of the Big Three will be the death knell for NASCAR.

Good idea.

NASCAR sucks anyway. A constant of left turns and maybe a crash-can one bother to get up from watching this shit on TV and not miss something?

[clocker]

"Hey instead of making cars more fuel efficient, lets put R&D into making them run on different fuel that is no better."

Nice going.
That's just it...there is minimal R&D required to run ethanol- change a few seals, maybe tweak the injector sizes a bit, modify the fuel maps and voila!, you have a "green" car.
Nobody cared where the ethanol came from- and the corn belt farmers were thrilled with the subsidy- it was just too easy to resist.

Stupidly shortsighted but that's been our "energy policy" for a long time.

[devilsadvocate]

I found this quite interesting considering the tone in Washington

linked from realclear politics http://www.nydailynews.com/opinions/2008/12/14/2008-12-14_republicans_subsidize_foreign_auto_maker.html

I think it's written in a very biased way but it makes an interesting point IMO


http://assets.nydailynews.com/img/static/columnists/col_hdr_louis.jpg
Republicans subsidize foreign auto makers, but leave Detroit hanging

Sunday, December 14th 2008, 4:00 AM
The group of Republican senators whose procedural votes doomed the auto industry bailout bill perfectly illustrates the narrow, "America Last" politics that is crippling efforts to revive the U.S. (http://www.nydailynews.com/topics/United+States) economy.
The proposed $14 billion in short-term loans for General Motors (http://www.nydailynews.com/topics/General+Motors+Corporation) and Chrysler (http://www.nydailynews.com/topics/Chrysler+LLC) were supported by a truckload of industry leaders and economists, along with President Bush (http://www.nydailynews.com/topics/George+W.+Bush), President-elect Barack Obama (http://www.nydailynews.com/topics/Barack+Obama) and majorities in the House and Senate.
All agreed that a loan would be better than bankruptcy, which could put as many as 3 million people (and 40,000 of them in New York (http://www.nydailynews.com/topics/New+York) alone) out of work.
But a clique of Republican senators blocked the bailout, which required 60 votes rather than a simple majority. And they did it for the worst possible reasons.
Exhibit A is Sen. Richard Shelby (http://www.nydailynews.com/topics/Richard+Shelby) of Alabama (http://www.nydailynews.com/topics/Alabama), an outspoken opponent of the bailout who told Detroit CEOs point-blank - before hearings even began - that he would vote no on a loan.
Shelby, it turns out, is a bought-and-paid-for advocate for non-American carmakers.
Toyota (http://www.nydailynews.com/topics/Toyota+Motor+Corporation), Honda (http://www.nydailynews.com/topics/Honda+Motor+Co.+Ltd.), Hyundai (http://www.nydailynews.com/topics/Hyundai+Motor+Company) and Mercedes-Benz (http://www.nydailynews.com/topics/Mercedes-Benz+International+Inc.) all operate in Alabama, a so-called right-to-work state where unions are scarce - but taxpayer help for corporations is not. At a recent press conference, Ron Gettelfinger (http://www.nydailynews.com/topics/Ron+Gettelfinger), president of the United Auto Workers (http://www.nydailynews.com/topics/United+Auto+Workers) union, ticked off the staggering sums of subsidy money Alabama has given to these foreign companies.
"We have Hyundai Motor Co. that got $252 million in incentives. Toyota there got $29 million in incentives. Honda, $158 million," Gettelfinger said.
Alabama gave Mercedes-Benz the sweetest deal of all: job training, incentives, an agreement to buy 2,500 cars and a parcel of land valued at more than $250 million - the price to Mercedes of building a plant.
"That incentive package totaled somewhere around $175,000 per employee to create those jobs there," Gettelfinger said. "We can offer incentives to our competitors to come here and compete against us, but at the same time we are willing to walk away from an industry that is the backbone of our economy."
That, in a nutshell, is the problem. Nationwide, right-to-work states have poured $3 billion in subsidies into foreign-owned carmakers since 1992, according to the union. And yet Republican senators from states like Alabama, Mississippi (http://www.nydailynews.com/topics/Mississippi), Kentucky (http://www.nydailynews.com/topics/Kentucky), Tennessee (http://www.nydailynews.com/topics/Tennessee) and both Carolinas suddenly turned into born-again opponents of giving government dollars to private companies.
The UAW actually gave in last week, agreeing to bring the salaries and benefits of Detroit (http://www.nydailynews.com/topics/Detroit) autoworkers down to the lower level paid by foreign car companies in union-hostile states.
But even that concession wasn't enough for Shelby and the anti-labor senators, who insisted that UAW salaries drop to foreign car company levels within a year.
When the union declined to gut its members' paychecks so quickly - at a time when the economy is in turmoil and people are hurting - the bailout deal collapsed.
Keep all this in mind the next time you hear conservatives carping about how "greedy" unions hindered Detroit's profitability.
A similar blind spot in the debate obscures the free trade pacts that give advantages to foreign carmakers. Current trade rules limit U.S. auto companies to selling 5,000 cars in South Korea (http://www.nydailynews.com/topics/South+Korea) - while allowing South Korean giants like Hyundai to sell 600,000 cars here.
Though it looks likely now, we don't know if the White House (http://www.nydailynews.com/topics/The+White+House) will order the Treasury Department (http://www.nydailynews.com/topics/U.S.+Department+of+the+Treasury) to lend bank bailout funds to GM and Chrysler until the new Congress convenes next month.
And if the administration does, we don't know if the money will be too little, too late to head off major job losses.
What we do know for sure is that the economy won't recover anytime soon if pols keep subsidizing foreign companies at the expense of American industry.
Back in the day I seem to recall the hog makers being saved by Honda introducing the goldwing, which was a much better product technically, reliably and performance wise than the Harleys of the day.
It spored a bout of "buy American patriotism" among bikers and phrases like "rather have a sister in a whorehouse than a brother on a jap bike".

I guess car buyers are a different breed.

[j2k4]

I read that and see this-

""We have Hyundai Motor Co. that got $252 million in incentives. Toyota there got $29 million in incentives. Honda, $158 million," Gettelfinger said.

Alabama gave Mercedes-Benz the sweetest deal of all: job training, incentives, an agreement to buy 2,500 cars and a parcel of land valued at more than $250 million - the price to Mercedes of building a plant."

It seems we have four thriving automakers employing scads of American workers for a billion dollars, more-or-less.

I think that's a better deal. :whistling:

[devilsadvocate]

I read it and see government subsidizing private foreign owned business on one hand and saying that's not what government should be doing on the other.
I'm supposed to accept corporate welfare because it's a sweeter deal?

[clocker]

Back in the day I seem to recall the hog makers being saved by Honda introducing the goldwing, which was a much better product technically, reliably and performance wise than the Harleys of the day.
It spored a bout of "buy American patriotism" among bikers and phrases like "rather have a sister in a whorehouse than a brother on a jap bike".

I guess car buyers are a different breed.
The whole concept of "Buy American" has always escaped me.
To knowingly and willfully invest in a substandard product seems like the very antithesis of being American.

Don't get me started on Harley Davidson...my hatred is deep and boundless.


The proposed $14 billion in short-term loans for General Motors and Chrysler were supported by a truckload of industry leaders and economists, along with President Bush, President-elect Barack Obama and majorities in the House and Senate.
And opposed by 60% of Americans (http://www.worldcarfans.com/9081204.004/public-opposes-auto-bailout-by-60-percent-in-cnn-poll)- the people who will actually end up paying for it.

I'm reminded lately of the British auto industry.
In the early 50's they dominated the world's export market (and produced some of the most iconic and desirable cars of all time- think Jaguar XKE and even that most American of performance cars, the Shelby Cobra, which was a British design), yet by the 70's they were dead in the water, subsisting on massive government aid.

Even with all the government intervention, today's British auto industry is but a shadow of it's former self.

There might be a lesson for us to learn from that...

[iEATlilKIDS]

i m for the bail out, my reasoning is that i would like to see the whole yank life style go down with flames and not just the couple hundreds of thousands of those who would loose thyre jobs due to American arrogance and sheer retarded narrow short term thinking that led to the making of some of the worst manufactoring and engeniring that has ever been prouduced by man.
let em fat bastards sit in the corner and think bout how dumb thyre way of life is for a while

[pentomato]

This is politics as ussual, republicans always talking about been patriotic, but they turn around and vote all the time to send jobs overseas, now they want to destroy millions of jobs in favor of foreign cars and the money they make will go to other countries. Of course American cars are bad, they buy the parts in china, so not surprise here.
I hope the day will come, when american people will hold those politicians accountable of so many job losses.
Free market just for big bussinesses, we the people get nothing in return.

[devilsadvocate]

Not only are foreign manufacturers benefiting from US corporate welfare but they get it from home ass well



Currency

“A sharp appreciation of the yen in November led to comments by a number of Japanese officials...[Official comments on exchange rate policy] may introduce additional volatility in exchange markets, and therefore are unhelpful.”


— Treasury Department Report to Congress on International Economic and Exchange Rate Policies,
December 2007
The Impact of a Misaligned Yen
on U.S. Automakers

U.S. automakers welcome competition from Japanese companies and other international competitors. We believe that competition in a free and fair environment is good for consumers, good for innovation, and good for creating ever safer and more fuel-efficient cars. However, the U.S. government continues to passively accept subsidized imported vehicles from Japanese automakers who are not competing fairly because their government effectively subsidizes its auto industry through the use of an artificially low yen. This policy has led to the skyrocketing levels of auto exports to the U.S. that harm the economy and cost American jobs by giving Japanese automakers an unfair and unearned advantage over American automakers.
The artificially low yen has helped fuel our trade deficit with Japan, which hurts the U.S. economy and gives Japanese automakers an unfair advantage over American automakers. Nearly two-thirds of that deficit, or $56 billion out of a total $88 billion, is exclusively a result of Japanese auto products.
This issue is not trivial or just a technicality. The impact of an artificially low yen on the automotive sector is a major competitive factor in the whole automotive industry: The misaligned yen gives the average imported Japanese car a huge windfall cost advantage over U.S. automakers and other competitors in the market. This 'yen effect' also crosses over to Japanese vehicles made in the U.S. because of the high level of subsidized imported auto parts used in their U.S. plants.
A few facts:


With a yen valued at 118 to the dollar, Japanese automakers enjoy an average windfall $4,000 cost advantage per vehicle more than they would if the yen traded at its true value. The overall subsidy Japanese automakers gain for the 2.2 million vehicles they import totaled $8.8 billion in 2006.
The total yen subsidy provided to Japanese automakers in 2006 was $13.4 billion – $8.8 billion for car & truck exports to the U.S. and $ 4.6 billion for imported parts used in American-made Japanese cars.
More than half (52%) of all automobiles manufactured in Japan were designated for export in 2006, exceeding 50% for the first time in 19 years. In fact, even as demand within Japan for new autos is declining, Japanese companies are adding production capacity to Japan-based facilities, reactivating assembly lines, adding workers and postponing planned factory closures as they move to export ever greater numbers of vehicles.

It is time for U.S. policy to place the needs and survival of its own manufacturing sector first. To do so will require the U.S. to demand that the Japanese allow the yen to regain its undistorted value. Japan must be pressed to bring its currency into alignment and trim its excessive currency reserves.


Yet all the southern republicans are interested in is cutting wages, pensions and health care for American workers.

[j2k4]

Not only are foreign manufacturers benefiting from US corporate welfare but they get it from home ass well


Yet all the southern republicans are interested in is cutting wages, pensions and health care for American workers.

Well...we still like a little piece of "home ass", too. :whistling

[clocker]

Not only are foreign manufacturers benefiting from US corporate welfare but they get it from home ass well


The Japanese have always considered their heavy industry as a national strategic asset and have exercised extreme government oversight to protect and nurture it. The government decided who was going to have access to raw materials- specifically steel- and steered engineers and other necessary labor to the companies it thought most likely to succeed. In a very real way (unlike GM's similar but self-serving claim), what was good for Nissan was good for Japan.
Since the end of WW2 when Japan was forced to disarm, corporations have taken the place of the military. Companies like Mitsubishi are the warriors of modern Japan, sent out to protect,conquer and maintain Japan's stability.
Given this role, it's hardly a surprise that the Japanese government will stop at nothing to ensure their corporate success.

Prior to the recent financial carpocolypse, such government intrusion into American businesses was considered totally unacceptable- nay, unAmerican, bordering on communist- and yet today that's just what they cry for.

A classic case of wanting one's cake whilst eating it too.
When times are good American companies want the government to leave them alone- no taxes, no regulation, unfettered capitalism at it's purest- when things go sour they want all the benefits and protections that Big Brother can provide.
Naturally, once the immediate danger has passed, Big Brother is supposed to gracefully bow out and allow the corporations to operate as they are used to doing.
Like that has ever happened here in the US.

[devilsadvocate]

@j2k4 I have a dell keyboard, made in china where they have problems with their ars oh never mind.


@clocker

I agree with all you say, I gave my opinion on a bailout in my first answer. I've been posting since on the talking points. The last one was about all this hot air from lawmakers decrying government subsidies while supporting them when it suits and all this stuff about how these foreign companies are doing well when they have certain advantages afforded them.

Just adding ignored tidbits.

What do you have against Harleys BTW? Is it the company, the bikes or the riders or just motorcycles in general?

[clocker]

What do you have against Harleys BTW? Is it the company, the bikes or the riders or just motorcycles in general?
I love motorcycles, which is why I dislike- OK, hate- Harleys.
The bikes and the people who idolize them.

Harley decided to freeze time in the era of The Wild One (which, oddly enough, featured a Triumph Bonneville) and stop innovating.

By the seventies, faced with the overwhelming technical superiority of the Japanese, Harley, enthusiastically abetted by the owners, decided it was somehow more patriotic to stick to outdated and inferior designs.
In essence, they threw up their hands, ceded defeat and tried to make it a virtue.

Faced with the fact that Yamaha RD350 (which cost about $750 at the time) could absolutely blow the doors off the biggest Harley made, they decided to pursue the only area in which they excelled...they made Harleys louder.

"My bike doesn't handle, has pathetic performance and features quality control that would make a Neanderthal craftsman weep but by God, you can hear it coming from 2 miles away!"

I could go on...

[j2k4]

What do you have against Harleys BTW? Is it the company, the bikes or the riders or just motorcycles in general?
I love motorcycles, which is why I dislike- OK, hate- Harleys.
The bikes and the people who idolize them.

Harley decided to freeze time in the era of The Wild One (which, oddly enough, featured a Triumph Bonneville) and stop innovating.

By the seventies, faced with the overwhelming technical superiority of the Japanese, Harley, enthusiastically abetted by the owners, decided it was somehow more patriotic to stick to outdated and inferior designs.
In essence, they threw up their hands, ceded defeat and tried to make it a virtue.

Faced with the fact that Yamaha RD350 (which cost about $750 at the time) could absolutely blow the doors off the biggest Harley made, they decided to pursue the only area in which they excelled...they made Harleys louder.

"My bike doesn't handle, has pathetic performance and features quality control that would make a Neanderthal craftsman weep but by God, you can hear it coming from 2 miles away!"

I could go on...

Amen to all of that.

Harley should have just ceded the highway and made off-road machinery...like John Deere, or, dare I say it, Kubota. :lol:

[clocker]

Harley should have just ceded the highway and made off-road machinery...
Given the horrible reliability of most Harleys- and the predilection of most owners to add chrome gee-gaws and polish instead of ride- "off-road" is exactly where they spend most of their time.
Thank goodness.

[devilsadvocate]

Beauty is in the eye of the beholder I guess.

Some people still like vinyl records over cds

With the noise I have to say I would rather be sat at the lights with a Harley next to me idling than have one of those jap sports bikes with the rider constantly revving the engine. It's almost as if they have uncontrollable muscle spasms in their wrists.

[j2k4]

I once skimmed a copy of The Harley Davidson Guide to Skanky Women, autographed by Sonny Barger himself.

True story.

[clocker]

Was it hollowed out to hide meth?

[j2k4]

Was it hollowed out to hide meth?

The skanky woman? :whistling

[clocker]

Yeah, her too.

[Busyman]

Prior to the recent financial carpocolypse, such government intrusion into American businesses was considered totally unacceptable- nay, unAmerican, bordering on communist- and yet today that's just what they cry for.

A classic case of wanting one's cake whilst eating it too.
When times are good American companies want the government to leave them alone- no taxes, no regulation, unfettered capitalism at it's purest- when things go sour they want all the benefits and protections that Big Brother can provide.
Naturally, once the immediate danger has passed, Big Brother is supposed to gracefully bow out and allow the corporations to operate as they are used to doing.
Like that has ever happened here in the US.

The problem is that with foreign government behind foreign car exports and idiot local car companies fucking up in a myriad of ways - advantage foreign car companies. No deuce.

@devilsadvocate - it seems weird that the article doesn't mention any incentives to the Big Three (not talking about TARP).

It seems also that those incentives were laid out to lure the companies to their state versus another.

I've always said that America would be become a nation primarily made up of high-paid executives and low wage earners. Ship middle-class jobs overseas to benefit the "company" consisting of executives with it's primary work force located elsewhere. Gut unions and have a Walmart roll back on wages and benefits. Meanwhile everything else like housing, food, medical care, transportation, and education doesn't get a roll back.

"Change is coming."