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Detroit bailout - Page 2

post #31 of 52
Quote:
Originally Posted by jcat View Post
I really have very I've also read opinions that it wouldn't matter, because foreign carmakers would take up the slack.
Trish, I was at least one of the persons that posted that opinion. It was done rather facetiously but you are right and it would be gross ignorance on my part if I honestly believed that. The problem we are facing right now is global and the big 3 are just a piece of that global crisis.

As to Tim's posts, I also agree. But as we know by reading many of the IMO threads on, well, just pick a subject, perception is a mighty argument for many. Perception and reality often do not equal the same thing.
post #32 of 52
Quote:
Originally Posted by jcat View Post
I really have very little sympathy for the big bosses.
I have none, nada, zip, zero. Jets aside, I believe only one of them was agreeable to giving up his outrageous salary. As far as other car makers picking up the slack...don't Toyota and Honda both manufacture cars in Canada and US? Wouldn't someone stand to increase sales, add employees, etc?

And didn't GM outsource many of its parts, etc, to Mexico?

I don't know the answers to these questions, which is why I'm asking.
post #33 of 52
Quote:
Originally Posted by jcat View Post
I We're seeing the extremely dark side of capitalism/free enterprise right now, .
Tricia, I don't think it's capitalism at fault. I'd rephrase your statement to read: we're seeing the extremely dark side of human nature: GREED. There's nothing inherently wrong with the capitalist economic system, but because of the freedom allowed to place capital where the capitalist best feels it can be put to use, the system does need close oversight to ensure that greed isn't allowed to drive the capitalist's decision-making. Government was persuaded to relax oversight on certain segments of the capitalist financial system, and human nature being what it is, greed overcame prudent decision-making.
post #34 of 52
Quote:
Originally Posted by Yosemite View Post
Trish, I was at least one of the persons that posted that opinion. It was done rather facetiously but you are right and it would be gross ignorance on my part if I honestly believed that. The problem we are facing right now is global and the big 3 are just a piece of that global crisis.
Sorry, Linda, I was unclear. I was thinking about articles or op/eds like these when I referred to opinions, rather than what people have posted here:
If Detroit Falls, Foreign Makers Could Be Buffer
In Detroit, Failure's a Done Deal

Quote:
Originally Posted by Cinder View Post
As far as other car makers picking up the slack...don't Toyota and Honda both manufacture cars in Canada and US? Wouldn't someone stand to increase sales, add employees, etc?

And didn't GM outsource many of its parts, etc, to Mexico?

I don't know the answers to these questions, which is why I'm asking.
They would stand to increase sales, etc., but it will take them awhile, and meanwhile they're idling plants. Stock prices have taken a real beating, and banks aren't lending, so where are they going to get the cash to pick up the slack?
Credit Crunch Hits European Autos
Toyota Scales Back Production of Big Vehicles
Quote:
With sales of pickups and big S.U.V.’s tumbling, Toyota said it would shut down truck production at two United States plants for three months and consolidate its pickups into one factory next year.
The Japanese automaker also said it would begin making its Prius gas-electric hybrids in a new plant in Mississippi by late 2010 to meet demand for more fuel-efficient vehicles.
Honda Swindon closing for 50 days
Quote:
Friday's announcement also means that Honda will have reduced its overall global annual vehicle production by 150,000 vehicles.

Rival Japanese carmaker Toyota is also suffering from the economic slowdown. It announced on Friday plans to cut its domestic temporary workforce in half.

"We will not be renewing contracts for 3,000 of our temporary workers at the end of March 2009," the company said.

Mazda, another of Japan's largest car markers, announced on Thursday that it would cut 1,300 jobs and cut production for the current year by 48,000 units.

Isuzu, one of Japan's biggest truck makers, also announced on Thursday that it would cut 1,400 domestic jobs and cut production for the year by 10%.

Tough economic conditions and banks' unwillingness to lend money mean global demand for cars is slowing dramatically.
Automakers Report Grim October Sales
Quote:
The Japanese rivals of Detroit’s Big Three hardly fared better, despite having a greater selection of small, fuel-efficient passenger cars in their product lineups.
Toyota’s sales dropped 23 percent in October, while Honda’s sales plunged 25.2 percent, and Nissan’s sales fell by 33 percent.
One of the crazy things being reported right now is that a group of Opel dealers are thinking about bidding to buy the company from GM, its parent.

Opel Dealers 'Eyeing GM's Euro Arm
post #35 of 52
The leadership of the UAW is just as stubborn and arrogant as the management of the Big Three. As far as I'm concerned reorganization is their only option. Bailing the banks out set a bad precedent, now every Tom, Dick and Harry with a floundering industry is going to show up with their hands out looking for money while attempting to fix their in house problems or change the way they do business.
post #36 of 52
post #37 of 52
Quote:
Originally Posted by jcat View Post
One of the crazy things being reported right now is that a group of Opel dealers are thinking about bidding to buy the company from GM, its parent.
The current market cap of GM is under $2 billion, so that's not as crazy as it sounds. In fact, it's a plan that I proposed on a call-in to Bill's show. Although my plan was to have the employees buy the company. The question is not whether GM can be bought, but whether the buyer has to take on the company's debt, its pension obligations, and its retiree healthcare obligations. Those could be an insurmountable hurdle for a buyer. My guess is that if a buyout is proposed, it's going to be conditional on the government taking on those obligations.
post #38 of 52
Quote:
Originally Posted by coaster View Post
The current market cap of GM is under $2 billion, so that's not as crazy as it sounds. In fact, it's a plan that I proposed on a call-in to Bill's show. Although my plan was to have the employees buy the company. The question is not whether GM can be bought, but whether the buyer has to take on the company's debt, its pension obligations, and its retiree healthcare obligations. Those could be an insurmountable hurdle for a buyer. My guess is that if a buyout is proposed, it's going to be conditional on the government taking on those obligations.
It looks like the idea of dealers buying Opel is off the table, at least for the time being:
GM Won't Sell Opel or Fire German Workers

If I seem preoccupied with the auto industry at the moment, it's because I am. Porsche and Daimler (Mercedes) are the big employers around here. A neighbor (production) and a tenant (engineering) work for Porsche, and a close friend is a Mercedes engineer. The school I work at has sort of a symbiotic relationship with Daimler, as the company is the major hirer of our graduates, and many of its foreign R&D people have learned German at the school. Need I mention that many students' parents are Daimler or Porsche employees?

I have a pretty good idea of what would happen to this neck of the woods if either of those companies went bankrupt (not probable), and am therefore concerned about the fate of the people dependent on the Big Three. I keep thinking about what happened to the British car industry.
post #39 of 52
What happened to the British car industry happened because the cars they built had crappy quality control. Their manufacturing techniques didn't keep up with the technology needed. I really don't think German auto manufacturers need worry about that. Unless something has gone fundamentally amiss with the German people, quality control and technology are two areas they're likely to be on top of the heap as long as Germans are Germans.
post #40 of 52
Quote:
Originally Posted by coaster View Post
What happened to the British car industry happened because the cars they built had crappy quality control. Their manufacturing techniques didn't keep up with the technology needed.
Doesn't the latter describe Detroit? Fuel efficiency?
post #41 of 52
Well, yes and no. Yes wrt to fuel technologies; no wrt quality control, which on "Big Three" built cars is pretty good nowadays. They learned their lessons from the Japanese on how to built reliable cars.

Fuel efficiency? Boy, you could get me going there. Basically, they don't make any improvements in that area unless they're forced to by the government. Lots of different reasons different viewpoints could come up with. In my opinion, I'd say the major reason Detroit hasn't done a better job at producing fuel-efficient vehicles is primarily because the U.S. market hasn't demanded it. Detroit CAN produce fuel-efficient vehicles; the technology isn't rocket science; they just haven't been motivated to do it because U.S. car buyers haven't cared all that much about fuel efficiency until the fuel price shocks of this past year. Now they're stuck behind the eight-ball because they didn't or couldn't look far enough ahead and have vehicles ready-to-go that would sell into a high-fuel-price marketplace.

GM has been doing quite a bit of R&D into electric and hydrogen-powered vehicles, but it hasn't got much beyond R&D except for the Volt. And if car customers don't buy the Volt, then that isn't going anywhere, either. And that gets into another whole discussion about why high gas prices are a good thing in one sense -- high gas prices are necessary to motivate not only R&D and production, but more importantly, to motivate the consumers to WANT fuel efficient or alternate-fueled vehicles. Now that gas is back down below $2 a gallon, everybody's out driving like crazy again.
post #42 of 52
Quote:
Originally Posted by jcat View Post
If I seem preoccupied with the auto industry at the moment, it's because I am. Porsche and Daimler (Mercedes) are the big employers around here. A neighbor (production) and a tenant (engineering) work for Porsche, and a close friend is a Mercedes engineer. The school I work at has sort of a symbiotic relationship with Daimler, as the company is the major hirer of our graduates, and many of its foreign R&D people have learned German at the school. Need I mention that many students' parents are Daimler or Porsche employees?

I have a pretty good idea of what would happen to this neck of the woods if either of those companies went bankrupt (not probable), and am therefore concerned about the fate of the people dependent on the Big Three. I keep thinking about what happened to the British car industry.

I am right along side you here. I don't know how I feel about the Big Three Bailout. I have no sympathy for the CEO's running the Big 3, but I do for the working class, and I do for the economy in my state. I don't know anyone who is not connected to one of the Big 3 companies. I've already seen the effect of closing parts factories in my home town. Our unemployment rate skyrocketed with hundreds suddenly out of a job, most of which were the sole breadwinners for their family, as the job market was in a downward spiral before TBM closed it's doors. The school I currently attend receives a huge chunk of it's money, which I personally receive a part of through scholarships, from Ford and GM. GM has the biggest internship program available to students, and hires more students from my college than any other school. Both Ford and GM sponsor many student projects and studies. So, while I don't know how I feel about these companies asking, or rather demanding, government handouts, I do fear the effect of any one of these companies closing their doors, nevermind all 3.

I do know that the Big 3 need to make some SERIOUS changes if they intend to stay in business, and I can only pray that this serves as a wakeup call to them. There is a good reason why I drive a Honda. It's a good, reliable, fuel efficient car that was made in America, with 80% American parts. That's more than I can say for the car(s) I owned prior.
post #43 of 52
Quote:
Originally Posted by Zissou'sMom View Post
They've said over and over that they won't last until January without intervention.

I do think we need to help pay the salaries of their working-class employees through the year. I don't know where that 57$ an hour came from, none of the people I know who work in factories make 120,000$ per year.
I believe that's not actual salary, but the value of pay, overtime and benefits. Many line workers do make 60-80,000/ year but that has been trimmed back with the lack of OT and sagging car sales.

ETA: I have worked in the auto industry and I live in southeastern Michigan, which would be very hard hit if one of those companies goes under. This state has been in a recession for years and I would say is in a depression now. I would also say that auto mfgs absolutely need to change the way they do business. And the UAW needs a good, swift kick in the pants. What really ticks me off is the whipping the auto CEOs received, while the financial sector companies got hand outs without any public pillorying by lawmakers. That doesn't seem fair. Lawmakers should demand plans for money from the likes of AIG and Citi, too? I haven't seen that reported anywhere...
post #44 of 52
Quote:
Originally Posted by whiteforest View Post
I am right along side you here. I don't know how I feel about the Big Three Bailout. I have no sympathy for the CEO's running the Big 3, but I do for the working class, and I do for the economy in my state. I don't know anyone who is not connected to one of the Big 3 companies. I've already seen the effect of closing parts factories in my home town. Our unemployment rate skyrocketed with hundreds suddenly out of a job, most of which were the sole breadwinners for their family, as the job market was in a downward spiral before TBM closed it's doors. The school I currently attend receives a huge chunk of it's money, which I personally receive a part of through scholarships, from Ford and GM. GM has the biggest internship program available to students, and hires more students from my college than any other school. Both Ford and GM sponsor many student projects and studies. So, while I don't know how I feel about these companies asking, or rather demanding, government handouts, I do fear the effect of any one of these companies closing their doors, nevermind all 3.

I do know that the Big 3 need to make some SERIOUS changes if they intend to stay in business, and I can only pray that this serves as a wakeup call to them. There is a good reason why I drive a Honda. It's a good, reliable, fuel efficient car that was made in America, with 80% American parts. That's more than I can say for the car(s) I owned prior.
The future looks very bleak for Michigan. Even if people want to relocate in order to find jobs, how can they if they can't sell their homes?

New Economic Fears Arise in Michigan

Quote:
It is the same story in other parts of Michigan, as the state’s already entrenched recession — in at least its fifth year, according to economic experts — digs deeper as a result of the recent global financial crisis.
New data show the state’s unemployment rate crept up to 9.3 percent, almost three times what it was in 2000, and, along with Rhode Island, the highest in the country. Just last week, Herman Miller Inc., an office furniture company based in Zeeland, Mich., announced that it would eliminate or lay off 400 to 650 workers, many of them in western Michigan. SKD Automotive, an auto parts manufacturer in Jonesville, Mich., where it is the largest employer, indicated it would eliminate 300 jobs.
As a result of the steady job losses that began in the summer of 2000, 1.82 million Michigan residents, or close to 20 percent of the population, are now on some form of public assistance, including food stamps and home heating credits, a record for the state.
GM should have kept making buses and locomotives, as I think a big part of the economic stimulus package will be pushing the expansion of mass transit.
post #45 of 52
I don't believe the car manufacturers are all to blame. The government needs to accept part of the blame. About 10 years ago when my BIL went to the Canadian government with his bio fuel they didn't have the time of day for him, wouldn't even talk to him and sent him on his way. He has been driving his car on this fuel for all those years and has on occasion given us some for our cars.

Greed is a very good word to use here - the government is as greedy as anyone else. They sure don't want to lose those oil revenues. So maybe they should bail out the companies - after all they are partially responsible for the gas crisis that started this whole slide by not even considering alternate fuel sources.
post #46 of 52
Quote:
Originally Posted by Yosemite View Post
- the government is as greedy as anyone else. They sure don't want to lose those oil revenues.
An astute observation.
post #47 of 52
These auto makers need to start cutting back and stop demanding hand outs to fix their problem.

Auto workers are apparently saying that they are not going to take a pay cut to save their companies. IMHO it's better to take a pay cut and keep the job than to get fired because the company closed and you are completely out of work.

The auto industry needs to start and the top and work their way down.

Prune the top level management positions. Cut salaries and then freeze salaries. Stop giving huge bonuses to top level executives. Reduce the number of various types of cars being made. There are thousands of makes and models around. All of that takes money to buy special parts for each one. Use the same type of engine and vary the type of exterior.

Once all that is done and they still find themselves in a bind, then they should look for a handout, but to give them a handout so that they can continue their ridiculous spending is outrageous.

Other companies in trouble cut back and find ways to save, the auto industry seems to think they are exempt from having to do that.
post #48 of 52
But they've already done all those things you suggest at various times and to various degrees, and it hasn't been enough.
post #49 of 52
Quote:
Originally Posted by Going Nova View Post


I own a Ford car... and it was assembled in Mexico. If the companies want American support, maybe they should support Americans... rather than export jobs.

...While my car gets pretty good gas mileage, it isn't reliable by any means. I don't drive it more than 100 miles from home.
I have to recant what I said about Ford. I've been converted to the Ford fanclub. I was happy to hear that they're trying to make it without government issued moneys, and some family members who recently bought from Ford (and others who didn't) told me I could get some pretty sweet deals right now.

So guess what I did? I bought another Ford. This time it's a brand new truck covered by a warranty. I did look into buying a Toyota, but the sell tactics used at the dealership were a huge turnoff. (I was there for 2 hours negotiating a $500 discount. I was not happy with the way they treated me, and wound up walking out.) Buying from Ford was pretty straightforward; we reached an agreement within minutes. I ended up spending just 700 more for a new Ford than I would have for a 2 year-old Toyota. Incidentally, Toyota is experiencing its first loss in about 50 years. (They should have taken my offer! )

So anyhow, I have to recant what I said. I admire that Ford is trying to make it on its own (and pleasantly surprised at the customer service).

I would like if more jobs were brought back to the United States. However with the government requesting cuts in labor costs as a qualification for loaning to the automakers (and the presence of the UAW), that would probably be difficult.

As for my car... I still would not buy another like it. (Although, I did have it for 8 of its 13 years. On the other hand, it has only got something like 120k miles on it.)
post #50 of 52
Thread Starter 
Good for you, that is great. I am on my second Ford Ranger. If they end up not taking a bail out as they are saying I will stay with Ford.
post #51 of 52
A Ford Ranger was the best vehicle I ever owned. I bought it new in 1990 and owned it for 12 years. Even then I was sorry to trade it in, but the A/C was inop and would have cost me one-half the trade-in value of the truck to fix. I drove it for one summer without A/C and I guess I'm just too old to do that any more.

I hope Ford makes it; I hope Ford survives AS Ford. GM? Eh.....they could dump the Buicks and the Pontiacs and just keep the Chevvies; that would be all right. I've never liked Buicks, and Pontiacs just aren't what they used to be.
post #52 of 52
I can honestly say the worst car I ever had was my Ford Crown Victoria. It was honestly a lemon. I had to wrap a blanket over my legs in the winter when driving because there was no heat and I was told by Ford that there was nothing they could do - the car was just like that. There were many things that went wrong with it over the few years that I had it and I got no help or satisfaction from Ford.

That was only the 2nd North American car we ever owned and the last.

I sincerely hope the North American three get their act together and get things going again but I'm afraid they'll do the same old, same old and this will all have been a waste of time and money.
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