Bankruptcy or Bailout??????

[gcarter]

Here's how politics can spill over into a boating, or truck, or car forum.
Something will happen soon to either have more of the past of faltering, failing US auto industry, or, a chance to completely redifine themselves.
What will it be?????
I know a little about the auto industry having worked as an engineering contractor in Michigan in the '80's.
It's always been a high priority in my personal interests.
So, now we're at this historic crossroads, what should happen?
If congress gives a bailout, it'll just be a last ditch effort to extend doing business the way it's always been done in Detroit.
If they're allowed to go bankrupt, all the old impediments, i.e., labor unions, retirement costs, and maybe most of the old management will be gone.
A new opportunity to redefine themselves, be more competitive, and sell products people want and can afford.

What will it be?

[BUIZILLA]

welp, you've opened a big can of worms now George..

[chappy]

Much will depend on what would become of the UAW.

[BUIZILLA]

Read it and weep
A MODERN PARABLE . .

A Japanese company ( Toyota ) and an American company (Ford) decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing.

Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents, and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the 'Rowing Team Quality First Program,' with meetings, dinners, and free pens for the rower There was discussion of getting new paddles, canoes, and other equipment, extra vacation days for practices and bonuses.

The next year the Japanese won by two miles.

Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses and the next year's racing team was out-sourced to India.

Sadly, The End.

Here's something else to think about:
Ford has spent the last thirty years moving all its factories out of the US, claiming they can't make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US. The last quarter's results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads.

IF THIS WEREN"T TRUE IT WOULD BE FUNNY

GM stock - $3
Ford stock - $2

Toyota stock - $67

and, last night the #30 Toyota Tundra won the Homestead NASCAR Truck Series year end race, a feature race sponsored by Ford.... Poodle, the Ford Freak, should have conclusive proof in a few pic's..

I will say this though, Ford went all out this weekend showcasing their trucks at the Homestead race, fuzzy and I crawled all over their new offerings, I was seriously, seriously impressed... a 2009 F150 4x4 is in my sights... maybe even a Rapture... they are also going to sell mega amounts of their new transit van if they can stuff a bigger engine in it, or a turbo or a diesel engine...

[mattyboy]

**** politics, **** the crooked big corp america, **** the bailout,

this is a boating forum i don't come here to whale in the sorrow of the world today i come here to get away from that ****

and Jim, if ford would have done it the ole fashion way and dropped a 351 windsor in that sumbitch they would have smoked charlie
NOWS THERE YOUR ****ING BOATING FORUM :shocking::eek::shades: :tongue:

[BUIZILLA]

Matty, you can put this topic on IGNORE ya know... :popcorn:

[mattyboy]

sorry Jim I saw bailout and i thought someone was sinking

in a boat ;) :) :laugher:

[gcarter]

I would hope that most of you noticed that I included management in the quotient of what would have to go.

But seriously, in the '20's, '30's, '40's, and early '50's, there were a small number of bespoke marine engine manufacturers in existance whose products, while good enough for the market, severely limited boating to very wealthy participants.
This industry won't survive without a supply of good, inexpensive engines.
Period.

[f_inscreenname]

And for you all that thought politics didn’t effect the boating world………the next time you are in your boat look under the motor hatch think about it. What’s under there may be all that’s left of a once proud business of the US.
I’m about to put a Chrysler motor in a boat I’m redoing. I’m thinking it may help sell the boat being they (Chrysler) wont be around anymore by then. But when it comes to my Ford, Chevy or Jeep vehicles I’m scared to death that the warrantees will be lost, the dealers will be gone to service them, etc, etc…..Oh and Mom’s Ford pension she lives off of in her retirement and my stock and corporate bonds will be lost also.
I’m a boater and politics affect me everyday. From boat plants closing to the power packages that will be offered in these boats in the future. How many of you folks would like to have a Toyota motor pushing around those classic Donzi’s?
On a side note, they are also talking about raising boat registrations, trailer tags and crabbing licensees here in Maryland. More boater politics……………….

[onesubdrvr]

How many of you folks would like to have a Toyota motor pushing around those classic Donzi’s?

Actually,

I had considered a 300zx (OK, it's nissan, not toyota), Twin Turbo motor for the 16,..... lacks torque ;)

Wayne

[BigGrizzly]

Just a word from a Honda guy. At the HAM (Honda American Manufacturing ) plant they voted not to have a union. The UAW complained and ther Feds made them have another vote same except 3 people voted for it. Shortly there after we were have some problems such as antifreeze was not strong enough and some other issues raised their heads. Two people were fired over the issues. I am not at liberty to say anymore on the subject, for I do not Know details. I will tell you this the Honda employees are darn proud of the cars they produce. And my opinion as an ex QC guy they should be.

[roadtrip se]

Simply put, depending on what you read and where, one in ten to one in twelve jobs in the US are dependent on the Big Three-ish. We really don't need these guys to fail and add to the economic chaos that is reality right now.

BUT, any money that comes out of the taxpayer pocket needs accountability, over sight, and a commitment to change many intrinsic faults in the business model. This means significant changes that will impact white collar and blue collar jobs, as well.
Even with a bail-out, there is going to be more pain. The big three need half of the number of dealers they have now, half the number of brands and models they have now, and more efficient cars and less SUVs, trucks, and crossovers they have now.

Comparing the big three to the imports is apples and oranges. The transplants do not have the legacy healthcare and retirement costs, they don't pay the wages, they don't have the domestic supplier base, and their car lines are inherently smaller based on being developed for their home markets. We won't even get into the capital advantage that these folks have based on govermental manipulation of their currency.

All of this being said, the domestics, especially Ford, have been building some steadily improving, desirable, and quality product over the past few years. The vernable import loving "evaluator", Consumer Reports has been giving Ford product, better and better reports over the past few years as they downgrade a lot of Toyota product.

The biggest problem? Even after a bailout or several failures, many Americans are not going to even consider buying their product.
Until they figure this out, all of the bail-out money in the world won't help.

I agree with Matty, I would rather focus on boating and get a break from the day-to-day grind of this stuff...

[zelatore]

Until the onions are gone, the US automakers will not make a profit.

My thoughts EXACTLY!

I would however like to see a study showing pay of similar jobs for a big-3 union job vs say the same guy at Toyota in Indiana or Honda in Ohio.

I understand (have family working at the Toyota plant in Princeton, IN) that Toyota actually pays their people pretty well, largely because they don't want the UAW to get a foot in the door. But I wonder how it compares, especially with all the pensions and benefits, to a UAW job.

The few people I know involved in UAW jobs (Ft. Wayne, IN, GM plant) seem to show all the classic union BS sense of entitlement. Basically, they know they can't be fired even if they screw up, and although most of them aren't specifically screw-ups, they feel that they 'deserve' all the pay and benefits they're union has negotiated for them. Even though it's far higher than the same level of work in any other industry.

[zelatore]

Simply put, depending on what you read and where, one in ten to one in twelve jobs in the US are dependent on the Big Three-ish. We really don't need these guys to fail and add to the economic chaos that is reality right now.
BUT, any money that comes out of the taxpayer pocket needs accountability, over sight, and a commitment to change many intrinsic faults in the business model. This means significant changes that will impact white collar and blue collar jobs, as well.
Even with a bail-out, there is going to be more pain. The big three need half of the number of dealers they have now, half the number of brands and models they have now, and more efficient cars and less SUVs, trucks, and crossovers they have now.
Comparing the big three to the imports is apples and oranges. The transplants do not have the legacy healthcare and retirement costs, they don't pay the wages, they don't have the domestic supplier base, and their car lines are inherently smaller based on being developed for their home markets. We won't even get into the capital advantage that these folks have based on govermental manipulation of their currency.
All of this being said, the domestics, especially Ford, have been building some steadily improving, desirable, and quality product over the past few years. The vernable import loving "evaluator", Consumer Reports has been giving Ford product, better and better reports over the past few years as they downgrade a lot of Toyota product.
The biggest problem? Even after a bailout or several failures, many Americans are not going to even consider buying their product.
Until they figure this out, all of the bail-out money in the world won't help.
I agree with Matty, I would rather focus on boating and get a break from the day-to-day grind of this stuff...


And there's the rub. I don't want to bail them out. They made their bed, let them lay in it. BUT, from a practical standpoint, if you can show me that it's better for the country not to dump all these jobs you can win me over. And there is certainly a big argument for that side of the picture.

As for putting government oversight via management in place - NO NO NO.

Oversight, yes if done right. Management, NO. Beancounters CAN NOT sell cars! Cars are emotional purchases. Even things like Toyotas (the anti-car) are sold largely by emotion. No government beancounter will ever successfully market an automobile, boat, or other emotional product.

I do believe the taxpayers should get their money back and then some. I’d like to know more about the Chrysler bail-out in ’79 – I understand that actually worked out quite well and they paid the loans back early. Give me a decent return on the investment, and I’ll be more likely to sign on.

As for all the press and others crucifying the big three for building big SUVs and trucks - it's all BS! The greens like to claim that people didn't buy econo-cars because they weren't on the market. WRONG! They weren't on the market because they didn't sell! GM gets flack for killing the EV-1. Uh, that's because nobody would have actually paid enough for the thing for it to turn a profit! Americans were (wrongly, in my opinion) buying ever bigger SUVs, so that's what the big three built. Now the big three are scrambling to bring smaller, more efficient vehicles to market BECAUSE THAT'S WHAT'S IN DEMAND. You ask for it, and they will build it. Simple enough.

Now, as a big strike against the big 3, they should have been taking that income from all those SUVs and funding research into eco-cars, hybrids, small diesels, etc BACK THEN, instead of panicking and trying to do it now when the Japanese have a big head start and they don't have any money coming in. You would have hoped one of their forecasters would have been able to foresee that maybe someday bigger wouldn't be better. Guess not.

I don't want the big three to go away, but it might actually be better for them to go under and restructure through bankruptcy, painful though it would be.

[gcarter]

There's about a $20.00/hour difference between the domestics and the US built imports.

Maybe some here aren't following me.......

IF they (the domestics) file bankruptcy, they get protection, and the courts allow them to shed all the baggage.

It's a whole new world.

If there's a bail out, basically there's no change, and no restructuring.
They fail eventually.

Think about it.

[zelatore]

There's about a $20.00/hour difference between the domestics and the US built imports.

Maybe some here aren't following me.......

IF they (the domestics) file bankruptcy, they get protection, and the courts allow them to shed all the baggage.

It's a whole new world.

If there's a bail out, basically there's no change, and no restructuring.
They fail eventually.

Think about it.

Painful as it is to consider, it may be the only way for them to get the wholesale change they need to be competitive.

BTW, Michele loves your sig picture. "me" sums up most of what Americans seem to be thinking.

[roadtrip se]

Sorry George, you are drawing conclusions that are in no way certain...and I certainly do follow your logic, but it is flawed.

Under you first assumption, would you buy a car from a bankrupt company that could quite possibly not be around to honor their warranties? If you say yes, I think you would be in the minority because most would not.

Under your second assumption, the bail-out does not guarentee the same end or why consider it?

What it does is give some liquidity to allow these guys to survive a perfect economic storm that has occurred over the past two months that they did not create. Look around you if you think this little storm isn't impacting all carmakers. Stop by your local Toyota store and see all of the zero percent offers, if you think this little trouble is isolated to the Big Three and is of their making. It gives time for the already signed and executed agreements with the UAW for revised healthcare, pay scale, and new work rules to actually kick-in in during 2010. This agreement erases the cost advantage that is typically $1200-1500 per unit that the transplants currently enjoy over the domestics. It also gives them the time to complete the introduction of several new platforms in 2010.

Also, for the record, the rumbles coming out of Pelosi Inc show many strings being attached to this money, including possible management and union changes. I don't think this will be a blank check.

Here is why I support this and I quote from the Auto Extremist Blog...

"For the record, there are around 14,000 domestic-oriented dealers in the U.S. employing approximately 740,000 people with a payroll of around $35 billion – that’s billion with a “B.” But that’s just the dealer side of the equation. When you add in the suppliers and all of the associated businesses that either directly or indirectly depend on Detroit for their livelihoods, we’re talking almost three million people who would be out of work in a matter of just a few months, adding up to a $150 billion loss in personal income."

These number are supported by several industry analysts. To simplify for you George, that is roughly the number of jobs in South Carolina.

While the consensus may be to let them swim with the fishes, we can't afford to let them without a devestating impact on our already totaled economy.

[gcarter]

Todd, you know a lot more about this than I do...it's your life.

However, the transplants still are in a better position to make money world wide than the domestics....after all, small cars got them started.

As far as buying from a bankrupt domestic under the protection of the court, I don't know.....Chrysler thrived under similar circumstances.

If it were presented properly, maybe it would.

A very lean GM (or fill in the blank) w/o any of the old cares of the world....

[BigGrizzly]

Well The last quarter Honda is down 23% in sale and they sell the fuel efficient stuff. Lets make no mistake both GM and Ford world wide are still making money. They do need to restructure. With filing chapter 11 like Christler did years ago may be the way to go. Now Honda has on a hire and travel freeze company wide. Now maybe the big three should produce what people need and ultimately want. GM has been buying down fleet average for the past 25 years, and being told to stop because this would happen. They should have been on top of it sooner. They have always though that in a bad situation they would get a gov bailout. I know this from a former GM person. All the auto makers have had a large decline in sales. Merc got rid of two VPs recently. This thing is all over.

[zelatore]

I'm curious - all I hear is people talking about how the big three don't make cars people want or cars that will sell.

These people act like the big three have deliberately gone out of their way to build either junk or undesirable vehicles.

Now, I have no desire to buy much from the big three and in fact I haven't had an American built car since....well, since I built a Maverick to drag race about 15 years ago. But that's because I'm an enthusiast; my taste runs toward European cars; my focus is on handling and style, not isolation from the road or maximum kiddie seats.

So the domestics focused on SUVs for the last 10 years - that's what was popular in the states. Can you blame them for building stuff like that?

It is true that fit and finish of the domestics has certainly lagged a lot behind the Europeans - even the cheaper cars. Nothing in the US can touch Volkswagen for example in it's price range for a quality interior. But that doesn't speak to WHAT they are/were building so much as HOW they build it.

Still, they are struggling to turn production around and bring new product to market. These things take a long time - to hear the press talk, you'd think all they have to do is press a button and a new car is developed, tested, the assembly line retooled, etc. This is a process that takes years, even when (like Ford) you've got stuff in your international catalogue that you can 'quickly' bring to the domestic market.

So while I have no great love for most domestic cars and don't see myself buying one anytime soon, I'm sick of hearing all the naysayer act like these companies intentionally turn out cars that won't sell. They may not have done a good job anticipating the markets, and they certainly have a lot of other issues, but it's not like they're trying to force people to buy stuff they don't want just because it's what they want to build.

I should note, this only applies to cars. When it comes to trucks, I'm pretty much a Ford guy even though I bought a Dodge last time out. My mistake - after 2 years I'm eagerly watching the new F150. I admit to looking at a Nissan, but I never even thought about a Toyota.

[MOP]

Newt Gingrich was asked about the auto bailout, he said the irony of it was that GM, Ford and Chrysler could be bought part and parcel for billions less then the proposed bail out $$$ they could receive. Basically why bail just buy and restructure as a Gov owned entity. This bail out BS is getting crazy, American Express is now becoming a bank so they too can receive bailout funds due to a slump in payments. I say let them all fail, yes the public will feel some of the pain but our children may be far better off! The bail out gives them license to do it again, just how the hell deep are our pockets suppose to be!

[gcarter]

Interesting comments Don.
I own three Ford SUV's and wouldn't really consider anything else for our personal SUV or tow trucks. They have been bulletproof. Only replace brakes and an occasional AC compressor.
We are thinking of a VW to replace Elaines Explorer though.
For our service trucks, we've used Toyotas exclusively. For over 20 years we've had exceptional success. Currently, we have V-6 Tundras, they get over 20 MPG. We don't carry heavy loads but require a lot of room for stuff. I couldn't ask for better trucks. They don't have the best SUVs though in my opinion (that's we have the Fords).
I think Ford has made really great strides in quality and useful cars for the US.
If you ever read the British auto magazine "CAR", or watch "Top Gear" you quickly realize they don't like, desire, or want most new American cars. The reasons given are usually based on size (a biggie in GB or Japan), fit & finish, and maybe a little envy. The important thing though is to design and build better cars for the time when fuel costs go back up (what'll it be...2 or 3 years?) and can compete w/other companies products who do a lot better job of that than we've been known to do. I think the Ford Flex is a great start. I could see buying one in 2 or 3 years. I don't want a really small car, so I'll compromize on some things.
Where my business is located is an older and let's say, colorful, part of town. One of the things I noticed is when fuel prices were really high a lot of the neighbors parked their old Cadillacs and Impallas w/the 24" rims and were riding bicycles.
I don't think anyone deserves that kind of humiliation. It's one thing to ride a bike for exercise, these folks were doing it out of necessity.
It's been my observation that there's a reluctance within GM to make the dramatic internal intelectual changes to compete in areas they've not dominated in the past. Ford and Chrysler have been able to, to an extent.
The Japanese have had the same reluctance to build the kind of products that have dominated the past US market.
Probably nowhere else in the world (except maybe Austrailia) do people load their entire families and belongings into the family car, van, or SUV and drive 1000 miles in a day. We have mastered that type of vehicle. It may not be what we need in 10 years though.
If alternative fuels will perpetually cost $3-3.50/gallon we better be able to get a lot of miles out of them.
But what happens right now?
If they get a bail out, even with a lot of oversight, I don'gt see a Democratic Congress allowing very much to happen to the UAW, the unions are too important to them. Sorry, but I don't see it working.

[mk32j]

Actually,

I had considered a 300zx (OK, it's nissan, not toyota), Twin Turbo motor for the 16,..... lacks torque ;)

Wayne

I'm a true American and I still believe that if you build a better product and stop making us the guinea pigs in the world of cars you will always be profitable., besides we live in a global car market.

One sub my street driven 2jz Supra makes 953 hp on 28 pounds of boost and 740 lbs of torque and I send it through a TH 400 manual valve body Gm tranny.
3.0 liters 8000 rpms 28 psi on borg warner s400 air werks turbo 4" exhaust......:yes::yes::yes:
IN BOOST WE TRUST

[onesubdrvr]

I'm a true American and I still believe that if you build a better product and stop making us the guinea pigs in the world of cars you will always be profitable., besides we live in a global car market.

One sub my street driven 2jz Supra makes 953 hp on 28 pounds of boost and 740 lbs of torque and I send it through a TH 400 manual valve body Gm tranny.
3.0 liters 8000 rpms 28 psi on borg warner s400 air werks turbo 4" exhaust......:yes::yes::yes:
IN BOOST WE TRUST
simply,....

WOW,... but marinized is a different story,..... or is it?

Wayne

[mk32j]

simply,....

WOW,... but marinized is a different story,..... or is it?

Wayne
I would imagine anything is possible would be fun to try exspecially with salt water as my playground:confused::confused::confused:

[BUIZILLA]

fuzzy and I crawled all over the new F150's this weekend, every model/style they offer... the Rapture is interesting, if not a tad intimidating.. I think I said it somewhere before, but Ford has the BEST lineup for the future, everyone else is just reacting or copying.. the Flex is a major homerun with a 4500# hitch as factory equipped... I can see a new F150 in my future... would you believe the 4wd Toyota platforms don't even have neutral in their transfer case?? WTF... stupid idiots...

[Air 22]

Guess my 2008 ESV 5yr 100,000mi Warranty may be in question? or NOT:nilly::popcorn:

[Tony]

Newt Gingrich was asked about the auto bailout, he said the irony of it was that GM, Ford and Chrysler could be bought part and parcel for billions less then the proposed bail out $$$ they could receive. Basically why bail just buy and restructure as a Gov owned entity.

SOCIALISM! :shocking: :kingme:


:beer:

[gcarter]

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November 17, 2008

Seeking Aid, Automakers Have a Friend in the U.A.W.

By BILL VLASIC and NICK BUNKLEY
DETROIT — When Ron Gettelfinger (http://topics.nytimes.com/top/reference/timestopics/people/g/ron_gettelfinger/index.html?inline=nyt-per), president of the United Automobile Workers (http://topics.nytimes.com/top/reference/timestopics/organizations/u/united_automobile_workers/index.html?inline=nyt-org) union, appears this week at Congressional hearings to help make the case for the Detroit automakers getting emergency federal aid, he wants lawmakers to know what he believes is at stake.
“It wouldn’t be just one company failing here,” Mr. Gettelfinger said in an interview. “It would be all three going down.”
He might as well add the U.A.W.
The union’s membership at General Motors (http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-org), Ford Motor Company (http://topics.nytimes.com/top/news/business/companies/ford_motor_company/index.html?inline=nyt-org) and Chrysler (http://topics.nytimes.com/top/news/business/companies/chrysler_llc/index.html?inline=nyt-org) has been nearly halved to 139,000 workers in the past three years, and it continues to shrink with every new plant closing.
When he and the leaders of Detroit’s Big Three speak at their scheduled hearing, Mr. Gettelfinger is likely to deliver the bleakest warning. A bankruptcy by any of the three companies in Detroit, Mr. Gettelfinger fears, would wipe out the rest of them.
“It’s not just G.M. (http://topics.nytimes.com/top/news/business/companies/general_motors_corporation/index.html?inline=nyt-org) going bankrupt,” he said. “It’s all the rest of the industry that goes with it. Two of the three companies would go under, and there’s a high probability all three would go.”
Perhaps it is no surprise that Mr. Gettelfinger would be a passionate advocate for saving union jobs and funneling $25 billion in federal loans to the beleaguered automakers.
But Mr. Gettelfinger was briefed on G.M.’s dismal financial condition before its earnings were announced on Nov. 7, according to two people familiar with the meeting, part of a presentation to win his support for a potential merger of G.M. and Chrysler.
He saw first-hand that G.M., as well as Chrysler, cannot last long at the rate they are losing sales and revenue in a market that is down 14.6 percent from 2007.
Robert L. Nardelli (http://topics.nytimes.com/top/reference/timestopics/people/n/robert_l_nardelli/index.html?inline=nyt-per), the chairman of Chrysler, and Rick Wagoner (http://topics.nytimes.com/top/reference/timestopics/people/w/g_richard_wagoner_jr/index.html?inline=nyt-per), chairman of G.M., have said they need federal help. (They broke off talks of a merger because of the rapidly deteriorating state of the industry.)
“At this juncture, we are in a crisis,” Mr. Gettelfinger said. “It’s not a matter of how we got here. When you have sales this low, this industry cannot survive.”
A carmaker’s bankruptcy would abrogate workers’ contracts, and probably lead to sharply reduced wages and benefits for any jobs that remain.
“The future of the U.A.W. will be determined over the next two weeks,” said Gary N. Chaison, a professor of labor relations at Clark University. “If G.M. goes bankrupt or doesn’t get a bailout, it’s just going to be a shadow of what it was 50 years ago.”
Mr. Gettelfinger, who is 64, wields new political clout in the debate this week in Congress over how to help Detroit survive the worst vehicle market in 15 years.
The U.A.W. was instrumental in the pivotal victories in Michigan and Ohio by Barack Obama (http://topics.nytimes.com/top/reference/timestopics/people/o/barack_obama/index.html?inline=nyt-per) in the presidential election, and two union loyalists in Michigan, Gov. Jennifer M. Granholm (http://topics.nytimes.com/top/reference/timestopics/people/g/jennifer_m_granholm/index.html?inline=nyt-per) and former Representative David E. Bonior (http://topics.nytimes.com/top/reference/timestopics/people/b/david_e_bonior/index.html?inline=nyt-per), are members of Mr. Obama’s economic advisory team.
For all its political heft, however, Detroit’s labor costs and union contracts will more than likely come under attack in House and Senate hearings.
Mr. Gettelfinger expects the union to be labeled part of Detroit’s problems, and to defend its $27-an-hour wages and top-of-the-line health care benefits and pensions.
But he won’t back down on his prediction of what failure of the Detroit auto industry will mean to the rest of America.
“For every 2,500 cars that the Big Three sells in this country, they employ 78 American workers,” he said. “There is a reason here for us to keep this industry in this country.”
The profound financial problems at G.M. and Ford (http://topics.nytimes.com/top/news/business/companies/ford_motor_company/index.html?inline=nyt-org) were laid bare in their huge third-quarter losses and disclosure that their cash cushions were shrinking by more than $2 billion a month at each company. Chrysler, a private company, does not disclose its financial performances.
Mr. Gettelfinger rejects talk that the U.A.W. will need to make major concessions for Detroit to win aid. The union, he said, has already agreed to job reductions of more than 100,000 workers since 2006, taking over its retiree health care through company-funded trusts, and opening the door to lower wages for new workers at G.M., Ford and Chrysler.
Still, the U.A.W. could be pressured to bend on union rules that provide workers with 95 percent of their wages while on layoff and other job-security provisions.
“The union would have a difficult time justifying benefits for retirees and guaranteed pay during layoffs when those aren’t enjoyed by many workers in the present recession,” said Mr. Chaison.
Auto workers acknowledge fear that the industry might walk away empty-handed from Congress. G.M., for one, has said that it will run out of sufficient cash to run its business by the end of the year without government assistance.
“That would be catastrophic for a lot of families,” said Scott Owens, a second-generation G.M. worker at the company’s car plant in Orion Township, Mich. “This is pretty scary.”
Mr. Gettelfinger had been largely silent on the Big Three’s troubles until blitzing the national cable shows and other news media this past weekend. But he has been meeting nonstop with Michigan Democrats and other legislators sympathetic to the union’s interests, according to associates.
He deflects questions about what conditions should be placed on any federal loans, or whether management at G.M., Ford and Chrysler should be replaced.
“I recognize that Congress should put stipulations on this and they should,” he said. “But there’s a big difference between a low-interest loan and a bailout.”
Mr. Gettelfinger, who started in the auto industry in 1964 on a Ford assembly line in Louisville, Ky., will need a thick skin at the hearings, said financier Wilbur Ross (http://topics.nytimes.com/top/reference/timestopics/people/r/wilbur_l_jr_ross/index.html?inline=nyt-per), who has interests in auto-parts firms dependent on Detroit.
“I think for a lot of the Republican senators, this gives them a chance to give the union payback for the election,” he said.
President of the union since 2002, Mr. Gettelfinger is determined to put the debate above politics and focus on the broader economic crisis.
“We have great respect for our government, we believe in our government, and we need our government,” he said. “We’ve got the case. The question is, can we make it?”


http://up.nytimes.com/?d=0/4/&t=&s=0&ui=0&r=http%3a%2f%2fwww%2enytimes%2ecom%2f2008%2f11%2f1 7%2fbusiness%2feconomy%2f17uaw%2ehtml%3f%5fr%3d1%2 6th%26emc%3dth%26oref%3dslogin&u=www%2enytimes%2ecom%2f2008%2f11%2f17%2fbusiness% 2feconomy%2f17uaw%2ehtml%3f%5fr%3d1%26th%3d%26oref %3dslogin%26emc%3dth%26pagewanted%3dprint http://wt.o.nytimes.com/dcsym57yw10000s1s8g0boozt_9t1x/njs.gif?dcsuri=/nojavascript&WT.js=No&WT.tv=1.0.7
http://www.nytimes.com/adx/bin/clientside/bb00bcdQ2FQ7BdXHQ25Q2FQ60WuQ25yh6_hAhH@d_Q3CWyH

[gcarter]

http://media.ft.com/FTCOM/Images/ftlogo2.gif






Car union rules out concessions

By Bernard Simon
Published: November 16 2008 23:24 | Last updated: November 16 2008 23:24

The US United Auto Workers (UAW) union has ruled out concessions – at least for the time being – to help rescue the ailing Detroit-based car industry.
Ron Gettelfinger, the union president, said at the weekend that “the focus has to be on the economy as a whole as opposed to a UAW contract”.
A showdown is looming in Congress this week over proposals for $25bn (€19.7bn, £16.8bn) in emergency funding for the carmakers, whose viability is threatened by sinking vehicle sales and massive cash outflows. GM has warned that it could run out of the cash needed to run its business early next year.
Mr Gettelfinger and the chief executives of General Motors, Ford Motor and Chrysler are expected to testify at hearings on Capitol Hill, starting on Tuesday.
“We’re here not because of what the auto industry has done”, Mr Gettelfinger said during a rare press conference. “We’re here because of what has happened to the economy.” The union represents blue-collar workers at assembly plants, as well as several parts suppliers.
High labour costs are seen by many outside the UAW as part of the reason for the carmakers’ distress. UAW members’ generous pay and benefits have gained them a reputation as the aristocracy of the US labour movement. Much of GM’s debt was taken on in the early part of the decade to finance its blue-collar pension plan.
Labour contracts negotiated last year include, among other concessions, a two-tier wage structure under which new assembly plant workers would be paid about half of existing workers’ wages, and enjoy fewer benefits.
But this concession has so far been of no benefit to the carmakers as they axe shifts and close plants, shedding tens of thousands of workers.
The UAW contracts would almost certainly be reopened if any of the companies filed for bankruptcy protection.
The union has been emboldened by the election of a Democratic president and a Democratic-controlled Congress. Mr Gettelfinger said that “we need a package approved by this lame-duck session of Congress. If we don’t get it, I’m not sure some of these automakers will make it to mid-January when Barack Obama becomes president.”
The UAW has urged its members to lobby in support of a bail-out. However, some senior Democrats have expressed doubt whether they can muster the votes necessary, especially in the Senate, to pass a rescue package this week.
The Bush administration has also been lukewarm, preferring to focus on speeding up implementation of $25bn in low-cost loans approved earlier to help the carmakers modernise plants to produce more fuel-efficient vehicles.

[roadtrip se]

Here is another way to look at this that I find helps explain what is going on and the case for loans:

Structural:

Many folks still think it's 1970 and the industry hasn't changed. Structural changes at the Big Three have been under way for quite some time with plant closings and workforce reductions. The UAW has agreed to a two-tier wage system, revised work rules, and administering their own health care for current and retired employees; effectively erasing the cost disadvantage to the transplants. They have new product in their pipeline to the tune of 50-60 releases planned per year over the next few years, most of it highly efficient stuff as being driven by the 35MPG CAFE getting ready to hit.

Cyclical:

People have over-bought everything over the past ten years due to easy and abundant credit. As everyone knows, credit has dryed up. The dirty secret now is that bank bail-outs are being utilized to shore up balance sheets, not loan funds to consumers. Not everyone has a 700 credit score and with the stock market and the media, nobody is in a big hurry to buy a car right now any way. The oil merry-go-round didn't help either. Sales have tanked an average of 35% for everybody, and that means EVERYBODY. This could be argued as a structural change, but the impact is cyclical for the car companies because they have no ability to impact the cyclical nature of demand in the business due to economic factors.


So the big question becomes, do you let the cyclical economy erase 3-3.5 MILLION jobs, plunging our country into deeper recession and eroding our manufacturering base further, or do you allow the domestics the opportunity, with many conditions, to finish up their strucutral changes that are almost complete?


A little side note that I found interesting. Many of the suppliers support both domestic and transplant production with frames, axles, interiors, and the like. If a domestic goes down and the supplier follows them, chances are good that the transplants would tank too.
Not good.

[BUIZILLA]

so Todd.... let's play *your the Pres of GM*

what would you do?

[BUIZILLA]

Buy a Ford Raptor... fairy tale trucks don't count... not out yet...

quiz is for structuring theory

[zelatore]

Repeat after me...
Until the onions are gone, the US automakers will not make a profit.


Repeat after me...
Until the onions are gone, the US automakers will not make a profit.


Repeat after me...
Until the onions are gone, the US automakers will not make a profit.


Repeat after me...
Until the onions are gone, the US automakers will not make a profit.

I'm repeating...I'm repeating...

[BigGrizzly]

Zel, My point was everybody wants but only some buy. Now if they limit production like Harly and some other companies do then retool for another product. This isn't that difficult, been on the ground floor of that project. Common seance if you have 1000 buyers than 2000 cars is too much and will be sold as leftovers. Todd is correct of the CAFE, but like I said they were waiting too long to start. What really happens is workers want more money, they get it and the price for the product go up. Then the companies streamline to reduce cost so either people get laid off or streamlining and equipment cost then price goes up again. In which case the people who built it(worker) can't afford it or the driveway to put the auto in, and so there in lies the rub.

[Air 22]

To bail out wallstreet and companies like AIG who r sending their exec's on trips to posh resorts and given 40 BILLION our our dollars to do so is absolutley insane....these guys r the crooks...That being said...if they get help why not the Big 3 Auto's?? they are not killing our 401k's like the sob's on Wallstreet have? U think its bad now...I'm with Todd...if the Big 3 go down...and all the suppliers will soon follow...its only a matter of time...should all that happen...God Help all of Us..
I'm fortunate to have a secure job but many others do not...more failures will be devistating!

[roadtrip se]

I would use this cyclical turn, and most likely government intervention, as an opportunity to accelerate some structural changes that need to happen NOW starting with;

1) Eliminating brands and models. Go with Chevrolet and Cadillac. No more badge engineering, no more diluted marketing effort, and no more confused customer.

2) Cut the dealer body in half. Nissan covers the market with 1200 dealers. Toyota and Honda pretty much the same. Customers can be served effectively with these numbers and I can apply leverage to the best servicing dealers and eliminate the others who don't take care of their customers. End result is profitable dealers, selling and servicing great products, over and over again.

3) Give the UAW another haircut. Eliminate the job bank, your plant runs when I have demand for your vehicle, and if you don’t build with quality I can yank the tooling and take it to someone who can. In return, my plants will be flex-based so you are rewarded with the ability and opportunity to build many kinds of vehicles based on your performance.

4) Chase alternative technology that makes sense and can be priced right. The Volt is a good start. Charging $40K for it, isn’t. Think Prius, as crappy a car as it is, for a potential price point. Hydrogen, hybrids, diesel, and anything that helps me break 35MPG I want.

5) Award product and process innovation in suppliers. I will pay for it, versus try to get you to give it to me for free like today. I will award non-traditional suppliers with business, think Microsoft SYNC. In return for the premium, I get a period of exclusivity for the technology to justify the expense. Continue to simplify the number of parts engineered into a vehicle and the time to put them there.

6) Establish the legacy of the Bob Lutz design philosophy. Bob isn’t getting younger. The design DNA for things that he has been involved in like the Malibu is excellent as for others, not so much. Put the best vehicles on the road to compete without regard to where they are sourced from to be the leader in the segment. If you can't compete, don't.

7) Get my captive finance arm back.

8) Sell Hummer, Saab, and the tooling for any other models that you don’t need or can’t make an ROI-based case for to the highest bidder in China, India or wherever…

9) Drop NASCAR and use the money to install viral and digital marketing campaigns like Scion and Mini have done to reach people that have no intention of even looking at GM vehicles today.

10) Hope and pray the cyclical stuff gets better...


Of course, much of the dealer stuff is prohibited by state-based franchise laws, but if the government is going to be involved, I say let's go for it and clean this mess up.


Just a start!

[smokediver]

Wonder who would make tanks or any other large vehicles if we went to war ? I really don't think unions are to blame . Sure they were at one time out of hand but times have really changed . A good friend of mine worked as an industrial firefighter at the van dyke ford plant and he wasnt making the money city ff were making and according to him , the highest wage earners in the union were around 30 bucks and they were skilled trades . to compare an apple to an apple as in ford or gm to toyota or honda one would have to remove the cost of health care as the majority of the foreign companies have national health care , real liberal enviromental laws , just to name a few . Sure , the companies based in japan that have plants here offer insurance and meet local laws but the vast majority of the company is located in japan, korea , etc ... So , in short ... the americans can't compete in some areas but can in other areas . Roadtrip is right , there needs to be downsizing of brands and dealerships and our companies deserve the chance to finish what they started ... They did build or tanks and planes when our country needed them the most !!

[Ghost]

Here is another way to look at this that I find helps explain what is going on and the case for loans:

Structural:

Many folks still think it's 1970 and the industry hasn't changed. Structural changes at the Big Three have been under way for quite some time with plant closings and workforce reductions. The UAW has agreed to a two-tier wage system, revised work rules, and administering their own health care for current and retired employees; effectively erasing the cost disadvantage to the transplants. They have new product in their pipeline to the tune of 50-60 releases planned per year over the next few years, most of it highly efficient stuff as being driven by the 35MPG CAFE getting ready to hit.

Cyclical:

People have over-bought everything over the past ten years due to easy and abundant credit. As everyone knows, credit has dryed up. The dirty secret now is that bank bail-outs are being utilized to shore up balance sheets, not loan funds to consumers. Not everyone has a 700 credit score and with the stock market and the media, nobody is in a big hurry to buy a car right now any way. The oil merry-go-round didn't help either. Sales have tanked an average of 35% for everybody, and that means EVERYBODY. This could be argued as a structural change, but the impact is cyclical for the car companies because they have no ability to impact the cyclical nature of demand in the business due to economic factors.

So the big question becomes, do you let the cyclical economy erase 3-3.5 MILLION jobs, plunging our country into deeper recession and eroding our manufacturering base further, or do you allow the domestics the opportunity, with many conditions, to finish up their strucutral changes that are almost complete?

Disclaimer
First, are we allowed to be having this conversation? I have scrupulously avoided seriously furthering political discussion, while waiting to hear the site owners' ultimate decision about the future of the section.

As you can see, all this pent-up tension eventually blew-up and I couldn't stand it, with this discussion underway and me not saying anything. So, my apologies to all those who are not posting anything political if I should have remained quiet. But for the rest of you, take THIS! :)

I think Todd's provided some very useful and insightful analysis above. (I would add that while I was typing all this, he has re-posted with even more good stuff.) I simply disagree with the conclusion that we taxpayers should be bailing out the Big 3 with "loans" or anything else. I think the kinds of things Todd has recommended make good sense, but they can happen with the companies going into bankruptcy first, if need be. Further, I think they probably will have go bankrupt for the UAW ever to agree to the things Todd is prescribing. Also, apologies for my tone, I'm in one of those moods, but it is not meant to be a slap in the face to anyone, just an attempt to make my case in what I hope is an extremely clear way.

One Point of Principle
I totally agree with the analysis about the cyclical economy and how the demand for new vehicles is tapped out for a while. I would expand on this by noting two components:

market-saturation/inventory-backlog
excess capacity
The second one is the big one. Worldwide, I think we probably have the ability to produce more cars than people are willing to buy at these prices given the money that they [don't] have to spend.

So, in that sense, doesn't some of that production capacity have to go away? Some people in this industry, perhaps a LOT of them, are going to lose jobs no matter what, right? So, who will stay and who will go? If we don't intervene, who stays and who goes will be decided on the playing field of the market, right? Whoever makes stuff that people choose to buy stays, and whoever doesn't goes. (Including all the baggage and history of their contractual agreements, and any restructuring that is underway, etc.)

If we intervene, who stays and who goes will be decided in other ways, and only temporarily. Isn't it pretty freaking immoral to intervene in ways that distort the outcome to something other than: "the people who get to keep their jobs are the ones who make cars that people choose to buy"? Not to mention, isn't it pretty freaking immoral to demand money from everyone else who is trying to figure out how to survive this economic disaster in order to intervene in that immoral way?

"But Wait, We're Almost Healthy..."
Okay, so I'm listening to the argument that structural changes are almost completed that will eliminate the competitive price advantage that other companies have over the Big 3. O-kay. That's interesting. Is there competitive price advantage or not? If there isn't, what's the problem? If the Big 3 are truly on the verge of a breakthough that will make them winners without any forced restructuring of management from bankruptcy, then investors stand to gain by lending them money to make it though the storm. Lending.

This sounds obnoxious (but in a world where people argue that you shouldn't reinvent the wheel despite the fact that everyone is clunking around on square wheels, it needs saying). <This time in the fat neighbor's mother's voice from "Better Off Dead"> Lend-ing. LENNND-ING. :wink:

Bear with me because this is extremely critical to my point. Lending is where Party A voluntarily hands over some of his money to Party B to be paid back, with interest, at a rate mutually agreed by Parties A and B in advance. If Party A thinks the risk is high, he won't agree to lend his money unless the interest rate is high enough. And if the risk seems too high, he won't lend his money no matter what the offered rate is, because he concludes he isn't going to get paid back.

The key here is that lending is voluntary, and the interest rate must be mutually agreed upon. Now, it is time to note 3 things that are very important.

1. Among the various things being proposed for bailing out the Big 3, some are not even loans. Hello. This is not acceptable, for all the reasons outlined above about why A LOAN IS THE ANSWER IF THEY ARE VIABLE.

2. If there are loans, they will be at artificially low rates that do not accurately reflect the risk, and thus they will short-change the lender. In the free market, no lender would make such loans. And as such, they are not really loans. They are subsidized loans, which is a nice way of saying that they FORCIBLY REQUIRE ME TO TIE UP MONEY, MONEY I WOULD INVEST IN OTHER WAYS TO TRY TO GET MYSELF THROUGH THIS TIME OF CRISIS, IN A RISKY VENTURE I DON'T WANT TO SUPPORT, AND THEY INCLUDE A PURE GIVEAWAY OF SOME OF MY MONEY TO BOOT. ("What's next, anally rape my mother while pouring sugar in my gas tank?" -Clerks)

3. I am the lender, and I say no. (Too bad I don't really get to choose for myself, which means I am not really the lender, but merely a subject of Big Government.) But if I do get to say, I say 'no.' I say these companies have costs that are too high because of lots of things, and these costs must come down for them to be viable. If they go into bankruptcy, the companies and all the jobs won't go away. They'll be re-organized, and some stuff will stay (the part that should) and some will go (the part that should). And the agreements that the unions negotiated will be null and void, and the people in those unions will want jobs and will settle for less money than they are getting now. They will voluntarily settle for less money than they stand to get under the restructuring that has been underway for years, and which supposedly has them on the verge of the verge of health.

All Roads Lead to Rome
Let's face the facts: the argument that the Big 3 are just around the corner from being viable is either bull$hit OR someone will lend them the money in the free market. And it appears that no one is going to do that in the free market because their costs are too high and their obligations are too great. This is not really arguable. If someone stood to gain from lending them money without wiping out their union agreements and obligations, someone would pick a nice hefty interest rate and lend them the money.

If we don't bail them out, they may go bankrupt, but they won't all go away and the jobs won't all disappear. *Some* jobs will disappear. The stuff that is viable will continue on under new management, and the labor costs will be cheaper, and auto workers will make less money, and retired auto workers won't get paid 100% of the mathematically unsustainable benefits that they negotiated when times were better.

If we bail them out, the problem of excess capacity does not get solved, and their labor costs will not be cheaper, and they cannot possibly be viable, and they survive only by taking even more money from you and me, and they will eventually fail BECAUSE YOU AND I WILL EVENTUALLY FAIL.

And then exactly the same thing will happen. They will be reorganized, and *some* jobs will go away, and some will stay. And the stuff that is viable will go on under new management, and the labor costs will be cheaper. The only difference will be that some folks who are currently overpaid will continue to enjoy that for a while, and YOU AND I WILL BE RUINED because that overpayment was made by stealing from us until we had nothing left to steal.

The point in Todd's note above was that they are largely restructured already, nearly healthy. That might be true, in that they may have gotten costs down to where they were competitive in times recently passed. But the target is moving, and they are not viable with the collapsing market without further cutting costs, because the excess world capacity in the industry will make their competition further cut costs. In short, they are chasing a moving target, and I'm willing to bet the existing union agreements and obligations keep them from being able to continue to move as they need to.

And anyone who says that I'll get some other subsidies and that'll take care of me just doesn't understand the math. Socialism is a parasite that kills the host. When it is the sweeping, aggressive kind that started in 1917, it kills the host faster than the gradual, slower-moving kind that has infected us. But make no mistake, it will kill us if we don't kill it.

I have bludgeoned this enough. I am willing to listen to whatever people think, but for now I come back to Buizilla's question below. Scratch that. Todd already answered it while I was typing.

Regards,

Mike


so Todd.... let's play *your the Pres of GM*

what would you do?

[smokediver]

Oh ... one more thing ... I am a union member and have been close to 20 years .. I can honestly say I have never felt entitled to anything more than a living wage and benefits ... Most unions were formed as a protection from company owners who would rather work someone to death for a few cents than to provide a safe work place . I am not here banging on a union drum or anything but all unions arent bad ..

[Air 22]

I would use this cyclical turn, and most likely government intervention, as an opportunity to accelerate some structural changes that need to happen NOW starting with;
1) Eliminating brands and models. Go with Chevrolet and Cadillac. No more badge engineering, no more diluted marketing effort, and no more confused customer.
2) Cut the dealer body in half. Nissan covers the market with 1200 dealers. Toyota and Honda pretty much the same. Customers can be served effectively with these numbers and I can apply leverage to the best servicing dealers and eliminate the others who don't take care of their customers. End result is profitable dealers, selling and servicing great products, over and over again.
3) Give the UAW another haircut. Eliminate the job bank, your plant runs when I have demand for your vehicle, and if you don’t build with quality I can yank the tooling and take it to someone who can. In return, my plants will be flex-based so you are rewarded with the ability and opportunity to build many kinds of vehicles based on your performance.
4) Chase alternative technology that makes sense and can be priced right. The Volt is a good start. Charging $40K for it, isn’t. Think Prius, as crappy a car as it is, for a potential price point. Hydrogen, hybrids, diesel, and anything that helps me break 35MPG I want.
5) Award product and process innovation in suppliers. I will pay for it, versus try to get you to give it to me for free like today. I will award non-traditional suppliers with business, think Microsoft SYNC. In return for the premium, I get a period of exclusivity for the technology to justify the expense. Continue to simplify the number of parts engineered into a vehicle and the time to put them there.
6) Establish the legacy of the Bob Lutz design philosophy. Bob isn’t getting younger. The design DNA for things that he has been involved in like the Malibu is excellent as for others, not so much. Put the best vehicles on the road to compete without regard to where they are sourced from to be the leader in the segment. If you can't compete, don't.
7) Get my captive finance arm back.
8) Sell Hummer, Saab, and the tooling for any other models that you don’t need or can’t make an ROI-based case for to the highest bidder in China, India or wherever…
9) Drop NASCAR and use the money to install viral and digital marketing campaigns like Scion and Mini have done to reach people that have no intention of even looking at GM vehicles today.
10) Hope and pray the cyclical stuff gets better...
Of course, much of the dealer stuff is prohibited by state-based franchise laws, but if the government is going to be involved, I say let's go for it and clean this mess up.
Just a start!


Tripper...I like ur idea...I knew I wasn't confused when I got my Cadillac:):)
Your points are valid...dunno how well the NASCAR elimination point would float?? That being said its good JJ's been driving a Chevy and won the title AGAIN:)

[BUIZILLA]

That being said its good JJ's been driving a Chevy and won the title AGAIN:) the only thing Chevy about that ride is the decals...

[roadtrip se]

Ghost, I enjoy reading your posts and generally agree with most of what you state.

When it comes to this topic and your post, I would say it looks very similiar to a business case I might have studied in Economics 401, and my final blue book free form essay utilizing the covenants from your post would have received an A+ for the exam, but the difference is that this is real, not a Harvard Business Review case on a college campus somewhere.

Michigan has been in a one state recession ever since I got here in July of 2003. I have witnessed job cuts numbering in the hundreds of thousands ever since, with passing by the empty hulk of the Ford Wixom Assembly plant, once the largest facility of its kind, on my daily drive into the city as a constant reminder of what this region has withstood over the past several years.

While I typically agree with the stance of keeping the government out of business as a life long philosophy, the $25B loan bail-out being kicked around Congress is less than 4% of the bank bailout just approved, and I sincerely doubt that the Wall street firms employ a tenth of the people that the domestic car companies and their suppliers do.

From another view, this bail-out loan is less than three months of what we invest in Iraq, where they have a budget surplus and oil revenue flowing in. I sincerely doubt we will ever see a penny of that investment back. An interesting cartoon ran in the Detroit Free-Depressed yesterday. It basically shows the city leaders of Detroit changing the name on the entry sign to the city from “Detroit” to “Baghdad” and seeing the military aid coming in on the transport planes in swarms. Interesting.

The domestic industry is already down-sizing and will continue to do so, whether the government is involved or not. I sincerely doubt these guys will want the government in their boardrooms for very long, so I bet we get paid off and Uncle Sam kicked to the curb on schedule or ahead of time.

Yes, there are many more steps that I outlined in my Resume for President of GM post that could be taken that are more radical and might bear more fruitful results with a little arm twisting to relax state franchise laws and some hard negotiating. But the reality is, the failure of these car companies would be a national economic disaster of epic proportions for millions of people, many of whom I see on the highway every day. After spending most of my adult life in the business, this is personal for me and many, many others, so I respectfully state that your libertarian essay and its let the cards fall where they may theme, rings very hollow for me.

[zelatore]

the only thing Chevy about that ride is the decals...

And those were made in China...

[gcarter]

The thing I don't like about the current UAW reorganization is everyone of the old timers will have to die off before the benifits will be appreciated. What'll that be, 15-30 years?????
The problem is now.
I've flown on bankrupt airlines and bought all kinds of products and services from bankrupt companies.
I would imagine if something the size of GM went bankrupt, an awful lot of care and attention would be paid to it by both the bankruptcy courts and congress. I doubt seriously if the healthy parts of the Corp and suppliers would be allowed to vanish.
Somehow, I still tend to think the way out is for bankruptcy protection.
I like the restructuring ideas Todd laid out. I can't think of a single successful car manufacturer that has more than two divisions, like Honda and Acura, other than BMW, VW, and DB with their super high end hobby cars.
And even NASCAR doesn't have to disappear, it would just require a lot more participation of the teams and sponsers.

[gcarter]

Many of you are probably aware of the fact that CitiBank announced today that it's laying off 53,000 people......


Those are some serious numbers.

I somehow can't see GM doing that on its own.

[Ghost]

When it comes to this topic and your post, I would say it looks very familiar to a business case I might have studied in Economics 401, and my final blue book free form essay utilizing the covenants from your post would have received an A+ for the exam, but the difference is that this is real, not a Harvard Business Review case on a college campus somewhere.

Yes, there are many more steps that I outlined in my Resume for President of GM post that could be taken that are more radical and might bear more fruitful results with a little arm twisting to relax state franchise laws and some hard negotiating. But the reality is, the failure of these car companies would be a national economic disaster of epic proportions for millions of people, many of whom I see on the highway every day. After spending most of my adult life in the business, this is personal for me and many, many others, so I respectfully state that your libertarian essay and its let the cards fall where they may theme, rings very hollow for me.

Hey Todd,

I know it's a mess out there--half of my 20 closest friends live around Detroit, and some of the people who would get their pension benefits clipped are actually my family--it is very real to me.


But even if it weren't, I went to the lengths I did in explaining because I think my points that you characterize as theoretical or academic analysis precisely represent the stark reality that people are not facing up to now.



Help me understand a couple of things. I'll keep it as short as I can, but I'm now totally lost on where you differ with my thinking, and I'd love to know your take on each of several points.

The union (from the story George posted) is already saying 'no' to any concessions. I think the kinds of things you recommended made tremendous good sense. Do you think the UAW would agree to such things unless forced to by a bankruptcy that broke all of their existing agreements and obligations?
Do you think allowing any or all of them to go into bankruptcy actually will mean the industry will actually die all the jobs will go away? The airlines have been in and out of bankruptcy. We still have airlines. (I think it means that some jobs will go away, but that loss of jobs is unavoidable, just like you said with the dealerships.) Bankruptcy just means that the people who negotiated unsustainable benefits and pay will officially lose them, right?
Won't bankruptcy lead to buyouts and new financing of the good parts of the companies, with exactly the sort of new management tactics that you so thoughtfully outlined?
Won't handouts like taxpayer-subsided loans lead to exactly the opposite of the things you outlined, because it gives the opportunity for people to postpone nullifying the unsustainable old agreements that your bullet points require nullifying?
Do you think it's okay to give them bailout money or subsidized loans because it is (so far) a small amount relative to other bailouts that are underway? I can see you point from a fairness perspective, but this is why I want to stop all the bailouts now. There is no end to this logic except bailouts for everyone affected as the storm worsens. And only a booksmart academic who is out of touch with reality would ever argue we can bail everyone out by with tax dollars from the people we're bailing out.
Seriously, I'm confused.

Regards,

Mike

[Tony]

Oh ... one more thing ... I am a union member and have been close to 20 years .. I can honestly say I have never felt entitled to anything more than a living wage and benefits ... Most unions were formed as a protection from company owners who would rather work someone to death for a few cents than to provide a safe work place . I am not here banging on a union drum or anything but all unions arent bad ..

I applaud your bravery in stating this. For what it's worth, I feel the same way. Two things stop mega-corporations from price-gouging - unions and government oversight. With government controlled by lobbyists, and unions under attack, we are where we are...with a severely shrinking middle class.

By the way...smokediver has the best avatar in history! :yes:
I watch that penguin get smacked in the back of the head and laugh every time.
Reminds me of my beloved Three Stooges!

:beer:

[gcarter]

I applaud your bravery in stating this. For what it's worth, I feel the same way. Two things stop mega-corporations from price-gouging - unions and government oversight. With government controlled by lobbyists, and unions under attack, we are where we are...with a severely shrinking middle class.

By the way...smokediver has the best avatar in history! :yes:

:beer:
Tony, how does Toyota, Nissan, Hyundai, BMW, and others do so well w/o unions?
And why do the workers keep voting down organizing?

This is a serious question.....

[zelatore]

By the way...smokediver has the best avatar in history! :yes:
I watch that penguin get smacked in the back of the head and laugh every time.
Reminds me of my beloved Three Stooges!

:beer:

It just never stops being funny....:yes:

[Just Say N20]

Ghost, for your sake, I hope you type about 120 works per minute!

[zelatore]

Tony, how does Toyota, Nissan, Hyundai, BMW, and others do so well w/o unions?
And why do the workers keep voting down organizing?

This is a serious question.....

Yes - a good question indeed.

As I noted ealier, I have friends/family who work at Toyota and GM. The Toyota people are not union, and so far as I know they don't really want to be union.

[BigGrizzly]

Trip I am with you. I think it should be noted that early Hondas actually got better fuel economy then todays units but were smaller and not as plush. I worked for Honda and as I said it isn't union, and they enjoy the same benefits but don't pay dues.

[zelatore]

Trip I am with you. I think it should be noted that early Hondas actually got better fuel economy then todays units but were smaller and not as plush. I worked for Honda and as I said it isn't union, and they enjoy the same benefits but don't pay dues.

Lots of early cars got better economy than today’s car. Colin Chapman could have told you the problem: weight!

Cars today are PIGS! Even today's cheapest econo-box demands things like full power everything, super sound deadening, 458 air bags, a sunroof, crumple zones, emissions equipment, etc. All that adds weight. To get some sort of reasonable performance with all that weight requires more power. More power means more fuel, no matter how good you are at squeezing the maximum from each gallon of gas.

Of course, there are all sorts of dynamic disadvantages to heavy cars, but with today's expectations and regulations, it's extremely difficult and/or expensive to build a light weight car.

The last issue of Car and Driver had and interesting article about a 30mpg/300hp/3liter car. They based it on a 3-series BMW. All the tech needed to build the car already exists, and the driving dynamics would be well within the performance envelope of the current 3-series - the leader in it's class. The big killer was the weight reduction. To get the car to 3000 lbs would mean extensive use of carbon fiber and titanium - and that would make it financially impossible, even in a 'premium' segment such as this.

[boxy]

By the way...smokediver has the best avatar in history! :yes:
I watch that penguin get smacked in the back of the head and laugh every time.
Reminds me of my beloved Three Stooges!

:beer:

Tony, put your mouse Smoke's avatar, right click, and chose properties....:kingme:

[BUIZILLA]

Two things stop mega-corporations from price-gouging - unions and government oversight. huh, what the hell are you thinking? you have got to be kidding me here... the govt can't control the oil company's can they? do you really think unions can control price fixing and gouging? if they did, there wouldn't be any pork to pay those ridiculous benny's...

[Air 22]

the only thing Chevy about that ride is the decals...
So..Sandbagger... GM isn't making the engines in The #48 Car or any of the NASCAR Chevy's ??:confused: hmmmmmmm

"According to Chevy, the R07 is the first purpose-built engine designed and developed by GM Racing specifically for Cup. It is not such a close variant of production-based engines as previous Cup engines were. We’re going to review its design genesis and technical features.The R07 replaces the SB2 (Small-Block / 2nd generation) engine that has been used by GM Cup teams since 1998 – an eternity in racing. Teams and GM started working on a successor to the SB2 in 1999, and multiple variations of a conventional small-block V-8 were designed, tested, and evaluated. There were R03 and R05 versions along the way that didn’t make the cut
We had started to lay the foundation for a future Chevrolet engine, and we were able to adapt that design to the Chevrolet R07," Covey notes. "A prototype R07 engine was running durability tests on a dyno six months after we kicked off the program. The R07 engine development team included Ed Keating and Ron Sperry, who focused on cylinder heads and intake manifolds, and Ondrej Tomek, who was responsible for the cylinder block. We also worked with our key Chevrolet teams, GM Powertrain, and our suppliers."
I guess i'm missing something......:nilly:

[Air 22]

Trip I am with you. I think it should be noted that early Hondas actually got better fuel economy then todays units but were smaller and not as plush. I worked for Honda and as I said it isn't union, and they enjoy the same benefits but don't pay dues.


http://www.honda.com/cvcc/?ef_id=1097:1:d74bdd9bc2255d77d158cc41bddf550e_398 231513_2949255513:dmKuJNBkLAoAAFCa1@IAAAAU:2008111 8011743

My Dad owned a Honda Car/Motorcycle dealer from 1971-2000 and ACURA from 1986-2000
They do make a well built car here in Marysville, OH and in Japan:wink:

[Air 22]

Volleyball?

U Serve....wearing no shirt...lol:)
....and were might the Ford's be made??....Paris??? commmon...:convertib::popcorn:

[BUIZILLA]

Airboy.... don't get so excited...

take all the decals off the COT crap and you tell me what make they are...

you can't tell them apart...

or were my eyes deceiving me this past weekend

[BERTRAM BOY]

What about the national security issue of GM building so many military vehicles and other machinery? Who's going to take up the slack? Don't we NEED a domestic auto maker. If the big 3 disappear, then what?

[smokediver]

Tony, how does Toyota, Nissan, Hyundai, BMW, and others do so well w/o unions?
And why do the workers keep voting down organizing?

This is a serious question.....
Easy answer ... The govt. in those countries are kinda like their unions . Germany has healthcare , mandated holidays and vacation time , pension system , yada yada ... Japan has pretty much the same system ... So it really isnt needed ...I wish this were an apple to apple comparison .They / we make the same product but unless all other things become equal , it is really hard to make an across the line comparison ... I don't think union pay has come close to keeping pace with executive pay ...

[dfunde01]

The latest figures I have seen were a total loaded cost per hour of $48 for Toyota US and $78 per hour for GM US.

[dfunde01]

Easy answer ... The govt. in those countries are kinda like their unions . Germany has healthcare , mandated holidays and vacation time , pension system , yada yada ... Japan has pretty much the same system ... So it really isnt needed ...I wish this were an apple to apple comparison .They / we make the same product but unless all other things become equal , it is really hard to make an across the line comparison ... I don't think union pay has come close to keeping pace with executive pay ...

How about the American employees at the US plants of Honda, Toyota, etc that keep voting down the unions? They are operating under the same government that you are. That is text book apples to apples.

[gcarter]

How about the American employees at the US plants of Honda, Toyota, etc that keep voting down the unions? They are operating under the same government that you are. That is text book apples to apples.
That was going to be my question?????????

[Air 22]

Airboy.... don't get so excited...
take all the decals off the COT crap and you tell me what make they are...
you can't tell them apart...
or were my eyes deceiving me this past weekend
Ok...if thats true,,,Lets have Chevy, Ford, Dodge all of them :convertib:just race one motor:shocking:...similar to APBA, OSS etc...most are running Merc Racing..a few ILMOR's but thats it...right? Then all the engineer's could work together for a Supreme Racing Engine...ultimately a technology design for possibly better more efficient engines to passed along to us avg joe the plumber's of the world....hmmmmm:)

[gcarter]

So..Sandbagger... GM isn't making the engines in The #48 Car or any of the NASCAR Chevy's ??:confused: hmmmmmmm

"According to Chevy, the R07 is the first purpose-built engine designed and developed by GM Racing specifically for Cup. It is not such a close variant of production-based engines as previous Cup engines were. We’re going to review its design genesis and technical features.The R07 replaces the SB2 (Small-Block / 2nd generation) engine that has been used by GM Cup teams since 1998 – an eternity in racing. Teams and GM started working on a successor to the SB2 in 1999, and multiple variations of a conventional small-block V-8 were designed, tested, and evaluated. There were R03 and R05 versions along the way that didn’t make the cut
We had started to lay the foundation for a future Chevrolet engine, and we were able to adapt that design to the Chevrolet R07," Covey notes. "A prototype R07 engine was running durability tests on a dyno six months after we kicked off the program. The R07 engine development team included Ed Keating and Ron Sperry, who focused on cylinder heads and intake manifolds, and Ondrej Tomek, who was responsible for the cylinder block. We also worked with our key Chevrolet teams, GM Powertrain, and our suppliers."
I guess i'm missing something......:nilly:
I know the early Dodge engines were open deck, maybe they still are....not likely something to be seen on production engines.

A manufacturer can still do R&D on engines. They don't necessarily need to produce finished engines, or even all the castings and forgings. They can be produced elsewhere.

[gcarter]

What about the national security issue of GM building so many military vehicles and other machinery? Who's going to take up the slack? Don't we NEED a domestic auto maker. If the big 3 disappear, then what?
There are other large manufacturers other than the 3.
During WW-II everybody was making everything under the sun.
Heck, appliance manufacturers were building large aircraft engines.

I remember as part of the Chrysler bailout, they had to sell Gulfstream (I think) and their tank division.

There're still a lot of heavy duty truck and tracked vehicle manufacturers that can build just about anything you want.

[BUIZILLA]

Toyota had to design an engine from scratch...

[Air 22]

Ok...:party::party::party:I now have come to the conclusuion I know everything about nothing... and applogize for posting "Air":bonk::boggled: all the typing had kept me ammused....:nilly::)

[dfunde01]

The NASCAR cup cars all use the same body and chassis. Each mfg provides their own engines and drive trains within NASCAR specs. You are correct that without the decals and paint all of the bodies would look the same.

Dave

[smokediver]

How about the American employees at the US plants of Honda, Toyota, etc that keep voting down the unions? They are operating under the same government that you are. That is text book apples to apples.
Are you trying to tell me that the vast majority of honda and toyota are here in the US ? what city and state are their world headquarters ? I think those companies did their homework well and offer the US employees real close to what the big 3 union employees are getting . I am not banging the union drum here at all just looking at this from the standpoint that the playing field isn't level . Also , it is no mistake that the companies that did locate here got huge tax incentives along with going to an area where wages were lower than the rest of the country ... Again .. Apples to apples please ...

[BERTRAM BOY]

There are other large manufacturers other than the 3.
During WW-II everybody was making everything under the sun.
Heck, appliance manufacturers were building large aircraft engines.

I remember as part of the Chrysler bailout, they had to sell Gulfstream (I think) and their tank division.

There're still a lot of heavy duty truck and tracked vehicle manufacturers that can build just about anything you want.


George I agree, but don't you think we should wary of a time overlap? These are production lines that we absolutley can't afford to have idle.

Besides, who's going to spend the time and money tooling up for these products in this economic climate? It's not feasable to line up replacement suppliers overnight.

[BUIZILLA]

NASCAR owns the body manufacturing co.

all teams must buy the body's from this single source

teams build their own chassis to NASCAR spec's to unifit the body..

it costs the teams about 25% more to run a COT project over the previous system

with the sponsor issues for next year and beyond I think the marketing landscape will change noticeably

[smokediver]

How many of the folks on here that want to let the big 3 go under are gonna pull out the "inferior" push rod V-8 made in america engines and install toyota and honda engines in their donzis ? I guess you are hypocrates if ya dont !:yes:

[Air 22]

How many of the folks on here that want to let the big 3 go under are gonna pull out the "inferior" push rod V-8 made in america engines and install toyota and honda engines in their donzis ? I guess you are hypocrates if ya dont !:yes:

I would luv to c that...:yes: glad I jumped on the HP500EFI Repower...it may be extinct soon....:nilly:

[zelatore]

A few points:

1- Even those that suggest the big three be left to file bankruptcy are not suggesting that they are going away. In fact, they are saying that by using this as a reorganization tool, they will survive and come out stronger than before. They thinking is that this may be the only way for them to create drastic enough changes to realize effective long-term improvements.

2- Yes, pushrod V8's are dinosaurs. Yes, we all run one in our boat. They may be dinosaurs, but they are a good solution to this particular problem. Boats require large doses of low rpm torque, and that is best achieved through large displacement or supercharging. Supercharging is much more expensive than displacement. Trucks fall into the same category, if to a lesser extent. Hence, when we shop trucks we still shop domestic. Cars and other lighter vehicles can get by quite well with less bottom end torque and can therefore afford to run smaller, more efficient motors. Although I have to say I really like the torque of my twin-turbo BMW motor...

3- Will you guys please stop talking about Nascar fer cryin' out loud! It's got nothing at all to do with cars actually sold; and nothing to do with developing technology for road-going projects. It's only purpose is as an advertising medium. At least in F1, sports car, or sedan racing, you get technological carry-over toward the street car segment.

[gcarter]

At least in F1, sports car, or sedan racing, you get technological carry-over toward the street car segment.
LOL...Don, I can't think of the last year there was any carryover from F-1 to ANYTHING!
F-1 has a lot more in common with NASA than anything else with 4 wheels.

[gcarter]

Are you trying to tell me that the vast majority of honda and toyota are here in the US ? what city and state are their world headquarters ? I think those companies did their homework well and offer the US employees real close to what the big 3 union employees are getting . I am not banging the union drum here at all just looking at this from the standpoint that the playing field isn't level . Also , it is no mistake that the companies that did locate here got huge tax incentives along with going to an area where wages were lower than the rest of the country ... Again .. Apples to apples please ...
John, reading this, I would have to assume it's impossible for corporations to self generate agreeable working conditions for large numbers of hourly workers w/o unions or the threat of unionization. Let's face it, it's not the '30's anymore.
I seriously think that if GM were to declare bankruptcy and the court were to agree that a better invironment for future growth existed in Georgia or Mississippi rather than Michigan, the same tax exemptions would be there for them.

[gcarter]

As an owner of one of the small businesses that generate 90% of jobs, even though my business is somewhat smaller now than it was six months ago, working conditions and wages are extremely important to me. I'm constantly thinking about ways to improve conditions for my employees. About 15 years ago I went w/a leasing company so that I could offer "big company benifits" to my employees. I try to generate a creative environment to inspire my service and office workers to constantly think of ways to improve their conditions and improve customer satisfaction.
I don't think scale has anything to do with it.
I wonder how many of those CITI employees were unionized?????

[gcarter]

George I agree, but don't you think we should wary of a time overlap? These are production lines that we absolutley can't afford to have idle.

Besides, who's going to spend the time and money tooling up for these products in this economic climate? It's not feasable to line up replacement suppliers overnight.
I'm sure that a bankruptcy court would take things like into consideration.

[smokediver]

Good point George . I know there are a lot of business owners such as yourself that do good by their employees and I am sure it comes back to you many times over .. I wonder if Japan would be so kind to GM if they wanted to open up a plant or 2 in their country or if they would allow the access to their markets as we allow them ? I do feel that the UAW has really dropped the ball in that they haven't thought of the reality of the global economy . Todd is right , think if GM were only making Chevys and Caddies ... That would be a great company . It is the unions responsibility to push to get their members access to re-training in other job fields instead of trying to hang on to jobs whose time has come and gone . Being a good union member is also being a good steward to your company and to the customer who buys the product . No doubt that has been forgotten in many cases . Paddle shift trannies .. F-1 ... last thing i can think the regular cars has gotten from F-1 , lol ....

[Air 22]

Good point George . I know there are a lot of business owners such as yourself that do good by their employees and I am sure it comes back to you many times over .. I wonder if Japan would be so kind to GM if they wanted to open up a plant or 2 in their country or if they would allow the access to their markets as we allow them ? I do feel that the UAW has really dropped the ball in that they haven't thought of the reality of the global economy . Todd is right , think if GM were only making Chevys and Caddies ... That would be a great company . It is the unions responsibility to push to get their members access to re-training in other job fields instead of trying to hang on to jobs whose time has come and gone . Being a good union member is also being a good steward to your company and to the customer who buys the product . No doubt that has been forgotten in many cases . Paddle shift trannies .. F-1 ... last thing i can think the regular cars has gotten from F-1 , lol ....


John....as a union memeber myself the last 12 years I agree with you. Its a two way street....We're fortunate enough to have a great working relationship with management now....but it wasnt always that way...through negotiations and a new contract the company has given the employee's the best training and latest equipment to do the safest job resulting in a superior product. We are number one in our business because both the company and the union are working together...the same has to happen here...if there is no communication, no good faith efforts...things can fail...as we have seen.

[Air 22]

A few points:
1- Even those that suggest the big three be left to file bankruptcy are not suggesting that they are going away. In fact, they are saying that by using this as a reorganization tool, they will survive and come out stronger than before. They thinking is that this may be the only way for them to create drastic enough changes to realize effective long-term improvements.
2- Yes, pushrod V8's are dinosaurs. Yes, we all run one in our boat. They may be dinosaurs, but they are a good solution to this particular problem. Boats require large doses of low rpm torque, and that is best achieved through large displacement or supercharging. Supercharging is much more expensive than displacement. Trucks fall into the same category, if to a lesser extent. Hence, when we shop trucks we still shop domestic. Cars and other lighter vehicles can get by quite well with less bottom end torque and can therefore afford to run smaller, more efficient motors. Although I have to say I really like the torque of my twin-turbo BMW motor...
3- Will you guys please stop talking about Nascar fer cryin' out loud! It's got nothing at all to do with cars actually sold; and nothing to do with developing technology for road-going projects. It's only purpose is as an advertising medium. At least in F1, sports car, or sedan racing, you get technological carry-over toward the street car segment.

Much of Honda's and Acura's engine technology comes from their Indy-car platform...:wink:

[roadtrip se]

We've got a union diatribe started, NASCAR COT and pushrods rolling around, and replacing our engines with Honda stuff.
It must be winter.


Couple of questions to Ghost, George, and any of the rest of you out there that wish to comment.


Would you buy a car from a bankrupt company?

How about a Corvette built in China by Chery Motors, after they buy the tooling in a liquidation sale?

I hazard to guess, that the response to both questions would be NO.

So bankruptcy is not really an option for these guys. This is the general consensus of analysts close to the industry. Manufacturing, especially for the consumer retail market and not commodities, is a bit different than the service industry, like the airlines.


Now, if I can convince our new President-elect to place me in the position of car czar to make sure that the tax-payers money is not squandered, I would start:

1) By abolishing all state franchise laws and allowing GM and the rest to cut dealers where it makes sense.

2) Telling the UAW that their agreements are under review and we will change where it makes sense, and Ron, you will take it to your members or we will just start shutting down your plants as management has been doing any way.

3) The days of the gold-plated executive with parachutes, bonuses, and all of the other goodies are over as long as we are stewing in the pot with you.

4) Your books are my books.

5) I would tell Cerebus to sell now and not to expect any money in reward for their carpet bagging ways at Chrysler.

6) Your purchasing practices will change to value buys versus lowest cost buys.

7) Sell the Ren Cen and the Glass House and move into one of the closed plants you still own.

8) Chevrolet, Cadillac, Ford and Lincoln, are all you need. The rest are gone.

I know a dream, is a dream, as nobody in Washington will really know how to find a business person to oversee the car companies.
Whatever over sight they put in place will be absurd and ineffective.


Reality is, and still is, these companies need some help and the investment up front will be no where near as costly as the losses sustained if we let them go down.

[BUIZILLA]

kinda like Johnson & Evinrude.... Mercury & Mariner...

why?

my .02 would be to keep Caddy as luxury but kill the Escalades, Hummer goes bye-bye, Saab goes bye-bye, Chevy full line stays as apple pie mainstream, Pontiac stays as performance, kill Chevy trucks and let GMC thrive with everything there up to 5500 series, kill Denali.., Buick goes bye-bye...

Ford is positioned right on target after selling their take in Mazda (which builds awesome cars BTW)...

Lincoln-Merc is an excess story in itself...

Chrysler sells Jeep off... concentrates on mainstream and ingenuity and maybe survives..

and then there's Saturn...

[BigGrizzly]

Zel you said cars today are pigs, well a friend of mine who worked with Honda racing and I were talking and here is a fact. Th road test on some old performance cars like the XKE jag and an old same vintage Porsha well the 4 door Honda accord kicked their butts in the road corses braking and handling and acceleration. I realize you race modern day so you already know this .
Smoke I can tell you this is Mother Honda is in Japan but American Honda Motor Co. calles the US shots on cars and styles. I was at the test that Japan was going to shove the V6 Prelude down our throats and we said nope, you keep it, its not good enough. This was ultimately the end of the Prelude. A little known fact is American Honda holds most of the stock in the US market. The other fact is if US Honda auto goes under so does Honda. They survive they always do it is called Management.

[zelatore]

LOL...Don, I can't think of the last year there was any carryover from F-1 to ANYTHING!
F-1 has a lot more in common with NASA than anything else with 4 wheels.

traction control
ABS
paddle shift manual gearboxes
aero (both downforce and drag reduction)
turbos
active suspension
structural carbon fiber
carbon brakes
tire technology (including rain tire tread patterns)
oil and fuel tech
and coming soon energy re-capture systems

Those are a few of the things developed in F1 that have found their way down to street cars.

Sure, at the F1 level it's cutting edge science experiment stuff, but that's how you lay the foundation to build production equipment.

And Honda in particular is fond of using actual factory production engineers in the F1 team in order to teach them about real-world application of theory under a deadline. Of course that said, Honda's F1 team pretty much sucks these days.

Nascar on the other hand is based on extremely strict spec-racer rules. The teams get to develop the motors, but they can't touch much else. Pushrod carb'ed V8s? 4 speeds? Ford 9" solid axle rears? Although the motors are pretty impressive pieces in their own right, the technology used doesn't carry over to designing new products with the exception of a few aftermarket companies. Nascar is very good at what it sets out to do - provide a medium for the manufactures to advertise, and an entertaining show for the fans. It's not a development bed for new technology because that's the way they want it to keep costs down and the teams close.

[Air 22]

kinda like Johnson & Evinrude.... Mercury & Mariner...
why?
my .02 would be to keep Caddy as luxury but kill the Escalades..
Ouuuuuuuch....kill the Escalades:eek: Not likeley....:pimp:

[zelatore]

Would you buy a car from a bankrupt company?
How about a Corvette built in China by Chery Motors, after they buy the tooling in a liquidation sale?

If Ford declared bankruptcy, that would not prevent me from shopping the new F150. I have no thoughts that even in bankruptcy they would actually go away. Yeah, I might loose the dealer closest to me, but that's not a big deal for most people as they probably have 2 more within a couple miles.

A 'vette built by Chery in China? No - simply because I don't think Chery or the Chinese manufacturers in general have the skill-base to build constant quality products. They are however coming on by leaps and bounds and within 15 years or so may well be the equal of any other manufacturing country. They learn fast.

[zelatore]

Zel you said cars today are pigs, well a friend of mine who worked with Honda racing and I were talking and here is a fact. Th road test on some old performance cars like the XKE jag and an old same vintage Porsha well the 4 door Honda accord kicked their butts in the road corses braking and handling and acceleration. I realize you race modern day so you already know this .
Smoke I can tell you this is Mother Honda is in Japan but American Honda Motor Co. calles the US shots on cars and styles. I was at the test that Japan was going to shove the V6 Prelude down our throats and we said nope, you keep it, its not good enough. This was ultimately the end of the Prelude. A little known fact is American Honda holds most of the stock in the US market. The other fact is if US Honda auto goes under so does Honda. They survive they always do it is called Management.

You're right. I recall several years ago Grassroots Motorsports compared a Honda minivan against a 356 and XKE at an autocross. It wasn't pretty.

By 'pigs' I was referring to weight, not performance. The fact is even our most basic modern cars perform much better than cars from the 50's, 60's, 70's or even 80's. Technology is a wonderful thing. However, when looking at economy, imagine where we could be with today’s power plant tech and yesterday's weight. We could go with much smaller motors as we wouldn't need near the power to achieve the same level of performance. Picture a new Civic that weighed as much as the original - you could get away with a 1-liter 80 hp motor, probably get 45-50 mpg, and still have the same performance as today's car.

Sure, it will never happen because people demand more features and safety and environmental friendliness, but in the quest for economy, weight is one of our biggest hurdles.

Save the planet! A Lotus in every driveway!

(btw, if I were in the market for a econo-runabout, I'd be down at my local Honda shop checking out the Fit)

[BUIZILLA]

if you would see how a Civic Si runs on an Xcross track, you'd never laugh at one again...

[zelatore]

if you would see how a Civic Si runs on an Xcross track, you'd never laugh at one again...

If you would see how I run at an autocross, you would never stop laughing...

[BigGrizzly]

Zel, I saw the rain pictures and knot that track up close and personal, and that being said I think your pretty good. Just remember first you get smooth then you get fast. After 40+ years I am trying to get past the4 smooth part.

[gcarter]

We've got a union diatribe started, NASCAR COT and pushrods rolling around, and replacing our engines with Honda stuff.
It must be winter.


Couple of questions to Ghost, George, and any of the rest of you out there that wish to comment.


Would you buy a car from a bankrupt company?

How about a Corvette built in China by Chery Motors, after they buy the tooling in a liquidation sale?

I hazard to guess, that the response to both questions would be NO.

So bankruptcy is not really an option for these guys. This is the general consensus of analysts close to the industry. Manufacturing, especially for the consumer retail market and not commodities, is a bit different than the service industry, like the airlines.


Now, if I can convince our new President-elect to place me in the position of car czar to make sure that the tax-payers money is not squandered, I would start:

1) By abolishing all state franchise laws and allowing GM and the rest to cut dealers where it makes sense.

2) Telling the UAW that their agreements are under review and we will change where it makes sense, and Ron, you will take it to your members or we will just start shutting down your plants as management has been doing any way.

3) The days of the gold-plated executive with parachutes, bonuses, and all of the other goodies are over as long as we are stewing in the pot with you.

4) Your books are my books.

5) I would tell Cerebus to sell now and not to expect any money in reward for their carpet bagging ways at Chrysler.

6) Your purchasing practices will change to value buys versus lowest cost buys.

7) Sell the Ren Cen and the Glass House and move into one of the closed plants you still own.

8) Chevrolet, Cadillac, Ford and Lincoln, are all you need. The rest are gone.

I know a dream, is a dream, as nobody in Washington will really know how to find a business person to oversee the car companies.
Whatever over sight they put in place will be absurd and ineffective.


Reality is, and still is, these companies need some help and the investment up front will be no where near as costly as the losses sustained if we let them go down.
First Todd, I like your ideas.
Next, I definately would buy a car from a bankrupt company if it were in the hands of a bankruptcy court that had the clout to make it into something along your ideas.

Todd, it was before your time, but there were a BUNCH of them at the end of WW-II. All of those that failed then (late '40's, early '50's) were mainly because the said companies hadn't restructured their manufacturing processes to comply with the lessons learned during WW-II.

[gcarter]

And to reiterate, I'd rather buy a new car from a manufacturer that was under the protection of a court, than one that just received a bailout and was not planning on making any structural changes.

[Ghost]

And to reiterate, I'd rather buy a new car from a manufacturer that was under the protection of a court, than one that just received a bailout and was not planning on making any structural changes.

Ditto--you all beat me to it. And I'd be interested in figuring out how to buy in on the ground floor to their stock...

[smokediver]

In the day, the onions were needed. Business's abused their employee's, and protection was needed. In today's world of OSHA, minimum wages, comptetitive wages, online job searches, well, not so much. IMO it's time they go away, they have served their purpose, now they just serve to inhibit progress. Daily I see construction project costs driven higher by onion demands, with no logical reason behind them other than they can.
Smoke, as far as the Foreign engine comments, I have already applied for the distibutorship (http://www.caudwellmarine.com/). The X and the Critter will be my demo boats :) :D
Poodle is joking ... like he is gonna be happy with 350 ponies !:lookaroun::kingme:

[smokediver]

And just as a follow up ... My union is the single largest donor to MDA , we volunteer many hours standing in traffic panhandling ,lol ... My local has spent tens of thousands locally helping with disabled kids , poor people burned out of their homes , just to name a few . We have fought for adequate staffing not only for our safety but the ability to help our taxpayers . OSHA shows up after the fact , maybe someone gets fined , maybe not . What is a good fine amount for an avoidable death?
I am sure you run into a bad few but there is a lot of good that comes from organization as well . We have our few bad apples but it is up to the body to keep them in check .. and we do ... Not all business owners are genuinely decent like you Scott .. Off my soapbox now ... getting the popcorn,lol:popcorn:

[boxy]

Smoke, Unions for Firefighters, Police Officers, First Responders are one thing. A union so that the the guy driving the forklift at the GM plant in Windsor can work his 4.6 hours a day, and get paid more than a Registered Nurse is something completely different.

[onesubdrvr]

Smoke, as far as the Foreign engine comments, I have already applied for the distibutorship (http://www.caudwellmarine.com/). The X and the Critter will be my demo boats :) :D
Hell,

You need a 16' demo boat too,....... and I volunteer MINE!!

Ahh, nevermind, the engine would be too far back ;)

Somejuan

[Tim Morris]

In the day, the onions were needed.

Maybe so grasshopper, but that was to put out the aroma
of the copius quantity of elixir consumed.

I'm needing an onion right about now after reading through all this.

[gcarter]

traction control
ABS
paddle shift manual gearboxes
aero (both downforce and drag reduction)
turbos
active suspension
structural carbon fiber
carbon brakes
tire technology (including rain tire tread patterns)
oil and fuel tech
and coming soon energy re-capture systems

Those are a few of the things developed in F1 that have found their way down to street cars.

Sure, at the F1 level it's cutting edge science experiment stuff, but that's how you lay the foundation to build production equipment..

I think you'll find that the first two were being developed simultaniously w/the auto industry.
#3, OK, but more than paddle shift (afterall, pushbutton shift has been in and out of the hopper for going on 50 years), but the imnportant thing here is "double clutch/double shaft transmissions" and this is viable.
#4, aero was used in sports cars simultaneously w/open wheel cars (and not just F-1).
#5, sorry, turbos don't cut the grade, F-1 used them MUCH later than other areas. Previously, F-! was much fonder of centrifugal and Roots blowers.
#6, Maybe, but no one is using it today...it's too expensive.
#7, No carbon fiber is being used on anything but the most expensive cars. But composites in general is a viable area of development for all.
#8, Carbon brakes are useless on street cars.

Don, I'm not saying there hasn't been significant tech advances in F-1.
What I am saying is not much of it is directly useful to the vast numbers of cars built every year.
Maybe shock and brake design benifit in general from the experience shock and brake manufacturors gain in building shocks and brakes for F-1 cars, but it's more of an experiential benifit to designers, but not a direct transfer of technology. In fact, NASCAR shocks and brakes benifit tremendously from the F-1 manufacturers edxperience much more than Ford, or Chevy does. I mean, they use the same manufacturers. Just take a look at the list of "Who's Who" in Charlotte.

If F-1 is "Tier 1" of automotive technology, then the avarage of current auto manufacturers is probably "Tier 6".

[Trueser]

Received today.


You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to www.gmfactsandfiction.com (http://email.generalmotors.bfi0.com/W0RH007CBE3BF5D11D4FC290A65960), where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable.

Sincerely,

http://images.bigfootinteractive.com/images/5690074/15700974/2008_11_qq_sig.jpg

Troy Clarke

[Air 22]

Received today.


You made the right choice when you put your confidence in General Motors, and we appreciate your past support. I want to assure you that we are making our best vehicles ever, and we have exciting plans for the future. But we need your help now. Simply put, we need you to join us to let Congress know that a bridge loan to help U.S. automakers also helps strengthen the U.S. economy and preserve millions of American jobs.

Despite what you may be hearing, we are not asking Congress for a bailout but rather a loan that will be repaid.

The U.S. economy is at a crossroads due to the worldwide credit crisis, and all Americans are feeling the effects of the worst economic downturn in 75 years. Despite our successful efforts to restructure, reduce costs and enhance liquidity, U.S. auto sales rely on access to credit, which is all but frozen through traditional channels.

The consequences of the domestic auto industry collapsing would far exceed the $25 billion loan needed to bridge the current crisis. According to a recent study by the Center for Automotive Research:

• One in 10 American jobs depends on U.S. automakers
• Nearly 3 million jobs are at immediate risk
• U.S. personal income could be reduced by $150 billion
• The tax revenue lost over 3 years would be more than $156 billion

Discussions are now underway in Washington, D.C., concerning loans to support U.S. carmakers. I am asking for your support in this vital effort by contacting your state representatives.

Please take a few minutes to go to www.gmfactsandfiction.com (http://email.generalmotors.bfi0.com/W0RH007CBE3BF5D11D4FC290A65960), where we have made it easy for you to contact your U.S. senators and representatives. Just click on the "I'm a Concerned American" link under the "Mobilize Now" section, and enter your name and ZIP code to send a personalized e-mail stating your support for the U.S. automotive industry.

Let me assure you that General Motors has made dramatic improvements over the last 10 years. In fact, we are leading the industry with award-winning vehicles like the Chevrolet Malibu, Cadillac CTS, Buick Enclave, Pontiac G8, GMC Acadia, Chevy Tahoe Hybrid, Saturn AURA and more. We offer 18 models with an EPA estimated 30 MPG highway or better — more than Toyota or Honda. GM has 6 hybrids in market and 3 more by mid-2009. GM has closed the quality gap with the imports, and today we are putting our best quality vehicles on the road.

Please share this information with friends and family using the link on the site.

Thank you for helping keep our economy viable.

Sincerely,

http://images.bigfootinteractive.com/images/5690074/15700974/2008_11_qq_sig.jpg

Troy Clarke


Got the same Email....:wink:

[Tony]

huh, what the hell are you thinking? you have got to be kidding me here... the govt can't control the oil company's can they? do you really think unions can control price fixing and gouging? if they did, there wouldn't be any pork to pay those ridiculous benny's...

Chill for a minute, Buiz, and look at the bigger picture.

We are witnessing a war on the middle class. Wages are well below inflation, and the number of families in poverty is growing. Debt load is off the charts, and the personal savings rate is below zero. The costs of a college education, of health insurance, of energy for heating and driving, and of pharmaceuticals grow out of reach for more Americans each day that passes.

Between 1991 and 2007 the GAO has recorded 2,600 mergers in the oil and gas industry. Has the result been lowered costs...or record profits? I think we all know the answer to that one. In 2005 President Bush said; "Working people have had to pay a tax, in essence, by higher gasoline prices". As energy, health care, and food fall into the hands of fewer and larger corporations, private interests in effect gain the ability to assess taxes on all of us. Excess corporate profits only serve to enrich the wealthy at the expense of the middle class.

These mega-corporations are acting without government or unions strong enough to balance their market power. Once people have more money than they can possibly spend on goods and services, they no longer use it in ways that stimulate the economy. Instead, they use the power their money brings to manipulate the government, and the economy, in order to make themselves even richer. They get more tax breaks, less regulation, more support for globalization, and policies that favor lenders over borrowers. The middle class continues to weaken.

Unfortunately, massive political contributions from mega-corporations weaken the resolve of politicians to work on behalf of the middle class. The middle class, and unions, are under attack. The large economic players, and their lobbyists, oppose minimum wage increases, demand tax breaks, and push globalization. They encourage the middle class worker to go it alone. Go to college, get retrained, work harder, tighten your belt...anything but organize. But, what are the corporations doing? Mergers and acquisitions are setting new records. Fewer, more powerful giants are roaming the economic landscape. This is nothing more than organizing, the same thing they are telling us not to do!

As smokediver stated earlier, not all unions are evil. Is it the athlete's fault for asking for outlandish salaries, or the owners fault for paying them? The Big Three have had zero foresight, and our government has been equally delinquent in establishing any type of national energy policy or leadership role in weaning us off foreign oil. The $25b loan is a small portion of the bailout money already approved for other corporations. The new buzzword is "bailout fatigue". If you think things are bad right now, just wait until GM goes under, followed by Ford and Chrysler, followed by the 3.5 million associated jobs relating to this industry! Be careful what you hope for...and hold onto your shorts, baby!



P.S. Some of the details outlined above should be credited to Richard A. Levins, a Professor Emeritus of Applied Economics at the University of Minnesota, and award-winning author of books about policy and market power issues.


:beer:

[onesubdrvr]

We are witnessing a war on the middle class. Wages are well below inflation, and the number of families in poverty is growing. Debt load is off the charts, and the personal savings rate is below zero. The costs of a college education, of health insurance, of energy for heating and driving, and of pharmaceuticals grow out of reach for more Americans each day that passes.
:beer:
Tony, my own experiences scream validity to this statement.

I make good money for what I do,..... but I haven't had a raise in 3 years,... how much has the COL increased? So essentially, I've lost money. I haven't bothered to change jobs yet because of putting myself through college.

Personal savings, a mere percentage of what they were 6 years ago - because of the market downturn mostly, so I am hopeful there

health insurance - Well, one thing that screwed me this year, was my employer changing insurance companies midway through the year, and with my tribe, I've paid 2 years worth of co-pays in one year (I max out early in the year)

Anyway, just wanted to lend some support to your statement.

Wayne

[Tony]

Got the same Email....:wink:

This was also a full page add in the Detroit News today...


:beer:

[gcarter]

Interesting reading Tony.
If I remember correctly, only 40% of our oil and gas is produced domestically (it could be a lot more, but that's another subject) most of the rest comes from national oil companies that belong to a world wide cartel that sets prices and wouldn't be legal here.
So, what can we take from it? Your favorite econimist's outline may not be based on real assumptions if the energy companies don't set prices.
They're (energy prices) much lower now......could it be because the cartel is swimming in the stuff because demand is down for some reason?
If most jobs come from small business (afterall, UAW membership is only 140,000 now, I just read that), you would naturally assume the small business' employees aren't represented (in many states anyway) and deal with the employer directly. The employer is dealing with those same ever rising health care costs. He's also trying to cope with the cost to his business of competition......that's just down the street, not in Mexico, or China.
Now, consumer credit has completely dried up because lenders like GE Capital have removed themselves from the market and he completely depends on the customer using his credit card or paying with cash.
Potential customers are scared and put off purchases. The employer lays off 50% of his employees and just hopes he can make it till confidence starts to return.
Sorry, I don't feel sorry for public employees protected by their unions and paid by my taxes.
I haven't had a real pay check since June and am making it from day to day. I still am responsible for the 50% of the employees I still have.

[zelatore]

I think you'll find that the first two were being developed simultaniously w/the auto industry.
#3, OK, but more than paddle shift (afterall, pushbutton shift has been in and out of the hopper for going on 50 years), but the imnportant thing here is "double clutch/double shaft transmissions" and this is viable.
#4, aero was used in sports cars simultaneously w/open wheel cars (and not just F-1).
#5, sorry, turbos don't cut the grade, F-1 used them MUCH later than other areas. Previously, F-! was much fonder of centrifugal and Roots blowers.
#6, Maybe, but no one is using it today...it's too expensive.
#7, No carbon fiber is being used on anything but the most expensive cars. But composites in general is a viable area of development for all.
#8, Carbon brakes are useless on street cars.

Don, I'm not saying there hasn't been significant tech advances in F-1.
What I am saying is not much of it is directly useful to the vast numbers of cars built every year.
Maybe shock and brake design benifit in general from the experience shock and brake manufacturors gain in building shocks and brakes for F-1 cars, but it's more of an experiential benifit to designers, but not a direct transfer of technology. In fact, NASCAR shocks and brakes benifit tremendously from the F-1 manufacturers edxperience much more than Ford, or Chevy does. I mean, they use the same manufacturers. Just take a look at the list of "Who's Who" in Charlotte.

If F-1 is "Tier 1" of automotive technology, then the avarage of current auto manufacturers is probably "Tier 6".

While I was trumpeting F1, I was also including sports cars and most other forms of road racing. There is seldom any direct connection between F1 - arguably the most technically advanced form of motorsports - and actual production cars. But all racing is a great developer of technology and F1 is the pinnacle. Regardless, all I was getting at is you're more likely to see a benefit to your road car production (many years down the road perhaps) from fielding an F1 or sports car team than a Nascar team. Although in the US you would likely get better advertising from the Nascar team.

(Although with the COT and the Nascar emphasis on publicizing drivers over car makes, I wonder just how much they get out of it?)

Truth be told, I know a lot of this stuff came from outside the automotive field all toghether. Aerospace for example. And even though some of these things (active suspension) have been banned from racing, the seeds they sowed have begun to show up in production cars.

Mainly though, I just wanted to complain about Nascar. I'm a glutton for punishment that way...

[BUIZILLA]

Although in the US you would likely get better advertising from the Nascar team.

(Although with the COT and the Nascar emphasis on publicizing drivers over car makes, I wonder just how much they get out of it?)

Mainly though, I just wanted to complain about Nascar. I'm a glutton for punishment that way... NASCAR is all_about the entertainment business, and they flat out admit that.... the racing just provides a platform for that.... Gaylord *Entertainment* does own a few tracks themselves... :convertib:

[BUIZILLA]

Chill for a minute, Buiz, and look at the bigger picture. Tony, in all due respect, until you get out from behind the sacrilige of a classroom desk, and behind a real world working man's business desk, you'll never grasp how mainstream mom and pop business operates, those responsibilites, your employee's and their family welfare, and what it takes to turn a profit to see that that can be successfully accomplished..

[Air 22]

This was also a full page add in the Detroit News today...
:beer:
Thats nice:wink:....Our's was a lil diff...a Personalized letter...thanking us for buying an 08 Escalade ESV and being loyal GM customers! That wasnt in the Detroit News..:beer:....Errrr was it?...lol:cool:

[Air 22]

Tony, in all due respect, until you get out from behind the sacrilige of a classroom desk, and behind a real world working man's business desk, you'll never grasp how mainstream mom and pop business operates, those responsibilites, your employee's and their family welfare, and what it takes to turn a profit to see that that can be successfully accomplished..



:wink::wink::wink::wink::wink:

[Tony]

Tony, in all due respect, until you get out from behind the sacrilige of a classroom desk, and behind a real world working man's business desk, you'll never grasp how mainstream mom and pop business operates, those responsibilites, your employee's and their family welfare, and what it takes to turn a profit to see that that can be successfully accomplished..

I'm completely confused by the "getting out from behind the sacrilige of a classroom desk" analogy...while the rest of of your comments do absolutely nothing to address the points made in my post regarding the interaction between corporations, the economy, and unions.

My grandfather started a plumbing/heating business in Detroit in 1934, taken over by my father and his two brothers, and currently operated by my two of my brothers. I am not unfamiliar with the fluctuating trends, and challenges, of small business ownership.

In my opinion your posts are usually terse, negative in their tone, close-minded, and rarely respond to the theme or point someone else is making. I posted a lengthy, detailed position partly to respond to the frustration you seemed to have by my first statement. You remember, the one where you said; huh, what the hell are you thinking? you have got to be kidding me here...

Apparently, my latest post did not help you comprehend my thoughts on this topic.
I don't know what else I can do to make it any easier for you to understand...


:beer:

[BUIZILLA]

Apparently, my latest post did not help you comprehend my thoughts on this topic.
I don't know what else I can do to make it any easier for you to understand... Tony, judging from the 6 either PM and personal emails I got from my reply to you, thanking me for my terse (your words) opinion, we aren't the one's who don't *get it*

get it ?

[Tony]

Tony, judging from the 6 either PM and personal emails I got from my reply to you, thanking me for my terse (your words) opinion, we aren't the one's who don't *get it*

get it ?

How many buds give you an "Atta-boy" via private e-mail has no relevance to me...or the topic. It is well documented, and no surprise, that many viewers of this thread have oppositions to unions. I shared a viewpoint that tried to convey an alternate position regarding their importance, and their relationship to the current economic climate. You still have not addressed that topic, nor have you clarified what you meant by your "getting out from behind the sacrilige of a classroom desk" statement. If able, please elaborate.


:beer:

[BUIZILLA]

You still have not addressed that topic, nor have you clarified what you meant by your "getting out from behind the sacrilige of a classroom desk" statement. If able, please elaborate.
I'm very able, unfortunately basic business and responsibilites of such aren't in your methods of life, so anything I say will go against your grain... your posts concerning politics and the election and your background show you have ZERO grasp of business ownership/management, and I say that gently and respectfully... just because your grandfather started a business 80 years ago is no relevance in 2008, BFD, my grandfather started an auto parts Co. in Louisville 60 days before the depression happened and he and my grandmother survived working 7 days a week and dining on cornmeal, and they went on to be extremely successfull... also, just because your a cab driver doesn't qualify you to run the cab company no more than being a teacher means you can run the school district's business (desk relevance)... unions have a place still, no doubt within Govt it works, but it has been proven beyond a shadow of any doubt that the car company UAW is the anchor sinking the ship, in other words the weight of the union far exceeds the weight of the ship it is strangling.. the last time a union got froggy like this Eastern Airlines called it quits... the UAW isn't far behind...

I'm trying to be as respectful as I can here...

[gcarter]

Tony, I'm confused a bit so I'd loike to ask you some questions;
Is your brother's business unionized?
If not, would it make a difference to their well being if it were?
When you're doing study about economic subjects, do you think about it in reference to how your families business operates?, or as it applies to large employers or multinational corporations?
Do you know the ratio of US employees who work for small businesses versus the number who work for large corporations?

I'm just wondering because many of your posts tend to convey that the answer is unionization and regulation.
If most US employees work for small businesses, how does that work?

[mattyboy]

listen i am not a rocket scientist or a geo political expert but i have a simple plan for this it is the way i handle telemarketers the basis of the plan
I got a call i had won a new caddy, $5000 in cash and a year supply of vitamins, the catch was I had to buy the next 2 years of vitamins at $1500 bucks and shoot a commercial as a loyal happy buyer so now that my dinner is getting cold i figure let me make the telemarketers night
I said great send the camera crew over in the caddy throw the vitamins in the back and make sure they have a check for 3500 bucks and i'll go get a haircut and look good for the commercial and if they fax me the script i make sure a memorize the lines before the camera crew arrives!!!well going through 4 managers and one assistant vice president they didn't go for the deal best 1 and half hour telemarketing call i ever had they never called back
so let's apply the same basic plan
instead of the gov't taking our tax dollars to bailout some bankrupt busineses
let us keep this years tax dollars as long as we either spend the money on wall street or buy a new car simple isn't it

[Rootsy]

The problem with the UAW is the same problem as those sitting in the board rooms of the big 3. The UAW "leadership" is no different than the president of GM, Ford or Chrysler. They are all a bunch of greedy motherflockers... The UAW leadership's product just happens to be the blue collar worker. By forcing some scraps out of the employing company the workers remain "content" and pay their dues...

Tough decision on what to do... If we lose the auto industry... we may as well shut the lights off and lock the doors in Michigan... The only ones left with any income will be the farmers... Michigan is not a business friendly state to begin with. This will all but extinct us.

Mega companies have, for too long, overcharged customers. Reaped the rewards and filled the coffers. The unions felt that the workers deserved a piece of that pie and with wealth flowing like a river the management agreed. Times have now changed...

Consumers don't have the liquid assets to purchase vehicles that cost a years wages.... Credit is tight and the debt burdened consumer is strapped... which equals no new car... See where this is going?

Competition has led to the need to lower production costs. But with old agreements and legacy costs looming it is difficult to do. Who's fault is that? Is it the union? the worker? the management? all 3?

As much as I don't care for unions for a variety of reasons I will say that corporate management agreed to certain benefits and wages. It is their responsibility to honor those agreements. But on the same hand, if the company fails those agreements will evaporate. In this case both sides need to cut the crap and forgo the silver lining and streamline the ship.

When you have a 20 year old HS graduate (barely) making a 6 figure income year in and year out, pushing the button on a welder or hanging a rim... There is absolutely NO WAY you can compete... The costs will drive you right out of business.... Because there sure as hell is no way some white collar manager or professional is going to work for less than the rim hanger... and so on and so forth right up the line...

Costs, waste and poor productivity and efficiency will drive any business right into the ground, especially if there is viable competition right next door, doing it better, cheaper and faster...

[boxy]

When you have a 20 year old HS graduate (barely) making a 6 figure income year in and year out, pushing the button on a welder or hanging a rim... There is absolutely NO WAY you can compete... The costs will drive you right out of business.... Because there sure as hell is no way some white collar manager or professional is going to work for less than the rim hanger... and so on and so forth right up the line...
Costs, waste and poor productivity and efficiency will drive any business right into the ground, especially if there is viable competition right next door, doing it better, cheaper and faster...


So endth the lesson.

Roots, you know it, I know it, it seems pretty much everyone except Buzz Hargrove and his US counterpart knows it.

So why can't we change it?

[Just Say N20]

Does it strike anyone else as ironic that BO wants to have Jennifer Granholm (governor of Michigan) on his economic advisory board?

I would hate to see the "success principles" she has demonstrated with Michigan implemented on a national level.

[roadtrip se]

So we have a few that keep banging the drum for this here and in the Senate.

Has anyone given thought to the fact that based on the shape of the credit markets these days, that funds may not be available for the Big Three to go into re-organization and they may not pass go, collect their $200 each, and instead go directly to liquidation?

Not too hard to fathom, when anything less than a 700 keeps you from driving a new car many places these days.

Also, I consider myself a pretty decent salesperson trained over thirty years of hearing every possible objection, but I pity the car salesperson that is trying to peddle a $40K pickup and he can't guarentee that his prospect will be able to get warranty or retail parts and service for that purchase when the useful life of that vehicle is seven to ten years.

As for the unions, their time is coming. Best thing that could happen to Michigan is to go right-to-work. Most aren't buying it any more, but quite a few don't have a choice. If they offer so much, let the employees have a choice about whether they have to belong or not. All of this aside, the UAW has given plenty in the new contracts, but may have to give some more.

[mike o]

I agree with Mr. Buizs point...that untill you have had the responsablity meeting payroll, week in, year out. Its really impossiable to understand what its like to be a small business owner. Its really hard to comprehend, how it can effect such a person, ever. However, we are talking here about the bailout or bankrucy now with the big 3. What type of (DESK) really isnt the problem. WTF, Here we go again. Now its the big 3. Like the other MEGA corps, banks, finiancal instutions, and insurance. All the mergers (Tony) has mentioned that have given them all so much POWER by the de-regulations (MR. C), to do whatever they want, gobble everybody up, get so huge, become disfuntional in everything with everything. Then Fly to Wash D.C. and cry for $$$$ on their corporate ( must be a blast to fly em Dwight,:wink:) jets. Where is this GONNA end, Whos next? How much $ can WE keep shelling out that we DONT have. Looks like ghosts disertations are coming to fruition here. What sucks is the small business guy gets thrown out on the street and would probably NEVER ask anybody for anything (like THE way) this sh*t's going down. Like Mr. Rootsy says.. a contract a contract. But if mis - management and contracts or labor costs means your not competitive. Sorry, Its over, and let it all run its natural capitalist coarse. Thats the way it works. But, Its true, the middle class GONNA pick up the tab, both clock puncher and small business owner. People are gonna get hurt. EVERYBODYS ALREADY HURTING IN SOME WAY. Mr. Don, who gets to tell a old family car dealership thats barely hanging on, but wants to tough it out (corn meal) that its all over for them. When their own taxes have bailed out the car company thats telling him its over, wtf. So welcome to the Global economy. Ill take the good old USA like in the 50-60's myself. How did WE get here?????:frown:

[Ghost]

So endth the lesson.

Roots, you know it, I know it, it seems pretty much everyone except Buzz Hargrove and his US counterpart knows it.

So why can't we change it?

The amazing part is, what we have to do is do nothing. (Now, sadly, in order to do nothing, we have a lot of work to do, because other people have wormed their way into so much control of our checkbooks for so long, that in order to do nothing, we need to STOP those people.)

To Todd's point about what you would or would not invest in, and whether the capital will be there, just look at the stock market--people are trying to buy anything solid, looking for companies that are lean and mean and have value to sell. Any or all of the Big 3, under bankruptcy protection, with no more pension obligations, and no more high-fixed wages, will drop their burdened $78/hr rates down close to or below the $47/rate. At that point, they become an extremely attractive investment relative to the rest of the market.

It's a painful choice, but would you rather keep 50-75% of the jobs at half the pay, or keep zero% of the jobs at full pay?

By the way, it is important to understand that that sort or painful choice is a choice ALL of us will be making soon. This stuff works just like layoffs, for all the same reasons, except this one is that much bigger and that much more political.

The first layoff is often actually a sweet deal. The banks got that one. We had banks like Wells Fargo being TOLD to take money they didn't want. True story.

The car companies are coming in now, with all the state and local municipalities who issued bonds that are about to go into default.

I am not without sympathy, in fact the reverse. But people need to have the sympathy of honest foresight. Things are going to get worse. Trimming the BIG 3 to where they would have been competitive before this disaster is shooting directly at a moving target (accelerating, actually, in this case) and missing.

The sympathy of foresight means being realistic and not wasting more resources while resources are tight. This means recognizing that all the taxpayers who still have jobs, but whose jobs will likely be in jeopardy soon, will soon be unable to shoulder the burden of the businesses that are failing now. In a few months, they won't even be able to shoulder the burden of their own failing businesses.

And as is the case with layoffs, the worst employees get the best packages, because they are the first to go. In the bailouts, the most mismanaged companies will be the first at the trough. Banks got there first. Everyone else will get crumbs, realative to the banks.

By the way, the only REAL bailout that should have happened, was already contracted, and that is FDIC. If the original bailout had been an authorization of funds to guarantee all insured deposits would be liquid and available, we would have avoided the run on the banks and then all the rest of the good or bad investment chips could have fallen where they might.

Sad part is, I think the stuff they are doing now will buy a little more time of comfort for some, make a much bigger problem ultimately, shaft all the little guys, and eventually, the little guys will be bailing out the 4.4 trillion of their own FDIC-insured deposits anyhow. (Which of course, doesn't work. It just means you are poor.)

[Ghost]

Lots of early cars got better economy than today’s car. Colin Chapman could have told you the problem: weight!

Funny to me that you mention Colin Chapman. I've wondered for a few years whether we could make some completely different sorts of cars that are much simpler, lighter-weight, and do-it-yourself for nearly everything, cheap, and long-lasting.

I suppose the economy may be pushing us into exactly that sort of thing. Is a 1200-1600 pound commuter car (perhaps much like a 4-wheeled motorcycle) unfeasible without ridiculously expensive materials?

[Ghost]

So, why doesnt the Federal government force them into chapter 11 with the promise of the 25b bailout... Best of all worlds...

Anybody know how much the taxpayer will owe on their federal pension insurance if they do go into Chapter 11? I would not be surprised if the number is very close to the 25 billion.




If that's true, by the way, the whole bailout loan could be looked at as a way of DOUBLING their pension insurance.
Scare everyone into a loan for 25 billion
Use the money to pay lump sum obligations to the UAW pensions from the cash reserves of the company
Run the companies into their inevitable bankruptcy
Pension gets its 25B of federal insurance after bankruptcy (on top of the $25B cash already paid in step 2)
Voila, you've doubled your pension insurance coverage when you knew you were going to have to file a claim soon.
This is my speculation. Anyone know if there is any truth here? (I'm NOT asking about what people in the Big 3 INTEND with their loan request, but rather if anyone knows whether this scenario is what will in-effect happen if the loan is made and they do go bankrupt anyhow.)

What would make for an interesting offer:"We will lend you $25 billion but you lose all your pension insurance if you go bankrupt."

I wonder what everyone in the UAW who is trying to convince us taxpayers that the "$25 billion loan is a good bet" would say to that offer? Not.

[Just Say N20]

Not that I tend to seek the worst of human nature, but I am VERY concerned about how much of the $700 Billion is going to disappear. That is such an enormous amount of money, I can see where people would think they could get away with siphoning off $15 million here and there, and nobody would be the wiser.

After seeing how much corruption there is in just about everything the government does (follow the money), it begs the question of who is overseeing this whole plan? I would think we have skated onto some very thin ice, when we put one guy (treasury secretary) in charge of $700 Billion, and award him the power to do almost whatever he wants.

It is OUR money, and all of a sudden, after being told "we have to commit this money IMMEDIATELY for the lending institutions and housing bailout or the country will collapse," we now are being told, "I changed my mind. We aren't going to spend the money that way at all."

Excuse me?!? Just like that? No vote, no discussion. Just one guy deciding we are now going to do something completely different?

Gee, how could this possibly go wrong?

[roadtrip se]

So, why doesnt the Federal government force them into chapter 11 with the promise of the 25b bailout... Best of all worlds...

And I repeat yet again, nobody in their right mind will buy a car from a bankrupt company with servicability being in doubt. Nobody.

One thing that keeps getting lost in the noise here and elsewhere, is that the Big 3 did not bring this on themselves. The issues are cyclical. Most people don't have a clue about what has really happened over the past couple of years in Detroit and continue to fall on the same, tired old cliches
from the 70's. Below are a few, followed by the truth.


6 myths about the Detroit 3
BY MARK PHELAN • FREE PRESS COLUMNIST • NOVEMBER 17, 2008

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case.

Myth No. 1

Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524vehicles worldwide -- about 3,000 more than Toyota. Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year. Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.


Myth No. 2

They build unreliable junk.

Reality

The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.


Myth No. 3

They build gas-guzzlers.

Reality

All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.


Myth No. 4

They already got a $25-billion bailout.

Reality

None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.


Myth No. 5

GM, Ford and Chrysler are idiots for investing in pickups and SUVs.

Reality

The domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry. The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6

They don't build hybrids.

Reality

The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

[f_inscreenname]

And I repeat yet again, nobody in their right mind will buy a car from a bankrupt company with servicability being in doubt. Nobody.

One thing that keeps getting lost in the noise here and elsewhere, is that the Big 3 did not bring this on themselves. The issues are cyclical. Most people don't have a clue about what has really happened over the past couple of years in Detroit and continue to fall on the same, tired old cliches
from the 70's. Below are a few, followed by the truth.


6 myths about the Detroit 3
BY MARK PHELAN • FREE PRESS COLUMNIST • NOVEMBER 17, 2008

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case.

Myth No. 1

Nobody buys their vehicles.

Reality

General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524vehicles worldwide -- about 3,000 more than Toyota. Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year. Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.


Myth No. 2

They build unreliable junk.

Reality

The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry.


Myth No. 3

They build gas-guzzlers.

Reality

All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate.


Myth No. 4

They already got a $25-billion bailout.

Reality

None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now.


Myth No. 5

GM, Ford and Chrysler are idiots for investing in pickups and SUVs.

Reality

The domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry. The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel economy ratings than Toyota and Nissan's full-size pickups.

Myth No. 6

They don't build hybrids.

Reality

The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

Makes you think don't it? It's the unions that are killing them. The same way they did the steel industry and are with the airline industry.

[Lenny]

I am no help either. As some of you can testify, my "cars" last about 30 years before I need to replace them. Not Todds' 7-10 year "service life" comment. That is barely broken in and the plastic would still be on the seats.
:)

[Ghost]

I'll take one last stab and shut up for a while, as the Car Czar's ideas make so much sense to me, but I don't know how to make them happen without forcing them down the union's throat, right away. And I see a big loan making it harder to force them down the union's throat, not easier. (A gift of 25 billion to the union pension, maybe. But not a loan.)

The Myths
I think it is good to disspell myths like those 6. I can totally accept the realities, including that the cars are just as good as the competition, and properly targeted in the market, etc. I've never said otherwise. But isn't arguing either side of these myths like looking for your keys a block from where you dropped them, just because the light's better on the next corner?

The Crux of the Problem?
Someone help me understand how the realities behind the myths have any bearing on what seems like the real issue--the unsustainable costs of production.

If it is true that the real burdened rates are in the neigborhood of $78/hr for the Big 3, and $47/hr for the competition, they are in trouble. (Anyone know if those numbers are approximately real? I got them in my head from this forum.) The numbers I have heard outside this forum are that Honda makes $1600/unit profit on comparable cars to GM, comparably priced, and GM LOSES $800/unit.

Isn't the reason for the estimated $2400/unit disparity driven by labor cost and benefits? And even with existing union concessions, won't it be 15-30 years before these cost differences go away with the passing of retirees? (And that doesn't even take into account the tightening world market, where the competition will be increasing the $2400/unit disparity by negotiating their own labor cost reductions.)

The Dilemma:
So, the union needs to give a LOT of ground to erase this disparity. They won't. So how do we get there? The union has contracts. Unless the "B" word forces them to drop those contracts, they can:

Voluntarily renegotiate them radically, including loss of wages, jobs, and benefits, and maybe have a chance. But they say they won't.
Or, they can stand pat like they are and see if they can get the taxpayers to cover the $2400/unit disparity for the next, what, 15-30 years?! But we taxpayers can't.
So, how do we get there without the bankruptcy option? And what good can a loan possibly do to solve the long term production cost disparity?

I'd love to know it is not this bad, but I just don't see a fix without breaking all of the negotiated union obligations, whether voluntarily or by force or bankruptcy. But 15-30 years of taxpayer prop-up is ridiculous. And it is mathematically impossible to make up the $2400/unit for 15-30 years with loans. It can only be a direct subsidy.


Who is less is in his right mind?

The guy who buys a vehicle from a cash-strapped company that is about to fall into bankruptcy, where it can then be protected from honoring its contracts and commitments and paying its creditors?
Or the guy who buys a car from a company operating under bankruptcy protection, that looks viable with fresh capital that is obligated to reasonable new contracts, without a cash crunch, and that has gotten out from under all its crushing obligations to past creditors?
Extra Credit Speculation: with the new laws that Obama and Democrats controlling Congress, won't they push through the new union organizing rules they've been trying to enact for a while already? Will that impact the foreign car makers who have plants here, and drive their costs up to match Detroit? If so, doesn't that pose a risk that propping up Detroit temporarily with loans keeps the inflated wages and benefits around long enough to force up wages and benefits at the foreign car plants here? Does that risk forcing foreign makers to close their plants here as long as Detroit is propped up at unsustainable rates? I don't know, it's my speculation, but I'll bet if you wanted to lose $25 billion AND lose a ton of jobs in Ameican Honda/Nissan/Toyota/BMW plants, AND not save the Big 3 from bankruptcy, our government's just the man for the job.

[BUIZILLA]

anybody consider the immediate used car value crash of whoemever brand goes poof... ala Oldsmobile..

[DonziJon]

My sister showed up from Seattle at Logan Airport in Boston this weekend to visit. She rented a Dodge Caliber with 15,000 miles on it. The sound of the doors shutting were...well...Clunky, compared to my wifes 4 year old Camry with 34,000 miles. The difference was imediately noticable. SAD. John

[zelatore]

Funny to me that you mention Colin Chapman. I've wondered for a few years whether we could make some completely different sorts of cars that are much simpler, lighter-weight, and do-it-yourself for nearly everything, cheap, and long-lasting.

I suppose the economy may be pushing us into exactly that sort of thing. Is a 1200-1600 pound commuter car (perhaps much like a 4-wheeled motorcycle) unfeasible without ridiculously expensive materials?

In short, no.

First, the current crash standards would never be met in that weight class.

Second, the public simply won't forego all the convenience features they've come to expect. Sound deadening; air conditioning; power steering and brakes; power seats, mirrors, windows, pedals..., dual-pain windows; sun-roofs; cruise control; remote keyless entry ... the list goes on and on. And these aren't just luxury cars that have these things - your typical Civic-class car has all these options and then some.

In another thread I recently put up a link to the Ariel Atom. You can think of it as a modern Lotus 7. It's little more than a 4-wheel motorcycle (and possibly the most fun you can have with your pants on...depending on your partner, maybe even more fun). Even this thing weighs in at 1400 lbs.

http://www.arielatom.com/
http://www.youtube.com/watch?v=WaWoo82zNUA

This of course is an extreme performance exercise. On the other end of the minimalist car scale we have the Nano:
http://tatanano.inservices.tatamotors.com/tatamotors/

This is more of a 'transportation module'; the cheapest thing they could build. Still, it weighs in at a target weight of 1300 lbs dry. As you can imagine, there are no plans for US sale.

2000 lbs. is a more realistic target for a bare-bones commuter car these days, but even that is less than anything on the current market. Here are some of the smallest current cars:
Yaris - 2340 lbs
Fit (base) - 2489 lbs
Mini (base) - 2568 lbs
Nissan Versa (base) - 2693

The only car I can think of sold as a general-use vehicle (i.e. not a kit car) in the US under 2000 lbs. is the Smart fortwo at 1808 lbs. And it's really considered a 'city' car and not even offered in rural areas where highway travel is the norm. Even at that, many people would never consider owning one as it's 'to small and dangerous'.

There is the option of the CanAm Spyder, but it's really more motorcycle (or more correctly, road going snowmobile) than car since it's an open 3-wheeler. It's certainly not marketed at the general public, and it's not especially cheap at nearly twice the price of the Versa. It does weigh in at only 699 lbs dry - less than some big touring bikes.
http://spyder.brp.com/en-US/

Frankly, I'd be happy to see nice production cars under 3000 lbs for mid-size sedan. My 335i isn't a big car by the general public's standards (although it is big to me) and it comes in at a portly 3594 lbs.



(edit)

BTW, my commuter vehicle is listed at 416 lbs, averages about 45 mpg at 80-90 mph, and thanks to lane splitting here in CA, gets me to work 30 minutes faster on an average day.
http://www.triumph.co.uk/usa/Speed%20Triple_5298.aspx

[zelatore]

My sister showed up from Seattle at Logan Airport in Boston this weekend to visit. She rented a Dodge Caliber with 15,000 miles on it. The sound of the doors shutting were...well...Clunky, compared to my wifes 4 year old Camry with 34,000 miles. The difference was imediately noticable. SAD. John

Not that I don't think the Caliber is a crappy car - it is in most every way - but it's really not fair to compare the rental version with much of anything. Rentals are always the most stripped-out, de-contented versions available. Often, they are below even the base model offered to the general public.

[Lenny]

Sound deadening; air conditioning, power steering, power seats, mirrors, windows, pedals..., dual-pain windows; sun-roofs; cruise control; remote keyless entry

Gee, when I look outside, my Van AND my Truck have none of those.

Beemer is OK tho. :D

[BUIZILLA]

Not that I don't think the Caliber is a crappy car - it is in most every way - but it's really not fair to compare the rental version with much of anything. Rentals are always the most stripped-out, de-contented versions available. Often, they are below even the base model offered to the general public. I don't know who you rent cars from, but I haven't seen that in the last 20 years... now it's mainstream midline to highline to make the re-marketing easier to digest...

[zelatore]

I don't know who you rent cars from, but I haven't seen that in the last 20 years... now it's mainstream midline to highline to make the re-marketing easier to digest...

Wow. Maybe it's just been a long time since I drove an entry-level car. I sure HOPED they were better than what I rented!

I can't even remember what most of my rentals are - just generic crap-wagons. I think the last one was .... uh ... er ... nope - too bland to remember. I do remember it came from Enterprise though, and it was in September.

I do remember renting a Magnum wagon last year that was tolerable; and a Ford Edge that was better than expected.

[zelatore]

Gee, when I look outside, my Van AND my Truck have none of those.

Beemer is OK tho. :D


Yeah, but you're up there north of the boarder where all bets are off!

:wink:

[Air 22]

In West Palm Beach...I rented several times from Hertz a 2007 Convert Vette, Mustang Shelby GT(Black n Gold for Hertz only) and Cadillac Escalade.(.Buiz u saw it)....all were basic layout...no nav unless u wanted to rent it...all were fun...Mustang and Vette were very close...but the Vette accelerated lil faster..403hp vs Stang's 325...but the Stang had the best sound by far....These cars were all under 3000miles and in nice shape...The lot agent said when they reached 7000mi back to the factory they went...

Of course these rentals were on official business...:kingme:

[BUIZILLA]

Let Detroit Go Bankrupt
By MITT ROMNEY
Published: November 18, 2008

Boston

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.

First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.

That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.

Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.

The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”

You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.

The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.

Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.

Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.

It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.

But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.

The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.

In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
__________________

[Air 22]

At 10k and hour..Fly'n to DC in each of their own Business Jets and home again... didn't exactly go over to well...nadda good move:nilly:....heck they could of at least "Jet-Pooled" together...:bonk:...on MSNBC..when the senator asked did anyone of the 3 CEO's here travel to/from these hearings via commercial jet...show of hands please??? and all 3 just sat there...that kinda sunk their ship:boat::bonk:

[gcarter]

Interesting article Buiz.
One of the major differences in the transplants is everybody eats in the same cafeterias. They might even all wear the same uniform at times.

[Carl C]

I pick up my new '08 F-150 4x4 Monday! I got a loaded $33,000 truck for $24,000 out the door!:yippie: I got it in northern Michigan. They needed to get it off the lot. Dealers down here in metro Detroit couldn't touch that deal! No imports in my stable.:)

[roadtrip se]

STEPHEN HENDERSON
Why Romney's right, and wrong, about the Detroit automakers
BY STEPHEN HENDERSON • DEPUTY EDITORIAL PAGE EDITOR • NOVEMBER 19, 2008

Native son Mitt Rommey, whose dad ran American Motors in its Rambler days and then became governor of Michigan, is the latest national figure to totally trash the Detroit-based auto industry. The former Massachusetts governor, whose campaign for the Republican presidential nomination peaked with his win in the Michigan primary, penned an op-ed in the New York Times titled, "Let Detroit go bankrupt." That’s a tough prescription which the Free Press took issue with in an editorial you can read here.
Romney said the three Detroit auto companies shouldn't get the government loans they're seeking so that market pressures will force them to restructure or die. If they get the money, Romney said, their demise is "virtually guaranteed," because the companies would just stay the current, "suicidal" course.

"Detroit needs a turnaround, not a check," he wrote.

OK, fair enough. Detroit does need a turnaround. And Romney, who was a huge success as a “turnaround specialist” in business before he went into politics, makes strong points about how some of that turnaround should unfold.

But his overall point is diminished by sloppiness in the details, and failure to acknowledge some of the harsh reality the industry, and the nation, would face if any of the Detroit 3 were to actually go bankrupt.

If he really wanted to give the Detroit 3 - or the lawmakers weighing their fate - solid advice, he'd have been much more careful and thoughtful.

But let’s start with what Romney got right.

He blasted current management for its largesse, and stubborn unwillingness to rein in salaries and perks that border on the absurd in the current economic environment. The auto companies' management made his point perfectly this week when they flew separately in private jets to Washington to ask for the bridge loans. Appearances don't get worse; decision making doesn't get dumber. The fat-cat culture is still way too alive and well in Detroit.

He also rightly said the companies must be managed without the historically intense focus on quarterly earnings and other short-term measures. Short-term thinking, especially when times were good, is largely what got the industry into its current bind.

Think about it. When profits were high from SUV sales, the Detroit 3 didn't take that windfall and invest heavily in the smaller, more fuel-efficient vehicles that would be more popular, and necessary down the road. They just built more trucks.

Similarly, when times were tight, the industry hardly ever took the initiative to actually restructure; it just temporarily excised capacity, which was reintroduced into the system once times were good.

The last thing Romney got right was his insistence that the government invest in new energy sources, fuel-economy technology and materials science that will help the auto industry down the road. The government has no more important role. The only thing he didn't mention was a floating national gas tax, which would keep the price of fuel high enough to drive consumer demand for the high-efficiency vehicles that fit better with our long-range energy needs.

But what Romney got wrong in his piece badly undercuts his strong points.

First, he gives the industry no credit for the huge steps already taken to restructure. He cites the inflated price of vehicles due to high benefits costs for retirees, but doesn't mention the significant off-load of those costs that was achieved with the latest labor contract. Certainly, the companies can do more, but the new cost structure, which kicks in next year, goes a long way toward making them competitive with foreign automakers.

Romney doesn't discuss the excess capacity that has been yanked out of all three automakers' production, so much so that they'll be able to more competitively price cars in a way they haven't for decades. He says nothing of the dramatic shift to making high-efficiency vehicles, which should kick into full gear by 2010.

Romney also fails to address how exactly he'd get rid of the expensive retiree benefits he decries, or what effect that would have in other parts of the economy. Yank health care from retired GM workers, for example, and they'll have to go elsewhere for those benefits, probably at a government expense that would exceed the cost of the assistance the auto companies are seeking. Does that make any sense?

Romney also suggests other things the industry has already done.
He insists management must recruit leaders from "unrelated" industries. But both Alan Mulally at Ford (Boeing) and Robert Nardelli at Chrysler (Home Depot) spent most of their careers doing other things. If outside expertise were a magic pill, both of those automakers would be healthy companies today.

Romney says management and the UAW must end the "enmity" that dooms their relationship, but doesn't even acknowledge the grand progress made on that front just in the last year. The labor contracts signed in 2007 were a wonderful example of both sides recognizing the others' needs, and their common interests.

What Romney gets most wrong, though, is the assumption that bankruptcy will somehow fix the problems he cites rather than exacerbate them and cause a raft of others.

How will the companies restructure when a bankruptcy obliterates sales? How will millions of job losses at the auto companies and their suppliers make it easier for the government to invest in the industry's technological future? Or for that matter, to sell cars?

Romney's words sting something awful in Detroit. If he runs for president again in 2012, they will surely come back to haunt him in Michigan.

Now, his dad’s AMC never made it to Big Three status and Romney’s never been a particular champion for the industry that effectively built his home state and his father’s career.

Still, he’s one of us, right? Born here, raised in an auto family, presumably absorbed some knowledge of the industry.

So how can he think bankruptcy is better than help? Why doesn't he understand?

If someone like Romney can't be convinced of the wisdom of saving the Detroit 3, maybe making the case in Washington is indeed hopeless.

[roadtrip se]

I think I have now mentioned the impossibility of going bankrupt 4X's in this thread. General consensus amongst analysts here is that 80% of people would avoid a car built by a bankrupt car company.

Poof, no sales over night. Poof, no cash flow.

I work for a supplier. I think I would probably ask for cash on the barrelhead for ANYTHING a BR OEM asked me to do for them. As the OEM, I need some of these things like tires, so I pay the cash. Poof, even less cash flow.

Oh. I am absolutely sure as a supplier, I would NOT be bringing my best innovations to you the BR OEM because I doubt you could pay for them, so POOF, the OEM loses whatever competitive edge I might be able to offer and my product goes stale. Say it again,
poof less cash flow.

No reason for Chapter 11, lets just try Lucky 7.

And then here come 3.5 MILLION very unhappy folks as they all fall...

[gcarter]

http://media.townhall.com/Townhall/Car/b/varv11192008a20081119044513.jpg

[roadtrip se]

Interesting article Buiz.
One of the major differences in the transplants is everybody eats in the same cafeterias. They might even all wear the same uniform at times.

Interesting enough, one of the biggest critics in the Senate hearings is from Alabama, home of several transplant manufacturering plants.

Too bad the big Three CEO's or Ronny did not have the nads to point out the free land, tax abatements, and other subsidies and propping up his state had promised to these guys to get them to locate their plants there.

Then we can go into the nationalized health care, currency manipulation, keritsue supplier chains, and artificial barriers to trade the transplants home countries put up to protect their auto industries.

We are the only country that doesn't subsidize or protect our auto industry, we just regulate the death out of it. And funny thing, the US now subsidizes them here, but we won't offer a loan to the Big Three to finish the restructuring that has been interrupted by a credit crisis of a magnitude not seen since the Great Depression and not of their making.

I find it extremely hypocritical.

[Rootsy]

The hypocrisy is hysterical. Grill the CEO's of the big 3 and the UAW in Congress and on National TV about private jets and yet do absolutely nothing about the crooks of Wall Street except hand them more money to piss away... I am so GD pissed off that I could literally strangle Levin, Stabenow and every Michigan Congressional house member...

[Air 22]

The hypocrisy is hysterical. Grill the CEO's of the big 3 and the UAW in Congress and on National TV about private jets and yet do absolutely nothing about the crooks of Wall Street except hand them more money to piss away... I am so GD pissed off that I could literally strangle Levin, Stabenow and every Michigan Congressional house member...


Three more letter's for ya...A I G.....now there is another joke!:eek:

[Just Say N20]

Deleted.

[zelatore]

Equally troublesome to me are his concluding sentences.
What did Romney say that leads him to the conclusion that Romney doesn't want to save the Detroit 3? That was one of Romney's main points; how vital it was for them to be saved. When someone reaches such a disconnected conclusion, it makes it hard for me to take much else they have to say very seriously.

Heck, you didn't even have to read that far to realize where the piece was going. Look at the first paragraph:

Native son Mitt Rommey, whose dad ran American Motors in its Rambler days and then became governor of Michigan, is the latest national figure to totally trash the Detroit-based auto industry

'totally trash'? Oh, by 'totally trash', the author meant 'not agree with me'.

[BUIZILLA]

I had a discussion yesterday with a LONG time BIG local truck parts supplier's son, good long time credible friend of mine, his dad is 90, my father in law is 89.... both elders stated within the past day that this smells like the Depression of the 30's, that they both went through personally... the only difference is, and both said this to me today, that DC just hasn't announced it yet... every other earmark is in place...

[Ghost]

The hypocrisy is hysterical. Grill the CEO's of the big 3 and the UAW in Congress and on National TV about private jets and yet do absolutely nothing about the crooks of Wall Street except hand them more money to piss away... I am so GD pissed off that I could literally strangle Levin, Stabenow and every Michigan Congressional house member...

Ain't it the truth, just sickening.


Interesting enough, one of the biggest critics in the Senate hearings is from Alabama, home of several transplant manufacturering plants.

Too bad the big Three CEO's or Ronny did not have the nads to point out the free land, tax abatements, and other subsidies and propping up his state had promised to these guys to get them to locate their plants there.

The hypocrisy of everyone involved is sickening. The Feds won't postpone imposing the CAFE standards, and won't use the CAFE loan money to help liquidity. The union won't further renegotiate pensions or wages. Just like current government borrowing, they are imposing their own overspending onto the backs of the workers to come. Management has run it into the ground, but won't even accept reasonable pay. The boards let management suck the last cash out for themselves. What an impasse! We already bled the stockholders dry. I guess we should just shaft the taxpayers--they never seem to do anything about it.

The "logic" of various people is just amazing. Barney Frank and others are now saying "we should give loans to the Big 3 BECAUSE it's only fair after what we already gave to the banks." Which kinda makes sense if the original premise were not so flawed. Ummm, this is one more reason why it was all a bad idea from the outset. There is no end to it. To be fair, you have to give these things to everyone.

I have not heard many people talk about one aspect, which was probably lost in the reams of stuff I posted yesterday. The only REAL bailout that should have happened was FDIC. If the original bailout had simply been an authorization of funds to guarantee that all insured deposits would be liquid and available, we would have avoided the run on the banks (the supposed emergency reason for the bailout). And then all the rest of the good or bad investment chips could have fallen where they might.

Just watch, eventually we little guys will still have to bail out the 4.4 trillion of our own FDIC-insured deposits. (Which of course, doesn't work. It just means we are poor.)

[dfunde01]

I think I have now mentioned the impossibility of going bankrupt 4X's in this thread. General consensus amongst analysts here is that 80% of people would avoid a car built by a bankrupt car company.
Poof, no sales over night. Poof, no cash flow.
I work for a supplier. I think I would probably ask for cash on the barrelhead for ANYTHING a BR OEM asked me to do for them. As the OEM, I need some of these things like tires, so I pay the cash. Poof, even less cash flow.
Oh. I am absolutely sure as a supplier, I would NOT be bringing my best innovations to you the BR OEM because I doubt you could pay for them, so POOF, the OEM loses whatever competitive edge I might be able to offer and my product goes stale. Say it again,
poof less cash flow.
No reason for Chapter 11, lets just try Lucky 7.
And then here come 3.5 MILLION very unhappy folks as they all fall...

People continued to fly bankrupt airlines. If the big three filed Chapter 11 to reorganize which would keep their creditors at bay and allow the bankruptcy judge to defang the UAW. It would give buyers MORE confidence to buy since the companies now have a chance to survive the major hemorage mandared by the CWA that result in a $78+ per hour loaded salary rate. I know a contract is a contract, but a dry well is a dry well. Your credit is solid in Chapter 11 as you can't default on obligations after you file.

Remember Eastern Airlines:

http://www.airlinesafety.com/Unions/UnionVictoryAtEastern.htm

They really showed Frank Lorenzo. Today he is chairman of Savoy Captial and still an extremely wealthy man.

The same thing could happen to the big three if CWA and management don't make nice.

Dave

[Air 22]

3pm News conf....they have come to a bailout agreement....

[Air 22]

People continued to fly bankrupt airlines. If the big three filed Chapter 11 to reorganize which would keep their creditors at bay and allow the bankruptcy judge to defang the UAW. It would give buyers MORE confidence to buy since the companies now have a chance to survive the major hemorage mandared by the CWA that result in a $78+ per hour loaded salary rate. I know a contract is a contract, but a dry well is a dry well.
Remember Eastern Airlines:
http://www.airlinesafety.com/Unions/UnionVictoryAtEastern.htm
They really showed Frank Lorenzo. Today he is chairman of Savoy Captial and still an extremely wealthy man.
The same thing could happen to the big three if CWA and management don't make nice.
Dave


As a furloughed Airline union memeber ALPA...I can tell you Lorenzo was a crook and will never work in the airline business again...:wink:

[dfunde01]

As a furloughed Airline union memeber ALPA...I can tell you Lorenzo was a crook and will never work in the airline business again...:wink:

Yes he was and no he can't. But, he is still rich and many, if not most, of the former Eastern employees aren't in the airline business anymore either. They really showed Eastern. The union won big time.

[Air 22]

Yes he was and no he can't. But, he is still rich and many, if not most, of the former Eastern employees aren't in the airline business anymore either. They really showed Eastern. The union won big time.

Yep...destroyed many hard working peoples lives..a real SOB:mad:

[dfunde01]

http://www.thetruthaboutcars.com/toyota-to-cut-executives-salary/

[Just Say N20]

Zelatore, I'm starting to get worried :wink:

We seem to agree, at least about where the article was going.

We both drive MOPARs with a Hemi.

You work at a Carver dealer, I own and love a Carver 38 Aft Cabin.

What next?!? :bonk: :bonk: :bonk:

[Rootsy]

If you would have bought GM @ $1.70 at about 10 am you would have more than doubled your money by 1 PM...

[zelatore]

Zelatore, I'm starting to get worried :wink:
We seem to agree, at least about where the article was going.
We both drive MOPARs with a Hemi.
You work at a Carver dealer, I own and love a Carver 38 Aft Cabin.
What next?!? :bonk: :bonk: :bonk:

Everybody sing along-

It's the of the world as we know it...

:shades:

[Ghost]

If you would have bought GM @ $1.70 at about 10 am you would have more than doubled your money by 1 PM...


Holy smoke, that's what happened. I peeked yesterday to see how big their market cap was next to the $25B, and took note of the $1.70 stock price.

Then about an hours ago I noticed them over 3 bucks on Yahoo, and I was like "man, did that almost double since last night? It's like they got bailed out or something." I guess it really was.

[zelatore]

Maybe it's just my location, but I keep hearing the talking heads on the radio and those who call in to discuss the big 3, and not a one of them seems to know squat about automobiles or the auto industry.

I'd really like to call up and rip them a new one. Or I could just forward along the 'myths' post from earlier.

Every person who calls in talks about 'they don't make hybrids' or 'they only make SUVs' (be sure to say it with a whinny little voice) or 'they just try to make us buy cars we don't want' (meaning the two statements above). Or my favorite 'they killed the electric car'. Good Lord - they're still working that tired old line??? Who exactly would have paid the actual cost of the EV-1 if GM had tried to sell it at just the break-even point?

Er....yeah, they make a lot of trucks and SUVs. Know why? Because that's what people were buying!

Guess what? Now they're turning out small cars and hybrids. Yes, they got a late start, but it's not like they don't build 'em at all. They'll build whatever the public will buy!

And although I'm not running out to buy a car from the big 3 (they simply don't make the cars I like) I'm not saying they are all junk. Some of the latest generation cars seem pretty decent. They may not be targeted at me, but neither are most mainstream cars that sell well. You may recall my rant last spring about a Camry rental I had and what a POS I thought it was. Still, that's the mainstream market that the big 3 need to target, and they are doing it.

Of course, I still think bankruptcy may be the only way to get big enough changes past the unions and top execs to make it all work.

And while I would be willing to consider buying a car from them under chapter 11, I suspect the general sheep (the same people crying above) wouldn’t understand that chapter 11 doesn’t mean the company just disappears. I suspect they would think ‘oh no, they’re gone!’ It may be better for the general perception to go through essentially a chapter 11 but call it a ‘government led restructuring’ or something. Not that I think ‘government led’ would induce any huge confidence boost.

I liked a lot of Romney's comments, but I don't agree with the part about bringing in outside management. That sounds like putting the bean counters in charge. Bean counters can't sell cars (or boats, or motorcycles, or...). Cars are emotional purchases. Just because you wow'ed 'em selling toothpaste at General Mills doesn't mean you know squat about selling sedans at General Motors.

[Ghost]

And while I would be willing to consider buying a car from them under chapter 11, I suspect the general sheep (the same people crying above) wouldn’t understand that chapter 11 doesn’t mean the company just disappears. I suspect they would think ‘oh no, they’re gone!’ It may be better for the general perception to go through essentially a chapter 11 but call it a ‘government led restructuring’ or something. Not that I think ‘government led’ would induce any huge confidence boost.

I agree that will be the first blush uninformed reaction for many. But unlike a lot of things out that cannot, THIS one can be remedied with their marketing. Word can get out and be effective on this. This is where the news media could also do some REAL good for the people they serve and for our country, I think. Any they'll be happy to do it, so long as they think it brings in ratings. But it should.

[gcarter]

[quote=zelatore;478247]Maybe it's just my location, but I keep hearing the talking heads on the radio and those who call in to discuss the big 3, and not a one of them seems to know squat about automobiles or the auto industry.

I'd really like to call up and rip them a new one. Or I could just forward along the 'myths' post from earlier.

Every person who calls in talks about 'they don't make hybrids' or 'they only make SUVs' (be sure to say it with a whinny little voice) or 'they just try to make us buy cars we don't want' (meaning the two statements above). Or my favorite 'they killed the electric car'. Good Lord - they're still working that tired old line??? Who exactly would have paid the actual cost of the EV-1 if GM had tried to sell it at just the break-even point?

quote]

Don, it's something in the water.
I've read some statements in your posts in the political section that had absolutely no foundation but still get a lot of traction in your neighborhood.:wink:
If you say it often enough, it's true.......at least in the bay area.:):):yes:

[Just Say N20]

Of course, I still think bankruptcy may be the only way to get big enough changes past the unions and top execs to make it all work.

Holy Crap! Another statement I agree with.

. . . . I hear Twilight Zone music playing. . . . . Things are getting cloudy. . .:shocking:

[Trueser]

Team Blue Tankini Cabana Boy. Have suntan lotion, will travel..

Does this mean your not bringing your boat to AOTH?

Should I start on the brickle bars.....

[zelatore]

Don, it's something in the water.
I've read some statements in your posts in the political section that had absolutely no foundation but still get a lot of traction in your neighborhood.:wink:
If you say it often enough, it's true.......at least in the bay area.:):):yes:

I will say this - people in the bay area generally are much better informed about politics than they are about automobiles.

Of course, that doesn't apply to all of them - I had a spiffy new F430 stop by the office Saturday. The guy had just gotten it back to the States a couple weeks ago after taking Italian delivery. He was still waiting on his 599 delivery.

[BUIZILLA]

Dems want automakers to show bailout spending plan


<LI class=cnnHiliteHeader _extended="true">Story Highlights <LI _extended="true">NEW: Lawmaker: We must take time to make sure there are safeguards
<LI _extended="true">NEW: Members of Congress from Michigan offer bipartisan proposal
<LI _extended="true">"Until [automakers] show us a plan we cannot show them the money," Pelosi says
<LI _extended="true">Reid opens door for last-minute compromise, but says "we have to face reality"
Next Article in Politics » (http://www.cnn.com/2008/POLITICS/11/20/transition.wrap/index.html?iref=nextin)
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WASHINGTON (CNN) -- The auto industry has until December 2 to fashion a plan that will provide a path to "accountability and viability," Senate Majority Leader Harry Reid said Thursday.
http://i2.cdn.turner.com/cnn/2008/POLITICS/11/20/congress.auto.bailout/art.harry.reid.phone.ap.jpg Senate Majority Leader Harry Reid said "we've tried a number of different approaches" to the bailout legislation.



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Reid and House Speaker Nancy Pelosi said in a press conference that the Big Three automakers -- Ford, General Motors and Chrysler -- had failed to convince Congress that they had developed a viable plan for the $25 billion they are requesting in bailout funds.
"This is an important industry in our country and we intend to save it," Pelosi said. "Until they show us a plan we cannot show them the money."
Reid said Congress would return the week of December 8 to consider the proposal, but only if lawmakers are convinced that the public would be well-served.
Reid said the automakers would submit the plan to Rep. Barney Frank, D-Massachusetts, and Sen. Christopher Dodd, D-Connecticut. Frank chairs the House Committee on Financial Services and Dodd heads the Senate Banking Committee.
The ultimatum was worked out in a closed-door meeting of House and Senate Democrats in Pelosi's office, the sources said.
Senators who helped in the negotiations include Michigan Democratic Sens. Carl Levin and Debbie Stabenow.
It's not yet certain what kind of bipartisan support the plan would have.
Reid also told reporters that members of Congress from Michigan have proposed a bipartisan agreement for the auto companies -- "but it's their agreement."
There still is nothing on the table that could be approved by Congress or President Bush, he said.
"We're disappointed that those hopes have not been met," said Democratic Sen. Carl Levin of Michigan, who helped forge the agreement. But he said he was encouraged that the leadership was taking all steps needed to help the auto industry survive with bridge loans.
Frank defended the amount of time being taken to deal with the automakers' request.
"We put through a bill putting $700 billion of taxpayers' money at risk, although we hope to recover it," he said, referring to the stimulus fund for banks approved last month.
"There is widespread dissatisfaction -- not just in the Congress but in the country -- with what is perceived to be a failure of the recipients of those funds to carry out the intent that the Congress had."
He added, "There is a sense that we did not do a good enough job of safeguarding those funds. That's why we need to take time."
On Wednesday, Reid reversed plans to hold a test vote on a automaker bailout bill.
A House Democratic leadership aide said a compromise had little chance in the House, whose members expect to leave town for the year on Thursday afternoon.
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Reid had planned to have a vote on legislation that would have taken $25 billion from the $700 billion already approved for Wall Street and diverted it to the Big Three automakers. But an aide said he decided to hold the legislation when it became clear it would fall well short of the 60 votes needed to pass.
Reid did, however, make a procedural move that could allow a vote on a compromise, which several senators from auto-producing states are feverishly trying to craft. http://i2.cdn.turner.com/cnn/.element/img/2.0/mosaic/tabs/video.gifWatch why the Big Three bailout is stalled » (http://www.cnn.com/2008/POLITICS/11/20/congress.auto.bailout/index.html#cnnSTCVideo)
Still, a Democratic leadership aide suggested the chances those senators could come up with something acceptable -- with the votes to pass the Senate and eventually the House -- are not very good. Reid himself acknowledged as much from the Senate floor.
"I understand the importance of this," Reid said. "But I would hope that in addition to understanding the importance of this, we have to face reality. And the reality is that we've tried a number of different approaches."
A senior House Democratic leadership aide said the outlook for a last-minute Senate compromise in the House would be grim.
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Pelosi "has made clear that's not going to fly," the aide said.
The aide said "no one wants to say die" on trying to revive something before members leave town -- as they expect to do Thursday afternoon -- but it's "very unlikely" that will happen.

The Senate on Thursday is expected to take up a bill to extend unemployment benefits -- which the House approved in September.

>> now if you were the head cheese of the Big 3 would you want Dodd and Franks in charge of your future, and those 3 million employee's it represents...

[Air 22]

Well... the Big 3 still have a chance to get it together....Dec 2 to submitt a plan...hmmm

1. Drive:convertib: or fly comercial to DC..:bonk:...A 1st impression is permanent..:wink:

[gcarter]

I will say this - people in the bay area generally are much better informed about politics than they are about automobiles.

Of course, that doesn't apply to all of them - I had a spiffy new F430 stop by the office Saturday. The guy had just gotten it back to the States a couple weeks ago after taking Italian delivery. He was still waiting on his 599 delivery.
Sorry, but I'm not sure what a "599 delivery" is????

I was primarily talking about the mantra that goes something like this;

"Ihatebushihatebushbushliedpeoplediedillegalwarmurd ererstorturersterroristsillegalwiretapsillegalwar. ..

Repeat quickly and frequently.:wink::wink::wink:

[zelatore]

Sorry, but I'm not sure what a "599 delivery" is????

I was primarily talking about the mantra that goes something like this;

"Ihatebushihatebushbushliedpeoplediedillegalwarmurd ererstorturersterroristsillegalwiretapsillegalwar. ..

Repeat quickly and frequently.:wink::wink::wink:

How about I rephrase: He's still waiting on delivery of his Ferrari 599 Fiorano.

As for the mantra, I think you missed a few but I know where you're going. Strangly, the voices in the background have gotten a bit quieter over the last couple weeks...

[gcarter]

How about I rephrase: He's still waiting on delivery of his Ferrari 599 Fiorano.

As for the mantra, I think you missed a few but I know where you're going. Strangly, the voices in the background have gotten a bit quieter over the last couple weeks...

I figured it was a Ferrari...I can no longer keep up with all the new models.
They produce more diverse models now than they ever have


As far as the voices......finally a little peace!

[Rootsy]

Poodle,

Could you please cite the source of that bar chart?

[Ghost]

Does that bar chart include all perks, bonus' and other compensation such as medical, dental, pension, etc etc?
Good question, perhaps Poodle knows?


What many do not realize is that most workers currently being hired by the big 3 and suppliers, in recent years, are actually making in the neighborhood of $14 / hr under new labor contracts. The soon to be new labor contracts that are going to take effect are going to further reduce overhead in terms of employment costs.

It's the existing old contract employees and the retirees reaping legacy costs that are burdening. As well as the inflated wages of the white collar ranks.
That's the way I see it too. Makes me wonder what the strife between those groups is like right now...

[Ghost]

Poodle,

Could you please cite the source of that bar chart?

I think I found it:
http://www.autospies.com/images/users/Monk/wages.jpg

[Rootsy]

Actually HERE (http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html) is the link to the original article....

[BUIZILLA]

The Bail-out and the Mustang Ranch


Ranch and $750 billion bail-out

Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for
tax evasion and, as required by law, tried to run it.

They failed and it closed. Now, we are trusting the economy of our country
and 850+ Billion Dollars to a pack of nit-wits who couldn't make money running a whore house and selling booze.

Now if that doesn't make you nervous, what does???

[Ghost]

They failed and it closed. Now, we are trusting the economy of our country
and 850+ Billion Dollars to a pack of nit-wits who couldn't make money running a whore house and selling booze.

Now if that doesn't make you nervous, what does???


I can't figure out whether to laugh or cry. :lookaroun:

[BUIZILLA]

If I was the GM Pres... and I had a proposal for 25b on the table
maybe I would have driven a Tahoe Hybrid to Wash...

or if I was the Ford Pres...
maybe I would have driven a Fusion Hybrid, they just used this 2010 model at the last NASCAR race as a Pace Car

or if I was the Chrysler Pres...
I would have driven.... hmmmmm.... well, lemme think about that... okay, gimme the billions first, and i'll get back to you on that...

[zelatore]

If I was the GM Pres... and I had a proposal for 25b on the table
maybe I would have driven a Tahoe Hybrid to Wash...

or if I was the Ford Pres...
maybe I would have driven a Fusion Hybrid, they just used this 2010 model at the last NASCAR race as a Pace Car

or if I was the Chrysler Pres...
I would have driven.... hmmmmm.... well, lemme think about that... okay, gimme the billions first, and i'll get back to you on that...

Now THAT would have been a BRILLIANT move. Just imagine the look on everybody's face when they answered the question of how they had gotten to the Hill if one of them had driven a Hybrid while the others took the jets. That's the kind of PR you can't buy.

While I understand that at a certain point there is some corporate efficiency to having a jet, you can't get past the statement it makes. Just as the AIG guys who went on the corporate retreat after the bailout looked really bad even though obviously all that had been paid for well in advance and not with the bailout money.

BTW, Chrysler is working on some hybrid stuff but are behind the others - they've shown a Jeep, a minivan, and a new small roadster which I believe is based on a Lotus Elise platform.

[BUIZILLA]

speaking of which...

did anybody see the Michael Moron interview last night....

my gawd... where did this clown come from, and why does he get the exposure he does?

he is the anti-Christ of the auto industry as a whole...

:nilly: :popcorn:

[chappy]

speaking of which...

did anybody see the Michael Moron interview last night....

my gawd... where did this clown come from, and why does he get the exposure he does?

he is the anti-Christ of the auto industry as a whole...

:nilly: :popcorn:

Yeah, that was tough to listen to. So many false statements it became comical.

[roadtrip se]

I checked out of this thread for a couple of days, because nobody really wanted to tackle my "Who is going to buy a car from a bankrupt car company?" question. The answer is simple, less than 20% would. So the BR arguement dies on the vine, because as soon as one of the Three goes there, they stop selling cars and they go directly to liquidation.

Now, lets talk about this union wage thingy for a minute. Has anyone here really stopped to think about why the transplant shops don't unionize? Why wouldn't they if they are making so much less than the UAW shops? Common uniforms and lunch rooms only go so far.

Why? Because they DON'T make any less than the union shops. The average transplant worker makes about $40 per hour in wages and benefits. It is nearly identical for the union workers. So how do we get to the $70 per hour number? Add retiree pensions and benefits to the calculation for each active worker and THAT is how you get there. Unfortunatley, the guy still working the shop floor isn't going to see this, so the arguement for busting the union contract via bankruptcy becomes much tougher, even if it were possible to do so as the company liquidates.

Their is room for some discussion with the UAW, for instance around the remaining job bank issue which should just be eliminated, but the 2007 contract that transfers 50% of the healthcare and retirement benefit liability over to the UAW and eventually, ALL of it, addresses this legacy cost that the transplants don't have to bear, maybe not fast enough, but eventually it does. Tie this with the entry level tier of $25 or less for new workers, and the Big Three got a pretty decent contract last year.

Don't think for one minute that I have become some sort of pro-UAW fan, but there just isn't much blood left in that turnip, contrary to popular belief.

In the meantime, we are contemplating bailing out Citicorp, with some of the most predatory consumer credit card practices known, probably with no questions asked. I love this country. Now where do I hide, until this all blows over? I guess there is a bit of a win in the fact that most people recognize Michael Moore for the buffoon that he is. I wonder if the AIG guys have corporate jets?

[zelatore]

I wonder if the AIG guys have corporate jets?

I don't wonder if they have a jet, but how many they have.

[Air 22]

I checked out of this thread for a couple of days, because nobody really wanted to tackle my "Who is going to buy a car from a bankrupt car company?" question. The answer is simple, less than 20% would. So the BR arguement dies on the vine, because as soon as one of the Three goes there, they stop selling cars and they go directly to liquidation.
Now, lets talk about this union wage thingy for a minute. Has anyone here really stopped to think about why the transplant shops don't unionize? Why wouldn't they if they are making so much less than the UAW shops? Common uniforms and lunch rooms only go so far.
Why? Because they DON'T make any less than the union shops. The average transplant worker makes about $40 per hour in wages and benefits. It is nearly identical for the union workers. So how do we get to the $70 per hour number? Add retiree pensions and benefits to the calculation for each active worker and THAT is how you get there. Unfortunatley, the guy still working the shop floor isn't going to see this, so the arguement for busting the union contract via bankruptcy becomes much tougher, even if it were possible to do so as the company liquidates.
Their is room for some discussion with the UAW, for instance around the remaining job bank issue which should just be eliminated, but the 2007 contract that transfers 50% of the healthcare and retirement benefit liability over to the UAW and eventually, ALL of it, addresses this legacy cost that the transplants don't have to bear, maybe not fast enough, but eventually it does. Tie this with the entry level tier of $25 or less for new workers, and the Big Three got a pretty decent contract last year.
Don't think for one minute that I have become some sort of pro-UAW fan, but there just isn't much blood left in that turnip, contrary to popular belief.
In the meantime, we are contemplating bailing out Citicorp, with some of the most predatory consumer credit card practices known, probably with no questions asked. I love this country. Now where do I hide, until this all blows over? I guess there is a bit of a win in the fact that most people recognize Michael Moore for the buffoon that he is. I wonder if the AIG guys have corporate jets?


Yes AIG has several planes.. AIG currently operates a Global Express, a Falcon 900 and 900EX and an Agusta A109P, and has a Global 5000 was on order..

[Air 22]

GM is down to 3 planes from 7...2 G-IV's and one G-200...see below..
The G-IV was flown w 9pax to Wash-Dulles for the initial hearings.


Air G.M. Grounds 2 Jets in Wake of P.R. Debacle
November 21, 2008, 7:14 pm Link to This
E-mail this
Topics LegalIndustries Airlines/Autos
Updated at 7:14 p.m.

From Leslie Wayne, a DealBook colleague:

Bye-bye corporate jets at General Motors.

After flying into flak in Washington, G.M. has decided to return two of its leased corporate jets. G.M. says the timing is coincidental since it was already in the process of returning the two jets.

But G.M. is handing back the jets right after the chief executives of the Big Three auto companies angered some lawmakers on Capitol Hill by traveling to Washington in private planes to lobby for a $25 billion industry bailout loan. The Ford Motor Company may cut back on its fleet of planes as well.

When the year began, Air G.M. consisted of a fleet of seven jets. Cost-cutting eliminated two of the jets in September and the other two are being handed back now, bringing the fleet down to a mere three. Tom Wilkinson, a G.M. spokesman, told DealBook that the jet fleet had been used to shuttle employees to G.M. operations in 34 countries.

“We used the jets to go around the world,’’ Mr. Wilkinson. “For instance, we took one from Detroit to China, to Thailand and then back to Detroit.”

But it was the flight that Rick Wagoner, G.M.’s chief executive, took from Detroit to the Capitol that made headlines, along with those of his counterparts at Ford and Chrysler. Some critics of the auto industry were appalled by the symbolism of the Big Three’s chieftains flying in luxury while pleading corporate poverty and asking for taxpayer aid.

“There’s a delicious irony in seeing private luxury jets flying in to Washington, D.C., and people coming off of them with tin cups in their hands saying that they’re going to be trimming down and streamlining their businesses,’’ said Representative Gary Ackerman, a New York Democrat, at a House hearing this week. “It’s almost like seeing a guy show up at the soup kitchen in a high hat and tuxedo.”

News of the slimmed-down fleet was reported Friday in Automotive News, the industry trade publication. Mr. Wilkinson said that even before the current industry downturn, the company had been cutting back on travel expenses, using more video conferences and lightening travel loads.

Not to be outdone by its crosstown rival, Ford announced later on Friday that it, too, was considering shedding some of the five jets in its fleet. Unlike G.M., Ford owns all its planes, which are housed at Detroit Metro airport. Three are used to shuttle executives around. The other two are used to ferry engineers to remote locations for new vehicle testing.

“We are exploring all cost-effective solutions for our air travel,'’ said Mark Truby, a Ford spokesman. “We have not made a final decision yet.”

There is no word yet, however, on what mode of transportation will be used if Mr. Wagoner, Alan R. Mulally of Ford, Robert L. Nardelli of Chrysler and Ron Gettelfinger, the head of the United Auto Workers, head back to Washington.

“We’ve been talking around the office that maybe the three C.E.O.’s and Gettelfinger would just carpool it to Washington,’’ Mr. Wilkinson said. “Of course, they probably will all be fighting to take the wheel.”

No word either on whether they would be riding in a Chevy, Ford or Chrysler.

[Ghost]

I checked out of this thread for a couple of days, because nobody really wanted to tackle my "Who is going to buy a car from a bankrupt car company?" question. The answer is simple, less than 20% would. So the BR arguement dies on the vine, because as soon as one of the Three goes there, they stop selling cars and they go directly to liquidation.

I tried, among several posts, here. FWIW.




Who is less is in his right mind?

The guy who buys a vehicle from a cash-strapped company that is about to fall into bankruptcy, where it can then be protected from honoring its contracts and commitments and paying its creditors?
Or the guy who buys a car from a company operating under bankruptcy protection, that looks viable with fresh capital that is obligated to reasonable new contracts, without a cash crunch, and that has gotten out from under all its crushing obligations to past creditors?
Maybe someone who knows more about bankruptcy laws can shed some light on when a company goes straight to liquidation, versus operating with protection from creditors? And how this affects warranties, and the obligations to make payouts to the unions. I'm considering buying a truck from Detroit right now, but I am more worried about doing it with bankruptcy looming than with it already started and what looks like a viable plan underway to go forward. Anyone know which way I'd be better off? I thought the latter of the two was better, but I'm all ears.


Why? Because they DON'T make any less than the union shops. The average transplant worker makes about $40 per hour in wages and benefits. It is nearly identical for the union workers. So how do we get to the $70 per hour number? Add retiree pensions and benefits to the calculation for each active worker and THAT is how you get there. Unfortunatley, the guy still working the shop floor isn't going to see this, so the arguement for busting the union contract via bankruptcy becomes much tougher, even if it were possible to do so as the company liquidates.

Their is room for some discussion with the UAW, for instance around the remaining job bank issue which should just be eliminated, but the 2007 contract that transfers 50% of the healthcare and retirement benefit liability over to the UAW and eventually, ALL of it, addresses this legacy cost that the transplants don't have to bear, maybe not fast enough, but eventually it does. Tie this with the entry level tier of $25 or less for new workers, and the Big Three got a pretty decent contract last year.


It sounds like a game of chicken, where the older workers and retirees are pitted against the younger. If the older workers and retirees don't give up their unsustainable benefits, all the younger workers lose the shot at something more like what exists in TN, KY, GA, etc. That about right?

And management, I suppose, too, who are probably strangely aligned with the older UAW folks now, so executives can continue to make 10-40 times what their equivalents in Toyota make, per another note I just saw. (Said the CEO of Ford makes more than the top 10? Japanese execs put together I think.

And regardless, you and I are obligated to pay 25 Billion (anyone know a good number, this is the one I've heard) that will be paid in federal pension insurance if they do fall into bankruptcy.

If we first lend them 25 Billion to keep operating and try to pull the nose up, and they fail, then they default, we lost the loan and we still have to pay the federal pension insurance. That sticks us with what, a $50Billion tab instead of the 25 Billion we're already on the hook for?



In short, what I think I'm getting out of this is:

the UAW and management both say that the unsustainable benefits they both set up for themselves are going to bankrupt the company, everyone will lose their jobs, and armageddon will ensue
the UAW and management both say that a $25Billion loan will save them and they will be able to pay it back and be viable going forward, thus we should lend it to them
the older workers and retirees won't let go of the the unsustainable benefits that they negotiated for in better times no matter what, even if that means armageddon ensues, and their kids and neighbors all lose their jobs
management won't cut their own monster executive salaries and benefits, even if that means armageddon ensues, and their kids and neighbors all lose their jobs
we taxpayers are on the hook to pay what, $25 Billon in federal pension insurance if they do go bankrupt
If I understand this correctly, the only people they think should shoulder any risk in the mess of their making are the taxpayers. Well, to hell with that. I say that if the pension insurance obligation is really about the same size as the loan they are telling us is a good bet to get them through, let THEM put their money where their mouths are. Here's the loan, you've lost your pension insurance. Take a union vote. (No secret ballot, since that seems so attractive to impose on everyone else.)

If the people who stand to lose their pension benefits agree, fine. If they will bet their own money the way they say we should bet ours, fine. Here's your $25Billion loan. Good luck. Don't ask for another penny. But if they decline that offer, and the details above really represent the lay of the land, I don't have any idea why I should not fight this with everything I am. AND go spend my 22k on a Toyota, to boot.

Thus is pure practicality. No discussion of libertarian principles. Nothing academic. I'll set all that aside. Pure and simple, it looks like they are lobbying my government to force me to place a huge bet, a bet on them to win, but that they themselves won't place with their own money.

What am I missing? I am open to suggestions but this sounds idiotic.

Unless they take the offer I have put forward. Anyone think they would?

Are my facts wrong? If so, how?

Regards,

Mike

[roadtrip se]

Mike, I would probably buy an F-series over a Tundra for two reasons. All indications, at least in today's crystal ball, point to the fact that Ford will make it with or without the bail-out loan, at least in comparison to GM and Chrysler. Second, there is a reason why the Tundra line shut down in early August and just recently fired back up, even though dealers aren't ordering the things.

I never said that there wasn't a way to buy and drive a vehicle from a bankrupt company, just that most wouldn't, and how do you overcome the objections of most prospects? It is a rhetorical question, because you don't.

As for Chapter 11 financing, where do you get it in today's market. Call Citi?

Finally, I really like your idea about the Pension Insurance guarentee. I wonder, if ANYONE in Congress has thought of ideas like this one, as they brow beat the Big 3, and continue to write blank checks to the banks. Should be even more entertaining on the next go-around of hearings, but probably more along the lines of comic tragedy.

[Ghost]

...as they brow beat the Big 3, and continue to write blank checks to the banks. Should be even more entertaining on the next go-around of hearings, but probably more along the lines of comic tragedy.

Agreed. The Congress's tone with the the Big 3 certainly seems bizarre given their tone with the banks. "Oh,another bank, well here, have some money. Don't need it? Take some anyway, we don't want the other banks to feel self-conscious...."

Fom a pure strategy perspective, maybe GM should have pulled an AMEX. "Yeah, we're just a bank, we're called GMAC. Nothing to see here but a bank. Well sure, we do have this group called GM, but it's just an incentive program to encourage people to use our loans--a small side operation. If you don't believe me, just look at its market capitalization--it's hardly worth anything."

[Rootsy]

Agreed. The Congress's tone with the the Big 3 certainly seems bizarre given their tone with the banks. "Oh,another bank, well here, have some money. Don't need it? Take some anyway, we don't want the other banks to feel self-conscious...."

Fom a pure strategy perspective, maybe GM should have pulled an AMEX. "Yeah, we're just a bank, we're called GMAC. Nothing to see here but a bank. Well sure, we do have this group called GM, but it's just an incentive program to encourage people to use our loans--a small side operation. If you don't believe me, just look at its market capitalization--it's hardly worth anything."

In regard to this whole mess.... how about we spend some time on this idea that I have not once heard mentioned... anywhere...

When a corporation(s) becomes SO large that to let it fail would doom the economy we have a serious problem. I think it is time to break a few of these mega-corporations up... From the financial sector to the energy sector, automobile sector and even the retail sector...

[Ghost]

In regard to this whole mess.... how about we spend some time on this idea that I have not once heard mentioned... anywhere...

When a corporation(s) becomes SO large that to let it fail would doom the economy we have a serious problem. I think it is time to break a few of these mega-corporations up... From the financial sector to the energy sector, automobile sector and even the retail sector...

Wow, I have to admit it surprised me to read that. Are you coming from this from the perspective that a really big company failing actually dooms the economy, or that the typical "too big to fail" arguments of implied taxpayer responsibility grant a certain amount of taxpayer authority? (aka: "We know you're going to dump the "too big to fail" line on us, so we have authority to preempt you and break you into smaller pieces?")

Regards,

Mike

[roadtrip se]

I would take the Viper, Camaro, Corvette, SVT, and SRT lines and have a ball with one very cool car company.

Unfortunately, the case for this kind of break-up isn't that great because of the components sharing, developmental expenses, and regulation by the government of just about all aspects of the business making it extremely cost prohibitive for the small guy with no scale for investments.

Look at Ford, while they have divested much of Mazda, you won't see them get completely out because of the Mazda platforms and pieces supporting their products. There is a lot of Volvo in Ford vehicles too. Jaguar and Land Rover, the two they pawned off on Tata, are already rumored to be on the block yet again, because they can't make it on their own.

Heck, there has even been talk of Mercedes and BMW, two archrivals, sharing engine and transmission development. So the trend leans toward consolidation, not divesture.

Of course, this all could change if somebody goes belly-up. A division like Jeep would most likely become another division of a conglomerate, like Hyundai, not stand on their own.

[Rootsy]

Wow, I have to admit it surprised me to read that. Are you coming from this from the perspective that a really big company failing actually dooms the economy, or that the typical "too big to fail" arguments of implied taxpayer responsibility grant a certain amount of taxpayer authority? (aka: "We know you're going to dump the "too big to fail" line on us, so we have authority to preempt you and break you into smaller pieces?")

Regards,

Mike

I am coming from the angle where a corporation merges with another and another and another and their assets build up to 2 trillion dollars. Where they employ 10's, maybe 100's of thousands of people and have a direct effect monetarily on millions, maybe 10's of millions of people.

They may not technically be a "monopoly" as there are competitors, no where near as large but competitors none the less. Yet if this big heavy cookie crumbles the entire country and a significant part of the world feel the effects.

It's like the old saying of putting all of your eggs in one basket.

Is it reasonably unhealthy for an economy to be steered by a few large corporations? Or is it better to have many smaller ones, not only for competitions sake but for stabilities sake.

This again comes back to the Government as they must more or less give their blessing on large mergers. Look at the oil industry. It's been whittled down to a half a dozen or less GIANTS that became uber giants through mergers with other giants. Exxon - Mobile... Conoco - Phillips... BP - Standard Oil... and so on and so forth...

I do not begrudge anyone from growing a business and becoming successful.. but there is successful and then there is gluttony...

[mike o]

I am coming from the angle where a corporation merges with another and another and another and their assets build up to 2 trillion dollars. Where they employ 10's, maybe 100's of thousands of people and have a direct effect monetarily on millions, maybe 10's of millions of people.

They may not technically be a "monopoly" as there are competitors, no where near as large but competitors none the less. Yet if this big heavy cookie crumbles the entire country and a significant part of the world feel the effects.

It's like the old saying of putting all of your eggs in one basket.

Is it reasonably unhealthy for an economy to be steered by a few large corporations? Or is it better to have many smaller ones, not only for competitions sake but for stabilities sake.

This again comes back to the Government as they must more or less give their blessing on large mergers. Look at the oil industry. It's been whittled down to a half a dozen or less GIANTS that became uber giants through mergers with other giants. Exxon - Mobile... Conoco - Phillips... BP - Standard Oil... and so on and so forth...

I do not begrudge anyone from growing a business and becoming successful.. but there is successful and then there is gluttony... Thats whats clearly going on. How much smaller than uber is it, where ya get nothing like the rest of us. So whos left after that ..to compete with uber?

[gcarter]

I would take the Viper, Camaro, Corvette, SVT, and SRT lines and have a ball with one very cool car company.

Unfortunately, the case for this kind of break-up isn't that great because of the components sharing, developmental expenses, and regulation by the government of just about all aspects of the business making it extremely cost prohibitive for the small guy with no scale for investments.

Look at Ford, while they have divested much of Mazda, you won't see them get completely out because of the Mazda platforms and pieces supporting their products. There is a lot of Volvo in Ford vehicles too. Jaguar and Land Rover, the two they pawned off on Tata, are already rumored to be on the block yet again, because they can't make it on their own.

Heck, there has even been talk of Mercedes and BMW, two archrivals, sharing engine and transmission development. So the trend leans toward consolidation, not divesture.

Of course, this all could change if somebody goes belly-up. A division like Jeep would most likely become another division of a conglomerate, like Hyundai, not stand on their own.
I don't know of a single stand alone performance car company that's profitable.
Jag (Tata) is asking for Pounds 2 Billion from the British government.

[zelatore]

I don't know of a single stand alone performance car company that's profitable.
Jag (Tata) is asking for Pounds 2 Billion from the British government.

Porsche(?)

I understand they make a lot of money from engineering support, not just auto sales.

How about BMW? Not exactly a 100% performance company, although much/most of their line falls into that catagory.

Otherwise I can't think of much...

[gcarter]

Porsche(?)

I understand they make a lot of money from engineering support, not just auto sales.

How about BMW? Not exactly a 100% performance company, although much/most of their line falls into that catagory.

Otherwise I can't think of much...
Porsche makes a lot of money in other areas, but they've had really bad years.
There have been years that BMW produced more vehicles than MB......we tend to get the top tier of cars from them. I think the rest would not be competitive here.

[roadtrip se]

when a company or industry is too big, too consolidated, and too gluttonous?

The folks in Washington?

That is comforting considering what a firm grasp they have on the principles of business inside the beltway.

[gcarter]

I This again comes back to the Government as they must more or less give their blessing on large mergers. Look at the oil industry. It's been whittled down to a half a dozen or less GIANTS that became uber giants through mergers with other giants. Exxon - Mobile... Conoco - Phillips... BP - Standard Oil... and so on and so forth...

I do not begrudge anyone from growing a business and becoming successful.. but there is successful and then there is gluttony...

I've not worked directly for one of the major energy companies, but I have worked all around them.
I'm not aware of any energy company of any scale failing. There were some small producers that failed in the '80's after the price of crude fell from $40/barrel.
Even in the '90's when crude fell to $9.00/barrel, I don't recall any majors failing. The majors seem to enjoy a lot more flexability than manufacturers do. Producing fields can be shut down, as can pipe lines and refineries.
They don't have the same labor issues car companies have.
Much of their operations are offshore and costs are completely different than here.

[Ghost]

[So who decides] when a company or industry is too big, too consolidated, and too gluttonous?

The folks in Washington?

If "it takes one to know one" actually meant anything, they would be well-equipped for the identification phase... :)

[Rootsy]

Didn't say I had a plan to fix it... just identifying existing issues... If you can't see what's wrong you can never correct it...

The Government is no longer of, by and for the people... That's the BIGGEST issue...

[zelatore]

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

If you believe this video, the big three (well, at least Ford) know how to do all the things the Japanese do in terms of plant efficiency. The last bit of the video tells why they don't do it...

[roadtrip se]

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

If you believe this video, the big three (well, at least Ford) know how to do all the things the Japanese do in terms of plant efficiency. The last bit of the video tells why they don't do it...

And actually, some of the most efficient plants in the USA are run by GM, not just the transplants.

As for the supplier in factory concept, the brand new Jeep facility in Toledo integrates several on premise, supplier-run sub-assembly component shops throughout the campus. I bring this one up as an example, because it is right in the middle of the rust belt and pro-union country. And yes, the UAW calls this factory one of their shops. This is not a new concept in many new flex-assembly shops run by the Big Three.

Why do I keep finding myself defending the UAW? I guess I just like to see the facts stand for themselves and their is plenty of dirt to be found on the UAW out there.

[zelatore]

RTSE - I did start with 'if you believe this video...' because I didn't know how much of it to believe myself. While I didn't doubt that the Brazilian plant was what they claimed, I had no idea if they actually used any/some/most of those techniques in the US, although I would certainly have believed the presenter's argument that the UAW would have been against some of the things mentioned.

[gcarter]

Porsche(?)

I understand they make a lot of money from engineering support, not just auto sales.

How about BMW? Not exactly a 100% performance company, although much/most of their line falls into that catagory.

Otherwise I can't think of much...


Porsche makes a lot of money in other areas, but they've had really bad years.
There have been years that BMW produced more vehicles than MB......we tend to get the top tier of cars from them. I think the rest would not be competitive here.


http://media.ft.com/FTCOM/Images/ftlogo2.gif
http://media.ft.com/t.gifCOMPANIES

http://media.ft.com/t.gifAutomobiles









Porsche warns of sales blow to revenues

By Daniel Schäfer in Stuttgart
Published: November 26 2008 11:01 | Last updated: November 26 2008 19:31

Porsche (http://markets.ft.com/tearsheets/performance.asp?s=de:PAH3) on Wednesday gave another example of the dire outlook for the automotive industry when it said revenues had plunged 15 per cent in the past four months.
The highly profitable German sports carmaker said it expected revenues in the four months to the end of November to come in below €2bn ($2.6bn). Porsche said it expected unit sales to fall 18 per cent in the same period.
Wendelin Wiedeking, the carmaker’s chief executive, said the drop in demand was widespread with Asia and Russia also weak. “No market is immune against the current weakness in sales,” he said.
Mr Wiedeking said he expected sales to fall “considerably” in the fiscal year that ends in July 2009, which is likely to result in the first year-on-year sales drop since Mr Wiedeking became chief executive 16 years ago.
Porsche, the world’s most profitable carmaker, has launched a cost cutting programme to counter the downturn in demand, Mr Wiedeking said. He refused to give details, but said no job losses were planned.
Porsche on Wednesday backed away from its target to take majority control of Volkswagen (http://markets.ft.com/tearsheets/performance.asp?s=de:VOW) by the end of the year, saying it was not willing to pay “ridiculous” prices for the shares of Europe’s biggest carmaker.
Mr Wiedeking said Porsche was “under no time pressure.” People close to the company told the FT that Porsche now aimed to lift its direct holding in VW from 42.6 per cent to 50 per cent at the beginning of next year.
Holger Härter, Porsche’s chief financial officer, said he considered a price of €200 a “reasonable” level for VW shares. After dropping sharply in the days before, VW’s share price rose more than 15 per cent to €294 on Wednesday.
Porsche’s revelation last month that it had secured more than 74 per cent of the carmaker’s shares by using derivatives led VW’s share price to quadruple. This inflicted heavy losses on investors that bet on a falling share price. Among the victims of these misplaced bets is Adolf Merckle, a German industrial billionaire.
Investors and analysts have dubbed Porsche a “hedge fund” after it raked in a profit of €6.8bn from VW option trades and just about €1bn from selling cars in the 12 months to the end of July.
Mr Wiedeking rejected this label, insisting Porsche simply followed an industrial logic with its takeover of VW and was using the derivatives to hedge against a rise in carmakers’ share price. “We are not speculators – we never have been and will never want to be.”
Porsche’s huge gains from VW option trades, which lifted the company’s profits above its revenue last year, could soon come to an end when it takes a majority stake in VW next year, Mr Wiedeking said.
“There will be times soon when the profits from these option deals will be over.” He reaffirmed Porsche’s goal to increase its stake in VW to 75 per cent in 2009.

[zelatore]

Porsche, the world’s most profitable carmaker,


I knew they were strong; that had always stuck in my mind since they were a relatively small company. But I didn't know they were the 'world's most profitable carmaker'.

Of course in today's climate, I'm more profitable than most carmakers...:convertib:

[gcarter]

http://media.townhall.com/Townhall/Car/b/lb1127cd20081126030915.jpg

[gcarter]

Financial Times FT.com



http://media.ft.com/FTCOM/Images/ftlogo2.gif
http://media.ft.com/t.gifLEX

http://media.ft.com/t.gifTransport & Infrastructure
Bellwether Buick

Published: November 27 2008 09:23 | Last updated: November 27 2008 16:14

“This is not your father’s Oldsmobile” ran the slogan General Motors (http://markets.ft.com/tearsheets/performance.asp?s=us:GM)used in vain to revive that dowdy brand before finally pulling the plug eight years ago. Earlier this week, GM revealed Tiger Woods as sponsor of the equally dated Buick, whose sedans typically attract buyers a little over twice the golfer’s age, or old enough to be his father. The 105-year-old marque, long positioned as an entry-level luxury car behind Cadillac, today epitomises both the challenges and opportunities of its parent.
American automakers will soon return to Congress with plans to use billions in government loans to restructure themselves without declaring bankruptcy. Congressmen mulling this request might want to visit their local Buick dealership. They should have no trouble finding one with 2,751 nationwide (the last time the National Automobile Dealers Association counted), over double those selling Toyotas. As a result, only 88 Buicks a year are sold per dealer versus 1,821 for Toyota (http://markets.ft.com/tearsheets/performance.asp?s=jp:7203), whose sales are spread across fewer brands. Barring Chapter 11, multiple brands and excess dealerships can only be remedied with billions in dealer buy-outs due to state protection, as seen with Oldsmobile.
On the other hand, Buick epitomises much GM has done right lately. For one, it is a leading brand in China, its big growth market, where it outsells the US and earned cachet from being driven by the last emperor and the first car to enter the Forbidden City. Back at home, it recently won awards for quality and has begun luring slightly younger drivers with its Enclave crossover, while consolidating four sedan models into two new ones. Buick has even considered introducing a model designed for China to the US.
Cash constraints today make it hard for GM to realise this global vision or to cull its bloated line-up. Buick may be worth keeping, but bankruptcy would allow it to weigh the costs and benefits properly.

[roadtrip se]

I knew they were strong; that had always stuck in my mind since they were a relatively small company. But I didn't know they were the 'world's most profitable carmaker'.

Of course in today's climate, I'm more profitable than most carmakers...:convertib:

Their profits have always been driven by small volume and high profit sportscar models.

Then came the Cayenne. Profitable, but a complete sell-out for their true base.

And now, we seem to want gobble up VW with all of their problems, with a slight pause, and deliver what has got to be the closest thing I have seen to an AMC Pacer in years, the Panamera, the world's first four door Porsche. Who would over-pay for this?

The horror, the horror...

http://www.autoblog.com/photos/2010-porsche-panamera/1185615/

[roadtrip se]

http://www.youtube.com/watch?v=U7YBjjLKLd0

Representative McCotter pretty much summed it up, but no, we got to hear about private jet flights instead.

Hello Citicorp, we need $25B, I hear you might have a little extra, no questions asked...

[gcarter]

Their profits have always been driven by small volume and high profit sportscar models.

Then came the Cayenne. Profitable, but a complete sell-out for their true base.

And now, we seem to want gobble up VW with all of their problems, with a slight pause, and deliver what has got to be the closest thing I have seen to an AMC Pacer in years, the Panamera, the world's first four door Porsche. Who would over-pay for this?

The horror, the horror...

http://www.autoblog.com/photos/2010-porsche-panamera/1185615/


I like the Panamera. Think of it as a Bentley GT for Porsche lovers.
When you get to be my age, you lose your taste for Vipers and such.
A little refinement (In the context of comfort) is a wonderful thing.
Think of the guy (or girl) who during their professional life have owned 25 or 30 Porsches. Would Porsche want to lose this customer to BMW or DB? Or even Cadillac?

[Cuda]

I like the Panamera. Think of it as a Bentley GT for Porsche lovers.
When you get to be my age, you lose your taste for Vipers and such.
A little refinement (In the context of comfort) is a wonderful thing.
Think of the guy (or girl) who during their professional life have owned 25 or 30 Porsches. Would Porsche want to lose this customer to BMW or DB? Or even Cadillac?

Good point.

[Lenny]

Let me simplify (IMO) I make wagon wheels for horse carriages. No one wants them anymore but I employ 2.5 million people making them. Therefor, I should get a bail-out so that what's left of the economy doesn't tank further and "we" are all better off. ???

I say lose 'em, come back with offerings we are all clamouring to buy... or not. Move on. Business's die and are born ever day. Might just be time for this rendition to revamp...

IMO


http://money.cnn.com/2008/12/02/news/companies/automakers_plans/index.htm?postversion=2008120217

[DonziFreak]

Lenny, it's easy to say that from the outside looking in, but I feel that the big-three deserve a bail-out (well, except maybe ford), more so then the banks ever did!

Just think about the amount of work that's already outsourced to other countries, and now the potential for 2.5 million more Americans to lose their jobs, thats just not acceptable.....

[Lenny]

Lenny, it's easy to say that from the outside looking in.....

I have seen and been part of this but in the TELECOM sector for 28 years. Who cared about MCI, WorldCom, Nortel, Cable and Wireless, 360 Networks... no one...the Baby Bells...the gloves came off, Legislated that way...

I would have a hard time swallowing ADDITIONAL debt ( on top of the trillion recently :rolleyes: ) born to the US taxpayer, to bail out Corporations that can not stand on their own two feet for a multitude of reasons. Given the multitude of challenges right now.

"You" (hypothetically speaking) lost your job, your neighbour as well, some down the street, houses are on the block BUT, because you work for the big three you are spared ??? ... and your "best friend" neighbour has his house on the block 'cuz his tax dollar is paying for you to keep yours' ?

But because you work for a Ma and Pa homegrown (previously successful) business you are NOT eligible for monetary handouts and suffer the consequences ???

That seems unfair to me, and one sided... almost socialistic...

Free Enterprise ???

I am not bringing "POLITICS up" as this resides with both Presidency's, but, how does this sit with folks that have survived, (and/or as their folks did) in private enterprise, as these Companies did, in the glory days, but now not, and need 34 Billion ? (for now)

All I can see, is the big three CEO's are bringing to the table salary cuts, to 1$ annually, :rolleyes: ...

Give me a break... They took 10 days to come up with this... ???

WOW, is the DJIA and our TSX fun recently...

DONZI LE18 and HP500 for sale shortly... (kidding, I will NEVER sell this stuff)

[DonziFreak]

When you consider that the big-three are our only domestic suppliers for automobiles, you realize that without them we become totally dependant on imports from other countries such as Japan, China, Korea, Germany, etc. I don't (and I'm sure many others will agree) want to see that happen, I don't want to have to be forced to buy a Crapyota truck five or six years down the line because GM or Ford are no longer around, besides, the fault of this current crisis doesn't fall on the big-three, it falls on wallstreet, who didn't soley cause the current crisis, but definatly contributed! I say take what ever money the big-three needs out of the 700 billion we gave the banks and tell them to go f%^& off if they have a problem with it.....

As far as the "unfairness" of bailing out the big-three versus the Ma and Pa corps, I know how hard it can be for small companies. Having been a part of a family company which has been forced to shut down after many years of what once was a succesful practice, I can say that yes, it sucks to have to lose your job to something as stupid as the current market situation, but I still support bailing out the big-three. I have since it was first considered and will continue to until it's done....

BTW, kinda hard to bring taxpayers money into this when we are talking about 2.5 million taxpayers possibly not being able to pay.....

[Ghost]

Of course the coming times will be extremely painful. Sadly, that die is already cast. But IF:

unemployment climbs to 10, then 15 or even 20+ percent, and
the resulting pressures drop wages further and further, and
the dollar starts to suffer the inevitable consequences of massive printing of new money (hyper-inflation)
Isn't it possible, or even likely, that:

we can start to bring back lots of real industries that for years have moved offshore?
(while lots of the B.S. jobs that legislation couldn't kill will finally succumb to the mathematics of unsustainability? (The ones that only politicians would fund, and from which no consumer derived sufficient benefit to make him pay for it directly, and which only massive, ruinous borrowing could keep around for this long))
Sorry, I risk leading the discussion to finger-pointing, which is not my intent. My intent is to see if we can't make some lemonade with the lemons that are certain to come, and come soon. Can we turn this disaster into the re-birth of real American industry?

[Lenny]

we can start to bring back lots of real industries that for years have moved offshore?
(while lots of the B.S. jobs that legislation couldn't kill will finally succumb to the mathematics of unsustainability? (The ones that only politicians would fund, and from which no consumer derived sufficient benefit to make him pay for it directly, and which only massive, ruinous borrowing could keep around for this long))
Sorry, I risk leading the discussion to finger-pointing, which is not my intent. My intent is to see if we can't make some lemonade with the lemons that are certain to come, and come soon. Can we turn this disaster into the re-birth of real American industry?

NICE... YES YES YES ... you see what I see... :yes:

..and about time for you folks (and our folks) to "bring it on home" IMO ...

...MADE in the USA ... and Made in Canada... actually has pride in it at P.O.S. machines. I hope we can get there once again... :yes:

Funny, how when growing up, you never thought about this stuff. But now,if given the choice, I would continue on my merry way and buy stuff that was Made in Canada, or Made in the USA.. :D

I remember chatting with Poodle about the "lowest common denominator" a few years ago...and its' consequences...

"12V Baterries" for $50

Free "Jumper cables" for being able to walk into the store

"Jawbreakers" @ 3 for a penny (like in '67, but now made of Melamine :( )

...couldn't last...

"WE" are there now...


I would love to see the Canadian and USA trade surpluses and deficits presented from 1960-2008 with the representative countries + or - highlighted... and re-enter this conversation...

[DonziFreak]

As we have said before, we need to hit bottom, then do as we always have, climb back up. I think the American car manufacturers realized they were on a path to self destruction, and started to re-evaluate their product lines a few years back. Too little, to late? Well, I'll go with the "to late" part, but IMO they have come a long way in quality, performance and economy. They are also building vehicles we now want, vs the SUV's of the past. We are all guilty of driving the SUV craze, it's just kind of sad that the big three didn't try to wean us off of them earlier.

This past weekend I was car shopping. Looked at Ford, the Taurus in particular. Nice vehicle (rebadged 300 I think), well built, good fit, reasonable price. Looked at Caddy's CTS (yeah, and the XLR-V while I was there :eek: ) and it's a hell of a car. Anyway, I think we are finally building some stuff to compete, now we just need to allow the Big 3 to be able to compete on equal footing.

The only way the US will survive as we know it is to bring back manufacturing. As we watch banks lay off thousands, chain stores closing (how many freaking gaps do we really need anyway?) malls going bye-bye, it's time to realize we are a country that grew by being THE leader in technology and manufacturing. We need to go back to those roots, quit teaching our kids to push buttons on a keyboard, put them (and out own fat asses) back into the trenches, and reclaim our world leadership in order to ensure our country will survive into the future. Legalizing the illegals will not do this, increasing the immigration quota's will not do this, and free gas will not do this. We need to as a whole, push the doctrine that built this country: hard, honest work pays, and pays well. Anything else is doomed to failure..

That my friends, is change...

I agree with you 100%! That was perfectly said!

[BUIZILLA]

for the 10,000 time

i'm 100% against gov't. bailing out the auto sector

let them go beg from a bank that we already gave money to

just like everyone else has to do :bonk:

[txtaz]

OK time to chime in...

If the Government wants to help the economy, give the 1.5 trillion back to the people and let the banks, automakers and everyone else compete for our money the way a free market economy should work. It is self regulating when the Government keeps it's hands out. OK GM goes bankrupt. Too bad, so sad. I guess the board should have recognised this was happening years ago and made changes. Investors should have recognized the board was not doing their job and bailed. These companies can only blame themselves for the mess they are in.

I work very hard to make sure we are safe for the rest of our lives. If I screw up I only have myself to blame. I pick myself up, lick my wounds and learn from it. No one is there to bail me out.

Da Taz<---Anyone else notice the market is acting just like 1929?

[Donziweasel]

I am with you Jim personally. Only problem now is that I am neck deep in GM products for my company. On a business level I need them to survive. In the last year and a half, I have purchased 11 GM vehicles. BTW, I am VERY happy with the GM products in a commercial applications. Much better than Ford in commercial stuff, although I will probably always be a Ford man personally.

[BUIZILLA]

I heard something interesting this morning that begs an answer....

why doesn't Ford go to Ford Credit?
why doesn't GM go to GMAC?
why doesn't Chrysler go to Chrysler credit?

or is there a credit rating issue that the Big 3 can't qualify for a loan within their own credit parameters?, within their own family?, using loan guidelines which they set forth their customers? The Big 3 with junk bond ratings is like a 600 score customer shopping for a Maybach loan with a new Volt for collateral...

I also heard recently that the initial 11% loan to AIG was discreetly lowered to 4 or 5% without a vote... :mad:

[BigGrizzly]

Lenny what a novel though an American enterprise ideal. Buiz That is a good Idea or they can go to their European corp for the money like Honda and Toyota do.

[Lenny]

I heard something interesting this morning that begs an answer....

why doesn't Ford go to Ford Credit?
why doesn't GM go to GMAC?
why doesn't Chrysler go to Chrysler credit?

... :mad:

Fabulous idea Jim, but aren't they making 10-15% on that money loaned out and would not want to use it when free money is available...

[roadtrip se]

Of course the coming times will be extremely painful. Sadly, that die is already cast. But IF:

unemployment climbs to 10, then 15 or even 20+ percent, and
the resulting pressures drop wages further and further, and
the dollar starts to suffer the inevitable consequences of massive printing of new money (hyper-inflation)
Isn't it possible, or even likely, that:

we can start to bring back lots of real industries that for years have moved offshore?
(while lots of the B.S. jobs that legislation couldn't kill will finally succumb to the mathematics of unsustainability? (The ones that only politicians would fund, and from which no consumer derived sufficient benefit to make him pay for it directly, and which only massive, ruinous borrowing could keep around for this long))
Sorry, I risk leading the discussion to finger-pointing, which is not my intent. My intent is to see if we can't make some lemonade with the lemons that are certain to come, and come soon. Can we turn this disaster into the re-birth of real American industry?


This has got to be the first time I have seen a recession going to a depression characterized as a potentially positive thing.

I think the last time we had the kind of unemployment you are envisioning was back in the early 30's. It took a huge public works project effort, spending government money, and ultimately a world war, spending a whole bunch more government money, to pull our country out of it. This little effort also was the beginning of the entiltlement age, which we all love so much.

3.5 Million people out of work in the auto industry will help get us to the "sustainability" model you seem to think will make us competitive again. Real fast.

The only problem is, who will buy the American products we are so proudly able to build now that we went through this little adjustment that was so good for us?

Sorry, Professor Ghost, and please, save your time on a follow-up post with a bunch of questions, your premise is ridiculous.
We are talking about real people and real hurt here, not some college exercise.

[roadtrip se]

I heard something interesting this morning that begs an answer....

why doesn't Ford go to Ford Credit?
why doesn't GM go to GMAC?
why doesn't Chrysler go to Chrysler credit?

or is there a credit rating issue that the Big 3 can't qualify for a loan within their own credit parameters?, within their own family?, using loan guidelines which they set forth their customers? The Big 3 with junk bond ratings is like a 600 score customer shopping for a Maybach loan with a new Volt for collateral...

I also heard recently that the initial 11% loan to AIG was discreetly lowered to 4 or 5% without a vote... :mad:

Simple answer, the captives get their money to loan to consumers for car loans, the same place everybody else does, the open market. They don't have the money in reserves to fund the parent company.

You sort of answered your own premise with the 600 maybach analogy.

[BUIZILLA]

Simple answer, the captives get their money to loan to consumers for car loans, the same place everybody else does, the open market. exactly my point, let them go to the open market for a loan, and not the Govt. If they can't qualify for a loan, then they don't deserve to survive... period...

[gcarter]

http://media.townhall.com/Townhall/Car/b/lb1203cd20081202030405.jpg

[handfulz28]

How about the oil companies stop buying their stock and lend a few bucks to the big 3? There's probably quite a few cash-rich tech companies that have not just the big 3, but their suppliers as customers also; seems like they would be in a position to help their customers in a time of need.

The problem with the open market isn't that there's no cash, but nobody wants to be the first one to offer a loan. Even a 600 credit score can get a loan (well, used to at least), just miserable terms.

What will happen is eventually the banks and people with cash on hand will have no where to earn interest. Earning 0.01% O/N to 1% for 1 year will stop paying the banks' bills not to mention they'll start getting chastised by auditors and regulators for low interest income. They'll have to start lending before long.

[Ghost]

This has got to be the first time I have seen a recession going to a depression characterized as a potentially positive thing.

...

Sorry, Professor Ghost, and please, save your time on a follow-up post with a bunch of questions, your premise is ridiculous.
We are talking about real people and real hurt here, not some college exercise.

Todd,

Hey, I will try not to assume too much here, it's easy to skim through stuff here and mis-read things--I suspect most of us do it often, I certainly catch myself doing it at times.

Please re-read my post.

I made no statements at all--I simply asked a question. The basic form being, IF things continue to get worse, is there anything we can do about it? Do the crappy circumstances in any way open the door for us to fight back and make it better?

Before I say anything further or jump to any conclusions, I ask that you just give it a closer read.

Regards,

Mike

[BUIZILLA]

How about the oil companies stop buying their stock and lend a few bucks to the big 3? . without cars and trucks, what do oil company's have to sell?

[txtaz]

I made no statements at all--I simply asked a question. The basic form being, IF things continue to get worse, is there anything we can do about it? Do the crappy circumstances in any way open the door for us to fight back and make it better?


Mike save your cash, don't borrow any money, lay low for a few years (I hope that's all). The more you spend now, the less you will have later. Think of it this way: The cost of money now is high while in the past it has been low. Also if we hit a depression you will want the cash to procure what you need to survive. Think credit is tight now, it will no non-existent in a depression.

To answer your second question: Nope!!! If the governement ignores what 70% of the population wants, there is non a damn thing you or I can do other than survive. If you have extra cash, you can buy in the market when it hits bottom and make a killing over the next 20 years.

Da Taz

[Ghost]

Mike save your cash, don't borrow any money, lay low for a few years (I hope that's all). The more you spend now, the less you will have later. Think of it this way: The cost of money now is high while in the past it has been low. Also if we hit a depression you will want the cash to procure what you need to survive. Think credit is tight now, it will no non-existent in a depression.

To answer your second question: Nope!!! If the governement ignores what 70% of the population wants, there is non a damn thing you or I can do other than survive. If you have extra cash, you can buy in the market when it hits bottom and make a killing over the next 20 years.

Da Taz

Thanks, that sounds like good advice.

Hmmm, also makes me keep wondering if I should try to sell my house while I might still be able to get out from under it without a big loss...

[roadtrip se]

Todd,
Hey, I will try not to assume too much here, it's easy to skim through stuff here and mis-read things--I suspect most of us do it often, I certainly catch myself doing it at times.
Please re-read my post.
I made no statements at all--I simply asked a question. The basic form being, IF things continue to get worse, is there anything we can do about it? Do the crappy circumstances in any way open the door for us to fight back and make it better?
Before I say anything further or jump to any conclusions, I ask that you just give it a closer read.
Regards,
Mike

Let me take a breath and respond:

Ghost. I read your post and got it the first time. Posing it as a question doesn't change the premise. Sorry, but sometimes your rhetorical posts, as much as I might enjoy some of them, hit a nerve. This nerve is exposed with me, so it doesn't take much. Reality sucks enough as it is without these sort of what-ifs.

Lenny. You over-simplify what is going on here. If you would like a detailed view from somebody who is living it, give me a call and I will be happy to share what it is like lving it at ground zero.

Buiz. I understand your stance. As a business owner, here is something to think about. People are complaining about a decrease of .5% in the GNP and unemployment rates at or around 6-7% depending on where you live and work. What happens to you, and I mean you and your business, when we take that decrease of GNP to 4% and conservatively double the unemployment rate? That impacts everybody including you, but I hope none of us see the day.

[txtaz]

Let me take a breath and respond:
Ghost. I read your post and got it the first time. Posing it as a question doesn't change the premise. Sorry, but sometimes your rhetorical posts, as much as I might enjoy some of them, hit a nerve. This nerve is exposed with me, so it doesn't take much. Reality sucks enough as it is without these sort of what-ifs.
Lenny. You over-simplify what is going on here. If you would like a detailed view from somebody who is living it, give me a call and I will be happy to share what it is like lving it at ground zero.
Buiz. I understand your stance. As a business owner, here is something to think about. People are complaining about a decrease of .5% in the GNP and unemployment rates at or around 6-7% depending on where you live and work. What happens to you, and I mean you and your business, when we take that decrease of GNP to 4% and conservatively double the unemployment rate? That impacts everybody including you, but I hope none of us see the day.

Hey YOU...yeah you...

Return your calls.

Da Taz<---Snicker

Man the loss of value on the dollar is really killing my imports of Rubber Duckies.

[gcarter]

Buiz. I understand your stance. As a business owner, here is something to think about. People are complaining about a decrease of .5% in the GNP and unemployment rates at or around 6-7% depending on where you live and work. What happens to you, and I mean you and your business, when we take that decrease of GNP to 4% and conservatively double the unemployment rate? That impacts everybody including you, but I hope none of us see the day.

I don't live in the past even though it may seem like it. I just happen to remember the way it was when much of this happened previously.
I don't remember what the loss of GNP was in the '78-'82 period, but inflation was 12%, unemployment reached to just over 9%, prime reached about 19%, mortgages were about the same, and Houston somehow got blessed w/about 200,000 unemployed Detroiters. I wasn't running a business then, but I was never unemployed. The realestate industry in Houston had similarities to today as it took about five years to sell off excess inventory.

The good news is that you do eventually get through it.

[roadtrip se]

One more thing...

This board and hobby is a stress reliever for me. I respect many of the folks I have met at the rallys and stay in touch with here.

My career has been based on automotive, so I am very close to the workings of it from manufacturing to distribution.

I have been amazed at some of the comments that have been made in the puiblic forum, including here, about the bail-out loan issue.

I have attempted to set the record straight, or at least give some additional food for thought, perspective, and knowledge to my friends here.

Without being too melodramatic, I am done with this. Anybody want to talk about it, give me a call.

Now back to your regularily scheduled boating diversion...

[handfulz28]

without cars and trucks, what do oil company's have to sell?

Yeah, that's my point. I haven't looked at Q3 numbers, but I think Exxon had more than $40B in cash and cash equivalents recently. It would be unprecedented, maybe even complicated, but imagine the goodwill that could be generated if the oil cos helped out a little.

[Ghost]

of course the coming times will be extremely painful. Sadly, that die is already cast. But if:

unemployment climbs to 10, then 15 or even 20+ percent, and
the resulting pressures drop wages further and further, and
the dollar starts to suffer the inevitable consequences of massive printing of new money (hyper-inflation)
isn't it possible, or even likely, that:

we can start to bring back lots of real industries that for years have moved offshore?
(while lots of the b.s. Jobs that legislation couldn't kill will finally succumb to the mathematics of unsustainability? (the ones that only politicians would fund, and from which no consumer derived sufficient benefit to make him pay for it directly, and which only massive, ruinous borrowing could keep around for this long))
sorry, i risk leading the discussion to finger-pointing, which is not my intent. my intent is to see if we can't make some lemonade with the lemons that are certain to come, and come soon. Can we turn this disaster into the re-birth of real american industry?


This has got to be the first time I have seen a recession going to a depression characterized as a potentially positive thing.

I think the last time we had the kind of unemployment you are envisioning was back in the early 30's. It took a huge public works project effort, spending government money, and ultimately a world war, spending a whole bunch more government money, to pull our country out of it. This little effort also was the beginning of the entiltlement age, which we all love so much.

3.5 Million people out of work in the auto industry will help get us to the "sustainability" model you seem to think will make us competitive again. Real fast.

The only problem is, who will buy the American products we are so proudly able to build now that we went through this little adjustment that was so good for us?

Sorry, Professor Ghost, and please, save your time on a follow-up post with a bunch of questions, your premise is ridiculous.
We are talking about real people and real hurt here, not some college exercise.


let me take a breath and respond:

Ghost. I read your post and got it the first time. Posing it as a question doesn't change the premise. Sorry, but sometimes your rhetorical posts, as much as i might enjoy some of them, hit a nerve. This nerve is exposed with me, so it doesn't take much. Reality sucks enough as it is without these sort of what-ifs.


Todd,

THIS LOOKS BAD BUT I THINK YOU WILL LIKE WHAT YOU READ HERE--PLEASE GIVE IT A SHOT.

Forgive me, I'm doing the best I can here and I didn't get much feedback other than:

you stand by what you said in your first response above
you are certain you understood what my first post meant, including
you think that I "characterize this recession going to a depresson" as a "potentially positive thing,"
you think I meant that the effects of unemployment, such as the collapse of the auto industry freeing up workers and dropping wages, will have a positive healing effect
This is what it sounds like you thought I meant. If so, good. Because it isn't, and if you did, I can see why it would hit a nerve something fierce. But I gotta believe you didn't get what I intended.

Let me clarify a couple of points. Please don't confuse my curt tone with any sort of intended slight. I'm trying to mend fences here with a sledgehammer of absolute clarity.

I do not welcome the suffering that our increasing unemployment is bringing and will yet bring. It sucks, or is going to suck, for nearly every single one of us. (And it already sucks more for me, personally, than you can possibly already know, not that that should sway anyone's rational analysis of the situation.)


I strongly suspect part of what set off a nerve here was confusion of:

the "sustainability" of BS jobs mentioned in my post above
with

discussion of "sustainability" of the auto industry jobs in my prior posts, which had nothing to do with my post above
Further, I suspect there was also confusion of:

the government borrowing that sustains the BS jobs, as mentioned in my post above
with

government borrowing for bailout loans for the auto industry or banks, mentioned in some of my previous posts, but which has nothing to do with my post above.
If so, this may be where mutual understanding went off the rails here. My post above was referring to unsustainable BS government jobs, like the people who get paid 140k a year to revise all your kids' textbooks with political correctness and other crap like that. Nothing to do with the auto industry, or how much they get paid, or anything like that. In fact, quite the reverse.

The auto industry, and a whole lot of other stuff historically based in MI and Ohio and Newark and so on are the very real industries I am hoping we might be able to both grow and re-colonize with stuff that went offshore in years past. Regardless of whether any auto company bailout happens or not, I want these to survive, and my post had bupkus to do with whether the current government loans get approved. Not a thing.

The midwest is full of real work, a much higher percentage of real work that provides real value than the BS part of the country I live in. The part of the country I live in, to a significant degree, leeches off of everyone else who does real work (like building cars), and when times get tough, it still gets to tell the people who work for a living to send in their taxes so that the people here who do overpaid BS jobs get to keep doing them. This is crap, it is crap that benefits the people around me and to an extent benefits me via the trickle-down, and yet I condemn it for the crime that it is.

We all know that the real industries (like building cars) that I mention are suffering, and have for a long time been moving overseas. There was a time when people made clothes here. People made appliances and TVs here. People made leather goods here. People made textiles here. People made plastic goods here. People made furniture here. And on and on. As time has gone by, low wages overseas have influenced the departure of these real industries to other places.

The point of my post was simple, and it essentially had two main parts.

1. There is nothing arguable or academic about the fact that our living standards are falling, unemployment is rising, and the buying power of our wages is falling. This is the given. This sucks. This is where we are. I don't think you would dispute that.

2. Asking, given the suck-a$$ circumstances in which we find ourselves, particularly with falling wages, will we be able to re-start some of the real industries that have gone overseas, doing for ourselves, and re-building a middle class? Will we be able to reclaim some of this, rather than letting corporations further bleed us of our wealth by shipping it overseas? Can we grow the real businesses that are still here, and can we re-start real industries that have moved away, so that the Americans who are already losing their jobs (whether those were "real jobs" or not) can get new jobs, doing something real, that people will pay them for?

I do't know the answer, but I sure as $hit hope so.

Sadly, some fraction of the people who do real work, like build cars, are going to lose their jobs because the economy sucks and we have excess capacity. No one disputes that as far as I can tell. Others, like the jerk who gets 140k a year to make your kids' textbooks crappier than they already are, are far more "deserving" of losing their jobs than the guy who tries to earn an honest living building cars. One would hope that a lot more of the people who must re-tool their careers are the ones who do BS things like ruining textbooks. And sadly, with things as royally f#cked up as they are, a lot of people work in industries where it is unclear whether their jobs return enough value, no matter how honest or hardworking they are. And sadly, we are so far behind the economic 8-ball, we're all either suffering, or well on our way to suffering.

For clarity, the comment I made about BS industries and unsustainability had not a thing to do with the auto industry or any other real industries that produce stuff of real value, nor with how much they should get paid or with whether the taxpayer should lend them any money. Not a thing. My post had nothing to do with the auto industry at all, except tangentially in that REAL INDUSTRIES LIKE THE AUTO INDUSTRY ARE THE ONES WE NEED MORE OF, AND WHICH I HOPE WE CAN BUILD MORE OF.

Rather, my post's comment about BS industries and sustainability had to do with the leech industries and protection rackets that are far more prevalent in my part of the country, where jacka$$es have for years gotten away with preying off the people in real industries, like the auto industry.

Per capita, I bet there are between 10 and 30 times as many people in the state of MI who can find their a$$e$ with both hands and who know something about building something useful than there are here in BIG-Ruinous-Government Maryland. What Maryland is good at is subjugating the rest of the country and making people who do real work pay for people who don't. And when the natural market consequences of that start to kick in, people around take out loans in your name, and print more money, to try to stave off the inevitable effects of the mess they got paid by you to inflict on you for the last 40 years.

I do NOT think having the auto industry disappear here would be a good thing, feeding unemployment that would help drop wages and bring other industry back. That would be a HUGE setback. I DO think we are going to see unemployment rise a lot no matter what.

What is vital in that circumstance is that we keep the industry that produces things of value, like the auto companies. Far better for the a$$hole here in MD who is revising your textbooks to be the one who has to move to an industry that produces something of value than for an auto-worker to have to switch from one "real job" to another. And the state of MI strikes me as the kind of place where more "on-shoring" of real industry can happen. THAT would be making the best of a bad situation. And I think the good people of Michigan and Ohio and other places will likely be the ones who can lead that charge, because so many more of the people there know $hit from $hinola.

(Even if they can't understand my posts the first two times. :))

Thanks for reading.

Regardless of anything I've ever said before in prior posts when we debated pros and cons of auto-company bailout loans, the post above that started this discussion was about something totally other.

I hope we are simply in violent agreement.

I hate misunderstanding with a passion.

Even more I hate misunderstanding that leads to people getting pissed at each other needlessly.

I love ya brother and I wouldn't have taken the time and effort just to say "F. you." Even I can do that with just two words. :)

Regards,

Mike, fighting from behind enemy lines in the People's Republic of MD

[BUIZILLA]

I hope we are simply in violent agreement. flat out, hands down, the quote of the year..:yes:

[BUIZILLA]

http://gohmert.house.gov/Article.aspx?NewsID=1355

I like it

https://redstate.kimbia.com/taxholiday

[Lenny]

Lenny. You over-simplify what is going on here. If you would like a detailed view from somebody who is living it, give me a call and I will be happy to share what it is like lving it at ground zero.

Tell you what Todd, why don't we talk about it at AOTH in '09 when a certain "wierd" X-18 looking boat deals you a can of WHOOP-ASS when you are running 80 :yes:

Put that in your pipe and smoke it... :D

..and I AM serious...

:)

..you need to lighten up a bit... (even if it hits your "home" ) this is hitting "our Home" as well as everyone here, regardless of occupation. Be it the USA or Canada. None of us are spared... Call me when you get a chance and maybe WE can chat about living at ground "ZERO" ...

Remember this. Deneen ( my wife) owns the LARGEST financial planning Company in Canada that is all female... (hence why I get more tail than anyone in North America... ) :D ...don't you think we have seen a hit in this debacle ??? :mad:

She is not crying for Bail-Out money (like we would have any in Canada anyway)

...it is called ...
DIE LOSER, YOUR BUSINESS IS TOAST she is working ten times harder...

:mad:


.., a side note Todd, unless you shut your Borders down and re-negotiate Tarrifs and Trade surplusses with Foreign Nations, the trend will continue. When the BIG THREE come up with something that EVERYONE wants, the tides will turn. Unfortunately we are not there yet.

IMO

Bail out the Big Three, continue down a familiar trail, have Obama give some incentives towards re-defining Factory design/propulsion, tax breaks, (regardless of the 34 Billion ) and "maybe" get Detroit back on its' feet again. :confused:

In the meantime, the folks that didn't spend their hard earned dollars on an American, "domestic perceived" product and have been offshore for a while, are going to have to be taunted 10 times over to get them to snuggle a Detroit product.

The writing is on the wall as I see it...

We'll see... boats are next...

[txtaz]

Boatsa are already there, they just do not make the news. Seen where my Fountain stock is lateley?? :( :(

DUDE, We need to talk about your investment strategy. Investing in toys is a long shot to begin with. Investing in toys run by an arrogant little prick is insane.

Da Taz<---I have a rubber duckie import business if you want to invest in it.

[gcarter]

I'm watching Fox News right now.....some folks are commenting the best solution for GM and Chrysler is bankruptcy.
Now just assume that happens and the bankruptcy judge says "reorganize w/o unions" and everything is good and wonderful.....
Wouldn't that put Ford at a disadvantage???????

I hope Todd breaks his word and decides to read and comment on this.
I would like his opinion.