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zeus3925
02-28-2009, 06:52 AM
Should the American auto companies be saved? Will their demise affect the defense of the country? Will the resulting unemployment sink the American economy forever? Would you drive a Korean, Chinese or Indian car?

Franco
02-28-2009, 07:03 AM
The Big 3 auto makers should be able to stand on their own 4 wheels. If they can't, then we will always be bailing them out. I say, "let the free market reign". When they do eventually go bust, it will create opportunity for new smaller domestic auto mfgs. Same for banks, why should we prop them back up? Plenty of good solvent banks to go around. Banks like Citi, BOA, WaMu, Wells Fargo need to go away!

luvmylabs23139
02-28-2009, 08:29 AM
Should the American auto companies be saved? Will their demise affect the defense of the country? Will the resulting unemployment sink the American economy forever? Would you drive a Korean, Chinese or Indian car?

I'm happy with my Toyota. The only other makes I consider are Honda and Subaru.

subroc
02-28-2009, 09:03 AM
Are the union commitments partly responsible for the downturn in the big three? Is it poor planning on management to not foresee the need for fuel efficient cars even though sales were brisk for the other models? Is management ultimately responsible? Would the government help, actually be helpful? Without the force of personality of a Lee Iacocca to turn things around, would the bailout money actually be wasted by the current management? There is plenty of blame to go around, but right off, if GM is losing money and Toyota is making money, there is a problem.

I am not sure it is possible to save the big three.

Yes, it will affect the economy.

Yes, it will affect the defense of the nation.

If anyone thinks it should be saved, are you driving an American car badged by the big 3? I expect, in the end, the way to save the big 3 is to buy one.

(Sarcasm button on)
I expect congress will be best served by taking GM from the corporate executives and stock holders, mandating that all debt be forgiven and just give it to the union bosses.
(Sarcasm button off)

BTW, I did not vote in the poll yet (I may later).

BTW2, I am driving a Ford F150

Franco
02-28-2009, 09:40 AM
BTW2, I am driving a Ford F150



Me too. When I purchased my new truck a little over a year ago, I also looked at the new Tundra. I liked the Ford better.

The problem with Detroit is not their trucks. GM's 1500 pickup saved them from bankruptcy in 93. Chrysler has come a long way in the last 12 years with thier trucks. Problem is they can't sell thier passenger cars. They are just not competitive with the Asian companies. That is both a Labor(quality) issue and Mangement(planning) issue. Maybe if Detroit just concentrated on trucks and SUV's they could export more and dominate in that arena.

zeus3925
02-28-2009, 10:49 AM
I have a lot of mixed feelings on this one. I am originally from Michigan. Those of my family and my wife's family that didn't farm worked for the auto companies or their suppliers. I make frequent trips to the "Auto Zone" and the I come home to Minnesota more depressed every time.

The How-we-got-there's are really a complex mix. There are way to many elements to cover them all here. But , I will lay out a few.

First, was down out right arrogance on the part of management. Charlie Wilson, President of GM was fond of saying "What is good for General Motors is good for the country." When the mechanics started to report that Toyota's were very reliable, they looked down their noses and viewed the rice burners as fad cars. GM still continues to live in the past and is resistant to change.

The companies were not interested in good relations with their workers. Often this lead to labor stoppages and sabotage. Although Ford and Chrysler eventually learned from their Japanese partners, GM still has problems. GM's Management still refers to its workers as "shop rats".

Often labor negotiations leave basic issues unaddressed and are settled by throwing money and packages at the unions. It feels good for a week or two but basic grievances are unresolved and things go back to the same old same old.

Health care is a real profit killer and this must be addressed if the industry is to survive.

Some of industry's problem was just poor engineering. Remember the Chevette transmissions in Chevrolets and Cadillacs? Or the Corvair? It is not that they can't market good cars here--they won't. American car companies make European models that are plush, reliable, and get terrific milage. Here, they make compact cars deliberately chinsy so you will look at that mega boat across the room.

The car companies often take over local government by insinuating management on to governance boards, keeping the company's tax burden low and competing industries out. When they leave they leave, the towns are unable to survive. Flint, MI is becoming a ghost city.

Marvin S
02-28-2009, 10:59 AM
As they exist NO, but they have areas where their product outcompetes. Small trucks, we own a 06 duramax & an 08 Uplander (minivan) & are happy with both. That also probably has a lot to do with our local dealer being customer friendly. But I do not want to get to the point that there is no competition domestically in the pickup market. The car companies can get very arrogant when times are good.

Gerry Clinchy
02-28-2009, 01:46 PM
My son works for Toyota. Evidently, they also lost money in the last quarter. But didn't bleed as much as the US 3.

badbullgator
02-28-2009, 07:08 PM
I am driving a Silverado that I just got 6 months ago. I would hate to see GM go under, but I hate even more to see the goberment give them money. They have not adapted and will probably die soon anyway no matter how much money we throw at them. Without the big three in the picture someone will step up and build a car/truck that people want and that the maker can make money on. The American car building system is broken and maybe the best way to fix it is to let it fix itself

Nate_C
03-01-2009, 10:40 AM
Letting the free market rain is fine but you have to accept the reality that another firm may not pop up in their place. We may loose it all together. There is a very large entry barrier to car manufacturing. Most large firms like that only pop up in the infancy of the industry when the competition is small and growth is large or when there is an isolated market like Japan after the war. This is for several reasons for this including:

1. Economies of scale: if you make 100 cars the cost will be 100,000 each, if you make 100,000 cars the cost is 20,000 each.
2. Need for a service infrastructure. Mechanics need to be trained and there needs to be a 3rd party parts system.
3. Brand and Name recognition need to be developed to compete.

So if you want to start a car company it would take what 5 Billion plus. It is very had to do this and very risky and likely no one would enter.

Ford will most likely make it. I would provide funding but only if Chrysler and GM merge. It is easier to keep them then to hope another industry will pop up and employ 500,000 people (GM + Parts and service networks). Honestly though. If you let Chrysler go bankrupt then give GM 10 Billion to fund ops and to acquire Chrysler, and with the economic hard times they really hammer out a good deal with the unions, and strip down the product lines to only the best ones, in ten years GM could be a very viable company. Also both companies have really closed the quality gap and have made strides in the design area.

Nate_C
03-01-2009, 10:45 AM
Also about the banks, no there aren't a lot of good solvent banks to go around. BofA and Citi get all the press but there are about 20-30 smaller banks around the country that are in trouble too. More importantly, the small banks need the larger banks. They don't act like individual firm but a network. For instance small banks get operating loans and sell asset to larger banks all the time. In addition Larger banks are market makers. Without there assets the system would get much tigher and it would lost 35% of the assets (just BofA and Citi). This would jack up interest rates maybe by a few points, and deepen the recession.

road kill
03-01-2009, 11:12 AM
This is not about the American Auto Compnaies.

This is about American Auto Companies workers UNIONS!!

badbullgator
03-01-2009, 12:11 PM
Letting the free market rain is fine but you have to accept the reality that another firm may not pop up in their place. We may loose it all together. There is a very large entry barrier to car manufacturing. Most large firms like that only pop up in the infancy of the industry when the competition is small and growth is large or when there is an isolated market like Japan after the war. This is for several reasons for this including:

1. Economies of scale: if you make 100 cars the cost will be 100,000 each, if you make 100,000 cars the cost is 20,000 each.
2. Need for a service infrastructure. Mechanics need to be trained and there needs to be a 3rd party parts system.
3. Brand and Name recognition need to be developed to compete.

So if you want to start a car company it would take what 5 Billion plus. It is very had to do this and very risky and likely no one would enter.

Ford will most likely make it. I would provide funding but only if Chrysler and GM merge. It is easier to keep them then to hope another industry will pop up and employ 500,000 people (GM + Parts and service networks). Honestly though. If you let Chrysler go bankrupt then give GM 10 Billion to fund ops and to acquire Chrysler, and with the economic hard times they really hammer out a good deal with the unions, and strip down the product lines to only the best ones, in ten years GM could be a very viable company. Also both companies have really closed the quality gap and have made strides in the design area.


Believe me I am not talking about you and I starting a new auto company.
There are people, groups, corporations and the like out there that DO have BILLIONS to invest IF, it can be done in a way that will make them money in the long run.
Hummm Warren Buffett has put BILLIONS into the basically buying out a bank, I wonder why? Because he knows it will eventually make him money. Down here in S. W. Florida we led the nation in foreclosures on homes and now the homes sales are climbing because people with lots of money are paying cash for value priced houses. Once a vacuum is created it will be filled. IF there is a market for autos, and IF they can be manufactured and sold for a reasonable price, and IF the manufacture can make a profit the vacuum left by the big three will be filled. IF this cannot happen it will not be filled, but IF it cannot be done then what is the point of spending the taxpayers money to prop up an industry that is unsustainable in the current form? Let them fail and let private money take a stab at filling the vacuum.

Roadkill
I agree to an extent that unions are PART of the problem, but not the entire problem. Should the big three go under I do not believe you will ever see an auto industry with labor unions as they are today. Union demands are too much as they stand now for the big three to continue to exist. That said, I donít think that simply doing away with the UAW is going to save Detroit. The industry is too fat from the top down and it has taken decades to get that way and it would take even longer to trim it down. It has become their normal way of doing business and they, like the union, cannot see that their excess is in the end their own death.

Marvin S
03-01-2009, 12:53 PM
Many years ago there was a similar situation with a well known company making a good product. The company was called International Harvester - They took a long strike - caved & ceded to the unions demands. IH is no longer a market symbol. Any one with 1st hand knowledge care to provide the details.

road kill
03-01-2009, 01:24 PM
Many years ago there was a similar situation with a well known company making a good product. The company was called International Harvester - They took a long strike - caved & ceded to the unions demands. IH is no longer a market symbol. Any one with 1st hand knowledge care to provide the details.

Allis-Chalmers suffered the same fate.

The old man told the union that if they struck he would shut the company down.

They (union people)picketed for 2 years after the old man shut the company down!!

I don't know who was right or wrong, but I do know that noone won!!

Uncle Bill
03-01-2009, 01:31 PM
Certainly not 'firsthand', unless my farmwork with several pieces of IH farm machinery counts.

J.I. Case company, (which had the ugliest tractors ever made, and not a 'complete' line of machinery) bought out the farm machinery lines, and Transtar took over the truck manufacturing, if memory serves me correctly.

BUT, way before that, what happened to the Oliver brand...or the Minneapolis Moline machinery line? I drove daily past the Moline factory just off East Lake street in Minneapolis when I was going to school there in the late 50's. When I returned from the service, they were being shut down? Don't recall much hulabaloo back then. Just another form of the buggy whip eh?

When you think of ALL the various automobile brands that the nation has had in the past that have eventually failed, it's not hard to imagine the current brands doing likewise. I doubt a GM bankrupcy would totally kill all their models...might consolidate several, along with the various dealerships.

For the past 25 years, I've driven either Suburbans or Yukon XLs...never noticed any difference in them. Why both? Dealerships is my guess. But I think that form of SUV will be around, manufactured by some company, even if it isn't the current GM. What will suffer is the freedom of selection we Americans have always had; less competition with fewer availabilities. Just another form of less freedom for the public.

UB

Lush Lumbago
03-01-2009, 04:10 PM
I think you have to look at the issue on a much larger scale. What is the cost of failure vs the cost of the bailout? Remember if the car companies go down, they will take a lot of parts companies and their employees with them. The falling demand for steel will take the US steel makers out and there go employees on unemployment. No steel or copper, the mines here go down and Great Lakes shipping vanishes. More unemployment benefits. Eventually you get a whole bunch of folks on the dole when the unemployment runs out.

It ain't so easy to start a car company. Where are Delorean, Bricklin, Tucker, Kaiser -Fraser, etc. these days?

The car industry has become the backbone of the economy. You can say let them go down to get at the "no brain" management or the "greedy" unions, but, then you gut the wealth of America with it and destroy the country for good. Your next combat vehicle maybe made in China.

Let's not be dollar wise and pound foolish here.

badbullgator
03-01-2009, 04:21 PM
I think you have to look at the issue on a much larger scale. What is the cost of failure vs the cost of the bailout? Remember if the car companies go down, they will take a lot of parts companies and their employees with them. The falling demand for steel will take the US steel makers out and there go employees on unemployment. No steel or copper, the mines here go down and Great Lakes shipping vanishes. More unemployment benefits. Eventually you get a whole bunch of folks on the dole when the unemployment runs out.

It ain't so easy to start a car company. Where are Delorean, Bricklin, Tucker, Kaiser -Fraser, etc. these days?

The car industry has become the backbone of the economy. You can say let them go down to get at the "no brain" management or the "greedy" unions, but, then you gut the wealth of America with it and destroy the country for good. Your next combat vehicle maybe made in China.

Let's not be dollar wise and pound foolish here.

If you believe bailing them out will actually save them. More likely it will only prolong their death. I guess a slow death may spread out the inevitable and make it less painful that dieing quickly. I also donít think that bankruptcy will put GM out of business, just force them to become better. Bailing them out just aint going to do it in my opinion. As far as the other industries, well if it is as you say ďthe backbone of the economyĒ then we are in trouble if these industries that are attached to the auto industry continue to ďdo business as usualĒ because I am just guessing that at some point the auto industry may not be around at all, and defiantly not as the internal combustion manufacturing industry it is now (not that I donít love me some big V8ís, just saying it is going to be forced to go away at some point).

Lush Lumbago
03-01-2009, 05:28 PM
As far as the other industries, well if it is as you say “the backbone of the economy” then we are in trouble if these industries that are attached to the auto industry continue to “do business as usual”

The mining business is changing all the time. There are the new iron nugget processes being installed that provide nearly pure iron from the mines. But you can't sell when the market tanks. There goes the investment.


The economy of the UP is sort of isolated. I don't know about where you live, but if we lose the mines there isn't much else here except pulp logging. You can't support 300,000 people on that.

If the worst happens, don't count on doing any deer hunting here. Mama will have the bugger baked up in pasties before we leave camp. So will my neighbors.

Richard Halstead
03-01-2009, 06:21 PM
Yes, bring back the Studebaker.

badbullgator
03-02-2009, 07:37 AM
The mining business is changing all the time. There are the new iron nugget processes being installed that provide nearly pure iron from the mines. But you can't sell when the market tanks. There goes the investment.


The economy of the UP is sort of isolated. I don't know about where you live, but if we lose the mines there isn't much else here except pulp logging. You can't support 300,000 people on that.

If the worst happens, don't count on doing any deer hunting here. Mama will have the bugger baked up in pasties before we leave camp. So will my neighbors.


Lush, maybe the answer for that area then is to move to something else that will keep them viable...

Lush Lumbago
03-02-2009, 09:22 AM
Lush, maybe the answer for that area then is to move to something else that will keep them viable...

A couple of problems with that. I don't know if you ever been here but the UP is kind of a special place. As with any area that is relatively isolated by geography, it has its own culture, even its own dialect--Yooper. Most Yoopers would rather bid the wife goodbye than leave the UP.

The local skill set is geared to extraction especially mining. If the economy tanks mining goes down all over--globally these days. There isn't too much of an option left if you have been wrestling mine timbers or side hill gouging for a living unless you want to work in a car wash somewhere at minimum wage. You can't keep a family together on that.

Of course, a few with education get away. We lose the Kelly Johnson's (Lockheed), Glen Seaborg's (Atomic Energy Commission), Paul Kangas's (PBS Evening Business Report). They take their skills elsewhere. Educated kids don't stick around because the future is better elsewhere. It kills the family ties.

Steve Hester
03-02-2009, 09:50 AM
Bail out the American automakers, but drastically gut the UAW, which is the cause for the American automakers not being competitive any more.

badbullgator
03-02-2009, 09:53 AM
A couple of problems with that. I don't know if you ever been here but the UP is kind of a special place. As with any area that is relatively isolated by geography, it has its own culture, even its own dialect--Yooper. Most Yoopers would rather bid the wife goodbye than leave the UP.

The local skill set is geared to extraction especially mining. If the economy tanks mining goes down all over--globally these days. There isn't too much of an option left if you have been wrestling mine timbers or side hill gouging for a living unless you want to work in a car wash somewhere at minimum wage. You can't keep a family together on that.

Of course, a few with education get away. We lose the Kelly Johnson's (Lockheed), Glen Seaborg's (Atomic Energy Commission), Paul Kangas's (PBS Evening Business) reports. They take their skills elsewhere. Educated kids don't stick around because the future is better elsewhere. It kills the family ties.


I understand that, however, are you saying that since these people only seem to know one thing that they should be able to do that for the rest of their lives? I have no idea how much ore there is up there, but at some point it seems that it would run out (maybe not in our lifetime) and then what? Isolation is not an excuse. Ever call Dell? Not exactly in the middle of downtown Manhattan now is it? We had a very similar issue here with mullet fishermen back in the late 80ís when the state banned gill netting. Entire communities were mullet fishermen and that was the only skill set many of them had. They too were located in relatively remote places with their own language as well. Guess what. They all adapted and got other skills. Some stayed in commercial fishing and others went into the mainstream jobs. Stuff happens. I myself use to own a construction company many, many years ago. Anyone can tell you that construction in Florida has great highs and devastating lows. I had enough of the constant swings and went back to school and moved on to something far more stabile.
Are you suggesting that the government subsidize an industry because people refuse to adapt?
Look I donít mean this as a personal attack on the fine folks of the UP or anywhere else. I am just saying you must adapt or die regardless of who you are or what you do.

badbullgator
03-02-2009, 10:18 AM
I know what your saying, but most folks with a family here can't afford to go back to school. You got to stay in Florida but, my folks are here.


I understand it is not easy, but then again nothing worth having is easy to get. Going back to school is not for everybody and with the current situation jobs in anything are hard to find. All I am saying is that you can't prop up an industry only becasue it will affect people. I don't mean that if it closes tomorrow that all the people you speak of could move into something else, but I am saying they should all be planning for the future and that may not include what they do now. Heck for that matter it might not include what I currently do.
BTW- I am in Florida now, but that does not mean that I have always been here as far as work goes. Even worse is that if my current job goes away I will more than likely have to move at the very least out of the area and more likely well out of state

Henry V
03-02-2009, 10:37 AM
Here's a real upbeat article on the outlook for the auto industry. NOT.

http://www.tradingmarkets.com/.site/news/Stock%20News/2201881/

Lush Lumbago
03-02-2009, 10:40 AM
Most people here with a family to support can't afford to go back to school.

What happens to us is going to be repeated on a humungous scale country wide. The auto industries are tied to just about every segment of the society. You can prime the pump or you can pay unemployment and welfare. Or you might support a massive retraining program. Which is cheaper? Anyway you slice it the depression is going to take massive expenditures to dig out.

Jobs give dignity as well as a paycheck. I rather see people working and producing.

There is a pent up demand for cars. But you are not going to sell cars when people with 700+ FICO scores are refused a car loan. That $5 billion in bonuses that went to one banking company's execs would have helped buy a lot of cars.

badbullgator
03-02-2009, 10:44 AM
Most people here with a family to support can't afford to go back to school.

What happens to s is going to be repeated on a humungous scale country wide.
You can prime the pump or you can pay unemployment and welfare. Which is cheaper?

Jobs give dignity as well as a paycheck. I rather see people working producing.

There is a pent up demand for cars. But you are not going to sell cars when people with 700+ FICO scores are refused a car loan. That $5 billion in bonuses that went to one banking company's execs would have helped buy a lot of cars.


The way I see it, it is one in the same. Dumping tax payer money into a dying industry is pretty much welfare, it just makes those reciving it feel better about themselves because it comes from their company and not the welfare office. Same thing different location

Lush Lumbago
03-02-2009, 10:56 AM
There isn't much dignity in a welfare check.

Franco
03-02-2009, 11:00 AM
Letting the free market rain is fine but you have to accept the reality that another firm may not pop up in their place. We may loose it all together. There is a very large entry barrier to car manufacturing. Most large firms like that only pop up in the infancy of the industry when the competition is small and growth is large or when there is an isolated market like Japan after the war. This is for several reasons for this including:

1. Economies of scale: if you make 100 cars the cost will be 100,000 each, if you make 100,000 cars the cost is 20,000 each.
2. Need for a service infrastructure. Mechanics need to be trained and there needs to be a 3rd party parts system.
3. Brand and Name recognition need to be developed to compete.

So if you want to start a car company it would take what 5 Billion plus. It is very had to do this and very risky and likely no one would enter.

Ford will most likely make it. I would provide funding but only if Chrysler and GM merge. It is easier to keep them then to hope another industry will pop up and employ 500,000 people (GM + Parts and service networks). Honestly though. If you let Chrysler go bankrupt then give GM 10 Billion to fund ops and to acquire Chrysler, and with the economic hard times they really hammer out a good deal with the unions, and strip down the product lines to only the best ones, in ten years GM could be a very viable company. Also both companies have really closed the quality gap and have made strides in the design area.

I disagree. A new car company doesn't have to open on the same scale as the present domectic companies. A start up company with good ideas and a good product can do it for a small fraction of your 5billion quote.

The Big3 can not be fixed, not with the UAW involved! We will always be throwing tax payer money at them to keep them afloat.

AS SOMEONE ELSE POINTED OUT, WE ARE NOT SAVING THE BIG 3. WE ARE SAVING THE UAW. Can you say, "political payback".

Buzz
03-02-2009, 04:52 PM
The mining business is changing all the time. There are the new iron nugget processes being installed that provide nearly pure iron from the mines. But you can't sell when the market tanks. There goes the investment.


The economy of the UP is sort of isolated. I don't know about where you live, but if we lose the mines there isn't much else here except pulp logging. You can't support 300,000 people on that.

If the worst happens, don't count on doing any deer hunting here. Mama will have the bugger baked up in pasties before we leave camp. So will my neighbors.


Hey Lush, I spent some of the best years of my live in the Copper Country, at Michigan Tech getting my EE degree. I love that place, but I bet this winter has been hard. One year I was there we got the record snowfall of something like 28 1/2 feet. Have you seen the big thermometer on the side of the highway, or is it gone now. I think it used to be between Houghton and Calumet.

Your time there is temporary, but you'll always have fond memories of the place I bet.

Lush Lumbago
03-02-2009, 05:03 PM
Here you go!

http://www.pasty.com/snow/index.html

Actually the record is 390 inches.

Lush Lumbago
03-02-2009, 05:11 PM
Here is some more

http://www.keweenaw.info/conditions.aspx

Buzz
03-02-2009, 08:32 PM
Here is some more

http://www.keweenaw.info/conditions.aspx

This is the actual Houghton snowfall amounts by year.

I didn't get your location at first. I think you're saying that the UP is temporarily part of Michigan. Been hearing that one for awhile. I was a troll, but sure loved the Keweenaw.

zeus3925
03-05-2009, 10:49 AM
Look who else is wanting a bailout.


http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090304-Toyota-Honda-Mazda-May-Ask-for-Government-Bailout/

badbullgator
03-05-2009, 11:18 AM
Well that was only a matter of time. Why wouldn’t Toyota, Mazda et al want in on this?

Now that is has come out today that GM’s own auditors don’t think GM can survive what do you think of continuing to fund them. They are going to die, why throw good money (borrowed from other countries) after bad?

Raymond Little
03-05-2009, 12:42 PM
Well that was only a matter of time. Why wouldnít Toyota, Mazda et al want in on this?

Now that is has come out today that GMís own auditors donít think GM can survive what do you think of continuing to fund them. They are going to die, why throw good money (borrowed from other countries) after bad?

Only if Toyota and Mazda are union shops and that is why they (foriegners) left where they came form to build cars in America.