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If the cost of oil were believed to remain at current levels, IMO the factories of the "Big 3" would be working overtime to produce the larger vehicles that many Americans love.
Since the current wisdom, IMO, is that the future price of oil is uncertain and likely to go higher, many people are afraid to buy a large vehicle.
That said, I think that the real question is how do the "Big 3" compete with Toyota, Honda, Kia and the other foreign/transplant nameplates given the public's preference for smaller automobiles?
How can the "Big 3" build small vehicles profitably?
If the "Big 3" cannot build small vehicles profitably, then I believe that the market should be allowed to run its course. No amount of bailout money will allow the "Big 3" to survive.
Ed Ward
Since the current wisdom, IMO, is that the future price of oil is uncertain and likely to go higher, many people are afraid to buy a large vehicle.
That said, I think that the real question is how do the "Big 3" compete with Toyota, Honda, Kia and the other foreign/transplant nameplates given the public's preference for smaller automobiles?
How can the "Big 3" build small vehicles profitably?
If the "Big 3" cannot build small vehicles profitably, then I believe that the market should be allowed to run its course. No amount of bailout money will allow the "Big 3" to survive.
Ed Ward
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8,332 Posts
They need the money to meet the pension and medical coverages for their beloved employees. If they declare bankruptcy, they would let them go and have them reapply for their jobs (like Mitsubishi - Toyota. All three have to go bankrupt at once otherwise the one(s) that don't/doesn't is stuck trying to compete aginst the others with union (read expensive) labor. That's why Ford didn't need the money, but asked for some anyway, because if they don't all do the same thing, the odd man out won't be able to compete pricewise and is screwed.
Let's see now, who voted for the current governing body?
Let's see now, who voted for the current governing body?
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849 Posts
My friend has an '04 Chevy Impala V-6. By observation I note that it gets 32 mpg @ 70mph. It has well over 100k miles on it and has no mechanical issues, nor has it ever had. None of the asian vehicles does any better.
Buz
p.s. I say that and I don't even like Chevys.
Buz
p.s. I say that and I don't even like Chevys.
Have a '99 supercharged Buick V-6 that does the same thing as that Malibu. Car was underappreciated in its day, and remains efficient and comfortable transportation to this day.
Sure my Infiniti '07 G35 is faster etc., but at a huge price in fuel economy. Not good. I also think GM messed up a lot by not marketing some of their good stuff and educating the public. Dumb GM, dumb public also contributed to the poor perception and reception of the American automobile.
Sure my Infiniti '07 G35 is faster etc., but at a huge price in fuel economy. Not good. I also think GM messed up a lot by not marketing some of their good stuff and educating the public. Dumb GM, dumb public also contributed to the poor perception and reception of the American automobile.
Look chapter 11 will take care of things. The courts will decide what is necessary to survive. I believe they call it restructuring. And there will be no union demands or even present. The courts will tell them how it is to be or else.
The companies do not want it the union does not want it and more often than not it does not work. Unless both sides want it to it won't happen.
Rock
Jim
The companies do not want it the union does not want it and more often than not it does not work. Unless both sides want it to it won't happen.
Rock
Jim
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Jerry in MI, quote: <i>"All you folks that buy Toyota, Kia, and the rest,under the thought they are built in the USA, is a crock. Where does the big profits go not to the USA. Rationalize it any way you want you are all sending profits to Japan and others."</i><br>
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We're under the "thought" that they are built in the USA? There are a lot of "foreign" vehicles built in the USA by AMERICAN workers. And there are "domestic" vehicles built by MEXICAN and CANADIAN workers. You need to do your research a bit better.<br>
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And why are you are concerned with making sure the very people who ran Detroit into the ground, like the GM CEO making $14 million to run his company into bankruptcy, get even more money. Please explain why we should be concerned about lining the pockets of these incompetents?<br>
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We're under the "thought" that they are built in the USA? There are a lot of "foreign" vehicles built in the USA by AMERICAN workers. And there are "domestic" vehicles built by MEXICAN and CANADIAN workers. You need to do your research a bit better.<br>
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And why are you are concerned with making sure the very people who ran Detroit into the ground, like the GM CEO making $14 million to run his company into bankruptcy, get even more money. Please explain why we should be concerned about lining the pockets of these incompetents?<br>
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ditto what Brian said, let the big three go to h---. The US will get over it and the unions will go away like they should
Bobcat, when the Big three corporate officers show up on private learjets and the head of the UAW says they are not willing to take any contract concessions the writing is on the wall.
None of the Big Three plan on using the money for re-tooling the assembly lines. They need the capital to run the day to day operation. Let me put it to you simply.."they want your tax dollars to pay for past & current inefficincies and to pay retirement and medical benefits for those that retured after 20 years of service." Money well spent? I think not. There best avenue is filing for re-organization through the legal system.
Rick
None of the Big Three plan on using the money for re-tooling the assembly lines. They need the capital to run the day to day operation. Let me put it to you simply.."they want your tax dollars to pay for past & current inefficincies and to pay retirement and medical benefits for those that retured after 20 years of service." Money well spent? I think not. There best avenue is filing for re-organization through the legal system.
Rick
The big 3 are in trouble but the Imports (that are made in America, by American auto workers) are not ... I wonder if it just might be the way the companys are run as opposed to the difference in quality of said products ...We just recently puschased a new vehicle and after the fast shuffle I was given at the Chevrolet dealer we went to the Hyundai dealer and bought a new Hyundai Azera Limited without all of the hassles and it has a better warrantee than the so called American made Chevrolet ... I say let the Big 3 go under and be done with it ... I won't buy their cars so why in the world would I want my tax money to bail them out of the hole they created for themself ... I do extensive research before I buy a big ticket item such as a car or truck and the Imports have it all over the Big 3 automakers in more ways than one ... Thats just the way it is ... WPT ... (YAC) ...
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The $25 billion is referred to as a "bridge" loan. It's purpose will be to support cash flow until auto sales turn around. That's the short answer.
The insurance companies which insure the CEO's, and other high-ranking executives for the Big Three often require that they fly privately. Security reasons are often the most cited. They do not fly alone on those jets. They have staff which accompany them, and their transportation costs have to be considered, also. These jets do not have luxury amenities, contrary to what most folks think. Neither are they Spartan. They are flying offices. When a corporate officer flies from Detroit to LA, for example, they get in about six hours more work than when flying commercial. No killing time in boarding lines. No waiting for limos or taxis.
Most of you forget just how much these guys work. They're "married" to the companies for which they work. The eleventh floor at Ford WHQ is lit long after the bottom ten are darkened. Twelve-to-fifteen hours are the norm, not the exception. On the weekends, while we're at the gun clubs, they're working at home, or the office, and their staffs do the same.
These guys got to the top because they are masters at organizing themselves, their work, and their organizations.
The questions you should be asking is, "What those socialists/collectivists in Congress are doing to cut waste and spending in government?"
I'm no fan of the the UAW and its "jobs bank". However, those folks collect a percentage of pay IN LIEU, of state-paid unemployment. The Big Three are self-insured, when it comes to unemployment. They don't pay a separate insurance company. They often work at charities during the day. Yes, the Big Three also donate thousands of labor hours to local charities. There are some anecdotal stories about watching TV all day long, but that's true with even the Teamsters and steel workers unions. So don't bash only the UAW.
RICO46 - Nobody at the Big Three retires after 20 years of service. You must be thinking of the fat [email protected]@rds who have municipal and state jobs.
Here's a basic lesson in how profits are applied -
The "transplant" companies, Toyota, Honda, Kia, Mercedes, etc., take their profits back to their home countries, whether Japan, Germany, or South Korea, and they usually get preferential state tax treatment here for having an assembly plant here.
The domestic companies, Ford, Chrysler, GM, etc., all take their profits back to the United States, where they are taxed twice. First, they are taxed at the highest corporate tax rate in the world. The profits are then taxed a second time, whenever stock dividends are paid to shareholders. Dividends are taxed at the rate of the last dollar into your taxes, the highest.
And it's such a deal to manufacture in Mexico. Were it not for the cheaper labor rates, it wouldn't be worth the hassle to deal with the Mexican government. Their own people fear the tax authorities there, much worse than the banditos in the hills.
Dennis
The insurance companies which insure the CEO's, and other high-ranking executives for the Big Three often require that they fly privately. Security reasons are often the most cited. They do not fly alone on those jets. They have staff which accompany them, and their transportation costs have to be considered, also. These jets do not have luxury amenities, contrary to what most folks think. Neither are they Spartan. They are flying offices. When a corporate officer flies from Detroit to LA, for example, they get in about six hours more work than when flying commercial. No killing time in boarding lines. No waiting for limos or taxis.
Most of you forget just how much these guys work. They're "married" to the companies for which they work. The eleventh floor at Ford WHQ is lit long after the bottom ten are darkened. Twelve-to-fifteen hours are the norm, not the exception. On the weekends, while we're at the gun clubs, they're working at home, or the office, and their staffs do the same.
These guys got to the top because they are masters at organizing themselves, their work, and their organizations.
The questions you should be asking is, "What those socialists/collectivists in Congress are doing to cut waste and spending in government?"
I'm no fan of the the UAW and its "jobs bank". However, those folks collect a percentage of pay IN LIEU, of state-paid unemployment. The Big Three are self-insured, when it comes to unemployment. They don't pay a separate insurance company. They often work at charities during the day. Yes, the Big Three also donate thousands of labor hours to local charities. There are some anecdotal stories about watching TV all day long, but that's true with even the Teamsters and steel workers unions. So don't bash only the UAW.
RICO46 - Nobody at the Big Three retires after 20 years of service. You must be thinking of the fat [email protected]@rds who have municipal and state jobs.
Here's a basic lesson in how profits are applied -
The "transplant" companies, Toyota, Honda, Kia, Mercedes, etc., take their profits back to their home countries, whether Japan, Germany, or South Korea, and they usually get preferential state tax treatment here for having an assembly plant here.
The domestic companies, Ford, Chrysler, GM, etc., all take their profits back to the United States, where they are taxed twice. First, they are taxed at the highest corporate tax rate in the world. The profits are then taxed a second time, whenever stock dividends are paid to shareholders. Dividends are taxed at the rate of the last dollar into your taxes, the highest.
And it's such a deal to manufacture in Mexico. Were it not for the cheaper labor rates, it wouldn't be worth the hassle to deal with the Mexican government. Their own people fear the tax authorities there, much worse than the banditos in the hills.
Dennis
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Notice: I am not being flippant here, not one word of sarcasm is intended, nor implied. My choice of words are intended to bring a sharp point to the discussion.
If 25 Billion is a "bridge loan", it's another bridge-to-nowhere.
I've seen the big-3 jets, actually ridden in one. They are opulent, and they are extremely expensive to run, and there are several in each fleet. The top dogs do work long hours, but even working 16 hours a day it's about $3500 an hour. What's more, the UAW dogs came in for the hearing on their own jets.
Now, if, and it's a BIG IF, they were making a profit with that work ethic, I'd say pay it - gladly. BUT, and it's a BIG BUT, they are NOT! NO ONE deserves to make huge bonuses when the company is LOOSING money! Ford is loosing a new Mustang every minute of the day (24/7). Imagine an endless line of car thieves driving a new Mustang out of the front gate for as far as you can see. That's the accurate picture.
Big salaries and bonuses are an insiders game. A game run by both the executives and the UAW. It's time to take the ego's out of this debacle, and take the keys away from them all. It's a sad state of affairs, but the Taxpayer stands a better chance in Bankruptcy Court than in Congress.
Money is always a short-term motivator. As soon as they have it, it will be right back to the old ways. Don't think so, look at what 700 Billion did for Wall Street........... America, we need to develop longer memories.
IMHO,
Kip
If 25 Billion is a "bridge loan", it's another bridge-to-nowhere.
I've seen the big-3 jets, actually ridden in one. They are opulent, and they are extremely expensive to run, and there are several in each fleet. The top dogs do work long hours, but even working 16 hours a day it's about $3500 an hour. What's more, the UAW dogs came in for the hearing on their own jets.
Now, if, and it's a BIG IF, they were making a profit with that work ethic, I'd say pay it - gladly. BUT, and it's a BIG BUT, they are NOT! NO ONE deserves to make huge bonuses when the company is LOOSING money! Ford is loosing a new Mustang every minute of the day (24/7). Imagine an endless line of car thieves driving a new Mustang out of the front gate for as far as you can see. That's the accurate picture.
Big salaries and bonuses are an insiders game. A game run by both the executives and the UAW. It's time to take the ego's out of this debacle, and take the keys away from them all. It's a sad state of affairs, but the Taxpayer stands a better chance in Bankruptcy Court than in Congress.
Money is always a short-term motivator. As soon as they have it, it will be right back to the old ways. Don't think so, look at what 700 Billion did for Wall Street........... America, we need to develop longer memories.
IMHO,
Kip
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1,566 Posts
Kip,
Re: Your statement, "It's time to take the ego's out of this debacle, and take the keys away from them all. It's a sad state of affairs, but the Taxpayer stands a better chance in Bankruptcy Court than in Congress."
The end-result of any bankruptcy for a company the size of GM or Ford would be catastrophic in terms of sales. No one will buy the cars of any company coming out of bankruptcy. That (those) company (-ies) will never recover to anywhere near their size and sales volumes prior to Chapter 11.
We're not talking about some company making transistor radios, or washing machines. The size of the design, engineering, manufacturing, and finance systems do not scale down. What part of the materials system would you like to downsize, and still get the volume of parts, on time, and correctly, to assembly plants? You can't downsize that system to one or two plants.
You can't arbitrarily shut off bonuses, when they are established to reward employees for achievement of specific annual goals. And not all employees who receive bonuses are VP's or general managers. People take risks, and deserve rewards, even in tough times. William Clay Ford, Jr., gets no salary or bonus, and hasn't, in several years. Salaried employees, in non-managerial positions get annual merit raises, since they get no automatic raises. For several years, our merit raises were deferred as much as six months because of losses.
During my career there, I flew on our jets and the turboprops, and none of them were "opulent" by any stretch of the imagination, comfortable, yes.
You are not "paying" for anything when it comes to the auto companies. These are LOANS, not tax money gifts. They will be repaid.
We never went "right back to the old ways" after downturns in the Company. We came out smarter, leaner, and better equipped to compete in the future.
In 1982, among twenty-two assembly plants, there were over 125 product cost accountants. As a result of our efforts in automating accounting processes, we eliminated over EIGHTY PERCENT of those positions, and moved the operations to a central location where we achieved reductions of an additional sixty percent in the next eight years. Eventually, head count was reduced to five accountants. This includes ALL North American locations (U.S., Canada, Mexico). In fact, I managed to eliminate my own job, and I gladly did it. I used my skills in accounting and data systems to move into Information Technologies, and finished the last thirteen years there.
You're still missing the point of the current problem. The sales of the Big Three (as well as the transplants) were already depressed as a result in a lag in the business cycle. Sales were then dealt a huge blow by the collapse of the credit markets. People just stopped buying cars and trucks. It has nothing to do with our product development, design, fuel economy, or any other measure of success. It was entirely brought about by a scandal with Fannie Mae/Freddie Mac. The resulting melt down ruined, for years to come, the ability for people to borrow money, since there is no confidence that the loaned money will be repaid. Since when is that the fault of GM, Ford, or Chrysler?
The county executive of Oakland County, Michigan, summed it up nicely, when he said, "Why do the Big Threee have to come on hands and knees to Congress, begging for money, when it was the fault of those sons of bitches (Congress), to begin with?"
Dennis
Re: Your statement, "It's time to take the ego's out of this debacle, and take the keys away from them all. It's a sad state of affairs, but the Taxpayer stands a better chance in Bankruptcy Court than in Congress."
The end-result of any bankruptcy for a company the size of GM or Ford would be catastrophic in terms of sales. No one will buy the cars of any company coming out of bankruptcy. That (those) company (-ies) will never recover to anywhere near their size and sales volumes prior to Chapter 11.
We're not talking about some company making transistor radios, or washing machines. The size of the design, engineering, manufacturing, and finance systems do not scale down. What part of the materials system would you like to downsize, and still get the volume of parts, on time, and correctly, to assembly plants? You can't downsize that system to one or two plants.
You can't arbitrarily shut off bonuses, when they are established to reward employees for achievement of specific annual goals. And not all employees who receive bonuses are VP's or general managers. People take risks, and deserve rewards, even in tough times. William Clay Ford, Jr., gets no salary or bonus, and hasn't, in several years. Salaried employees, in non-managerial positions get annual merit raises, since they get no automatic raises. For several years, our merit raises were deferred as much as six months because of losses.
During my career there, I flew on our jets and the turboprops, and none of them were "opulent" by any stretch of the imagination, comfortable, yes.
You are not "paying" for anything when it comes to the auto companies. These are LOANS, not tax money gifts. They will be repaid.
We never went "right back to the old ways" after downturns in the Company. We came out smarter, leaner, and better equipped to compete in the future.
In 1982, among twenty-two assembly plants, there were over 125 product cost accountants. As a result of our efforts in automating accounting processes, we eliminated over EIGHTY PERCENT of those positions, and moved the operations to a central location where we achieved reductions of an additional sixty percent in the next eight years. Eventually, head count was reduced to five accountants. This includes ALL North American locations (U.S., Canada, Mexico). In fact, I managed to eliminate my own job, and I gladly did it. I used my skills in accounting and data systems to move into Information Technologies, and finished the last thirteen years there.
You're still missing the point of the current problem. The sales of the Big Three (as well as the transplants) were already depressed as a result in a lag in the business cycle. Sales were then dealt a huge blow by the collapse of the credit markets. People just stopped buying cars and trucks. It has nothing to do with our product development, design, fuel economy, or any other measure of success. It was entirely brought about by a scandal with Fannie Mae/Freddie Mac. The resulting melt down ruined, for years to come, the ability for people to borrow money, since there is no confidence that the loaned money will be repaid. Since when is that the fault of GM, Ford, or Chrysler?
The county executive of Oakland County, Michigan, summed it up nicely, when he said, "Why do the Big Threee have to come on hands and knees to Congress, begging for money, when it was the fault of those sons of bitches (Congress), to begin with?"
Dennis
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10,360 Posts
Thirty years ago, a very wise owner of a GM dealership told me that eventually, a dealer would occasionally sell a new car and depend on service to survive.
Also, dealers would eventually sell a complete line of cars, like a gun shop selling different brands of firearms.
This means the auto makers will scale way down. Why the auto maker insists on making an auto like an airplane without wings is beyond me. This has simply put them out of reach for the average buyer. My last 7 cars have been Cadillacs, but I will not pay $70K for my next one!
I prefer to buy domestic, but the last Cadillac I bought was badly overpriced, and has cost a lot of money for repairs.
I may well look at a reasonably priced, reliable import for my next auto.
I truly do not think, with the current state of Federal and State labor laws, that Unions are good for today's economy.
Also, dealers would eventually sell a complete line of cars, like a gun shop selling different brands of firearms.
This means the auto makers will scale way down. Why the auto maker insists on making an auto like an airplane without wings is beyond me. This has simply put them out of reach for the average buyer. My last 7 cars have been Cadillacs, but I will not pay $70K for my next one!
I prefer to buy domestic, but the last Cadillac I bought was badly overpriced, and has cost a lot of money for repairs.
I may well look at a reasonably priced, reliable import for my next auto.
I truly do not think, with the current state of Federal and State labor laws, that Unions are good for today's economy.
auto workers make $75 per hour. what's in your wallet????? most of the big 3 are made in canada or mexico. this is just like the stock market. they could cut the price of all their cars and still sell them for a profit. just like the stock market. wake up and smell the grease. 0z
Dennis- I do not disagree with any of your post. You are much more knowledgeable in this area than I am. I do have two questions. Are you certain that bankruptcy would depress income (sales) more than it would help by cutting expenses? Also, the banks I deal with are very eager to loan money. They are requiring that the borrower be in a position to pay back the loan. If the large lenders are skeptical about the ability of GM to repay a loan, why should the government be certain that they will repay the loan? I fear that if the government grants the loan, it will have so many strings and ear marks, that it might not really help the auto industry.
Pat Ireland
Pat Ireland
I just watched a special on the "Big" 3's up and coming life savers. The Chevy Volt at about $40,000 and the Ford's new electric car both of which are about double the cost of the Toyota and other electric cars. Chrysler is pushing their new "Muscle Car" at about 13 miles to the gallon.
No frigin' wonder they are in the shape they are in!!!!
In my opinion, the "Big 3" need to go bankrupt then start over with new ideas, a new union, and new management.
No frigin' wonder they are in the shape they are in!!!!
In my opinion, the "Big 3" need to go bankrupt then start over with new ideas, a new union, and new management.
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