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Automakers promise to cut salaries, ditch planes (http://www.detnews.com/apps/pbcs.dll/article?AID=/20081202/AUTO01/812020426/1148)

excerpts...

The chiefs of both Ford and GM would cut their salaries to $1

they are grounding their corporate jet fleets

Ford's business plan projects that with a $9 billion federal line of credit the Dearborn-based carmaker can return to profitability sometime in 2011

Ford also will introduce electric vehicles and plug-in hybrids within three years

will seek more union concessions and trim its lineup of suppliers and dealers

CEO Alan Mulally -- who was paid $21 million last year -- would cut his salary to $1 only if Ford draws on the government money

GM's plan has CEO Rick Wagoner cutting his salary from $2.2 million this year to $1

The plan also outlines GM's plans to cut hourly costs, shrink its dealer network and sell up to four brands

Detroit-based GM already announced it is selling Hummer, and it may say it will try to sell its Saab, Saturn and Pontiac brands

Privately held Chrysler LLC has been quieter so far today about details of the turnaround plan

Apparently, they drove to Washington in hybrids...

More on The Plan (http://news.bbc.co.uk/2/hi/business/7761015.stm)

The company's heads decided not to use private jets to get to Washington this time to avoid criticism.

GM chief executive Rick Wagoner and Ford chief executive Alan Mulally are both said to be driving one of their own companies' hybrid cars from Detroit, while Chrysler boss Bob Nardelli will not use a corporate jet.


I guess that Nardelli may have hitch-hicked :huh:.  Chrysler does seem pretty desparate.

Too many symbolic gestures, too vague where it counts.

Chrysler canned their hybrids before Nardelli could drive one.

LOL - driving a hybrid car from Detroit! An even bigger joke than plug-in hybrids and electric vehicles!

How about building high-quality, competitive, cost-effective small and medium-sized vehicles while paying your manufacturing labor realistic wages and benefits??? Seems to work for most anyone else...

I'm almost embarrassed for the CEOs letting themselves get pimped by know-nothing politicians and the MSM, but alas, they're paid the big bucks to take the bullets.

Maybe I'm not a dyed in the wool capitalist, but the concept of fat-cat CEOs making huge money while their ship sinks is irritating to a lot of americans.  I don't see the point in CEOs making no money; they should be rewarded for their work, they clearly must be something special to be leading a corporation.  But refusing to take a pay cut, or in Mulally's case taking home 21mil while his company spirals down the toilet is downright irresponsible.

For me to accept the concept of a bailout, Ford and GM would need to fire the top level management and start over fresh with some new talent, they would need to be allowed by the federal government to void their contract with labor unions and start over (whether with a restructured union agreement that isn't so ridiculous or with non-union labor, which I would prefer). And they would need to take a page from their successful competitors such as Toyota and run a lean, efficient machine.

Quote from: R-inge on December 02, 2008, 04:02:37 PM
Maybe I'm not a dyed in the wool capitalist, but the concept of fat-cat CEOs making huge money while their ship sinks is irritating to a lot of americans.  I don't see the point in CEOs making no money; they should be rewarded for their work, they clearly must be something special to be leading a corporation.  But refusing to take a pay cut, or in Mulally's case taking home 21mil while his company spirals down the toilet is downright irresponsible.

For me to accept the concept of a bailout, Ford and GM would need to fire the top level management and start over fresh with some new talent, they would need to be allowed by the federal government to void their contract with labor unions and start over (whether with a restructured union agreement that isn't so ridiculous or with non-union labor, which I would prefer). And they would need to take a page from their successful competitors such as Toyota and run a lean, efficient machine.

Ford management knows however that Mullaly would make as much or more at dozens of other Fortune 500 companies.

Rick Wagoner making $2.2 million last year is very reasonable in my book, especially considering before the economic meltdown, GM was doing fairly well in the turnaround. 

Also, driving down from Detroit to Washington D.C. in a car is a huge waste of their time. It makes me just as mad that they are spending an entire day driving down versus a few hours when their companies are on the verge of bankruptcy. I blame the public's irrational criticism for this.

Would anybody buy Pontiac, Saturn, or Saab anyways? I can see buying Saab (hopefully Ford sells Volvo and Saab and Volvo team up), but the other two are virtually worthless.

Quote from: GoCougs on December 02, 2008, 03:27:20 PM
LOL - driving a hybrid car from Detroit! An even bigger joke than plug-in hybrids and electric vehicles!

How about building high-quality, competitive, cost-effective small and medium-sized vehicles while paying your manufacturing labor realistic wages and benefits??? Seems to work for most anyone else...

Woah...easy there...that makes way to much sense.  ;)

I'm almost embarrassed for the CEOs letting themselves get pimped by know-nothing politicians and the MSM, but alas, they're paid the big bucks to take the bullets.

GM to streamline brands: Sell Saab, shrink Pontiac, close or sell Saturn

General Motors announced today that it plans to refocus its dwindling resources on its core brands - Chevrolet, Buick, Cadillac and GMC - and sell Swedish automaker Saab, shrink Pontiac to a niche brand and either discontinue or sell Saturn depending on its value. The automaker will cut one-third of its current nameplates by 2012 and lose about 1,700 of its 6,400 dealerships.

The new, streamlined GM will debut by 2012, the automaker told the United States Congress today as a part of its restructuring plan.

Saab

GM President Fritz Henderson told reporters that Saab is essentially on the market effective immediately, though the automaker is conducting an ?expedited and strategic review? of the brand. GM has owned Saab since 2000, though it has had a stake in the Swedish luxury automaker for nearly 20 years. Potential suitors for Saab haven?t been named.

Saturn

Henderson told Automotive News that Saturn ?is just not successful.? He declined to specify whether the brand would be folded or sold off, though most analysts say that Saturn?s value is quite limited. Henderson said that the automaker would discuss the brand?s future with its dealer group before making an official decision.

Pontiac

Pontiac will become a ?specialty niche? brand, according to Henderson. This likely means the brand will be trimmed down to core performance models and that the volume models, G5 and G6, will probably not be replaced. Speculation earlier today about the future of the slow-selling G8 leads us to believe it will probably not be replaced, either, and the automaker has reportedly canned the next-generation Solstice.

?Pontiac will be more of a high-value performance brand, like Corvette to Chevrolet,? Mark LaNeve, GM?s North American vice president of sales, told the Detroit News.

Further restructuring

GM says it will continue cutting up to 30,000 workers by 2012 and continue closing up to at least nine plants. The automaker said it will also slash more than 1,700 of its 6,400 dealers.

The automaker?s plan calls for negotiating with the UAW to help cut manufacturing costs further, as well as with lenders and bondholders to cut back about $35.6 billion of the automaker?s $66 billion in debt.

$18 billion

GM requested $18 billion of the $25 billion the three automakers are asking in low-interest loans from the U.S. government. That figure is quite a bit higher than the $10 to $12 billion that CEO Rick Wagoner requested two weeks ago when he first met with Congress.

Four billion dollars are needed by the end of December, GM says, or, according to Henderson, ?the company cannot fund its operations.? He refused to confirm or deny that GM would go into bankruptcy, but the statement is still pretty clear about how dire GM?s need has become.

Absent such assistance, the company will default in the near term, very likely precipitating a total collapse of the domestic industry and its extensive supply chain, with a ripple effect that will have severe, long-term consequences to the U.S. economy,? the automaker wrote in its report to Congress.

Salary cuts

In response to concerns about executive compensation, Wagoner will take a $1 annual salary.

Henderson, who received $1.9 million last year, will take a 30 percent cut, while three others - Vice Chairman Bob Lutz, Chief Financial Officer Ray Young and Tom Stephens, executive vice president of GM powertrain and global quality - will all take 20 percent cuts.

GM?s Board of Directors will also reduce their annual retainer to $1 in 2009.

Chrysler requests $7b loan, promises efficient gas and electric vehicles

Given its lean current condition, it comes as little surprise that the proposal Chrysler LLC issued to the United States Congress earlier today outlines fewer future product changes than the proposal issued by General Motors. Chrysler, in its request for a low-interest $7 billion loan, detailed its plan to bring more efficient gasoline and electric vehicles to the market.

Though it would be hard to say whether it is in more dire straits than General Motors, Chrysler announced that it will have just $2.5 billion in cash at the beginning of 2009. The automaker says its cash level will fall below the amount needed to operate during the first quarter of 2009 without the loan.
Unlike General Motors, which vowed to drastically cut its product lineup in its plan, Chrysler?s outline was more akin to Ford?s in that it discussed the automaker?s green future model line, though Chrysler neglected to specify any details on cost-savings plans.

Chrysler says it intends to bring 24 new models to dealer showrooms by the end of 2012, including a ?wide portfolio of hybrid electric-drive vehicles.?
Chrysler intends to introduce its first full-function electric-drive model by 2010 with the eventual goal of 500,000 units on the road by 2013.
The automaker also says it intends to increase international partnerships - like the one with Nissan that will see Dodge-badged Nissan Versas for sale in South America and Nissan-badged Dodge Rams for North America.

The plan neglects to mention what Chrysler would do to reduce costs, however. The automaker has already slashed thousands of jobs, closed factories and reduced CEO Bob Nardelli?s salary to $1 annually. Chrysler apparently won?t cut or sell any brands - most analysts view Jeep as the most valuable brand in the automaker?s lineup and say that Dodge and especially Chrysler division are of limited value.

Ford details business plan to Congress

Ford Motor Company has released details of the plan its CEO, Alan Mulally, is currently presenting to the United States Congress in Washington, D.C. In the plan, Ford asks for up to $9 billion in bridge financing and says that it intends to invest up to $14 billion in the U.S. over the next seven years to develop more fuel efficient cars and that it will work to reduce costs, including canceling all 2009 management bonuses.

There aren?t many shocking statements in Ford?s plan. It can essentially be broken up into two themes: Cost savings and future products.

Cost savings

Ford confirmed in a statement released to the media that it is selling its fleet of five corporate jets. As we previously reported, Mulally plans to take a salary cut to $1 annually if the U.S. government approves the loan, though there?s no timeline detailing when his compensation would increase. Ford also confirmed that it will continue cutting dealers and the number outsourcing suppliers it will consider for work. Ford looks to cut the number of potential suppliers from 3,400 to 750.
All bonuses to be paid in 2009 have been canceled, the automaker said, adding that no employee will receive a merit increase in 2009, either.

Future products

Ford said it plans to invest $14 billion on advanced technologies and products over the next seven years. It said that by 2014, more than 90 percent of the models Ford, Lincoln and Mercury offer will be considered ?Advanced Technology Vehicles? by the U.S. Energy Independence and Security Act.

At next month?s North American International Auto Show in Detroit, Ford says it will discuss in detail the company?s ?accelerated vehicle electrification plan,? which will include a family of hybrid vehicles on the market by 2012 and battery-electric vehicles for commercial use in 2010 and a sedan in 2011.
Ford?s plan doesn?t specifically detail negotiations the automaker is currently having with the UAW.

I just saw the newspaper a few minutes ago, one of the headings was "Ford to advance green car timeline" or something like that. I thought "ooo, expedited Fiesta! C-MAX! Ka! :wub:" Then I read the column and saw that they were referring to electrics. Piffle. :rage:

I really hope congress does not bail out Chrysler. It is a waste of money!

Hmm...

18+9+7 /=25

Quote from: TBR on December 02, 2008, 05:44:53 PM
Hmm...

18+9+7 /=25

They want $34B now, the statements listed the old $25B figure from the first time they asked congress. I have to say, kudos for congress in making the Big 3 release a business plan as to what they are doing with the money, the executives seem to have given more thought about what their companies need to do. I wish the banks had to give us a little more insight as to what is going on with their billions of government money.

It will be interesting to see if anyone buys Saab. It'll probably be a while if anyone does considering the market.

Quote from: CosmicSaab on December 02, 2008, 05:54:17 PM
It will be interesting to see if anyone buys Saab. It'll probably be a while if anyone does considering the market.

I'll buy Saab.

I won't buy a Saab, but I'll buy Saab. 

Quote from: CosmicSaab on December 02, 2008, 05:54:17 PM
It will be interesting to see if anyone buys Saab. It'll probably be a while if anyone does considering the market.

The problem with the plan of someone buying Saab or any of their companies is that few can afford to do so right now, and even fewer banks have the capital to lend for such a transaction. Perhaps bailout bank money can be used?

Quote from: Raza  link=topic=16678.msg936486#msg936486 date=1228265809
I'll buy Saab.

I won't buy a Saab, but I'll buy Saab. 

Let's pool our money.  I've got $11 CDN ($8 USD).

Quote from: Colonel Cadillac on December 02, 2008, 05:53:42 PM


They want $34B now, the statements listed the old $25B figure from the first time they asked congress. I have to say, kudos for congress in making the Big 3 release a business plan as to what they are doing with the money, the executives seem to have given more thought about what their companies need to do. I wish the banks had to give us a little more insight as to what is going on with their billions of government money.

I wish the government would give us a little more insight on whats going with their billions of our money.

Quote from: TBR on December 02, 2008, 06:35:46 PM
I wish the government would give us a little more insight on whats going with their billions of our money.

Hah, good point there. That makes me ask another question, why the hell did we enter Iraq if weapons of mass destruction was not the reason? That's been a pretty big waste of taxpayer money.

Quote from: Colonel Cadillac on December 02, 2008, 06:43:08 PM


Hah, good point there. That makes me ask another question, why the hell did we enter Iraq if weapons of mass destruction was not the reason? That's been a pretty big waste of taxpayer money.

Complicated issue well beyond the scope of this thread....

I don't care about $1 salaries, grounding jets, and all that crap. I want to see improvements in areas where is really counts. I want to see more efficient manufacturing, more flexible factories and plants, cutting costs where is doesn't matter but keeping the product a quality product. Things like that show me that the company wants to change. The things they said tell me that they want to get back to where they were before and then go back to those bad habits.

Quote from: hotrodalex on December 02, 2008, 07:00:07 PM
I don't care about $1 salaries, grounding jets, and all that crap. I want to see improvements in areas where is really counts. I want to see more efficient manufacturing, more flexible factories and plants, cutting costs where is doesn't matter but keeping the product a quality product. Things like that show me that the company wants to change. The things they said tell me that they want to get back to where they were before and then go back to those bad habits.

It sounds like Chrysler is going down that path for sure and I believe it to be a bad idea to bail them out--Chrysler represents the excess in the auto industry and needs to be shut down, almost all of their cars save the minivans, new Rams, and some Jeeps, are completely unsatisfactory and cannot compete with the rest of the industries' products.

Ford has had a good restructuring plan for the past few years and the products they have been turning are competitive in the market, it's just that consumer confidence in their products was shot through horrible products 10-20 years ago and it needs to be regained. With the government money, they will be turning out a different type of product (fuel efficient cars, electric cars etc) which is entirely a new direction for Ford and a good direction, perhaps their brand image will shift back towards a positive one. I believe they can return to profitability, hopefully by 2011 as they say, but we'll see. Hopefully on top of a change in product strategy, they also enact major cost-cutting, and that was mentioned. They should be closing Mercury like GM is Saturn and hopefully Pontiac (let's face it, nobody will buy them), so that irks me that they are not.

GM is shutting down their excess makes, Saturn, hopefully Pontiac, and attempting sales of Hummer and Saab, also to remove the excess in the auto market, something they should have done long ago but would never have been able to do. They are also going to be moving towards different product strategies similar to Ford, and that should be beneficial. Also, they are cutting much of the workforce and are generally downsizing. The company was too big and had too many similar products, things were inefficient; they won't be nearly as inefficient in the future having one economy brand, Chevy, two luxury brands, Cadillac and Buick (they should get rid of Buick North America, but that is not a part of the plan, not good), and one SUV/Truck brand, GMC. They should have one of each, but they are keeping Buick which is a mistake. Otherwise, they look to be going in the right direction

The current situation the Big Three are in is quite an eye opener for them and hopefully the UAW and they are learning not to take certain situations for granted--they must always innovate and build quality products. They cannot take brand loyalty for granted like they did.

Quote from: Secret Chimp on December 02, 2008, 03:14:42 PM
Too many symbolic gestures, too vague where it counts.

I think that's probably right.  I'd need to hear a lot more details.  It's awfully late to be thinking of this stuff -- by about 30 years.

Maybe its time to bail out the dealerships too...


http://www.cbsnews.com/stories/2008/12/02/eveningnews/main4644132.shtml?tag=lowerContent;homeSectionBlock201

Quote from: JWC on December 02, 2008, 07:44:58 PM
Maybe its time to bail out the dealerships too...


http://www.cbsnews.com/stories/2008/12/02/eveningnews/main4644132.shtml?tag=lowerContent;homeSectionBlock201

Yes, let's bail out every failing enterprise.

This whole bail out mess is going to have to fall of its own weight.

I get the feeling that all this is actually going to prolong our economic problems, by preventing us from making the adjustments necessary to get our economy healthy again for the long run.  Let's not forget that our current problems have come about at least in part because of the actions we took to prevent a recession at the end of the last cycle.

Do liberals even believe in evolution anymore?

First, save all the dying species on the earth for fear that without even one, the whole food chain will fail.   I know life's been hell for me ever since the demise of the Dodo bird.

If they truly believe in the survival of the fittest, then some companies will fail and the stronger ones, the ones with foresight and good leadership will survive.  You can not bail out everyone. 

If my dealership fails, then all my customers will go to the next dealer.  With all the extra business, they will need more techs and service advisers and the jobs will be filled by those who lost their jobs elsewhere.  Not to mention a larger building, so contractors go back to work to enlarge the other dealer.

Right now, my dealership and the nearest other Ford dealer are running out of work by 2-3pm and what we do have is mostly oil changes and tire rotations.  It isn't enough for both to survive. They have already started laying off office personnel.  With a bailout though, we can delay the eminent failure of one or both for another year or so....or business can return to the levels it was one year ago.  (Though two years ago was even better).

One thing to keep in mind: Ford only requested a credit line and not a loan. They say that they might not need the money but they'd like the option to be available if needed.

I'm kind of an optimist and I'd like to believe that thats the case and its not some PR line.

Quote from: JWC on December 02, 2008, 08:33:57 PM
Do liberals even believe in evolution anymore?

First, save all the dying species on the earth for fear that without even one, the whole food chain will fail.   I know life's been hell for me ever since the demise of the Dodo bird.

If they truly believe in the survival of the fittest, then some companies will fail and the stronger ones, the ones with foresight and good leadership will survive.  You can not bail out everyone. 

If my dealership fails, then all my customers will go to the next dealer.  With all the extra business, they will need more techs and service advisers and the jobs will be filled by those who lost their jobs elsewhere.  Not to mention a larger building, so contractors go back to work to enlarge the other dealer.

Right now, my dealership and the nearest other Ford dealer are running out of work by 2-3pm and what we do have is mostly oil changes and tire rotations.  It isn't enough for both to survive. They have already started laying off office personnel.  With a bailout though, we can delay the eminent failure of one or both for another year or so....or business can return to the levels it was one year ago.  (Though two years ago was even better).

In most cases, that's all bailouts really do -- delay the inevitable.

Quote from: Danish on December 03, 2008, 01:29:02 AM
One thing to keep in mind: Ford only requested a credit line and not a loan. They say that they might not need the money but they'd like the option to be available if needed.

I'm kind of an optimist and I'd like to believe that thats the case and its not some PR line.

Most of us remember that Ford mortgaged the house when credit was available a couple of years ago.  That's what's carrying them now.  As well, going back at least 7-8 years, after the foolish Nasser was booted out and Bill Ford took over, they started some serious restructuring with plans to be profitable within a stated number of years.  A lot of the ground-work had been done by the time Mulally joined the company and, seemingly, he is part of the answer...inspite of the failed economy.  They just might make it and Mulally may even get to keep his big salary.  If he does, he'll have earned it.

A little more news...

Situation is far worse than we thought (http://www.detnews.com/apps/pbcs.dll/article?AID=/20081203/OPINION03/812030391/1148/AUTO01)... teetering General Motors Corp. says it needs $12 billion in cash -- a third of it by the end of this month -- and a $6 billion credit line to make it into next year.


I'd sure like to see what's in their plan details...Four quick thoughts to the most detailed corporate striptease this town has ever seen: It's far worse than many thought, especially at GM. Second, "the Big Three automakers" are not a monolith mired in identical dire straits, as the Senate Banking House Financial Services committees will see later this week. Third, members of Congress hoping for an easy call on the Detroit loan package won't get one -- and some of them are likely to be scared stiff after they read the automakers' plans, particularly GM's 37-page doozy that could have been subtitled "Prelude to the Apocalypse."

I guess the UAW got a copy of the plan...UAW leaders meet at 10 a.m. on domestic auto crisis (http://www.detnews.com/apps/pbcs.dll/article?AID=/20081203/AUTO01/812030417/1148).

Even they must accept that the party's over.

Quote from: hotrodalex on December 02, 2008, 07:00:07 PM
I don't care about $1 salaries, grounding jets, and all that crap. I want to see improvements in areas where is really counts. I want to see more efficient manufacturing, more flexible factories and plants, cutting costs where is doesn't matter but keeping the product a quality product. Things like that show me that the company wants to change. The things they said tell me that they want to get back to where they were before and then go back to those bad habits.

Translation: Get rid of the UAW.  I agree  :evildude:

The plans laid out by each respective company don't go far enough. The bull with the electric cars is just an early 1990s redux.

They need Chapter 11 to fix themselves.

I just read some highlights of the propsals from the Big 3...  This has just gotten rediculous. 

To please the grandstanding congressmen, Chrysler has pledged no raises or merit bonuses for any North American salary worker.  Good f'in luck to them retaining any kind of worthwhile engineer if your promising no salary increases AND cutting their performance bonuses.  Cutting the CEO pay to $1?!?!?  Good f'in luck getting any worthwhile replacements if any of the CEO's quit and their replacements can only be paid $1 a year.

GM and Chrysler WILL kill themselves with their own proposals.  Ford is about the only one that stands a chance (particularly if they get all of GM's customers)

There is no engineering culture left to kill at Chrysler.

Quote from: HEMI666 on December 02, 2008, 05:22:22 PM
Pontiac

Pontiac will become a “specialty niche” brand, according to Henderson. This likely means the brand will be trimmed down to core performance models and that the volume models, G5 and G6, will probably not be replaced. Speculation earlier today about the future of the slow-selling G8 leads us to believe it will probably not be replaced, either, and the automaker has reportedly canned the next-generation Solstice.

“Pontiac will be more of a high-value performance brand, like Corvette to Chevrolet,” Mark LaNeve, GM’s North American vice president of sales, told the Detroit News.

So basically, Pontiac is the brand that should have the Corvette and Camaro? Good luck with that, GM.

Quote from: 3.0L V6 on December 03, 2008, 09:09:33 AM
They need Chapter 11 to fix themselves.

No, that's the last thing they need.  Would you buy a car from a company in bankrupcy?  Of course not.  Neither will anyone else.

"Well, Mr. Customer, there's a pretty good chance we won't be around to honour your warranty and service your car in a couple of years.  Oh, and good luck getting parts, too."

Talk about a tough sell!  Whether these fears are justified or not, that's what the buying public will believe.  Chapter 11 will completly annihilate any chance for these companies to be able to sell cars and continue to survive.


Cheers,
Madman of the People

Right, because a government bail out just fills people with confidence.

Quote from: GoCougs on December 02, 2008, 04:36:30 PM
Ford management knows however that Mullaly would make as much or more at dozens of other Fortune 500 companies.

Why would anyone hire the dude... he has shown his strength as the leader of a company

Quote from: sportyaccordy on December 03, 2008, 12:36:52 PM
Why would anyone hire the dude... he has shown his strength as the leader of a company

Mullaly is doing a great job so far.  I think Ford is in the best position of the domestics because of him.

November 2008 Mustang sales now have the official title of being the worst month for Mustang sales ever in Ford?s 45 year history of producing the Mustang.  November Mustang sales shattered the previous months record low of 4,686 which was last month by just over a 1,000 units.  With no end in sight for these record monthly sales low, I fully expect to see an even lower number for December.

Sales of Mustangs for November of 2008 were 3,667 compared to 7,352 from November of 2007 showing a 50.1% decrease in sales from the previous year. Year to date Mustang sales are 87,224 compared to 126,311 for the first eleven months of 2007, which is a 30.9% drop.

Quote from: TBR on December 03, 2008, 12:34:03 PM
Right, because a government bail out just fills people with confidence.

Millions of people bought Chrysler K-cars despite the "bailout" of the early 1980s.  The buying public will have much more confidence in a company with the government standing behind it than one that is allowed to fall into bankruptcy.

Cheers,
Madman of the People

Quote from: Madman on December 03, 2008, 01:22:02 PM

Millions of people bought Chrysler K-cars despite the "bailout" of the early 1980s.  The buying public will have much more confidence in a company with the government standing behind it than one that is allowed to fall into bankruptcy.

Cheers,
Madman of the People

I only suggest Chapter 11 because it allows GM to void contracts without penalty. GM had a miserable time killing the Oldsmobile line because they had to pay off everyone involved. Now, imagine trying to get rid of Hummer, Pontiac, Saturn and whoever else, and GM can't possibly afford it.

Quote from: sportyaccordy on December 03, 2008, 12:36:52 PM
Why would anyone hire the dude... he has shown his strength as the leader of a company

He did a phenomenal job at Boeing.

Quote from: Madman on December 03, 2008, 12:29:44 PM

No, that's the last thing they need.  Would you buy a car from a company in bankrupcy?  Of course not.  Neither will anyone else.

"Well, Mr. Customer, there's a pretty good chance we won't be around to honour your warranty and service your car in a couple of years.  Oh, and good luck getting parts, too."

Talk about a tough sell!  Whether these fears are justified or not, that's what the buying public will believe.  Chapter 11 will completly annihilate any chance for these companies to be able to sell cars and continue to survive.


Cheers,
Madman of the People

I wouldn't think it would matter.  A judge or a trustee (in a case this big, more than likely in will take several to oversee a reorganization) will control what gets paid and what will not.  A judge would also decide what and who had priority.   I'm sure the  two priorities are labor and consumer rights.   GM would commit suicide by canceling warranties or offering warranties that are not competitive.

If the deals are good and warranties stay in affect, people would continue to buy GM vehicles.

Quote from: JWC on December 02, 2008, 08:33:57 PM
Do liberals even believe in evolution anymore?

First, save all the dying species on the earth for fear that without even one, the whole food chain will fail.   I know life's been hell for me ever since the demise of the Dodo bird.

If they truly believe in the survival of the fittest, then some companies will fail and the stronger ones, the ones with foresight and good leadership will survive.  You can not bail out everyone. 

If my dealership fails, then all my customers will go to the next dealer.  With all the extra business, they will need more techs and service advisers and the jobs will be filled by those who lost their jobs elsewhere.  Not to mention a larger building, so contractors go back to work to enlarge the other dealer.

Right now, my dealership and the nearest other Ford dealer are running out of work by 2-3pm and what we do have is mostly oil changes and tire rotations.  It isn't enough for both to survive. They have already started laying off office personnel.  With a bailout though, we can delay the eminent failure of one or both for another year or so....or business can return to the levels it was one year ago.  (Though two years ago was even better).

Would a bailout of the manufacturers really even help the dealerships if nobody is buying any cars and nobody is taking their car to the dealer to be worked on?

Quote from: MX793 on December 03, 2008, 06:34:52 PM
Would a bailout of the manufacturers really even help the dealerships if nobody is buying any cars and nobody is taking their car to the dealer to be worked on?

Ford has been closing dealerships for over two years now.  It is one of the reasons they are in better shape than GM and Chrysler.  Ford began with company owned dealerships.  Then as smaller dealerships or dealerships in questionable market areas came up for renewal, they just wouldn't renew the contract.  A small town dealer not far from us met this fate. 

A local Ford dealer principle was killed in a car wreck.  The franchise was in his name alone. He had been working on having his son's name added to it, but the paperwork was not finished. Upon his death, the franchise contract was technically terminated.  The son tried to keep the franchise, but Ford refused to renew it.  The dealership closed and 30 people were out of work.  While this dealership didn't sell very many Ford automobiles, they were the most experienced truck dealer and service department in our area.

A well run service department could stand on it's own even without new vehicle sales.  I've worked at dealerships that were filing bankruptcy and the service department kept the dealership standing and paid the bills.   It was our lack of credit that finally shut the door.   We couldn't buy supplies and parts without credit and no one was going to extend credit to the current owner. 

With that in mind, Mercedes had developed a plan in the 1990's to install central sales offices and have satellite service departments in outlying cities.   GM and Ford could do the same. In North Carolina, it would probably be something on the order of, keeping the sales showrooms in areas like Raleigh, Charlotte, and Wilmington, but have service departments in areas like the Outer Banks, Greenville, and New Bern.   You could have a small showroom and one or two sales reps on hand with a couple of demos.    You could pick the colors and options you want and the car could be shipped to the satellite office.

JWC, you're exactly right about Ford closing dealerships.

There was a Ford dealer near me, Miller Ford, that was closed, with the customers advised to go to a Stevens Ford a few towns up.  My understanding is that Stevens Ford, together with other Ford dealerships in the area, paid Miller to stop selling Fords.

Miller is now totally devoted to Nissan.  They used to also sell Buicks, but they stopped that close to 10 years ago.

One problem I see with GM dealerships is the sheer redundancy of so many vehicles means that you can basically take your car to any GM dealer for repairs without a hitch.  This also means that the Chevy, Cadillac dealer literally 100yds down the street competes with my GMC, Pontiac, Buick dealer.  I am constantly working on Chevys and various other GM makes, and I am sure many of our customers go to the other dealer as well.  It's an honest problem.

When I worked for a GM dealer in 2000, GM's policy forbid the crossing of car lines for warranty.  If you had a Pontiac, you had to go to Pontiac; Buick owners had to go to Buick, and so on. This requirement was probably due to pressure from dealers.  The requirement allowed dealers to develop a relationship with the customer.   There were exceptions, but it required a GM rep's approval.

When I went to Ford, there was no such requirement.  A dealer could do warranty work on any vehicle in the Ford family of cars.  To me it was a much better idea.  If we sold a Lincoln Town Car, we could do warranty work on it and that maintained the relationship with the customer.  The down side to that is that it made the Lincoln dealer nine miles away, useless.  It weakened the market for the Lincoln dealer. 

If Ford doesn't do away with Lincoln or Mercury, it should at least stop the separation of franchises.   The local L/M dealer is also a Chrysler dealer.   Ford could consolidate the sales of its cars to one dealership in that town by allowing the much larger Ford dealer to start ordering and selling L/M vehicles.

It would be more profitable for the dealers and allow Ford to cut back on it's dealer support network without completely losing a franchise in a town.

Quote from: R-inge on December 03, 2008, 07:57:03 PM
One problem I see with GM dealerships is the sheer redundancy of so many vehicles

I can't imagine how their lineup could possibly be successful in a bear market. It simply isn't feasible. A little forsight and we could have avoided a lot of this mess.

I wish those hypocritical politicians had the tables turned on them. I'd like to see them explain why the national debt is over 10 trillion. :rolleyes:

Quote from: 280Z Turbo on December 04, 2008, 08:02:48 PM
I wish those hypocritical politicians had the tables turned on them. I'd like to see them explain why the national debt is over 10 trillion. :rolleyes:

Their answer would be simple:

Republicans

Quote from: JWC on December 05, 2008, 10:43:04 AM
Their answer would be simple:

Republicans

I think it has more to do with having the same party control both the legislative and executive branches of government.

But I digress, as this isn't a political topic.

From www.jalopnik.com, who says they got it from the Wall Street Journal website:

Report: Chrysler Hires Bankruptcy Firm Jones-Day
By Ray Wert, 1:10 PM on Fri Dec 5 2008, 568 views

The WSJ is reporting Chrysler hired bankruptcy firm Jones-Day "several weeks ago" to "prepare for imminent financial failure."

All we have so far is directly from the top of the WSJ web site:

"Chrysler several weeks ago hired the prominent law firm of Jones Day as bankruptcy counsel, suggesting the auto maker is preparing for imminent financial failure should its efforts to obtain federal rescue funds fall short."
[via WSJ]

Quote from: 3.0L V6 on December 05, 2008, 11:22:51 AM
I think it has more to do with having the same party control both the legislative and executive branches of government.

But I digress, as this isn't a political topic.

I think it has to do with all politicians being conniving villains more concerned with winning the next election than actually doing what's best for the country.

Quote from: Nethead on December 05, 2008, 12:14:47 PM
From www.jalopnik.com, who says they got it from the Wall Street Journal website:

Report: Chrysler Hires Bankruptcy Firm Jones-Day
By Ray Wert, 1:10 PM on Fri Dec 5 2008, 568 views

The WSJ is reporting Chrysler hired bankruptcy firm Jones-Day "several weeks ago" to "prepare for imminent financial failure."

All we have so far is directly from the top of the WSJ web site:

"Chrysler several weeks ago hired the prominent law firm of Jones Day as bankruptcy counsel, suggesting the auto maker is preparing for imminent financial failure should its efforts to obtain federal rescue funds fall short."
[via WSJ]

Well, that should be the proof Congress needs.

I just read a lengthy article on the  Popular Mechanics  website entitled "10 Cars that Damaged GM's Reputation".

Popular Mechanics  is as pro-Detroit as any publication on Earth--always fawning over the latest electronic gizmos and gadgets for automobiles and always buying into the typical manufacturer hype about how added complexity always adds value because the manufacturer says so (therefore, it must be true).

The article convinced me that a bail-out of Ford is sketchy and a bail-out of Chrysler/Cerberus is ill-advised--but a bail-out of GM would be one of the classic  civilization-ending mistakes  of all time!!!  Sheee-it they're awful!!!  And a bail-out might prop GM up for another year of shittiness in everything!!  GM fanboys, don't read that article...

bah, you can't tell us what to read! :devil: ;)

http://www.popularmechanics.com/automotive/reader_rides/4293188.html (http://www.popularmechanics.com/automotive/reader_rides/4293188.html)

http://www.popularmechanics.com/automotive/reader_rides/4293188.html?page=2

THANK YOU

A 1980 Citation made my middle school experience even more ruinous than it had to be.

Quote from: Vinsanity on December 05, 2008, 01:59:59 PM
bah, you can't tell us what to read! :devil: ;)

http://www.popularmechanics.com/automotive/reader_rides/4293188.html (http://www.popularmechanics.com/automotive/reader_rides/4293188.html)

I don't agree with the Saturns.

Quote from: hotrodalex on December 05, 2008, 05:38:01 PM
I don't agree with the Saturns.

neither do I.

A lot of people really liked the early Saturns. They had fan clubs and Saturn rallys and everything.

Now, there really are no Saturns, just rebadged something or others.

Of course, the basic premise behind making an "import fighter" brand was flawed from the beginning. Every single car that GM makes needs to be an import fighter.

Quote from: Soup DeVille on December 05, 2008, 05:44:04 PM
neither do I.

A lot of people really liked the early Saturns. They had fan clubs and Saturn rallys and everything.

Now, there really are no Saturns, just rebadged something or others.

Of course, the basic premise behind making an "import fighter" brand was flawed from the beginning. Every single car that GM makes needs to be an import fighter.

My brother has an SL2 (? idk it's a '96 sedan) and it is a good car. It's no drag racer or F1 car, but it gets the job done.

And before my mom gave the car to my bro, my dad was driving it and slid on ice. Hit the car in front on him and no damage was done, thanks to the plastic body panels (he pulled the hand brake and slid sideways to avoid a head-on)

Quote from: Soup DeVille on December 05, 2008, 05:44:04 PM
neither do I.

A lot of people really liked the early Saturns. They had fan clubs and Saturn rallys and everything.

Now, there really are no Saturns, just rebadged something or others.

Of course, the basic premise behind making an "import fighter" brand was flawed from the beginning. Every single car that GM makes needs to be an import fighter.

This high-ranking lady at my office leased a M-B CLK which she constantly complained gave her problems, but still holds her old Saturn she drove back in the early 90's with high regard; her mom now drives it.

Quote from: hotrodalex on December 05, 2008, 05:38:01 PM
I don't agree with the Saturns.

I'll say that they're not bad cars for the era. They were totally outclassed by the end though. There were some model-wide problems that tarnished them though. Oil burning, differential pin explosions, coolant temp sensor failures were all common to the Saturns.

I think they're a deal when bought used, as they suffer pretty brutal depreciation, and they're pretty frugal with gas. Nothing special, but if you know the weak points, you could have a pretty reliable small car.

Quote from: Soup DeVille on December 05, 2008, 05:44:04 PM
neither do I.

A lot of people really liked the early Saturns. They had fan clubs and Saturn rallys and everything.

Now, there really are no Saturns, just rebadged something or others.

Of course, the basic premise behind making an "import fighter" brand was flawed from the beginning. Every single car that GM makes needs to be an import fighter.

With your last line, you absolutely hit the nail right on the head.

GM (as well as Ford and Chrysler) assumed that there were a certain number of people who would buy domestic cars no matter what, and they geared their lineup accordingly.  As the number of people in this category kept steadily dropping, to below the point to allow the survival of their businesses, they didn't readjust their thinking.

It's awfully late now to suddenly whip up a 'plan' to straighten things out.  Where have they been the past 30 years?

Mullaly said Ford's previous philosophy was "if you build it, they'll come."  I haven't owned a Ford since the mid 1980s, when they were putting out pieces of crap that were shot at 50,000 miles.  With that attitude, it's not hard to see why they're in deep trouble.

Car buying happens at a young age, and it will shape your opinions for the rest of your life.  If you get your dad's hand me down Accord and it goes 300,000 miles before you sell it, and it's still running like a top, chances are your next car might be a Honda because you trust them so much.

The Big 3 killed a lot of their chances to get young people when they decided to keep the scheisse J-Body for so long (and cars like it), and not make anything especially reliable or inspiring that the masses could afford for a while.

Quote from: dazzleman on December 05, 2008, 06:31:38 PM
With your last line, you absolutely hit the nail right on the head.

GM (as well as Ford and Chrysler) assumed that there were a certain number of people who would buy domestic cars no matter what, and they geared their lineup accordingly.  As the number of people in this category kept steadily dropping, to below the point to allow the survival of their businesses, they didn't readjust their thinking.

It's awfully late now to suddenly whip up a 'plan' to straighten things out.  Where have they been the past 30 years?

Mullady said Ford's previous philosophy was "if you build it, they'll come."  I haven't owned a Ford since the mid 1980s, when they were putting out pieces of crap that were shot at 50,000 miles.  With that attitude, it's not hard to see why they're in deep trouble.

There was a BBC radio story about the whole big 3 bailout thing I listened to last night, and it had an interview with a couple of different lineworkers.

They all basically were of the opinion that "nobody could have seen this coming."

They were obviously living in a dream world.  It was very easy to see this coming.

As per WSJ, Chrysler hired a bankruptcy firm and TB3 are going to get a small "stay afloat" bailout it looks like.

I think one point that everyone is missing is that all car sales are down, be it GM, Ford, Chrysler, Honda, Toyota, or Nissan.  I agree with the line worker, no one could have seen this coming.  If this down turn only affected the three US companies, then yeah, it could have and should have been foreseen.  When a drop such as this strikes all manufacturers, then this isn't about not building green cars, less trucks, or hybrids.  It is about a economy where people have stopped buying automobiles.
 

When something like pneumonia strikes, those who were less healthy before the disease hit are the ones who die, while people who were stronger before the disease are more likely to survive it.

It's the same with business and economic slowdowns.  While the magnitude of this downturn was not forseen by many, the steadily eroding financial and market position of the Big 3 has been clear for a long time.  There were rumblings about a GM bankruptcy well over a year ago.  To say that this whole thing came totally out of the blue is either disingenous or dangerously out of touch.

Mullaly said for previously had the 'build it and they'll come' attitude.  I guarantee Honda and Toyota didn't build up their sales at the expense of the Big 3 with that attitude.

The Big 3's problem is they didn't build cars enough people wanted to buy.  Their problems were evident before this downturn, and this downturn is hastening theor death the way pneumonia kills an already-sick person.

The potential is that the government will make it worse, by extending them a lifeline on the condition that they build politically correct vehicles that consumers are 'supposed' to want, but don't actually want.  When they can't sell enough of those to stay afloat, the taxpayers will have assumed a greater amount of financial responsibility for the whole mess.

Quote from: dazzleman on December 06, 2008, 12:24:23 AM
The potential is that the government will make it worse, by extending them a lifeline on the condition that they build politically correct vehicles that consumers are 'supposed' to want, but don't actually want.  When they can't sell enough of those to stay afloat, the taxpayers will have assumed a greater amount of financial responsibility for the whole mess.

That's a scary thought. And somewhere in Germany, there'll probably be a group of Trabant engineers pointing and laughing at us if that happens :(

Dazzle, I hear you, but still, it is one thing for a company to be sliding downhill when cars are selling, quite another when everyone's model sales drop also.  Ford realized they had a problem and began restructuring over a year ago.  GM was probably in denial.  People knew Chrysler was in trouble, or should have because the company had been up for sale.  Car companies have failed before, but those companies didn't take everyone down with them.  Admittedly, suppliers will be affected, but if other car makers are having the same problem getting the public to buy their vehicle, then the problem isn't something solely the Big 3's, which is what member of Congress and the media are telling the public.

Yesterday on Morning Joe, the comments were on the order of....American cars are junk, they were not building what people wanted, they get terrible gas mileage. etc.  Tucker Carlson had nothing good to say about the quality of American cars and trucks.  He backed up his statement by saying the he had rented numerous American cars when traveling.

Congress is telling everyone that American car companies need high gas mileage and "green" cars.  But there is a link in another thread, that shows even the hybrids have dropped in sales.

Quote from: JWC on December 06, 2008, 05:57:09 AM
Dazzle, I hear you, but still, it is one thing for a company to be sliding downhill when cars are selling, quite another when everyone's model sales drop also.  Ford realized they had a problem and began restructuring over a year ago.  GM was probably in denial.  People knew Chrysler was in trouble, or should have because the company had been up for sale.  Car companies have failed before, but those companies didn't take everyone down with them.  Admittedly, suppliers will be affected, but if other car makers are having the same problem getting the public to buy their vehicle, then the problem isn't something solely the Big 3's, which is what member of Congress and the media are telling the public.

Yesterday on Morning Joe, the comments were on the order of....American cars are junk, they were not building what people wanted, they get terrible gas mileage. etc.  Tucker Carlson had nothing good to say about the quality of American cars and trucks.  He backed up his statement by saying the he had rented numerous American cars when traveling.

Congress is telling everyone that American car companies need high gas mileage and "green" cars.  But there is a link in another thread, that shows even the hybrids have dropped in sales.

I think the problem with American cars is at least partly one of perception.  Take Pontiac, for example.  Pontiac has been hampered in its ability to attract wannabe higher end sports car purchasers because of its lower class image.

People have long memories, and they still remember the junk that Detroit was putting out in the 1970s and 1980s.  They remember the bad service they got when they kept taking the car back to be fixed over and over.  The whole thing was rotten.  People also remember that their car experience improved when they switched to Japanese.  This is the perception that Detroit has been fighting for a long time, with very limited success.  Once a certain idea takes hold in the public mind, rational or not, it is very difficult to change it.  For that reason, Detroit was able to compete on sedans only by pricing them more cheaply than the competition, which magnified their problem with higher labor costs than their competitors.  Had the cars had better appeal, they could have charged enough of a premium to overcome the higher labor costs, and they wouldn't be that big a deal.

Detroit has done well in recent years with trucks and SUVs.  For whatever reason, these sorts of vehicles haven't suffered from the lower class image that American sedans seem to have.  In my neighborhood, the typical auto configuration is for a family to have a German sedan, and an American SUV.  So Detroit became very dependent on these high-margin vehicles, and didn't do enough to improve their image with sedans.  That left them vulnerable when gas became very expensive.

I don't know if people will go back to the SUVs now that gas prices are falling.  I'm not sure they trust that the prices will remain low, and people aren't in a mood for unnecessary spending anyway.

To some extent, our economic weaknesses are sort of like a house being eaten by termites.  Those termites are excessive debt, among other things.  With termites, you might have little signs of a problem here and there, but to the naked eye, the house appears completely undamaged until almost the moment of collapse.  And that is what has happened with our financial institutions, and it's what's happening with the Big 3.

To some extent, they're still in denial.  I saw Bob Lutz on some show last night, talking about what a great job the Detroit CEOs have been doing, what great cars they have, and how the current problems are completely because of the economic slowdown.  While I recognize that the slowdown is what has potentially pushed them over the brink (the way pneumonia kills a patient already in poor health), the problems have been developing for a long time, and the Big 3 have not addressed them sufficiently.

I echo your concerns about the whole hybrid/green thing.  Those are the sorts of cars that the politicians want people to buy.  I'm not at all sure that that's what people really actually want to buy.  Now that the Big 3 are on the ropes, and will do anything to be rescued, I fear that congress will force them to agree to make a lineup of cars that people want even less than the current lineup.  As poorly as the Big 3 have been run over time, I see no evidence that government boards will do any better, if they're appointed by congress.  And I find the idea of government running private businesses to be a pretty scary one, though obviously there has to be some oversight for the taxpayer money being invested in these companies.

The bottom line is that even if the government helps the Big 3 to get over the current hump, their longer-term survival is very much in doubt unless they change their image and appeal to more buyers.  Their "Buy American" campaigns in the past appealed to naked patriotism, and basically told people that they owed it to their country to buy an inferior car.  That failed miserably, as they steadily lost market share.  They need to come up with something better, because the government can't prop them up indefinitely.  You can't push a thread through a needle.  I recognize all the jobs that depend upon the auto industry, and I consider it a strategic asset to have that large-scale manufacturing capacity in the US.  I have deep concerns about our economic future without major manufacturing.  But the answer can't be for taxpayers to prop up unsuccessful companies indefinitely.

The consensus seems to be that Ford has done the most out of the Big 3 to improve their position already.  GM still seems to be in denial, and Chrysler is a mess.

Japanese quality did improve by the end of the 1980's, but I believe it was over-rated during the seventies and eighties. 

I worked for Honda during that period and those cars had some very serious quality problems, but people were so loyal, they forgave them.  Honda, Toyota, Datsun were usually the cars that parents bought for their kids to drive from high school and college.  That period was formative for those young people to develop their loyalty to the car that took them on road trips and some good times.

There was certainly a basis for the reliability factor, but not to the degree that is fondly remembered.  Same for interior and sheet metal.  Let's not forget, the Japanese cars of the 1970's and early 1980's were rust prone.  The sheet metal was thin and shutting the door on a Japanese car revealed a lack of sound deadening.  Interior panels were just paste board with vinyl stretched over it. Sunvisors warped after just a couple of years.  Seats were basic and generally uncomfortable, which I guess was fine for a buttocks of a young person.   Engine problems, and there were some, were taken care of discreetly to build that reputation of quality.  At Honda for example, we were having head gaskets blowing out on the CVCC engines.  The replacement part was redesigned several times before the problem appeared to be solved.  On the late seventies Accord, front fenders were rusting through, even in dryer climates like California.  Honda discreetly took care of the problem.

By the late eighties, Honda cars were getting away from the basic car to more luxurious models.  The reason given was because all those kids were now college grads and were looking to American companies for bigger and better. Honda saw the market changing and wanted those college grad to look to Honda to "grow with them and their families".  Not a bad marketing idea, but it did lead manufactuers away from offering a basic reliable car at a economical price to a dressed up version at a much higher price.

Quote from: JWC on December 06, 2008, 08:14:14 AM
Japanese quality did improve by the end of the 1980's, but I believe it was over-rated during the seventies and eighties. 

I worked for Honda during that period and those cars had some very serious quality problems, but people were so loyal, they forgave them.  Honda, Toyota, Datsun were usually the cars that parents bought for their kids to drive from high school and college.  That period was formative for those young people to develop their loyalty to the car that took them on road trips and some good times.

There was certainly a basis for the reliability factor, but not to the degree that is fondly remembered.  Same for interior and sheet metal.  Let's not forget, the Japanese cars of the 1970's and early 1980's were rust prone.  The sheet metal was thin and shutting the door on a Japanese car revealed a lack of sound deadening.  Interior panels were just paste board with vinyl stretched over it. Sunvisors warped after just a couple of years.  Seats were basic and generally uncomfortable, which I guess was fine for a buttocks of a young person.   Engine problems, and there were some, were taken care of discreetly to build that reputation of quality.  At Honda for example, we were having head gaskets blowing out on the CVCC engines.  The replacement part was redesigned several times before the problem appeared to be solved.  On the late seventies Accord, front fenders were rusting through, even in dryer climates like California.  Honda discreetly took care of the problem.

By the late eighties, Honda cars were getting away from the basic car to more luxurious models.  The reason given was because all those kids were now college grads and were looking to American companies for bigger and better. Honda saw the market changing and wanted those college grad to look to Honda to "grow with them and their families".  Not a bad marketing idea, but it did lead manufactuers away from offering a basic reliable car at a economical price to a dressed up version at a much higher price.

Honda allowed their demographics to age, and that is a good strategy for a time, if you start out with younger buyers.  It is a problem if it's allowed to go on for too long.

That's one of the big problems with the Big 3 -- that they allowed their demographics to age until many of their customers were dead, without younger replacements.  Cadillac service departments have been known as "God's waiting room."  Oldsmobile and Buick suffered similar image problems, as has Ford's larger sedans.  It was cheaper in the short run to keep turning out cars that were unchanged largely for a couple of decades.  It saved on R&D costs and produced a higher profit margin, but the buyers for these cars eventually dwindled due to attrition.

Honda buyers now are often in their 50s or so, so Honda is actually on the edge of the demographic issue.  They can't afford to let their demographics age more, or they'll face the same problem as GM and Ford with demographics.

I think a big part of the problem for the Big 3 is that many people are still angry at them not just for the junky cars they produced in the 1970s and 1980s, but for the way their loyalty was taken for granted.  It wasn't just the bad cars, but also the bad service at dealers when cars under warranty were taken to be fixed over and over again.  Anybody over a certain age has horror stories.  People are still angry that Detroit thought it could force absolutely crap down their throats, and tried to make them feel unpatriotic for looking elsewhere.  While Japanese cars at the same time weren't perfect, they were generally better, and that's what people remember.  They think that at least the Hondas and Toyotas knew they had to earn their business, while the Big 3 thought they didn't have to.

Rational or not, that attitude plagues the Big 3 to this day.

I don't know how valid it is, by my view is...

The imports got their foothold in the NA market during the first and second energy crisis when their cars were cheap to run and didn't need a bunch of efficiency and power strangling pollution devices to pass emission laws.  The NA automakers, in the early '60s, gave some attention to producing compacts, Falcon, Dart, Corvair, et al, but somehow that got lost in the musclecar era.  These cars were competing against imports from the UK and Europe.

By the time of the real energy crisis, combined with stricter pollution laws, NA didn't have much to offer and the imports, Toyota, Honda, were starting to show up; and they weren't really very good cars for the NA climate...especially cold and damp weather areas.  Perhaps a bit better that the UK models but not as good as domestics.  However, being cheap to run, many households bought them.  The kids growing up in those households, rather than becoming a Chevy, Ford and Mopar fans, became a Honda or (god forbid) Toyota fans.  Eventually, they became import fans in general and this led to the tuner (riceboy) era.

The real decline of the domestics happened from the mid '70s through to the '90s.  Either through complacency or bad management, or they were simply waiting for the bad times to pass, they all but ignored product; with a few exceptions like the Taurus.  The economic boom of the '90s was a mixed blessing; and may well have sealed their fate.  Cheap (relatively) energy spurred the consumer demand for trucks and SUVs...guys were embarrassed driving vans and saw a great compromise in SUVs; women as well.  The domestics responded by putting all their development resources into SUVs and trucks.  In the late '90s they were all bulging with cash and went on shopping sprees in Europe and Japan.  Then the bottom fell out and by the early 2000's they had started to wake up to the reality...at least Ford did; likely spurred on by the infamous Firestone fiasco.  It was then that they realized that they needed to plug some enormous holes in their product line or the ship would sink.

Many details need to be plugged in, but that is the gist.

Quote from: FoMoJo on December 06, 2008, 08:37:53 AM
I don't know how valid it is, by my view is...

The imports got their foothold in the NA market during the first and second energy crisis when their cars were cheap to run and didn't need a bunch of efficiency and power strangling pollution devices to pass emission laws.  The NA automakers, in the early '60s, gave some attention to producing compacts, Falcon, Dart, Corvair, et al, but somehow that got lost in the musclecar era.  These cars were competing against imports from the UK and Europe.

By the time of the real energy crisis, combined with stricter pollution laws, NA didn't have much to offer and the imports, Toyota, Honda, were starting to show up; and they weren't really very good cars for the NA climate...especially cold and damp weather areas.  Perhaps a bit better that the UK models but not as good as domestics.  However, being cheap to run, many households bought them.  The kids growing up in those households, rather than becoming a Chevy, Ford and Mopar fans, became a Honda or (god forbid) Toyota fans.  Eventually, they became import fans in general and this led to the tuner (riceboy) era.

The real decline of the domestics happened from the mid '70s through to the '90s.  Either through complacency or bad management, or they were simply waiting for the bad times to pass, they all but ignored product; with a few exceptions like the Taurus.  The economic boom of the '90s was a mixed blessing; and may well have sealed their fate.  Cheap (relatively) energy spurred the consumer demand for trucks and SUVs...guys were embarrassed driving vans and saw a great compromise in SUVs; women as well.  The domestics responded by putting all their development resources into SUVs and trucks.  In the late '90s they were all bulging with cash and went on shopping sprees in Europe and Japan.  Then the bottom fell out and by the early 2000's they had started to wake up to the reality...at least Ford did; likely spurred on by the infamous Firestone fiasco.  It was then that they realized that they needed to plug some enormous holes in their product line or the ship would sink.

Many details need to be plugged in, but that is the gist.

I think that's a great summation.

When gas prices and shortages hit in the 1970s, Detroit was offering cars like the Pinto and the Vega.  Absolute pieces of crap.  That's how the Japanese got their first foothold.

Car buying preferences tend to be formed in youth.  When I was a kid, I remember there were certain families that were Ford families, certain families that were GM families, and so on.  That all fell apart in the 1970s.

I completely agree that the 1990s boom helped seal Detroit's fate, because it pushed them in the worst possible direction -- back to undue reliance on high-margin gas guzzlers.  They made in effect the same mistake they made in the 1960s and early 1970s all over again.  They just took the path of least resistance, something that we Americans have been doing a lot in recent decades, much to our long-term economic detriment.

Both of your opinions are very accurate.  I agree, to a degree, with the reliance on gas guzzlers being a mistake.  It is only mistake when shit hits the fan.  A quick look to the past could have foretold that it was bound to reoccur. 

But....who knew when it would happen. 

Gas guzzling, huge SUV's and full-size pick-ups were such a big hit with the public, even the Japanese started producing them to be able to compete and remain viable in the U.S. market with American based companies.   The same kids that were students in the 70's and 80's, then yuppies in the 80's and 90's, were beginning to move on to the SUV and pick-up market.  Just as they did a couple of decades ago, evolving to follow that market, the Japanese companies began to focus on what those now middle-aged customers wanted.   Why?  Simple, while they were still buying Accords and Camrys, their other car was a Sierra or a F150.  To meet the new demand and to maintain a hold on those customers, you saw the development of the Titan and the Tundra.

The future lies with convincing the public they do not need a crew cab F-150 or a Expedition.   I'm not sure that is going to happen.  You have people on TV talking about how Detroit wasn't producing the cars that the public wanted, while saying in the same broadcast that they own a full-size SUV. You can build a full-size truck that gets great fuel mileage, but compromise is power and torque.  With Congress in full Democratic control mode, you'll going to see CAFE ratings for trucks increase.  If Congress follows their usual path, they will set the bar high, probably higher than the manufacturers can afford at this time, and you'll find even a full-size hybrid will not meet the requirements.  The way Detroit succeeded in meeting those requirements in the past was by choking the life out of the engines they produced.  It was a cost saving measure and it evidently succeeded for a short time, but now they are paying the price.  Knowing Detroit, they'll repeat that mistake.

The future isn't with requiring that Detroit build cars that Congress thinks people will buy, but changing the publics perception of what they need.  As long as a gallon of gas is less than $3.00,  the public will not buy a "green" car no matter how much Congress wants to believe they will.

Quote from: JWC on December 06, 2008, 10:00:15 AM
Both of your opinions are very accurate.  I agree, to a degree, with the reliance on gas guzzlers being a mistake.  It is only mistake when shit hits the fan.  A quick look to the past could have foretold that it was bound to reoccur. 

But....who knew when it would happen. 

Gas guzzling, huge SUV's and full-size pick-ups were such a big hit with the public, even the Japanese started producing them to be able to compete and remain viable in the U.S. market with American based companies.   The same kids that were students in the 70's and 80's, then yuppies in the 80's and 90's, were beginning to move on to the SUV and pick-up market.  Just as they did a couple of decades ago, evolving to follow that market, the Japanese companies began to focus on what those now middle-aged customers wanted.   Why?  Simple, while they were still buying Accords and Camrys, their other car was a Sierra or a F150.  To meet the new demand and to maintain a hold on those customers, you saw the development of the Titan and the Tundra.

The future lies with convincing the public they do not need a crew cab F-150 or a Expedition.   I'm not sure that is going to happen.  You have people on TV talking about how Detroit wasn't producing the cars that the public wanted, while saying in the same broadcast that they own a full-size SUV. You can build a full-size truck that gets great fuel mileage, but compromise is power and torque.  With Congress in full Democratic control mode, you'll going to see CAFE ratings for trucks increase.  If Congress follows their usual path, they will set the bar high, probably higher than the manufacturers can afford at this time, and you'll find even a full-size hybrid will not meet the requirements.  The way Detroit succeeded in meeting those requirements in the past was by choking the life out of the engines they produced.  It was a cost saving measure and it evidently succeeded for a short time, but now they are paying the price.  Knowing Detroit, they'll repeat that mistake.

The future isn't with requiring that Detroit build cars that Congress thinks people will buy, but changing the publics perception of what they need.  As long as a gallon of gas is less than $3.00,  the public will not buy a "green" car no matter how much Congress wants to believe they will.

Good points, John.

As I stated earlier, I share your concerns about having congress decide what Detroit should build, since it probably won't coincide with what people actually want.  As bad as Detroit has been at anticipating what people are going to want, congress is a safe bet to do even worse.

One thing I'd say is that while the Japanese companies got into the SUV craze in the 1990s as Detroit did, they were never so completely dependent upon the sales of those vehicles as Detroit was.  They were able to make money on more fuel-efficient sedans also, so they had something to turn to when sales of the SUVs declined.  Detroit didn't.

Detroit's mistake was not bringing in competitive vehicles, small cars, from their more successful European branches.  They still don't get it.  Look no further than the 65mpg diesel (Fiesta?).  Ford contends that American buyers are not ready to buy a small diesel powered automobile.  This is despite the waiting list over at VW for their diesel cars here in the U.S.   

Detroit saw the car sales as incidental to cross-over, SUV, and truck sales.  I can almost imagine that the suits in the boardroom were saying, "let Honda have the cars, we'll take the trucks."

Some good points above.  I got the impression, at the time, that some of the people who where slamming the domestics for building SUVs, etc. were more than willing to buy them when they were produced by the import manufacturers.

This article titile Washington's whipping boys (http://www.detnews.com/apps/pbcs.dll/article?AID=/20081208/OPINION03/812080301/1148/AUTO01) makes some good points as well. 

some excerpts...

If the Midwest hadn't realized before there was a front and back door to Congress, we know now. Indeed, we know there's a side door, too, reserved for the country's lower castes, which apparently now includes American automakers and anyone remotely linked to them.

Just call us the whipping boys of Washington's anti-bail-out backlash.

While Wall Street was welcomed into the front door on a Sunday night and served a bail-out with hot cocoa, Michigan's auto chiefs have been publicly humiliated before the national press so Congress and the Bush administration can show voters they're finally holding someone accountable for this disaster of an era.

While Wall Street's 1990s orgy of deregulation wrecks the economy and the Manhattan Brooks Brothers set gets a true bail-out of more than $170 billion, the Detroit Three automakers beg for a loan -- and get mocked as if they're janitors at an arrogant New Jersey country club.
The United Auto Workers slash their wages down to $14 an hour -- little more than McDonald's wages -- and humbly prostrate themselves in front of the altar of Beltway egos.

What did Wall Street sacrifice? A few brokers and Starbuck's mochacinnos.

Wall Street needed no plan. No hearings. No apology. No oversight. No proof of its importance to national security.

Wall Street didn't have to leave its comfy New York City skyrise perch, while Detroit has had to succumb to scoldings from fools such as Sen. Richard Shelby.

Shelby represents Alabama, one of the most federally subsidized, bailed-out states in the union for the last 150 years. Michigan has been a sender state in taxes -- meaning we send far more to the feds than we get back -- and has helped fund endless jump-starts in economic development in less developed states such as Alabama for most of the last century.

And he's busting our chops about a temporary loan?

Excuse Mr. Shelby, but you should be praying for Detroit's survival. Somebody's gotta pay for your subsidies!
Small-minded leaders and politicians look to blame the most vulnerable for their own sorry mistakes. They appeal to our darkest angels.

Wall Street isn't easy to pick on, but Detroit is. We, the folks with ties to old economy industries in the very un-hip Heartland, are perceived by many as the weakest on America's new socio-economic ladder.

You can hear it in the nasty undertone lurking in the debate. It's hardly just about the automakers' past mistakes, though there are many.

The story between the lines is an ancient one, about who is deserving for investment. Throughout history, the poor and working classes have always had to work harder to prove themselves and their worth. Much of the Bible is about busting that myth. Wall Street didn't have to deal with this lurking, ignorant bias. Wall Street doesn't have the United Auto Workers and rough-and-tumble factory workers linked with it.

The anti-union comments are just the beginning. Washington's negative stereotypes increasingly are associated with geographic region, too.

Globalization is remaking our country, moving the population and power base from the Industrial Midwest and Northeast to coastal, new economy wealth centers such as Silicon Valley and Portland.

The shift is in American culture, too, reflected in the comments of average people. My California friends and cousins say, with all seriousness, Midwesterners are backward, stupid. Seattle's citizens imply our region is already dead, why not just let it fall? We in the industrial heartland can all move out to Washington state (where it's so much better, they imply) and find new work -- something meaningful, say, as cashiers at Target.



There is a bit of hypocracy and pettiness going on in Washington.  I've watched a bit of the proceedings and was surprised at the venom poring out of some of the Representatives and Senators.  They may be representing the interests of their states and constituencies but refuse to look at the larger picture.  Some relish blaming the Auto CEOs for the failure of the economy while dismissing the Wall Street bailout as a basic need; essentially implying that labourers aren't as important to the US economy as the bankers and brokers of Wall Street.  They don't seem to understand that employment is the critical factor, at the moment, and the crisis will only worsen as the unemployment rate increases.  Some of them, truly, are small-minded.

Quote from: FoMoJo on December 06, 2008, 08:37:53 AM
I don't know how valid it is, by my view is...

The imports got their foothold in the NA market during the first and second energy crisis when their cars were cheap to run and didn't need a bunch of efficiency and power strangling pollution devices to pass emission laws.  The NA automakers, in the early '60s, gave some attention to producing compacts, Falcon, Dart, Corvair, et al, but somehow that got lost in the musclecar era.  These cars were competing against imports from the UK and Europe.

By the time of the real energy crisis, combined with stricter pollution laws, NA didn't have much to offer and the imports, Toyota, Honda, were starting to show up; and they weren't really very good cars for the NA climate...especially cold and damp weather areas.  Perhaps a bit better that the UK models but not as good as domestics.  However, being cheap to run, many households bought them.  The kids growing up in those households, rather than becoming a Chevy, Ford and Mopar fans, became a Honda or (god forbid) Toyota fans.  Eventually, they became import fans in general and this led to the tuner (riceboy) era.

The real decline of the domestics happened from the mid '70s through to the '90s.  Either through complacency or bad management, or they were simply waiting for the bad times to pass, they all but ignored product; with a few exceptions like the Taurus.  The economic boom of the '90s was a mixed blessing; and may well have sealed their fate.  Cheap (relatively) energy spurred the consumer demand for trucks and SUVs...guys were embarrassed driving vans and saw a great compromise in SUVs; women as well.  The domestics responded by putting all their development resources into SUVs and trucks.  In the late '90s they were all bulging with cash and went on shopping sprees in Europe and Japan.  Then the bottom fell out and by the early 2000's they had started to wake up to the reality...at least Ford did; likely spurred on by the infamous Firestone fiasco.  It was then that they realized that they needed to plug some enormous holes in their product line or the ship would sink.

Many details need to be plugged in, but that is the gist.

FoMoJo:  Hands down the most perceptive posting in this thread!  All added something worthwhile--but this posting is the lighthouse in a hurricane.  Well said, Buddy!

dazzleman, Nethead, thanks for your kind comments.

We complained greatly about the "beancounters" at the domestic brands over the last few years.  No doubt beancounters are needed at any large corporation in order to keep costs under control but they should never have any influence over the decisions regarding product development.  The beancounter mentality of "bottom line rule" may well have influenced the decisions of the domestics to take the short view and focus on trucks as long as the public were willing and able to buy them; giving only token regard to NA car development.  Rebadging second string imports has never worked very well either; as GM is fond of doing.  There is no technological growth in doing that and no profit either.

Given that the bailouts are likely to be approved using the funds set aside for technological growth, doesn't bode well for government plans that the domestics can be technological leaders.  The loans should be contingent on the necessary hacking and slashing of all aspects that are not profitable; save research and development.  In short, the companies need to start over again by building the true cars of the future allowing only the current brands which are profitable to survive.  This will shrink the companies considerably but if there is any hope for the domestics to regain the mantle of technology leaders with prospects for future growth, especially employment growth, they must take this hit now; and, unfortunately, so must thousands of their employees.  They exist now only on borrowed time, imo.

Quote from: Vinsanity on December 05, 2008, 01:59:59 PM
bah, you can't tell us what to read! :devil: ;)

http://www.popularmechanics.com/automotive/reader_rides/4293188.html (http://www.popularmechanics.com/automotive/reader_rides/4293188.html)

I tend to agree with the diesel engine, V8-6-4, and the EV-1 as each setback their perspective technologies 10-20 years or more in this country.... christ diesels still haven't really taken ahold yet once again

(http://www.treehugger.com/20081209-the-bailout-shitty-cars.jpg)

:lol:
Cheers,
Madman of the People

Damn, that poster is funny and it hits home.

I told my brother inlaw, he buy's only Nissan, that he didn't buy an American car, but he will be buying an American car company.

He didn't think my comment was funny.

Quote from: r0tor on December 09, 2008, 12:15:50 PM
I tend to agree with the diesel engine, V8-6-4, and the EV-1 as each setback their perspective technologies 10-20 years or more in this country.... christ diesels still haven't really taken ahold yet once again

Speaking of the viability of diesel...

At my local gas station today:

87: $1.89
Diesel: $2.97

Haha to that poster! So true...sad, but true. If only we'd let the free market take its course.

I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

Quote from: Nethead on December 11, 2008, 08:48:25 AM
I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

More or less.

Quote from: Nethead on December 11, 2008, 08:48:25 AM
Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

If GM and Chrysler go under, their parts suppliers will more then likely go under (which Ford probably shares some of them)... and if thats the case Ford is SOL and needs to scramble to reengineer or bail-out their parts suppliers

Quote from: Nethead on December 11, 2008, 08:48:25 AM
I've not been paying much attention to the bail-out.  It appears that only GM and Cerberus/Chrysler are asking for cash, with Ford saying they're OK without the cash for now and only want something like a credit line that they believe they will only need to use if one of the other two go bankrupt--although I never heard of any reasons why the bankruptcy of GM or Cerberus/Chrysler would cause Ford to need some credit(?)... 

Is that correct?

I'm not sure if they question is...if GM and Chrysler go bankrupt why would Ford need the money?...but if that's the question...

If/when GM and/or Chrysler go bankrupt it would drive the suppliers into bankruptcy as well and, as most automakers in NA, including the imports, use the same suppliers, there would be an upheaval in the NA industry for all of them in their ability to assemble vehicles thereby drying up their revenue source.  Money would be needed while they acquire other supply sources.  No doubt, they are looking into this now.

I hope this helps to answer your question...if you had one ;).

Yes, the Nethead here did have a question of sorts--actually, more of a request for an affirmation of whether my brief bail-out summary agrees with the general public perception as to the bail-out postures of the three domestic manufacturers:

GM wants cash.
Cerberus/Chrysler wants cash.
Ford doesn't want cash but a credit line that it may or may not need to use, depending upon whether the other two can stave off bankruptcy in the short-term.
I could use a little cash myself.  Small denominations, unmarked, in a plain suitcase will be just fine.  No IOUs.  I will use these, uh,  contributions  to purchase the Senate seat vacated by President-Elect Barack Obama and I'll see that a proper bail-out of the Big Three gets passed.  After I get a modest percentage of those Treasury funds from the Big Three, of course...

I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

Quote from: the Teuton on December 11, 2008, 01:25:46 PM
I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

Do you mean Representatives (as in House of) or Republicans (as in those angry old men that just love pork).

As it is, the House passed the bill and Republican Senators are threatening to sink it.

Quote from: the Teuton on December 11, 2008, 01:25:46 PM
I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

My prediction is that this bailout is all smoke and mirrors, not enough to make a difference, but allows the dems and carmakers a smoke shield to make it look like they tried and also seem pro-union. In a few months Chrysler/GM will go Ch. 11, allowing them to put the screws to the UAW, and the dems will say they tried.

Ford will use the fact the others now have an advantage to also put the screws on the UAW.

Sadly, much like the airlines, I suspect the taxpayers will be left with picking up a good portion or all of the UAW pension nonsense.

Quote from: the Teuton on December 11, 2008, 01:25:46 PM
I hope the Reps finally come to their senses and vote down the bill.

My dad came to the self-made epiphany that the automakers want this bailout because they won't have to renegotiate with the unions.  But the question is:  Why wouldn't they want to renegotiate their contracts (with bankruptcy) instead of keeping the status quo and maybe doing it all over again in a few years?

There's some hope here:

"This package doesn't demand the fundamental core restructuring that is absolutely necessary for these companies to survive," Vitter said.

McConnell indicated he would support a proposal by Sen. Robert Corker, R-Tenn. Under that proposal, the car companies would get immediate assistance under the conditions they work with creditors to reduce their debt by two-thirds and with the United Auto Workers union to bring labor costs in line with those of foreign auto makers. If a March 15 deadline weren't met, the companies would be required to file for bankruptcy protection.

"The Corker proposal would make many much-needed and dramatic improvements to the underlying bill," McConnell said.

Corker said union leaders and car-company executives have expressed openness to those conditions, and the process would have the same effect as a reorganization in bankruptcy court.

http://money.cnn.com/news/newsfeeds/articles/djf500/200812111715DOWJONESDJONLINE001005_FORTUNE5.htm

Looks like there are a few people with their heads on straight. While this bill absolutely needs to pass, it needs to pass with the assurance that the UAW will bring their costs down and that the Big 3 have major reconstructions.

The Department of the Treasury ready to prevent ?imminent failure? of the Big Three

Uncertainty swept through Detroit late last night when the Senate failed to pass a bailout plan for the Big Three automakers, but it looks as though all hope is not lost, after all, for Chrysler, General Motors and Ford. The Department of the Treasury announced on Friday morning that it will step in to help the Big Three.

Without immediate government funding, Chrysler and GM would be forced to file for Chapter 11 bankruptcy protection, a move that would likely spin both companies into liquidation. The Treasury Department doesn?t see this as a viable option for the U.S. economy, and has vowed to step in where Congress failed.

?Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the [auto] industry,? The Department of the Treasury said in a statement Friday morning.

The emergency funding will likely come from the $700 billion already set aside for TARP funds. The Department of the Treasury has yet to announce how much funding the Big Three will receive, but look for the amount to at least equal the $15 billion Chrysler and GM have requested. Terms of the funding are also unknown at this time.

Although the Big Three are far from out of the woods, a collective sigh of relief should be emanating from Detroit this morning.

Looks like the UAW got what they wanted :rolleyes:

Actually, it looks like none of them got anything they wanted--the marketplace has apparently doomed Chrysler & GM with or without a bail-out, since all prayers for success depended on a much larger annual US sales volume in 2009 that realistically ain't happenin', per this excerpt from an article in the Left Lane News:

"According to a new study by CSM Worldwide, new car sales will fall to just 11.5 million units in 2009 ? marking the lowest total since 1982. In comparison, 12.35 million vehicles have been sold in the U.S. through the first 11 months of 2008.

According to Michael Robinet, vice president of forecast services with CSM Worldwide, Chrysler would not be able to sustain its operations at the level of 11.5 million units. If Robinet?s theory holds true, we will likely see Chrysler sold off in pieces during 2009 and 2010.

General Motors could be in the same boat as consumers are already steering clear of brands it says it intends to sell or kill off entirely. Because of this fact, CSM predicts the Big Three?s market share will slip from 2008?s 47.4 percent to just 43 percent in 2009.

As it stands now, anything below the 12 million mark is the death sentence for Chrysler and GM, regardless of how much Washington decides to give Detroit. If CSM?s prediction becomes reality, it would likely mean a long and deep recession for the entire United States, and probably the rest of the world, too."

BTW:  The effort to combine Buick, Pontiac, and GMC "under one roof" is part of the process of combining these makes into a full-line vehicle enterprise--much more marketable in a sell-off, yet without incurring the huge cost of buying all of GM.  Then, too, North Korea quietly said a GM that includes these three brands as well as Hummer and Saab is not as desirable a purchase as is a GM without these five brands.  They got that right!

Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

As well, it seems to me that what is happening in the US auto industry is what happened to the UK auto industry a couple of decades ago.  I hope hope not, but unless there is some intervention, it looks like it will.

One other thing...the "experts", as well as the decision makers, seem not to have an up-to-date appreciation of the domestic automaker's capabilities as far as manufacturing world class automobiles.  They refer to it as it was about 10 years ago.  Going by their comments, they all still seem to think that only Japan can build efficient and reliable vehicles. 

Quote from: FoMoJo on December 13, 2008, 10:34:02 AM
Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

Quote from: FoMoJo on December 13, 2008, 10:34:02 AM
Something I heard on some discussion show that I'm still trying to digest.  Someone, an expert of some sort, said something to the effect..."the industrial sector is no longer the economical base, it's the financial sector"...I can't quite come to grips with that.  How many jobs can the financial sector generate compared to the industrial sector?

As well, it seems to me that what is happening in the US auto industry is what happened to the UK auto industry a couple of decades ago.  I hope hope not, but unless there is some intervention, it looks like it will.

One other thing...the "experts", as well as the decision makers, seem not to have an up-to-date appreciation of the domestic automaker's capabilities as far as manufacturing world class automobiles.  They refer to it as it was about 10 years ago.  Going by their comments, they all still seem to think that only Japan can build efficient and reliable vehicles. 

What type of intervention are you talking about?  Do you honestly believe that the government can succeed where private management has failed?

There's no reason why the US auto industry can't succeed.  It hasn't made the right moves to succeed, but with the right management, it could.  I doubt very much though that the government can do a better job.  Look at how well the British government did running auto companies.  It was a disaster there, and it would be a disaster here too.

Quote from: MX793 on December 13, 2008, 10:40:38 AM
Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

All that is true, but the finance industry is still a secondary, service industry.  It facilitates the creation of wealth through other primary industries, but doesn't actually generate any wealth in its own right.  That's something we seem to have forgotten.

Quote from: dazzleman on December 13, 2008, 02:54:26 PM
All that is true, but the finance industry is still a secondary, service industry.  It facilitates the creation of wealth through other primary industries, but doesn't actually generate any wealth in its own right.  That's something we seem to have forgotten.

I agree, there is sort of a co-existance there.  But the fact is, you can't just look at the people the financial sector directly employs, as they have influence beyond their own circle and in that sense they have an effect on employment beyond their own sector in the market.

Quote from: MX793 on December 13, 2008, 02:59:29 PM
I agree, there is sort of a co-existance there.  But the fact is, you can't just look at the people the financial sector directly employs, as they have influence beyond their own circle and in that sense they have an effect on employment beyond their own sector in the market.

I completely agree.

And that's the reason why more people supported a bailout of the financial system, as opposed to the auto industry.  A collapse of the financial system means a collapse of the total economic structure, even industries (unlike the auto industry) which are fundamentally healthy.

The auto industry is like a limb of the economy, while the financial system is the heart.  You can lose a limb and survive, but if the heart goes, the whole thing dies.

Personally, I can't wait until The Big Three consists of Ford, AM General, and Avanti.  That looks to be the way things are going.

Quote from: MX793 on December 13, 2008, 10:40:38 AM
Money makes the business world go 'round.  Companies need capital to operate.  Where do they turn (normally) when they need a loan?

Companies typically invest some of their profits to build a stronger asset base.  Where do they turn for those services?

Most car buyers take out a loan to purchase a new vehicle.  Who provides those loans?

I was thinking more of jobs.  Ultimately, it seems, that the sector than can generate the most jobs would be the economical base.

Quote from: dazzleman on December 13, 2008, 02:53:27 PM
What type of intervention are you talking about?  Do you honestly believe that the government can succeed where private management has failed?

There's no reason why the US auto industry can't succeed.  It hasn't made the right moves to succeed, but with the right management, it could.  I doubt very much though that the government can do a better job.  Look at how well the British government did running auto companies.  It was a disaster there, and it would be a disaster here too.

It seems that there are a couple of things the GM and Chryser need at the moment; a bit of cash to keep them going and some means of getting out from under the labour and dealer restrictions they are subject to.  In order to make the right moves they need to get rid of some obstacles that are impeding them.  As for the government doing a better job, after watching some of those bozos during the hearings I wouldn't trust them to run a Kool-Aid stand.

Quote from: dazzleman on December 13, 2008, 03:01:46 PM
I completely agree.

And that's the reason why more people supported a bailout of the financial system, as opposed to the auto industry.  A collapse of the financial system means a collapse of the total economic structure, even industries (unlike the auto industry) which are fundamentally healthy.

The auto industry is like a limb of the economy, while the financial system is the heart.  You can lose a limb and survive, but if the heart goes, the whole thing dies.

While the auto industry is a limb, it is a limb of the industrial sector.  Would you not consider the industrial sector, as a whole, the heart of the economy?  I would think that it is, still, where the bulk of the people are employed and make their livings so that they can utilize the financial sector as well as other sectors such as service and recreational sectors.  The financial sector seems more like the life blood that flows between the various sectors to supply the energy and vitality to the economical system.

Quote from: the Teuton on December 13, 2008, 06:01:38 PM
Personally, I can't wait until The Big Three consists of Ford, AM General, and Avanti.  That looks to be the way things are going.

Perhaps, on a global view, that may make some sense.  However, if countries such a Germany, Japan, Korea, et al, can support multiple major automakers, the US surely can as well.  What is needed is removing the barriers that prevent them from doing so; and it's not just the unions and stupid managers.  The US has provided some of the outstanding management and engineering teams for the foreign manaufacturers that they have an interest in.

Although I have long been a Ford (racing) fan, it would be a shame to see Chevy and Dodge bite the dust :(.

I'm sure we can on these foreign companies if we have another world war to to build war materials. Yeah right.

The big 3 built a lot of the war machinery during WWII. Who will build it.

We are already very militarized and the Big 3 retain little to no involvement in that.

Since the gub'mint is handing out free money, I suggest we all travel to Washington and lobby Congress to approve the CarSpin Bailout Plan!

All we need to do is fill in this official goverment form......

(http://mtblog.vanityfair.com/online/politics/2008/12/01/federalbailout.gif)

:lol:

Cheers,
Madman of the People

lol, there's no Four Seasons in Laguna Hills. Silly.

If I round off to the nearest billion, I'm entitled to $0. :cry:

The White House bailed out GM and Chrysler! Hopefully the Obama administration lets Chrysler fail, because they really have no future with or without a bailout, but they've been bailed out in the meantime.

As for the problem of returning to competitive companies (per CNN):

We do not feel it is appropriate for government to dictate the specific terms of negotiations between management and labor or management and dealers or management and creditors," the official said.

UAW President Ron Gettelfinger said the union does not want further concessions to be spelled out in the loan agreement, but that the union would hold talks with the government about how to make the Big Three more competitive. :rolleyes:

"We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry," he said. I wonder how likely this is

In light of such a great number of people in favor of ridding the Big Three management, why has absolutely nobody brought out the idea of getting rid of Ron Gettelfinger? He and his union are for a large part responsible for the mess the Big Three are in on top of everything. While the union has managed incredible wage rates and tons of perks, he has certainly argued for too many and too much from these companies; his efforts have led to much of the lack of profitability which have in turn caused thousands of employees to be "bought out" and laid off.

QuoteWe do not feel it is appropriate for government to dictate the specific terms of negotiations between management and labor or management and dealers or management and creditors," the official said.

UAW President Ron Gettelfinger said the union does not want further concessions to be spelled out in the loan agreement, but that the union would hold talks with the government about how to make the Big Three more competitive. :rolleyes:

"We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed as we join in the coming months with all stakeholders to create a viable future for the U.S. auto industry," he said.

LOL! Good luck trying to keep the government out now that they have a hand in the jar.

I as a taxpayer, for one, hope that the concessions are strictly enforced and remain binding for the entire duration until the bailout loans are paid back.

Quote from: Colonel Cadillac on December 19, 2008, 11:12:48 AM
The White House bailed out GM and Chrysler! Hopefully the Obama administration lets Chrysler fail, because they really have no future with or without a bailout, but they've been bailed out in the meantime.

This is one area I would like to see Bush at least TRY to be actually, you know, conservative, and he sells out. What the fuck. Is there any way to get this guy out of office any sooner?

Quote from: Colonel Cadillac on December 19, 2008, 11:18:21 AM
In light of such a great number of people in favor of ridding the Big Three management, why has absolutely nobody brought out the idea of getting rid of Ron Gettelfinger? He and his union are for a large part responsible for the mess the Big Three are in on top of everything. While the union has managed incredible wage rates and tons of perks, he has certainly argued for too many and too much from these companies; his efforts have led to much of the lack of profitability which have in turn caused thousands of employees to be "bought out" and laid off.

I don't like his stance or unions in general but think about it, you are asking that he be removed because he did/does his job too well.    :huh:

Quote from: Laconian on December 19, 2008, 12:08:39 PM
This is one area I would like to see Bush at least TRY to be actually, you know, conservative, and he sells out. What the fuck. Is there any way to get this guy out of office any sooner?

I don't like any of these bailouts, but I'm guessing the judgment is that the economy can't take another shock of this nature right now, and it was therefore necessary to keep the auto companies going at least until the overall economy stabilizes somewhat, and allows the problems to be dealt with in an orderly manner.

What a mess.

Quote from: Byteme on December 19, 2008, 01:14:45 PM
I don't like his stance or unions in general but think about it, you are asking that he be removed because he did/does his job too well.    :huh:

Not necessarily. He is the liaison between the companies and the union and it is his responsibility to keep the union's best interests at heart. By arguing for wages and perks that are beyond what the companies could afford, or to be competitive is not in the union's best interests. The UAW has gone on strike countless times over the years forcing the companies to take on debts they should not have taken on and pay them wages they should not have been payed, thus their costs became much higher than the non-unionized companies manufacturing in the United States. Anyone in their right mind knows that a company with costs higher than another company in the same industry cannot remain competitive, and therefore will eventually fold causing the very employees the union is fighting for to be fired and out of work.

Unions were invented for fair wages and safe working environments. Being that the government has enough control these days to ensure that working environments are in most cases perfectly suitable and safe to work in, their only purpose is to fight for fair wages. They have not fought for fair wages and have gained too much power of these companies forcing them into their own personal agenda; better wages and better perks.

Ron Gettelfinger took advantage of his and his union's power causing the companies to lose their ability to be competitive and therefore, the companies should be going into bankruptcy. He screwed over everyone he is fighting for, and those who he fought for too blindly followed orders and did not realize the consequences of their actions.

One thing I haven't seen talked about very much is the effect on unit vehicle cost of inflexible union work rules that prevent employees from being deployed in the most efficient manner, and thereby require featherbedding which pushes up manufacturing costs.

Is this a big issue with the B3?  I suspect it is, so this problem is about more than the amount that individual workers earn in wages and benefits.

Quote from: dazzleman on December 19, 2008, 04:48:23 PM
One thing I haven't seen talked about very much is the effect on unit vehicle cost of inflexible union work rules that prevent employees from being deployed in the most efficient manner, and thereby require featherbedding which pushes up manufacturing costs.

Is this a big issue with the B3?  I suspect it is, so this problem is about more than the amount that individual workers earn in wages and benefits.

You bet it is.

An example: While comissioning (the process by which new machinery is put on line in a plant) a particular machine at Lake Orion, an electrical panel had to be removed and discarded. The electricians disconnected it, and went and got a hi-lo to pick it up and take it to the scrap yard. Driving up to the panel, a millwright stops them and asks what they think they're doing.

It is under the electrician's work rules that they get to install and remove electrical equipment. It is under the millwright''s work rules that they get to install and remove large equipment. Both groups claimed the removal of this panel as their work. Work stops, and they call their respective stewarts (a paid employee who's only job is to make sure union rules are adhered to, which, BTW, is different from a committeman who's job it is to bring worker complaints to the union's attention, or an ombudsman, who's job it is to bring union complaints to the management's attention, anywyas...). Upon consulting the bylaws, it is a millwright's job if the panel is over 15 cubic feet. The panel happens to measure just over that, but thelectricians say that panels are measured on their interior dimensions, not their exterior size. The book doesn't cover this that specifically, so they debate it for a while, go to lunch and come back, and eventually have somebody from material handling take care of it.

Quote from: Soup DeVille on December 19, 2008, 05:30:52 PM
You bet it is.

An example: While comissioning (the process by which new machinery is put on line in a plant) a particular machine at Lake Orion, an electrical panel had to be removed and discarded. The electricians disconnected it, and went and got a hi-lo to pick it up and take it to the scrap yard. Driving up to the panel, a millwright stops them and asks what they think they're doing.

It is under the electrician's work rules that they get to install and remove electrical equipment. It is under the millwright''s work rules that they get to install and remove large equipment. Both groups claimed the removal of this panel as their work. Work stops, and they call their respective stewarts (a paid employee who's only job is to make sure union rules are adhered to, which, BTW, is different from a committeman who's job it is to bring worker complaints to the union's attention, or an ombudsman, who's job it is to bring union complaints to the management's attention, anywyas...). Upon consulting the bylaws, it is a millwright's job if the panel is over 15 cubic feet. The panel happens to measure just over that, but thelectricians say that panels are measured on their interior dimensions, not their exterior size. The book doesn't cover this that specifically, so they debate it for a while, go to lunch and come back, and eventually have somebody from material handling take care of it.

That confirms what I was thinking.  If the unions would get rid of these stupid work rules, they could make higher salaries and have their companies still be more competitive than they are.  I bet the non-unions plants in the south aren't dealing with this bullshit.

Quote from: Byteme on December 19, 2008, 01:14:45 PM
I don't like his stance or unions in general but think about it, you are asking that he be removed because he did/does his job too well.    :huh:

Alan Mullaly is doing a pretty good job yet congress wants him to work for nothing (meanwhile, congress just gave themselves a raise), clearly rational thinking is not required here.