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When Ford's stock hit $2, I told him I was going to buy in. He recommended I wait.
Spoke to him a couple of days ago, and asked him if he felt the bottom had been hit (again, close to a buck and a quarter per share). He said if it was his money, he still wouldn't do it.
Now, when an employee of the company advises not to buy his company's stock, on the cheap, I take that as a good indication not to.
As you say, GM isn't far behind. Either some investors are going to get very rich off of these stocks (may take awhile), or they're going to look like buffoons for investing in them. There's going to be no in-between.
Dealerships haven't done much in the way of consolidation around my part (SW OH) in recent years. There have been some that have changed hands, but nothing of the wholesale variety. I don't know if the inevitable closures are just around the corner. Or, if the dealerships around me have prepared themselves well for this downturn.
All of them have plenty of stock, that's for sure.
So as long as people want to buy autos then there will be factories, workers, sales, mechanics and suppliers in the auto industry. So long as there is enough demand in a geographical area there will be some sort of auto dealer brand(s).
The thing that we should be focusing on is how to stimulate demand and spending. And I don't mean we push vehicles to people who can't afford it. And if people choose not to buy the Big3 vehicles as they have been doing, with the Big3 market-share continuing to decline, there is nothing that can be done, other than the U.S. taxpayer subsidizing the companies forever.
In order for the Big3 to increase market-share they need to build vehicles we like, with good quality of all sorts, and prices we like. Increasing prices a couple of months ago as GM did, such that a base Impala is $23K, is crazy if you want to succeed. I really contemplated that GM's management is intentionally trying to bankrupt themselves, to break their contracts and obligations.
Fiat at some points
Lada
British Motor Corporation
"I'd be curious to see examples of successful, government-owned & operated automotive manufacturers. I can sure think of one notable example that wasn't. "
Ford, in my mind, is a totally different conversation. I have no problem if we set up a "line of credit" for Ford. Ford has made the hard decisions and are acting with a sense of urgency. GM needs to start doing this NOW! They are truly a product of the credit crisis. GM and Chrysler.....they can talk to the government for help after a Chapter 11 filing.
I'll give you Renault (Lada is part of the same group and is much weaker)
BMC - went downhill and merged with British Leyland, one of the lousiest companies of all time. Ever.
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Well, another example would be dealer consolidation, some of which has already happened. You may still need the same number of mechanics but lots of other jobs (and buildings) would be redundant.
If we go through a prolonged downturn and people start driving beaters longer, I wonder if at some point the whole love affair dies and we wind up with a declining automobile population like Japan? Can't really see that, but I think someone is going to have to come up with a new angle to get people really excited about cars again. Excited enough to open their wallets, not Edmunds excited about cars. :shades:
Now aren't those the real money making items on the dealership side?
Another thing they were questioning a lot on CNBC is why Gettlefinger and the union weren't getting grilled as hard as the CEO's.
If you truly believe in the company and its future, it seems like a time to jump in, does it not??
Lot of people got burned thinking K-Mart would turn it around too. (K-Mart did turn around, but not after banko and wiping out all the shareholders).
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said “Getting more and more pay for less and less work is a dead-end street.”
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Yep, count me in that crowd. Now immediately after the bankruptcy, once they reorganize and issue a new stock I might be tempted to jump in, but you couldn't pay me to take their stock right now.
Chrysler gobbled them up, mainly for the Jeep brand. They made a stab at marketing some cars AMC had pretty far in development (called Eagle). Supposedly, Eagle was going to go "head-to-head" with the European makes. But, that dream was short lived and Chrysler eventually did away with the Eagle brand, leaving nothing but Jeep as a remnant of the old AMC.
Chrysler then revamped the Jeep Toledo, OH plant. Chrysler then did a total redesign of the Grand Cherokee, which went onto very good success.
The last remnants of any AMC involvement with Jeep went away when Chrysler scuttled the old in-line 6 motor that had powered the Cherokee and Grand Cherokee for many years. That was awhile ago, though.
from CNN today:
Consumer Reports considers GM reliability to be much improved, but it's not as consistent as that of other brands, like Ford. GM has made huge strides, however, in the "perceived quality" of its vehicles.
In more recently designed GM vehicles interiors are more attractive and feature richer-feeling materials. Ride and handling qualities are also more sophisticated.
The target keeps moving for quality. What is average today far exceeds above average from 3 years ago. We would rather see our own countries company fail than to accept quality from it that exceeds the best of Japan from a few years ago.
two types: real and perceived quality.
How is the fact that the dealer mechanic is sitting around doing nothing a selling point? Maybe they charge too much.
management as is must go
I'd give Mulally a bye - he came to Ford from Boeing, trained as an engineer, and seems to be doing a good job with what has to work with.
new labor agreements to align pay and benefits
You run back into the ageism thing. Workers at the Big 3 tend to be older than the workers at the upstart auto factories down in the South. Their costs theoretically will go up unless they can figure out how to dump the older workers without running afoul of discrimination laws. I'd be curious to see if the Nissan plant in Smyrna TN has higher labor costs than the Canton plant, since it's been around since the 80's.
Tennaco, world's biggest maker of auto exhaust systems, is closing 4 factories and cutting 1,000 jobs. The CEO is on the radio blaming the credit crunch and loss of consumer confidence. He thinks a 1/3rd shake-out of suppliers is possible in a worse case scenario.
Meanwhile, for the AMC nostalgic..... I've got a friend who knows zip about cars. Back when he and his then wife bought a Pacer. Oh, my what a horrible car. One day it died and their chief decider in what to get next was where the nearest dealer was since tehy were likely walking there and driving back. They ended up in an Alliance. Ouch!
If that isn't jumping from the frying pan into the fire, I don't know what is...
The Environmental Motor Company
The evil subplot to use the loans as leverage to remake US automakers into bastions of green.
Somehow, I doubt that Alabama "competed" with Michigan 230 yrs ago. They were too far apart for that.
The problem this country faces now is that technology makes this country smaller and smaller by the day. You think if a person gets a job in Ala. at the expense of someone in Mi. especially a lower paying job, that it's a good thing for the US??? That's foolish. What's good is that BOTH people get a good paying job.
What are you talking about??? :confuse:
F150 #1 seller for 31 years, will be 32 here in a month or so
Taurus #1 selling car in the world for years
In the late 90's we had 6 of the top 10 selling cars in country. Having the best car in a segment has never been the problem.
WheelMan
The problem is it's not the late 90's anymore. Ford blew all that they gained during the 90's. I think they are back on the right track, but it might be to late.
They keep it alive every five years (I think it's five years) in nonsensical legal "paper posting" which is meant to keep someone else from using the name again. It's quite ridiculous and territorial..... Trust me, AMC is really dead and gone.
Saying it (AMC) still exists in some form is ridiculous, I have not seen a brand new Javelin crusing down the street, until that happens it's a nerd world argument.
Nothing lasts forever, and I'm not for throwing money at it because it can't make a decent competitive product anymore.
One of the big three needs to get absorbed into the remaining big two......
I'll give you the Taurus- kind of. They didn't improve it, and it had serious problems with things like engines from what I understand. It was certainly innovative, but I doubt it was the best car in its segment at the time (One of the Camcords, likely at that time). Trucks certainly don't count, as focusing on that is what got the Big 3 in this mess. What were the other 5 bestselling cars?
An air of invincibility can lead to complacency and bad decisions.
Dynasties do come to their end.
I think the best way to judge "Best in Class" is to look at their resale. A good car will always fetch more. Having said that, Vette is the only American car I really consider "Best in class". And its resale shows.
Not the result he intended would be my guess.
Consider this moment that probably doesn't happen if TV cameras aren't in the room..
"There's a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands," Rep. Gary L. Ackerman (D-N.Y.) advised the pampered executives at a hearing yesterday. "It's almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. . . . I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here?"
The Big Three said nothing, which prompted Rep. Brad Sherman (D-Calif.) to rub it in. "I'm going to ask the three executives here to raise their hand if they flew here commercial," he said. All still at the witness table. "Second," he continued, "I'm going ask you to raise your hand if you're planning to sell your jet . . . and fly back commercial." More stillness. "Let the record show no hands went up," Sherman grandstanded.
I'd like to see more reality and specifics rather than showboating, but I'm not holding my breath
This is a complete mess that appears to be heading to a complete disaster.
They all flew in on their nice big expensive company Lear jets. Like one congressman stated... like standing in line to a soup kitchen dressed in a tuxedo. :sick:
Wasn't the Premier morphed into the Vision, Intrepid, Concorde, and the previous 300? Not all of it went away.
That's it. The American people are not having any of it, folks. And do you know The Democrats are owned by the unions, and I don't see them rushing to loan the Big 3 any money, do you? They know if they do, in 2010 we replace the entire Congress again with Republicans, period.
It was also interesting when the execs were asked if they would take $1 for compensation.... only the Chrysler exec said yes. It is clear that the Ford and GM execs aren't willing to sacrifice any of their own personal compensation to help save their companies.
I think Ford will survive, but it will be sink or swim time for GM and Chrysler. Bankruptcy seems to be the best option for GM, but the execs are still clinging to their arrogance and the notion that as GM goes, so does the economy. :sick:
I hope they are two of the NO votes on any kind of bailout for the automakers.
Agree - Wagoner looked worse IMHO than any of the others. He has no vision, no plan. His idea of the restructuring he's done is to negotiate some cost reductions with UAW. No fundamental changes in the company. In fact he said that they've ALREADY done the restructuring and are just needing this bridge loan until the economy improves.
GM needs to fire Wagoner, and demand the UAW radically modify the contracts or they'll go BK and then there's no guarantee that the UAW at GM will have any jobs at all.
Ford is doing OK right now and I'm fine with investing in them.
Surprisingly, Nardelli looked pretty good, although their products are still no good.
The path is clear... regardless of the complexity. It's not going to be easy or pretty to watch, but hopefully the Phoenix will rise again from the ashes.
Did you listen to Micheal Moore.., i think he is close enough to being right !
General Wesley Clark 'U.S. Army'(from NY Times) says the government should help the Big 3 !
Can the Big 3(the companies) help starving people by just giving them cash.., The banks get trillions(3,000,000,000 or more, i've heard 9,000,000,000).
Good luck making it past January, Wagoner!
Regards,
OW
You could almost forgive their wasteful travel to beg, if they had offered any kind of hope for survival. They basically want the tax payer to keep them going till they figure out what they are going to do. I would rather just pay unemployment and let them start selling off their assets in bankruptcy. The sooner they get out of the auto business the sooner a viable group of automakers can fill our needs. There are millions of unsold vehicles and dealers bailing out by the droves. Their dealer networks being gone will mark the end of them anyway. Unless Wagoner plans to sell online and hire illegals to drive your new car cross country to your home.