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Now there were multi-billion-dollar investments by GM, Ford and Chrysler that are being moved to Mexico and China. As a matter of fact if I read the blurb accurately part of the strategy of one of the detroiters is get cash from Congress, close plants as fast as possible, have dealers go out of business and make as many vehicles as possible outside the borders of the US where the UAW can't get at them.
Why would the transplants NOT leave? It's cheaper to make the vehicles here. Again you are ignoring the basic economics of currency exchange rates. Right now the cheapest and most stable place to buy land, build buildings and employ labor is right here in the USofA.....unless that labor is UAW. Then that's a deal killer ( see the above paragraph ).
Are you serious? You do mean the American auto companies, right? And how would the oil companies be hurt if any of the Detroit 3 go under? For every vehicle lost in sales from a company that goes under, another auto company would get that sale.
GM owes $66 billion that they are going to tell the lenders too bad so sad cannot pay it. That leaves US to pay the banks GM defaults on.
GM wants $4 billion for Christmas or they will take down GM and millions of Americans will suffer with them.
Along with that GM has not kept the money they were obligated to keep in the pension fund for 450,000 retirees. Did they borrow against it or just piss it away? That leaves US with untold $billions to keep those retirees from freezing, unless they retired to Florida.
GM and the UAW have conflicting stories on wages and benefits. One says they will be equal to the industry by 2012. They other says they are already equal. Someone is lying.
The dealers they are concerned about will get NOTHING from the bailout, so unless GM comes up with cars people want they will continue to die.
The suppliers will get nothing except whatever continued orders for parts.
I do not believe for a minute that the GOOD parts suppliers will not get more orders from the automakers that survive this. No way will GM bring Ford and Chrysler with them. That is just cheap rhetoric. If the board at GM want to keep Wagoner, that is their choice. I say no cash if his team of losers is not fired with NO severance. They do not deserve the pay they have stolen from the stockholders over the last 40 years. It is the good ole boy club in some of the major corporations that have brought this country to their knees and they will get away with it scott free.
http://oversight.house.gov/documents/20070329144701-85817.pdf
Similarly what are the states in which the Big3 have plants doing to raise money. How many are there - 20? Are they issuing bonds to help finance the Big3? maybe NY could help - they're spending $833M in and around the new Yankee Stadium!
So anyone in a state with a lot of auto suppliers and plants, tell us what your city and state is doing to raise a few billion $'s in conjunction with the other cities and states to loan the Big3.
Well being good to the constituents back home, ensures votes to keep them in power, and being good costs $. If you don't spend $, then people back in the state aren't happy.
It's just like having someone else's Platinum card, and deciding whether to buy your wife or girlfriend what she wants to keep her happy. Pretty much a no-brainer to spend the $ - nothing to gain by saying "no".
There was a time a few years ago, I wanted a small truck. I looked at a Tacoma and it was just too dang expensive for what I wanted - a small basic work truck. Was considering a Dodge Dakota. Didn't like either the Ranger or the Chevy/GMC small trucks.
You severely underestimate the loyalty Americans have to their full-size trucks. My BIL is worried about the collapse of Ford because he doesn't want to be stuck driving a (censored) Toyota truck!
The 500/Taurus is sort of an in-between size class that I always called "new wave full-size", or some might call a "tweener". It's a group that started in 1985 with GM's FWD Electra, Ninety-Eight, and DeVille. These things sort of split the difference between the midsized cars and the traditional full-sized cars of the time.
Chrysler entered this size class in 1993 with the Intrepid and Concorde, and then the NYer/LHS. Ford was a latecomer though, not getting into it until the 500/Montego.
In some dimensions, the 500/Taurus is actually bigger than a Crown Vic. Notably, headroom, trunk volume, and back seat legroom. Shoulder room is less though, and I swear it feels like it has less legroom up front. The front seat is higher than a Crown Vic, but doesn't feel like it goes back as far.
Just another scheme to take from the middle and upper class and give to the lower classes. It will be those on the bottom of the ladder that suffer first in any economic downturn. We are already spreading the wealth around and the Coronation is not until January.
Wages are only part of the story. You can't build a factory in a country that lacks 1st world road & port facilities. Otherwise, you can't get components & raw materials in & the finished product out. This is a critical requirement - I'm speaking from sad experience here - & it rules out most 3rd world countries.
You need a fairly literate work force that can learn to operate & maintain machinery. Ideally, many of the native workers should be proficient in English so that they can communicate with senior American management. Your local managers should be absolutely trustworthy & should be able to function effectively without your having to closely supervise them. Otherwise, you'll have to fly to that part of the world every other week to clean up the latest mess. (Again, I'm speaking from experience.)
You also need a reasonably stable, transparent & honest government. Without this, you can't do business. What you'll save in wage costs you'll spend on bribes.
With this in mind, when you step back & look at the big picture, you'll see that non-union U.S. labor is the biggest bargain on the planet. Sure, some American jobs will go elsewhere, but I'll bet that you'll see many more high-priced EU jobs come here.
That is exactly right. A friend at HP told me that some of the tech support they outsourced to India, is now being done in the USA by the Indian Company. Too many complaints of language barriers.
It would be ideal if the plants that get closed when GM goes belly up, to be reopened with other automakers taking their place. If the EFCA law passes Michigan and Ohio will have to become Right to Work states or no one will set up shop there. The UAW thug mentality would make it impossible to do business in those states. So many do not realize just how bad that law will be.
What do we make there? Old tech. My company will not send any new or patented technology, or any chemical formulae to our products, to these countries, for fear of reverse engineering and copying.
We make most of our products here in the U.S., and the direct labor is very small. Our main product is priced about $500. The people who physically make that product cost about $3.00. The corporate and technical people cost another $15. The materials cost $50. Then there's some sales and shipping costs. And we pay a 37% federal tax on profit, and then some to our state.
If the labor overseas to make this part drops to $1.50/unit have I saved much? After I rent a building, train people, pay the extra shipping, have inventory tied up on ships and in Customs? When we spend $5,000 every month to send someone there to fix things?
So the labor to actually make something is fairly small, compared to the other costs. There is not a lot to save in most industries, by going overseas, and the companies that have gone overseas have found that out.
you know, i wonder if anyone has thought of that...the best thing to do might be to give some bailout money to the suppliers, rather than giving it all to the Big 3...if one of them STILL goes down, the suppliers need to be kept afloat in order for other car companies to have a shot at getting through.
Just like they should have been doing all along.
Regards,
OW
The neo-Taurus is full-sized on the inside where it matters. What it lacks are the two feet of wasted space between the grille and radiator, and the pseudo-cavernous trunk with a tire taking up half the usable space: crappy packaging that marked the traditional full-size American car.
All the automakers in the USA are hurting for sales. Why just bailout the ones with American names? If you let survival of the fittest work, the poor companies will go away and the good ones will be stronger. All the bailout will do is weaken the whole automotive industry worldwide.
G8 is very nice car. It could be a fantastic car when GM tune engine, suspension & etc up to BMW. GM have to to couple small steps.
It actually goes way way beyond the PC makers. It's whose platform is the software industry standard? It was IBM versus Microsoft and Microsoft won. IBM was just another case of a company trying to force their product on the customer.
What I get from this is that state and local municipalities will suffer greatly with a big three failure because of reduced sales tax income from the sale of new cars. Thing is, somebody is still going to be selling cars in the future. State and local municipalities collect the same whether a Toyota or a Ford is sold. Areas that have disproportionate amounts of Big 3 dealers would suffer, but countrywide the sales tax revenue would only vary by dollar amount of cars sold.
The other thing is - this guy equates Big 3 bankruptcy with their instantly disappearing from the face of the earth (with no possibility of restructuring). I just don't see it happening that way.
Maybe there's some analogy there - anti-trust and CAFE?
Or maybe it's Alzheimer's of the Big3. I remember my 40mpg 4-speed '82 Escort. I guess they misplaced the blueprints? and forgot there is a limited amount of oil in the world? 27 years later with their R&D, and engine advancements, I don't see a 40mpg vehicle sold by Ford here.
A few million$/exec, or a few hundred thousand/year for the next layer down of management sure doesn't get you much these days!
I used to, but in the last year he has descended into increasingly incoherent old-man rants. At this point, I expect him to start blaming GM's woes on the Trilateral Commission and the abolition of the gold standard.
Yeah, but 40 miles in 1982 gallons works out to about 28 these days, with emission standards, E10, and the EPA rigging the numbers for the doemstics.
>You need a fairly literate work force that can learn to operate & maintain machinery
India comes up as the only choice. and why not? GM does have a plant there and is doing very good.
http://wikimapia.org/3825876/GM-Halol
http://www.gm.com/corporate/about/global_operations/asia_pacific/indi.jsp
I'm sure that in your American car-loving neck of the woods (Philadelphia?), you should have no trouble finding 1st-rate independent mechanics, some of whom might have dealership experience.
Are you worried they might screw up the Heated Windshield washer fluid? :P
Just joshin ya. Anyways, a good mechanic should have all the right tools nowadays that you shouldn't have to fear going to them to get work done. If they didn't, they'd be out of business. Even some of the German stuff that is out right now has been "Americanized" enough that you don't need Hans da Wundermechanic to change a tire.
Well, I trust the dealer's service center to get more oil ON the engine than In the engine, and I trust them to get a TSB right on the third try, but that's about it.
NEW YORK (CNNMoney.com) -- A majority of Americans oppose a bailout of the troubled U.S. auto industry, according to a poll released Wednesday.
The CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.
A full 70% of respondents indicated that a bailout is unfair to taxpayers.
In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.
Sandeep Dahiya, a professor of finance at Georgetown University, said the poll results were "quite surprising." The large percentage of those opposed to the bailout "tells you much about how what is good for GM is not good for America."
http://money.cnn.com/2008/12/03/news/economy/automakers_poll/?postversion=200812- 0312
it travelled pretty well, too. not seat was not great but not horrible.
there is no comparison between cars from 1982 to now.
the crown vic is probably the closest.
Why does the government have to get involved? Why couldn't GM advertise a new warranty system where the customer has the choice of a traditional GM warranty, or to give up the GM warranty and they would get a 3rd party warranty of equal coverage. So GM would save the cost of any warranty and would spend that $ on buying you a different warranty, that you liked.
Or GM could say Malibu = $20K with warranty, (calculate what they spend on average for a Malibu warranty repairs) and discount the price that much. So if the average warranty cost on a Malibu are $1,500 over the years, discount the car that much more.
We really don't need politicians deciding how businesses should run manage. GM, the UAW, the dealers, the suppliers could all get together and fix this mess tomorrow, if they rip up their agreements, and say let's start with a clean sheet of paper and see how they can spend only what they earn.
The sooner we take away this unneeded government help, the sooner they will realize deal, and deal fast, or else they all go-down. When they realize they have 2 choices - to deal with each other and salvage something, or all fail the better.
I'm asking nothing more of these companies, then to do what every family has to do with a budget! If the family is running up debt, the family needs to get together and decide someone's got to give up their gym membership, cut the cable, get rid of the cellphone, and start eating spaghetti.
They can do this if they stop holding each other to the contracts that are driving them into debt!! But neither the CEO's, the unions, the suppliers, the retirees, or the dealers want to give up enough. They're still fighting amongst themselves.
I agree. I cannot tell you how many products I have bought and tried to get repaired to find the company is out of business or does not support that item any longer. That is part of the risk you take buying a domestic car when the company is on the brink of disaster. I never got any compensation on my solar system in AZ when it quit and the company was history. That was $10k down the toilet. In 1988 that was the price of a car.
So why did the money boys get trillions and others have to beg and say yessir. Maybe the young generation is indeed fodder.
Our fully trained, ASE-certified technicians provide sophisticated, professional, and highly technical auto repair and automotive maintenance services, using state-of-the-art computer diagnostic equipment, seven days (and six evenings) a week.
Regards,
OW
Toyota (a non-union US manufacturer) on the other hand - is $48 per hour.
While the average American worker comes in at $28 per hour.
So let me get this straight.........
The $28 per hour worker needs to bail out the $78 per hour worker whose company is going bankrupt ? :confuse: :sick:
I have several friends that would jump on $28 per hour in wages and benefits. Most around here are lucky if they make $20 an hour and pay for most of their health care.
It is sad that the fat cats all want the rest of US to bail them out when they make stupid decisions.
The cost per employee may be that high, but only because the automakers are spreading the pension and retiree health care costs to the workers. The guys on the line don't see those benefits and it shouldn't be included in talk about how much they make.
Nutty Math on Auto Worker Pay at NYT (The American Prospect)
Taking your example to an extreme, say that in the middle of Michigan somewhere there is a UAW township served by 6 domestic dealerships. Now because they are bad managers and business people the detroit 3 all go out of business at the same time. It's very painful in that town. All 6 D3 stores close up shop as they do in all the surrounding towns.
What does that town do when it needs vehicles? What does a family do when their vehicle is in an accident? What do the wealthy people do when they want a new vehicle? New drivers? Vehicles that are old and give up the ghost.
In fact these people will just find other vehicles to purchase and drive. As long as they continue to purchase the same number of vehicles after the disappearance of the D3 then state and local tax revenues and income generated from vehicle sales will not change one single dollar.
Another 'threat balloon' punctured falling to earth. THUDDD
I worked for IBM as well as lived in Rochester NY where Kodak "was" king of cameras and Xerox "was" king of copiers. And it is sad to see those dominant companies go through a long slow downward spiral. Life goes on though.
Maybe we should get away from Capitalism and move towards Socialism.
We are an average size dealership, we sell 200+ in the good times and 130-150 in the current and we employee 110 people, plus probably 50 vendors. Those are folks that no one takes into the equations. We got landscaping people, the guy who has the soda and candy machine, the people who sell us forms, the Dent Dr, the touch up guy, the guy who puts in leather, another for AM electronics, DVD's etc. The list goes on and on.
We may have to downsize if the trend continues but will not go under. On 06/16/2008 we opened a new state of the art facility here in TN and that has helped us quite a bit. Can't wait to see what we do when the worm turns