Also, with the demise of the Big Three taking the UAW with them, what's to keep the foreign makers from paying its workers Wal~Mart wages?
I think you're missing that the existence of the Big 3 and its union-workers, does not affect what wages foreign makers pays its workers. So nothing would change in that respect. The wages an employer has to pay is based upon what others are paying in the area. If a machinist is making $20/hr down the street making bearings, then the auto plant has to decide whether to pay slightly more, or how else to keep the worker happy. The wage that worker gets does not depend on whether someone 500 miles away in Detroit gets $25/hr.
Also if the current Big 3 fade away, why couldn't they be replaced by another American Big 3? Maybe we could have Gates Motors, Buffett cars, and Apple trucks? Why do you care if the owners and managers of the Big 3 succeed, when they could be replaced?
Let's ask the people employed by the foreign competitors in this country. What is the fair wage of an assembly worker?
Ford, according to its annual report, paid $70.51 per hour in wages and benefits to workers last year. GM's annual report says its labor costs average $73.26 per hour, while Chrysler's costs average $75.86 -- all well above the average $48 hourly cost incurred by Toyota, Honda and Nissan.
I assume a lot cheaper the and Physician-sized salaries of the UAW in it's prime. GM will pay new workers $14/hour.
In line with adjusted salaries needed to keep manufacturing here in the U.S.
I don't think Gates, Buffett, Kerkorian, or any other billionaire of you're choice would be as reckless and self-destructive as to try to start-up a new auto company. The last guy who tried that was Henry Kaiser and we all know how well that worked out. Maybe I'd be stupid enough to try it if I had the capital, but I'd still call my company General Motors though it would only be manufacturing Cadillacs and Buicks - but they'd really be awesome Cadillacs and Buicks if they were manufactured to my standards. Oh, I'd have Chevrolets too, but they'd be more like the Impalas, Chevelles, Corvettes, and Camaros of old. My small high-quality car would be the Nova.
Shoot, $14 an hour in Philly means either I live in a crappy one-bedroom apartment in a marginal neighborhood and pray I can pay the rent and utilities or I supplement my earnings with the proceeds from my illicit pharmaceutical sales position. I can forget about owning a car, unless I buy some hooptie and drive uninsured.
That's why auto plants are gone from the North. Too damned expensive.
Down south you can get an average house for $149K. Sure, you couldn't get one when you first start your job. You would need to save first. Does anyone remember what SAVING for the future means?
I don't think Gates, Buffett, Kerkorian, or any other billionaire of you're choice would be as reckless and self-destructive as to try to start-up a new auto company.
If any of the Big 3 collapse, why couldn't a billionaire or some investment firm come in and buy the factories and tooling for 25% of the value, rehire workers or get new workers at prevailing wages, and even buy the rights to the names of the cars?
That's why auto plants are gone from the North. Too damned expensive.
$12/hr is about what the workers in my plant make here in NH. Most make $15-$16/hr. Rents are about $800 for a 2-bedroom, but then again most families have 2 wage-earners.
A couple hours north of here are a bunch of shutdown papermills. Those guys would love some manufacturing work, at $15+/hr, and decent benefits. In fact there are many, many millions of people with no health care who would love a job assembling cars for those wages and benefits.
"$12/hr is about what the workers in my plant make here in NH. Most make $15-$16/hr. Rents are about $800 for a 2-bedroom, but then again most families have 2 wage-earners."
See, that's the key; 2 WAGE EARNERS. My wife's grandmother was saying a few weeks ago how tough her father had it about 70 years ago, raising 4 girls and taking care of a sick wife by himself, paying a $3,000 mortgage all on $25/wk. I tried to explain to her that that same house today would cost $300,000 yet I guarantee that her father would make no where near $2,500/wk. She couldn't comprehend the simple math and how they correlate (both being 100 times what they were). You'd be hard pressed to find 2 wage earners today grossing $2,500/wk. even up here in RI.
This is something no one seems to get, that you can't just take the standard of living from one part of the country, and unilaterally apply it everywhere, and expect everyone to adjust at the snap of a finger.
Even if GM could say look we're moving our factory from Lansing, Mi to San Antonio, Tx. You can come if you want, but the job pays what everybody else makes down there. Do you think people would be able to sell their houses and move at the drop of a hat??? Who would be SOL if the house sells for less than is owed???
All this competition between different parts of this country is bad. Instead of dragging people down to their standard of living, we should be working to bring everyone up. THAT'S the American dream.
Even if GM could say look we're moving our factory from Lansing, Mi to San Antonio, Tx. You can come if you want, but the job pays what everybody else makes down there. Do you think people would be able to sell their houses and move at the drop of a hat??? Who would be SOL if the house sells for less than is owed??? /i>
And that is the big problem here in Michigan and it is spreading thruout the country. My wife has a standing offer elsewhere with a sizable wage increase but we could never sell our house for what it used to be worth if we could sell it at all.. We only have a few more years left on the 15 year mortgage but we just do not want to move. So we are hoping that nothing happens that she loses her job. We do not want to move, we want to stay here.
So why did the do it in the first place? Did they think it *would* be viable and then found out too late that was not the case? Or did they just want to showcase some technology even though it wasn't ever going to amount to anything?
All this competition between different parts of this country is bad. Instead of dragging people down to their standard of living, we should be working to bring everyone up. THAT'S the American dream.
No, all of this competition across the country is GOOD. I'm in a very high tax state (CA), and it's GOOD that other states can steal work and companies from us. CA deserves to hurt if they overtax us and make us business-unfriendly. It's GOOD that FL has no state income taxes, people retire to FL and it supports their economy. Any state that cannot compete should SUFFER. Anybody who can't find work in their state when there's lots of work elsewhere should MOVE.
If you don't like competition then I'm sure you're excited about having one cable company -- how that provides you with high quality customer service and low monthly costs.... :P
So why did the do it in the first place? Did they think it *would* be viable and then found out too late that was not the case? Or did they just want to showcase some technology even though it wasn't ever going to amount to anything?
It was required by California mandate.
CARB devised a mandate for our most-populous state which says that the six largest auto companies must sell 10% of their products in the form of zero-emissions vehicles (ZEVs) by 2003--and ZEV means electric vehicle.
The Steel Mills went through this and PA was in bad shape back then. The auto industry is undergoing the same process. Change is always good even though you might have to go through some pain.
I look at it as an opportunity to try new things. You can't stop change even though it seems hard sometimes. No one can really hurt you at the end of the day.
I went thru similar. 20 years ago I bought a townhouse for $92K. While I didn't work there, the closure of Wang and Digital computers in the area sent the real estate market into a steep slide. The condo was worth about $30K five years later when I got a new job about 75 miles away. This was the price because many people were just walking away from their properties as they owed more then they would be auctioned for.
I kept my place, and rented it. Lo and behold other businesses rented these buildings, and new jobs came in. I sold my condo about 5 years after renting for $110K.
So while no one necessarily wants to move or to change jobs, its part of life. I now work at a company that was in a family for 95 years, but was sold 2 years ago, and there are all sorts of changes. It happens.
If GM goes under and it will someday - check how many companies 50 or 100 years ago in the Dow 30 are still around; then you adapt. Autos will still need to be made somewhere, and Detroit will have to make it look competitive for someone to do business there.
"No, all of this competition across the country is GOOD. I'm in a very high tax state (CA), and it's GOOD that other states can steal work and companies from us. CA deserves to hurt if they overtax us and make us business-unfriendly. It's GOOD that FL has no state income taxes, people retire to FL and it supports their economy. Any state that cannot compete should SUFFER. Anybody who can't find work in their state when there's lots of work elsewhere should MOVE"
Well, in that case maybe we should rename ourselves the Every State for Themself of America instead of UNITED.
I'm not saying that competition is bad, it IS good. Bad decisions SHOULD be punnished with bad results. But to say that states that CAN'T (as opposed to WON'T) compete should suffer is wrong.
I'm sure that an entertainment company could "out Disney" Disney, and RI could give them all the incentives in the world to do so, but the fact that it averages 39 degrees in the winter makes that IMPLAUSIBLE. Not RI's fault, just a fact of life, and we souldn't be punnished for it.
I'm all for states rights, but there comes a point in time where the federal government has to step in for the "GOOD OF THE COUNTRY".
Labor laws, for example, should be standardized throughout the country.
A more apt title should be "Who Stole My Cheese?" If you think everything is cool with those former PA steel towns these days, you're dead wrong. They're either ghost towns or ghettoes these days.
Good post, but I have to agree with tlong on this. I live in NY, possibly the most highly taxed state of all (particularly for those of us who live downstate), & I'm certain that our esteemed lawmakers would drive our taxes even higher if there were no competition from lower-taxed states.
After all, it was a New Yorker who coined the expression, "No man’s life, liberty, or property are safe while the Legislature is in session”. That was in 1866 - more than 140 years ago. Things haven't gotten better since then.
We're grossly over-taxed not for reasons beyond our control, like the weather, but because we've become a paradise for public employees. We not only have more of them but we pay each of them more money. Civil service unions wield enormous political clout here, & they make it almost impossible to reduce their numbers or their salaries.
In my county, for example, the base salary for a patrol officer with 5 years of experience is $100K. Sergeants & higher ranks make more, & overtime sweetens the pot further.
Given this, would you build an auto plant or any other factory in NY?
Well, I must say that NY has NOTHING on RI when it comes to high taxes. Unfortunately, as far as the legislatures (state and federal), lobbyists probably account for more wasteful spending and higher taxes than a $100k cop.
Would I build a plant in NY??? Well, I've thought about that for RI as well, and I'd say yes, as NY could be a central spot for supplying the entire northeast, from Md. to Me., as well as southern Ontario. Also, if a company (say VW) were there, they could, in essence, use local ports to export cars back to Germany.
I do agree that here up North, we have to get our ducks in a row as far as taxes and other types of regulations go, but I don't think that unionization should be enough to scare people away from up here.
"The Oshawa plant where the Camaro, and hopefully future Zetas, are built is consistently one of the highest quality plants in the US." Huh? I thought Oshawa build Hummers??? Or is it Mishawa... something.... Fairly speaking yes I do hear good things about cars built there, but I've yet to hear any good reviews on GM's other plants. The big question is: how is GM going to improve things when only 1 or 2 plants are doing great jobs?
"I do not know where the exchange rate would put the US built G8 at but you sure are going the wrong way. It would be cheaper here. And US GM is selling it at quite a bit lower price than what the same vehicle is sold for in' Austrailia. " Err, the GM products sold in Aussie are priced higher because they come from the European market division, where the Euro-Dollar rate affects pricing more than Aussie dollar to US dollar. The bomber is the fact that most European market parts are NOT avaialable in the US plants, leaving only 2 options should they wish to build foreign GM cars in US: 1) Replace the foreign parts with local parts, or 2) Produce these parts or import them to US plants. The former will lower both cost AND the vehicle quality, while the latter will bloat the price even more.
"He roots for HUNDREDS OF THOUSANDS of AMERICANS to LOSE THEIR JOBS. He's not OW, he's GW. " My goodness. Honestly, I feel sorry for those losing their jobs, but its NOT OUR FAULT. Do I feel simpathy? Yes. Do I care to save them by buying GM products? I sure as hell dont. I'm not talking patriotism here, people, I'm talking cold hard reality. When its my turn to choose a side, I choose with my green, my hard earned green, not my red-white-blue. This is reality, and I KNOW I'm with the majority. Why do most Americans buy foreign? Because they choose logic over patriotism. Should "buy american" really resonate with customers, foregners like Honda would've lost a huge chunk of sales by now. Years from now, when quality really catch up (assuming it really happens), buyers will turn back to domestics, I'll take a second look when it happens. I wont buy Cadillac Ford etc the same way I'd stay away from RCA like plague. Yes I did consider STS but not anymore, too many bad reviews there. OTOH I will buy American, in the form of Apple and Intel. Oh wait, theyre built in China now, whatever. Do I care if companies like RCA, GM and FoMoCo perish? Nope. Its competition = its inevitable. Oh and btw, I used to drive a Ford Escape, so unless I'm totally mistaken I think its made in US.
"In addition to what you say about Hummers, at the time GM had canceled an electric car of theirs that was in demand (EV1) to promote the environmentally grotesque and obscene Hummer line, which now thankfully seems to be going the way of the dodo bird. " Now this is somewhat absurd. Sorry, media, but the so called EV is in high demand by a bunch of loyalist. Second, lets not forget the cost of development, including battery chargers, will bloat the vehicle price UNLESS heavy federal incentives are on the way, which will NOT happen because our government dont have the money!!!!! However I'm interested in how the Volt will fare.
See? I dont dish GM all the time, just most of the time :P
I agree generally, with Cooter. Competition, the free market, and yes, even greed are good for the consumer at the end of the line. It's what has given us the quality of cars we have today. Do you think for one minute GM would be building the Malibu of today were it not for Toyota and Honda building Camcords like they do? Nope - they would still be putting out the 1977 Cutlass, with doors that won't shut without lifting them up, engines that get 7 mpg, and bodies that rust in the showroom..... Sure, only the strong survive, and that can be devastating to those who are weak, or don't change rapidly enough, but the consumer is getting a great car now at a decent price because of the free market and competition.
Step #1 - Scrap Buick Step #2 - Stop using global platforms for Caddy. Step #3 - Keep LaNeve out Step #4 - Decide who your target demographic is Step #5 - Cater to ONE demographic and do it better than everyone else Step #6 - Defect from GM altogether.
People don't forget bad experiences and that's not just about GM.
My grandfather had (according to family legend) the steering wheel come off in his hands on his new '49 Ford. Whatever the truth to that story, he would never buy a Ford after that, and none of his four children ever did either, and that's verifiable fact. 50 years of lost customers from one defect.
It's also a fact that many people still don't believe in GM's reliability, no matter how good it's gotten over the past several years. GM needs something to change people's perceptions. It's that or suffer through another generation of lost sales.
I keep wanting GM to do something dramatic to demonstrate the quality of its new cars..... Say, take a CTS to Times Square, and have it running at 70 mph day and night on a demo platform for a year with robot arms opening and closing the doors and trunk, with the lights flashing on and off, stereo blasting - oil changes done with the engine running etc.
The idea is that nothing should break during the test. It might not really be an effective test or prove anything in truth, but it would be a great advertisement.
This kind of thing is nothing new - recall Volvo running over a line of cars with a Monster Truck (OK - they got caught cheating, but GM wouldn't cheat this time) and Mercedes did it a few years ago with 3 diesels going 100,000 miles nonstop. http://www.edmunds.com/insideline/do/Features/articleId=105899
That's one reason I see Ford as having a better chance. Even if they don't have a lot of money to develop new cars, they take an old Focus platform and put SYNC in it. They work on a new Fusion and it has an innovative dash display. They also have Mazda which adds a lot of innovation - better than GM's sources such as Holden IMHO. And Ford is much less bloated and has a better cash position. And if GM gets Chrysler, well, 10 divisions here we come...
Bit confused by #2. Cadillac does not use a "global platform" unless we consider all GM's platforms global because they sell globally?? Or then again the Escalade is Global but I doubt that is what he/she was referring to.
"What incentive does Honda have to build more plants here if the Big 3 go belly up and Honda needs the extra capacity to make up for the demand created by the loss of Big 3 products??? "
uh, the same incentive they have for building them in the US today? you think Honda will just pack their bags if GM goes under? you think creating artificial jobs with tax payer dollars makes sense? How fair is that to Honda, Toyota and Nissan who have plants here and employ Americans with decent paying jobs that quite frankly are alot more secure than any employee at GM.
If you can't beat em, join em. If you can't join em, then you'll go under. This isn't about saving an endagered species.
"First of all, gas was $1 a gallon when GM was lobbying for that (Hummer tax credit). Why wouldn't you do what you can to encourage people into a vehicle you make $10 grand profit on???"
Because it showed a lack of vision while Toyota was busy developing the Prius. I'm amaized that even through hindsight you can't see that. And part of that $10 grand in profit came at the expense of the tax payers. We should be giving tax credits to people who are willing to conserve energy, not needlessly burn it up.
Selling the Hummer wasn't a lack of vision, not expanding the EV-1 to a Prius like car, or offering a Duramax in the Hummer WAS.
I don't think Honda will "pack it in", but if they share suppliers of components with the Big 3, and the supplier goes under or is unable to supply Honda with any extra components to pick up the slack for the needed demand of their cars, they'll just import them or the whole cars to NA from wherever else they are made. From this point on, there will be no incentive to add plants. What incentive is there to build TV's here??? NONE!! How many are built here??? None.
From a marketing perspective, cars & TVs are different beasts. Car makers learned a long time ago that to sell large numbers of vehicles in a particular market, they must have plants in that market. If the market is big enough, they'll also set up design & engineering facilities there.
With TVs, there aren't many differences from one market to the next. What sells well in east Asia will probably sell just as well in Europe & North America. But vehicles require much more market-specific differentiation. For example, hatchbacks sell very well in western Europe but bomb in North America.
With cars, if you don't have a plant in a market, then you won't be a serious player in that market.
I get to drive a new Cadillac CTS today. Cadillac sure sweated the details as even the geniune stitching on the dashboard lines up with the geniune stitching on the doors, (no more of that cruddy molded-in stuff of the past). Even the key fob and key are nicely detailed - each sporting a raised chrome wreath & crest with colored inlays. The fit and finish in this car is amazing. What once sported hard plastic surfaces is now high-quality soft touch material.
The Big3 would not go under as a group, as Ford and Chrysler would be more than a year off. If GM goes under, I would expect Ford and Chrysler, and the other auto manufacturers in this company to pick up. So I see the suppliers having to shift what they make, but the total amount of auto parts should stay about the same.
If you have 5 restaurants in your town, and 1 closes, the other 4 are going to do better, because the number of restaurants does not affect the demand to go out and eat.
And I think some of the better GM products would get bought up. Some manufacturer would come in and buy the CTS plant and rights to sell it. Similarly other GM products would get built under some other name - the Corvette in Bowling Green would still get built, under some nameplate.
"If you have 5 restaurants in your town, and 1 closes, the other 4 are going to do better, because the number of restaurants does not affect the demand to go out and eat."
In theory, yes as the other 4 restaurants will just call Sysco and order up more food to make.
But with such small profit margins, it's possible that if Honda's CV joint supplier is the same as GM's, and they can't afford to retool to make Honda Cv joints to meet their extra demand, or can't retool fast enough, then maybe Honda imports CV joints from a factory that supplies them for their foreign markets, and that is all it takes for that US supplier to go belly up.
Per the experts if GM or Ford shut down the whole US industry shuts down for a year. Personally that seems a bit long. I think the companies that build the same vehicles overseas are looking right now on how they would import the needed parts. But it would take time to get all the parts needed. Longest lead time would be parts only used in US.
I'm not sure how you'll grow to be a "standard" when you discount a new 08 STS by about $10,000 and when I drive it away the trade in value is already $10,000 less than what I paid for it, even after the huge discount.
I'm glad they wanted to give me low KBB less the cost of tires for my trade because I walked away from the deal.
I believe they may have a chance as the ultimate used car value though.
I was thinking of my friend's 1980 Chevrolet Citation which had that stuff all over the interior - like it was fooling anybody into thinking it was real stitching.
I don't think GM interiors started getting crappy until maybe the late 1960s with the increased use of plastics. Mid-sixties Pontiacs have beautiful interiors and a clearly a step up from Chevrolets. What happened?
However, I think they've finally realized the error of their ways. I wasn't entirely happy with the interior of my 1994 DeVille. My 2002 Cadillac Seville STS had a much nicer and better quality interior, the interior of my 2007 Cadillac DTS Performance is really nice, if not quite as nice as a Lexus or Benz, and the interior of the 2009 CTS I recently drove was nicer still.
Interesting question. I wonder if they figured that cutting back on the parts quality of the drivetrain would kill them on warranty claims but they could cut back on interior quality because fake stitches wouldn't cause a breakdown on the road.
False economy if true - plenty of people complain about VW reliability but their interiors sell a lot of cars.
VWs have nice interiors but I wouldn't trust one as far as I can throw one. However, if a Cobalt had as nice an interior as a Jetta, there would be people busting down the doors to get one.
Maybe someone can hand them a document concerning the USS Yorktown (fleet aircraft carrier) repair between the Battle of Coral Sea and Midway in 1942. The ship was nearly sunk at Coral Sea with large holes in the flight decks, towed into Pearl, spent only 24 hours there - refueling, rearming, and replaced planes/crews, and joined the Midway battle 2,000 miles away several days later.
Or maybe another good read would be how the Russians in 1941-42 picked up entire factories, moved them hundreds of miles east, and had them producing shortly thereafter.
I guess in either case they didn't use union rules!
... then maybe Honda imports CV joints from a factory that supplies them for their foreign markets, and that is all it takes for that US supplier to go belly up.
Maybe. But since the owner of the parts supplier gets $0 if he closes the doors and Honda does not get its parts, the more likely business scenario is that Honda buys the parts supplier for very cheap money getting a bargain, and the former owner gets something rather than $0.
And any factories that any of the Big3 own that make good products and are profitable are unlikely to be shuttered for the same reason. If GM were to close tomorrow, plants that make things like the Vette/XLR will be bought and will restart very shortly, albeit with new management/workers/owners possible.
The computer industry went thru a huge shakeout 15-20 years ago, poorly managed companies with poor products were replaced, suppliers shifted to new manufacturers.
".....Maybe. But since the owner of the parts supplier gets $0 if he closes the doors and Honda does not get its parts, the more likely business scenario is that Honda buys the parts supplier for very cheap money getting a bargain, and the former owner gets something rather than $0. "
Either way, Honda gets no extra parts until they can be made or imported. That could shut down factories.
Remember, the American buying public went without buying new cars for 4 YEARS during WWII, so they can wait until they find what they want. However, the auto factories were full steam ahead back then. This time we are talking about layoffs rippling throughout the industry. No jobs, no money. No money, no car purchase.
Either way, Honda gets no extra parts until they can be made or imported.
It's rather illogical to think that the remaining car manufacturers would simply allow their supppliers to close, and that the whole U.S. manufacturing of all autos would stop. The stakes are too big for Toyota and Honda, and the remaining Big 2 not to keep the suppliers going, or to put a 100% effort into retooling the suppliers. As I gave examples, suppliers should be able to retool in days if they care about their jobs.
Remember, the American buying public went without buying new cars for 4 YEARS during WWII, so they can wait until they find what they want.
That is rather irrelevant as an argument. There was demand for autos during WWII. They would have sold cars if manufactured. There is demand for autos today - currently 12M, which will be there. There was demand for autos during the Depression. As lng as there is demand AND the manufacturers are allowed to produce autos, then there will be sales. And those sales will be 12M, as it looks right now. If GM goes under, the demand is still 12M, and as such other manufacturers are going to see their business increase some.
And given that GM has maybe 75 days inventory on lots, and these would be sold at greta discounts, there won't be a sudden wave of demand on the other manufacturers. While the remianing GM inventory is sold, is plenty of time for the suppliers to retool for Ford, Chrysler, Toyota.
Cerberus, Ford and Toyota have plenty of cash to loan to any of their suppliers to keep going. They're not going to let a little money to suppliers shut down their 12M in auto sales. Anyone who knows anything about business will tell you that's preposterous.
The only reason that story of a shutdown of suppliers and the whole economy is out there is because it's meant to scare the general public into giving them lots of money. If I could get $25B or $75B by making up an Arrmageddon-style story like that to the general public - I guess I'd be corrupted as well. Follow the money and who's putting these falsehoods out. It is the people who will benefit from the loans who are are screaming this, not most financial experts.
Yes, there is demand. But the problem is that inflation and wages have fallen behind where they were in the 60s even, when you adjust for cost of living and inflation.
In short, there ARE people who want cars, but they just can't afford them. This means that you'll see cars from India, China, and elsewhere come in and undercut the current market. The cars may be hardly any better than the old Geo Metro was, but they did sell a lot of those little tins cans if you remember.
Comments
I think you're missing that the existence of the Big 3 and its union-workers, does not affect what wages foreign makers pays its workers. So nothing would change in that respect. The wages an employer has to pay is based upon what others are paying in the area. If a machinist is making $20/hr down the street making bearings, then the auto plant has to decide whether to pay slightly more, or how else to keep the worker happy. The wage that worker gets does not depend on whether someone 500 miles away in Detroit gets $25/hr.
Also if the current Big 3 fade away, why couldn't they be replaced by another American Big 3? Maybe we could have Gates Motors, Buffett cars, and Apple trucks? Why do you care if the owners and managers of the Big 3 succeed, when they could be replaced?
Ford, according to its annual report, paid $70.51 per hour in wages and benefits to workers last year. GM's annual report says its labor costs average $73.26 per hour, while Chrysler's costs average $75.86 -- all well above the average $48 hourly cost incurred by Toyota, Honda and Nissan.
I assume a lot cheaper the and Physician-sized salaries of the UAW in it's prime. GM will pay new workers $14/hour.
In line with adjusted salaries needed to keep manufacturing here in the U.S.
Regards,
OW
Down south you can get an average house for $149K. Sure, you couldn't get one when you first start your job. You would need to save first. Does anyone remember what SAVING for the future means?
Regards,
OW
If any of the Big 3 collapse, why couldn't a billionaire or some investment firm come in and buy the factories and tooling for 25% of the value, rehire workers or get new workers at prevailing wages, and even buy the rights to the names of the cars?
$12/hr is about what the workers in my plant make here in NH. Most make $15-$16/hr. Rents are about $800 for a 2-bedroom, but then again most families have 2 wage-earners.
A couple hours north of here are a bunch of shutdown papermills. Those guys would love some manufacturing work, at $15+/hr, and decent benefits. In fact there are many, many millions of people with no health care who would love a job assembling cars for those wages and benefits.
See, that's the key; 2 WAGE EARNERS. My wife's grandmother was saying a few weeks ago how tough her father had it about 70 years ago, raising 4 girls and taking care of a sick wife by himself, paying a $3,000 mortgage all on $25/wk. I tried to explain to her that that same house today would cost $300,000 yet I guarantee that her father would make no where near $2,500/wk. She couldn't comprehend the simple math and how they correlate (both being 100 times what they were). You'd be hard pressed to find 2 wage earners today grossing $2,500/wk. even up here in RI.
This is something no one seems to get, that you can't just take the standard of living from one part of the country, and unilaterally apply it everywhere, and expect everyone to adjust at the snap of a finger.
Even if GM could say look we're moving our factory from Lansing, Mi to San Antonio, Tx. You can come if you want, but the job pays what everybody else makes down there. Do you think people would be able to sell their houses and move at the drop of a hat??? Who would be SOL if the house sells for less than is owed???
All this competition between different parts of this country is bad. Instead of dragging people down to their standard of living, we should be working to bring everyone up. THAT'S the American dream.
What is a "hooptie"? Is that Philadelphia slang? I live in downstate NY & I've never heard that word.
And that is the big problem here in Michigan and it is spreading thruout the country. My wife has a standing offer elsewhere with a sizable wage increase but we could never sell our house for what it used to be worth if we could sell it at all.. We only have a few more years left on the 15 year mortgage but we just do not want to move. So we are hoping that nothing happens that she loses her job. We do not want to move, we want to stay here.
So why did the do it in the first place? Did they think it *would* be viable and then found out too late that was not the case? Or did they just want to showcase some technology even though it wasn't ever going to amount to anything?
No, all of this competition across the country is GOOD. I'm in a very high tax state (CA), and it's GOOD that other states can steal work and companies from us. CA deserves to hurt if they overtax us and make us business-unfriendly. It's GOOD that FL has no state income taxes, people retire to FL and it supports their economy. Any state that cannot compete should SUFFER. Anybody who can't find work in their state when there's lots of work elsewhere should MOVE.
If you don't like competition then I'm sure you're excited about having one cable company -- how that provides you with high quality customer service and low monthly costs.... :P
It was required by California mandate.
CARB devised a mandate for our most-populous state which says that the six largest auto companies must sell 10% of their products in the form of zero-emissions vehicles (ZEVs) by 2003--and ZEV means electric vehicle.
REad this article for lots of good EV1 data.
http://findarticles.com/p/articles/mi_m0FWH/is_/ai_76445141
The Steel Mills went through this and PA was in bad shape back then. The auto industry is undergoing the same process. Change is always good even though you might have to go through some pain.
I look at it as an opportunity to try new things. You can't stop change even though it seems hard sometimes. No one can really hurt you at the end of the day.
REgards,
OW
I kept my place, and rented it. Lo and behold other businesses rented these buildings, and new jobs came in. I sold my condo about 5 years after renting for $110K.
So while no one necessarily wants to move or to change jobs, its part of life. I now work at a company that was in a family for 95 years, but was sold 2 years ago, and there are all sorts of changes. It happens.
If GM goes under and it will someday - check how many companies 50 or 100 years ago in the Dow 30 are still around; then you adapt. Autos will still need to be made somewhere, and Detroit will have to make it look competitive for someone to do business there.
62, thanks for the info.
Well, in that case maybe we should rename ourselves the Every State for Themself of America instead of UNITED.
I'm not saying that competition is bad, it IS good. Bad decisions SHOULD be punnished with bad results. But to say that states that CAN'T (as opposed to WON'T) compete should suffer is wrong.
I'm sure that an entertainment company could "out Disney" Disney, and RI could give them all the incentives in the world to do so, but the fact that it averages 39 degrees in the winter makes that IMPLAUSIBLE. Not RI's fault, just a fact of life, and we souldn't be punnished for it.
I'm all for states rights, but there comes a point in time where the federal government has to step in for the "GOOD OF THE COUNTRY".
Labor laws, for example, should be standardized throughout the country.
After all, it was a New Yorker who coined the expression, "No man’s life, liberty, or property are safe while the Legislature is in session”. That was in 1866 - more than 140 years ago. Things haven't gotten better since then.
We're grossly over-taxed not for reasons beyond our control, like the weather, but because we've become a paradise for public employees. We not only have more of them but we pay each of them more money. Civil service unions wield enormous political clout here, & they make it almost impossible to reduce their numbers or their salaries.
In my county, for example, the base salary for a patrol officer with 5 years of experience is $100K. Sergeants & higher ranks make more, & overtime sweetens the pot further.
Given this, would you build an auto plant or any other factory in NY?
You follow the cheese.
Regards,
OW
The equally colorful NY equivalent is "piece of s---".
Would I build a plant in NY??? Well, I've thought about that for RI as well, and I'd say yes, as NY could be a central spot for supplying the entire northeast, from Md. to Me., as well as southern Ontario. Also, if a company (say VW) were there, they could, in essence, use local ports to export cars back to Germany.
I do agree that here up North, we have to get our ducks in a row as far as taxes and other types of regulations go, but I don't think that unionization should be enough to scare people away from up here.
Huh? I thought Oshawa build Hummers??? Or is it Mishawa... something.... Fairly speaking yes I do hear good things about cars built there, but I've yet to hear any good reviews on GM's other plants. The big question is: how is GM going to improve things when only 1 or 2 plants are doing great jobs?
"I do not know where the exchange rate would put the US built G8 at but you sure are going the wrong way. It would be cheaper here. And US GM is selling it at quite a bit lower price than what the same vehicle is sold for in' Austrailia. "
Err, the GM products sold in Aussie are priced higher because they come from the European market division, where the Euro-Dollar rate affects pricing more than Aussie dollar to US dollar. The bomber is the fact that most European market parts are NOT avaialable in the US plants, leaving only 2 options should they wish to build foreign GM cars in US:
1) Replace the foreign parts with local parts, or
2) Produce these parts or import them to US plants.
The former will lower both cost AND the vehicle quality, while the latter will bloat the price even more.
"He roots for HUNDREDS OF THOUSANDS of AMERICANS to LOSE THEIR JOBS.
He's not OW, he's GW. "
My goodness. Honestly, I feel sorry for those losing their jobs, but its NOT OUR FAULT. Do I feel simpathy? Yes. Do I care to save them by buying GM products? I sure as hell dont. I'm not talking patriotism here, people, I'm talking cold hard reality. When its my turn to choose a side, I choose with my green, my hard earned green, not my red-white-blue. This is reality, and I KNOW I'm with the majority.
Why do most Americans buy foreign? Because they choose logic over patriotism. Should "buy american" really resonate with customers, foregners like Honda would've lost a huge chunk of sales by now. Years from now, when quality really catch up (assuming it really happens), buyers will turn back to domestics, I'll take a second look when it happens.
I wont buy Cadillac Ford etc the same way I'd stay away from RCA like plague. Yes I did consider STS but not anymore, too many bad reviews there. OTOH I will buy American, in the form of Apple and Intel. Oh wait, theyre built in China now, whatever. Do I care if companies like RCA, GM and FoMoCo perish? Nope. Its competition = its inevitable.
Oh and btw, I used to drive a Ford Escape, so unless I'm totally mistaken I think its made in US.
"In addition to what you say about Hummers, at the time GM had canceled an electric car of theirs that was in demand (EV1) to promote the environmentally grotesque and obscene Hummer line, which now thankfully seems to be going the way of the dodo bird. "
Now this is somewhat absurd. Sorry, media, but the so called EV is in high demand by a bunch of loyalist. Second, lets not forget the cost of development, including battery chargers, will bloat the vehicle price UNLESS heavy federal incentives are on the way, which will NOT happen because our government dont have the money!!!!! However I'm interested in how the Volt will fare.
See? I dont dish GM all the time, just most of the time :P
Regards,
OW
Step #2 - Stop using global platforms for Caddy.
Step #3 - Keep LaNeve out
Step #4 - Decide who your target demographic is
Step #5 - Cater to ONE demographic and do it better than everyone else
Step #6 - Defect from GM altogether.
My grandfather had (according to family legend) the steering wheel come off in his hands on his new '49 Ford. Whatever the truth to that story, he would never buy a Ford after that, and none of his four children ever did either, and that's verifiable fact. 50 years of lost customers from one defect.
It's also a fact that many people still don't believe in GM's reliability, no matter how good it's gotten over the past several years. GM needs something to change people's perceptions. It's that or suffer through another generation of lost sales.
I keep wanting GM to do something dramatic to demonstrate the quality of its new cars..... Say, take a CTS to Times Square, and have it running at 70 mph day and night on a demo platform for a year with robot arms opening and closing the doors and trunk, with the lights flashing on and off, stereo blasting - oil changes done with the engine running etc.
The idea is that nothing should break during the test. It might not really be an effective test or prove anything in truth, but it would be a great advertisement.
This kind of thing is nothing new - recall Volvo running over a line of cars with a Monster Truck (OK - they got caught cheating, but GM wouldn't cheat this time) and Mercedes did it a few years ago with 3 diesels going 100,000 miles nonstop.
http://www.edmunds.com/insideline/do/Features/articleId=105899
I think it would be a great attention-getter.
Nah. Too innovative for GM.
That's one reason I see Ford as having a better chance. Even if they don't have a lot of money to develop new cars, they take an old Focus platform and put SYNC in it. They work on a new Fusion and it has an innovative dash display. They also have Mazda which adds a lot of innovation - better than GM's sources such as Holden IMHO. And Ford is much less bloated and has a better cash position. And if GM gets Chrysler, well, 10 divisions here we come...
uh, the same incentive they have for building them in the US today?
you think Honda will just pack their bags if GM goes under? you think creating artificial jobs with tax payer dollars makes sense? How fair is that to Honda, Toyota and Nissan who have plants here and employ Americans with decent paying jobs that quite frankly are alot more secure than any employee at GM.
If you can't beat em, join em. If you can't join em, then you'll go under. This isn't about saving an endagered species.
"First of all, gas was $1 a gallon when GM was lobbying for that (Hummer tax credit). Why wouldn't you do what you can to encourage people into a vehicle you make $10 grand profit on???"
Because it showed a lack of vision while Toyota was busy developing the Prius.
I'm amaized that even through hindsight you can't see that. And part of that $10 grand in profit came at the expense of the tax payers. We should be giving tax credits to people who are willing to conserve energy, not needlessly burn it up.
I don't think Honda will "pack it in", but if they share suppliers of components with the Big 3, and the supplier goes under or is unable to supply Honda with any extra components to pick up the slack for the needed demand of their cars, they'll just import them or the whole cars to NA from wherever else they are made. From this point on, there will be no incentive to add plants. What incentive is there to build TV's here??? NONE!! How many are built here??? None.
With TVs, there aren't many differences from one market to the next. What sells well in east Asia will probably sell just as well in Europe & North America. But vehicles require much more market-specific differentiation. For example, hatchbacks sell very well in western Europe but bomb in North America.
With cars, if you don't have a plant in a market, then you won't be a serious player in that market.
I think the Citation had that crud on the seats. Whoever thought that plastic-mold-stitch was a good idea? :confuse:
Did you manage to find the trunk release on the CTS?
If you have 5 restaurants in your town, and 1 closes, the other 4 are going to do better, because the number of restaurants does not affect the demand to go out and eat.
And I think some of the better GM products would get bought up. Some manufacturer would come in and buy the CTS plant and rights to sell it. Similarly other GM products would get built under some other name - the Corvette in Bowling Green would still get built, under some nameplate.
In theory, yes as the other 4 restaurants will just call Sysco and order up more food to make.
But with such small profit margins, it's possible that if Honda's CV joint supplier is the same as GM's, and they can't afford to retool to make Honda Cv joints to meet their extra demand, or can't retool fast enough, then maybe Honda imports CV joints from a factory that supplies them for their foreign markets, and that is all it takes for that US supplier to go belly up.
Per the experts if GM or Ford shut down the whole US industry shuts down for a year. Personally that seems a bit long. I think the companies that build the same vehicles overseas are looking right now on how they would import the needed parts. But it would take time to get all the parts needed. Longest lead time would be parts only used in US.
I'm glad they wanted to give me low KBB less the cost of tires for my trade because I walked away from the deal.
I believe they may have a chance as the ultimate used car value though.
Why Lemko! I never thought I'd hear you actually admit that GM interiors of the past we cruddy! Which they were, IMO...... :shades:
I don't think GM interiors started getting crappy until maybe the late 1960s with the increased use of plastics. Mid-sixties Pontiacs have beautiful interiors and a clearly a step up from Chevrolets. What happened?
However, I think they've finally realized the error of their ways. I wasn't entirely happy with the interior of my 1994 DeVille. My 2002 Cadillac Seville STS had a much nicer and better quality interior, the interior of my 2007 Cadillac DTS Performance is really nice, if not quite as nice as a Lexus or Benz, and the interior of the 2009 CTS I recently drove was nicer still.
Interesting question. I wonder if they figured that cutting back on the parts quality of the drivetrain would kill them on warranty claims but they could cut back on interior quality because fake stitches wouldn't cause a breakdown on the road.
False economy if true - plenty of people complain about VW reliability but their interiors sell a lot of cars.
Man, you said a mouthful there, lemko!
Regards,
OW
Maybe someone can hand them a document concerning the USS Yorktown (fleet aircraft carrier) repair between the Battle of Coral Sea and Midway in 1942. The ship was nearly sunk at Coral Sea with large holes in the flight decks, towed into Pearl, spent only 24 hours there - refueling, rearming, and replaced planes/crews, and joined the Midway battle 2,000 miles away several days later.
Or maybe another good read would be how the Russians in 1941-42 picked up entire factories, moved them hundreds of miles east, and had them producing shortly thereafter.
I guess in either case they didn't use union rules!
... then maybe Honda imports CV joints from a factory that supplies them for their foreign markets, and that is all it takes for that US supplier to go belly up.
Maybe. But since the owner of the parts supplier gets $0 if he closes the doors and Honda does not get its parts, the more likely business scenario is that Honda buys the parts supplier for very cheap money getting a bargain, and the former owner gets something rather than $0.
And any factories that any of the Big3 own that make good products and are profitable are unlikely to be shuttered for the same reason. If GM were to close tomorrow, plants that make things like the Vette/XLR will be bought and will restart very shortly, albeit with new management/workers/owners possible.
The computer industry went thru a huge shakeout 15-20 years ago, poorly managed companies with poor products were replaced, suppliers shifted to new manufacturers.
Either way, Honda gets no extra parts until they can be made or imported. That could shut down factories.
Remember, the American buying public went without buying new cars for 4 YEARS during WWII, so they can wait until they find what they want. However, the auto factories were full steam ahead back then. This time we are talking about layoffs rippling throughout the industry. No jobs, no money. No money, no car purchase.
It's rather illogical to think that the remaining car manufacturers would simply allow their supppliers to close, and that the whole U.S. manufacturing of all autos would stop. The stakes are too big for Toyota and Honda, and the remaining Big 2 not to keep the suppliers going, or to put a 100% effort into retooling the suppliers. As I gave examples, suppliers should be able to retool in days if they care about their jobs.
Remember, the American buying public went without buying new cars for 4 YEARS during WWII, so they can wait until they find what they want.
That is rather irrelevant as an argument. There was demand for autos during WWII. They would have sold cars if manufactured. There is demand for autos today - currently 12M, which will be there. There was demand for autos during the Depression. As lng as there is demand AND the manufacturers are allowed to produce autos, then there will be sales. And those sales will be 12M, as it looks right now. If GM goes under, the demand is still 12M, and as such other manufacturers are going to see their business increase some.
And given that GM has maybe 75 days inventory on lots, and these would be sold at greta discounts, there won't be a sudden wave of demand on the other manufacturers. While the remianing GM inventory is sold, is plenty of time for the suppliers to retool for Ford, Chrysler, Toyota.
Cerberus, Ford and Toyota have plenty of cash to loan to any of their suppliers to keep going. They're not going to let a little money to suppliers shut down their 12M in auto sales. Anyone who knows anything about business will tell you that's preposterous.
The only reason that story of a shutdown of suppliers and the whole economy is out there is because it's meant to scare the general public into giving them lots of money. If I could get $25B or $75B by making up an Arrmageddon-style story like that to the general public - I guess I'd be corrupted as well. Follow the money and who's putting these falsehoods out. It is the people who will benefit from the loans who are are screaming this, not most financial experts.
In short, there ARE people who want cars, but they just can't afford them. This means that you'll see cars from India, China, and elsewhere come in and undercut the current market. The cars may be hardly any better than the old Geo Metro was, but they did sell a lot of those little tins cans if you remember.