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Does America Even Need Its Own Automakers?
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Comments
Back when I bought our 00 Accord I really wanted a Passat but got cold feet. Just as well. Six months later the only nearby Volkswagen dealership burned to the ground. Seven years later they have started rebuilding but still aren't near opening.
I just hope that if push comes to shove, we'll still be able to get supplies we need in case any supplying country becomes hostile towards us (i.e. China, or S. Korea if the North were to invade, or any S. american country aligning w/ a country like Venezuela). I don't think we can trust anybody but ourselves, and even that is a stretch.
I'm a free market guy, who would prefer to buy American where I can, and I agree with what you're saying as well. I'm all over the place, but here's the deal. I have driven mostly American (owned companies) cars all my life. But when Lincoln quit making luxury cars (about 05) I went to Lexus. I did it with not much remorse because Ford got what they deserved - they abandoned me, I didn't leave them.
As for where the car is made, I don't really care. I would rather buy GM or Ford, but if they make the car in Mexico to be competitive, that's fine. Toyota makes most of their cars in the US now - how strange? Not really, it escapes the import duty that way. These companies must do what they must do to remain competitive or die. Nobody thinks GM and Ford going away will be good for America - but they have to perform, and management and the unions must do whatever it takes to be competitive and survive. Anyway, that's how I feel.
And that someone lives in china, where you can get factory overflows dirt cheap.
Bounty and "Made in USA" stuff is pricey, and I guess it's cheaper here, so whenever I go I just load up on it.
I guess the allure of something made in the US is worth something to family members overseas... (that and the thought of getting the quilted quicker picker upper for less $$ )
Second, while companies like AM General, Cat, Prevost, Hughes, etc. may be able to make enough for defense today, how about if we encounter another situation like WW II? We will NEED american companies like GM, Ford, and Chrysler to pick up the slack and start building these things for a scaled up war. I think it would be dangerous to rely on a foreign company HQ'ed in a country purported to be our ally for any extra manufacturing we may need just because they have plants here. I know I'm being a little vague, but I could forsee a situation where we need the manufacturing capacity, and if all we had to rely on to pick up the slack was Toyota or Honda, and the Japanese gov't said "No, don't" because they don't believe in the American policy that led to this (hypothetical) major conflict, and the Administration was hesitant about just seizing their plants because they were trying to coax the Japanese to see things our way, it could be dangerous.
Third, Humvees may be a poor excuse, but retaining our manufacturing base and job retention is an EXCELLENT reason for keeping the big 3 alive.
I can't imagine such an idea ever flying in this country if, indeed, the Big Three went broke. They would just have to die off and be replaced by something else that can make a profit.
Our weapons manufacturers are rolling in money--they are much better off than our car makers.
So if you're saying to turn car makers into weapons manufacturers, rather than some dual-purpose enterprise, well that might work. Just convert the infrastructure.
But we couldn't possibly need or sell that much weapon production.
I suppose we could mothball all the factories, like we do with the mothball fleets ????
We now have a manufacturing base that is capable of turning out astonishing amounts of military hardware. Darn good thing, too, since we are about to get an enormous bill for replacements for all the stuff we're wearing out overseas.
Whichever side of the fence you might be on you have to know that's gonna be a heck of a bill.
H3 in South Africa
People keep refering to WWII but they forget that modern weapons and military vehicles don't have a thing to do with most modern vehicles.
I mean a sherman tank and a tractor or construction bulldozer are not that different. The tank just has armor and a gun while the bulldozer does not.
A M1A1 does not share anything at all with a big CAT bulldozer. Hell the armor isn't even made out of any kind of metal that you can even describe. The heaviest armor rating on the M1 is equivalent to 600 mm(23.6 inches) of conventional armor for kinetic rounds and 1,300 mm(51.2 inches) of conventional armor for chemical rounds.
M1A1
That is the reason all you see in Congress is talk. They all know when we quit building war materials this country will go into a MASSIVE recession. We have no other giant projects to sustain the current economy. Talk of GM or Ford or Chrysler going away is very premature. We did bail Chrysler out once before. We subsidize every other industry, why not automakers?
However, as you point out, losing that kind of chunk out of our economy would indeed start us on a major recession. It would probably be cheaper in teh long run to do the bailout.
The UAW needs to have ads showing line workers from the Big 3 driving BMW, Cadillacs and Mercedes to work. That would get the attention of the Honda and Toyota workers that can only afford a Yaris or Fit.
An Abrams still uses a lot of automotive technology. They need transmissions, suspension pieces, gagues...that's why it's necessary to have a strong automotive industry in order to build tanks. Most tanks need engines too (The Abrams uses a turbine, so it's an exception).
Remember, we don't ONLY make the Abrams...there's this little thing called the Bradley which uses a combustion engine...then the Marine corps LAVs and Army Stryker vehicles, which are also ICE, and use wheels rather than treads. Again, in addition to the engine and fuel system, you need shocks, struts, chassis engineering, transmissions, controls and gauges, tires, wheels....
Then of course, there's the military trucks, FAVs, and HMMWVs, which ARE in fact automobiles. Want to import them?
This would be an excellent study for economists, who apply research without adding any personal value systems. So they'd look at the hard numbers of buying out the automakers and running them as national industries vs. letting them collapse. Which scenario has the most adantageous result?
Economists don't factor "pride" or "disgrace" into the formula....which, when making big, serious economic decisions, is usually a good thing....usually.
It is true, though, that America is basically on a full-time war economy. Such is the price of Empire.
MrShiftright
Visiting Host
Hey there, that's the Global War on Terror, you evil liberal communist terrorist you. :P Or is it "Spreading Democracy?" this week? I forget. :shades:
You know, "pride" and "disgrace" might not be factored in, but they DO have value...so does prestige, come to think of it. Sometimes those non-physical factors can really skew an equation.
By the way, did they just update the forum software? I see some new icons lined up kind of weird.
"pride" or "prestige" have to be grounded in reality. Taken as absolutes, they are dangerous concepts and taken as absolutes, they are lousy economics I think. Did Rolls Royce's "pride" make a better car? Not at all. It was a false pride, founded on nothing but distant memories.
Who wants to subsidize a corpse? Not me.
MrShiftright
Visiting Host
How do these new icons work? There's no hover-over help in Firefox on the things.
icons: you can get the hover-over add-on at the Firefox website.
MrShiftright
Visiting Host
I think THAT is why we need our own automakers: American jobs. Many people look in disgust at the "job banks" that get UAW employees at places like GM 1 yr pay to sit home, but in an economic turndown, you don't want these laid off employees to go work for the competition, whether it's Ford or Toyota, because when you need them back, they won't be there. That means the other companies get YOUR experienced workers that YOU paid to train, and now you have to train a whole new set of employees. May seem frivolous, but makes some sense.
Look at what happened during WW II, we were MASS PRODUCING Rolls Royce designed V-12 plane engines at Packard better than they could. Why? We had a well trained work force. THAT is why we need an auto industry.
If we needed 250,000 tanks right now, could those companies build them that fast? I doubt it. But guess what? GM, Ford, and Chrysler DO have a well trained workforce that could. All the government would have to do is ask, and like 65 years ago it's done. NO QUESTIONS ASKED!!!! Could we say the same if GM were owned by, say Renault?????
I don't suppose I thin the world will fall apart if the big three don't survive but I do think if we are to throw money at them like we did at Chrysler that is what it will be made to appear.
Maybe someone could refresh my memory on the logistics of the auto plants producing military hardware in WWII. Was this not something stronger than a polite request from the government? I know several automakers welcomed it because the depression was killing them and they could make much more producing aircraft than cars. I'm not an expert in the field here so if you are please enlighten me.
The one thing that really gets me is that you had all these companies that were struggling - Packard, Studebaker, Hudson, what have you and they came out of WWII in good shape - and then managed to go broke in, at most, 20 years.
There were some pretty classic bad decisions that made some of this possible - like Packard's decision to throw their fate in with Studebaker when the Studebaker folks had more or less already decided to go broke as painlessly to themselves as they could.
I actually remember when we'd go to my mom's folks we'd pass by a Packard dealer who then became a Studebaker dealer. At the time I thought they were just making bad choices... Once Studebaker folded it became a transmission shop and it still is today.
The bad management decisions are one reason I don't want to see the government prop these companies up. They have some really bad habits.
How can they keep not making money and survive?
MrShiftright
Visiting Host
In GM's case, they emptied out the cupboard in the last few years and firesaled just about every collateral operation on hand (Allison and the medium-duty truck lines are up on the block now). Ford hocked itself to stay afloat. Their overseas operations are doing pretty well, which raises the question of how long it will take for GM and Ford to jettison their North American suckholes to protect the rest of the business.
Well, if they're Ford they mortgage all their buildings and pray whatever the next plan is that it works.
GM? I dunno. They are clearing small profits of late. If they can keep in that direction that would be fine.
That would be the Way, Way, Way, Way Forward Plan, right?
I read that Stalin was absolutely enamored with the Packards of the late '30's and early '40's (me too), to the point where Roosevelt kind of strongarmed Packard management into selling Russia the tooling for those cars during WWII. After that they didn't have the money to make that tooling, and ended up staying with that "upsidedown bathtub" look after the war. They only sold because people were starved for new autos. By the mid '50's Packard had plenty of dough, but had lost the lustre from the late '30's and were pressured into doing something, because the Big 3 were so aggressive w/ new models every couple years. They figured by teaming up it would save on tooling expenses, but Studebaker's mismanagement took all that money, and drove them right into the ground
I knew that when Hank Williams hit big at first he was riding around in a Packard until he got the word that Packard wasn't king of the hill anymore and that he didn't own :the very best." Well those were fighting words to Hank and he immediately replaced it with the Cadillac Fleetwood.
m6vx - you understand Ford very well...
I was actually saddened that Bill Ford didn't work out. That would have been a good story and he came in saying all the right things. He just didn't do any of them.
Once this government "subsidy" expired, the Independents collapsed under normal competition from the Big Three, as one might expect. Without the ability or capital to introduce new models and modern engines, it was just a matter of time before GM Ford and Chrysler ground the Indies into the dirt. Which they did with glee.
I never believed the Packard-Stalin story. I think it's just urban legend. The Russians just copied the car from Packards that were shipped to them, along with the 400,000 or so trucks they got from us. The Russians rode to Berlin on American trucks (and in Packards we presume) and given what they did to Germany, it was money well spent IMO.
They also copied the B-29 bomber from ones that crashed in Russia. They were very clever at copying things, they didn't need any Presidential intervention to be rascals.
Packard DID introduce a new V-8 to replace the old inline 8 in 1953. In 1955, they introduced a new line of cars that were a hit, but by 1957 they decided to badge engineer Packards on Stude platforms w/ Stude engines, instead of vice versa. By 1958, the Big 3 had their new designs out after a miniscule 3 year run. For Packard, that was that. All the loyal customers abandoned them. Sounds to me what I'd expect out of a Chinese Buick
I wouldn't say Packard cars were a "hit" in 1955, although they were technically quite interesting that's true. Sales were actually really really dismal.
The Independents got all the steel they wanted from reserves, so they could build new body styles and/or rev up production very quickly. The Big Three had to make 1941 model cars all over again in 1946-47 and they couldn't tool up as fast.
So the Indies got out of the gate a little faster, and that lead was good for a few years until the 600 lb Gorillas caught up with them.
If you step back far enough, the entire US auto industry is a history of brutal attrition, big shake-outs and a lot of dead bodies....as many as perhaps 1,500 or 2,000 dead makes of cars over the last 100 years.
MrShiftright
Visiting Host
ironic that '55 was a better year than '56, because '55 models had a lot of problems with engine oiling and suspension. 1956 was a much better car.
Anyway the lesson from Packard is "grow or die"...after a while of continued loss of business, you reach a certain base level of economy of scale wherein it just doesn't pay to stay in business anymore.
Whoa, better yet, lets export our blue collar people even! Get rid of those pesky Americans that can't afford the best our economy has to offer. They're just holding us back anyway. Think of it, for every american, we could import 5 illegal mexicans to work in our grocery stores. Hey Kroger, are you listening? Why bother with that pesky union you have here that starts pay at 5.25/hour (whoopty do you may ask? That's what I thought working for Kroger for 3 years through high school and part of college, watching the union take the equiv. of 2 hours pay from me a week, but I got a dime raise every year. ) when you could get some chinese immigrants to do it all for a dollar a day, and then americans still wouldn't care because the job was getting done.
Oooh, another brilliant idea. Lets get rid of these american banks! The dollar isn't what it was anymore, so lets just dismantle our entire banking system, and import other countries currencies. It'll save so much time.
Damn. So many ways, so little time to screw over everyone. I'm sure we can collectively keep the ideas coming. Join in!
Once this kind of crap starts, where do we draw the line saving a buck? Because next... it could be YOUR job. You might not care that doing something this stupid could screw up millions of American's lives, but if we start down this slippery slope, you can't always know where it will end. YOUR job could be next...
Think about this: You can send your money to corporate Detroit, which then uses it to build a Mexican factory (or maybe even sinks it into Daewoo), or you can send it to Japan and they send it back to build an American factory. Basically, there's no guarantee either way, the way these companies are set up. But just keeping money in America by itself isn't enough. Companies need to INVEST that money in America as well: it's investment of wealth rather than retention of wealth that builds up economies.
Think so? Saturns are designed in Europe and South Korea. GMs are built in Canada and Mexico (and South Korea, heh). That's where a significant portion of your money is going. So please rethi9nk your statement.
You make a good point about money going to a corporation's employees. Now keep in mind how many AMERICANS are employed IN AMERICA by foreign automakers, building cars IN AMERICA!! Money goes to them, meaning that that money is being invested INTO AMERICA!! Partially, at least. But you can say that about any car company, whether it's headquartered in Detroit, Seoul, Tokyo, or Bavaria.
No one here is trying to export all the jobs or eliminate blue collar America. Far from it.
I have two built in the USA Hondas and have owned a third and owned another that was built in Canada (which is also where my one and only Ford was built; the Chrysler I once owned was built in Mexico).
I think what you are seeing a lot of in this topic is a questioning of whether or not the Big 3 are capable of putting together real American cars or whether the full blown American car company is a remnant of the past.
I'm still open on the subject.
Oh, and you'll find no greater distaste for the Wal Marting of America than me. As we actually had a Wal Mart when Sam Walton was still around I can tell you he wouldn't like what's happening now either. Back then (and this is only maybe 10 years ago) a Wal Mart was full of American goods.