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Does America Even Need Its Own Automakers?
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What many people agree is American needs to move far more of its businesses back on shore. Our experiment with globalization was a flop and rather than bringing others up to our standard of living we have fallen down to theirs. We need to get business back on shore. I don't need to call customer service for my phone company and talk to someone in India. Not Indiana but India. MY cable TV is like that and I swear you get someone from somewhere that english is a second language 3 out of 4 times.
It is the same with our Car companies. Maybe we should have let them fail but in the same time force foreign companies out to be replaced with new domestic companies supported by the government. Oh no it will never work? That is just exactly how Japanese companies and Korean companies work. An American company or business is simply not allowed to own a majority share of a Japanese company. It works for them it could work for us. But however we do it we have to move jobs back to the US. Manufacturing jobs have simply been shipped off shore.
Ask yourself this, were we better off before we lost our manufacturing base or after? Is America better off now than when American bought 90 percent of their goods because they had a made in the USA on the Label? We may not need the domestic car companies we now have. But we need the domestic labor force far and away more than we need to improve the life of the foreign manufacturer. And for those that argue that our trading partners wouldn't trade with us under those circumstances just remember we have traded with them under the exact same restrictions from their government. And they trade with other governments with the same restrictions.
HUH?
NO way I'm voting for that. If I'm going to bail out GM, I want a piece of it, either sink or swim in the future, I want a piece of it.
I'm not too keen on giving them both tax money and then buying the very stock in the company I helped to buy in the first place.
Isn't this double-dipping? :P
I suppose if we got into a war, the gov't could seize all the transplant factories and convert them to making war machinery. The transplants are countering that by making their production at least 75% done by robots and only 25% by colonists. When we take over, the programming in the robots self destructs and 75% of the floorspace becomes filled with useless machines. The 'associates' also don't know anything but how to press a button. When they ask the manufacturing engineers to raise their hands, 4 Asians do out of 900 people. When they ask where all the machines were made so they could talk to the creators, Japan is the answer.
We have already taken the first big step away from Capitalism by two monster bail outs. If our Tax money is being used to promote domestic can manufacturers we need to limit the compitition. We have to do something to make our investment more secure. If we didn't do this bail out then let the chips fall where they may. Like you said we can only take one road.
I was not in favor of bailing out our auto makers like Japan has done with their support of theirs. But if we as a nations have our private industry competing with companies subsudised by their own government we must respond in kind. Once we decide to buy into the car companies we have to do something to protect our investment as a tax payer. If that means restricting foreign imports that is what we have to do. Otherwise we should never have invested as tax payers in that company. That includes banks and Wall Street. But can makers are something we can place our hands on and if we have already decided to save them with tax money they we need to go all the way and protect them from falling sales but reducing the compitition.
Like you said, we can't do both.
Australia nationalized Qantas. (they tried to nationalize their banks but this was constitutionally defeated).
I think Ireland is going to nationalize the Anglo-Irish bank very soon or might have done already.
So there are working models.
Right now the reason that the D3 are trying to escape the borders of the US while the transplants are building new factilities is labor.
All vehicle makers use steel and plastic and fabric and aluminum and glass and rubber to build their vehicles. It essentially costs each of them the same amount for the same weight vehicle. Ditto if these vehicles were produced in Thailand or China or Mexico or S Africa. It's the labor component and the rules that go with that component that cause one venue to have a cost benefit over another.
Creation and design are areas where humans excel. This is what our goal should be for this century. Testing in the final stages can even be done by drones and crash test dummies.
A new paradigm for keeping our auto production at home? Design vehicles with a labor cost lower than the lowest offshore assembler....$ZERO!!
No. We don't need a plural. Ford is plenty.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
At one time, it may have been true that D3 drove some of the technology, but I don't see that happening now. For instance, there is a large percentage of electronic component in the cost of a vehicle now days. The D3, and Japan, have been piggybacking off the consumer electronics and aerospace field for years in that regard, and not really developing anything new.
If the D3 just went away, apart from the loss of direct jobs, I'm not sure that we as a nation would really lose anything because of it.
Call it "Conspiracy and Armaggedon" or something...
It's not 1941 anymore...
I now think GM should probably be reorganized through bankruptcy or an equivalent process facilitated by the government (of course, the same thing should have been done to the big banks, such as Citi. Somehow the FDIC managed to do this seamlessly with Wamu, turning it over to Chase, with the losers being the stock and bond holders of Wamu). I assume the first in-line for any remaining assets would be the 13+ billion that the government loaned them. I just don't see the sense in loaning them $30 billion, so that they can sell maybe 10 million cars over the next 5 years (that is about $3000 per car).
There is NO way GM will ever pay back what they borrow. Money down the drain. That $3000 is about what the legacy costs per car will be with GM selling half as many vehicles. I would be surprised is GM can maintain even 15% of the market share at their current rate of sales. The model they are showing the Feds is not going to make them any money. The $70 billion they owe to others is also as good as lost. Our $30B would have them owing a cool $100B by the end of this year. It is not worth it for only one vehicle the Obama administration likes, the Volt. A vehicle that will lose money for years to come.
I agree with you. The first loan of, what was it, $17 billion dollars, was around 5 times GM's net worth, if I remember correctly. And now they want more. I would like to see the details of how they plan to pay that back, and what assumptions go into that pay-back plan.
I'm thinking that the $100B estimate of bailout costs in December is looking really low.
1) we are fighting 2 wars already, anything more than this, we can have all the machines we can produce but not enough bodies to handle them. If we ever have to fight someone in the near term, it will just be dropping bombs and sending missles.
2) have you ever been inside an auto manufacturing plant? Nothing in there is super duper complicated that no one knows how it works. In fact, all of them are quite similar in terms of the machinery being used. And no, it cannot be converted into making weapons, unless you want to drop corollas from 30k ft
3) skynet does not exist, otherwise we'll be seeing more summer glau.....
We'd be seeing more Chrysler products too.
No wonder they're going out of business...when Skynet was destroyed, it destroyed Chrysler's best customer. :shades:
Great idea. Fill all those unsold GM and C vehicles with explosives and drop them on the enemy.
H1's for the battlefield and H2/H3 for LR Bombings. :P
As for cars, we made need to explore which types of cars we are good at, and then decide how many companies we really need to make that type of car.
Obviously, we are very good at trucks and large 5-6 passenger 4-door cars.
As for cars, we made need to explore which types of cars we are good at, and then decide how many companies we really need to make that type of car.
Obviously, we are very good at trucks and large 5-6 passenger 4-door cars.
Right, might as well just do status quo, no sense in learning a new skill, developing a new competency, or growing the economy...nope not us, just keep doing the same thing again and again...I wonder when the next catastropic economic event will be, or WWIII.
Americans can't build small cars. They've been trying for 50 years and they still can't do it. Enough about competency at this point, seems to me.
Sometimes the best thing to do is actually give up. This "try and try again" thing is very pollyanna but it isn't working.
I think before getting fancy, American automakers should learn how to build cars for a profit. That IS the point, isn't it?
Maybe it's not technology but business schools that are needed?
As for WW III, it'll be short and final, no need to worry about anything after that one except how to sharpen a stick.
We've got lots of business schools, and business school graduates. Look where they got us.
I might not like the idea from a civil liberty standpoint but I think we are in a war of survival with the rest of the world. Yes we have to have trade partners but they aren't our friends they are thinking of themselves. We moved too much work off shore and lowered restrictions for trade with countries that never lowered restrictions with us. We might just want to think about protectionism until we as a nation are back on our feet. The global economy idea simply didn't work. If it was supposed to bring everyone up to our level it failed. If it was supposed to bring us down to their level it worked. At least looking at the stock market it seems that way.
Sure, in 3 developed markets
Surely America can develop other technologies---like green tech for instance.
Sure, because windfarms can be anywhere...and there is nothing overlapping between green tech and cars...unless you are a new fangled "hybrid" maker.
Americans can't build small cars. They've been trying for 50 years and they still can't do it. Enough about competency at this point, seems to me.
How small? Ford Ka small, Ford Fiesta small, or Ford Focus small? Opel Astra small?
I think before getting fancy, American automakers should learn how to build cars for a profit. That IS the point, isn't it?
I don't know, they just got castrated in congress for building SUVs and trucks that were highly profitable and using those gains to subsidize the other vehicles. I don't know any other major global car maker that sells some vehicles at a loss and makes it up on other ones /sarcasim.
What just happened with Ford and the UAW...if the vote passes, then it means a lot of legacy costs being taken out of every vehicle, and a more level playing field. Maybe those other folks in Warren and Auburn Hills can get in on this thing.
Nope, no need for progress, everyone just give up and go home. Game over. We can just move paper around pretending its money and opening fast food franchises.
The new Fiesta - which certainly LOOKS like a nice car, and is winning rave reviews in Europe - will be the big test of this approach.
For that matter, the current Focus isn't a bad car, either. The problem was that Ford of North America thought it didn't have to perform any testing on the European design. Only problem was that it used different vendors and some different parts. That wasn't an engineering decision; that was a cost-accounting decision.
Once Ford got the quality kinks worked out (around 2003), the resulting car was actually pretty good.
Okay, let me revise my comments then.
America can't build a small competitive car at a profit.
Maybe what we need is one really good NON-PROFIT automaker. :-P
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Management of GM has to realize that these are unprecedented financial times. People may not buy a car from a bankrupt company but no one is buying cars from a company on the verge of bankruptcy. The credit situation is not going to improve over the coming months which means sales will stay in the 9M mark and no one makes money.
There is no way GM can pay back the money. This is not 1980 and a $1B loan like Chrysler had. GM has lost money for the past 4 years when sales were good.
I don't see the need to drive an American car to feel patriotic. I don't feel any sense of pride riding in a Ford pickup truck. Maybe I am too young to remember the positives of the domestic auto industry. I won't miss GM and Chrysler.
There are plenty of choices out there.
I don't feel any sense of pride riding in a Ford pickup truck.
What does give you a sense of pride? Is there anything automotive based that does or is it other things like a nice home or a job where you feel is especially a good fit? Pride comes from a lot of places, for some people its a car (and because of the way it looks, drives, handles, where it comes from, what fuel economy it gets, what political statement it makes, etc).
Maybe I am too young to remember the positives of the domestic auto industry.
Prior to 6 months ago, what were the negatives of the domestic auto industry?
I won't miss GM and Chrysler.
I don't think you will have to worry about missing them for the first few years...the string of bankruptcies from all of the tier one and tier two suppliers will keep them in the news. Then the shortages in parts for the remaining OEMs. Then all the personal bankruptcies for all of the employees.
Then the string of issues in the supply chain (since all of the suppliers are going bankrupt) for the rest of the OEMs.
Then there is just the regular issue of 10% unemployment (or regionally, even higher).
You won't miss them because we will be paying for what happens for years to come. Either they are fixed, add to GDP, and help the economy, or they go away, the drag is still there, and our economy is held back longer.
Actually, GM makes a good fit for the federal government's auto-manufacturing branch, to provide fleet cars and trucks for all needs for the various other branches of the federal government. They could even sell vehicles to states, cities, counties, and other government entities for a fixed profit, say 2% plus the cost of shipping.
Heck the federal government basically owns Citi Group as of this morning, maybe they could even force it to finance government purchases of vehicles from Government Manufacturing at, say, 0.9% ;-)
Whew, these are wild times we are living in......
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
It's certainly possible and profitable with the correct corporate emphasis.
The same things that are wrong now. It just got worse as people ran out of credit. The problems of lousy offerings and running red ink were there then as now.
Then there is just the regular issue of 10% unemployment (or regionally, even higher).
Our taxes are now paying them much better money than they'll make on unemployment.
Any case for having our own automakers has to be based on them being able to be run profitably. I'm not hearing that from either GM or Chrysler. As Chrysler is privately owned cut them off now. They can choose to invest more into their mistake or not.
The Cobalt
The Aveo
The Colorado
The Avenger
The Aspen
The Nitro
The concept of a "mild hybrid"
Just to name a few
There were lots, and they were mostly built by GM and Chrysler.
Compared to what? The Fit at 2x the price? Hyundai Accent? Or are you thinking of a 5 year old Civic (which is more likely what I would get at that pricepoint).
The Colorado
Compared to what? A Ranger? A Taco is 1.5x the size and 2x the price. For that much money, you can get a full size domestic pick-up in one of the "MPG" editions and come out about the same. Or is it just that they should abandon this market all together? That might make sense given the number of people that step up to a full size.
The concept of a "mild hybrid"
Wasn't the original Civic hybrid considered a "mild hybrid?"
When you are idling at a red light, what is your MPG?
The new EcoBoost engines from Ford (and some of Mazda's as well) are getting "directed auto start stop" or something like that:
Assisted Direct Start. The 1.6-liter EcoBoost engine also features other fuel-saving powertrain technologies such as Assisted Direct Start (start-stop), which contributes to an additional 3% gain in fuel efficiency. Assisted Direct Start automatically shuts down the engine when the vehicle is at idle and automatically restarts the engine when the brake is released or gas pedal is engaged, improving fuel economy by saving idle fuel consumption.
Some other bright points:
Chrysler Town & Country/Dodge Caravan, Cadillac CTS, Chevy Malibu (or really any GM car with the 3.6 DI engine), GM's full size SUV hybrids (30% increase in city cycle MPG...if that doesn't matter to you, then you are either all highway or don't need a big SUV) and that is leaving the Dearborn folks completely off this list.
Compared to what? The Fit at 2x the price? Hyundai Accent?
Actually, yeah, it's a loser compared to the Accent...ever driven an Accent? My mother owned one, and I liked it quite a bit. Mind you, this is the PREVIOUS gen Accent that I'm saying is better than the CURRENT gen Aveo.
Oh, and the Versa also beats out the Aveo.
The Colorado
Compared to what?
Tacco, Frontier, and (wait for it) Dakota. The Ranger is a size smaller.
The concept of a "mild hybrid"
Wasn't the original Civic hybrid considered a "mild hybrid?"
Maybe, until GM managed to pull the term down even further to mean "hybrid badge, larger battery and an improved alternator." The point of a hybrid was originally to save gas, but GM turned it into a marketing thing first, and if it happened to save gas OK (and if it doesn't no biggie).
The new EcoBoost engines from Ford (and some of Mazda's as well) are getting "directed auto start stop" or something like that:
One of the best technologies to come out of the hybrid craze and the easiest to apply to any vehicle. Incidentally, this is about equivalent to GM's "mild hybrid" system (the idle start-stop is really all it does), only Ford doesn't try and pass it off as hybrid technology (maybe because they make ACTUAL HYBRIDS?). We shouldn't be surprised...Ford was smart enough to prepare for the economic downturn, and has been smart enough to stay well clear of bailout money.
Some other bright points:
Chrysler Town & Country/Dodge Caravan, Cadillac CTS, Chevy Malibu (or really any GM car with the 3.6 DI engine),
One hit for Chrysler...and how many stinkers? maybe 20? So they have a 5% success rate? 10% if you insert the Dakota (which really should be in there, nice truck, why didn't you mention it?). Two bright spots for GM (their full-size hybrids haven't improved anyone's real-world city-cycle mileage) out of how many piles of Waggoner droppings? That may actually be a lower percentage than Chrysler given how many zillions of models GM has.
Compared to what? The Fit at 2x the price? Hyundai Accent? Or are you thinking of a 5 year old Civic (which is more likely what I would get at that pricepoint).
A 5 year old Civic is a better car than a new Aveo and probably has more life left in it.
Wasn't the original Civic hybrid considered a "mild hybrid?"
It was less mild and five years ago. There was also the Insight, a real hybrid about 8 years ago.
Some other bright points:
Chrysler Town & Country/Dodge Caravan, Cadillac CTS, Chevy Malibu (or really any GM car with the 3.6 DI engine), GM's full size SUV hybrids (30% increase in city cycle MPG...if that doesn't matter to you, then you are either all highway or don't need a big SUV) and that is leaving the Dearborn folks completely off this list.
Chrysler minivans have poor reliability and don't compete well against Sienna and Odyssey. The Malibu is finally at least in the ballpark - a double, not a home run. Noteworthy only because it doesn't suck like its predecessors. GMs full SUV hybrids are the wrong product at the wrong time. Even at $4/gal they can't earn back their $10K up front cost.
That was weak, spyder. I expected better of you :P
If anything, having them built by American labor only rubs salt in the wounds of the Big Three. Leaves nobody to blame but the higher ups!
It's still the corporate emphasis. Such vehicles like the Corolla, Civic, Cobalt, Focus all weigh about the same and are composed of about the same amount of materials. They all have about the same amount of direct labor ( not legacy costs ). I don't think we as Americans are any less capable of designing a small vehicle than the Japanese, Koreans, Italians or French. We may even have some creative advantages.
But the corporate influences heretofore have pushed the creative and manufacturing talents of the D3 toward building and perfecting larger more profitable vehicles. It's not the workers it's the managers.
I have often suspected you were way too optimistic.
One could very carefully assemble a badly designed part, and finish it beautifully, and it would still break.
Excellent small cars can be built in America, if management chooses to do so.
Just not by the D3. As long as they carry $1500 to $3000 in legacy costs on each car they will not be able to build them with UAW labor. You cannot add $3000 to an Aveo and sell it. An Escalade maybe. Even a Silverado. Not a small car that will compete with Fit and Yaris.