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Buying American Cars What Does It Mean?

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Comments

  • fintailfintail Member Posts: 57,136
    edited November 2013
    More apples to oranges. If the subsidy is part of the competitive advantage enjoyed by someone else, we can match it, compensate for it, or die. No other options. Sometimes it doesn't matter how good you are if someone else's daddy gives them a huge trust fund to start with.

    Heavy industry such as cars or planes (aviation is also hugely subsidized in the US via the military-industrial cabal) also is different from say entertainment or software.
  • robr2robr2 Member Posts: 8,805
    I have no doubt Ford and the others would have picked up the slack and been happy to do it.

    What you fail to see is that it would have taken the automakers too long to be able to increase production to replace 1/5 of supply. In that time, much of the supplier base would have contracted as they would have lost much of their business. You seem to think that the other automakers could have started to increase production overnight. It would have taken months to expand facilities, make and install tooling, train employees. Yes there would have been all those items from GM but again, it would have taken months to get a plant changed over to making other products.

    As a fan of trickle down, I expect you understand how a closing of GM would trickle down and affect our economy.

    GM also gave up Hummer which I believe supplied the military.

    GM licensed the Hummer name from AM General who manufactured the HMMV for the military. GM left the defense industry back in 2003 when it sold the division to General Dynamics. AFAIK, GM still supplies the military through it's fleet division but does not make any special military vehicles.
  • fintailfintail Member Posts: 57,136
    Have you been to Canada or Germany etc lately? From my experience, the standard of living is certainly not less than what is enjoyed by the average American. Some pay more and get more. Americans pay less and get a lot less.
  • tlongtlong Member Posts: 5,194
    edited November 2013
    Marketwatch shows 14 analysts recommending "buy" and nobody recommending "sell".

    I don't think you want to use market analysts as some sort of legitimate referendum on the success of a stock. You do know that the reliability of market analysts is right up there with astrologers, don't you? A monkey throwing darts at the stock pages typically produces better overall returns than market analysts.

    I'm with gagrice - the whiners will whine about how unfair it all is, and how victimized they all are. The innovators and leaders just make things happen and get it done. Such as Tesla.
  • gagricegagrice Member Posts: 31,450
    It is pretty obvious you and shifty have a totally different view of business than I have. You go broke you pay the consequences. I just don't buy the BS being spread about too big to fail. The whole deal with GM was how all the suppliers would go broke and those people would lose their jobs. Well the largest supplier has closed all its US factories. So that lie has been debunked. When the bankruptcy came down the auto market was in the tank anyway. It would be easy for the other auto makers to expand in a timely fashion. The bailout was purely political. GM is NOT making money selling cars in the USA. Without their China profits they would still be going broke. Anyone that cannot see the GM bailout was purely political pandering to the UAW have their head in the sand. It is unsustainable. The Pension plan will soon be broke and we will be asked to bail it out again. This is still the case:

    There was also the so-called “thirty and out” rule allowing union workers to retire with full pensions and health care benefits after thirty years of work. A worker might be able to retire in his early 50s and collect an annual pension of $37,500, paid wholly by GM. By 2008 there were 4.6 retired GM employees for each active worker. Did anyone think this was sustainable?

    http://www.forbes.com/sites/realspin/2013/05/20/what-explains-gms-problems-with-- the-uaw/

    Here is what we will be faced with:

    Is it true that a large proportion of the UAW auto industry workforce is eligible to retire in the next few years?

    Yes.
    Nearly half the 180,681 UAW members at the automakers will have the necessary combination of age and years of service to retire within the next five years.

    http://www.uaw.org/page/pensions
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Let's see who's around in 5 years, GM or Tesla. Until then, the future of Tesla is astrology IMO.

    As for Marketwatch, they show 6 buys and 6 holds for Tesla.

    So given 2 optimistic reports, one for GM and one for Tesla, how can you question the source for a company you don't like, but praise it for a company you do like?
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    edited November 2013
    Well we are longterm thinkers but you are short term I guess. Both valid points of view in their context.

    Actuall Tesla and GM have one bad thing in common: they both pay customers to buy their product.
  • gagricegagrice Member Posts: 31,450
    You sound like a philosophy major and not a business major.

    Businesses you short term thinking and long term PLANNING. Most long term thinkers are not doers.

    I agree that Tesla and GM are staying alive at the tax payers expense. Corporate welfare to the max. The sub prime auto loans pushed by GM will come around to bite them in the behind.
  • robr2robr2 Member Posts: 8,805
    The whole deal with GM was how all the suppliers would go broke and those people would lose their jobs. Well the largest supplier has closed all its US factories.

    You keep harping on about Delphi closing it's US plants. In that, you are correct. But Delphi has been closing US plants since it was spun off in 1999. But Delphi was/is not the biggest tier one auto supplier. As of 2009, it was 9th - way behind Denso at #1. There are thousands of tier 1 and tier 2 suppliers that would have been affected.

    It would be easy for the other auto makers to expand in a timely fashion.

    Do you really think setting up billion dollar production lines just happens? It probably would have taken over a year for the auto industry to start to take up that capacity but where would it have gone in order to borrow the money to do it? In that year the price of cars would have gone up to the lack of product. In that year, hundreds of thousands would have lost their jobs and unable to buy much of anything. The country would have gone into a deeper economic crisis than it did.

    The bailout was purely political.

    No doubt it was political. But it was also an economic decision.

    We will always disagree on this.
  • tlongtlong Member Posts: 5,194
    So given 2 optimistic reports, one for GM and one for Tesla, how can you question the source for a company you don't like, but praise it for a company you do like?

    First, I disregard the analysts' views on any company. Second, of course we don't know that Tesla will survive. They are limiting their production to electric. If they decided to go internal combustion this perhaps it would be less risky. What I was trying to say that it is admirable that a company has started completely new in this market, and in a short time has produced extremely high customer satisfaction and ratings from auto magazines and CR, without whining about how unfair everything is.

    Tesla is led by the same Elon Musk who has developed a way to launch (and that means the rocket engines, the rocket, and the capsule) cargo to the ISS for about 10% of what NASA has spent just getting to a demo of a rocket flight that was pretty much a joke. These are the kinds of entrepreneurs that the US needs. Thsi is what always made the US great and what we need to continue to foster to keep the US great. Bailing out failed companies is money down the drain IMHO. It is a short term bandaid to a longer term problem. It didn't work for Chrysler in the long run, lets see how it goes for GM. IMHO GM has not been reformed enough - they should have killed the UAW contracts and killed off more of the junk models.
  • tlongtlong Member Posts: 5,194
    I agree that Tesla and GM are staying alive at the tax payers expense. Corporate welfare to the max. The sub prime auto loans pushed by GM will come around to bite them in the behind.

    For many years the only part of GM that made money was the finance arm. Then they divested that to raise cash and surprise! - they weren't making money making cars. So in a sense GM was another one of the failed banks, too. Riding high on subprime loans to risky borrowers who would pay ultra high interest rates to have that new car.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    edited November 2013
    More like the difference between a tactician vs. a strategist or perhaps studying the string of effects derived from every cause (as best one can).

    crude example: need to get warm, chop down all the trees. And then what?
  • steverstever Guest Posts: 52,454
    SpaceX gets subsidies too. And if they run out of money and another ISS launch is needed I'm sure NASA would bail them out.

    Blast-off! Why SpaceX and Falcon 9 can pull off what NASA won't do alone (Christian Science Monitor)
  • gagricegagrice Member Posts: 31,450
    This is what always made the US great and what we need to continue to foster to keep the US great.

    The Elon Musks, Bill Gates, Steve Jobs, Ted Turners, Henry Fords etc are what made this country great. I cannot think of a politician that is fit to tie any of the aboves shoes. Entrepreneurs and industrialist built this country in spite of poorly run governments. The less obtrusive the government the easier for real men & women to make the country great. I fear we are no longer capable with the mess in Washington and many of the states governments. The age of worthless WIMPS is upon the USA.

    As far as buying stock. I cashed out almost all my US stocks. GM is not even on a list of possibles. If people think they are a good bet go for it.
  • gagricegagrice Member Posts: 31,450
    I think it is better to pay a US company to supply the ISS than pay the Russians as we are now doing.

    Since the shuttles' retirement, only Russia has the spaceships to ferry station crewmembers, a service that costs NASA more than $60 million per person.

    http://www.businessinsider.com/nasa-iss-space-taxis-2013-11
  • steverstever Guest Posts: 52,454
    edited November 2013
    Yeah, I think it's great, and giving SpaceX a subsidy isn't any different than giving one to GM, except giving a subsidy or "government contract" to an existing entity like the D3 is probably a "safer" bet.
  • gagricegagrice Member Posts: 31,450
    I am an American retiree. Like many small investors, I am relying on "safe" investments such as bonds backed by America's largest companies to fund my retirement. One of these companies is General Motors.

    First, let's set the record straight about who owns GM's bonds. We are hardworking families, individual investors and retirees who purchased billions of these bonds in $25, $50 and $100 increments. Many bonds were bought directly and others are held in our pension funds, 401(k) plans and other retirement programs.

    I purchased GM bonds in 2005 and own $91,000 worth. These bonds account for a very sizeable portion of my retirement income, and so it is absolutely devastating to watch GM's problems bring the once venerable company to the brink of failure. My standard of living is truly in jeopardy.

    Despite the terrible position my fellow bondholders and I are in, we are being portrayed as the cause of GM's problems and inability to restructure.

    Who is perpetrating this myth? The American government, which is at once encouraging investment in U.S. companies and vilifying those who have already invested. Billions upon billions of taxpayer dollars have been used to stabilize companies to restore investor confidence. But how can investors be confident when they're at risk of ending up on the wrong end of the government's stick?

    http://online.wsj.com/news/articles/SB124338330278956585
  • gagricegagrice Member Posts: 31,450
    Protecting union interests and defrauding bondholders during GM bankruptcy proceedings

    September 15, 2012 by Fred Dardick 4 Comments

    When General Motors went bust following the stock market crash of 2008, the Obama administration stepped in to oversee the restructuring of the company. Obama was concerned that if the company were to go into Chapter 11 bankruptcy the oversized union contracts and pension obligations would be thrown out in court and restructured under the direction of a bankruptcy judge, most likely not to the union’s advantage. Unions had provided Obama’s campaign with $206 million to get him into the White House and he wasn’t about to let them down, at least not when taxpayer money could be used to bail them out.

    New York investor Steven Rattner, who had zero auto industry experience but had raised millions for Democrat campaigns over the years, was given the task of protecting union interests at all costs. The plan he came up with was as unprecedented as it was illegal: defraud GM investors who were owed billions and hand over the newly restructured company free of debt to the United Autoworkers Union and federal government.

    The formula developed by Rattner awarded 40% of GM to the UAW, 50% to the federal government while granting only 10% ownership to bondholders who would collect a measly 5 cents on the dollar on their initial investment. There was no precedence in bankruptcy history to support the wholesale fleecing of GM bondholders who, unlike stockholders, are guaranteed preferential treatment during Chapter 11 reorganization.

    http://conservativespotlight.com/2012/09/15/16-protecting-union-interests-and-de- frauding-bondholders-during-gm-bankruptcy-proceedings/
  • tlongtlong Member Posts: 5,194
    SpaceX gets subsidies too. And if they run out of money and another ISS launch is needed I'm sure NASA would bail them out.

    I don't believe they get any subsidies - they are being paid for contract services from NASA. And those costs are a fraction of what NASA would spend doing those same things itself, or using Boeing/Lockheed/etc.
  • tlongtlong Member Posts: 5,194
    Yeah, I think it's great, and giving SpaceX a subsidy isn't any different than giving one to GM, except giving a subsidy or "government contract" to an existing entity like the D3 is probably a "safer" bet.

    Totally different. GM was given loans and special treatments, just to survive, after their failures.

    SpaceX is being paid for service to the US government (NASA).
  • steverstever Guest Posts: 52,454
    Well, the BBC says "The California-based firm developed the vehicle with a large subsidy from Nasa.". (link - this Yahoo link may be of interest too)

    Call it contracting or subsidizing or bailing out or economic development as you wish. Often it doesn't work out (Solyndra) and sometimes you hit a home run (DARPANet). Still a better use of tax dollars that lots of other stuff in the budget.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    those people didn't make it 'great'. They made it 'rich'. And all of them owe a great debt to our free market (more or less) economic system and our government, which gave them the opportunity to get rich and in some cases, to do quite a bit of good.

    I'm not so sure, however, you'd enjoy what some of these "great" people have to say about global warming or their favorite [non-permissible content removed].
  • tlongtlong Member Posts: 5,194
    Call it contracting or subsidizing or bailing out or economic development as you wish. Often it doesn't work out (Solyndra) and sometimes you hit a home run (DARPANet). Still a better use of tax dollars that lots of other stuff in the budget.

    In fact, Congress has been lukewarm on SpaceX because diverting money to them for crew transportation (even though a big potential savings for the taxpayer) threatens many jobs in their districts from Boeing, Martin Marietta, etc to develop an "official" NASA crew transport. So the much bigger money keeps getting spent as NASA crawls toward a new space transportation capability, even though SpaceX is cheaper and farther evolved than they are. NASA has become a jobs program unfortunately and the good of the country is secondary.
  • steverstever Guest Posts: 52,454
    edited November 2013
    Congress (at least the house) was also lukewarm because Musk supported Obama and gave more money to Ds than Rs. ;-)

    As of 2010, "SpaceX has 15 lobbyists registered on its behalf, according to disclosure forms. By comparison, space giants Boeing and Lockheed Martin together employ more than 220 lobbyists and spent a combined $16 million on lobbying in the first six months of this year, the data show." (Wash. Post)
  • tlongtlong Member Posts: 5,194
    As of 2010, "SpaceX has 15 lobbyists registered on its behalf, according to disclosure forms. By comparison, space giants Boeing and Lockheed Martin together employ more than 220 lobbyists and spent a combined $16 million on lobbying in the first six months of this year, the data show." (Wash. Post)

    Unfortunately that's what it all boils down to these days. Who can spend the most money lobbying the Congress? And the individual citizens are left in the dust.
  • steverstever Guest Posts: 52,454
    edited November 2013
    And on that note, don't forget that Ford lobbied on behalf of GM and Chrysler for the bail out.

    Everyone feel free to move on to buying American cars and what that means.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    The NASA budget is chintzy, miserly, way underfunded. It's .8% of the Federal budget, and is being cut annually (and again for next year).

    When someone lands on Mars, they probably won't be Americans.

    We can't even launch a human into space anymore.
  • gagricegagrice Member Posts: 31,450
    My daughter went to trade her GMC PU truck in on a Subaru Outback. She was told they are made in USA. Which they are sort of. When she got to looking at all the Subaru models she fell in love with the Forester and bought it. Was not until a month later when we were out to visit I showed her the Forester was 0% US content. By then they had traded their Yaris on an Impreza which is also not made in USA. Seems the top selling models are made in Japan. With the Outback and Legacy being the exceptions with 40% US content down from 55% a couple years ago. Seems we are bleeding US content faster than we are gaining. Does anyone know of any models that are more US content now than before the recession?
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Aside from domestics the only imports with substantial U.S. content are going to be some models from Toyota and Honda.
  • gagricegagrice Member Posts: 31,450
    That is what I asking. Do you know of any domestics that are more US content now than say 5 years ago? I can't find any. Toyota and Honda probably build more high US content cars than the Domestics.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I *think* the #1 vehicle for domestic content right now is the Ford F-150 having dethroned the Camry recently. How/why----gee, I dunno.......
  • tlongtlong Member Posts: 5,194
    The NASA budget is chintzy, miserly, way underfunded. It's .8% of the Federal budget, and is being cut annually (and again for next year).

    When someone lands on Mars, they probably won't be Americans.

    We can't even launch a human into space anymore.

    You're preaching to the choir on that one. NASA's current decline is indicative of the rest of the country.

    But that is the reason I don't like supporting failed companies. Tesla is American, and yet GM is becoming much less so. The foreign transplants are becoming more so all the time. Many of the foreign vehicles are designed in the US as well as being built here. They even have local management. OK, corporate HQ is in another company. So what? Most of the economic benefit is right here on our soil.
  • fintailfintail Member Posts: 57,136
    Businesspeople do long term planning? That doesn't seem to be a skill of the modern exec/cloned MBA dope.

    I haven't seen any credible analysis stating there is anything really new with subprime car loans, nor a looming disaster - because cars are a completely different and uncomparable type of good compared to what passes for residential housing in the US.
  • berriberri Member Posts: 10,165
    edited November 2013
    I'm trying to figure out how GM thinks getting more Chinese is going to help them move up in the reliability charts versus the Japanese products? It seems like not a week or two go by before there is another Chinese quality debacle. If you're lucky it's just a defect, but sometimes it is something that can harm or kill you, or something in the environment around you. No thanks.
  • guido65guido65 Member Posts: 25
    Americans just can't put the 2 and 2 together. As Americans complain about not finding good paying jobs, or jobs at all. Yet we continue to purchase foreign goods and services?? Watch a show called "Death by China", it is on Netflix right now. I believe every American should watch this. Americans need to think long term. When you purchase foreign it damages our economy long term. Takes money out of our system, takes money offshore for investment, taxes, payroll, and more. Our education system needs to educate our next generations on what it means to them to keep our wealth closer to home.
  • anythngbutgmanythngbutgm Member Posts: 4,277
    3 Million and counting
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    That film is pretty crude and heavy handed. It's certainly a one-sided polemic that is short on analysis and long on propaganda. It's rather hysterical--sort of a Michael Moore film in reverse.
  • gagricegagrice Member Posts: 31,450
    The workers all looked happier than the average UAW worker.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    That wouldn't be hard!
  • gagricegagrice Member Posts: 31,450
    Not all UAW members are disgruntled auto workers. Seems the TAs doing all the work for over paid professors are not happy with their UAW contract. Time to strike and shut down the University system in CA.

    A union representing student workers throughout the UC system has authorized its members to go on strike following a unionwide vote that passed with 96 percent support. United Auto Workers Local 2865 includes 12,000 teaching assistants, graduate student teachers and readers who now have the authority to strike in protest of alleged intimidation tactics used by the UC administration.

    The vote comes a week after the union’s no-strike clause expired in its contracts with the University of California. UAW has expressed support for the American Federation of State, County and Municipal Employees 3299 workers, who plan to strike at UC campuses on Nov. 20. UAW may join them in solidarity.

    http://ucsdguardian.org/?p=15934
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    The Byzantine complexities of academia are almost beyond belief.
  • gagricegagrice Member Posts: 31,450
    It is harder to get a professorship in some Universities than to get elected President of the USA. In CA universities it is worth the effort.
  • marsha7marsha7 Member Posts: 3,703

    One thing that should be eliminated from all teachers is the concept of tenure...just because you have managed to stay somewhere for 5 years does not guarantee you not to be fired...

  • fintailfintail Member Posts: 57,136

    Not just for teachers, but for the usually oversalaried and overpensioned public sector "professional" ranks in general. I have a friend who works for a local city...he says once you've been there 5 years, it'd take a catastrophe for you to be let go.

    @marsha7 said:
    One thing that should be eliminated from all teachers is the concept of tenure...just because you have managed to stay somewhere for 5 years does not guarantee you not to be fired...

  • marsha7marsha7 Member Posts: 3,703

    fintail

    I am with you...eliminate tenure for anybody...nobody should have a guaranteed job simply because they managed to stay out of trouble for X amount of time

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481

    The U.S. Army top brass isn't going to like that! :)

  • marsha7marsha7 Member Posts: 3,703

    Oh, well...:):):)

  • berriberri Member Posts: 10,165

    I'm also leery of tenure type situations. However, OTOH you also need to be careful of penalizing a teacher in a given year when they were stuck with dumb students, or students who have the attached baggage of poor parenting. I mean this may not be politically correct, but it's a truism sometimes unfortunately. I still think the answer is bringing schools back to their 50/60's roots were they were local. Get state and federal noses out of it. It will be cheaper with better performance. I mean look at all the additional levels of staff and administrators that higher gov involvement has saddled our school systems with. That costs money and all the resultant bureaucratic reports take attention off of the students and community served. Our schools excelled back in those decades because schools were primarily part of the local community and political correctness didn't preclude discipline and academic performance. The bell curve says most students should get a "C", higher level gov has inflated that with bad consequences when the students get to the college level. Back in the day, school district performance differences affected local property values and resale ability - you bet parents took it seriously.

  • steverstever Guest Posts: 52,454

    Anyone meaning to buy an American car this month?

  • imidazol97imidazol97 Member Posts: 27,147

    @Stever@Edmunds said:
    Anyone meaning to buy an American car this month?

    Most likely within the next month: February only has 6 days left.

    2014 Malibu 2LT, 2015 Cruze 2LT,

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