The difference is that the examples you noted were never made here. There were no multi-billion-dollar investments here by Sony and Panasonic which then moved to South America.
Now there were multi-billion-dollar investments by GM, Ford and Chrysler that are being moved to Mexico and China. As a matter of fact if I read the blurb accurately part of the strategy of one of the detroiters is get cash from Congress, close plants as fast as possible, have dealers go out of business and make as many vehicles as possible outside the borders of the US where the UAW can't get at them.
Why would the transplants NOT leave? It's cheaper to make the vehicles here. Again you are ignoring the basic economics of currency exchange rates. Right now the cheapest and most stable place to buy land, build buildings and employ labor is right here in the USofA.....unless that labor is UAW. Then that's a deal killer ( see the above paragraph ).
they would be in deep trouble if the auto companies go under.
Are you serious? You do mean the American auto companies, right? And how would the oil companies be hurt if any of the Detroit 3 go under? For every vehicle lost in sales from a company that goes under, another auto company would get that sale.
I worked for IBM for 15 years right out of college and in a way, its downfall to Microsoft and others looks similar to the downfall of the Detroit 3 to the imports. They just couldn't keep up with a faster moving marketplace and made some fundamentally bad long term business decisions. At one time IBM jointly held 50% of the rights to Windows, known at that time as MS-DOS, and they also owned 30% of Intel. It wasn't until they sold those two assets to the parent company that things really started to go bad for IBM. There was a good show on, I think, the Discovery channel called "Revenge of the Nerds" that detailed how IBM was take down from the mid-1980s until about the late 1990s.
The way I see the proposed bailout of GM in particular is this:
GM owes $66 billion that they are going to tell the lenders too bad so sad cannot pay it. That leaves US to pay the banks GM defaults on.
GM wants $4 billion for Christmas or they will take down GM and millions of Americans will suffer with them.
Along with that GM has not kept the money they were obligated to keep in the pension fund for 450,000 retirees. Did they borrow against it or just piss it away? That leaves US with untold $billions to keep those retirees from freezing, unless they retired to Florida.
GM and the UAW have conflicting stories on wages and benefits. One says they will be equal to the industry by 2012. They other says they are already equal. Someone is lying.
The dealers they are concerned about will get NOTHING from the bailout, so unless GM comes up with cars people want they will continue to die.
The suppliers will get nothing except whatever continued orders for parts.
I do not believe for a minute that the GOOD parts suppliers will not get more orders from the automakers that survive this. No way will GM bring Ford and Chrysler with them. That is just cheap rhetoric. If the board at GM want to keep Wagoner, that is their choice. I say no cash if his team of losers is not fired with NO severance. They do not deserve the pay they have stolen from the stockholders over the last 40 years. It is the good ole boy club in some of the major corporations that have brought this country to their knees and they will get away with it scott free.
Yes IBM and Compaq were the PC makers of choice. Now it is Dell, HP and Gateway, along with hundreds of small companies. Life goes on and it will do just fine without GM.
This is an automotive site. Ads by the manufacturers. Let them fail good for them boo hoo luxury planes. Who pays for the bandwidth. In case you, our hosts, or edmunds start to feel the pinch, let me offer you a Happy Holiday Season and Happy New Year Now while you are still up and running.
The city of Detroit had no trouble giving $300M to help build a couple of new sports stadiums. What have they done in the last couple of months to offer $ help to the Big3?
Similarly what are the states in which the Big3 have plants doing to raise money. How many are there - 20? Are they issuing bonds to help finance the Big3? maybe NY could help - they're spending $833M in and around the new Yankee Stadium!
So anyone in a state with a lot of auto suppliers and plants, tell us what your city and state is doing to raise a few billion $'s in conjunction with the other cities and states to loan the Big3.
These folks in congress are so hot to burn taxpayer money giving it to everyone and their mother,
Well being good to the constituents back home, ensures votes to keep them in power, and being good costs $. If you don't spend $, then people back in the state aren't happy.
It's just like having someone else's Platinum card, and deciding whether to buy your wife or girlfriend what she wants to keep her happy. Pretty much a no-brainer to spend the $ - nothing to gain by saying "no".
The Five Hundred/Taurus is not full-size unless you're a midget. The Crown Victoria is the full-size Ford.
There was a time a few years ago, I wanted a small truck. I looked at a Tacoma and it was just too dang expensive for what I wanted - a small basic work truck. Was considering a Dodge Dakota. Didn't like either the Ranger or the Chevy/GMC small trucks.
You severely underestimate the loyalty Americans have to their full-size trucks. My BIL is worried about the collapse of Ford because he doesn't want to be stuck driving a (censored) Toyota truck!
Wow! I like that idea! The G8 is a fantastic car and would make a really nice Buick if they tweak the interior. A little Buick roadster? Wow, with a Buick grille, it might look like a modern day Austin-Healey!
The Five Hundred/Taurus is not full-size unless you're a midget. The Crown Victoria is the full-size Ford.
The 500/Taurus is sort of an in-between size class that I always called "new wave full-size", or some might call a "tweener". It's a group that started in 1985 with GM's FWD Electra, Ninety-Eight, and DeVille. These things sort of split the difference between the midsized cars and the traditional full-sized cars of the time.
Chrysler entered this size class in 1993 with the Intrepid and Concorde, and then the NYer/LHS. Ford was a latecomer though, not getting into it until the 500/Montego.
In some dimensions, the 500/Taurus is actually bigger than a Crown Vic. Notably, headroom, trunk volume, and back seat legroom. Shoulder room is less though, and I swear it feels like it has less legroom up front. The front seat is higher than a Crown Vic, but doesn't feel like it goes back as far.
Well being good to the constituents back home, ensures votes to keep them in power
Just another scheme to take from the middle and upper class and give to the lower classes. It will be those on the bottom of the ladder that suffer first in any economic downturn. We are already spreading the wealth around and the Coronation is not until January.
I'm not necessarily talking about them moving back to Japan, but what about India??? China??? South America???
Wages are only part of the story. You can't build a factory in a country that lacks 1st world road & port facilities. Otherwise, you can't get components & raw materials in & the finished product out. This is a critical requirement - I'm speaking from sad experience here - & it rules out most 3rd world countries.
You need a fairly literate work force that can learn to operate & maintain machinery. Ideally, many of the native workers should be proficient in English so that they can communicate with senior American management. Your local managers should be absolutely trustworthy & should be able to function effectively without your having to closely supervise them. Otherwise, you'll have to fly to that part of the world every other week to clean up the latest mess. (Again, I'm speaking from experience.)
You also need a reasonably stable, transparent & honest government. Without this, you can't do business. What you'll save in wage costs you'll spend on bribes.
With this in mind, when you step back & look at the big picture, you'll see that non-union U.S. labor is the biggest bargain on the planet. Sure, some American jobs will go elsewhere, but I'll bet that you'll see many more high-priced EU jobs come here.
you'll see that non-union U.S. labor is the biggest bargain on the planet.
That is exactly right. A friend at HP told me that some of the tech support they outsourced to India, is now being done in the USA by the Indian Company. Too many complaints of language barriers.
It would be ideal if the plants that get closed when GM goes belly up, to be reopened with other automakers taking their place. If the EFCA law passes Michigan and Ohio will have to become Right to Work states or no one will set up shop there. The UAW thug mentality would make it impossible to do business in those states. So many do not realize just how bad that law will be.
My company has setup some minimal manufacturing in Asia, simply because of some of their rules that require a company to produce in the country, if they want to make any sales in the country. So we have setup a few 10 person operations.
What do we make there? Old tech. My company will not send any new or patented technology, or any chemical formulae to our products, to these countries, for fear of reverse engineering and copying.
We make most of our products here in the U.S., and the direct labor is very small. Our main product is priced about $500. The people who physically make that product cost about $3.00. The corporate and technical people cost another $15. The materials cost $50. Then there's some sales and shipping costs. And we pay a 37% federal tax on profit, and then some to our state.
If the labor overseas to make this part drops to $1.50/unit have I saved much? After I rent a building, train people, pay the extra shipping, have inventory tied up on ships and in Customs? When we spend $5,000 every month to send someone there to fix things?
So the labor to actually make something is fairly small, compared to the other costs. There is not a lot to save in most industries, by going overseas, and the companies that have gone overseas have found that out.
The suppliers will get nothing except whatever continued orders for parts.
you know, i wonder if anyone has thought of that...the best thing to do might be to give some bailout money to the suppliers, rather than giving it all to the Big 3...if one of them STILL goes down, the suppliers need to be kept afloat in order for other car companies to have a shot at getting through.
The Five Hundred/Taurus is not full-size unless you're a midget. The Crown Victoria is the full-size Ford.
The neo-Taurus is full-sized on the inside where it matters. What it lacks are the two feet of wasted space between the grille and radiator, and the pseudo-cavernous trunk with a tire taking up half the usable space: crappy packaging that marked the traditional full-size American car.
Keeping the suppliers going is just as much a part of this problem. My thought is Congress should look at all three plans and pick one or two that look doable. Put the financing where it is most likely to succeed. I don't see GM surviving without constant infusions of cash. They have not been successful for 40 years. What makes people think they will all of sudden become profitable?
All the automakers in the USA are hurting for sales. Why just bailout the ones with American names? If you let survival of the fittest work, the poor companies will go away and the good ones will be stronger. All the bailout will do is weaken the whole automotive industry worldwide.
The G8 is a fantastic car G8 is very nice car. It could be a fantastic car when GM tune engine, suspension & etc up to BMW. GM have to to couple small steps.
Yes IBM and Compaq were the PC makers of choice. Now it is Dell, HP and Gateway, along with hundreds of small companies
It actually goes way way beyond the PC makers. It's whose platform is the software industry standard? It was IBM versus Microsoft and Microsoft won. IBM was just another case of a company trying to force their product on the customer.
What I get from this is that state and local municipalities will suffer greatly with a big three failure because of reduced sales tax income from the sale of new cars. Thing is, somebody is still going to be selling cars in the future. State and local municipalities collect the same whether a Toyota or a Ford is sold. Areas that have disproportionate amounts of Big 3 dealers would suffer, but countrywide the sales tax revenue would only vary by dollar amount of cars sold.
The other thing is - this guy equates Big 3 bankruptcy with their instantly disappearing from the face of the earth (with no possibility of restructuring). I just don't see it happening that way.
Back in the day, IBM was just coming out of a big anti-trust action against them, and that hampered some of their competitiveness. They managed to ride it out and turn things around just fine. But just getting from investigation to trial took 13 years. They were still skittish when the PCs hit the market.
Maybe there's some analogy there - anti-trust and CAFE?
Maybe there's some analogy there - anti-trust and CAFE?
Or maybe it's Alzheimer's of the Big3. I remember my 40mpg 4-speed '82 Escort. I guess they misplaced the blueprints? and forgot there is a limited amount of oil in the world? 27 years later with their R&D, and engine advancements, I don't see a 40mpg vehicle sold by Ford here.
A few million$/exec, or a few hundred thousand/year for the next layer down of management sure doesn't get you much these days! It must be the schools! They need more $ !
I used to, but in the last year he has descended into increasingly incoherent old-man rants. At this point, I expect him to start blaming GM's woes on the Trilateral Commission and the abolition of the gold standard.
I love American cars and have a driveway full of GMs driven by me, my wife and kids. It would break my heart to see GM go bankrupt but I am a firm believer in the free market. That being said I do think the government should make a move for big three that is analogous to FDIC and provide backup "insurance" to the US automakers warrantees in the event of bankruptcy. Right now there are people who might buy a US car who are afraid to because in the event the company goes under they would have no warranty. That is an additional nail in the coffin that the automakers do not need. As a tax payer I am OK with this "insurance". Lets get this idea in front to the right politicians!!!
Maybe not, but that doesn't mean that you have to go to the dealer. In my German car-loving NYC suburb, there are several excellent independent mechanics who can work on my BMW. Most of them are veteran dealership service techs. In fact, I haven't set foot in my dealer's service area in well over 3 years.
I'm sure that in your American car-loving neck of the woods (Philadelphia?), you should have no trouble finding 1st-rate independent mechanics, some of whom might have dealership experience.
Oh, there are some guys whose shop is very close to me whom I trust very much with my older cars. I just don't think they're currently equipped to handle something as sophisticated as my new DTS. Maybe there will be independent guys in the future with the expertise.
What's really sophisticated about it? The Northstar is over 10 years old now and the platform dates to what 2003? It's probably no more complex than a 1998 Seville. Plus, it's a front driver just like the rest of your cars.
Are you worried they might screw up the Heated Windshield washer fluid? :P
Just joshin ya. Anyways, a good mechanic should have all the right tools nowadays that you shouldn't have to fear going to them to get work done. If they didn't, they'd be out of business. Even some of the German stuff that is out right now has been "Americanized" enough that you don't need Hans da Wundermechanic to change a tire.
Heck, I trust the guy who works on my DeSoto and '67 Catalina with my 2000 Intrepid more than I trust the dealer I bought it from!
Well, I trust the dealer's service center to get more oil ON the engine than In the engine, and I trust them to get a TSB right on the third try, but that's about it.
Survey shows that Americans think federal aid for the Big Three is unfair and won't help the economy.
NEW YORK (CNNMoney.com) -- A majority of Americans oppose a bailout of the troubled U.S. auto industry, according to a poll released Wednesday.
The CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.
A full 70% of respondents indicated that a bailout is unfair to taxpayers.
In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.
Sandeep Dahiya, a professor of finance at Georgetown University, said the poll results were "quite surprising." The large percentage of those opposed to the bailout "tells you much about how what is good for GM is not good for America."
my focus easily got 36-37 mpg average on the highway and could get close to 40 keeping the cruise on 70. it was rated 33 highway under the ratings in effect until this year. it travelled pretty well, too. not seat was not great but not horrible. there is no comparison between cars from 1982 to now. the crown vic is probably the closest.
2024 Ford F-150 STX, 2023 Ford Explorer ST, 91 Mustang GT vert
That being said I do think the government should make a move for big three that is analogous to FDIC and provide backup "insurance" to the US automakers warrantees in the event of bankruptcy.
Why does the government have to get involved? Why couldn't GM advertise a new warranty system where the customer has the choice of a traditional GM warranty, or to give up the GM warranty and they would get a 3rd party warranty of equal coverage. So GM would save the cost of any warranty and would spend that $ on buying you a different warranty, that you liked.
Or GM could say Malibu = $20K with warranty, (calculate what they spend on average for a Malibu warranty repairs) and discount the price that much. So if the average warranty cost on a Malibu are $1,500 over the years, discount the car that much more.
We really don't need politicians deciding how businesses should run manage. GM, the UAW, the dealers, the suppliers could all get together and fix this mess tomorrow, if they rip up their agreements, and say let's start with a clean sheet of paper and see how they can spend only what they earn.
The sooner we take away this unneeded government help, the sooner they will realize deal, and deal fast, or else they all go-down. When they realize they have 2 choices - to deal with each other and salvage something, or all fail the better.
I'm asking nothing more of these companies, then to do what every family has to do with a budget! If the family is running up debt, the family needs to get together and decide someone's got to give up their gym membership, cut the cable, get rid of the cellphone, and start eating spaghetti.
They can do this if they stop holding each other to the contracts that are driving them into debt!! But neither the CEO's, the unions, the suppliers, the retirees, or the dealers want to give up enough. They're still fighting amongst themselves.
I agree. I cannot tell you how many products I have bought and tried to get repaired to find the company is out of business or does not support that item any longer. That is part of the risk you take buying a domestic car when the company is on the brink of disaster. I never got any compensation on my solar system in AZ when it quit and the company was history. That was $10k down the toilet. In 1988 that was the price of a car.
How many retired posters collecting a retirement check. How many young guys who didn't have a blue collar father. Southern foreign factories with no retirement cost and etc - it's called cherry picking. Have you ever seen a broken body that has to work till it rests in the cold ground. How much do you think you would've earned per hour per year if it wasn't for the unions and those liberals. If all you have is gravy train in your history maybe you should take a walk or go do some serious historical reading. Raise your hand in a non-union shop to keep your pants clean, better soil them or you'll be hunting for another fifty cents an hour job, if you're lucky.
So why did the money boys get trillions and others have to beg and say yessir. Maybe the young generation is indeed fodder.
Our fully trained, ASE-certified technicians provide sophisticated, professional, and highly technical auto repair and automotive maintenance services, using state-of-the-art computer diagnostic equipment, seven days (and six evenings) a week.
While the average American worker comes in at $28 per hour.
I have several friends that would jump on $28 per hour in wages and benefits. Most around here are lucky if they make $20 an hour and pay for most of their health care.
It is sad that the fat cats all want the rest of US to bail them out when they make stupid decisions.
Another way to look at pay, paraphrased from the left:
The cost per employee may be that high, but only because the automakers are spreading the pension and retiree health care costs to the workers. The guys on the line don't see those benefits and it shouldn't be included in talk about how much they make.
That $78 bucks an hour is a lie. It's already been debunked. Some Republican big shot through that figure out there and it has caught on all over the place. The sad thing is it isn't true. Saw a report on it where someone actually did their facts and broke it down. it's like 50 bucks an hour including benefits and that's for the top blue coller earners.
So what we let the big 3 go down and we depend on the Japenese for all of our transportation needs? China hasn't even borken in our market yet, but they are trying now. I say hell no! I'm for free mnarket, but the big 3 going under is exactly what the foreign automakers want. We already sold out our electronics and many other things to china and others overseas. When will people wake up and say enough. Let the US make some d@mn products and stop importing everything. I put the blame on some companies as well who are looking for cheap labor as also.
I agree with your pov except that JDL and the rest of the doom-threateners ignore is that the key player(s) in this whole scenario are not the vehicle makers. It's the buyers. US.
Taking your example to an extreme, say that in the middle of Michigan somewhere there is a UAW township served by 6 domestic dealerships. Now because they are bad managers and business people the detroit 3 all go out of business at the same time. It's very painful in that town. All 6 D3 stores close up shop as they do in all the surrounding towns.
What does that town do when it needs vehicles? What does a family do when their vehicle is in an accident? What do the wealthy people do when they want a new vehicle? New drivers? Vehicles that are old and give up the ghost.
In fact these people will just find other vehicles to purchase and drive. As long as they continue to purchase the same number of vehicles after the disappearance of the D3 then state and local tax revenues and income generated from vehicle sales will not change one single dollar.
Another 'threat balloon' punctured falling to earth. THUDDD
What should we do for American companies who continually lose market share and can't compete with it's competition? How much should we give them to keep them from right sizing? 25 Billion? 100 Billion? A trillion? Why not just buy all the company's outstanding stock? That would be cheaper.
I worked for IBM as well as lived in Rochester NY where Kodak "was" king of cameras and Xerox "was" king of copiers. And it is sad to see those dominant companies go through a long slow downward spiral. Life goes on though.
Maybe we should get away from Capitalism and move towards Socialism.
About 7,000 GM dealerships, so 50 people per dealer on average? Yikes.
We are an average size dealership, we sell 200+ in the good times and 130-150 in the current and we employee 110 people, plus probably 50 vendors. Those are folks that no one takes into the equations. We got landscaping people, the guy who has the soda and candy machine, the people who sell us forms, the Dent Dr, the touch up guy, the guy who puts in leather, another for AM electronics, DVD's etc. The list goes on and on.
We may have to downsize if the trend continues but will not go under. On 06/16/2008 we opened a new state of the art facility here in TN and that has helped us quite a bit. Can't wait to see what we do when the worm turns
Comments
Now there were multi-billion-dollar investments by GM, Ford and Chrysler that are being moved to Mexico and China. As a matter of fact if I read the blurb accurately part of the strategy of one of the detroiters is get cash from Congress, close plants as fast as possible, have dealers go out of business and make as many vehicles as possible outside the borders of the US where the UAW can't get at them.
Why would the transplants NOT leave? It's cheaper to make the vehicles here. Again you are ignoring the basic economics of currency exchange rates. Right now the cheapest and most stable place to buy land, build buildings and employ labor is right here in the USofA.....unless that labor is UAW. Then that's a deal killer ( see the above paragraph ).
Are you serious? You do mean the American auto companies, right? And how would the oil companies be hurt if any of the Detroit 3 go under? For every vehicle lost in sales from a company that goes under, another auto company would get that sale.
GM owes $66 billion that they are going to tell the lenders too bad so sad cannot pay it. That leaves US to pay the banks GM defaults on.
GM wants $4 billion for Christmas or they will take down GM and millions of Americans will suffer with them.
Along with that GM has not kept the money they were obligated to keep in the pension fund for 450,000 retirees. Did they borrow against it or just piss it away? That leaves US with untold $billions to keep those retirees from freezing, unless they retired to Florida.
GM and the UAW have conflicting stories on wages and benefits. One says they will be equal to the industry by 2012. They other says they are already equal. Someone is lying.
The dealers they are concerned about will get NOTHING from the bailout, so unless GM comes up with cars people want they will continue to die.
The suppliers will get nothing except whatever continued orders for parts.
I do not believe for a minute that the GOOD parts suppliers will not get more orders from the automakers that survive this. No way will GM bring Ford and Chrysler with them. That is just cheap rhetoric. If the board at GM want to keep Wagoner, that is their choice. I say no cash if his team of losers is not fired with NO severance. They do not deserve the pay they have stolen from the stockholders over the last 40 years. It is the good ole boy club in some of the major corporations that have brought this country to their knees and they will get away with it scott free.
http://oversight.house.gov/documents/20070329144701-85817.pdf
Similarly what are the states in which the Big3 have plants doing to raise money. How many are there - 20? Are they issuing bonds to help finance the Big3? maybe NY could help - they're spending $833M in and around the new Yankee Stadium!
So anyone in a state with a lot of auto suppliers and plants, tell us what your city and state is doing to raise a few billion $'s in conjunction with the other cities and states to loan the Big3.
Well being good to the constituents back home, ensures votes to keep them in power, and being good costs $. If you don't spend $, then people back in the state aren't happy.
It's just like having someone else's Platinum card, and deciding whether to buy your wife or girlfriend what she wants to keep her happy. Pretty much a no-brainer to spend the $ - nothing to gain by saying "no".
There was a time a few years ago, I wanted a small truck. I looked at a Tacoma and it was just too dang expensive for what I wanted - a small basic work truck. Was considering a Dodge Dakota. Didn't like either the Ranger or the Chevy/GMC small trucks.
You severely underestimate the loyalty Americans have to their full-size trucks. My BIL is worried about the collapse of Ford because he doesn't want to be stuck driving a (censored) Toyota truck!
The 500/Taurus is sort of an in-between size class that I always called "new wave full-size", or some might call a "tweener". It's a group that started in 1985 with GM's FWD Electra, Ninety-Eight, and DeVille. These things sort of split the difference between the midsized cars and the traditional full-sized cars of the time.
Chrysler entered this size class in 1993 with the Intrepid and Concorde, and then the NYer/LHS. Ford was a latecomer though, not getting into it until the 500/Montego.
In some dimensions, the 500/Taurus is actually bigger than a Crown Vic. Notably, headroom, trunk volume, and back seat legroom. Shoulder room is less though, and I swear it feels like it has less legroom up front. The front seat is higher than a Crown Vic, but doesn't feel like it goes back as far.
Just another scheme to take from the middle and upper class and give to the lower classes. It will be those on the bottom of the ladder that suffer first in any economic downturn. We are already spreading the wealth around and the Coronation is not until January.
Wages are only part of the story. You can't build a factory in a country that lacks 1st world road & port facilities. Otherwise, you can't get components & raw materials in & the finished product out. This is a critical requirement - I'm speaking from sad experience here - & it rules out most 3rd world countries.
You need a fairly literate work force that can learn to operate & maintain machinery. Ideally, many of the native workers should be proficient in English so that they can communicate with senior American management. Your local managers should be absolutely trustworthy & should be able to function effectively without your having to closely supervise them. Otherwise, you'll have to fly to that part of the world every other week to clean up the latest mess. (Again, I'm speaking from experience.)
You also need a reasonably stable, transparent & honest government. Without this, you can't do business. What you'll save in wage costs you'll spend on bribes.
With this in mind, when you step back & look at the big picture, you'll see that non-union U.S. labor is the biggest bargain on the planet. Sure, some American jobs will go elsewhere, but I'll bet that you'll see many more high-priced EU jobs come here.
That is exactly right. A friend at HP told me that some of the tech support they outsourced to India, is now being done in the USA by the Indian Company. Too many complaints of language barriers.
It would be ideal if the plants that get closed when GM goes belly up, to be reopened with other automakers taking their place. If the EFCA law passes Michigan and Ohio will have to become Right to Work states or no one will set up shop there. The UAW thug mentality would make it impossible to do business in those states. So many do not realize just how bad that law will be.
What do we make there? Old tech. My company will not send any new or patented technology, or any chemical formulae to our products, to these countries, for fear of reverse engineering and copying.
We make most of our products here in the U.S., and the direct labor is very small. Our main product is priced about $500. The people who physically make that product cost about $3.00. The corporate and technical people cost another $15. The materials cost $50. Then there's some sales and shipping costs. And we pay a 37% federal tax on profit, and then some to our state.
If the labor overseas to make this part drops to $1.50/unit have I saved much? After I rent a building, train people, pay the extra shipping, have inventory tied up on ships and in Customs? When we spend $5,000 every month to send someone there to fix things?
So the labor to actually make something is fairly small, compared to the other costs. There is not a lot to save in most industries, by going overseas, and the companies that have gone overseas have found that out.
you know, i wonder if anyone has thought of that...the best thing to do might be to give some bailout money to the suppliers, rather than giving it all to the Big 3...if one of them STILL goes down, the suppliers need to be kept afloat in order for other car companies to have a shot at getting through.
Just like they should have been doing all along.
Regards,
OW
The neo-Taurus is full-sized on the inside where it matters. What it lacks are the two feet of wasted space between the grille and radiator, and the pseudo-cavernous trunk with a tire taking up half the usable space: crappy packaging that marked the traditional full-size American car.
All the automakers in the USA are hurting for sales. Why just bailout the ones with American names? If you let survival of the fittest work, the poor companies will go away and the good ones will be stronger. All the bailout will do is weaken the whole automotive industry worldwide.
G8 is very nice car. It could be a fantastic car when GM tune engine, suspension & etc up to BMW. GM have to to couple small steps.
It actually goes way way beyond the PC makers. It's whose platform is the software industry standard? It was IBM versus Microsoft and Microsoft won. IBM was just another case of a company trying to force their product on the customer.
What I get from this is that state and local municipalities will suffer greatly with a big three failure because of reduced sales tax income from the sale of new cars. Thing is, somebody is still going to be selling cars in the future. State and local municipalities collect the same whether a Toyota or a Ford is sold. Areas that have disproportionate amounts of Big 3 dealers would suffer, but countrywide the sales tax revenue would only vary by dollar amount of cars sold.
The other thing is - this guy equates Big 3 bankruptcy with their instantly disappearing from the face of the earth (with no possibility of restructuring). I just don't see it happening that way.
Maybe there's some analogy there - anti-trust and CAFE?
Or maybe it's Alzheimer's of the Big3. I remember my 40mpg 4-speed '82 Escort. I guess they misplaced the blueprints? and forgot there is a limited amount of oil in the world? 27 years later with their R&D, and engine advancements, I don't see a 40mpg vehicle sold by Ford here.
A few million$/exec, or a few hundred thousand/year for the next layer down of management sure doesn't get you much these days!
I used to, but in the last year he has descended into increasingly incoherent old-man rants. At this point, I expect him to start blaming GM's woes on the Trilateral Commission and the abolition of the gold standard.
Yeah, but 40 miles in 1982 gallons works out to about 28 these days, with emission standards, E10, and the EPA rigging the numbers for the doemstics.
>You need a fairly literate work force that can learn to operate & maintain machinery
India comes up as the only choice. and why not? GM does have a plant there and is doing very good.
http://wikimapia.org/3825876/GM-Halol
http://www.gm.com/corporate/about/global_operations/asia_pacific/indi.jsp
I'm sure that in your American car-loving neck of the woods (Philadelphia?), you should have no trouble finding 1st-rate independent mechanics, some of whom might have dealership experience.
Are you worried they might screw up the Heated Windshield washer fluid? :P
Just joshin ya. Anyways, a good mechanic should have all the right tools nowadays that you shouldn't have to fear going to them to get work done. If they didn't, they'd be out of business. Even some of the German stuff that is out right now has been "Americanized" enough that you don't need Hans da Wundermechanic to change a tire.
Well, I trust the dealer's service center to get more oil ON the engine than In the engine, and I trust them to get a TSB right on the third try, but that's about it.
NEW YORK (CNNMoney.com) -- A majority of Americans oppose a bailout of the troubled U.S. auto industry, according to a poll released Wednesday.
The CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.
A full 70% of respondents indicated that a bailout is unfair to taxpayers.
In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.
Sandeep Dahiya, a professor of finance at Georgetown University, said the poll results were "quite surprising." The large percentage of those opposed to the bailout "tells you much about how what is good for GM is not good for America."
http://money.cnn.com/2008/12/03/news/economy/automakers_poll/?postversion=200812- 0312
it travelled pretty well, too. not seat was not great but not horrible.
there is no comparison between cars from 1982 to now.
the crown vic is probably the closest.
Why does the government have to get involved? Why couldn't GM advertise a new warranty system where the customer has the choice of a traditional GM warranty, or to give up the GM warranty and they would get a 3rd party warranty of equal coverage. So GM would save the cost of any warranty and would spend that $ on buying you a different warranty, that you liked.
Or GM could say Malibu = $20K with warranty, (calculate what they spend on average for a Malibu warranty repairs) and discount the price that much. So if the average warranty cost on a Malibu are $1,500 over the years, discount the car that much more.
We really don't need politicians deciding how businesses should run manage. GM, the UAW, the dealers, the suppliers could all get together and fix this mess tomorrow, if they rip up their agreements, and say let's start with a clean sheet of paper and see how they can spend only what they earn.
The sooner we take away this unneeded government help, the sooner they will realize deal, and deal fast, or else they all go-down. When they realize they have 2 choices - to deal with each other and salvage something, or all fail the better.
I'm asking nothing more of these companies, then to do what every family has to do with a budget! If the family is running up debt, the family needs to get together and decide someone's got to give up their gym membership, cut the cable, get rid of the cellphone, and start eating spaghetti.
They can do this if they stop holding each other to the contracts that are driving them into debt!! But neither the CEO's, the unions, the suppliers, the retirees, or the dealers want to give up enough. They're still fighting amongst themselves.
I agree. I cannot tell you how many products I have bought and tried to get repaired to find the company is out of business or does not support that item any longer. That is part of the risk you take buying a domestic car when the company is on the brink of disaster. I never got any compensation on my solar system in AZ when it quit and the company was history. That was $10k down the toilet. In 1988 that was the price of a car.
So why did the money boys get trillions and others have to beg and say yessir. Maybe the young generation is indeed fodder.
Our fully trained, ASE-certified technicians provide sophisticated, professional, and highly technical auto repair and automotive maintenance services, using state-of-the-art computer diagnostic equipment, seven days (and six evenings) a week.
Regards,
OW
Toyota (a non-union US manufacturer) on the other hand - is $48 per hour.
While the average American worker comes in at $28 per hour.
So let me get this straight.........
The $28 per hour worker needs to bail out the $78 per hour worker whose company is going bankrupt ? :confuse: :sick:
I have several friends that would jump on $28 per hour in wages and benefits. Most around here are lucky if they make $20 an hour and pay for most of their health care.
It is sad that the fat cats all want the rest of US to bail them out when they make stupid decisions.
The cost per employee may be that high, but only because the automakers are spreading the pension and retiree health care costs to the workers. The guys on the line don't see those benefits and it shouldn't be included in talk about how much they make.
Nutty Math on Auto Worker Pay at NYT (The American Prospect)
Taking your example to an extreme, say that in the middle of Michigan somewhere there is a UAW township served by 6 domestic dealerships. Now because they are bad managers and business people the detroit 3 all go out of business at the same time. It's very painful in that town. All 6 D3 stores close up shop as they do in all the surrounding towns.
What does that town do when it needs vehicles? What does a family do when their vehicle is in an accident? What do the wealthy people do when they want a new vehicle? New drivers? Vehicles that are old and give up the ghost.
In fact these people will just find other vehicles to purchase and drive. As long as they continue to purchase the same number of vehicles after the disappearance of the D3 then state and local tax revenues and income generated from vehicle sales will not change one single dollar.
Another 'threat balloon' punctured falling to earth. THUDDD
I worked for IBM as well as lived in Rochester NY where Kodak "was" king of cameras and Xerox "was" king of copiers. And it is sad to see those dominant companies go through a long slow downward spiral. Life goes on though.
Maybe we should get away from Capitalism and move towards Socialism.
We are an average size dealership, we sell 200+ in the good times and 130-150 in the current and we employee 110 people, plus probably 50 vendors. Those are folks that no one takes into the equations. We got landscaping people, the guy who has the soda and candy machine, the people who sell us forms, the Dent Dr, the touch up guy, the guy who puts in leather, another for AM electronics, DVD's etc. The list goes on and on.
We may have to downsize if the trend continues but will not go under. On 06/16/2008 we opened a new state of the art facility here in TN and that has helped us quite a bit. Can't wait to see what we do when the worm turns