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The Current State of the US Auto Market
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SC300 was a Supra engine. Lexus is just now seeking the idea of an involving car again.
As for the Mark VIII, I didn't like them when they first came out, but I've warmed up to them over the years.
The Mark did too - futuristic in a way. The first American made car with HID lights, IIRC.
The 2013 VW Beetle can be configured that way. Pretty intriguing combination, if you ask me.
What effect would it have on our economy if we could entice them to come back, by having more competitive rates? Perhaps even companies like GM and Ford would be adding more manufacturing here than they have been, versus other areas like Mexico and South America.
I am all for an experimental corporate tax holiday of sorts, to see if it actually works. If it doesn't go as the free marketeers claim, it will be time to break out the guillotines. Let's see if they can put up, if not, it's time to shut up.
Sadly, taxes are only a fraction of the story, labor issues and corporate accountability are larger.
That's true, and on the surface, it sounds excessive. Problem is, the true tax rate is the "effective" tax rate, after all the givebacks and deductions have been applied, much like you may see if you have deductions for mortgage interest, etc. Your effective tax rate ends up being far less than your published (marginal) tax rate.
And, it makes a big difference.
http://www.marketwatch.com/story/10-us-companies-paying-no-taxes-2013-03-26
The Mark VIII had all the right pieces. 32v V8 power, RWD, independent rear suspension etc. Plenty of technology, but unfortunately it had to much Ford DNA. They didn't seem to hold up very well, and while the interior had a modern design (at the time) the materials weren't all that great. Overall the quality of the car wasn't all that good and the depreciation on those were horrendous. It would have been a good used buy.
I still have a soft spot for the late 80's Lincoln MK VII LSC with the 5.0 Mustang engine. That car had some attitude.
True, we have a situation were some companies pay a 30% effective rate and others pay 0. of course you have to earn a profit. And like personal taxes, corporations pay their share of payroll taxes and other employee related taxes etc regardless of Fed and state income taxes.
They could have easily saved the most worthy of the Big 3 (such as Ford that didn't need a bailout), and then the worthy suppliers they needed to support due to GM's bad credit and allowed disappearance, and to keep Ford moving.
It would have cost us 95% less and been much better for America in the long run. Tesla might have a full car line by now if we gave them the money that went to GM. When has GM got a 99 in CR?
When has Ford, Chrysler, Toyota, Nissan, Honda, Benz, Hyundai, Kia, ad nauseum?
Just asking.
Absolutely, I know first hand Chrysler drivetrains do not like any stress, the 4-doors are probably too heavy for the penny pinching designers at Chrysler. Design it JUST good enough for the 2-door weight, down to the nanometer.
gets stuck in the mud, is used to pull other rigs out when they get stuck, and so on, and perhaps all that muddin' and such is enough to sway the statistics?
Absolutely again. If you actually drive your Chrysler vehicle, it'll fall apart. You must baby it, no more than 20% throttle, or face devastation.
I know it's anecdotal, but someone tracked a recent model Camaro with the Audi Club and Hertz was on the hook for a new automatic transmission before the day was up. P.S. after half a dozen track weekends no one's dropped ATF fluid from an Audi like the Camaro did. And that's all Audi Club events, so the sample size of the Audi's is 100X larger. Buy GM? Not for me!
Just asking.
A fair question; I'll drop the standard to 90. I know Acura and Lexus have exceeded that for a fact.
My 03' Accord Coupe V6 puked it's transmission too, but it was sudden and made no noise.
It would do crazy things like shift into 3rd gear at 75 MPH or 2nd at 60 MPH while you were just cruising and coasting down the highway. Rough hard shifts at times. Still was able to usually drive it smoothly, I'm sure it would have gotten worse and more repeatable with time. I was afraid it was going to be one of those "dealer tech unable to experience problem" phantom issues.
What would GM have done for a failed transmission had they not been bailed out by Bush and by Obama. Obama had to outright say the US government would cover warranty claims on behalf of GM.
How effective do you think it would have been for a GM owner to write Wagoner requesting reimbursement after they went bankrupt absent a bailout? Maybe Lutz would respond to letters with reimbursement checks?
When has Ford, Chrysler, Toyota, Nissan, Honda, Benz, Hyundai, Kia, ad nauseum?
Just asking.
I think the only other manufacturer ever to get a 99 score was Lexus.
My own view is that a 99 is meaningless by itself. Now, create a range, say something like 95-100, and it might be meaningful, if there are enough vehicles in the range. When one example is in a range all by itself, it makes one wonder about the quality of the selection criteria.
I just don't personally see how one make/model can be that far superior to the rest of the entire market. Was my high school Valedictorian really the smartest guy in my school? According to his GPA he was, but I doubt there was any test he could take and consistently beat every other student in the top 1-5% of his class.
It's a bit like the opposing view of number of reported problems/per 100 cars by make and model. If one make ranks a 3, and a competitor ranks a 4, does that really have any significance, overall? Surely, a 3 ranked car is probably a better car than another one scoring 30.
I just think the comparisons get really fuzzy when one starts seeing aberrations appearing in the data set.
Well, from Wikipedia, the only significant country with a higher corporate rate is Japan. But of course that doesn't also include the state income taxes.
List of Countries by Tax Rates
Or we can use KPMG; the other big auditing firms have similar lists:
Corporate Tax Rates Table
Rates vs what is paid are different worlds ...Not even close, you know that.
Well once you try to throw out quantitative arguments, you can argue any position you want. You know that, too. We can't pretend that even with loopholes, the rates don't matter. In fact, the biggest "loophole" is keeping those earnings *out of the high tax country*. As an example, Apple has >$100Billion offshore, but chose to borrow money in the US to pay its dividend. Then it deducts the interest on the loans!
I am all for an experimental corporate tax holiday of sorts, to see if it actually works.
Well that's some progress. I agree that it would be a good experiment - revenue might actually go up rather than down. But it's all an academic argument anyway, as Congress will look at short-term reelections over what's actually good for the country. On that we can agree.
...labor issues and corporate accountability are larger.
Those issues could be fixed by government if it chose do to so. Obviously it has not.
At least Ford has that highly modern plant in Brazil to brag about, and the Fusion made in Mexico. Too bad those things aren't here. Add the UAW to the high-tax mix and any sane company would diversify to other countries.
It would have cost us 95% less and been much better for America in the long run. Tesla might have a full car line by now if we gave them the money that went to GM. When has GM got a 99 in CR?
Excellent observations. We could have pruned a lot more of the deadwood and further enhanced newer-age modern entrants, while still preserving the manufacturing base. And Ford would be making a bigger profit than it is, and would have been able to de-leverage much faster than it currently can with the GM boat anchor bailout in place. In a sense, Ford is bailing out GM, too, in the sense of lower profits now and forward.
The most money in the bank only counts for car companies. :shades:
I remember those LSCs could be had with kind of a lace/mesh wheel, the car looked pretty mean in black with black wheel centers especially.
I don't care about rates, I care about what is paid. Actual pay rates are just as quantitative and objective, but somehow are ignored by the "tax = evil" crowd. Who buys the laws? The 1% have high rates, too.
Again, who buys the laws? Government could fix labor issues and corporate accountability? How so, when corporations buy government? Especially in this oligarchic lobbyist-driven system. The biggest loophole is that we don't have capital punishment for financial crimes and treachery.
So, would you support an experimental tax holiday, with rewards given if it succeeds, but punishment given for failure? Like you say, not going to happen, as the corporations who buy laws wouldn't like to see their lies unveiled.
Does anyone really believe there is relocation of mfg to second world areas for tax reasons, and not to take advantage of cheap (and sometimes iffy) labor, along with zero social and environmental responsibility? I think everyone here knows better. Taxes are a red herring. Labor costs and social/environmental standards are the drivers.
UAW is another matter entirely, and is indicative of the management vs worker culture in the US. Automotive unions in other locations aren't as troublesome, as workplace relations are entirely different in other places. In some places, management and people who work actually get along, relatively. A very un-American ideal.
In my class, not by a long shot.
I think it varies from soup to nuts, but if I had to guess I would say non-valedictorians probably excel as much as valedictorians in life, but far more valedictorians fail (as a %) as compared to non-valedictorians, from an expectations POV.
No, I was listening to the radio, and I sent you a link for both Wikipedia and KPMG which supported the information. I thought that would be easy to understand. And no, your complaint isn't even relevant to the point being discussed. A common diversionary tactic. Why the insults instead of substance?
I don't care about rates, I care about what is paid.
You may not care about rates, but companies do. And that influences their decisions. Not all companies have the loopholes available to them to avoid those taxes.
Again, who buys the laws?
Again, who makes the laws? The companies are lobbying legally. The government should represent us, and they've allowed that not to happen. They're there to maintain a degree of fairness in our economy, and they've failed.
Does anyone really believe there is relocation of mfg to second world areas for tax reasons, and not to take advantage of cheap (and sometimes iffy) labor, along with zero social and environmental responsibility? I think everyone here knows better.
I absolutely know that this occurs - it may not occur in every case, but in certain lines of business where labor is a smaller fraction of the cost of goods sold, but the products are valuable (think electronics or pharmaceuticals), taxes can be a much larger part of the savings than labor, and decisions are made on that. But I guess you know that's not the case. :P
That's one of the best cars I've owned. '88, Black/Burgundy and the only issue was replacing an A/C seal after 70K miles.
His next car was an Acura TL. 2003 I think. And he's stuck with Acura ever since, and leases them these days, so he doesn't keep them more than a few years. He still has a long commute, so I imagine that must get pretty expensive.
Don't get me wrong, I am all for a cut - with the caveat that if it doesn't have the impact that some claim, that fairly severe penalties are enacted.
Some interesting data to be found here, too
Which companies which run overseas, taking advantage of the system here to get started and then fleeing when it comes time to maintain said system, are not able to exploit tax loopholes?
Maybe one type of tax holiday isn't the best idea - "According to Michael Mundaca, assistant Treasury secretary for tax policy, “In 2004, when the U.S. enacted a repatriation tax holiday, the goal was to encourage U.S. multinationals to pay bigger cash dividends from their overseas subsidiaries and use the cash to make investments in the United States. Unfortunately, there is no evidence that it increased U.S. investment or jobs, and it cost taxpayers billions.” - shocking. It just increased profits for a few on the backs of the masses. Kind of like our trickle down/job creator personal tax policies.
This seems to be all it has wrought
A lot of things "should" exist, but I can't find any time in history when government actually represented people. Surely not in either of our lifetimes, nor the past several generations of our ancestors. If I pay you to do something wrong, and you do it, do I not have any fault? Why is their no accountability on the side of corporations?
I can't think of any electronics or pharma manufacturing that has chickened out and ran away simply due to taxes. The production of which specific products have been offshored via this reason? Of course, some head offices/HQs etc have fled. I can see perhaps in areas where labor is not an intensive input. And which tax havens in particular? It would be interesting to see how they benefit from the largesse of the American taxpayer via the policeman ideal or other subsidies.
That gen TL was the best from Acura so far.
As for saving the Big 3, there was simply no political alternative. Naturally, we don't get to see the "what if", that being 'what if we let them fail", but I personally think it would have been suicidal in the midst of the financial debacle of 2008.
Besides, throwing all those workers into unemployment lines and into social welfare, again in the midst of a huge financial depression, would have probably cost the American taxpayer FAR MORE than what they paid out to keep the automakers alive.
And it has all worked out. GM has exceeded its initial IPO stock price of 2011, and may one day soon once again appear on the S&P 500.
Well something is happening in Korea...too bad the U.S. can't get it right yet...
Bloomberg reports shifting tariff regulations have upended the traditional automotive pecking order in Korea. Thanks to cheaper import taxes, foreign brands have seen market share jump from 28 percent to 41 percent over the last two years. BMW, Mercedes-Benz and Audi have all capitalized on the shift, with domestics like Hyundai and Kia suffering at the hands of their German rivals.
Taxes on European imports have fallen from 8 percent in 2011 to just 3.2 percent today. Over the next few years, tariffs will all but be eliminated for most imports, and taxes on US-made vehicles are expected to fall to just 4 percent in 2014. By 2016, that number will be zero. Needless to say, Hyundai and Kia are concerned about the shift.
Hyundai has seen profit fall by 15 percent last quarter, and the company says it is on pace to see the slowest sales growth since 2007. The company's shares have fallen by 12 percent. In order to stem the losses, Hyundai has discounted its midsize sedans and started working on diesel engine options.
South Korea is hardly a poster child for capitalism, unless one considers having a big brother to run protection (at his expense) is capitalistic. I suspect we would see a much different business model and environment coming out of Seoul if the US told them they were on their own, defense wise.
How different would the US business model look if an outsider took care of our defense, paying for our navy, the troops stationed here, etc?
I'm not anti-Korea at all, but I know a sweetheart deal when I see one.
We are such lousy imperialists. Most conquerors bleed their captives dry, historically.
Of course, we did eventually wise up to the "Japanese invasion" of our auto industry in the 1980s, when Toyota, Datsun (aka Nissan) and Honda delivered staggering blows to our Big 3. We finally put some clamps on that.
So in that sense we protected an auto industry that, left to its own devices, would undoubtedly have gone under and been conquered totally by the Japanese and Europeans.
If you need an example of what happens to an industry left unprotected, look to the British motorcycle industry, which, under attack from the then-rapacious Japanese (with I might add, their most excellent products), went from global leader to a pile of rust in about 5 years.
That's what it comes down to, for me. If someone exploits an existing expensive system and finds success via it, they need to keep the system going so the next guy can have that same chance. Kind of the reason I don't mind paying for schools even though I have no kids. The system helped me, and it should help those who come next.
I think GM still needs some reforms, but they aren't dead yet. Same for the other 1.5 Detroiters. I agree letting them simply collapse would have been very expensive - but it seems many who collect public or private pensions or have received inheritance think there shouldn't be any unemployment or non-religious safety net at all.
The only boss that ever fired me, had a new "Vigor". He was a guy who always said "Perception is reality". Trouble is, perception was more important than reality to him.
Our resources subsidize someone who then competes without limits on our turf. It's a nice game if you're on the right side of it.
Were the British not a pile of rust before the Japanese made competent products? I think there was just finally a better alternative. The domestics had issues before the 80s, too.
The Brits had, for so long, complete control over the motorcycle market, with a few minor players hanging around. It was a recipe for keeping the status quo, and building bikes that generally had a 1:1 ratio of hours ridden to hours of required maintenance.
Enter the Japanese, with low maintenance, affordable, very reliable and fun bikes such as the smaller engine Hondas, and the deal was sealed.
Other than the destruction of the British bike manufacturing facilities, there was little left that one could do to help drive the British bike industry into the dirt.
And, the same applied to the smaller sports cars like the MG and Triumph series vehicles.
RE: Foreign economies---don't underestimate the advantages of having a totalitarian government run an economy. While there are perils, on the other hand a snap of the fingers can often make needed changes. Such systems needn't be overly violent or inflexible by any means and they do have a lot of power over the currency. After all, fascism and corporations have been quite cozy in the past and, for better or worse (mostly worse) did accomplish some amazing short-term goals.
In any event, all indicators are that economic power is shifting to the Asian markets, and it is possible, barring a meltdown, that China will be investing far more in the global economy than the USA by the year 2030 or so.
They might not be just buying lots of Buicks, they may be the new owners .
http://247wallst.com/2013/05/16/the-ten-best-cars-for-the-american-family/
1) "Style" is rated
2) 43% owner loyalty is top-of-the-heap (Avalon). Hard to believe. That's 57% who might or wouldn't buy it again. Not picking on the Avalon, but seems weird to me.
Personally, I like the new Impala better than the Avalon, but it's too new to have garnered any of the data they used, other than 'style'.
I swung into my usual Chevy dealer today and didn't see a single '14 Impala. Guy who sold me my Malibu said they'd only gotten one in so far and that they dealer-traded it for another to garner a sale.
Well that sort of sums up the last 30 years, doesn't it? :P