22 replies to this topic

[RD Milhollin]

From the FWST: Editorials Wednesday, Dec 24, 2008


With the U.S. economy facing its most perilous downturn in at least a quarter-century, and perhaps since the Great Depression, these are extraordinarily difficult times. Correspondingly, extraordinary measures are needed.

One of those critically needed measures is to grant emergency aid to cash-strapped U.S. automakers General Motors and Chrysler.

If nothing is done . . .

The consequences of failing to render such assistance could be disorderly and catastrophic bankruptcy proceedings that worsen America’s already severe recession, accelerate job losses and decimate a proud industry that long has been a pillar of the world’s largest economy.

Many consumers would be reluctant to buy cars from an automaker in bankruptcy. The White House estimates that failing to help the automakers would cost 1.1 million jobs and further shrink the economy. At the local level, there could be negative impacts on the 2,500-employee General Motors assembly plant in Arlington, as well as plant suppliers and auto dealers.

Congress failed to authorize aid to the industry when Senate Republicans blocked legislation after House approval of a rescue plan. On Friday, President George W. Bush ordered emergency assistance in the form of loans and demands for major concessions from the auto companies and workers. President-elect Barack Obama praised Bush’s action but added a somber warning: "The auto companies must not squander this chance to reform bad management practices."

Necessary actions

Indeed, the automakers must take numerous measures to lower costs, shed consistently unprofitable units and accelerate development of more energy-efficient and less-polluting automotive technologies, including plug-in hybrid and electric cars such as General Motors’ Volt, scheduled to enter showrooms in 2010.

Under the aid measure, the automakers must have in place, by the end of 2009, pay and work rules to make them competitive with foreign auto manufacturers with U.S. plants.

Even if the federal aid plan is carried out fully, there will be continued pain for the U.S.-based automakers as a result of necessary cost-cutting measures and the deepening recession. U.S. auto sales, on the heels of a disastrous 2008, are expected to remain subpar in 2009, with hope of a rebound in 2010. Even highly regarded Toyota, which has eclipsed GM in global auto sales, announced Monday that it expects its first annual operating loss in 70 years.

Dispelling myths

Many Americans, including some members of Congress, apparently are laboring under a false notion that the U.S. automakers and United Auto Workers union have done little or nothing to address their problems before seeking help from Washington.

On the contrary, the industry has shut down or reduced operations at numerous assembly plants, revamped product lines and begun putting substantial sums of money into alternative fuel and engine technologies. The UAW has made some major concessions in labor contracts in recent years. GM alone has cut 90,000 jobs in North America since 2000, according to Forbes magazine.

The Star-Telegram Editorial Board long has been critical of the domestic automakers for persistently opposing increases in federal fuel economy standards, which Congress finally adopted a year ago. But the automakers in the past year have consistently stressed that they are intent on embracing new technologies and building more fuel-efficient vehicles. And they’ve largely closed the quality and safety gap that had existed between U.S. and foreign cars.

We believe it’s important for America to retain strong U.S.-based auto companies, just as we think it’s vital for the nation to maintain a robust oil and gas industry and remain a global leader in computer technology.

These are core industries that provide millions of good-paying middle-class jobs, both directly and indirectly, as well as technological know-how that can prove vital in wartime or other crises. The U.S. auto industry, largely abandoning civilian vehicle production, played a vital and heroic role in building military vehicles, airplanes and ships during World War II.

The American auto industry almost certainly will never again enjoy the global preeminence it had in the 1950s and 1960s. But it will be a sad day for the nation if U.S.-based automakers go the way of the dinosaur.

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"If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers. Under ordinary economic circumstances, I would say this is the price tag that failed companies must pay — and I would not favor intervening to prevent automakers from going out of business.

"But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."

President George W. Bush in a Saturday radio address supporting federal aid to U.S. automakers
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

I have not made up my mind whether putting public money into the Detroit automakers is the best course of action in the long term, all things considered.

It is hard to say no to an industry employing so many US workers at considerably above-average wages and with excellent benefit packages. And it is even harder to say no after the greedy and self-serving banking industry was absolved of past sins and given a healthy dose of new blood by the Feds. The economies of many US cities, including Arlington and Tarrant County, would suffer huge hardships if the auto-related plants in their areas were to close, and the ripple effects could be disastrous to the overall national, and because of the international nature of the auto industry, world-wide economy.

But the US automakers have been foolish and the unions greedy for a long time; the crisis that it faces today did not happen overnight. The product they make has not changed fundamentally in 100 years, while other industries undreamed of in 1910 have become keystones of the world economy. In comparison to other technologies auto transportation, especially US cars, has lagged in innovation and in addressing changing environmental and social conditions. At best the car companies have successfully integrated computer technology into production models, but for the most part terribly inefficient internal combustion engines rule the road. Any attempt at change for the better, such as increased CAFE standards, have been fought tooth and nail by the Big 3 (or Big-2 at times), this effort requiring huge expenditures that have to be recovered by trimming product cost (quality) or raising prices (inflation). Neither has been good for the overall, long-term economic standing of the domestic industry or the national economy.

Foreign companies, especially Japanese manufacturers, have pushed ahead with the development of new technologies (hybrid and electric) and materials (composites) that have been incorporated into some of their production models. Admittedly their innovation was driven in some part by domestic fuel prices in Japan, and by intense competition from other lean Japanese and recently Korean competitors. The US government has some blame to shoulder in allowing the price of fuel to remain artificailly low for many years and for the FTC to allow unwise mergers of several manufacturers into massive industrial conglomerates that now "can't be allowed to fail" because of their enormous impact over the entire econmy.

I hate to see billions (and probably trillions) of public money flushed down the GM and Chrysler drains without some attention given to the potential for a new automobile technology barely in its infancy. Small players like Tesla have raised their heads showing that a new paradigm for auto manufacturing is possible. The potential for technological innovation as a result of the Progressive Automobile X-Prize is tremendous, and will likely result in a production model 100-mpg vehicle in the next few years. Artificial support given to the industrial dinosaurs could be responsible for the failure of these new industries, made up of companies most likely not hamstrung with antiquated thinking about how things have to be done because "that is how we have always done it". I think one of the reasons for the problems the US manufacturers face is that they have become entrenched in a culture of invulnerability, as have their unions. Smaller, leaner, more competitive (and thus more creative) companies would probably be more responsible, and more reactive to overall long-term considerations, rather than year-to-year reaction to public demand for socially irresponsible products. Another concern I have is the rediculous amounts of compensation publicly-owned corporations can award their top executives. I believe that Japanese and European companies enforce some sort of cap based on average or median employee pay, and I would like to see that for any company asking for handouts now, and eventually for all publicly-owned US corporations.

I suppose I face a dilema in deciding what I would do if my vote counted in this decision. On the one hand given how the US auto industry, and auto industry in general worldwide is suffering, a closedown could forseeably send the teetering economy into a tailspin. On the other, supporting a foolish and change-resistant technology might artificially doom the new, creative startups.

The North Texas area governments should coordinate to attract next-generation, clean, green, environmentally focused industries to this area, including new-car startups, to this area. There are "free trade zones" scattered around that area already set up for new businesses, and the rail and air infrastructure here is already in place. By acting now local and regional leaders could assure area residents employment in future-oriented, clean, sensible industries.

[Brian Luenser]

I say, "Let's send Prairie Pup to Washington!"

As many facts and emotions as Prairie put into this piece, I cannot disagree with one bit of it. Nicely considered and communicated.

I too do not like government bailouts. I dislike loans slightly less. I do think the American Auto industry is critical to our economy now and in the future.
I think we are becoming a County that thinks we can base our economy on professional sports and fast food. We cannot. We have to innovate and manufacture if we hope to maintain our standard of living. (We can't exist by paying each other a bunch of money to shoot hoops.)

I agree the price of gas was much too cheap for much too long. Should have had a buck a gallon additional tax a decade ago to pay for new roads and bridges. (Can anyone tell me that Loop 820 going past Rufe Snow shouldn't have 4 more lanes in each direction?) We now have major highways all over our state in gridlock and too many large/ high horsepower vehicles on the road. And the pollution to prove it. And how about a high speed train to Austin and Houston? That would be nice.

I only buy American made vehicles. (By American Manufacturers) For two reasons. A. Patriotism. B. High quality, high value. I have not had a car break since I was in High School and I am 52. American cars got sloppy some time ago and have been playing catch up. I think they have caught up. I think they have surpassed most foreign vehicles in total cost to operate. (Cheap to buy and cheap to maintain/ insure.) I bought 3 2007 GM vehicles I liked them so well. They are the best ever. Quality is mostly a psychology these days. Grass is always greener on the other side. If there were cars made on Mars people would love them. Every bass fisherman puts his boat in the lake and races to the other side where the fish are. Crap-think.

Those of us that have been buying foreign cars for years should realize they are a major reason our industries are in a fix. Blame yourself, mostly. We are all now going to pay for your past decisions. Maybe even by a great economic depression.

Those of you that bought a 1992 Lexus gave Toyota the development money to make the Prius. Had you bought a 1992 American car our Country would have had that research money.

I do not believe in Unions. Any union. Ever. Anti-Capitalism and wrong. So yes, I would like union concessions. (Mostly on overly rich health benefits.)

But I think we should loan the big two money. (With plenty of concessions as to wages from top to bottom, commitment to increased fuel standards etc...)

And as I am standing by for all the "I bought a Pymouth once that overheated every vacation and dripped oil on my garage floor", I would like to add this. I have a sister that buys foreign cars. (That's right, she's not my favorite sister.) I hear her telling people how her Honda's never break. Then I say, "How about the time your timing belt broke when you drove to Houston?", how about the water pump you paid too much for last summer?" etc... etc... Some how she forgets about all the repairs she has had done. She even blames herself for most of them. "They told me I should have replaced the coolant sooner, or I was supposed to have my timing belt changed at 75k miles, or the guy that put my brake pads on must have damaged the master cylinder etc... " Selective memory to justify her choices. It reminds me of the Plymouth Laser and the Mitsubishi eclipse that were identical cars made on the same assembly line in Normal Illinois. (In the 80's) The Mitsubishi consistently got better reviews and were rated more reliable by their owners even though it did not become a Mitsubishi until the last few minutes on the assembly line. Shameful.

[RD Milhollin]

I do think the American Auto industry is critical to our economy now and in the future.

For the near future I have to agree. Even in countries (and the few US cities) with highly developed mass-transit infrastructure automobiles are considered a necessary part of the overall transportation mix.

I think we are becoming a country that thinks we can base our economy on professional sports and fast food. We cannot. We have to innovate and manufacture if we hope to maintain our standard of living. (We can't exist by paying each other a bunch of money to shoot hoops.)

Agreed. I have always viewed the "services" model of the post-industrial economy with some suspicion (The "Hitchhikers Guide to the Galaxy" dealt with this in a typically offhanded and irreverent way in the "Golgafrinchians" chapter). It is disappointing the public education infrastructure seems to have bought into the services paradign as evidenced by the decline of vocational programs such as metal and wood working. US corporations have not been discouraged from outsourcing manufacturing jobs overseas. I am not sure why... only one candidate in the recent election (hint: Primary) addressed this situation head-on). A comparison of the salaries earned by sports figures and rock stars versus teachers, engineers, etc. demonstrates a certain amount of insanity in our economy, but again consider the astronomical / nearly unbelievable earnings by top coroprate executives. The "free market" is certainly not perfect, and perhaps not really "free", and in my opinion needs something more than a slight nudging in the right direction from the public sector. In that vein I don't see a real problem with socialization of resources and industries vital to society, for society's sake. Some things (fossil fuels, nuclear energy, water) may be dangerous left in the hands of short-term-profit driven corporations.

I agree the price of gas was much too cheap for much too long. Should have had a buck a gallon additional tax a decade ago to pay for new roads and bridges. (Can anyone tell me that Loop 820 going past Rufe Snow shouldn't have 4 more lanes in each direction?) We now have major highways all over our state in gridlock and too many large/ high horsepower vehicles on the road. And the pollution to prove it. And how about a high speed train to Austin and Houston? That would be nice.

Agreed again. But there is a point at which adding lanes to highways leads to diminishing returns in transportation efficiency, especially in light of alternative uses for land (housing, food production, open spaces). In fact there is a plausable theory that adding lanes will in the long term result in the same level of congestion as exists before construction. Taxation policy (licensing fees, excise surcharges) in favor of lesser polluting vehicles will help some, but effective public transit is absolutely necessary to providing consumers options.

Those of us that have been buying foreign cars for years should realize they are a major reason our industries are in a fix. Blame yourself, mostly. We are all now going to pay for your past decisions. Maybe even by a great economic depression. Those of you that bought a 1992 Lexus gave Toyota the development money to make the Prius. Had you bought a 1992 American car our Country would have had that research money.

Yeah...but. The foreign makers offered a superior product and better pricing (even factoring in import costs) for years, while US makers turned out mainly disposable junk. I do think that the Japanese and by extension the Koreans have been much more innovative and cost-effective in their manufacture of autos in the past decades. The image was set, and perceptions die hard. I do agree that from all I have seen personally, anecdotally, and from published statistics that US products have stepped up to the standards of safety and overall quality that many foreign competitors set in past years. Most buyers don't really spend adequate time researching models for the best buy, even though Consumer Guide is available to most of the footwork. US makers have historically spend vast sums on advertising, and American consulers eat it up. And I seriously doubt that more money in sales would necessarily have resulted in increased R&D; why should it if sales were fantastic? If anything slumping sales by US companies and burgeoning/repeat sales by the Japanese should have been the indication that new ideas were needed. While Japanese firms were developing hybrids GM developed the Hummer.

I do not believe in Unions. Any union. Ever. Anti-Capitalism and wrong. So yes, I would like union concessions. (Mostly on overly rich health benefits.)

I have to disagree with you here. I have long been a more than casual student of US history and the union movement was significantly responsible for the rise of the Middle Class, and therefore the economy we enjoyed in the US for a long time. Have unions behaved badly? I believe that instances of massive corruption and excessive demands, especially the high pay scales for uneducated workers, are all indications that unions over-reached. But unions were and are a necessary foil to the over-reaching, plundering tactics of corporations, past and present. Remember that corporations have essentially no responsibility to society at large, other than those imposed and enforced by law. Corporations don't have consciences, yet current law allows them the same protection as real people. Given corporate profits-run-wild, why should the workers not profit as well? Of course unions also don't have implicit concern for society at large either, their stated concern is the welfare of their members only. Capitalism is not a narrow concept: it comes in many flavors. Small players organizing against goliaths is not wrong, it is smart. Unions are very much part of the American contribution to human society, and if we encouraged formation of unions in overseas markets, as well as some of our own more provincial areas, I believe that the average quality of life worldwide would improve, reducing the frantic efforts of exploited workers overseas to immigrate at any cost to more developed countries, like our own.

But I think we should loan the big two money. (With plenty of concessions as to wages from top to bottom, commitment to increased fuel standards etc...)

Ford has stated they don't want the money...at least not now. And what if GM (or more likely Chrysler) defaults? I have to ask myself: if GM was to be allowed to go into bankruptcy would it serve as a stimulus to break the huge, inefficient organization into several smaller, leaner, smarter, more specialized and competitive companies? And, again I have a concern that loans to the existing giants could snuff out creative startups that might usher in a new and better paradigm in personal transportation, and even in mass manufacturing. What if the government had gone overboard in supporting the horse-and-buggy industry in the early 1900's? There was another article today in the S-T addressing some of the organizational foibles of GM, as compared to Japanese automakers.

[RD Milhollin]

Hmmm. went back to find the article and it wasn't there. Here is another article from Businessweek last month dealing with the same topic though.

I could see GM breaking up into several competing companies:

Hummer should be combined with GMC and spun off as a comercial/full-sized truck/military vehicle venture under the GMC brand.
Saturn should be spun off (sold to employees?) to compete head-on with Japanese carmakers manufacturing in the US. Good brand loyalty and good designs/quality.
Spin off Corvette, again good brand loyalty. Probable sale to single buyer or to workers.
Chevrolet: Volt, 3 models with varying capacity, small trucks, and Cadillac. Holden/Daewoo retained as overseas arm in Asia and Australia.
Vauxhall and Opel Combined with Buick, allow this new company to take advantage of German design and engineering.

Sell Saab to a Swedish partnership, at a loss though.
Pontiac should be eliminated; too much duplication with Chevy.

Which resulting company should be encouraged to operate out of the Arlington Texas plant? Probably the GMC creature since it is currently employed making full-sized trucks, but Arlington and the North Texas region in general should get on the stick in attracting new-technology companies of all types.

[Keller Pirate]

I, like many people, have listened to both sides of the arguments for and against the bailouts. I don't think anyone, including the people making the decisions, really know if they are doing the right thing, they just think something is better than nothing.

My personal opinion, I fear we are throwing good money after bad, but if I had to err I would err on the side of a starter bailout. I don't think 3 months is going to make any difference in the long run, but with the change in administrations, the auto makers should be kept afloat until the new people can decide how they want to handle them.

The problems and perceptions about American cars started in the late 70's and you can't fix 30 years of mistakes in 3 months. Unlike monee, I gave up on the US cars in 1980 and haven't looked back. I have had Nissan, Toyota and Honda products since then and only once had a problem. I was on a road trip heard a noise under the hood pulled into a dealer 500 miles from home. They said the water pump was starting to go out and they would be happy to replace it free of charge since it was under warranty.

I have seen the Consumer Reports ratings that the quality has improved on US cars and have thought about trying them again. Then I just remember the last rental I drove and put that thought out of my mind. Used to be the odds of getting a brand new car at the airport were 50/50 but now they are holding on to them longer and I haven't had one rental I would want to own. My experience tells me they still aren't as good as the Japanese cars.

On the other hand you wouldn’t catch me in a BMW or Mercedes either. They're repair records are some of the worst. I mock Range Rovers.

While the public doesn’t want an American car, they do seem to like American trucks and SUV’s over the foreign competition.

I do agree with monee that the highway infrastructure hasn’t kept up in the North Texas region. Absolutely 820 should have more than 4 lanes between 183 and I-35W. I was reading the other day that I-35W was built in 1959, nearly 50 years ago, North of DTFW it still has the original 4 lanes for the most part.

Not taking care of the highway demands has us behind in capacity and now planners and others would like to build alternatives that will compete for the same money. We should have thought about the roads when increasing the population of the region. If we had built expansions, we could now be in a position to say the next step is rail. Unfortunately I think highway expansion will have to come before the money can be used for less efficient rail projects.

Highway vehicles are always going to be the primary transportation mode, even if they all run on electricity.


Happy New Year to the forum.

[Birdland in Handley]

Great Pup-Monee point-counterpoint in the last Pup post.
My admiration for the UAW's being a pretty clean union, and the tragedy that would befall Tarrant county if there were no GM, makes me selfishly want to shore it up.
But the plant mainly produced SUV's and giant trucks, no? Talk about blind!
There's nothing wrong with ambivalence. . . is there?

[Birdland in Handley]

Great Pup-Monee point-counterpoint in the last Pup post.
My admiration for the UAW's being a pretty clean union, and the tragedy that would befall Tarrant county if there were no GM, makes me selfishly want to shore it up.
But the plant mainly produced SUV's and giant trucks, no? Talk about blind!
There's nothing wrong with ambivalence. . . is there?

[Fort Worthology]

Short answer? Against bailing out the auto makers with no exceptions. Let them die.

Long answer? Meh, I'm on vacation. It can wait.

[Brian Luenser]

Short answer? Against bailing out the auto makers with no exceptions. Let them die.

Long answer? Meh, I'm on vacation. It can wait.

With no exceptions? I am going to guess that if you get hungry enough in the great depression of 2009-2014 you would change your mind. The auto industry is the big deal in this land. (And the feeder industries, auto dealerships etc...)

I have great reservations about bailouts. Primarily to greedy/ ignorant homeowners. I have reservations about loaning money to the big two/ three however I am pretty sure if we don't bail out the auto makers we will go into a deep world-wide depression. It is only that I have no children and saved enough money to eat well for the rest of my life that I might would chance it. (ie,. I am standing by to buy your house for 15k) If I didn't have enough cash to retire young and live well I would propose to bail them out for sure.

And do remember that United States got paid back with good profits (And got paid back early) on the Chrysler "Bail-out" in the Eighties... One of the few smart business decisions our Country has made in my limited memory.
Loans do beat pure handouts.

Limit the Unions, limit executive salaries, and talk about loans with large stocks options for the US in return. I would also be OK with a one shot deal. "Here is a loan of 20 billion, but we will not give more so manage it wisely."

The Big Three has made many mistakes in the decades. But much of what they are dealing with now was not readily predicable. (Toyota and Honda were blind-sided and are hurting deeply as well.) In recent years, Toyota was spending billions tooling for the thirstiest pickup truck ever to roll on the road just in time for 4 buck gas and a new wave of environmentalism. (The 14mpg Tundra)

[gdvanc]

I support loans to the automakers simply because the impact on the economy of losing that many jobs should one or more of them fail would be quite significant. Like many, I have this uneasy feeling about whether the industry will subsequently adapt to today's and tomorrow's markets and be viable for another generation or so. But no matter what you feel about our auto-dependent lifestyles I don't know how you could feel good about the potential of an abrupt layoff of that many workers and the shuttering of that many plants. That would be bad indeed, and not just for those losing their jobs.

Those of us that have been buying foreign cars for years should realize they are a major reason our industries are in a fix. Blame yourself, mostly. We are all now going to pay for your past decisions. Maybe even by a great economic depression.

Fifteen years or so ago I read an article blaming the struggles of GM (and by extension the other domestic automakers) on a public too willing to "buy American" no matter what they carted gingerly off of the assembley line. The industry's innovation muscle atrophied considerably under those conditions in the 70's and 80's and as the Datsuns and Hondas started rolling in with cheaper and more innovative products the Big 3 started losing market share. Initially, if I recall correctly, the insurgents won share in the small car and light truck markets, into which the domestics never seemed to put a lot of effort and which they more or less yielded. As the new entrants started gaining a reputation for quality (I'm old enough to remember when "Made in Japan" was considered to be synonymous with "Fails Often"), they were able to extend into other categories - particularly into the more profitable mid-size sedans. Classic business strategy, that.

There is something to be said for "Buy American" and there is a place for "Buy Local" (and even brand loyalty), but there can be a down side. Competition and demanding customers drive innovation. That's pretty much a business axiom. Businesses who are able to sell to overly-loyal customers without the investment and risk associated with innovation will not have the incentive to innovate. The more customers base their buying decisions on extrinsic properties of the product, the less manufacturers focus on intrinsic properties.

I agree that overall quality of the domestic products has imporoved, but my experience with my most recent domestic purchases has not been positive. Although there were a lot of things we liked about it, our late 90's model Caravan was an electrical nightmare. Did they use British Leyland on those? I lost count of the number of batteries we went through, and two of my wife's sisters had similar problems with their Caravans of about the same model year. The service departments never would admit there was something wrong with the cars; they kept saying "faulty battery". Whatever. If that's the case, there's a serious problem with the QC from their battery supplier. Between the three of us (in two different states), we easily replaced a dozen "faulty" batteries. I also had electric problems with my Neon. Right now, I won't be giving Chrysler the equivalent of several months salary any time soon. (I have heard they've fixed the problems the service department wouldn't admit they had.)

I haven't experienced anything from GM that I liked in the two types of cars for which I'd be in the market: a small or mid-sized car for my commute and an eight-seat van for hauling the eight hooligans. They make a 'Burban for that, I'm told, and they seem to be well made (demanding customers for sure, there), but my wife would be the primary driver for that and I think it just feels too big for her little 5'3" 95 lb. frame. I did kind of like one of the Saturns when I was looking for a car to replace my Neon (and its dying tranny), but I ended up going with the Prius. 30-mile commute, you know. Man how I hate that. Paid off the Prius this month and have 5 years of overall pleasant experience. Hasn't been perfect; glitches here and there. When we finally got tired of paying to fix the latest nonsense with the Caravan (Voyager, really), we decided on the 8-seat Sienna as one of my wife's ex-Caravan sisters had one and hadn't had any problems with it. We haven't had any so far, either, except a couple of scratches because I have no depth perception.

There are some Fords I like (although some have told me Quality is actually job None) and I'll consider them on my next purchase (historically my best luck has been with Toyota and with Ford/Mercury; my worst has been with Chrysler and GM; I like the styling on some of the Chrysler products and really want to love them again but no love for them right now; Chevys have killed me and my relatives with big failures and tons of annoying little ones; not literally killed, of course, but if you drive GM you may know what I mean).

Having said all of that, if Holden ever puts their Efijy into production and I win the lottery - oh, man am I all over that. That one is cool like the other side of the pillow.

Enough about me. Back on topic. Here's some "Dogpile on Detroit Month" reading material for ye:

John Quelch: How GM Violated Your Trust
Bill Taylor: Memo to an Auto Industry CEO: Less Head, More Heart
Umair Haque: Detroit's 6 Mistakes and How Not To Make Them
John Baldoni: Detroit's Leadership Failure
Jeff Stibel: Detroit CEOs Take the Low Road
David Silverman: Four Myths about Fat Cats
Kathy Bloomgarden: Big 3 PR Lessons

-dc

[360texas]

1973 2 VW's no repairs required.
1986 2 Toyota Camray's no repairs required
1990 2 Acura Integras no repairs
1995 2 Saturns - 2 major transmission repairs
1998 2 Acura Integra no repairs
2008 Still driving Acura Integras no repairs yet but looking at 2 Honda Insight Hybrid for 2009/10 http://automobiles.h...insight-hybrid/

[gdvanc]

1986 2 Toyota Camera's no repairs required

I hear fuel pumps and lenses are hard to get for those these days.


I bought a used '79 Celica in the mid- or late-80s; it's still one of the best cars I've ever owned and the fit and finish felt better than some late models I've driven lately. I also had a used '76 Corolla that I didn't like because it was old, beat-up, and ugly but it was what I could afford. That dang thing just wouldn't die and I ended up giving it to a relative when I bought my first new car after graduating college and getting a job.

[Brian Luenser]

1973 2 VW's no repairs required.
1986 2 Toyota Camera's no repairs required
1990 2 Acura Integras no repairs
1995 2 Saturns - 2 major transmission repairs
1998 2 Acura Integra no repairs
2008 Still driving Acura Integras no repairs yet but looking at 2 Honda Insight Hybrid for 2009/10 http://automobiles.h...insight-hybrid/

1966 Ford Mustang - Many repairs
1979 Chevy Chevette - No repairs
1988 Chevy Silverado - No repairs
1989 Pontiac Sunbird - No repairs (Wife's)
1994 Dodge Ram - No repairs
1996 Saturn SL2 - No repairs (wife's)
1999 Chevy Silverado - No repairs
2005 Honda Big Ruckus scooter. Elect. probs., kickstand fell off, can no longer read any writing on handlebars (I confuse the brights with the horn.) Second exhaust leak, battery replacement and bent wheel ($400) from hitting a mud puddle. Has minor oil leak.
2007 Saturn Sky - No repairs (but too small)
2007 Chevy Cobalt SS - No repairs (Wife's)
2007 Chevy Silverado - No repairs. (And runs mostly on 4 cylinders and gets 28mpg on trips.)

Several of my vehicles had more than 200k miles on them.
Outside of a few batteries and tires, have never had a repair in or out of warranty on my American made vehicles.
BTW: when America makes a scooter I will buy it and get rid of my junk Honda.

I, of course, am not saying American vehicles don't break. I am saying they don't don't break as often as people think. Am I Patriotic for buying American vehicles? Yes. And I can also say foreign cars break more than people will even admit to themselves. They even have to justify to themselves screwing the Country of their birth.

[360texas]

Yeah, sorry about the spelling.. agree Toyotas and lenses are hard to spell much less match up properly.

[360texas]

Maybe this is a good topic for another thread.. if so .... feel free to relocate

Ok.. Pat and I go shopping at a lot of different stores and locations. One of the attibutes of a product is Country of Origin. Its a thing [Topic = Balance of Payments] we have cultivated over the last few years.

Today what does the US actually produce ?
What products do you find on the store shelves that read "Made in the USA"

Now of the American Cars.... [this is a tough question] what automobile parts are made in the USA?

I am sure that you will find a few main frame parts.. like the transmission... but who supplies the other car pieces ?

The focus issue is why are small parts and supplies being outsourced? Maybe US labor costs are too expensive. It might be that the US Labor has out priced itself from the world market place.

Market indicators might be... peoples earnings can not pay the mortgage, doctors and medical staff are loosing clients because medical expenses are too costly, Medical insurance are loosing clients due doctors and medical staff costs are too expensive. Peoples earnings can not support the the auto industry product costs.

Geesh, seems like a slippery slide downwards... which might be a good thing.

[Brian Luenser]

Maybe this is a good topic for another thread.. if so .... feel free to relocate

Ok.. Pat and I go shopping at a lot of different stores and locations. One of the attibutes of a product is Country of Origin. Its a thing [Topic = Balance of Payments] we have cultivated over the last few years.

Today what does the US actually produce ?
What products do you find on the store shelves that read "Made in the USA"

Now of the American Cars.... [this is a tough question] what automobile parts are made in the USA?

I am sure that you will find a few main frame parts.. like the transmission... but who supplies the other car pieces ?

The focus issue is why are small parts and supplies being outsourced? Maybe US labor costs are too expensive. It might be that the US Labor has out priced itself from the world market place.

Market indicators might be... peoples earnings can not pay the mortgage, doctors and medical staff are loosing clients because medical expenses are too costly, Medical insurance are loosing clients due doctors and medical staff costs are too expensive. Peoples earnings can not support the the auto industry product costs.

Plenty of products made in USA still. (Though not enough.) Most car parts are made in USA for American manufactures. False rumor that they are mostly foreign parts. It was drummed up by foreign car buyers to help them justify their decisions. And most of the auto parts that are foreign are made in Mexico and Canada, our good trading partners. (And whose economy's are very important to us.)

My big telescope I am looking at is made in USA as all the good ones are. (Meade) Most of the world's aircraft are made in USA. Most heavy machinery is made in USA. Many big trucks and cars are made in USA with mostly USA parts. To me, it is worth my trouble to find out where stuff is made before I buy it. Of course everything I buy is not made in USA. I buy American when available. Not that it is always the best, but I don't care. I plan to live in this Country the rest of my life. I have not had to die for my Country. (though I served) I have not fought directly in a war. Buying American products is the least I can do. I had a great economy handed to me on a platter. I do what I can to keep it that way.

[Keller Pirate]

According to the news reports they cut the checks for GM and Chrysler today, about $8 billion each. Reporters were saying GM will use most of their (our) money to buy out dealers. They plan to reduce 1700 dealers in the next 4 years. Now I can see that a smaller market share doesn't require as many dealers and fewer of them will be good for the ones left.

Can someone explain to me how cutting back on dealerships is going to fix the root cause of the problem?

After reading the posts and thinking some more about the situation, I think Chrysler should close up shop now. They were owned by a bigger, profitable company for a while and Daimler couldn't do anything for them. Neither can anyone else, so I say go away now and save us a few bucks. Maybe Ford and GM can pick up some of their pathetic market share.

[Sam Stone]

Just got back from vacation. . . I have a lot of opinions about this.

My opinion is that they don't deserve a single cent of our money. These are the same automakers that killed off streetcars in the 1930s, that opposed safety regulations, emissions regulations, free trade, and spend who knows how much money lobbying congress.

Any news story I hear or see about this gets me very frustrated because most of their premises are inaccurate. No one is asking the right questions and this whole thing is a distraction from the real problems and solutions.

First off, calling them American auto companies is inaccurate. Most of the foreign ones are not really foreign either. These are gigantic multinational companies that build and sell vehicles on every continent.

Bankruptcy is not the same as going out of business. People would not stop buying "American" cars because the companies were in bankruptcy. Their cars have sucked for decades but some people just love "American" cars. BTW, If your VIN starts with a 1, 4, or 5, it was built in the US. If it doesn't, it wasn't.

The so called American car companies build many fuel efficient vehicles. We just don't buy them because gas has been historically very very cheap. And, their fuel efficient vehicles that they sell in the US tend to be inferior to the fuel efficient "foreign" vehicles sold here. But go to Europe and you'll see lots of Fords and GM brands on the roads. They're models that aren't sold here. The reasons for this are: our safety and emissions regulations are actually much stricter than in Europe which would require the cars to be re-engineered and gas has been so cheap that the profit margin here is greater on bigger more expensive cars.

The new CAFE mileage standards that are about to kick in actually benefit GM, Ford and Chrysler. That is because they were written by them. The new "more stringent" standards are a joke. See below:
Autoweek story explaining CAFE

Electric cars are NOT the solution. A comprehensive public transit network, walkable cities, and good urban design are. It takes hours to recharge an electric car. Imagine how different that is from a gas powered car. You run out of juice and you're SOL for at least three hours.

I've got more to say, but I'm leaving it at that for now.

[Brian Luenser]

Just got back from vacation. . . I have a lot of opinions about this.

My opinion is that they don't deserve a single cent of our money. These are the same automakers that killed off streetcars in the 1930s, that opposed safety regulations, emissions regulations, free trade, and spend who knows how much money lobbying congress.

Any news story I hear or see about this gets me very frustrated because most of their premises are inaccurate. No one is asking the right questions and this whole thing is a distraction from the real problems and solutions.

First off, calling them American auto companies is inaccurate. Most of the foreign ones are not really foreign either. These are gigantic multinational companies that build and sell vehicles on every continent.

First and foremost, these are American Auto Companies. Pure and simple. There are indeed American companies as there are Japanese companies and German Companies. They fact that they also buy or sell cars or parts overseas doesn't change their status as an American or Japanese company. That is all crap talk that people are more than willing to believe. Particularly people that are buying foreign cars. (It doesn't matter what brand, they are all multi-national.) Crap. People will say and believe anything that supports their behavior, rational or true matters not.

Does Ford sell cars in Europe? Yes. Do they buy parts from Mexico? Yes. Is it an American Company?
Absolutely. That is probably why it is listed on the NYSE. That is probably why their headquarters is in America. (Dearborn MI.) That is why most of the Stockholders are Americans. You likely own Ford Stock and don't realize it. It may be in a mutual fund, or 401k plan. Our Texas Teachers have Ford and GM in their retirement funds. (That you and I will have to fully fund.) Not complicated. American Company. You might ask, how many Americans are employed by Ford. How many "others" are employed by Ford. Not many in comparison. Toyota makes Pickups in San Antonio (At least final assembly.) Is it a Japanese Company. Absolutely. You can pretend this is a gray area but it really isn't. And yes, Chrysler had a period of German ownership. (Daimler Benz) Now it is owned by Chrysler LLC of New York. (American again.)

The same companies that killed streetcars? Yikes. Now you're reaching for straws.
Surely you don't think Honda and Volkswagen were happy about competition of any kind. You don't think Honda and Volkswagen have not had disagreements about legislated safety issues? They have.

Again, I am not 100% for a loan package to the AMERICAN auto companies. I do think we will go into a deep depression if they go under. And to a large extent I think Americans deserve to be in a deep depression. Most Americans are willing to screw their homeland for just the right heated seats. There is very little patriotism in America anymore. (All talk, no action, for the most part.) They may have an American Flag sticker on the window of their Lexus. Big deal.

I'm just glad I am financially prepared for the depression.

[Sam Stone]

Regarding streetcars:
http://en.wikipedia....reetcar_scandal

Regarding how American they are, US employees account for about 40 of GM's payroll and foreign sales account for slightly more than half. I wasn't trying to diminish the effect that their collapse would have on our economy. My point was that they operate all over the world and make and sell fuel efficient cars all over the world. They don't sell many of them here because of gas prices, not because of some fatal flaw in the company. I mention that as a retort to the way it's described in the news media, not to anyone on this board.

But don't get me wrong, there's plenty wrong with how GM has been managing their company and selling cars here. My opinion is that one of their biggest problems is their brands. Rebadging has cannibalized sales across their company. They ought to get rid of Saturn and Buick in the US (not in China, for whatever reason the Chinese love Buick), and maybe make GMC fleet only. Same with Ford--get rid of Mercury. Chrylser doesn't have too many brands, just too many undifferentiated products. Go to the Jeep web page sometime and see if you can tell the difference between the Patriot and the Liberty.

But that's a whole other subject. My real point is that we would be much better off investing in a national rail network. We could employ far more people that way than by rescuing the Big Three.

[Sam Stone]

This illustrates the fundamental flaw with CAFE:
Ferraris are greener than Priuses

[Keller Pirate]

This illustrates the fundamental flaw with CAFE:
Ferraris are greener than Priuses

Along the same line of reasoning, government figures show that transit is less energy efficient than me driving myself to a destination.

The reason is that my car is an on demand vehicle and doesn't spend the day running around mostly empty when I'm not in it.

During rush hour times transit is more fuel efficient, but during the off peak times that the systems operate, energy is largely wasted, so the overall effect is a net loss on a per passenger count compared to cars. Obviously, more riders incrementally improve the efficiency of any transit system without much or any increase in fuel usage.

[Sam Stone]

That's a good point, KP. I wonder if that applies only to the US where everything is built around the car or also to places like Europe which has more extensive and integrated transit. What I mean is that there must be places where transit doesn't run around mostly empty most of the day and in that would make it more efficient.

My point about CAFE is that it is an average and not a total or a cap. So average fuel economy can hold steady or increase while miles driven can increase far more and we still use more and more gas. This is good system only from a consumer's rights point of view, but not from the point of view of national security, the economy, or the environment. Taxing gas at a much higher rate and doing something productive with that revenue would be much more effective than CAFE.

I know it seems off topic to go on about CAFE, but it's one of those basic premises in the news that doesn't get questioned. You hear people say things to the effect of, "well if we raise fuel economy standards high enough, Detroit will respond by making more fuel efficient cars and that will solve their problems and most of our energy problems." But because it's an average, one thing does not follow from the other. Transit, on the other hand, runs straight off electricity. We don't have the kind of power grid in place today to produce and share "clean" electricity, but building that would itself create jobs and help the economy. And now that we understand what a threat burning fossil fuels is to national security, the economy, and the environment, nuclear power is looking a lot more attractive. At least we know that burying nuclear waste doesn't contribute to global warming.