this is a pretty good commentary on GM's history and the direction GM (and the other big 2) needs to take.
what do you guys think? are they too big to fail? or are they better off filing for bankruptcy and re-structuring somehow?
personally, i don't think the gov't should be stepping in on this one. I understand there's a ton of jobs at stake, but I think in the long run it's better for them to have to restructure or break up.
The government would be better off just taking the $25B and investing it directly in mass transit rather than forcing the automakers to be middle men in transit reinvestment as a precondition of a bailout.
the question seems to be whether or not they could even survive bankruptcy, which apparently ford and chrysler are better poised to do due to some loans they took out before the financial crisis. the argument for the bailout in part seems to be about concessions the UAW made to GM a couple years ago that takes them off of the hook for certain employee/retiree benefits and to buy out certain contracts, but it doesn't go into effect until 2010, so people are saying they just need some bailout money to survive another year and then they'll be fine. people in michigan seem to want them bailed unconditionally out from what i've heard. i don't know that much about it honestly. it seems to me that the people arguing against it are mainly doing so because of the "principle" of it, but i think right now people need to set some of their principles aside and just think pragmatically about what is best for the economy. if ford and chrysler can make it through, then why not just bail out GM? they all need to restructure though. all three companies offer a significant amount of "twin" cars across their brands, which to me is pretty inefficient business model. i've always thought GM should just do away with oldsmobile, buick, and GMC altogether and just be chevy, pontiac, cadillac, and saab. who among us would honestly buy an oldsmobile? in principle, no, they probably shouldn't be bailed out but they need to think about the most effective way to minimize job losses while also encouraging the companies to be more competitive, and i don't know enough about the subject to decide what that would mean.
I support bailing out ford and GM, because i think they are just beginning to turn the corner and make good cars again people want to buy, but with apologies to the MOPAR heads out there, Chrysler has got to go. There isn't a single car in the entire Chrysler range i would want to buy and most of my beef comes down to the quality of their products.
i think GM has been building quality products for a long time, and the idea that the cars suck or have sucked in the past 15 years is just perceived. back in 04, i bought a 94 grand am with over 120k miles on it for 1200 bucks. since then, i've put over 50k miles on it (now at 175k) and it still runs really well and i haven't put any more in maintenance into than i paid up front for it. i drove it cross country over labor day and didn't have any problems with it.
Jeep is a Chrysler brand, and has a reputation for reliable vehicles... It also happens to be the only Chrysler brand that's been performing relatively well. I couldn't care less about the rest of Chrysler, but I'd hate to see the Jeep brand die off. I've read some speculation that Chrysler may simply rename itself Jeep Corp. and focus exclusively on that product line, and kill off the rest of the company.
GM and Ford are both dinosaurs who deserve to go extinct, but I'd hate to see all their suppliers and pensioners get wiped out in the process. Guess I have mixed feelings about whether they should get a bailout. At the very least, any bailout should force them to accept higher fuel economy standards (which they've been successfully fighting for years) and force them to make some much-needed internal reforms.
And of course, healthcare costs are a huge reason these companies are failing. Universal healthcare needs to be one of Obama's first priorities when he takes office.
well the big three certainly have to deal with all those legacy costs. a year ago gm stock was 42 bucks and everyone wanted suvs and trucks. so you could argue that they were doing the right thing(if you discount the environmental factors) then gas doubled in price (all do to speculation) and just as it has come down the economy tanks to a point where no one is buying cars out of uncertainty for the future. so its been a perfect storm, now in chicago if you by a new chrysler pacifica you get a slightly used pt cruiser for a dollar. frankly though if there is a bailout it really needs to come with some strings ie higher fuel economy for all vehicles. and a percentage of all vehicles being hybrid. why however you need to make a buick and a chevy and a pontiac which basically all serve the same market doesn't make much sense.
my jeep has 175,000 miles on it and the gear shift knob came off in my hand last night when shifting. The turn signal quit working a couple of months ago so I have been sticking my hand out the window. I thought it looked like an easy fix, a couple of screws and an couple of male female connections....you know plug and play. Then I take off the decorative housing and I find two star screws which have been modified so I can't remove them. I'm pissed at
a company who makes things more difficult for the mechanically inclined and who refused to pay their shop prices. So I plan on a trip to the junk yard to see if my local shop has a fix for the problem. Now I have to find a gear shift knob and a turn signal indicator.
I will drive my Jeep until it dies...but I will not support a bailout said company! Until I hear they want to really address gas milage issues.
Instood of giving monster salaries and bonuses based upon SUV sales they should have been investing in the future....and unlocking all the technology they have managed to keep locked up for so long.
that's the unfortunate thing snook dude, that they had many, many opportunities in the last 10 years to prepare for the future, and they just kept going on and on like it was going to last forever. watching it unfold, it did seem strange to watch toyota roll out the prius, honda roll out the insight, and chevy roll out the avalanche. i think that this gets at the fundamental problem with the big three's corporate culture.
i read somewhere that a huge part of the problem for them is they make something like 60-70 different car lines between the big 3 and they only have like a third of the market share. The reason japanese and german and other foreign companies do so well is they make only a handful of car lines that are well built, get great gas mileage, and they don't have to deal with the UAW.
i believe the sins of the banking industry were far worse than those of the auto industry. if you accept the rational of the $700 banking bailout, it's hypocritical to say that it should not extend to the auto industry. frankly, i believe the banking bailout set a terrible precedent for government involvement, but i don't believe there's any backing out now. the relationship of business and government has fundamentally changed, and the road we've taken must be taken to its logical conclusion.
is it even worth it to re-design the jeep to give better gas mileage? it's inherently inefficient. the engineers can possibly squeeze out a bit more gas mileage by fiddling with the motor but those bodies are heavy as hell!. jeeps as daily commuter vehicles doesn't make sense.
at this point, i'm for cleansing.
i think there are some underground auto engineering happening at garages and small shops across united states. i just recently saw an ad looking for a drafter for a start up company developing an electric car. I have an 80 year old neighbor who builds cars and if he really wanted to, i belive he can design and build an electric car.
Those "myths" are pretty good. I agree, it's not that these companies don't build good products, they're just spreading themselves way too thin and they def. need way better marketing.
GM also does a lot of business in mortgages and insurance, so it's not just cars bringing them down. Should they be eligible for banking bailout money taking that into consideration?
i won't pretend to know how to fix any of those three companies, but bailing them out is in no way comparable to bailing out the banking system. both have committed some really stupid moves over the past decade. however, if the banking system fails, the entire economy is completely screwed. everyone. if the 3 us automakers fail, there will be some short term pain (and it may finally kill detroit) but people will still buy, service, and use cars. they may get them from other makers and the service market will dwindle, but someone will step in and pick off the carcasses. heck, those companies may even pull out and start anew.
the larger question is: if they are bailed out, where do we draw the line between what is 'essential' to the economy and what isn't? how will we decide which companies and industries are allow to suffer and die and which ones are important enough to be given taxpayer money? even the airlines are not a comparable - if the entire airline industry collapsed, commerce in general would suffer tremendously. not so if we can't get a chevy, f-150, or 300.
the fate of the big three directly and indirectly affects the jobs of 3 million people in this country. the banking industry directly and indirectly affects the bonuses of 100,000 hedge fund managers. who would you rather have the government bailout?
they shouldn't get a bailout, they should get retooled to design and build state of the art cars. reorganized, restructured, redesigned. any bailout should be an investment in technology and design.
the funny thing about it is, organizational design and efficiency problems aside, i think the problem with these big 3 auto manufacturers is design. *it's aesthetic* as well as the cost problem. regarding automobile performance quality, american cars have technically advanced alot in recent years, but IMHO, they don't *design* well... as far as quality goes, they could potentially compete.
and maybe i'm exaggerating the importance of this, but i think the key to reviving the american auto industry is design. technology as well, sustainable fuel efficient cars, etc. but design is fundamental to a successful automobile. exterior aesthetics, attention to details, design concept, functionality, endurance of design aesthetic and marketing concept. design matters. people, the consumer market is driven as much or more by human desire as it is by functionality of the thing.
the other day i was watching a movie... actually it was 'kite runner', abouut afghanistan, but in it, there were scenes in afghanistan in the 70's where the protagonist's father was driving a classic 1969 ford mustang... this beautiful machine... looking at it, it was like an object of perfection, of beauty, a modern object of desire that was admired around the globe. american cars used to have this kind of pure design and engineering appeal...
design, aesthetics, performance and precision and consistency of design down to the most minute details, is basically everything in the car industry, and why american cars haven't been able to compete. maybe the bailout should be for the auto industry to hire architects as concept designers.
there is something to be said for the fact that the designs aren't always that great. although i think they've always made a few beautiful cars, and a lot of ugly ones. and then there's cars like the prowler, the viper, and the gt. there certainly isn't any lack of talent. lately i've felt they've been doing a much better job; i like the cobalt, the impala, the malibu, even the focus. part of the issue though is just the way americans value design: i was at a shopping mall with a friend once where there was a pt cruiser on display as well as an audi sedan. my friend and myself were the only ones drooling over the audi, but there were about 15 people crowded around the pt cruiser. americans will usually get more excited about a big mac than a filet mignon.
Hearing the GM CEO fear mongering about how this will kill the economy pisses me off. fortunately the bill wont go through since Paulson doesnt have any buddies to save in Detroit. They are all in NY.
There is one reason why they are in trouble. Their business model is terrible. And you cant blame the recession bc they were in trouble beforehand. They did well before they had serious competition before foreign market and were about to die and went all-in playing the SUV/ big truck card. They didnt hedge and develop smaller cars until very very recently. Now they are getting killed for overspecializing.
Plus their marketing, design, and engineering are all poor.
So screw them and their greed when they shouldve hedged and be happy to have been solvent. 25 billion will only grant them maybe a year of liquidity in the market. So it will be money wasted.
honda manufacturers something like 50 cars globally, only a portion of which is available in the states.
toyota is something like 80 w/ scion/lexus
i love this "freemarket" BS until we're too big to fail and need a massive bailout.
if you are too big to fail,
you are too big to exist.
divy the bitches up and let them fight it out.
OR
sure, let's bail them out.
effective within 2 years, minimum standard of 70+ MPG on ALL vehicles. and make the american version of cars as nice as the same model you are selling in europe, you dimwit hacks.
yeah i wasn't really sure of what everyone did in the rest of the world, i was basing it off what i see here in the US....i know the Big 3 produce a lot of other cars that they sell elsewhere in the world and not here
i like the "if you are too big to fail, you're too big to exist", couldn't have said it any better
the beauty of capitalism is some companies succeed and some of them fail, and you've just got to let it play out....we can't be bailing out every American corporation under this guise of "too big to fail"
all i know is that i simply don't understand 'too big to fail'. if the company fails, the infrastructure doesn't go away. the products of the real investments are still there for someone else to use - if these particular companies go away.
but the companies themselves are also not likely to go away. they'll just reconfigure. seems they're arguing now so that they won't have to do that, but i think it's exactly what NEEDS to happen. i expect that the companies (maybe with the same names) that emerge from failures will be better companies.
it's not like people aren't buying cars at all. they're just buying fewer and different cars. somebody will still have to make these cars and detroit's fall-off in sales has only been something like 20% (?). somebody's gotta make the 80% of detroit cars that have been selling.
the scare tactics of the trickle-down to parts suppliers, etc, are therefore suspect. these people, like everyone else, may have some hard times over the next couple of years. but the stuff they produce will still be necessary unless all automakers start sourcing everything from overseas.
i haven't understood either the dem or repub positions on the potential for bailout. the repubs say that any bailout would have to be in addition to the $700b banking monies, i.e., more tax-payer life support. the dems are for supporting big corporate structures so that they don't have to reorganize. these just among other positions: i don't see how either party is being consistent with their expected roles. everybody's just flailing around trying to look like they're doing something.
'fail' has been made to sound like an endgame by all the people pitching to congress, but it really might be an opportunity to open a new chapter. try, try again.
personally, i don't have any issues with the cars the big 3 makes (except for the retro crap & cheap knock-offs that chrysler has been turning out lately...they've kind of become the banana republic of autos).
anyhow, the big 3 is really the big 2 as chrysler is already a corpse. they died after daimler abandoned them like a used condom after their short lived "merger." cerberus bought what was left and is basically just looking for buyers to sell the salvageable assets to. they promptly took the company private and pulled it out of stock markets else it would already be trading at zero. so what assets do they have? i guess a few name brands (chrysler, jeep), a sprawling suburban office hq in auburn hills and, most importantly, about $9 billion in cash. the cash is why GM has been after them recently for a merger. GM has been hemorrhaging cash lately with monthly losses easily topping the $1 billion dollar mark. they had something like $30 billion dollars in cash a couple of years ago and are now down to something more like $10 billion. That is, at current pace they've got barely a year to survive.
Ford is in somewhat better shape (relatively speaking) than GM right now...but these are the same people who run the Detroit Lions football team so they pretty adept at futility and will probably crash soon too.
so, yeah, i don't support a bailout of these lurching wrecks of companies. all that would do is buy GM & Ford another 1-2 of business as usual while they hope the market turns around...which isn't going to happen anyways. time to pull the plug & begin a new era in michiganistan!
i agree about chrysler - if they get a bailout, all it will go to is lining the private investor's pockets while they continue to downsize it enough to make it a more attractive purchase for someone else (vw?)
the 3 million argument isn't quite there - if they file for bankruptcy, it's not like all those jobs evaporate overnight. in fact, it'd probably be less than 1/10th of that. to put it in perspective, even if 300,000 were laid off from GM and Ford tomorrow, it wouldn't even equal what we've been averaging for the last few months as a country.
what would hurt is the presumed concentration of the jobs in a geographic area (midwest) and the impacts that could have downstream. it would also be a loss of higher paying jobs which almost certainly won't be replaced anytime soon.
all 3 put themselves in this lousy position. i'm in favor of letting the free market work them out. otherwise, i expect a government check tomorrow to help alleviate the debt our firm took on trying to keep the office together over the past few months. i'm too important to fail...
if the company fails, the infrastructure doesn't go away. the products of the real investments are still there for someone else to use - if these particular companies go away.
i don't think you've ever been to detroit, steven. the city is strewn with abandoned infrastructure. maybe the movie industry will come in and use the abandoned warehouses as sets, or detroit can capitalize on the tourism of ruin (tongue planted firmly in cheek). quite honestly, i don't think many of you really understand what this will mean for the real economics of working class people or the urban implications for industrial cities.
I think in any case it’s going to get worse before it gets better as they say. American car companies seem to have been in a downward trend for a decade or better now and I don’t see how loaning them more money is going to change that trend; I think it will only extend their hospice time.
Letting them fail will be bad for all of us in the short run but could act as a giant reset button allowing them to break free of the things that have been holding them back and draining their cash.
i think people are well aware what this means. unions have screwed themselves, the auto industry has screwed themselves, now the "real" working class people are asked to bailout two groups that could care less about "real" people. time for everyone to pony up and concede that they were riding a wave of ridiculous expectations and raping of resources; natural, infrastructural, human, etc....bail them out, get newer and better products to market, increase CAFE to 40 mpg within 3 years, fire every executive, and union chief and get new leadership. "real" people demand it.
you do have to wonder what the hell gm is thinking when they see the success of the prius and civic hybrids, the waiting list for the smart car etc, that they introduce as one of their first hybrids a freaking escalade! wtf???
jafidler, the city might be strewn with abandoned infrastructure but there is still quite about of the manufacturing & design of auto parts & components scattered about the region including many in suburban detroit.
for what it's worth, the present detroit auto industry emerged out of the previous industry of building engines for steam ships (link to best website ever!). perhaps freed of the shackles of the current (and dying) paradigm of auto industry, a new henry ford can emerge to congeal detroit's latent talent into a new transit industry focusing on elecltric & hybrid technologies. it won't be easy...but revolutions are often bloody.
also, for those interested, lessenberry stresses th importance of auto industry in today's [url=http://www.metrotimes.com/news/story.asp?id=13453]metrotimes[url]
i've been to detroit, jafidler. and i said i didn't understand all of the issues...
...but i still think the implications of 'failure' are overstated. the stuff will still be there (granted, it will degrade over years if left abandoned) and the demand for (less/smaller) cars will still be there, the product suppliers and workers will still be there.
maybe all that won't be there will be the bloated administrative structure and culture. these companies need smart people, they need creatives, and they need to be more flexible and resilient. buttressing their current structure won't lead to those results.
assuming detroit is still the center - or that it should be - may also be a problem. ky is, i think, the #3 auto-manufacturing state now - ford and toyota, primarily. domestic companies' and foreign companies' plants are all across the country, and they're not of the old model that sits mouldering in/around detroit. they're big open boxes that can be and are being retooled for different uses on a fairly regular basis as their lines evolve.
I'm in the NO bailout camp. In America we have something called Chapter 11 Bankruptcy that allows companies to restructure and emerge as a more vibrant company. That's what needs to happen.
A bailout does nothing to kill redundant brands (i.e. Buick, GMC, Mercury, etc.) and nothing to renegotiate contracts (i.e. UAW "job bank" etc.).
Remember that the market share of Detroit 3 has been sliding down for over 30 years! This is not a problem that wasn't seen on the horizon years and years ago. The 90's were relatively good times with high margins on SUV's but market share still slid every year. Even with their "improved" products available today each year more and more people are going over to Toyota, Honda, etc.
Give me the reigns of GM and I immediately file C11. First order of business is eliminate every brand but Chevrolet and Cadillac. Dump all UAW contracts and lay off ALL hourly workers. Rehire under a new contract similar to non-union contracts at Toyota and Honda plants. Drop franchise dealer count from 7,000 down to about 1,500 to match Toyota. Cut production capacity to handle the +/- 20% of US market share GM currently has. Sell idle infastructure. Refocus Chevrolet product development to mix of 3 sedans, 2 trucks and 2 SUV models. Eliminate badge engineering between brands ~ let Cadillac develop their own vehicles to properly compete with Lexus/BMW et. al. Put a rock solid 10/100 warranty on all products to bring confidence back to the brand. Emerge from C11 nimble and ready to compete with the Japanese/Euro competition.
Barney Frank just reminded us, on NPR, that if we had a national health system, the corporations wouldn't be saddled with their current health obligations.
Sen Kyl (R) yesterday proposed something like aqua's approach above -- though not so drastic, and no mention of the union issue (as I recall). Chapter 11 allows the business to continue, while dropping franchises and other excess baggage.
It's tempting to let them fail, but what's the point ?
the "bailout" of the big three really needs to be structured as a government-supported effort to expand r&d in the private sector in respects to fuel efficiency and alternative fuels. this is actually the republican approach to the allocation of the $25 billion. the problem is that gm, in particular, may not survive until those funds become available. what mystifies me is that government seems perfectly willing to "loan" $675 billion to the banking industry, but will not make $25 billion available to the automotive industry, an industry with a far more direct connection to middle class jobs.
additionally, it's the auto industry that if working in partnership with the federal government can address the national issues of security through oil independence and climate change. to see the american auto industry fold is to set back innovation in r&d for a very long time.
even if that original $25b is freed up NOW, i.e., the terms are changed so that it isn't tied directly to r&d and can be used for life-support, how would we expect these companies to change?
i'm actually more in support of that - of allowing that $25b already set aside to help solve their current crisis. more than that, though, i think they'd have to demonstrate materially that they have the will, the ideas, and the ability to actually transform themselves.
i believe a lot could be gained from a public-private partnership on energy independence and climate change, but really there are two issues here: first is the economic crisis in the automotive industry created by the current state of the economy (the big three would not be in the straits they are now in if the economy was humming). that issue is directly tied to the loans afforded in the bailout package. i personally feel it's hypocritical to bailout the banks and not the automotive industry when it's the auto industry that has closer ties to real jobs. the second issue of government-supported r&d is another issue. the problem is the government is shooting itself in the foot if the auto industry dies before any meaningful partnership effort can be created.
there's nothing mystifying about the handout to wall street...those banks & firms are having been major insiders in wash dc circles for years and those wall street "bailouts" are really nothing more a blatant act of embezzlement of the US treasury to keep their unscrupulous ways propped up.
the auto industry is complete outsider by comparison and is about as relevant to the insiders as the baseball card industry. Should we bailout Topps & Donruss too? I think we need federal money to prop of the values of my Mark Mcgwire, Barry Bonds & Roger Clemens rookie cards that have lost a lot of "value" over the past couple of years.
One of our top pols (was it Barack ?) suggested recently that we have an "Auto Czar" in DC to shepherd the industry in the right direction. Who better than Amory Lovins ?
an "auto czar" and/or more federal involvement & bigger bureaucracy are not a good idea. on the contrary, the american auto transit industry needs to be smaller, leaner & more competitive. in short, it needs to be more "american" than it's been in the last 50 years.
if we must go the route of government controlled, socialist style enterprise then we should at least get the sadistic pleasure of offing a few heads in the public square. this bloodless revolution is really disappointing.
to me the problem with an "auto czar" is that it would be yet another endorsement by the Federal government of the concept that every adult is entitled to personal automotive transport.
Bailout the car companies??
this is a pretty good commentary on GM's history and the direction GM (and the other big 2) needs to take.
what do you guys think? are they too big to fail? or are they better off filing for bankruptcy and re-structuring somehow?
personally, i don't think the gov't should be stepping in on this one. I understand there's a ton of jobs at stake, but I think in the long run it's better for them to have to restructure or break up.
The government would be better off just taking the $25B and investing it directly in mass transit rather than forcing the automakers to be middle men in transit reinvestment as a precondition of a bailout.
the question seems to be whether or not they could even survive bankruptcy, which apparently ford and chrysler are better poised to do due to some loans they took out before the financial crisis. the argument for the bailout in part seems to be about concessions the UAW made to GM a couple years ago that takes them off of the hook for certain employee/retiree benefits and to buy out certain contracts, but it doesn't go into effect until 2010, so people are saying they just need some bailout money to survive another year and then they'll be fine. people in michigan seem to want them bailed unconditionally out from what i've heard. i don't know that much about it honestly. it seems to me that the people arguing against it are mainly doing so because of the "principle" of it, but i think right now people need to set some of their principles aside and just think pragmatically about what is best for the economy. if ford and chrysler can make it through, then why not just bail out GM? they all need to restructure though. all three companies offer a significant amount of "twin" cars across their brands, which to me is pretty inefficient business model. i've always thought GM should just do away with oldsmobile, buick, and GMC altogether and just be chevy, pontiac, cadillac, and saab. who among us would honestly buy an oldsmobile? in principle, no, they probably shouldn't be bailed out but they need to think about the most effective way to minimize job losses while also encouraging the companies to be more competitive, and i don't know enough about the subject to decide what that would mean.
I support bailing out ford and GM, because i think they are just beginning to turn the corner and make good cars again people want to buy, but with apologies to the MOPAR heads out there, Chrysler has got to go. There isn't a single car in the entire Chrysler range i would want to buy and most of my beef comes down to the quality of their products.
i think GM has been building quality products for a long time, and the idea that the cars suck or have sucked in the past 15 years is just perceived. back in 04, i bought a 94 grand am with over 120k miles on it for 1200 bucks. since then, i've put over 50k miles on it (now at 175k) and it still runs really well and i haven't put any more in maintenance into than i paid up front for it. i drove it cross country over labor day and didn't have any problems with it.
Jeep is a Chrysler brand, and has a reputation for reliable vehicles... It also happens to be the only Chrysler brand that's been performing relatively well. I couldn't care less about the rest of Chrysler, but I'd hate to see the Jeep brand die off. I've read some speculation that Chrysler may simply rename itself Jeep Corp. and focus exclusively on that product line, and kill off the rest of the company.
GM and Ford are both dinosaurs who deserve to go extinct, but I'd hate to see all their suppliers and pensioners get wiped out in the process. Guess I have mixed feelings about whether they should get a bailout. At the very least, any bailout should force them to accept higher fuel economy standards (which they've been successfully fighting for years) and force them to make some much-needed internal reforms.
And of course, healthcare costs are a huge reason these companies are failing. Universal healthcare needs to be one of Obama's first priorities when he takes office.
well the big three certainly have to deal with all those legacy costs. a year ago gm stock was 42 bucks and everyone wanted suvs and trucks. so you could argue that they were doing the right thing(if you discount the environmental factors) then gas doubled in price (all do to speculation) and just as it has come down the economy tanks to a point where no one is buying cars out of uncertainty for the future. so its been a perfect storm, now in chicago if you by a new chrysler pacifica you get a slightly used pt cruiser for a dollar. frankly though if there is a bailout it really needs to come with some strings ie higher fuel economy for all vehicles. and a percentage of all vehicles being hybrid. why however you need to make a buick and a chevy and a pontiac which basically all serve the same market doesn't make much sense.
my jeep has 175,000 miles on it and the gear shift knob came off in my hand last night when shifting. The turn signal quit working a couple of months ago so I have been sticking my hand out the window. I thought it looked like an easy fix, a couple of screws and an couple of male female connections....you know plug and play. Then I take off the decorative housing and I find two star screws which have been modified so I can't remove them. I'm pissed at
a company who makes things more difficult for the mechanically inclined and who refused to pay their shop prices. So I plan on a trip to the junk yard to see if my local shop has a fix for the problem. Now I have to find a gear shift knob and a turn signal indicator.
I will drive my Jeep until it dies...but I will not support a bailout said company! Until I hear they want to really address gas milage issues.
Instood of giving monster salaries and bonuses based upon SUV sales they should have been investing in the future....and unlocking all the technology they have managed to keep locked up for so long.
that's the unfortunate thing snook dude, that they had many, many opportunities in the last 10 years to prepare for the future, and they just kept going on and on like it was going to last forever. watching it unfold, it did seem strange to watch toyota roll out the prius, honda roll out the insight, and chevy roll out the avalanche. i think that this gets at the fundamental problem with the big three's corporate culture.
i read somewhere that a huge part of the problem for them is they make something like 60-70 different car lines between the big 3 and they only have like a third of the market share. The reason japanese and german and other foreign companies do so well is they make only a handful of car lines that are well built, get great gas mileage, and they don't have to deal with the UAW.
i believe the sins of the banking industry were far worse than those of the auto industry. if you accept the rational of the $700 banking bailout, it's hypocritical to say that it should not extend to the auto industry. frankly, i believe the banking bailout set a terrible precedent for government involvement, but i don't believe there's any backing out now. the relationship of business and government has fundamentally changed, and the road we've taken must be taken to its logical conclusion.
i also believe these points are for the most part true and what the big three really lack is a good pr and marketing firm. where's steve jobs when you need him?
is it even worth it to re-design the jeep to give better gas mileage? it's inherently inefficient. the engineers can possibly squeeze out a bit more gas mileage by fiddling with the motor but those bodies are heavy as hell!. jeeps as daily commuter vehicles doesn't make sense.
at this point, i'm for cleansing.
i think there are some underground auto engineering happening at garages and small shops across united states. i just recently saw an ad looking for a drafter for a start up company developing an electric car. I have an 80 year old neighbor who builds cars and if he really wanted to, i belive he can design and build an electric car.
Those "myths" are pretty good. I agree, it's not that these companies don't build good products, they're just spreading themselves way too thin and they def. need way better marketing.
GM also does a lot of business in mortgages and insurance, so it's not just cars bringing them down. Should they be eligible for banking bailout money taking that into consideration?
In response to cmu268 about the variety of cars that the big 3 produce:
I think this number is going to come down in future - I heard (on Marketplace, I think) that they are already beginning to cut r&d by a huge amount.
Yeah those numbers are from the last few years and they're def. going to have to come down if these guys want to survive and stay competitive.
okay you're put in charge of one of the big three...what do you do generalist thinking outside the box creative designer types????
create a partnership with apple. (no joke)
resurrect the ghost of harley earl. seance anyone?
put the company in the hands of its young design staff. the company needs a serious youth movement. we have entered a new era of leadership.
here's my brainstorm...
create 4 divisions
active/sport
family
work
executive/luxury
within each division there would be a progressive series
within each at least half would be hybrid...
i won't pretend to know how to fix any of those three companies, but bailing them out is in no way comparable to bailing out the banking system. both have committed some really stupid moves over the past decade. however, if the banking system fails, the entire economy is completely screwed. everyone. if the 3 us automakers fail, there will be some short term pain (and it may finally kill detroit) but people will still buy, service, and use cars. they may get them from other makers and the service market will dwindle, but someone will step in and pick off the carcasses. heck, those companies may even pull out and start anew.
the larger question is: if they are bailed out, where do we draw the line between what is 'essential' to the economy and what isn't? how will we decide which companies and industries are allow to suffer and die and which ones are important enough to be given taxpayer money? even the airlines are not a comparable - if the entire airline industry collapsed, commerce in general would suffer tremendously. not so if we can't get a chevy, f-150, or 300.
the fate of the big three directly and indirectly affects the jobs of 3 million people in this country. the banking industry directly and indirectly affects the bonuses of 100,000 hedge fund managers. who would you rather have the government bailout?
fuck them.....
let them go down and i'm sure toyota/honda will pickup them workers.... they just wont pay the guy that holds the broom 35 an hour though...
why support a company that sends your jobs overseas but yet people hate on the foreign companies that employ your ass
the big 3 needs to take notes on affordable cars and get rid of the suvs...
sell to the masses and not the classes.....
they shouldn't get a bailout, they should get retooled to design and build state of the art cars. reorganized, restructured, redesigned. any bailout should be an investment in technology and design.
the funny thing about it is, organizational design and efficiency problems aside, i think the problem with these big 3 auto manufacturers is design. *it's aesthetic* as well as the cost problem. regarding automobile performance quality, american cars have technically advanced alot in recent years, but IMHO, they don't *design* well... as far as quality goes, they could potentially compete.
and maybe i'm exaggerating the importance of this, but i think the key to reviving the american auto industry is design. technology as well, sustainable fuel efficient cars, etc. but design is fundamental to a successful automobile. exterior aesthetics, attention to details, design concept, functionality, endurance of design aesthetic and marketing concept. design matters. people, the consumer market is driven as much or more by human desire as it is by functionality of the thing.
the other day i was watching a movie... actually it was 'kite runner', abouut afghanistan, but in it, there were scenes in afghanistan in the 70's where the protagonist's father was driving a classic 1969 ford mustang... this beautiful machine... looking at it, it was like an object of perfection, of beauty, a modern object of desire that was admired around the globe. american cars used to have this kind of pure design and engineering appeal...
design, aesthetics, performance and precision and consistency of design down to the most minute details, is basically everything in the car industry, and why american cars haven't been able to compete. maybe the bailout should be for the auto industry to hire architects as concept designers.
there is something to be said for the fact that the designs aren't always that great. although i think they've always made a few beautiful cars, and a lot of ugly ones. and then there's cars like the prowler, the viper, and the gt. there certainly isn't any lack of talent. lately i've felt they've been doing a much better job; i like the cobalt, the impala, the malibu, even the focus. part of the issue though is just the way americans value design: i was at a shopping mall with a friend once where there was a pt cruiser on display as well as an audi sedan. my friend and myself were the only ones drooling over the audi, but there were about 15 people crowded around the pt cruiser. americans will usually get more excited about a big mac than a filet mignon.
Let them die.
Hearing the GM CEO fear mongering about how this will kill the economy pisses me off. fortunately the bill wont go through since Paulson doesnt have any buddies to save in Detroit. They are all in NY.
There is one reason why they are in trouble. Their business model is terrible. And you cant blame the recession bc they were in trouble beforehand. They did well before they had serious competition before foreign market and were about to die and went all-in playing the SUV/ big truck card. They didnt hedge and develop smaller cars until very very recently. Now they are getting killed for overspecializing.
Plus their marketing, design, and engineering are all poor.
So screw them and their greed when they shouldve hedged and be happy to have been solvent. 25 billion will only grant them maybe a year of liquidity in the market. So it will be money wasted.
cmu-
honda manufacturers something like 50 cars globally, only a portion of which is available in the states.
toyota is something like 80 w/ scion/lexus
i love this "freemarket" BS until we're too big to fail and need a massive bailout.
if you are too big to fail,
you are too big to exist.
divy the bitches up and let them fight it out.
OR
sure, let's bail them out.
effective within 2 years, minimum standard of 70+ MPG on ALL vehicles. and make the american version of cars as nice as the same model you are selling in europe, you dimwit hacks.
yeah i wasn't really sure of what everyone did in the rest of the world, i was basing it off what i see here in the US....i know the Big 3 produce a lot of other cars that they sell elsewhere in the world and not here
i like the "if you are too big to fail, you're too big to exist", couldn't have said it any better
the beauty of capitalism is some companies succeed and some of them fail, and you've just got to let it play out....we can't be bailing out every American corporation under this guise of "too big to fail"
bring back the studebaker hawk!!!
bring back the amc javelin!!!
plus my former bosses had audis and those cars were in the shop all the damned time.
all i know is that i simply don't understand 'too big to fail'. if the company fails, the infrastructure doesn't go away. the products of the real investments are still there for someone else to use - if these particular companies go away.
but the companies themselves are also not likely to go away. they'll just reconfigure. seems they're arguing now so that they won't have to do that, but i think it's exactly what NEEDS to happen. i expect that the companies (maybe with the same names) that emerge from failures will be better companies.
it's not like people aren't buying cars at all. they're just buying fewer and different cars. somebody will still have to make these cars and detroit's fall-off in sales has only been something like 20% (?). somebody's gotta make the 80% of detroit cars that have been selling.
the scare tactics of the trickle-down to parts suppliers, etc, are therefore suspect. these people, like everyone else, may have some hard times over the next couple of years. but the stuff they produce will still be necessary unless all automakers start sourcing everything from overseas.
i haven't understood either the dem or repub positions on the potential for bailout. the repubs say that any bailout would have to be in addition to the $700b banking monies, i.e., more tax-payer life support. the dems are for supporting big corporate structures so that they don't have to reorganize. these just among other positions: i don't see how either party is being consistent with their expected roles. everybody's just flailing around trying to look like they're doing something.
'fail' has been made to sound like an endgame by all the people pitching to congress, but it really might be an opportunity to open a new chapter. try, try again.
personally, i don't have any issues with the cars the big 3 makes (except for the retro crap & cheap knock-offs that chrysler has been turning out lately...they've kind of become the banana republic of autos).
anyhow, the big 3 is really the big 2 as chrysler is already a corpse. they died after daimler abandoned them like a used condom after their short lived "merger." cerberus bought what was left and is basically just looking for buyers to sell the salvageable assets to. they promptly took the company private and pulled it out of stock markets else it would already be trading at zero. so what assets do they have? i guess a few name brands (chrysler, jeep), a sprawling suburban office hq in auburn hills and, most importantly, about $9 billion in cash. the cash is why GM has been after them recently for a merger. GM has been hemorrhaging cash lately with monthly losses easily topping the $1 billion dollar mark. they had something like $30 billion dollars in cash a couple of years ago and are now down to something more like $10 billion. That is, at current pace they've got barely a year to survive.
Ford is in somewhat better shape (relatively speaking) than GM right now...but these are the same people who run the Detroit Lions football team so they pretty adept at futility and will probably crash soon too.
so, yeah, i don't support a bailout of these lurching wrecks of companies. all that would do is buy GM & Ford another 1-2 of business as usual while they hope the market turns around...which isn't going to happen anyways. time to pull the plug & begin a new era in michiganistan!
viva la revolution!!!
i agree about chrysler - if they get a bailout, all it will go to is lining the private investor's pockets while they continue to downsize it enough to make it a more attractive purchase for someone else (vw?)
the 3 million argument isn't quite there - if they file for bankruptcy, it's not like all those jobs evaporate overnight. in fact, it'd probably be less than 1/10th of that. to put it in perspective, even if 300,000 were laid off from GM and Ford tomorrow, it wouldn't even equal what we've been averaging for the last few months as a country.
what would hurt is the presumed concentration of the jobs in a geographic area (midwest) and the impacts that could have downstream. it would also be a loss of higher paying jobs which almost certainly won't be replaced anytime soon.
all 3 put themselves in this lousy position. i'm in favor of letting the free market work them out. otherwise, i expect a government check tomorrow to help alleviate the debt our firm took on trying to keep the office together over the past few months. i'm too important to fail...
i don't think you've ever been to detroit, steven. the city is strewn with abandoned infrastructure. maybe the movie industry will come in and use the abandoned warehouses as sets, or detroit can capitalize on the tourism of ruin (tongue planted firmly in cheek). quite honestly, i don't think many of you really understand what this will mean for the real economics of working class people or the urban implications for industrial cities.
I think in any case it’s going to get worse before it gets better as they say. American car companies seem to have been in a downward trend for a decade or better now and I don’t see how loaning them more money is going to change that trend; I think it will only extend their hospice time.
Letting them fail will be bad for all of us in the short run but could act as a giant reset button allowing them to break free of the things that have been holding them back and draining their cash.
gm sold 9.37 million cars in 2007. thats a lot of cars.
i think people are well aware what this means. unions have screwed themselves, the auto industry has screwed themselves, now the "real" working class people are asked to bailout two groups that could care less about "real" people. time for everyone to pony up and concede that they were riding a wave of ridiculous expectations and raping of resources; natural, infrastructural, human, etc....bail them out, get newer and better products to market, increase CAFE to 40 mpg within 3 years, fire every executive, and union chief and get new leadership. "real" people demand it.
you do have to wonder what the hell gm is thinking when they see the success of the prius and civic hybrids, the waiting list for the smart car etc, that they introduce as one of their first hybrids a freaking escalade! wtf???
jafidler, the city might be strewn with abandoned infrastructure but there is still quite about of the manufacturing & design of auto parts & components scattered about the region including many in suburban detroit.
for what it's worth, the present detroit auto industry emerged out of the previous industry of building engines for steam ships (link to best website ever!). perhaps freed of the shackles of the current (and dying) paradigm of auto industry, a new henry ford can emerge to congeal detroit's latent talent into a new transit industry focusing on elecltric & hybrid technologies. it won't be easy...but revolutions are often bloody.
also, for those interested, lessenberry stresses th importance of auto industry in today's [url=http://www.metrotimes.com/news/story.asp?id=13453]metrotimes[url]
excuse me...metrotimes
i've been to detroit, jafidler. and i said i didn't understand all of the issues...
...but i still think the implications of 'failure' are overstated. the stuff will still be there (granted, it will degrade over years if left abandoned) and the demand for (less/smaller) cars will still be there, the product suppliers and workers will still be there.
maybe all that won't be there will be the bloated administrative structure and culture. these companies need smart people, they need creatives, and they need to be more flexible and resilient. buttressing their current structure won't lead to those results.
assuming detroit is still the center - or that it should be - may also be a problem. ky is, i think, the #3 auto-manufacturing state now - ford and toyota, primarily. domestic companies' and foreign companies' plants are all across the country, and they're not of the old model that sits mouldering in/around detroit. they're big open boxes that can be and are being retooled for different uses on a fairly regular basis as their lines evolve.
I'm in the NO bailout camp. In America we have something called Chapter 11 Bankruptcy that allows companies to restructure and emerge as a more vibrant company. That's what needs to happen.
A bailout does nothing to kill redundant brands (i.e. Buick, GMC, Mercury, etc.) and nothing to renegotiate contracts (i.e. UAW "job bank" etc.).
Remember that the market share of Detroit 3 has been sliding down for over 30 years! This is not a problem that wasn't seen on the horizon years and years ago. The 90's were relatively good times with high margins on SUV's but market share still slid every year. Even with their "improved" products available today each year more and more people are going over to Toyota, Honda, etc.
Give me the reigns of GM and I immediately file C11. First order of business is eliminate every brand but Chevrolet and Cadillac. Dump all UAW contracts and lay off ALL hourly workers. Rehire under a new contract similar to non-union contracts at Toyota and Honda plants. Drop franchise dealer count from 7,000 down to about 1,500 to match Toyota. Cut production capacity to handle the +/- 20% of US market share GM currently has. Sell idle infastructure. Refocus Chevrolet product development to mix of 3 sedans, 2 trucks and 2 SUV models. Eliminate badge engineering between brands ~ let Cadillac develop their own vehicles to properly compete with Lexus/BMW et. al. Put a rock solid 10/100 warranty on all products to bring confidence back to the brand. Emerge from C11 nimble and ready to compete with the Japanese/Euro competition.
well non-union ain't gonna fly...
Barney Frank just reminded us, on NPR, that if we had a national health system, the corporations wouldn't be saddled with their current health obligations.
Sen Kyl (R) yesterday proposed something like aqua's approach above -- though not so drastic, and no mention of the union issue (as I recall). Chapter 11 allows the business to continue, while dropping franchises and other excess baggage.
It's tempting to let them fail, but what's the point ?
aqua, one prob, emerging markets like China buy in major quantities either the Buick or Olds brand,
the "bailout" of the big three really needs to be structured as a government-supported effort to expand r&d in the private sector in respects to fuel efficiency and alternative fuels. this is actually the republican approach to the allocation of the $25 billion. the problem is that gm, in particular, may not survive until those funds become available. what mystifies me is that government seems perfectly willing to "loan" $675 billion to the banking industry, but will not make $25 billion available to the automotive industry, an industry with a far more direct connection to middle class jobs.
additionally, it's the auto industry that if working in partnership with the federal government can address the national issues of security through oil independence and climate change. to see the american auto industry fold is to set back innovation in r&d for a very long time.
even if that original $25b is freed up NOW, i.e., the terms are changed so that it isn't tied directly to r&d and can be used for life-support, how would we expect these companies to change?
i'm actually more in support of that - of allowing that $25b already set aside to help solve their current crisis. more than that, though, i think they'd have to demonstrate materially that they have the will, the ideas, and the ability to actually transform themselves.
i believe a lot could be gained from a public-private partnership on energy independence and climate change, but really there are two issues here: first is the economic crisis in the automotive industry created by the current state of the economy (the big three would not be in the straits they are now in if the economy was humming). that issue is directly tied to the loans afforded in the bailout package. i personally feel it's hypocritical to bailout the banks and not the automotive industry when it's the auto industry that has closer ties to real jobs. the second issue of government-supported r&d is another issue. the problem is the government is shooting itself in the foot if the auto industry dies before any meaningful partnership effort can be created.
there's nothing mystifying about the handout to wall street...those banks & firms are having been major insiders in wash dc circles for years and those wall street "bailouts" are really nothing more a blatant act of embezzlement of the US treasury to keep their unscrupulous ways propped up.
the auto industry is complete outsider by comparison and is about as relevant to the insiders as the baseball card industry. Should we bailout Topps & Donruss too? I think we need federal money to prop of the values of my Mark Mcgwire, Barry Bonds & Roger Clemens rookie cards that have lost a lot of "value" over the past couple of years.
One of our top pols (was it Barack ?) suggested recently that we have an "Auto Czar" in DC to shepherd the industry in the right direction. Who better than Amory Lovins ?
http://www.archinect.com/forum/threads.php?id=76989_0_42_0_C
an "auto czar" and/or more federal involvement & bigger bureaucracy are not a good idea. on the contrary, the american auto transit industry needs to be smaller, leaner & more competitive. in short, it needs to be more "american" than it's been in the last 50 years.
if we must go the route of government controlled, socialist style enterprise then we should at least get the sadistic pleasure of offing a few heads in the public square. this bloodless revolution is really disappointing.
to me the problem with an "auto czar" is that it would be yet another endorsement by the Federal government of the concept that every adult is entitled to personal automotive transport.
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