But every point made is irrelevant.
The only way any of these things is relevant is if you look at the bailout as a reward or at the denial of the bailout as a punishment. Whether or not Detroit has been good or bad in the past has no bearing on the question.
Liberals want to use the bailout to twist the arm of Detroit, to force them to build a certain type of car or to pay a certain wage (higher for the workers, lower for management). To Liberals, all of these matters are of great importance, because they are trying to force the Big 3 in that particular direction.
We should not play that game. The Big 3 must be permitted to manage their own affairs. We should insist on that premise before we even start talking about a bailout.
“The Big Three build cars nobody wants.”
No. They build cars the government don’t want us to have.
As long as we have SUV’s and Pickup Trucks they can’t impose their green caveman economix on us. They can’t force the greedy oil companies out of business or the dirty coal mines out of business as long as consumers dictate our market freedom.
“Ford is ahead of Hyundai”
They must be so proud.
Those greedy UAW workers make $75 an hour.” Wrong. This figure includes total labor costs, which dumps the cost for all retirees into the equation. The average worker on the line actually earns $55,000 a year, which comes to about $28 an hour. With benefits, those numbers have been a lot higher in the past. But after last year’s historic UAW contract, those benefits get whacked down to levels neaerly equivalent to the transplants.
But the costs for retirees etc are the problem. Yeah Yeah yeah...new hires get less going forward. If there are new hires. In the meantime the big 3 pay laid off employees 95% of their pay.
Dunno...seems passing strange that Toyota and GM sold almost the same number of vehicles and Toyota made around 17billion while GM lost 38billion.
Finally, someone who actually understands the auto industry. I agree with him that US auto companies are doing a better job than they are given credit for in the MSM. However, he does not talk about how they got into their current problems. GM and Chrysler need to make tough decisions and change their cost structure quickly to survive. Congress and the Washington liberals will only make things worse once they appoint a board with a political agenda to oversee the companies but not make the necessary cost savings. These politically appointed boards will force the auto companies to make bad decisions and ruin the companies once and for all.
The JD Powers awards are based on self selecting respondents to surveys, so the results should always be taken with a grain of salt.
I wonder how many Big Three cars are sold to employees or those eligible for employee purchase plans (notwithstanding the current frenzy of “employee pricing deals” available now)? At one point I remember hearing something like 25%. I don't know if this number is even close to correct, but it illustrates a bit of a captive market. Of course, for fair comparison the non-UAW companies included too.
How many Big Three cars are sold to fleets ( rental car companies, company fleets, etc.)?
Sure there are cult followings for some cars. Big deal. Charles Manson also had a cult following. I often wonder if some Corvette owners might be overcompensating for other, ahhhhh, short comings.
Finally, the consumer seeks the best value to them for their car dollars. Fit and finish are important, quality, milage, durability, style and design are important (on varying scales) are all important. Also important is the honesty and integrity of the dealer representatives matter (I had a Chevy dealer tell me not too long ago I did not have to get the “finish protection package” because I obviously (”you're white”) had good credit. He went on to say the $1300 dealer add was just a wax job.)
So, Detroit is losing market share. There are a number of reasons that people are less inclined to buy their products. The solution? Make and sell stuff people want to buy with their limited car and truck dollars. Ultimately, the buyers are going to seek what they the best value for their $$$. And it would appear that Detroit is not measuring up in the market place.
On the bail out: let them do what every other company should do. Raise cash in the equity or debt markets. Otherwise declare bankruptsy.
Bottom line is value. When the big 3 can build me an efficient car that will last me 200k in miles, carry my kids and stuff, I'll buy it.
J.D. Power measures quality in the short term. It might be as low as one year. I admit that the Big 3 have closed the gap there. However people expect more now. What are repair costs at the five year mark? I had a Saturn that (other than warranty repairs on known poorly designed brakes), was pretty good the first four or five years. Then it started going into the shop more and more often. Nothing was huge, but little things like a leaking radiator, failed clutch hydraulics, failed alternator, leaking sunroof, failed ignition switch, some pin in the transmission snapping twice, etc. etc. put a drag on my wallet that my Mazda from the 1980s never did. Other than maintenance on wear items over eight years, the only thing it needed were a thermostat and an exhaust pipe. Essentially it didn't go into the shop except when I scheduled it to.
The Big 3 have gotten past the Vega era of cars rusting while still in the factory or snapping in half for no good reason, but they (in general) haven't caught up with the Japanese. Are the Big 3 making decisions to save a few bucks on parts when building the car? Are the counting on aftermarket parts and post-warranty repairs as being a profit center for themselves and their dealers? Do they have too many brands so that the Cadillac has to be better than the Olds which is better than the Buick which is better than the Pontiac which is better than the Chevy, so the Chevy must be intentionally 4 noticeable steps worse than their top line? (Yes, I know they are dropping brands. Good! It has been way too long.) Some of their trucks prove that they can make a long lasting, high quality vehicle. The question is why don't they do that for everything?
Thanks for posting this. I have argued most of these points. I don’t understand how people remain so ignorant about this industry. You can google anytime and find the truth.
One good point this article misses is the millions-perhaps billions of dollars given to transplant auto makers by the south in order to have transplants in their states. They are using taxpayer money and some of it is federal. How is this free market? This is bailout essentially. They are helping foreign manufacturers to drive out American industry-disgusting.
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I’m certain the UAW gave this a big old gold star. I disagree with nearly everything in the article.
Off load retiree and employee health care expenses onto the taxpayers through a national health care plan;
Off load retiree pension costs onto the PBGC (i.e., taxpayers); and
Continue to make loans as long as necessary.
Could be wrong, but that's my take on it.