Posted on 11/15/2008 6:05:44 AM PST by reaganaut1
And then the line forms to the left for all other industries to get their bailout.
Should have never bailed out Chrysler all those years ago, it set a bad precedent.
I read that, but not clear how many are taking what I assume to be paycuts. My article was printed July 07.
Just asking—I lived in an auto town 10 years ago, and they were considered very well-paid for high school education. With overtime, some were making even more.
Consider the following alternatives for the long term economic future of the US:
1) give $50 bil to GM, Ford, Chrysler
2) let venture capitalists keep $50 bil more via lower taxes to invest in whatever they think will make the most money
Who on Freerepublic will really argue that in the long term the US will get more jobs, growth and wealth creation from option 1) ?
Someone will buy the assets from the Big 3 and start a new car company, that actually makes good cars. Creative Destruction is a beautiful thing.
I think even buying the pick of the assets of the big 3 from a ch7 auction will still be really tough.
Big three are weak in small car and fuel efficient midsize car segments.
Ch7 and a new company would get rid of UAW and legacy costs. But obsolete plants and obsolete products problem would still remain.
It will be tougher still in a recession with total units sold down way from 17mil level.
However, there is something salveable there. The US is the world’s biggest car market, there is a significant market for pickups, suvs, luxury cars, midsize cars, minivans, sporty coupes.
I think a restructured Detroit could be competitive in those segments. But, putting $50 to $100 bil into failing Big 3 is just a repetition of British Leyland on a massive scale.
The reinventing has been going on for the last two years (at least) but many haven’t been watching, and that is not a shot at you, It it just reality. As far as bringing the Euro Transplants here, a gnome tells me that decission was made almost 2 years ago internally with no fanfare. Again, I do not have the cycle plans so I do not know which will be built here, but I am going to out on a limb here and say some will be built here.
The lower pay is for a 2nd tier employees brought in as older ones retire or take "packages". The question I have is this. Will the bailout money in thier "Cash" accounts (acctg 101 speak) give them the liquidty they need to offer one "Final" package that is too juicy for these laggards pulling down the $73/hr total compensation to finally leave and end up with a work force that is effectively equal to Toyota in very short order.....
Sorry, waiting until the last 2 years for a fundamental restructuring that should have begun 30+ years ago is just way too little, way too late.
Vulnerability to an oil price spike was demonstrated in 1973 (35 years ago). There have been 3 more since.
Quality gap with japanese was evident to everyone by the early 80’s (25 years ago). Big 3 has been arguing they are “almost as good” for 25 years while every family in north america has a horror story which says different.
Labour and benefit cost disadvantage have also been an issue for decades. The weakest link always caved to the UAW to avoid short term problems and the others followed via pattern bargaining.
The big 3 just limped thru the past recessions and waited until the next boom where they could get back to profitability selling guzzlers. But they lost market share with every cycle. GM has lost a point of market share, each year, every year, for the last 30 years!
When you have an industry where all of the domestic manufacturers have repeated the same mistakes for decades, it becomes clear that they are all braindead, and will never restructure for long term viability.
They need to die so the assets and resources they waste can be applied to other businesses with a future.
There also has to be other strings attached. New management at the Big 3. UAW takes a hit too.
Those of you who are more than willing to distrust the MSM, seem MORE than willing to trust the MSM when it comes to the quality of American autos.
Flame away!
SMM48 wrote: “In lieu of a bailout, I was thinking more like $10000 coupons issued to those Americans who paid income taxes in 2007.”
In round numbers approx 100 million taxpayers would put up $10K each - that’s a 1 trillion dollar program. GM etc is not worth it.
On another thread I proposed some regulatory ways that could distort the market enough to make the Big 3 competitive. Note I do not agree with any of these changes, but they illustrate how uncompetitive the Big 3 are and how much the market would have to change for them to survive.
The IMPLAUSIBLE path to profitability might be the following:
-fold the big 3 into one company, with one pickup/suv platform; one luxury car brand; one midsize and minivan platform; one sporty car platform
-gov’t guaranteed low gas price so the big guzzlers sell again
-special toxic metals excise taxes to drive hybrids out of the market (target the batteries)
-change the gov’t crash test to make it impossible for small vehicles to pass.
-decertify the UAW and rewrite pension and retirement health plans so labour and legacy costs don’t bankrupt the new company
-some sort of federal mandate on dealer coverage in remote/rural areas so that the overbuilt Big 3 dealer network is an asset, not a liability
-target would be 20%-25% of the market.
-these sorts of radical gov’t regulation/mandates are the only way i can think of to make the Big 3 instantly competitive again
This way, we know the consumers will get some good out of it.
It may not be a bad idea to allow the coupons to be transferrable. Let's see, I get a $10,000 coupon. Sell it to someone for $5,000. I have $5,000 to spend and whoever gets it gets $5,000 off on a second car. I don't see the downside to that because all the coupons would eventually be used for autos--if that's our goal.
I don't like the idea of this whole bailout idea. Why should anyone ever be responsible about anything because there's always a safety net for everything.
Did you see this thread....
UAW leader: Workers will make no more concessions
Giving them (more) money would be like pouring it down a rat hole.
Go to Channel 4 Detroit TV.
The TV show is "Flashpoint".
Sunday Morning local version of MTP.
Today with limited interuption was GM's Waggoner and Gedelfinger from the UAW.
Much of what was said it not being discussed via the lame-streams or the new media.
It might take a day or two for Channel 4 to get the Web version posted.
GM makes some great cars, but I suppose a self hating American would not know this. Enjoy you pretty foreign toys (crap mostly), wave the American flag proudly (unless you prefer the Japanese flag of course) while you stab your country in the back and don’t forget to loudly proclaim your patriotism every chance you get. Words are all you have to offer this country;don’t be surprised if people doubt your commitment to this country. Actions speak louder than words.
We are not talking about a business. We are talking about an entire industry going away during a crisis not of their making. Every auto industry in the world will need a bail out to get through these times. No one in the world would allow an entire industry to go under except this country. If this happens don’t expect to ever win back the presidency. As goes Ohio,so goes the presidency. You have no idea how angry people in the Mid West are at the GOP. We have lost the east, are losing the West and now are give away the Mid West to the Dems. The GOP is truly the stupid party.
Tis to laugh!
The Big Three have been making reasonably good vehicles for a while now. If you look at the reported repair rates, there's just not that much difference in quality any more.
American auto makers are deeply invested in an unworkable business model, the largest mistake of which is the UAW.
US automotive manufacturing will never be a viable industry in the long term if the UAW continues its stranglehold on it.
The VEBA, the new work rules, and parity of pay are either to difficult for you to comprehend or you just want to bash.
This is what sucks. Freepers, Conservative Punditry, and Talk Radio are not telling the entire story. I figured it out on my own, and others can't. We are not different than Katie Couric at this moment, God help us......
No, we aren’t talking about an entire industry...only those who have allowed the unions to go over the top with demands (so they get their cut too). I will grant you that the way trade has been REGULATED has also played its part. We honestly need to be on a level playing field with others....but remember we have to be competitive too....and we CAN do it and still produce that which is not “crap.”
“The GOP is truly the stupid party.” <—— not germane to the conversation; also a generalization.
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