Posted on 11/20/2008 2:03:40 PM PST by fightinJAG
Let's look at General Motors as a classic tale of large numbers. What would it mean if GM were to go bankrupt? How significant would it be to the economy?
Emotionally, we may feel General Motors (nyse: GM - news - people ) represents a pillar of our economy and should be saved. But when we look at the facts and rely on industry experts to put them in context, we see an alternative conclusion.
The Center for Automotive Research just released a report indicating that, as of December 2007, the motor vehicle industries employ 732,800 workers and the Detroit Three (GM, Ford and Chrysler) employ 239,241 workers in the U.S. Assuming the worst-case scenario--that all three companies will cease operations in 2009--the report estimates a loss of nearly three million American jobs.
This estimate assumes each direct job creates four jobs for suppliers and 7.1 "spin-off" expenditure-induced jobs.
(Excerpt) Read more at forbes.com ...
“Second favorite is the ‘59 Pontiac 4 dr. Flattop Bonneville...”
Forgot to mention my ‘62 Bonneville convertible, sweet!
I used to have a Vauxhall Vectra but now have a Honda Accord.
The Honda was made in England, the Vauxhall wasn’t. The Honda handles better, corners better, brakes better, it’s a smoother ride, I’m up to 70,000 miles without any parts wearing out (the gasket on the Vectra wore out three times before it hit that mileage), I’m getting 60.5 mpg on highways (50% better than the Vauxhall) and best of all it hasn’t lost 90% of its value in the two years I’ve had it, unlike the Vauxhall.
Guess which car I’d buy again.
Vauxhall didn’t have anything like the same union issues that the British manufacturers had in the 70s, but they did carry on turning out poor quality gas-guzzlers for the UK market, when the equivalent Beamers, Audis, Hondas and Toyotas are far more reliable, far more comfortable, far cheaper to run, and hold their value more than the equivalent Vauxhalls do.
When British Leyland went down the pan, the factory floors were on 3 day weeks (and that’s when they weren’t spending more time on strike than in the factory building the cars).
Militant unions who strike at the drop of a hat and work to rule, can cause a car company to make shoddy motors that nobody wants to buy.
Paying a fair wage with fair working conditions to the workers so they take pride in their work, and make good quality cars that people DO want to buy, is well worth it.
Don’t believe me? Ask Honda.
For a 72 year old that grew up with GM—Ford—Chrysler I hate to see this happen
I hope bankruptcy and a comeback for all of them
It is as if part of the USA died
I still can’t get used to all the foreign makes dominating here
There are US owned automobile companies in foreign countries.
What's not to like.
I love my 05’ Silverado 2500HD LT. I just don’t get to drive her very often but when I do it puts me into a good mood.
I think that a collapse of GM could be the last straw that pushes us into depression. I don’t think they should bail them out without fixing the problem, but they should knock the UAW’s wage scale down by about 35-40%, and management should be forced to take the union scale until they’ve paid off the US loans.
The proposed bailout of $25B had $12B earmarked to go to pay UAW *retirees,* not people making cars.
Think about it.
I think you are right. These businesses need a bailout because they are NOT producing.
So how does propping them up save “jobs”? It just uses “jobs” as a nice way to disguise the welfare checks.
Ironically, it’s been conservatives who have been most dedicated to the idea of “Buy American,” and who purposely buy Big 3 cars whether they really wanted to or not. That loyalty to America was sucked up by the union bosses and turned into . . . President Obama.
What is wrong with this picture?
Whatever good will the automakers had left with the American people, and in particular with their most loyal customers-—the politically opposite, conservatives-—is fast going down the drain.
This is a 20th century industry that cannot come into the 21st century until it sheds the now unneeded union shackles. The only way to do that is for these companies to go into bankruptcy.
Cars will still be made in America by American workers.
It’s the chick who wrote the article.
That's where Chapter 11 would work for GM.
If they just made their Chevy line (cars,trucks,sports)and their Cadillac passenger line, they would have a sustainable business.
Americans are going to buy 12 million + cars, whether the Big Three are there or not.
The only hiccup in this plan is the cross-production the Big Three do for each other in parts such as windows,steering wheels, etc.
Yep. Did you know that to get NAFTA passed, i.e. backed by the unions, certain auto suppliers had to keep on people who would have lost their jobs? Those people now sit in cafeterias literally doing nothing - playing cards, drinking coffee, watching movies, etc. They are fully compensated. That’s the problem when unions insert themselves into trade and business.
We don’t need the domestics to survive. The economy will work itself out just fine.
Toyota, Honda, Nissan will fill the void left by the Detroit 3. The consumer has already decided; that is why the Detroit 3 are in the shape they are in. And why Toyota has hundreds of billions of dollars in reserve to ride this out.
The foreign automakers are building here because that is where their customers are. If the Detroit 3 go out of business, Toyota, Honda, Nissan and VW will expand here in the US. In fact, Toyota and VW are building new plants right now in the midst of this downturn. These other automakers will make more investments here, hire more Americans, and build more cars/trucks here.
Yes, Toyota is based in Japan. But they employee 40-50 thousand direct workers here in the US, and are probably responsible for 300,000 thousand total jobs. (Of course using “detroit 3 math”, it would be times 11, or 550,000 thousand jobs) Toyota stock is also traded on the NYSE, so you can buy up all their shares you want, and be an owner just like with GM.
Let the market work. If GM/Ford/Chry haven’t been able to resolve their problems during the global auto boom of the last 10 years, why do you think they can solve them now?
GM has to reorganize, either through bankruptcy or massive reorganization. I personally think they would have to sell or liquidate half their product lines. They would have to trim a lot of blue and white collar jobs. Fire the deadwood management, and pay top dollars for the best out there.
The bailout is a bandaid on a severed limb. It will only prolong the patients agony.
She seems to have very strong jaws.
If you think the economy is in the tank today just wait until GM goes down...
__________________________
It’s already down and to keep it alive by burning up cash does nothing more that give welfare to recipients who got into this mess on their own. For those who think this is a good idea, why aren’t you pushing for a direct cash payment from government rather than fiddle with congress, union leadership and automobile management. Just give cash to everyone who needs it and forget the middle players. /s
You’re just scared of her teeth and strong jaws.
Toyota, Honda, Nissan will fill the void left by the Detroit 3. The consumer has already decided; that is why the Detroit 3 are in the shape they are in. And why Toyota has hundreds of billions of dollars in reserve to ride this out.
General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year.
Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year.
Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year.
The domestic automakers have a solid pipeline...their problem is the legacy contracts which add $2000 to the cost of a vehicle over their foreign counterparts (who are subsidized by their governments). With that albatross on their necks and CAFE standards which force them to build small cars that they cannot make a profit on, it's a wonder they do as well as they do. On a level playing field, the Big 3 can compete, but the UAW gravy train has to end.
Half the GM and Ford cars are made in Mexico, Canada, Europe and Brazil.
When the bell tolls and the profits are made, where do you think the money goes? TOKYO.
They build great cars. Never had a single problem with them. I can't say that for the "American" cars I've owned. The last "American" car I bought was a rattle trap within 50,000 miles. My Toyota has over 130,000 miles on it and it still runs like it was new.
I'm not going to buy a piece of crap GM car just because it will support the members of the Auto Workers Union, who in turn vote like lemmings for members of the democrat party.
When the Big 3 fail, so will the foreign companies because they use the SAME SUPPLIERS the Big 3 use.
The same number of cars will be bought without GM as with GM. People need cars. They don't need junk made by overpaid union flunkies who think that because they belong to a union, that they are entitled to build junky cars and expect people to buy them just because they think they are doing their patriotic duty. The suppliers will simply look for new customers. The customers will be there as long as people keep needing new cars.
BTW since I bought my Toyota 6 years ago, and since it still runs like new, unlike my old American cars which were junk before I could pay them off, I don't need a new car. I'll probably go another 6 years before I start thinking about a new car.
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