Should we just let GM, Ford and Chrysler fail?

[Larry Gude (Premo)]

Originally Posted by Bann

Mitt agrees with me - let 'em go bankrupt.



http://www.nytimes.com/2008/11/19/op...y.html?_r=1&hp

Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.

[SamSpade]

Originally Posted by Pete

GM directly employs 266,000 people, Ford 90,000, Chrysler 133,000 with an estimated 4 million other jobs directly related to supplying parts and or services.

4.4 million jobs would be lost. Asia would have no domestic competition. Every dollar of profit spent on vehicles would leave the country destined to foreign corporate offices.

Well I'm late to this discussion but - yes - and no. I think that if there's little chance that all those jobs would be lost permanently - because it seems to me that SOMEONE would want to buy them up - then yes, they should be allowed to croak. I can't recall anything over the last twenty years - at least not since Iacocca - that ever showed that the Big Three have been doing well. And as often as I've bought American cars, it still generally galls me that with so much of the industry in this country, I can't quite get why we don't make the best cars anymore.

I do think that Detroit has been myopic as far as innovation. The general cry seems to be that it takes a very long time to re-tool everything. Too bad. Capitalism is about innovation and adjustment. Build a better mousetrap and the world will beat a path to your door - not, we're working on it and we'll get back to you. Monopolies make excuses; competitive industry makes changes.

On the other hand - our competition, I feel has been granted far too much latitude and mercy for their unscrupulous behavior. Japan has repeatedly pounded our markets with products being dumped below cost in long-term efforts to kill off our manufacturers - and it has absolutely worked while we let it happen. Remember back in the '92 election, when that whole thing about the 35,000 Hyundai was brought up? That tariffs and costs for American products made them prohibitively expensive?

On another hand - unions have had the Big Three by the balls for years - one of my co-workers says that Detroit doesn't make cars anymore - they pay pensions - and make cars on the side to pay the pensions. Union workers in Detroit get paid vastly more than their foreign competitors IN THIS COUNTRY - to make inferior cars. I can see how having that kind of influence shackling you could slow innovation, because your job is to keep afloat for another year, instead of indefinitely.

I suppose the government could loan them money with conditions - but I don't think that will change anything.

[SamSpade]

Originally Posted by Larry Gude

...not only that, but we already have something approaching one car for every person old enough to drive in the nation. That means a household of four has one for mom, one for dad, one for sissy and one for boy. That means for every person living in the city who doesn't even have a car, there is, statistically, one for them and I have a city friend who has NEVER owned a car.

Now, there IS market globally where the emerging nations, India, China, Brazil, etc, have about one car per 100 driver aged people.

You knew something was wrong 30 years ago when the Japanese could make a better car, cheaper, AND ship it 1/2 around the world. Now, they've earned market share and it's gonna be tough earning it away from them.

But to use your oil argument - if we don't make it here, that's dollars leaving our economy and going abroad, right? If we buy foreign oil and energy instead of domestic, doesn't that mean we've got dollars leaking out? Wouldn't that be just as true for the auto industry, or anything else?

I can see the wisdom in having employees working for a foreign company - IF you're a developing nation or in the Third World. It's jobs for people unlikely to have any, or any benefits. It makes a little less sense for the world's largest economy and most powerful nation to have millions of its people working for someone else. Do we employ hundreds of thousands of Japanese making our cars?

WE employ workers abroad to make shoes and clothing, because it's low-skill labor, and both sides profit from it. That's the way it ought to be. But it makes less sense for a foreign company to come HERE and employ our people in an environment where much higher skills are needed, to make a product which competes with ours. It seems to me that the long-term consequence is, we have no one making cars, and they employ us to make their cars.

[Larry Gude (Premo)]

Originally Posted by SamSpade

But to use your oil argument - if we don't make it here, that's dollars leaving our economy and going abroad, right? If we buy foreign oil and energy instead of domestic, doesn't that mean we've got dollars leaking out? Wouldn't that be just as true for the auto industry, or anything else? Oil that comes from the ground in Venezuela that gets traded some 30 times sends dollars all over the place; just not here. A Toyota made in Kentucky with local labor, local suppliers and whatever domestic inputs go into it is a horse of a different color

I can see the wisdom in having employees working for a foreign company - IF you're a developing nation or in the Third World. It's jobs for people unlikely to have any, or any benefits. It makes a little less sense for the world's largest economy and most powerful nation to have millions of its people working for someone else. Do we employ hundreds of thousands of Japanese making our cars? GM is opening some huge plant in China...for the local market

WE employ workers abroad to make shoes and clothing, because it's low-skill labor, and both sides profit from it. That's the way it ought to be. But it makes less sense for a foreign company to come HERE and employ our people in an environment where much higher skills are needed, to make a product which competes with ours. It seems to me that the long-term consequence is, we have no one making cars, and they employ us to make their cars.

Toyota is here as a check against the monopoly that is Detroit. Kentucky is more than happy to have Toyota bring in some nice jobs and do construction and everything else that goes into it...when no one else will.

This is why I say our car makers are three legged stools; one part car company, one part union, one part politics. Someone would have long ago started up some new US car making company if there were not so many hurdles to over come.

The story of Detroit the last 30 years is the story of 'No'.

Let's make BETTER cars! 'NO'.

let's make cheaper cars! 'NO'.

Let's spread the business around! 'NO'.

If our politics had allowed some US maker to be none union and to compete for market share, there's never be room for a foreign manufacturer.

Could they get inputs from the union controlled mills? No.

Could they get equipment and financing from the companies that serve Detroit? No.

Could they get regulatory help to get going? No.

At some point you simply can't compete with a better product if there is no reason for the consumer to buy yours other than a sticker on it.

There is blame enough to go around but, at the end of the day, I own Toyota's because they are simply better cars and better value. If a Ford Ranger was better than my Tacoma and about the same price, even a few grand more, I'd own a Ranger. One of my guys has a Ranger and he thinks it's a POS, especially compared to the Tacoma.

[itsbob (Premo)]

Dakota won in mid size pick ups over Tacoma.
Ratings | J.D. Power

Interesting.. Consumer Reports wasn't as nice.

Highs: Acceleration, towing capacity.
Lows: Handling, braking, ride, noise, fuel economy, fit and finish, location of rear wiper.


The site I'm on won't tell me who ranked above the Durango, but it does give points.

The winner of the class scored 77, the Durango 44.

[itsbob (Premo)]

Consumer Reports top Ten Cars 2008

ConsumerReports.org - Top Picks 2008

Only American 'Car' on the list is the Chevy Silverado.

Even Hyundai is kicking the Big Three's butt.

[Larry Gude (Premo)]

Originally Posted by itsbob

Dakota won in mid size pick ups over Tacoma.
Ratings | J.D. Power The winner of the class scored 77, the Durango 44.

I've got both; A Dakota and a Tacoma. The Dakota is a fine truck. The Tacoma is better. FAR better handling. Better performance. Better fit and finish. FAR better seats. The Dakota feels cheaper and the CD player quit working which is some sort of rule, it seems, with Chrysler radios.

The Dakota has a little bit better leg room.

If the Dakota was $20k and the Tacoma $30, I'd get the Durango. If it's under $5,000 difference, which it is, Toyota.

[Pete (Premo)]

Originally Posted by Myuzishin

I'm willing to take back the Slave Labor part, as I learned today that GM workers make an avg of 75/hr, while Toyota workers make 50/hr. However, my earlier point about market saturation stands. GM has over 7000 US Dealerships. Toyota 1500, Honda just over 1000.

Not buyin the arguments above, tho. Because we don't dominate the world in a particular industry (anymore) doesn't make it 'gone'. There are still plenty of ships made in the US (wouldn't be surprised if some of em were made out of steel), and the Japanese car companies that have plants all over the south (remember? the ones that are outdoing US car makers at the moment?) didn't exactly bring all their own workers. There are plenty of Americans makin a fine living with those folks, at a lower cost of living too.

We dominate the world in NO industry anymore. Every American Icon has either folded up or moved overseas......why? Labor costs.
Why are the Japanese beating us with their factories scattered all over the south? Labor costs.

Other than DOD contracts what shipyard in America is still producing ships?

As far as GM having 7000 dealerships I don't understand how that puts them at a disadvantage. Since the dealerships are not owned by GM they do not hurt them do they. That is like saying that Coke is hurting itself by being in TOO MANY retail outlets. Regardless, if the dealerships fail because they will not be competitive, then fine let them.

[Larry Gude (Premo)]

Originally Posted by Pete

That is like saying that Coke is hurting itself by being in TOO MANY retail outlets. Regardless, if the dealerships fail because they will not be competitive, then fine let them.

...Sheetz doesn't service your Coke after you buy it. Nor do they deal with you on your trade in or new deal for your next Coke.

[itsbob (Premo)]

Originally Posted by Pete

Other than DOD contracts what shipyard in America is still producing ships?
.

I THINK there is ONE in Rohode Island that is making oil/ gas tankers, but I'm not sure.


But yes, I agree with your point.