Let them fail!

[a_majoor]

Protectionism doesn't work both ways; Ford of Europe is doing very well indeed (and is the only reason Ford isn't in as bad shape as GM or Chrysler), while Buick is number one or two in.....China!

The "core business" in the United States is the part going in the tank, and the business, labour and regulatory environment the Big Three operated under, magnified by rather bone headed management decisions and substandard products over many years [GM may never live down their reputation in that regard], are the primary causes.

 

[retiredgrunt45]

Somehow I don't think that trade barriers forcing North American to buy domestic cars is really a solution.  How, exactly, would that make the Big 3 create cleaner technologies or cost effective business models?

Your nor paying much attention are you, GM and Ford are already spending billions into cleaner technology vehicles, but does anyone listen, no because their so hell bent on seeing them fail, that they are willing to buy a Japanese car that is built right here in north America, using the very same parts manafacturers that GM and Ford uses, just to what? Say it's a superior vehicle.

I'm done, you people have already made up your mind long time ago, so why even try, go buy your Japanese cars and and i'll keep on buying my US junk and when the bottom truly falls out from under us, well at least I can say I didn't contribute to it.

 

[Michael OLeary]

Oh, I'm paying attention alright.  I drive a '95 Ford minivan that's going to need a replacement some time in the next few years.  I'm watching very closely to determine what company(ies) might even be around to provide parts and service to make my next vehicle last 10-15 years.  The Big 3 auto makers have been digging a hole in public confidence for a long time.  They don't deserve a bailout with my tax dollars if they can't convince me to spend my money on them directly.

 

[muskrat89]

retiredgrunt - what's up with the tone of your last few posts? The information you are presenting is interesting, but we can do without the digs and jabs.

Everyone - keep it civil please

Army.ca Staff

 

[retiredgrunt45]

All due respect for everyone on this thread and I do apologize for some of my of handed comments, (referring to the one direted at Thulycedes) Sorry. But I'm not going to apologize for the passion I have for what goes on in my own backyard or for seeing the repressions that will most certainly ripple through an already fragile economy if these companies are allowed to go under.

That also brings up the subject of the news conference this morning of the PM and Premier McGuinty. McGuinty even said that he was at a meeting with the head of Toyota International and was told that they can't allow the big three to fail, because the consequences to the Japanese auto makers would be catastrophic.

I guess all I'm asking is instead of closing your minds and being absolute in your thinking against the idea, think what would happen if this scenario played out the other way. Most of us on this board have the luxury of some sort of guaranteed income, pensions etc, so we can sit back and have the luxury of and outsider looking in, but what about the insider looking out on a world gone mad. Pretty scary prospect.

Michael I'm not asking you to buy a Chev, Ford or Chrysler, all I'm asking you to do is really look at what they have to offer before you condemn them to the junk heap.

For those who think the big three are condemned to the junk pile, not going to happen, they will probably comeback as the (smaller three) or more likely the smaller two, with new management and a new lease on life and I will continue on buying their cars. This recession won't last forever and when its run its course, the (smaller two) will come out of it on top of their game and give the Japanese a run for their money.

Heres a few consumer reports to chew on about Toyota's so called reliability.

http://money.cnn.com/2007/10/16/autos/cr_reliability/index.htm

From "The truth about cars":

http://www.thetruthaboutcars.com/toyota-tumbles-in-consumer-reports-reliability-ratings/

AutoBlog.

http://findarticles.com/p/articles/mi_qn4158/is_20070120/ai_n17146844


I had a similar problem with my Honda minivan, but instead of admitting the problem, Honda handed me the bill.

People have been bamboozled into thinking that somehow Japanese auto makers are immune to having faulty products. God forbid my Toyota Carola has a problem, can't be, it's just not allowed!

I've been to the other side and after seeing and having to pay for in some cases thousands of dollars in repair costs to cars that some said were the most reliable on the planet, I now know that it was all about the hype and an image that Japanese car makers continue to project under false pretences onto their customers that their cars are still the best. The truth sometmes comes with a hefty price tag, especially when you have to find that out the hard way...

Cheers.

 

[Flip]

I, for one have never thought American cars were so bad. (with the possible exception of my Tempo).  And since I see lots of American cars around (newish at that )I suspect sales isn't the whole problem.  There should be money in the bank left over from those sales. The downturn should affect car maker about equally.

I won't go into Japans' de-facto consumer driven protectionism. If Americans only bought American we wouldn't be making comparisons.

In truth, I believe that the American business model is in failure.  Obscene salaries for management. Labour and regulatory costs that are not being controlled and a failure to protect the companies from foreseeable ups and downs.

Wall Street's reputation is suffering from frauds and scams.  Expectations are just not reasonable.......... ???

I think (what do I know?) American business culture needs some adjustment. That simple.

 

[retiredgrunt45]

In truth, I believe that the American business model is in failure.  Obscene salaries for management. Labour and regulatory costs that are not being controlled and a failure to protect the companies from foreseeable ups and downs.

On that I agree, there must be concessions by labour, unions and management in order to make the North American auto sector profitable again.

 

[Snafu-Bar]

Do not forget to include the regulatory body from the government requiring such engineering inefficiencies as airbags, crumple zones and other such NON needed but must have items driving the costs up for what should be "basic transportation".
 
Everyone should be able to march into a dealership and sit down with a "sales person" and build their own vehicle to wants and needs before the assembly is even attempted. They have the technology and the means to do per order manufacturing.

If i want a vehicle with RAW BASICS i should have the option to get just that, 2 or 4 doors, roof, glass, seats ,drivetrain and paint, the rest should not be forced down my throat by someone saying it IS a necessary evil, when we all know it is not.

The entire industry IS and has been corrupt on all levels for more than 40 years, and i highly doubt it's going to change any time soon.

Cheers and happy mass transiting.

 

[tamtam10]

Canada announced just hours ago a plan to contribute $4 Billion to Canadian subsidiaries of the Big Three US automakers. You can an article about it here:

http://informedvote.ca/2008/12/canada-approves-4-billion-auto-bailout-plan/#more-330

What do you guys think about this decision. Is it justified?

 

[KingKikapu]

McGuinty even said that he was at a meeting with the head of Toyota International and was told that they can't allow the big three to fail, because the consequences to the Japanese auto makers would be catastrophic.

It's about friggin time that people start to recognize this.  I, along with the rest of the business admin group, have been saying this for weeks.

 

[Snafu-Bar]

I think it stinks.

Thankfully there are strings attached to this money to keep the greedy bastards in check. So hopefully no one gets a nice big fat thanks for the paycheck now i'm retiring deal. I still feel that the industry needs to be left to it's OWN demise and shouldn't be hand held through this situation. Sure there are tons of jobs at stake but they are also at thier own make it break it points. Those companies with proper management and employee's are doing just fine and are capable of making profits. The rest through ineptitude, greed and corruption are failing, and they justifiably should be left out of the loop when it comes time for this handout.

No matter how you look at this deal, it's not in anyone's BEST interest to keep throwing money in the money pit.

Cheers.

 

[Blindspot]

I hear all this hype about how Japanese autos are superior to North American autos.

Well, how about another anecdote for you then? I still drive a 1990 Nissan Pathfinder. Has 200,000kms on it and been in 6 accidents from every angle. Each vehicle that has hit that truck has been a right-off including an old, steel buick boat that t-boned me. The body shows its age, it creaks and groans in different spots, sometimes it leaks something but it gets patched up and drives on another year. I'll be surprised if my father's 7 year old Jimmy lasts half as long.

 

[Edward Campbell]

I just did a very unscientific survey. This morning we attended an athletics event at a suburban Dallas (Texas) sports/recreation complex. During a break I decided to go for a walk (it was sunny and 65º+(F)) and I decided to count the first 100 cars in the lot and keep track of the region of origin of the brand (Asia = Honda, Hyundia, Kia, Nissan, Toyota) (European = Audi, BMW, Mercedes Benz, Volkswagen, Volvo) and (North American = Chrysler, Ford and GM).

A word, first about the survey: The sports event was for kids in the 10-15 year age group so the parents were, in the main, in their 30s and 40s. The event included North Dallas plus three North Dallas suburbs (Allen, Plano and Richardson) these four districts contain three or four of the Dallas area’s major universities and almost all of its (many) high tech companies so there was a disproportionate (to the American population) number of Asian because, like Canada, the US would rather import its tech and scientific talent than bother to grow it at home.

As is customary here in North Texas SUVs, crossovers and pickups predominate in the parking lot. Vans and full-sized/mid-sized sedans finish a distant second; there are very few compacts – I did not see a single Honda Fit or Toyota Yaris (but I did see one Mini Cooper S and one VW Beetle). I’m guessing (I’m not a car expert) that almost all the cars I counted were 2005/06/07/08. I’m pretty sure than only one was built prior to 2000.

My count: 66 Asian vehicles; 21 North American vehicles and 13 European cars.

I went, later, to a small private lot (35-40 vehicles) in the same complex and found about the same ration of Asiathers but the North American vehicles outnumber the European cars by 6:1. But in this lot every single one of the dozen or so American vehicles was a truck – 100% - and a substantial majority of the truckes were Ford 150s.

Not all Asians prefer Asian cars. As we pulled out of the lot we waved goodbye to some Asian neighbours as they climber into their huge Dodge Ram pickup and we waited until the Americans in the vehicle beside us left: it was a Toyota Highlander SUV.

Some Americans have voted on the auto industry with their wallets.

 

[Nfld Sapper]

I've owned 2 Japanese vehicles both Nissans 94/95 Sentra (Can't remember the model year  :-\), and my current 05 Altima and my parents owned an 88/89 Mazada 323 (1st Generation). Also had our share of American Cars.

I've got nothing but good reviews for the Japanese Cars. The only reason I got rid of them was that the Sentra was 10 yrs old didn't want to take the chance on major repairs and the 323 well that one was pushing 11 yrs and again did want to take the chance on major repairs.

 

[GAP]

Everyone DOES realize don't they that this is only for the next 100 days.....more will be needed.

One economist is saying the three will need a total of 85-125 Billion over the next two years, with Canada having to come up with 25-30 Billion....

 

[Kirkhill]

....During a break I decided to go for a walk (it was sunny and 65º+(F)) .......

Nasty individual.  Wings off of flies.  Salt in wounds.  ;D

 

[Kirkhill]

I'm not sure that it is a sure thing that the industry will be bailed out under Obama - a "controlled" restructuring might be more likely.

Obama: Auto Bailout 'Necessary'
December 19, 2008 4:17 PM

ABC News' Sunlen Miller Reports:

In his fifth Chicago press conference in as many days, President-elect Obama addressed the auto bailout by the White House this morning in his opening remarks, calling the move "necessary" to avoid devastating consequences to the economy.

"With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together, including labor, dealers, creditors and suppliers, to make the hard choices necessary to achieve long-term viability," Obama said.  "The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely necessary to save this critical industry and the millions of American jobs that depend on it, while also creating the fuel efficient cars of tomorrow."

Obama was if he has plans to change the terms of the automakers’ loans when he takes office – as groups such as the United Auto Workers are already upset over some of the provisions that apply to workers.

Obama started to note that "inch by inch” progress that had been made to protect auto workers since the initial proposals from the auto-workers asked for just a blank check.

Obama then was quick to confess that he has not seen the details of the auto bailout yet this morning, and would not comment about his plans for changing it.

“Since the White House just made the announcement this morning, I have not had an opportunity, nor has my economic team, to look at all the details of the plan.  So I wouldn't want to comment about what changes I would want to  make before I've even seen what's already on the table.”

Obama warned the Big Three they are going to have to take some "painful steps" here on out.

"I do want to emphasize to the Big Three auto makers and their executives that the American people's patience is running out and that they should seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable.  And that means that they're going to have to make some hard choices."

Obama said his intention is to have his economic team work with auto management and the UAW to protect jobs in the long-term.

"I just want to make sure that when we see a final restructuring package, that it's not just workers who are bearing the brunt of that restructuring, that they're not the ones who are taking all the hits and others who in the past have enjoyed a lot more of the benefits of the auto industry somehow aren't being affected. I think all shareholders are going to have to be -- play a part in this process."

Obama also said a 'bold' economic recovery plan was needed, but declined to give an estimate of how much it would be.

-Sunlen Miller

  Source

 

[muskrat89]

I spent 9 years working as a manager at a Tier II automotive supplier. I have seen 1st hand the ruthless mandates handed down from the the automotive manufacturers. Negotiate a piece price, demand cost reductions every year after that, regardless of what was negotiated. Insist on QS9000, ISO 14000, TS16949, regardless of plant size, cost or effectiveness of these programs. Right or wrong, the same kind of heavy-handedness that Wal-Mart often gets accused of - while CEOs and Union members alike get wages that "normal" CEOs and production workers can only dream of.

My old plant ceased operations yesterday. 100 or so people out of work. No severance, no package, no golden parachute, no "job banks". Nada. Nyet. Not even a ham for Christmas or a "kiss my a$$". Where is their "bailout"?

I know my perspective is skewed, but I have no sympathy for the automakers.

 

[a_majoor]

To RG45: If the Big Three, politicians and unions were not busy looking to take our money and destroy the taxpayers wealth, then I would not be so cranked about this issue. After all, if they were concentrating on business (i.e. producing a product that people were interested in at a price that they were willing to pay), they could have come out with this first:

http://thesecretsofvancouver.com/wordpress/china-beats-the-big-3/tech-goodies

China’s first mass-produced hybrid car goes on sale

China’s first mass-produced hybrid electric car hits the market on Monday, in a move aimed at driving the nation to the cutting edge of the world’s green auto industry.

The car is made by BYD Auto, a Chinese company backed by American Warren Buffett, who owns 9.9 percent of the firm.

The F3DM is also the world’s first mass-produced plug-in hybrid car, meaning owners can charge it from home for the first time, as well as in specialized electric car charging stations.

The Household Charge Port and Quick Charge Port are seen on a F3DM electric vehicle. BYD F3DM, China’s first mass-produced electric vehicle by BYD Auto, is a gasoline-electric hybrid plug-in vehicle, using a small gasoline combustion engine to charge the car’s battery. When fully charged, it can run as far as 100 to 110 kilometers by electricity. (Photo by China Photos/Getty Images)

The car’s acceleration is impressive, going from zero to 60 in 10.5 seconds.  The car’s top speed is about 100 mph, and it is capable of running for 60 miles before the batteries need recharging, which occurs automatically when the gas engine kicks in.

If you thought Wal-Mart impacted our market, wait till this car shows up. The United States is currently examining the F3DM to see if it meets the necessary standards for its domestic market.

Exports to the United States could begin in 2010, according to the report. Pricing is around $22,000. (Interpolation, the Chevy Volt is expected to debut at @ $40,000 USD)

Looks a lot better than a Prius, blows away the Smart Car, and has everything you’d want in a luxury sedan, for the price of a Honda Civic… think the Big 3 could possibly match this?

Considering that President Clinton provided $800 million to the Big Three to produce this type of car in the 1990's and they produced exactly nothing (Toyota and Honda came out with Hybrid cars during that time period without government funding), and their current business model produces losses measured in billions per month, I don't see any indication that they can continue to exist as currently constituted.

A chapter 11 produces an orderly bankruptcy, releases the companies from all current contracts and obligations and allows them to shed their liabilities and non productive "assets". A bailout means they will not have incentive to restructure in an efficient and timely manner, and only set the stage for handouts for years to come.

Let them fail.

 

[KingKikapu]

I'm still scratching my head in wonder at how people expect a chapter 11 to play out like they think it will.

Because it won't.