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Automotive News & Views Does America Even Need Its Own Automakers?
1788 messages, Last post on Mar 03, 2009 at 2:18 PM
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There has been no one I have ever come across that has been as big a supporter of the American car industry or GM than me I have ever come across. That being said, I am completely against any money going to the big 3 under any circumstances. Chrysler is not worthy of getting money because they have become a bit player on the global scene. Their models generally speaking are of marhinal quality versus that of GM and Ford. If you don't believe me look at JD Powers and Associates quality surveys over the last 20 years. Although Chrysler has made marked improvement in their quality ovet this period, they are still generally speaking behind Ford and GM. I realize part of Chryslers present problems are brought about by the wicked step child perception Mercedes viewed Chrysler. Mercedes looked at Chrysler as a cash cow in the early days of their relationship, than saddled Chrysler with big inefficient engines, and ugly car bodies without upgrading their manufacturing processes to compete effectively with the other Detroit offerings and the offerings in markets around the world. Also Chrysler was and is presently hampered by being tied at the hip to Mercedes as a major supplier. This will hurt Chryslers potential for survival to a great extent because of Mercedes over priced parts and other components for the next number of years of this exclusive arrangement Mercedes put together in spinning off Chrysler. Ford and GM are different from Chrysler in the following ways. Both of these companies actually have a much better potential for survival. I would not bail these companies out. Why? Well, it comes down to the fact that the big 3's legacy costs are so ridiculously expensive that GM and Ford can't sell a car on the same even playing field as Toyota or Honda can. If GM and Ford were to file for bankruptcy than all the legacy costs and unions are busted. If you bust the unions, than they are on the same footing as Toyota, Honda, Nissan, Hyundai, Mercedes, and BMW here in the US. GM and Ford will be able to save the roughly $2,000 per car wasted on these legacy costs and put some of that money back into the research and development of their products. It will be only a matter of time before they would be making even better quality cars than they are at present (which by the way very very good overall.) I fully understand that the Big 3 brought this on themselves. I will admit this point to an extent but you the reader of this have to realize that the unions were in their own way greedy of taking the opportunity put at their feet to an extreme extent. If the unions were smart and looked at the long term viability of their demands they would have (and probably did) realize that the extremely generous benefits couldn't be sustained with the ever increasing world competition within the car market. This motivation to be as much of a parasite on the backs of the Big 3 was especially true after the Arab Oil Embargo of the early 1970's and the price shock of oil prices in the late 70's. Even if the Big 3 automotive boards were incompetent and in their own right willing accomplises the UAW should have realized that things were not sustainable over the decades ahead and the Big 3 would be in peril to the point of killing the UAW itself. I give Walter Reuther and Doug Frasier a whole lot of credit for instituting programs and benefit packages that were great for the unions at first, but now that UAW membership is about 10% of the US workforce, it hasn't been the utopian world both these leaders worked so hard to implement. If the Big 3 were to get money from Congress they would have to establish policies and provisions politicians in Washington (primarily Democrat) politicians want. One of the biggest parts of a potential bailout that Washington wants to be a part of, is for Washington to control the Big 3's making of small fuel efficent cars. Washington screws everything up. Social security, Fannie and Freddie you name it. Government on all levels tries to legislate everything including the use of oils that contain trans fats. Freedom of choice is being assulted on a daily basis. If I want to buy a Hummer, I can at present but who knows whether I'll be able to 10-20 years from now, and even if I can they will tax that vehicle like crazy thereby legislating behavior. This applies to many different things. A toilet that was the standard 20+ years ago that could flush 3 gallons of water everytime its flushed now can't be purchased as brand new anymore. Now you have to buy a a smaller capacity flushing unit that flushes less water thereby saving water. Why not sell a lower capacity toilet along side the normal capacity unit and let the market decide. It might sound trivial folks, but it demonstrates my point exactly. Let industry come up with solutions to market problems, and changing conditions. That is much better than forcing businesses through government intervention fix the problem(s). If gas goes to $10 a gallon auto companies will build the right cars for the market if they don't they will be out of business. Government shouldn't legislate peoples behavior, government should work on making markets available to businesses and establishing rules and regulations that promote business growth. By taxing a type of car because "its considered a gas guzzler in the eyes of some people" doesn't promote the sale of that vehicle. The people are smarter than the government is aware. |
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I think the main problem with the Big 3 is that they have burned too many customers that just "won't go back." So they've earned a reputation for cheating customers, which means they have lost those customers. The simple fact is no matter what the Big 3 do, they have lost too many customers, and there are not enough customers in the world to replace all the ones they have burned. Extinction is inevitable. |
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The head of Audi, the high-end line made by the Volkswagen group, said he favoured a "junkyard bonus" to encourage households to get rid of older cars The German automobile importers federation VDIK also called for a bonus for households that junked old vehicles, saying it would be an "incitement to trade in old clunkers for new cars that respect the environment." http://news.yahoo.com/s/afp/20081112/ts_alt_afp/financeeconomygermanyautoaidcomp- anyford_081112153824/print;_ylt=AnfoLVMbsVtFwwCR.PeZ9PfZa7gF How you would arrange this in the US so that it would encourage purchase cars from Ford or GM, I don't know. In any case, something like this could act as a general economic stimulus and, in the US, could maybe help get rid of some of our fleet of gas guzzling SUVs and trucks (a legacy from the era of cheap gas...oh wait, maybe that's back?)
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Replying to: jeffyscott (Nov 12, 2008 11:41 am)  Turn in a car for a Big 3 one, get a nice tax credit. Works for me - I'd go buy a Pontiac Vibe based on a Toyota Matrix.
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Replying to: jeffyscott (Nov 12, 2008 11:41 am) |
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I think the main problem with the Big 3 is that they have burned too many customers that just "won't go back." So they've earned a reputation for cheating customers, which means they have lost those customers. The simple fact is no matter what the Big 3 do, they have lost too many customers, and there are not enough customers in the world to replace all the ones they have burned. Extinction is inevitable. The Big 3 might have a reputation that is less than flattering and maybe some of their customer base would love to see them go under. The part you are so willing to ignore is that GM, Ford and Chrysler still have roughly 45% of the car sales in the US (the worlds largets car and truck market at present and has been now for 60,70 years.) even if they were to go bankrupt I fully realize and am perfectly happy with them coming back into the economy much smaller than they are now but at least profitable. They will be smaller regardles what happens in the next 10-20 years or so anyway. Once the Chinese figure out how to build reliable cars and trucks that are dirt cheap which they will figure out at some point even Toyota and Honda will have their hands full. If I were the Big 3 I would seriously consider ditching manufacturing entireley here in the US. The Big 3 should continue building cars and trucks in Mexico, until the UAW gets a strionghold there which is inevitable they will. Once the UAWis strong in Mexico, the bulk of their cars and trucks should be built in China. Once the quality thing is mastered, and it will be mastered at some point in the next 10 or so years the Big 3 will be poised for a come back in the US. The UAW and CAW are no friends of the Big 3, especially these days. I heard today that if you take th average pay and benefits of an assembly line worker in Detroit, they make $72.20 an hour, That is obscene! The Japanese here in the Country make about $48.00 for the same type of job. GM, Ford, and Chrysler can't compete against that. $26.00 less an hour for the sasme type of work, that is crazy. Dress it up anyway you want to justify money going to the Big 3, it is most certainly a bailout. One thing that makes me upset about the "bailout" is that the bulk of the money would be going to pay for the wages of the UAW and CAW employees because they are the biggest expense the Big 3 have to contend with, to spin it any other way is being disingenious. Since there are so many people that are so interested in seeing the Big 3 go under, I think The Big 3 should leave this country and move to China. When you see how many jobs are directly and indirectly hurt by no auto industry, I think you might have a change of attitude.
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Replying to: dill (Nov 12, 2008 5:53 pm)
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Replying to: fezo (Nov 12, 2008 6:11 pm)
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Replying to: gagrice (Nov 12, 2008 6:24 pm)
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Replying to: cooterbfd (Nov 12, 2008 6:28 pm) Seems like our congresspeople aren't listening to the public at all - Pelosi has got a special session set for next week to give away umpteen billions of taxpayer dollars to Detroit. I'm going to start hounding their phone switchboard..... |
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Automotive News & Views Does America Even Need Its Own Automakers?
