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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
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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Replying to: circlew (Nov 14, 2008 6:01 pm) |
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Replying to: Mr_Shiftright (Nov 14, 2008 4:31 pm) Open mouth, insert foot.
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Replying to: cooterbfd (Nov 14, 2008 6:07 pm) Sometimes I think these writers really have a love/hate thing goingx and that leads to this contradictory reasoning. It's like when you find your high school hero is really a stoner or something. The disappointment when an exalted figure in your mind stumbles and falters can lead to real anger. I know that sounds pop-psyche but you know what I mean, right? You see this in sports all the time, the once-hero now despised. If they didn't care, they wouldn't scream so loudly. |
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Replying to: circlew (Nov 14, 2008 6:01 pm) As for cost disadvantages, I'm not sure what all is driving the difference, but Detroit overhead is not competitive these days. UAW work rules may be part of it, but management largess may be as well. The real issue is that many people, and their kids as they grow up, remember all of the bad products and problems, so they are no longer sympathetic and are gravitating away from GM, Ford and Chrysler even as the products may be improving. I don't know how fixable this problem is, but you are right it will take time if it can even be fixed. Personally, I hope Detroit can turn it around, but I'm reluctant to return to their products based on too many bad experiences over the years. It will take a lot of proof over a period of time, not just some good initial quality surveys to get me back.
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Replying to: berri (Nov 14, 2008 6:36 pm) Dead men tell no tales! I wonder if it's something like "critical mass", that the number of HAPPY Big Three owners (and there are surely a good number) have to actually outweigh the unhappy ones, or at least "out-shout" them.
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Replying to: Mr_Shiftright (Nov 14, 2008 6:58 pm) You can count me among the extremely happy Big Three owners! 
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Replying to: keepinon (Nov 14, 2008 4:30 pm) I could be convinced to provide some big loans if we really require the necessary reshaping: 1. Get rid of Wagoner and his direct reports. 2. Break the work rules and union contracts to allow for a more flexible industry. 3. Dump 50% of the models they make - they can pick them. Anything less..... they should just fail without a bailout. And we're primarily talking about GM here. |
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I favor government aid to the domestic auto makers, but with significant caveats. I believe it would be a mistake for the government to attempt to bail out the automotive sector without demanding concessions from labor that would essentially bring its costs in line with non-union ones. Some differences in the work rules could remain in place, so long as their economic impact is minor. This would be harsh for the auto industry workers, but anything less would be unfair to tax payers and workers in other industries. Also, anything less would ultimately fail since, in addition to manufacturing products that people choose to buy - a huge challenge, given current consumer preferences - the domestic auto industry must be cost competitive to survive. I think it would be very difficult, but perhaps not impossible in the current environment, for the Obama administration to demand the concessions from organized labor that are essential for the long-term viability of the domestic auto makers, but without them I believe any financial help would be doomed to fail. One could argue that it would have been easier for a McCain administration to play hardball with the unions, since they didn't enjoy much union support. On the other hand, there's the "it took a Nixon to go to China in the '70s" argument. It says that, because Obama had strong union support, he is in a better position to extract concessions than McCain would have been. He would have to use all of his considerable political skills to obtain the necessary compromises, though, and that's after he's persuaded Nancy Pelosi and others to side with him. At this point we don't even know if President elect Obama has the desire and will to demand major concessions from the unions, in exchange for government help. A major argument for throwing a lifeline to the auto sector is that its demise would increase unemployment. The degree of the increase is arguable, but more jobs would be retained, even with a shrunken domestic auto sector than without one. In addition, for a variety of reasons that are unique to this industry, including the long lead times required to design and introduce new products, the volatility of fuel prices plus the impact of the credit crisis, a good case can be made that the perfect storm has impacted autos more severely than other industries. Should Washington demand that the auto makers be forced to only produce green cars, as a condition for receiving aid? Absolutely not! Detroit has to produce cars that consumers want to buy, and despite a series of bad calls in the past, auto industry managers are more in tune with consumer needs and desires than politicians are. In addition to being bad strategy, it would be even a worse precedent to permit Washington to dictate auto design, beyond what it already does with safety, emissions and fuel economy standards. Further, management should be strongly encouraged, if not required, to reduce its compensation until the companies' viability is restored. For this effort to succeed, it's important that management lead by example. Finally, the demand for domestic vehicles needs to be stimulated. I would favor an appeal to patriotism in this time of need. To that end, the industry should mount a strong marketing campaign to encourage consumers to consider a domestic brand before they buy their next vehicle. It could be useful for the industry to appoint one or more respected, charismatic spokesperson to make its case with consumers.
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Replying to: Mr_Shiftright (Nov 14, 2008 2:33 pm) Innovation would skyrocket. Entrepreneurs would flood in. New and pioneering car companies -- or better yet, radical new ideas for urban human transport -- would flourish. New jobs would be created almost instantly. Few people are going to by a new car from a non-established manufacturer. Bankruptcy typically means a reorganization, I think this would mean that there would be a new GM and/or a new Ford that are freed from some of their current obligations and probably under new management. If instead, the bankruptcy is a liquidation, then it would seem likely that foreign manufacturers will ultimately buy up at least some of the assets and increase their US operations. For the consumer I would imagine liquidation would mean increased new car prices, due to less competition. |
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Replying to: jeffyscott (Nov 15, 2008 7:03 am) Yeah, and a LOT less choice, or in my case, no choice. Maybe you won't buy a Big Three car, but wouldn't you at least want the option? A world of Camcords would be like going into a Baskin Robbins and they have 31 flavors and they're all vanilla. |
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