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Automotive News & Views Do You Favor A Government Loan To The Detroit 3?
3958 messages, Last post on Oct 02, 2009 at 4:52 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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..."After running up the biggest loss in its history, Toyota Motor will focus on finding ways to make more money selling small cars to cope with a devastating shift in consumer demand." Toyota executives outlined their back-to-basics approach Friday as the company disclosed a stunning $7.7 billion loss for the January-March quarter, a bigger loss than General Motors suffered in the same period. "... link title While this might come across as an exercise in watching paint dry, for my .02 cents, this (along with the big 4 bru ha ha) signals that prices even the small car segment will rise (almost exponentially) in the 5-10 year/s time frame/s. |
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Replying to: gagrice (May 08, 2009 7:02 pm) Sorry this is just naive. Governments are nothing more thant the politcal arm of the business community. The reason that we're independent is a consumer/commercial revolt against British business/governmental practices. The Articles of Confederation failed and the Constitution resulted because of business disputes. Business is the money-making arm of the government and the government protects business by instituting laws to keep peace and stability. The two are opposite side of the same coin, you can't have one without the other. Government can't stay the H*** out of business, it IS an integral part of business. Yes I agree that they two of them would have disappeared already without intervention. I also think that it was a good thing for the country as a whole. Preferences and politcal considerations aside it has kept workers working, it has kept ( thus far ) two huge American businesses making vehicles for the future, it has kept certain towns in the Midwest from becoming complete wastelands. This is the job of the President, to look at the entire picture for the entire country. YOU may not want GM / C to continue in business but there are millions in the Midwest that would differ. Bush recognized this, to his credit. Obama obviously has bills to pay back to the midwestern states. In several years I truly believe that the two companies will be smaller, obviously, but more efficient, leaner and more profitable. This is good for America. |
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Replying to: imidazol97 (May 09, 2009 6:06 am) Folks who are obsessed with so-called "unfair trade practices" seem to assume that people buy cars the same way they buy ground beef - by the pound. In their minds, price is all that matters. Getting rid of these practices will make imports more expensive & thus less attractive. They forget that most car buyers will gladly pay more for something that they really like. Once upon a time, the Big 3 - particularly GM - understood that & built hugely profitable franchises around that basic fact. GM's problem isn't "unfair trade practices" or that it builds bad cars - it doesn't - but that very little of what it makes gets most of us excited. Someone else made a good point about GM: they build excellent trucks, SUVs & one of the best sports cars in the world. But if you're not a truck/SUV guy - I'm not - & your wife won't let you buy a Corvette, then GM has very little to offer you. For me, there's the Caddy CTS, which I'll certainly consider the next time I'm in the market, & nothing else. If that's the best that GM can do, then it deserves to die - or at least get much, much smaller. |
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Replying to: jimbres (May 09, 2009 3:20 pm) I won't argue that fully, as it has merit ( think GM X bodies, Century and Ciera being built from 1982-1996, 15 MODEL YEARS, w/ very little changes). However, it is a well known fact that GM has been losing money on it's cars not only because there is an extra $3000 on the hood of undesirable cars, but because of legacy costs that other companies don't have, whether their cars are built here or in Japan. Now, I'm not going to say gov't sponsored healthcare is the way to go, but I think we can (and should!!!) do better.
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Replying to: gagrice (May 09, 2009 5:35 am) I don't care if they offer what I want at some future point. They offer it today. What I want includes tech jobs for America. Hontoy doesn't hire engineers and technicians or managers. They only offer jobs that do not create intellectual property or support America's retention of a technological edge. The US government has spent billions on R&D that has directly benefited the Domestic auto makers. A few crumbs fell on the floor? What direct benefit is there? HonToy does not get health care coverage for their US employees. And in Japan the people are taxed very heavily for that coverage. You and Rocky are always looking for a free lunch. Not always, just during this recession. Me and Rocky didn't coin the word 'Bailout'. Did you gorget we gave $35 Billion of TARP money to Euro banks. |
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Replying to: cooterbfd (May 09, 2009 3:57 pm) You're probably right, but this argument wins no sympathy points from me. Those "legacy costs" aren't like the color of your eyes - something beyond your control. No one forced these costs on the D3. They're the consequences of really bad business decisions. The domestic manufacturers tried to buy labor peace by giving the UAW pretty much everything it wanted, figuring that it could pass the cost on to us car buyers. Well, too many of us didn't like what GM (or Ford or Chrysler) were trying to sell us & went elsewhere. The D3 should have planned for that possibility. They didn't, & the market punished them, as it should. Whenever you see the words "legacy costs", substitute the more accurate phrase "imbecilic business decision", & you'll get the idea. If your biggest business rival shoots himself in the foot by failing to control his costs, are you obligated to ride to his rescue - or even feel sorry for him? Of course not. He screwed up & now he'll suffer. It may be cruel, but it's fair.
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Replying to: jimbres (May 09, 2009 3:20 pm) Here the distinction between the car enthusiast who wants to be exciting or it's not a good car and the people who use cars for transportation shows up. I believe many on here are enthusiast and they want their cars to "turn them on when they turn the car on" to quote the CTS advertisement... And that's not bad. But for many people an Echo got them there just as well as a Civic or MazdaSpeed. Or in my case in the comfort of a LeSabre/Park Avenue for traveling 6-8 hours for a weekend getaway or a stay with friends. Don't both have their merits. The cars for each may not be enthusiast cars. The government should help the US auto industry because it's creating part of the problem and/or has allowed the creation thereof. As for the rest... remember the US made VCRs? Wonder why they don't make them here. In fact the TV industry got copied. I recall the story about a shoe manufacturer who had Japanese show up at his company wanting to see his plant. A few years later they were making shoes to compete with him. Recall socks made in the USA? Recall oak furniture made in the USA? Remember when the foreign cars had signs of design from US cars but were smaller?
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Replying to: imidazol97 (May 09, 2009 6:53 pm) Here's where you lose me. Even if I accept your hypothesis that the government caused the industry's problems, which I don't, I don't accept your conclusion that the government ought to help. For one thing, I don't think that that government is smart enough & nimble enough to do anything but make things worse. More to the point, I deeply resent the use of my tax dollars to reward incompetence. You may see the domestic manufacturers as victims, but I don't. They're in the soup today because they've made a string of bad decisions that go back 35 years. As far as I'm concerned, the market is working just as it should -- by punishing corporate stupidity. Sorry, but I'm not a socialist - not anymore, at least. (I was a real lefty in my youth. I would've been a lot more sympathetic to your ideas back then.) remember the US made VCRs? No, but I recall that one company tried to sell a VTR (video tape recorder) in the early 70s. It didn't work very well & consumer response was underwhelming, so the company dropped it after only a year. Sony used different technology when it introduced the 1st successful home VCR a few years later.
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Replying to: jimbres (May 09, 2009 8:22 pm) The Sony Beta VCR was a short lived product, as Matsushita (Panasonic) built the VHS VCR and through superior marketing made the Sony Beta obsolete. Even though the Beta machine was superior. The same goes for automobiles. It requires a combination of good engineering, good manufacturing processes, good marketing, consumer confidence, consumer appeal, good dealers and some luck. GM and Chrysler have little of any of the needed ingredients. How the Feds think they can make a silk purse out of a sow's ear is beyond me. I will concede being wrong when I see the money paid back with or without interest. Until then I think it is a giant mistake to bail out a company that has NO Chance for survival. But what the heck, we are bailing out half the countries in the World. Why not the Midwest. Though they got their freebie with the Corn Ethanol debacle. That is $billions$ down the toilet paid for by the rest of the states that are forced to use the stuff.
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