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Rob
12-07-08, 12:50 PM
It's time for Americans to take their blinders off

by Rob Loszewski
Sunday, December 7, 2008
©2008 Rob Loszewski, Corvette Action Center
No use without permission

http://www.corvetteactioncenter.com/images/columns/wheelspin/wheelspin2.gifOver the last couple of months, as the U.S. economy has worsened and the fate of the Detroit Big 3 has darkened, I've remained quiet in voicing my own personal views of what should happen to GM, Chrysler and Ford. After listening to the Detroit Big 3's testimony on Capital Hill, and the opinions of friends and family, I'm not sure I can remain silent any longer.

The general consensus of Americans regarding the possible bailout of Detroit is, "let them go bankrupt." Really? Are you serious? Why? The reasons I've heard is because Detroit is old, stagnant, not keeping up with the times, and not building cars the American public wants.

If that's truly the case, then please try and explain to me why so many American families drive Suburbans, Escalades, Denalis, and enormous trucks?

In my opinion, Detroit built exactly what American's wanted. A company isn't in business to build, or provide a product or service that nobody wants. If Detroit has been building products that nobody wants, they would have gone bankrupt MANY years ago.

The next thing I hear is that Detroit's quality sucks. While I'm willing to admit, that some of what has come out of the Detroit in past years has been complete trash, and some cars and platforms to this day, are trash compared to the competition in their market, Detroit has come A LONG way in building fantastic cars with excellent quality.

Think I'm kidding? Spend a little time running some Google searches regarding J.D. Power and Associates Quality Studies and take a look at the cars from Detroit that have won that award.

Let's take a look at what type of car has won the well respected and coveted, "Motor Trend Car of the Year" award:

2008 Cadillac CTS
2007 Toyota Camry
2006 Honda Civic
2005 Chrysler 300
2004 Toyota Prius
2003 Infiniti G35 Coupe / Sedan
2002 Ford Thunderbird
2001 Chrysler PT Cruiser
2000 Lincoln LS
1999 Chrysler 300M
1998 Chevrolet Corvette
1997 Chevrolet Malibu
1996 Dodge Caravan
1995 Chrysler Cirrus
1994 Ford Mustang
1993 Ford Probe GT
1992 Cadillac Seville Touring Sedan
1991 Chevrolet Caprice Classic LTZ
1990 Lincoln Town Car
1989 Ford Thunderbird SC
1988 Pontiac Grand Prix
1987 Ford Thunderbird
1986 Ford Taurus LX
1985 Volkswagen GTI
1984 Chevrolet Corvette
1983 American Motors Renault Alliance
1982 Chevrolet Camaro Z28
1981 Chrysler K-cars, Dodge Aries/Plymouth Reliant
1980 Chevrolet Citation

In Car and Driver's "10 Best Cars of the Year" going back to 2006, Cadillac, Chevrolet Corvette and Chrysler have made the list.

I also found that the Cadillac CTS and the Corvette have been repeat contenders and winners; the Corvette for many more years than the CTS.

There is no doubt, even these cars have room for improvement, but if you really stop and think about it, what car/platform doesn't?

In my opinion, Detroit is in the situation they're in, NOT because of quality, and NOT because they refuse to build cars that people want. They are in the situation they are in because over the last several months, the cost of gasoline had skyrocketed - sometimes over night and the economy took a nosedive causing the credit market to run and hide.

Go do some research on what has happened to the credit market and take a look at how difficult it is to get a loan for just about anything now. If people are not able to get financing to buy a car, guess what....car sales take a nosedive.

All of a sudden, all the Chevy Suburban, Denali and Escalade owners are driving around in their land yachts wondering why it's costing them around $75.00 per fillup instead of $40.00. So the typical American belief is, "well, who's fault is this? It must be Detroit's fault because they continue to build these cars and refuse to build more fuel efficient vehicles." No actually, it's YOUR fault, because YOU bought the land yacht because YOU could afford the gas at the time. Why did you buy the land yacht to begin with? Oh, because you have 3-6 kids that you need to haul around and you couldn't stop at just 1 or 2 kids.

You get the picture....before you point the finger of blame at Detroit, take a cold, hard look at yourself in the mirror.

"Well....why is Detroit the only ones affected by this and why are they the ones asking for help?"

Again, do some research. I think you'll be surprised to find out that the Big 3 in Detroit are NOT the only ones approaching their government and asking for help.

Here's an interesting article I ran across published on April 16, 2008:


From The Times
April 16, 2008

European car sales plummet as the credit crunch takes its toll

Christine Buckley, Industrial Editor

Carmakers in Europe have suffered their worst month in more than four years as the impact of the credit crunch begins to be felt by industry....

Link to article: European car sales plummet as the credit crunch takes its toll - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article3753340.ece)

I believe that you'll also find in your research that UK and Chinese car manufacturers have gone to their respectives governments and asked for help.

Folks, this is NOT a Detroit problem. This is a GLOBAL ECONOMIC PROBLEM. Why? Because the economy, just like everything else in this world, is subject to the laws of physics. What goes up, must come down. For as long as Man has walked this earth, we've seen it time and time again. We have seen it repeatedly in many facets of the American society for decades as seen in the automobile industry, the housing market, credit market, stock market, and overall health of the economy.

The difference between now and many decades ago, is that the economy is no longer affected by what goes on within the borders of the United States. It is a GLOBAL ECONOMY that is affected by situations that occur across the sea - something which the majority of Americans are still incapable of seeing. We're getting better, but boy do we have a long way to go.

So now that it's quite clear to see that Detroit is really a victim of a global economy that other car manufacturers have fallen victim too, do you still feel that Detroit should be allowed to go bankrupt?

Let's take a look at some numbers for a minute. In this thread:

http://www.corvetteactioncenter.com/forums/gm-auto-industry-news/109948-auto-workers-per-state-dec-3-2008-a.html

...I posted a breakdown of automotive related jobs per state as of Dec. 3, 2008.

The total number of jobs for all states: 2,201,955. That number encompasses auto parts, assembly and sales jobs. Nearly two and a quarter million jobs - gone. Don't think you'll be affected because you don't work in the automotive industry? Think again.

Take a look at what happened to the coast of baby food in the grocery stores when the diesel fuel went through the roof just a short time ago and that increased fuel cost trickled down to the cost of groceries. In fact, it trickled down to almost everything we buy.

Just imagine what will happen when the Detroit 3 collapses and that collapse hits parts manufacturing companies and they collapse. Then auto parts suppliers such as VIP auto or NAPA auto parts goes bankrupt because they are no longer able to get the parts they need to sell. Now, the cars and trucks that are used to deliver goods to market are no longer able to be repaired because - well repair shops are closing up because they aren't able to get the parts required to conduct repairs because the parts manufacturers went bankrupt because Detroit - their bread and butter - collapsed.

Before you know it, the cost of everything goes through the roof and we are no longer in a Recession - but we're seeing Depression rear it's ugly head on the horizon.

A pretty scary scenario and one that might not be 100% accurate, but I hate to say it, it's not out of the realm of possibility.

Over the last few decades we've seen American jobs leave this country and go overseas? Why? Because of corporate greed in my opinion. This country has gone from a manufacturing nation to a nation of consumption. Detroit iron is the last great thing this country continues to manufacture.

Just imagine if Detroit crumbles and gets bought up by European and Asian car companies. Just imagine if the Corvette is no longer a "Chevrolet" but a "Nissan" or "Honda". Or just imagine if the car manufacturer that buys GM decides that the Corvette competes too closely with their one or two of their own products and decides to axe the Corvette platform all together.

Stop and think about the great age of cars and Detroit iron back in the fifties and sixties....hopping in that 1965 Corvette of yours, picking up your girlfriend, and heading down to the local burger joint listening to Wolfman Jack on the radio. Once you get your burger you head to the coast for some slush and sit parked at the beach listening to the baseball game on the Corvette's radio.

Times like that are going by the wayside quick and America is losing her identity at an alarming rate. If Detroit's Big 3 is allowed to go bankrupt, it will be the end of the United States manufacturing anything of significance. American Pride will have gone from pride in building and marketing unique American products to how much money we have in our wallets to buy the products we desire overseas.

The United States will become a country that is owned by all other countries, and American citizens will no longer be able to take pride in products that were built through American blood, sweat and tears. There needs to be a government representative or board that oversees the use of the money and insures that the money is paid back to the government within a set amount of time. Once the money is repaid, the government steps back and the representative or board no longer has a say in what Detroit does.

Detroit needs to be helped and should be extended a bailout. However, that bailout should not come without reservations or restrictions.

That money should be given to Detroit with the complete understanding that it is to be spent HERE on American soil and not overseas in the building of a new assembly plant on foreign land.

GM in particular should undergo a restructuring of it's platforms and assembly processes within a certain time frame in order to make it more competitive in a global economic market that can quickly change on whim.

Detroit has become a pro at product re-badging and it needs to stop NOW. The perfect example is the F-body platform of the late nineties. The Firebird and Camaro looked identical with the exception of the bumpers, some plastic body cladding and some interior components.

Another example is the Pontiac Solstice and Saturn Sky.

What about product ingenuity?

The Chevy HHR - a great car/crossover, but molded after the PT Cruiser. It took GM how long to come to market with that after the general public was getting sick of seeing the PT Cruiser everywhere?

The Chevy SSR - one word: why?

Other than Cadillac and Corvette, GM's styling has become disgustingly bland, boring, stagnant, and unemotional. GM Styling Dept. needs a major fire lit under their ass and they really should take lessons from Chrysler's Styling Dept.

Last but not least, Marketing. In my opinion, GM's marketing arm has completely dropped the ball and become quite pathetic in trying to market the products they're building. GM has fought long and hard to build cars that meet or exceed European quality standards, and yet, where is the marketing? They have cars that have won JD Power and Associates awards, but where are the commercials and advertisements? Maybe I just don't pay much attention, but they only play on JD Power and Associates I've seen recently is in a GM Truck ad on TV. Regardless, if I'm not paying attention to the ads, how much of the American public is?

Support what you build. If you think you're just going to bring a product to market touting it as the latest and greatest, and try to get people to forget about the crap that was built in the seventies and eighties....forget it.

In summary, Detroit should be bailed out, but they should be bailed out with stipulations that the money is used to rebuild and reposition Detroit in being leaders and innovators - not followers trying to play catch up requiring a bailout everytime the global economy suddenly shifts in one direction or the other.

We gave billions of dollars to AIG - the pinnacle of corporate greed and they didn't have to jump through all the hoops that Detroit has been required to go through. And yet, we, the American public are willing to let the last great American manufacturing industry crumble.

Talk about a sad state of affairs due to double standards, corporate greed and short-sightedness.

If you feel that Detroit and GM in particular should be helped, go to: Facts About the Auto Crisis - GM Facts and Fiction (http://gmfactsandfiction.com/) and contact your U.S. Senator and Representative. Let them know that you support a bailout, otherwise, continue to stick your head in the sand and watch as America loses its pride and identity it worked so hard to achieve.

gmjunkie
12-07-08, 01:13 PM
:D:D:D "The Junkie" purdy much agrees with you 99.454,427,396,350,327,283%!!:thumb:thumb:thumb

XLR8
12-07-08, 03:30 PM
Very well thought out and well written piece, Rob. :thumb

I think a bailout with stipulations attached is a must. Bailout to prevent a total meltdown of the American economy (talk about ripple effect) and stipulations to insure taxpayer money is used in the best interest of the taxpayer.

This nightmare reminds me of a post I made 2 or 3 years ago concerning the loss of jobs due to the movement of factories/jobs overseas.

Eventually it would catch up with us. You cannot expect to move all the jobs and money overseas, at the same time expecting the American consumer to purchase your product. When you're out of work, the last thing you consider buying is a new car.

:wJane Ann

DRTH VTR
12-07-08, 04:07 PM
Well said, Rob. The fact that Detroit builds what sells is central here. They built all those trucks and SUV's that are closer to locomotives than they are to cars because that is what people wanted to buy! The consumers chose that.

I certainly support capitalism and the free enterprise system. But I don't support greed and theft. The robber barons of the early 20th century were an example of the excesses that can happen when free enterprise is abused. The mess with housing, AIG, etc is another one.

We will run out of oil- perhaps not in my lifetime, but certainly in the lifetimes of my grandchildren. Things cannot continue as they have been, with ever-expanding energy use and ever-growing human population. We cannot drill our way out of this. The planet can only support so many people. There will be a population adjustment one of these days...

67HEAVEN
12-07-08, 04:20 PM
For me, it all comes down to a few simple matters.


I am unconvinced that any economy can last long when all it does is import. Are we simply going to sell things to each other, without making anything? More and more of North America's wealth is being exported.
North American (yes in my country too) automotive plants were converted to military equipment and munitions manufacturing during WWII. Imagine that scenario being repeated in the current situation?
Seven to ten (take your pick) spin-off jobs (sales, parts, service, trucking, rail, etc.) for every Big Three job in North America. I don't want to imagine the consequences if all those jobs are lost.
There's little choice.............loan guarantees (on both sides of the border -- we've already provided 100's of millions here) with specific requirements and tight controls.

;shrug

Yoda
12-07-08, 06:58 PM
:w Rob :ohnoes

I’m not sure if I should put “From the Halls of Montezuma” or “Nocturne Violin” (Chopin) on the old reel to reel, for inspiration here ;)

Well written opinion and point of view. I don’t agree, but that doesn’t make me right either.

I must be a bit more callus or maybe it’s just that I find it difficult to understand the nature of the beast. It seems to me, GM ~ Ford ~ Chrysler have squandered their future and the future of their stockholders, employees and affilated business’s with PPP (pisspoorplanning). Where was, where IS their Short-Range, Mid-Range and Long Term planning business forecasts. Usually a business will consider many things, but most are prepared for Short Term, Mid Term forecasts that include upswings, and downswings with a plan setup to go into effect when or if needed. In the Electric Utility Business we called it Planning and future forecast ~ looking at worst case scenario's ~ with corrective measures to address minor, major and castrophic events.

Somewhere in all this hype and shell game, Flags, Whistles, Flashing Lights and a very loud Train Whistle has been sounding. I can’t believe the brain trust of the Big 3 didn’t see, hear or say anything until the bottom fell out. Can we really point at the price of Oil, or the Mortage minipulation as the cause of the Big 3’s troubles. It would be nice, but in reality how many Home Mortage’s out there (% wise) have gone into default(?) compared the Total number of Mortages? How many people walked away from their Primary Resisdence? How many walked away from “Investment Properties” ?

The World ecomony may have more to do with the Big 3 than any of us would like to know about.. I believe manipulation of the Worlds ecomony is not as “Art Bell'ish” as some think. :eek

The entire Industrial Base of the United States has been under attack for years. Expensive Labor, Governmental Regulations, Enviornmental Agencies and Groups… is it any wonder why Car Manufacturer's in “North” America can NOT be assembled without imported parts… parts that used to be made (read: Manufactured) in “North” America.

As you point out, and I agree.. We are becoming a Consumer Driven Nation.

JMHO:
Me thinks GM ~ Ford ~ Chrysler need to refocus and look inward at their Strengths and Weakness. Take a firm gripp on reality, look at a solutions not the problem. They need to take another notch up on their belts. Look at what works and get rid of what doesn’t. Quit looking for an easy fix or way out, and do some Realistic Short Range Planning with Labor, Plant & Facilities budgets. Consider re-negotions at EVERY level, and leverage their assets. Management needs Lead or be replaced! Stockholders, consumers, employee's and associates within the business world need to believe and have confidence in the management, products, service and sustainability. Throwing $$$ at the Big 3 does not provide the incentive needed for them to regroup or recover what they have fiddled away.

I’m losing my train of thought and interest, before I ramble on too much more, I’ll just say "I respect your opinion, but I do not totally agree" :D

Bud

Rob79er
12-09-08, 11:08 AM
I picked up a copy of Consumer Reports auto edition this week and was amazed at how unimpressed they are with regards to American cars with the exception of a few standouts. They thoroughly dislike Chrysler in particular - all poorly rated. But its not a surprise - Its been this way as long as I can remember - every year in CR.

Cruzen
12-09-08, 11:44 AM
I never discuss religion or politics because either is a never ending discussion. However, if anyone wants to know why the auto manufactures did this or that they should be asking that of the person who looks back at them when they are looking into a mirror. Detroit is nothing more than a mirror of us Americans. Detroit is over weight in many respects and so are 40% of the American population. Detroit is slow to predict and respond to change and so are most Americans. Detroit is buried by debt. So are most Americans.

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How many of you paid cash for your VETTE? I’ve seen one and two year old Vettes advertised as “just take over my payments” and the payment is $900 per month or more. The person who bought that car obviously had no money down and did not “plan/save ahead” for that purchase and now they are in trouble. Now you get the idea. If GM only sold vehicles to people who had cash in hand, as I think they should, then the industry would have folded or changed fifty years ago. It would be smaller but more responsive to changes in the industry.

<o:p></o:p>
Most of us have learned to live with immediate gratification relying on future expectations and when those strategies fail to come to fruition we do not want to take blame for it. Detroit does the same thing and we blame them for poor planning. Detroit suffers from management issues but I’ll bet most Americans have similar difficulties just managing their personal and family needs. When was the last time you opened the refrigerator and found that you had run out of one staple item such as milk or another. Hey, doesn’t that indicate bad planning? Now you know what Detroit goes through.

<o:p></o:p>
Someone talked about Detroit building the vehicles that Americans demanded. I believe that statement was right on the money. I was associated with two Arizona dealerships around 1996 when Suburban’s were selling for over list price. In response, Chevy converted another plant to build Suburban’s. You think they would have done that if buyers did not demand it?? Many local residents thought he/she needed a big four wheel drive Suburban as a status symbol. This continued till the present time and now I find many of these sitting in drives with for sale signs.

<o:p></o:p>
As far as quality, I believe that it is a relative concept. I have put 180K on a 1984 Monte Carlo SS and after 23 years of ownership sold it for half of what I paid for it. Try that with you foreign import. Totals items replaced were two alternators one water pump and one power steering pump, two ignition coils, one radiator, four sets of brakes and hoses and other normal wear items. All done by me. That car still had the original floor mats when I sold it.

<o:p></o:p>
I drove 1994 & 1998 turbo Pontiac Sunbirds convertibles for 160K and 170K. My 94 Vette roadster currently has 100K and all with minimal upkeep. I think this shows that Detroit can and does turn out a good product that provides value for the money.

<o:p></o:p>
I think most people are concerned about Detroit because they do not have their own house in order. If they do then what happens to Detroit will have an impact but other alternatives will present themselves. However if you’re over extended on credit and worrying about loosing your job then who can you blame for that?? Poor management in Detroit or poor management at home? I am sorry if I offended anybody but I think it’s time we stop looking for someone else to blame when we, through our purchasing/spending habits, are the primary cause of what is happening in this country.

Rob
12-09-08, 11:57 AM
^^^^ An excellent and quite valid response.

Bob Chadwick
12-09-08, 12:17 PM
Its a three part disaster. I agree that Detroit needs to be saved; either through a bailout with strict conditions or a controlled bankruptcy.

The problem is that no one seems to address the other two pieces to the puzzle. The UAW and government regulation. Unless something changes that reduces the labor cost and government regulation, think of the two tier CAFE standards, the situation will just continue indefinitely.

6 Shooter
12-09-08, 12:24 PM
...let it go down the Freaking Tube! (http://www.corvetteactioncenter.com/forums/edge/109498-ok-enough-bs-whens-last-time-you-bought-something-new-big-3-a.html) ;squint:
L8TR - D

mgdim
12-09-08, 12:53 PM
While there is plenty of blame to go around and all of the above posts hold some truth, the difference maker has and will be the UAW. They have bled those three companies dry and have been doing it for years. Free health insurance for life, Job Banks, free legal for life and a general abuse of the system has doomed Detroit. I have relatives from Michigan and those that do not work for GM have nicknamed it "Generous Motors". Those that do work for GM feel that there is some great big, mean entity that owes them a living. For those of us who work hard every day to ensure our jobs for tomorrow, this attitude is offensive.

6 Shooter
12-09-08, 12:59 PM
...the difference maker has and will be the UAW.

...UAW the contracts (http://www.google.com/search?hl=en&safe=off&q=Big+3+Union+Contract+Bargaining&btnG=Search) they currently have, the Big 3! ;)

L8TR - D

mgdim
12-09-08, 01:02 PM
With a gun to their head! I can't imagine anything worse than being a large corporation with union employees, particularly the UAW.

LT4man
12-09-08, 01:52 PM
Rob, very well written. I concur with your opinions 100%.

Time for our country to take back the manufacturing and the innovation we have allowed to leave.

Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

WHILE ALL THIS IS GOING ON, WILL SOMEONE PLEASE SAVE THE :w?

6 Shooter
12-09-08, 01:53 PM
...in the Big Leagues (http://www.google.com/search?hl=en&safe=off&q=1982+Caterpillar+Strike&btnG=Search) ya need to carry a big bat and use it from time to time: If not the kids will be telling dad what to do! :cool

Later . . . . . . .
6 Shooter

minifridge1138
12-09-08, 02:56 PM
This is a simple problem, but it has no simple solution.

The problem:
If the amount of money that comes out of a company is LESS than the amount of money that goes into the company, then the company will fail.

There are two solutions to this problem:
1) reduce the amount of money that goes out
2) increase the amount of money that comes in

A bail-out or loan is not a solution. It is a temporary boost of money going in, but it does not solve the problem. It will add water to the bucket, but it does not plug the hole.

Raising the cost of cars would increase money coming in on a per car basis, but would reduce sales (and reduce money coming in), so I do not see that happening in the near future.

Buying cheaper materials would reduce the amount spent on building the car, but could result in lower quality cars. Which would lower sales and reduce the money coming in.

Selling more cars would increase money in, but demand is at a low. Companies are announcing layoffs by the thousands. People are worried about keeping their jobs and feeding their family. They are going to be more likely to keep their old cars running than buy new cars. So sales are at a low.

Reduce the operating costs. The most viable option. Unfortunately, that usually results in people losing their jobs (I've been laid off twice this year, so please don't accuse me of being out of touch with workers). Reducing costs can create new jobs: someone has to keep the machines running. And there are other ways to reduce cost that do not involve cutting jobs (I would gladly have taken a pay cut rather or see my co-pays go up than loose my jobs).

How can a bailout help?
As mentioned earlier, it is not a solution; it only buys time. Hopefully, it will buy enough time that two things can happen:
1) Demand for cars increases. Selling more cars increases money coming in.
2) Operating costs can be reduced without cutting jobs. Machines that use less electricity, cheaper power from new sources (long term goal, not short term), reduced corporate spending, retooling factories to produce cars with greater demand, and some compromises with UAW.

Hopefully, I haven't picked sides. I was talking about possible solutions (some of them are probably unrealistic) and not blaming anyone for causing this mess. That is a different rant.

Good luck!!!

mgdim
12-09-08, 03:12 PM
Minifridge1138 - nicely done to stay in the middle

6 Shooter - The big bat theory has gotten the union and the manufacturers where they are today. Teetering on no company and not a single job for any employees. Not a great result for anyone, in the long term!

Yoda
12-09-08, 04:08 PM
ANY business that means to be successful puts together a cost analysis: cost of doing business ~ profits minus expenses ~ (Short version)

The bottom line in any Business Model is to continue to grow and prosper! Major, I mean BIG corporations have MBA’s, and other financial PHD type guru’s to study trends and future revenue streams, economic forecasts to help mold and give insight to update their Business Model. This Brain Trust provide the decision makers with all those charts and graph’s. Let’s not forget the figures they bounce around the Board Rooms that only the true Bean Counters understand. From all that Brain Trust and the fortitude to succeed, risks are taken and real Hands On business decisions are made. It may not be pretty, but the company lives or dies by these decisions.

On a lot smaller scale and as individuals we are responsible for our on weight gain, people we choose to associate with, type of home we live in, type of automobile we drive etc. . If our goals and objectives are not being met, or seem out of reach, we have choices. Do what needs to be done to accomplish our goals, e.g. more/better education, change career paths, “leverage” property to provide the scratch for the insatiable itch. Then there is “wish in one hand and _____ in the other” and see which one fills up first!! :eek They all come risk/reward, some are more desirable than others. (And most of us do this without the perception or aid of MBA's and PHD's, we are accountable for our decisions)

Pure speculation on my part ~ I bet General Motors is/has diversified and is much more that Just Detroit Iron. At one time I recall GM having corporate holdings and investments (auto and NON-auto related companies) in more than 20 Countries. I wonder if all GM’s holdings are on the cliff of failure.

Great discussion :thumbs
Life is NOT for the weak at HEART!

Bud

Paul T
12-10-08, 02:34 PM
Rob, I cannot disagree with your argument that we need our automobile manufacturing capabilities. The thought of a foreign logo on our beloved Corvette is indeed repugnant. With full support for saving our companies, I must profoundly question the government's approach to that salvation. A quick look at the advertised "facts" should dispel any notion that a bailout will truly work.
The Big 3 requested $34 Billion to "tide" them over until the end of March. The math says that they have a burn rate of $11B/month. What does their business plan say about when they will become profitable and be able to pay back the loan? Figures quoted indicates that 2010 is a possibility. Assuming that is a good date, the price tag is now up another $165B or so. You have to ask if they will really be profitable then. Look back two years when times were good, full employment, growing wages, easy credit, etc., and they were still losing billions each year.
For the bailout to be even considered, the following questions have to be answered, not just with rhetoric but with fully sustainable facts. Also, stipulation must be put on the government oversight to prevent the companies from being strangled by the experts in our U.S. Congress.
1. When will the companies become profitable?
2. How many units must they sell to meet that goal?
3. When will the economy(i.e. employment) reach the level to absorb those units?
4. Assuming no more easy credit, how many buyers will be locked out of the market?
5. Will emissions and mileage requirements be relaxed until the market recovers?
6. Will the companies truly be allowed to build what the consumer wants or what the
government decrees?
7. Can three companies survive in the projected market given the number of units that
must be sold for them to survive?
8. If all the billions reqested do not achieve the desired results, who pays back the
"Bridge Loans" which can conceivably reach a half trillion dollars.
If someone can show me that X billion dollars over Y years equal three viable companies
with full payback of the loans, sign me up for the bailout. If it is just going to be a crapshoot, meet me in Vegas.

Yoda
12-10-08, 04:42 PM
:thumb Paul I couldn't agree more ~ so what dates work for you to meet in Las Vegas :D :boogie

Bud

gmjunkie
12-10-08, 05:41 PM
:thumb Paul I couldn't agree more ~ so what dates work for you to meet in Las Vegas :D :boogie

BudIf you guys can make it before Jan 15th or so I'll drive Steve's car and keep the miles down on mine!!:boogie:boogie:boogie

:thumb :D:D:D

vett boy
12-10-08, 07:28 PM
If you guys can make it before Jan 15th or so I'll drive Steve's car and keep the miles down on mine!!:boogie:boogie:boogie

:thumb :D:D:DHey ,i'm keepin' my eye on you fella;)

I'm also watchin' GM closely.Keep in mind GM does a lot in the defence industry .Who'll fill that gap China ?

grapeknutz
12-11-08, 09:50 AM
It's the perception of the lack of quality the big three need to battle. It took about 30 years for Toyota to battle the moniker of " made in japan" ( for all of us that remember that) that made it derogatory, now it said with pride for the Japanese.
I have no argument that the American worker is the best, head to head with any foreign worker. I do however have the a problem with the quality of the engineering the the big three have, and the business decisions the executives used that got them here at this point in time.
Whats needed is for the executives to leave and get some real car guys to take charge and start steering in a direction that will get the car buying public to actually buy car that they want!! NOT what congress wants us to buy!

http://i231.photobucket.com/albums/ee20/grapeknutz/soapbox.gif

Bonnell
12-11-08, 10:01 AM
Rob, very well written. I concur with your opinions 100%.

Time for our country to take back the manufacturing and the innovation we have allowed to leave.

Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

WHILE ALL THIS IS GOING ON, WILL SOMEONE PLEASE SAVE THE :w?



I agree. :thumb

Yoda
12-11-08, 10:06 AM
Bailout, Bridge Loan call what you like, there isn’t neither enough money nor government help that will provide the relief needed by ALL the greed. Yep GREED, you, me, small business, large business and our Government.

We don’t have to look too far back to see a very similar pattern…. Of greed.. Remember these institutions and the abuse they “fostered” Federal Land Bank ~ Farm Credit System. It wasn’t the fault of these fine Government backed institutions,..... Well they contributed to all the FARM FORECLOSERS in the late ‘70s and early ‘80s. It takes 2 to tangle. The inflationary price for land, and the GREED of ALL parties brought down many family owned farms. Even some huge Insurance Companies and Foreign Investors found the bone pile back then.

Personal accountability and sound business decisions were cast aside and customers couldn’t sign notes fast enough (read Contracts) for what “They couldn’t believe” to be true loans on their property and homes. When the government started using agricultural products as a “weapon” to influence policy… well we all know what happened. Loans came due, and land prices and farm commodities fell like a lead ballon.

That was some 25 or 30 years ago. Now we see a similar economic crisis rearing it’s ugly head in the form of “home mortgages and business failures.” We all share in this debacle…. As consumers, as business owners.... The Golden Goose was running through everyone’s yard laying those Golden Eggs, seems we all forgot that if you don’t feed the Goose, and provide a little care, the Goose will die and even if the Golden Goose is cared for, it only lives so long.

I can not believe that the Big 3 will fail without a Government Bailout. I may be naïve or too cynical. If there is a way to turn the Auto Industry around, then there will be investors. It may require a purchase through bankruptcy and a complete restructure before the price is appealing enough.

Having the Government take over ANY control of the Auto Industry would be like having a wolf or fox taking care of the Golden Goose!

The FARM Community, and agricultural products survived the depression of the ‘30s, it survived the ‘80s … Will the Auto Industry survive … Will we still have a Chicken (Goose) in every pot and 3 or more Vehicles in every driveway?? As the old saying goes… the Best Times about owning a boat, “The Day I bought it and the Day I SOLD it…”

Bud

johnm
12-11-08, 09:48 PM
Rob, very well written. I concur with your opinions 100%.

Time for our country to take back the manufacturing and the innovation we have allowed to leave.

Time to tell the UAW they will have to start playing by the Big 3's rules, not theirs!

WHILE ALL THIS IS GOING ON, WILL SOMEONE PLEASE SAVE THE :w?

Let me start by saying I am not a UAW supporter, however I wil say all the bailouts in the world won't help if people don't buy their products. American cars are as good or better than imports! BUT even if they aren't "YOU ARE BUYING MORE THAN A CAR. YOU ARE BUYING A LIFESTYLE" You can pay for the japanese economy to boom or your own. The thing about the UAW is they took a lot of money out of the corporation and put it into the economy by SPENDING it in bussineses like mine all over the country. I took that money and spent it in businesess like yours! It is time for americans to stop being so damn "me" oriented and do what's right for the country.Because if your neighbor isn't thriving neither will you for long. We are all interconnected. Finally, I watched the senate hearings with the big 3 bosses-what an outrage! These arrogant SOBs telling the CEOs the missmanaged their companies money now they what taxpayers to bail them out. They should have straightened their houses out long ago. WHAT CRAP! these jokers have grotesquely mismanaged the business of our country with no sign of fixing their house. Whenever they need more money they get a "taxpayer bailout" by raising taxes. Worse yet they are now borrowing money from our grand kids. This is revolting. And for them to call the car compnies out. OUTRAGEOUS. We NEED to wake up folks! Buy AMERICAN! and lets vote these jerks out of office and get some decent people in there before it's to late.

67HEAVEN
12-11-08, 09:57 PM
johnm,

Wouldn't change a word. :thumb

XLR8
12-11-08, 11:04 PM
johnm,
You made some very valid points, thank you for speaking up. :thumb

Money paid to American workers goes right back into our economy, our communities, our schools, providing more jobs for more Americans. Good point.

And it's hilarious, ironic, or pathetic - you chose your favorite term - that the people questioning, badgering and chastising the CEO's are collectively the most stupid and poorest money managers on the planet.

:( Jane Ann

LT4 CE
12-11-08, 11:51 PM
Hi Rob,

There is another reason most Americans are against the bailout and encouraging the auto companies to declare bankrupcy. It is the Unions!

Once they declare bankrupcy, the union contracts will be void, and the auto companies can start over without the burden of high wages, early retirement with benefits, production limitations, and the health insurance burden. When these restrictions are removed, the auto companies can start to compete on a more equitable basis with foreign manufacturers.

I am not suggesting that the Unions are the sole reason for the auto manufacturers demise, but it is the major cause for their losing money.

LT4 CE

Full Bull
12-12-08, 12:49 AM
Folks,

As one who has negotiated with labor unions in the past (not the UAW), and have personally seen the backroom deals made between the union and their closest political allies, I can tell you that GM's not the running this game/calling the shots--the Union and the Senate Dems are.

Trust me, if GM had it's way, they'd dump the UAW contracts/agreements and start from scratch. When appx $4,500 (thereabouts) of every car GM builds/sales goes to pay for the health care benefits of their current and past employees--and these cars are priced in the mid to upper $30K--folks can't afford to buy and GM's not going to be able to sell. As one talking head on the radio said, "The American people are going to awaken to the fact that GM is really a health care company who happens to build cars on the side." There's much truth to that statement ....

Believe the ONLY way GM stays in business is that they get back to producing cars that the majority of Americans can afford; if they don't, no amount of money sent their way will save their bacon. These loans will only serve to postpone the inevitable ....

WB9MCW
12-13-08, 02:12 AM
I THINK I FOUND THE PROBLEM


http://i126.photobucket.com/albums/p110/HAMMERHATE/forduawcontract.jpg


Ever wondered what a UAW contract looks like? Here is all 22 pounds of it (in this case, Ford’s 2,215 page 2007 master contract; Coke can is for scale and because I was thirsty).


I’ll tell you this much, those 2,215 pages don’t include much regarding efficiency and competitiveness. What you’ll find are hundreds of rules, regulations, and letters of understanding that have hamstrung the auto companies for years.


If you’d like to read the contracts for yourself, here they are >>>


LaborPains.org » Blog Archive » 22 Pounds of UAW Rules and Regulations (http://server1.laborpains.org/?p=1130)

67HEAVEN
12-13-08, 07:40 AM
I THINK I FOUND THE PROBLEM




Yikes!

It would take a full-time staff of Mandarins just to look up the answer to any question that came up. :eyerole

http://www3.sympatico.ca/bob-johnston/smiley-leaving.gif

gmjunkie
12-13-08, 07:59 AM
Yikes!

It would take a full-time staff of Mandarins just to look up the answer to any question that came up. :eyerole

http://www3.sympatico.ca/bob-johnston/smiley-leaving.gif
Aren't those Oranges?? :D:D:D

67HEAVEN
12-13-08, 08:04 AM
Aren't those Oranges?? :D:D:D

CLICK (http://www.chinahistoryforum.com/index.php?showtopic=17870)

;)

Full Bull
12-13-08, 03:30 PM
CLICK (http://www.chinahistoryforum.com/index.php?showtopic=17870)

;)

I did click ...yep, it's oranges! :boogie

ken mohr
12-21-08, 06:57 AM
I think the management needs to lead by taking a pay cut. The UAW here took a pay cut of 40%. Now you are asking them to take another. The top exes are all making over 10M and we are asking an employee making 36K to take another pay cut while the top management take home millions. They say they are worth it. The price of GM stock in 2002 was $68.00 now it is less than $5.00 but the board of directors are excellent. What would the numbers be if they were not such smart people? -$65.00 per share. The numbers I hear on the Toyota plant is $26.00 per hour or 54K a year. They are not going bankrupt. Also remember GM management agreed to the contracts and got big bonuses for being smart enough to negotiate them. The greed in GM is not limited. they are all guilty.

killain
01-01-09, 08:19 AM
I would like to be really optimistic, but the facts don't lend themselves to that perspective. The Dow Jones ended the worst year since the great depression at around 8700 and we are as close to a full depression as we've ever been. Unless Detriot and the UAW decide that "They" are going to tackle the real Economic situation "NOW", then come March 30, we're going to be closed, Period! the Big 3 don't hold the 70% they once did, they hold 19% and dropping. So far GM has failed over and over at developing more market attractive models then ever. 'Can you really compare a Nissin Sentra with a Chevy Aveo ? beyond that we have the Colbalt, and frankly folks ain't breaking down the doors to get one of these either. I'm not a Union basher, and at this point I really don't know what their game plan is, but I can sum up what should be in their immediate newsletter, New Job Training center to Open soon ! Ford seems to be in almost OK position, GM as of Monday had a 0 balance in their operations bank account, save for the billions that the government deposited last night. But the senior management at GM needs to be replaced. I really don't think any long term plans exist. As is the case with Chrysler, their long range plans hold very little in a competitive model lineup. And whoever runs GM marketing and advertising needs to be fire at once. The reality is that the big 3 automakers are going to need about 1/3 + less workers that at present. And no matter how rosey the water is scented, the taste is bitter. GM needs Chevrolet, Cadillac and Buick. GMAC is a viable company and should be invested in, Chevy needs a total revamp, Hummer, How did this vehicle make it through "concept initiation"? what market is it directed at? all it's models are on Consumer reports WORSE MADE list, Jeep rounds out the list? Combine Pontiac models with Chevy. Decide if Buick is worth reshaping, I think perhaps it is, (But my opinion doesn't matter). What is most troubling to me is that 1. the US government Does Not want to get into the auto building industry. 2. I belive Mr. Gettlefinger would be quite happy to go home on April 1st and have a beer or cup of coffee and say "Well I did my best for the retired members, but of course we all laid off since the company is in bank receivership. and 3. I don't think anybody involved understands that WE ARE NOT SPENDING MONEY WE HAVE! we are barrowing money that your children and their children are going to have to pay back. 700 billion is a lot , lot of money. I want to see the American auto industry flourish, but it can only do this at a much smaller industry. The whole mindset of the peole involved needs to change, because come March 30th, and there's not a really, really conservative long range plan on the table, the Government is going to get involved in New Job training with our infrastructure and existing industries in mind. because we don't have the money to spend it both ways. I wish things were better, but their not and the sooner we realize that the faster we are going to prepare for the future. There is no such thing as a job guarranty anymore in any industry. I'm sorry if I disturbed anyone holiday, but we have to think about what is really important in life, like taking care of the children, their education and the elderly. Imagine what would happen come March if the Social Security Administration was in competition for the same dollars that Detriot is begging for, because that's not really that far off the mark! GM, Ford and Chrysler = self;help That Mr Wagoner and Mr. Gettlefinger is the future. The pathway to hell is paved with good intentions.

grapeknutz
01-01-09, 09:41 AM
I would like to be really optimistic, but the facts don't lend themselves to that perspective. The Dow Jones ended the worst year since the great depression at around 8700 and we are as close to a full depression as we've ever been. Unless Detriot and the UAW decide that "They" are going to tackle the real Economic situation "NOW", then come March 30, we're going to be closed, Period! the Big 3 don't hold the 70% they once did, they hold 19% and dropping. So far GM has failed over and over at developing more market attractive models then ever. 'Can you really compare a Nissin Sentra with a Chevy Aveo ? beyond that we have the Colbalt, and frankly folks ain't breaking down the doors to get one of these either. I'm not a Union basher, and at this point I really don't know what their game plan is, but I can sum up what should be in their immediate newsletter, New Job Training center to Open soon ! Ford seems to be in almost OK position, GM as of Monday had a 0 balance in their operations bank account, save for the billions that the government deposited last night. But the senior management at GM needs to be replaced. I really don't think any long term plans exist. As is the case with Chrysler, their long range plans hold very little in a competitive model lineup. And whoever runs GM marketing and advertising needs to be fire at once. The reality is that the big 3 automakers are going to need about 1/3 + less workers that at present. And no matter how rosey the water is scented, the taste is bitter. GM needs Chevrolet, Cadillac and Buick. GMAC is a viable company and should be invested in, Chevy needs a total revamp, Hummer, How did this vehicle make it through "concept initiation"? what market is it directed at? all it's models are on Consumer reports WORSE MADE list, Jeep rounds out the list? Combine Pontiac models with Chevy. Decide if Buick is worth reshaping, I think perhaps it is, (But my opinion doesn't matter). What is most troubling to me is that 1. the US government Does Not want to get into the auto building industry. 2. I belive Mr. Gettlefinger would be quite happy to go home on April 1st and have a beer or cup of coffee and say "Well I did my best for the retired members, but of course we all laid off since the company is in bank receivership. and 3. I don't think anybody involved understands that WE ARE NOT SPENDING MONEY WE HAVE! we are barrowing money that your children and their children are going to have to pay back. 700 billion is a lot , lot of money. I want to see the American auto industry flourish, but it can only do this at a much smaller industry. The whole mindset of the peole involved needs to change, because come March 30th, and there's not a really, really conservative long range plan on the table, the Government is going to get involved in New Job training with our infrastructure and existing industries in mind. because we don't have the money to spend it both ways. I wish things were better, but their not and the sooner we realize that the faster we are going to prepare for the future. There is no such thing as a job guarranty anymore in any industry. I'm sorry if I disturbed anyone holiday, but we have to think about what is really important in life, like taking care of the children, their education and the elderly. Imagine what would happen come March if the Social Security Administration was in competition for the same dollars that Detriot is begging for, because that's not really that far off the mark! GM, Ford and Chrysler = self;help That Mr Wagoner and Mr. Gettlefinger is the future. The pathway to hell is paved with good intentions.


I remember back in the day when GM decided to go with the "corporate engine" in 1978, I was in the dealer network as a mechanic and we were shocked when this happened! We had customers come in with Oldsmobiles with a Chevy engines in them to the customers dismay. Even the Olds dealer would refuse to work on them and the owners of the cars wanted GM to buy them back as they thought they were being swindled by GM. This was to "save" money for GM, but the quality of the build contineued to get worst, and the customer satifaction continued to decline. To me this was the water mark of GMs decline to posible bankuptcy and it's image of poorly built cars.

WB9MCW
01-01-09, 07:29 PM
Well put Killian I think you hit the nail on the head.

The formula is broken and it needs a major overhaul.

To put the burden on the future generations of Americans is not right period.

If any of the 52% of the GDP small business companies get in trouble well who saves our azz?

Remember The great Senator Clinton's comment as the first lady "We can't help it if you small businesses are under capitalized and have trouble making it through tough times." :bash

The last thing I want to see is the government get into the health care business. We will end up like Canada. They come to the US for operations on their own nickel (more like saved up Gold coins) since the waiting list is so long in their own country. Some great solution that is. :puke

We have major issues ahead for the new "I am gonna bring you great change" President. Notice as soon as he was elected he started back tracking about how big the economy problems are and how it may take him 1-2 -- well heck maybe 4 years to turn it all around. He is already figuring he will need 2 terms to fix it all--- RIGHT!!! :chuckle

I think he has just now figured out how big a job he has in front of him and now with the new Zion-Hamas War just starting he will be tested as soon as he begins as well Ms. Hillary too! ;shrug

I am sorry to say the government is not very good at business and if they were held to the standards they hold all the "real business companies" (Banks and Car companies evidently excluded) to they would never survive. ;LOL

This whole business of the Freddy/Fanny bailout is pathetic and a total ripoff of the Taxpayers to bailout the banks (who print and control our money in the first place) and to give control to one man (who has the banks best interest in mind being an ex one of them) is a total sham and trickery at its finest. Shame on the all of the Repubs and Demos for this crap. I do not trust either party anymore.:ugh

Funny how the banks are sitting on the money now with no accountability and the dumb azzes in Congress look like a bunch of nim wits because they were and are. Stupid is as stupid does. :bash

Full time munti-term, multi-millionaire, lawyer/banker politicians who vote their own wages and belong to the "elite ruling class", Self appointed big wigs are the real problem and the fact that many years ago President Wilson sold the USA to the New York bankers who were afraid of losing financial control of the country because of the wealth transfer happening to the farmers and the western expansion of the USA to the banks south and west was the real beginning of the problem. It is now just finally caught up to us all. :mad

The depression generation is very well into retirement and most are doing very well indeed -- Look at em all in Florida and AZ. and at the BJ auction spending all their wealth. They do not have to worry about Social Security. The silent generation now is well into retirement is in about the same boat -- good timing and they will be OK before SS goes broke. :D

Ahh but the Baby Boomers (me) -- we are up the chit creek with out any paddle. The whole damn system will be broken and impossible to repair since there is not enough younger workers to pay into SS to make it work any more. :confused

But fear not Baby Boomers because the new great King Obama has promised us a great change and he and all of his smart cronies will finger out another way to fix it for a while longer to get all of us Baby Boomers through a decent retirement. :upthumbs

No doubt at the expense of the future generations. You see this is how modern politics works - it is called "Passing the Buck" or should I say "NO BUCKS" on to the next generation. :L

Sorry I paint such a bleak future bit I am just trying to be real and relate all that History should have taught us. I guess us Americans think the great ruling elite who are so smart and know it all will finger it all out and save us all! --- NOT!!! :chuckle

As Henry Ford said many years ago "Tis good the average American knows not much about the real financial conditions and operations of the US government and how the ultra wealthy bankers have it all worked out because if they did there would be a revolution at the White House the very next morning." :mad

Does an ostrich with its head in the sand come to mind!:W

Sheeple of the USA need to wake up and vote the bums out of congress and put in real honest non-lawyer and non-banker types who will run a real county the way the forefathers designed it to be. Go to Washington and serve a term maybe two and then go back to where you came from and get back into the business that made you in the first place. :thumb

Boy have we deviated from that original formula. No wonder it is all screwed up these days. Wealthy career friggin lawyer/banker politicians for life that is the problem in a nutshell. And it is very wrong! :ohnoes

"JMO and I might be all wrong" -- as Dennis Miller likes to say. :beer


(http://www.corvetteactioncenter.com/forums/members/killain.html)

Don Strausburg
01-01-09, 07:40 PM
Come on Rob, get real. Just because JD Power says they are good we should all go out and buy one. JD Power is nothing more than a big joke. They are hired by anyone who wants there product rated. JD Power is in business to make money. If they are hired by a company to evaluate their product do you really believe that JD Power is going to give them a negative review? You always get what you pay for, and if you pay enough you can get them to say the Chevy Vega was one of the best economy cars ever built. :puke

motorman
01-01-09, 09:35 PM
guess what nancy and barney will be designing your next corvette. do you think that the libs are going to allow GM to build a 638 HP 205 MPH car ???? people wanted change and they are going to get more change than they ever imagined.

killain
01-02-09, 12:06 PM
Very well put WB9MCW, One would think that after 233 years we'd learn something. But as sheeple we allow the wealthy to decide the furure course for us. History is almost like Math, When you do as you did, you get what you'v got. J.D Power is a company, a business, paid to do research on other businesses. What do you think their going to find? If you doubt this, Look at the good ol. BBB The Better Business Bureau, in every major city and town. Do you know who pays for the Better Business Bureau to operate? The regional Business community. Knowing this, using common logic, how do you think their going to find if you have a dispute with a business? And don't get a headache trying to figure this one out. Just look at Cuba, fifty years ago yesterday, Fulgencio Batista ' El Mulato Lindo' fled Cuba, do you know who left with him? Cuba's wealthy, and Cuba's wealth. If your a purist, look at America, Thomas Jefferson, a nice guy, reasonable and optimistic, he said "Banking establishments are more dangerous than a standing army!" Fast forward to the begining of the twentieth century, another wise individual said " There is no tyranny facing this country, more dispised and vile than that of wealth." Teddy Roosevelt, the only American president to be awarded the Congressional medal of honor. So if anyone out there thinks that a soul on GM's fourteenth floor is interested in saving the company, then they are few and far apart. I'm quite sure Mr. Wagoner has sold his stock and has his assets in offshore accounts and is perhaps hoping something incredible happens soon after January 20th. But just in case,.... If General Motors is saved, it'll be by some lone soldier down the ranks. I hope so. If this country is to make it to 333 years, it's going to take a something incredible as well. A PA politician once told me, "Wealthy people don't vote, they move!" There's 85 days and counting, I'm hoping their well used.