The Big 3

[Central Scrutinizer]

My dad spent his life pouring foundations, my brother is a mason, both of them are (was in my dad

[Spawn's dad]

I'm really not clear what your point is. We're competing with an Asian market who does it cheaper and better. Precedent in this country indicates that mfging will continue to move to countries where it's ever cheaper to mfg.

[ZenLunatic]

What has been driving the market for US vehicles is cheap loans with no down payments, so people have been trading up to negative equity for years. So many people are underwater on their auto loans -- I think we have a stat that more than 35% of people who have a car loan are upside down (though don't quote me -- I need to look it up). So now they can't trade them in because they can't get another loan -- so traffic is way down in dealerships across the US.

 

And you are right about T and H being smart and manufacturing and selling high quality, high mileage vehicles. However, I can argue that SUVs and trucks last longer than passenger vehicles on average. I have the stats to prove it (its my job).

 

T and H also sell trucks and SUVs -- and they are taking a bath on them too. They just have been smarter about their product mix as the big 3 ceded the small/midsize passenger vehicle market years ago so they could own the bigger profit SUV truck market -- which they had to in order to pay their US workers in plants around the US.

 

Do you know how a car is made economically -- and how long engineering just one vehicle takes? This is not a "pick up the pieces and start over" kind of thing -- like a bank.

 

First off, you cant have a company driven by cheap loans. Cheap money is the reason we are in the this mess. If you rely on that, you're company is garbage. You also have to admit to being a fool if you are in a upside down car loan. If you buy a car with no money down, you are trying to live way past your means. Stupid irresponsible move. Companys should be driven by quality products at good prices.

 

Well it seems like GM really doesnt know how to make a car economically. It hasnt for the past decade or 2. So what's going to make me think they know now? At least give someone else a chance.

[Guest Jules]

Without knowing too much about it, I'd wager that both US and Japanese automakers source a good deal of their parts from third world countries.

Yeah cause they're fucking idiots.

[bigshoulders]

Right, and towards Jude's point it's still their best selling product and they have to exploit what ever strengths they have left.

 

What is aggravating is stuff like this..

link

 

The 65 mpg Ford the U.S. Can't Have

Ford's Fiesta ECOnetic gets an astonishing 65 mpg, but the carmaker can't afford to sell it in the U.S.

 

VW has been selling affordable passenger-car diesels for years decades.

I think FORD deserves to go belly-up for such short-sightedness.

[bjorn_skurj]

Oh man. They just said on CNN that UAW-staffed car companies pay $1,600 per car for health insurance costs, compared to $200 for the non-union Japanese companies who manufacture in the U.S. And, apparently when the Big Three lay people off, they have to pay 96 percent of their salary.

I am as pro-union as they come, but holy shit. No wonder these dudes are up the River Fucked. I would most definitely peg any bailout plan to reworking these contracts so as to bring them in line with reality.

[mountain bed]

Oh man. They just said on CNN that UAW-staffed car companies pay $1,600 per car for health insurance costs, compared to $200 for the non-union Japanese companies who manufacture in the U.S. And, apparently when the Big Three lay people off, they have to pay 96 percent of their salary.

I am as pro-union as they come, but holy shit. No wonder these dudes are up the River Fucked. I would most definitely peg any bailout plan to reworking these contracts so as to bring them in line with reality.

Like I was saying a few pages back, my friend Mike has been laid off since Feb. '07 - and still makes $35+/hr. To do NOTHING. It's crazy, I tell ya.

[Guest Jules]

They also support more retired/ex-employees than current employees. It's a clusterfuck of biblical proportions.

[bjorn_skurj]

What a racket. Apparently the union leaders were no more cognizant of the non-sustainability of their methods than management.

[ZenLunatic]

They also support more retired/ex-employees than current employees. It's a clusterfuck of biblical proportions.

 

The sad part about all this, is that we as tax payers will probably end up giving them money. Then later, they will ask for more and we maybe give them more. Our leaders have lead us astray, the only thing we can do now is protect our own wealth.

[chearing]

Should the Feds give the big 3 an injection of cash in the form of loans? No, that's just throwing good money after bad and postponing the inevitable restructuring needed. Should the Feds allow the Big 3 to cease to exist? No, the implications across the entire economy would be far ranging and pretty nasty in any economic climate; in today's economic climate it could be devastating. Should the Feds put stringent conditions on the automakers to force them to change course? No, the odds are low that some federal oversight board can accomplish what lots of pretty smart executives have been unable to accomplish.

 

What the Feds should do is provide the DIP financing necessary to keep these 3 going once they've filed for Chapter 11. A likely problem right now is that if any one of the 3 filed Chapter 11 the chance that any bank would step in to finance ongoing operations during the restructuring has to be very low given the credit markets. The Feds can step in to provide that ongoing financing, be first in line to be repaid and let someone else come in to restructure the companies or buy them out without the incredible burden of the existing labor and pension contracts. That will almost necessarily lead to hardship for many of the past and present workers which is a terrible thing and the gov't. should be planning to help those people out but doing nothing is only going to lead to the situation getting worse not better.

 

The Big 3 automakers lose between $500 and $1500 on every car sold....Honda, Toyota and Nissan make between $1000 and $1500 on every car sold. It's been like this for years and doing anything to prolong the pain simply doesn't make sense.

[Sweet Papa Crimbo]

The Big 3 automakers lose between $500 and $1500 on every car sold....Honda, Toyota and Nissan make between $1000 and $1500 on every car sold. It's been like this for years and doing anything to prolong the pain simply doesn't make sense.

 

 

With the cost of retiree benefits running at c. $2000 per car, one can see the implications and fallout.

[mfwahl]

How To Save A Major Automobile Company by Neil Young

Find a new ownership group. The culture must change. It is time to turn the page. In the high technology sector there are several candidates for ownership of a major car and truck manufacturer. We need forward looking people who are not restricted by the existing culture in Detroit. We need visionary people now with business sense to create automobiles that do not contribute to global warming.

 

It is time to change and our problems can facilitate our solutions. We can no longer afford to continue down Detroit's old road. The people have spoken. They do not want gas guzzlers (although they still like big cars and trucks). It is possible to build large long-range vehicles that are very efficient. People will buy those vehicles because they represent real change and a solution that we can live with.

 

The government must take advantage of the powerful position that exists today. The Big 3 are looking for a bailout. They should only get it if they agree to stop building autos that contribute to global warming now. The stress on the auto manufacturers today is gigantic. In order to keep people working in their jobs and keep factories open, this plan is suggested:

 

The big three must reduce models to basics. a truck, an SUV, a large family sedan, an economy sedan, and a sports car. Use existing tooling.

 

Keep building these models to keep the workforce employed but build them without engines and transmissions. These new vehicles, called Transition Rollers, are ready for a re-power. No new tooling is required at this stage. The adapters are part of the kits described next.

 

At the same time as the new Transition Rollers are being built, keeping the work force working, utilize existing technology now, create re-power kits to retrofit the Transition Rollers to SCEVs (self charging electric vehicles) for long range capability up to and over 100mpg. If you don't think this technology is realistic or available, check out the Progressive Insurance Automotive X prize. Alternatively, check out Lincvolt.com or other examples.

 

A bailed out Auto manufacturer must open or re-purpose one or more factories and dedicate them to do the re-power/retrofit assembly. These factories would focus on re-powering the Transition Rollers into SCEVs but could also retrofit and re-power many existing vehicles to SCEVs. These existing vehicles are currently sitting unsold at dealerships across America.

 

Auto manufacturers taking advantage of a government bailout must only sell clean and green vehicles that do not contribute to global warming. No more internal combustion engines that run exclusively on fossil fuels can be sold period.

 

No Big Three excuses like "new tooling takes time". New tooling is not a requirement for SCEV transition rollers.

 

Build only new vehicles that attain the goal of reversing global warming and enhancing National Security.

 

Government legislation going with the bailout should include tax breaks for purchasers of these cars with the new green SCEV technology. The legislation accompanying the bailout of major auto manufacturers must include directives to build only vehicles that attain the goal of reversing global warming while enhancing National security, and provide the financial assistance to make manufacturing these cars affordable in the short term while the industry re-stabilizes.

 

Eventually the SCEV technology could be built into every new car and truck as it is being assembled and the stop gap plan described above would have completed its job of keeping America building and working through this turbulent time.

 

Detroit has had a long time to adapt to the new world and now the failure of Detroit's actions is costing us all. We pay the bailout. Let's make a good deal for the future of America and the Planet. Companies like UQM (Colorado) and others build great electric motors right here in the USA. Use these domestic electric motors. Put these people to work now. This plan reverses the flow from negative to positive because people need and will buy clean and green cars to be part of World Change. Unique wheel covers will identify these cars on the road so that others can see the great example a new car owner is making. People want America to win!

 

This plan addresses the issue of Global warming from our automobiles while enhancing our National Security and keeping Detroit working.

[ZenLunatic]

What the Feds should do is provide the DIP financing necessary to keep these 3 going once they've filed for Chapter 11. A likely problem right now is that if any one of the 3 filed Chapter 11 the chance that any bank would step in to finance ongoing operations during the restructuring has to be very low given the credit markets. The Feds can step in to provide that ongoing financing, be first in line to be repaid and let someone else come in to restructure the companies or buy them out without the incredible burden of the existing labor and pension contracts. That will almost necessarily lead to hardship for many of the past and present workers which is a terrible thing and the gov't. should be planning to help those people out but doing nothing is only going to lead to the situation getting worse not better.

 

The existing labor and pension contracts are a big part of the problem though, why do you want to keep them in tact? The fact is, people will suffer and you cant avoid it. Trying to avoid it makes political sense but not economic sense.

[chearing]

The existing labor and pension contracts are a big part of the problem though, why do you want to keep them in tact? The fact is, people will suffer and you cant avoid it. Trying to avoid it makes political sense but not economic sense.

 

 

I wasn't saying keep them intact at all. I agree that the pensions and labor agreements are a huge part of the problem and need to be scaled way back or eliminated which would be possible in bankruptcy. I was trying to say (not very clearly) that the Feds should be prepared to provide some level of safety net for the folks displaced in the inevitable upheaval that the bankruptcies will create. That safety net already exists in unemployment benefits, etc which can and probably should be extended in this situation.

[ZenLunatic]

I wasn't saying keep them intact at all. I agree that the pensions and labor agreements are a huge part of the problem and need to be scaled way back or eliminated which would be possible in bankruptcy. I was trying to say (not very clearly) that the Feds should be prepared to provide some level of safety net for the folks displaced in the inevitable upheaval that the bankruptcies will create. That safety net already exists in unemployment benefits, etc which can and probably should be extended in this situation.

 

Yeah we have to try to help the people that are hurt the most by this. I just dont support giving billions to the same people who ran the companies at this point. For the most part, we offered them the $25 billion from the energy car plan, they want to keep that and get $25 more. Cmon..... they dont deserve the first $25.

 

The hearings are over. GM needs money now or else they will file Chpter11, they wont make it till Obama gets in so we should hear a resolution soon.

[explodo]

I liked the Mitt Romney piece in the NYT today. He doesn't say anything new or anything surprising, but I think he is right. It won't win him any favors in Michigan, though.

[tugmoose]

ABC ran a piece on the big 3 CEO's arriving in DC in private jets to beg for $25 billion.

[bjorn_skurj]

CNN has been beating that drum as well. One could berate the CEOs for being insensitive to their position, but I think it has more to do with normative behavior in that particular stratum of culture. It probably never occurred to them they were committing a faux pas. Maybe next time, they'll take the bus.

[mfwahl]

"There's a delicious irony in seeing private luxury jets flying in to Washington, D.C., and people coming off of them with tin cups in their hands." - Rep. Gary Ackerman, D-NY

[ZenLunatic]

Really doesnt look like a bailout is gonna happen this calendar year. So happy that America isnt as stupid as I thought it was. Good sense won this time, I just hope we are getting smarter about this whole bailout plan. Worried about what Obama may do once he gets in.

 

If GM wasnt lying, they should file Chater11 early Janurary. GMAC now trying to become a bank to get bailout funds. Dont think this will work either.

[Edie]

Really doesnt look like a bailout is gonna happen this calendar year. So happy that America isnt as stupid as I thought it was. Good sense won this time, I just hope we are getting smarter about this whole bailout plan. Worried about what Obama may do once he gets in.

 

If GM wasnt lying, they should file Chater11 early Janurary. GMAC now trying to become a bank to get bailout funds. Dont think this will work either.

 

Yeah, Chapter 11 is going to be awesome.

 

And GMAC is 51% owned by Cerberus who also owns Chrysler Financial and Chrysler. GMAC probably will get bank status -- Goldman Sachs did.

[JUDE]

How do you feel about large insurance companies acquiring failing banks in order to get some bail out money?

[ZenLunatic]

Yeah, Chapter 11 is going to be awesome.

 

And GMAC is 51% owned by Cerberus who also owns Chrysler Financial and Chrysler. GMAC probably will get bank status -- Goldman Sachs did.

 

I know its gonna suck for Detriot and whoever is directly effected but it is the right move.

 

They can get bank status if they want, but the government has to realize all these businesses cant just start changing into banks just to get money.

[ZenLunatic]

How do you feel about large insurance companies acquiring failing banks in order to get some bail out money?

 

Unacceptable. A bank that gets acquired should not have access to any bailout funds.