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286 Comments
- ezekiel105, on 11/17/2008, -13/+80This is a perfect example of how the market could help ease the burden if these companies fail. We already have multiple foreign car companies with factories in the U.S. They make better cars for less money. If the domestic companies can't compete, let the foreign companies with domestic factories take over.
- tonycomp, on 11/17/2008, -5/+60capitalism at its finest, this is exactly how it is suppose to work! automaker builds ***** cars, no one buys ***** cars, other automaker makes better cars, people buy the better cars, ***** car builder goes out of business... wash, rinse, repeat it's the f'ng cycle of business.
- phreak79, on 11/17/2008, -5/+51That's the thing, no one seems to care about the consumer in all of this. If the consumer was buying enough GM cars they wouldn't need to be bailed out. The fact is that they aren't buying GM cars. That should tell congress something.
- hokie47, on 11/17/2008, -1/+27One problem is the way all the car manufacturers do business even Toyota somewhat. Why have these huge dealer lots with tons cars? It is the push way of doing business. Why not get rid of the dealers, have smaller test lots with just a few cars and then the consumer can custom order his or her car and get it in within two weeks or less. It will be kind of like the Dell's direct model but with cars. Ford talked about doing this but chicken out.
- TheTaoOfBill, on 11/17/2008, -7/+30The problem is not that GM makes ***** cars (They do but that's not where the problem exists)
The problem exists in the auto workers unions.
The unions have completely destroyed the industry. They've gone on strike for ridiculous benefit changes with no consideration on if the company can even afford it. Working in the auto companies used to be the best job you can get in Michigan with a basic high school education but it wasn't enough for the unions. They got greedy and made it impossible for the auto companies to make a profit and still compete with foreign auto makers.
GM should drop some benefits to it's workers. If the unions have a problem with it I'm sure they can find someone else to work for them. With the unemployment rate so high I'm sure they can find people to work who are less whiny about the benefits they get.
Unions are meant to keep workers safe and keep them from being taken advantage of. Not to sap an industry dry. - brad3378, on 11/17/2008, -2/+25As far as I know, Toyota is the only company that builds a full size pick-up truck comparable to what Detroit builds. At the moment nobody wants to buy trucks, but eventually businesses will need to replace fleet vehicles. A failure in Detroit could be great news for Toyota in the long run if they can come up with the required production capacity.
- ka9dgx, on 11/17/2008, -3/+25If they made cars worth buying, instead of ***** with crappy mileage, they wouldn't be in this fix.
- hirro, on 11/17/2008, -3/+25As someone that would (will) be drastically affected by the downfall of the Big Three I'm still all for it. My house value will drop significantly and other businesses in my county tied to them will go under.
However, postponing the inevitable causes a harder crash in the future. The business cycle fluctuates naturally, during the hard times failing business go under and more efficient companies take them over. This encourages competition, innovation, lower prices and a stronger economy. - greenm1981, on 11/17/2008, -1/+23Labor costs are not the reason that GM and Ford are foundering. GM and Ford have always had to pay for relatively high labor costs, good times and bad.
What is new is the position decided to take with respect to their finance sector. GM decided that getting into the banking industry was more profitable than innovating the next generation of autos. They leveraged themselves terribly, particularly in the "credit default swap" markets, and started feeling the pain when the housing bubble started bursting.
By diverting their capital towards making and/or buying sub-prime loans, they failed to properly invest in the production capital required to innovate and meet market demand.
So, no labor is not the root of Detroit's problem. They screwed up when they decided to to prop up demand for their ***** vehicles by fueling the sub-prime bubble and taking a risky position in the CDS market. They should've stuck to making cars people want. - hitkaiser, on 11/17/2008, -2/+22reach for under the seat, pull the lever and push backwards.
- BuzzFriendly, on 11/17/2008, -3/+17Here are a few good ideas to put US automakers on track.
1. Kill of the UAW NOW!!!!!!!
2. Change the management.
3. Don't build to compete build to lead and have others compete with you. - Brian48216, on 11/17/2008, -0/+12Nobody cares about your blog.
Stop advertising it. - inactive, on 11/17/2008, -1/+13why should we help these companies when they've neglected what we needed all these years?
Instead of building dependable small cars, they've focused on the opposite.
Let the oil companies help them out, though i believe it's too late because we're gonna bail them out soon.
I don't see the gov't helping me out when i take a loss in my business - TheWriteGuy, on 11/17/2008, -1/+12I would imagine most of these brands and divisions would be sold to other automakers/companies.
- samimnot, on 11/17/2008, -2/+12I like that most of the posts in here are putting the blame for this disaster, squarely where it belongs.
Big 3 Management / Greedy Unions and Inept State Governments
I am firmly against bailing them out, and this article is correct that most of the jobs lost would be replaced by other manufactures. Giving these companies Billions now (followed by Billions every 3 or 4 months after...is not the answer). - DarkStar3333, on 11/17/2008, -1/+11Automotive assembly is not a skilled profession. $15/hr is appropriate considering your job is no harder then someone working at a Coffee Shop, Loading Dock or Moving Company.
Why should a line worker be paid $25-40 an hour to do the same thoughtless repetitive task while other professions require years of education and experience to reach the same pay grade?
Living in Windsor I am used to the mentality of work a half day but get paid for overtime. Ask yourself why the Unions have yet to provided a single contract concessions?
The problems with these companies have been apparent since the 80's and 90's and absolutely no aid should be provided. If blood needs to be spilled to make the industry understand the reality of the situation then so be it. - kero552, on 11/17/2008, -0/+10Sorry, but to compare WW2 to Iraq war is wrong. The scale is completely different (not to mention that Iraq war has ended 5 ago, followed by occupation and now it is probably called assistance to domestic forces).
Pentagon should have bought these MRAPs long time ago, humvee is basically jeep, formerly no armor = not good in hostile environment. Besides MRAP can be delivered by other companies like Force Protection Industries (first MRAP, but formerly there was not demand for them, they had delays -> they only have 1/3 share of contracts) - StonerThomas, on 11/17/2008, -0/+10Because people are picky little bitches more or less. Car dealers know they need to try and close the deal the day you walk in(even if that's annoying). This is most doable if they have the exact model you want on the lot.
As for the direct model, casual consumers are the enemy of the marketer. The longer someone has to decide if they want to buy, the more likely the answer will be a 'no'. - nutsackninja, on 11/17/2008, -0/+10Well said, the problem also is on the average union worker who has no reason to be an efficient employee. My neighbor always works the night shift at GM, when he comes home he never sleeps (in the summer he is always working on his car or deck). I asked him one day when do you find time to sleep? he was like I sleep at work they don't know what us plant maintenance guys do, its the best job in the world. Well now the next generation is going to have to pay for it.
- ZenMojo, on 11/17/2008, -2/+12Anyone remember when the big 3 were about to fail in the 70's because Japanese cars had better gas mileage and domestic car companies were lobbying fiercely to fight against CAFE standards? Anyone remember back in the 1980's when they started getting bought up by foreign car companies? Remember in the 1990's when they got partnered with foreign car companies? Remember in the 00's when the foreign car companies broke it off because they still couldn't make any money? Remember when we bailed them out with billions of dollars?
No? Really? Not at all? Well, go ahead, throw some more money at them and see what happens. I'm sure it's all the Unions' faults and has nothing to do with the H2 or the Ford 500 or any of that other stupid executive-level *****. - diggThis77, on 11/17/2008, -0/+9None of the Big 3 want to file for Chapter 11 because if they do then they won't be able to take money from the govt. AND the consumer will have another thing to consider when buying a vehicle from them. Namely...will my warranty still be valid when something basic on this POS breaks in the first 3 years.
Second, as many comments have said the Unions decided to screw the hell out of the Big 3 by demanding 50 thousands dollars PLUS a year on jobs that a high school graduate can do with very little training. While I'm not trying to belittle anyone that works for a Union in an auto plant ask yourself this question. Can anyone do my job with very little training? Most jobs that pay 50k plus require some kind of training/experience/apptitude or whatever you want to call it that means that only a portion of the population can do it. This has made vehicle holy ***** expensive and someone making $10 an hour isn't going to be able to buy a 30k vehicle which is why loans have extended out to 72 and even 84 months!
In the end the govt will bail the Big 3 out even though most say let them fail and the Unions will continue to screw the rest of the US and world so that they can have an extra 10 minutes on break and another $10 an hour on their already $25 an hour job. - a2fan, on 11/17/2008, -2/+11Letting any of the Big 3 fail won't be a political option. Democrats are in power, and one of their largest constituencies is the labor unions. It's practically a slam dunk that there will be some kind of assistance.
- clemsontiger, on 11/17/2008, -2/+11It is funny that we can all see this but yet the government wants to bail them out again. On top of that the government wants to push them into a market that isn't there (electric cars) which is going to cause them to fail even harder. Use this bailout money to train the employees that lose their jobs. Lobbyists need to get off their knees and stop blowing our economy.
- rashawty, on 11/17/2008, -0/+9Also i forgot to add WHAT?! You want to tax foreign companies excessively to what end? So they'll close up the American plants or so consumers can pay higher prices on their vehicles. And what's to prevent other countries from retaliating. I'm all for taxing imports but i think your idea is a little overboard.
- diggit83, on 11/17/2008, -1/+10You think GM is the only company capable of developing these vehicles?
- Shakermaker, on 11/17/2008, -3/+12Get rid of the unions. In this day and age, there are enough laws on the books to protect workers. If car companies didn't have to pay ridiculously high salaries for the unions, they wouldn't be going bankrupt.
...or at least not as fast - ifruit, on 11/17/2008, -1/+10Bailout of GM is a Bailout of UAW, nothing more.
- smyph, on 11/17/2008, -2/+11So you know for a fact that Toyota pays far less than GM and Ford?
- scoottie, on 11/17/2008, -2/+11If the Big 3 fail its the fault of the UAW for being greedy bloodsuckers The Big 3 need to file for Chapter 11 so they can restructure and get rid of those ***** up union contracts. If the Big 3 get this bailout all Americans should stop buying American cars until the UAW decides to renegotiate.
- brstilson, on 11/17/2008, -3/+12"But, do we want foreign companies taking up that slack? I'd personally rather give my money to domestic companies than foreign because that money is (in theory) being reinvested in jobs and growth in the US if the company is US owned."
Tell that to the millions of auto workers who have been laid off by their employers, the domestic auto makers who shipped their jobs to China and Mexico. Trickle-down theory doesn't work because companies very rarely invest their money back into the US. They use us for our massive consumer spending habit, but when it comes to giving some of that wealth back, they high-tail it to a country where they can pay workers $1 a day an avoid our health and safety requirements.
This economic crisis is the direct result of more and more companies for years taking from the coffers of the American consumer and giving nothing back. They did it because the atmosphere on Wall Street isn't "how can we make our company stable and give it some long-term life," it's "how can we make a profit NOW?" This short-term thinking actually worked to their disadvantage. Now that vast pool of consumer wealth is drying up, their number one customers are broke. They auto industry is broke because the guys in the tool and die shop, the hardware store, and the refrigerator factory lost their jobs and can't afford new cars every few years anymore.
When you take the very thing that generates your customer's wealth, you are hurting yourself. If all the jobs go to China, who will be left to buy the gas grills, the televisions, the Blu-Ray players, the new minivans, or the new tool set?
The fact is that this economic crisis is only hurting the foolish companies who only had short-term profits on their minds. There are companies out there that stayed out of debt and looked to the long-term who are not in nearly as much trouble as the banks and the auto industry. This crisis is ironically what is so great about capitalism. We should let these companies that were mismanaged into oblivion die so that something better can take their place. I happen to know first-hand how wasteful GM is when it comes to bureauocracy. The unions share some blame in this, too. They kept asking for more and more perks until they effectively priced their workers right out of the market. Who would hire a $30 an hour with full medical bolt-turner instead of a $1 an hour no benefits bolt-turner? Nobody that wanted their company to make any money, that's for damn sure. - ZenMojo, on 11/17/2008, -3/+11*****. The problem IS that GM makes ***** cars. GM's sales are down, not their production. Which means the auto workers are producing their fair share in response to the demand. The problem is with the executives making millions of dollars to develop cars nobody wants, not with the 150,000 GM workers and their ***** healthcare.
Simple math. The bailout is 25 billion dollars. GM's share would be more than 8 billion dollars. However, if you divide that by 150,000 GM union workers that's around 55 thousand dollars each. That's a pension for every worker or healthcare for about 40 years for each. Except the big 3 are already asking for MORE money.
Now, ask yourself. Is it the pensions and healthcare costs that are sucking the auto industry dry or is it the fact that the big 3 are ***** retarded and have been doing their best to fight innovation for decades? - inactive, on 11/17/2008, -3/+11Another reason unions are in fact inhibitors of progress. They served their purpose but now it's apparent that they are no longer a benefit to ANYONE. Toyota, Honda, and other manufacturers have shown that unions are no longer needed. When check out clerks went on strike in California (UFCW) all they did was prove (yet again) how useless and toothless they were. Sure they got some of the raises they wanted for their membership, but supermarkets laid off a lot of people to pay for the raises. Those that were laid off were not the senior people making the most money, the unions threw their newest members under the bus. Nope, unions are worthless nowadays.
- computershack, on 11/17/2008, -2/+10A question: If Ford US goes under, what happens to Ford Europe? If GM goes under, what happens to Vauxhall/Opel, GMs European arm? Ford Europe own a few other brands too such as Land Rover AFAIK.
- michaelpinto, on 11/17/2008, -6/+14This is a national security issue: What’s Good for G.M. Is Good for the Army:
http://www.nytimes.com/2008/11/16/opinion/16clark. ...
"In a little more than a year, the Army has procured and fielded in Iraq more than a thousand so-called mine-resistant ambush-protected vehicles. The lives of hundreds of soldiers and marines have been saved, and their tasks made more achievable, by the efforts of the American automotive industry. And unlike in World War II, America didn’t have to divert much civilian capacity to meet these military needs. Without a vigorous automotive sector, those needs could not have been quickly met." - inactive, on 11/17/2008, -0/+8Maybe GM should think about being a defense contractor and abandon the civilian market.
- freeridstylee, on 11/17/2008, -2/+10If GM files bankruptcy, the government will have to take over their healthcare/pension plan. The cost of that alone would cost taxpayer's much much more then a loan now.
- mikeymondavi, on 11/17/2008, -1/+9Let them fail...
This is a union issue and the unions contract with GM should be voided. Not to mention, why should myself, my son or my one day grandchildren pay for this? So they can keep their 17 million a year viagra stipulation? ( http://www.consumeraffairs.com/news04/2006/04/gm_v ... ) Why the hell should my wallet be on the line for that. Hey, GM, heres a hint. If you want to continue to sell cars, get rid of the unions, get some decent management in there who actually can produce results and ultimately, learn to take the lumps life gives you when you screw up and run a business stupidly. You made your bed, lay in it without stealing from the rest of us to keep your stupid business model going. - FountainDew, on 11/17/2008, -1/+9You're an everyday hero.
- Firebird2k6, on 11/17/2008, -0/+8Blame the UAW, not hte automakers
- acknotSW, on 11/17/2008, -0/+7The biggest problem with unions and other groups is that they never go away after they win their wars.
Everything unions were created for back in the day is covered under federal and state laws now and all they can do to continue to justify their existence is push for wages and benefits that are out of line with the rest of the workforce.
Someone driving a forklift in a small warehouse might make $15 to $20 an hour, someone driving a forklift at fords is making $25 to $30 an hour with full medical, pension, and other benefits. There is a serious problem there.
The republicans are in a similar mess right now, many of the biggest issues that they fought for or against in the 70's, 80's, and 90's are irrelevant today. - milkmage, on 11/17/2008, -0/+7um
the Buffalo is made my Force Protection
the Stryker is made by General Dynamics Land Systems
the Bradley is made by BAE
the HMMWV is made by GM, but other military forces in the world have an equivalent that's not
national security issue MY ASS.
did you read the whole article you linked? "To be sure, the public should demand transformation and new standards in the auto industry before paying to keep it alive." - even the Army says ***** GM unless they change their ways. - NonLeftistDiggr, on 11/17/2008, -1/+81. Obama won and the congress is san francisco blue, when hell freezes over at the same time a pig flies that will happen
- inactive, on 11/17/2008, -2/+9nissan has the titan and honda will soon roll out a v8 ridgeline
- Anub1s, on 11/17/2008, -0/+7One thing that the American people apparently fail to grasp is the mere fact that if one company fails, regardless of market share, the rest of them will pick up the slack, the economy will recover, and everyone will go on with their lives. Nobody wants that SHORT time span of discomfort where things are changing, people are always afraid of that, but they need to learn that it's part of economic growth. Panic and fear are what's destroying this country. People are leading themselves over the cliffs that they've carved out themselves.
- inactive, on 11/17/2008, -1/+8Remember, if we let GM go under not only will that add thousands of it's workers to the ranks of the unemployed but it will affect the people who work for the companies that supply it with parts, at dealerships, etc. I'm not sure that adding tens, (hundreds?), of thousands of people to the unemployment line is the best way to turn the economy around.
Not to mention it's a no win situation for the government. If they bail them out they'll get hell for it. If they don't they'll be blamed for the huge loss of jobs and making the economy worse. - sonicomega, on 11/17/2008, -1/+8Economic stimulus packages in the amount of new cars....FTW
- bman1984, on 11/17/2008, -1/+8The Aveo is a perfect example. 32 mpg hwy in a tiny little car is ***** for engineering, and ***** for effort. GM failed horribly with this car, and many like it. They get some sales from people who believe that they are efficient. Couple that with long long list of constant problems with just about every line of GM vehicle that there is and you get the current situation.
I get 32mpg out my v6 mazda6, 220hp. My other vehicle, toyota corolla can get 42 mpg hwy, and I assure you it is much nicer and has much more room than an Aveo. GM made by a bad move by assuming people will always by their cars, just because they are GM and they should fail for it. - StonerThomas, on 11/17/2008, -3/+9Keep in mind: if detroit falls, we're coming to your city! And you don't want that.
- mnocket, on 11/17/2008, -1/+7" They make what people want"
Oh, well then surly they have no problem selling them. - inactive, on 11/17/2008, -1/+7and for the first time in 17 years it has been beaten by the civic, corolla, camry, and accord
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