National Poll: Public Supports Assisting Automakers
Today, Peter D. Hart Research Associates released a poll taken this week to gauge public opinion about federal assistance to U.S. automakers. The results show that a majority of Americans – 55 percent - believe that the U.S. government should aid the automakers, while only 30 percent oppose such assistance. The poll also reveals that when respondents learned some basic facts about the role that the automakers play in the U.S. economy, 76 percent of respondents predicted that the collapse of the auto industry would be “extremely likely” or “very likely” to trigger an economic depression.
While we find these numbers sobering, we are heartened to see that Americans understand the impact and importance of our industry. We also understand that people expect us to be accountable for the assistance we receive. With 84 percent of respondents saying that the collapse of the domestic auto industry would harm the U.S. economy, we know that this issue is a very important one for the American public right now. Please feel free to share these results with anyone you know who would like to gain a better understanding of the current crisis. - Christopher Barger, Director, Global Communications Technology
- Posted in Business
Shazam
My god… i’m glad to hear this… it’s about time we wake up as a country and understand the impact of doing nothing.
Marcos A B
Aren’t you guys just a little bit embarrassed to be posting stuff like this right now? I mean, with all due respect the whining is pretty unseemly. A business strategy based on pleading with the taxpayers? Ugh.
Joe
“Accountable” is right…I hope every CEO and exec at GM has that thought on their mind..
I have no doubts GM will gain access to the $700 billion or at least get *something* in the way of loans…but please DON’T botch it up and make us all regret it. Having been singing your praises for years now, I’m not ready to be blindsided…if/when this goes through…and GM does what needs to be done responsibly…do you have any idea how many people will look at the company in a better light?? “They asked for help and didn’t abuse it…and those vehicles aren’t half-bad, I guess…maybe I’ll buy from them after all…”
On a happier note…I’m glad the majority of America feels the way they do. The economy everyone is so worried about *directly* connects to GM, Ford, and Chrysler…
Laramie Jordan
“While we find these numbers sobering, we are heartened to see that Americans understand the impact and importance of our industry.”
Of course we are concerned about the impact and importance of the car industry.
But our concern is also about how the car makers are going to make things better, not just bailing them out for the short term. If U.S. car makers can’t fix the problem permanently, we may as well pound that money down a rat hole.
In order for the U.S. car makers to get the money, you’d better show us a really good plan for how you expect to improve things.
Tell us why Honda, Toyota, BMW, and Daimler can make cars profitably in the U.S. while you can’t, and why even VW sees enough future in the U.S. they are planning to invest a billion or more dollars in a new plant at Knoxville. None of them are asking for a bailout.
I can’t believe it. VW is going to invest in American while you want a bail out. What exactly is going on here?
Don’t just try to convince us you need the money with silly surveys, tell us how you’ll fix the problem.
Euroclydon
I vote “No” for a bailout unless I also have some assurance that bailout will somehow make Big Three CEO’s RIck Wagoner, Alan Mulally, and Bob Nardelli, and UAW boss Ron Gettelfinger smarter.
Right now, all four should go public with a statement that they will accept salaries of only $1 per year until they get things sorted out and the U.S. auto companies are on the path to recovery.
Hawkshaw
Reinforce Success
Vice chairman Bob Lutz has a military background and he should understand this better than anyone else.
One of the first things a military officer learns about strategy and tactics on the battlefield is to “Reinforce Success.” A smart commander sends his resources to the spot on the front or battlefield where his troops have been successful and where more resources will cause a breakthrough.
I hope President-elect Obama understands that. With respect to where this economy is going, we need to reinforce success, not just chase failure with more money and resources. Throwing money into a black hole of failure, just means you’ve thrown money into a black hole.
A bailout would not be “reinforcing success.” Instead of throwing that money into a black hole, let’s reinforce and invest in the U.S. companies and projects that have proved successful and that are about to make world changing breakthroughs.
Unfortunately, there is little success among the Big Three to reinforce.
Tomoe1
Marcos AB,
This is neither whining nor a business strategy. This is GM senior management laying out their cards on the table for all to see. If the Feds refuse to help out their local industry than kiss it good-bye along with the rippling effect the pain will cause others (not just in the auto industry).
If this situation was reversed and it was the (Big 3) German or Japanese companies/auto industry on the verge of collapse - don’t you think their Governments will support their industry and protect jobs?
Look at it this way, there is talks underway in Canada to provide aid to our auto industry but let’s not delude ourselves if the US Government doesn’t help the Big 3 then Canada’s aid will do nothing to save the North American auto industry.
Pierre Roberge
Is Toyota in such a crisis?
This is what killed GM, it’s not the economy:
NOTE FROM GENERAL MOTORS HEADQUARTERS, circa 1976
“My fellow automakers,
Let us agree on one thing:
We are not in the business of making cars;
We are in the business of making MONEY!”
When you put profit first and customer second, you will die sooner or later.
“Later” turns out to be NOW!
Of course it will hurt…only for a while, but bankruptcy means that management will be changed, another manufacturer will buy the plants for a very good price, workers will be hired back, and flowers will grow back where a pile of manure once was.
It is about time the US wakes up about poor management.
RIP
Beaugrand®™©
I’ll repost this here:
“Breaking news (13 Nov 2008) is that Congress probably won’t pass the “bailout” package that Detroit wants until January.
“I think it might be a really smart idea for the top brass at the US car companies to make the rounds of news and talk shows to bring their case before the American people…”
You might want to reassure members of Congress and the public that the bailout money would be spent wisely, not for executives to line their pockets or to pay lavish dividends, as seems to be common practice with the $700 billion banking bailout.
Wendell Mercantile
Tomoe said: “If this situation was reversed and it was the (Big 3) German or Japanese companies/auto industry on the verge of collapse - don’t you think their Governments will support their industry and protect jobs?”
Tomoe,
The German and Japanese auto makers had in fact once collapsed. At the end of WW II almost all of their plants were little more than bombed-out rubble. Their situation then was much dire than the position GM finds itself in now.
But somehow BMW, VW, and Daimler persevered and made it back to the top. The Germans never would have believed it at the time, but being forced to start over was actually good for their companies.
In a way, the complete collapse of GM might actually be good for its future as was the complete destruction of BMW, VW, etc, in WW II. It would force GM to completely restructure and realign, getting rid of a hundred years of deadwood and tradition while turning themselves into a dynamic, nimble, and innovative company.
Taxpayer
Global warming is “a total crock of sh**”
- Bob Lutz, February 2008
Please give us billions and billions of taxpayer dollars.
- Bob Lutz, November 2008
I am not sure the American people and the Congress are going to be all that forgiving.
tdaxp
I will change my post if I am wrong or incomplete, but it appears this is a push-poll [1]. Question 5 looks to me like a prime intended to change the likelihood of later responses. A reworded Question 5 might lead to substantially different answers.
I am not even mentioning Questions like 12, which are clearly designed to show that people can be persuaded in a telephone call.
[1] http://www.tdaxp.com/archive/2008/11/14/the-detroit-push-pll.html
Abe
I’m all for the bailout even if it’s going to cost the taxpayers for decades to come. Hundreds of thousands of jobs are risk and economy cannot take another major business collapse. However, the bailout will mean nothing if the management and overall corporate structure and product strategies are not changed. If they keep going at the rate that they are now, they will burn through that aid in a year and another crisis will erupt out of control. I am ashamed to see how our most historic and important businesses have been devalued and ruined by a bunch of headless chickens. The management of the now “Worthless 3″ should be thrown into a sandbox where they can make a big mess over and over and no one would expect them to clean it up.
DJS
You are kidding me right? 809 people voice thier opinon and you jump. Hmmmm. Millions voiced their opinion for the Beat and you said haha that was nver for you. Now you want my money to build something that the public probably doesn’t want that will still put you in a whole down the raod. I don’t see that as a good business practice. The trio of cars that you showed to us was well before this crisis. They would have probably helped some. Mini is selling well as are companies with other cars that have flavor and are small. You had them yet decided to shy away.
Joe
Everybody who posts in here…keep one thing VIVIDLY clear in your minds…
No GM will mean no Ford or Chrysler, none of these three means no suppliers…no suppliers means a potentially crippling blow to Toyota and friends, and all the jobs along the way…nearly 3,000,000, in fact. If any of you are so niave as to think this won’t effect you; you’re dead wrong, and there’s no debating it. This is boost the unemployment to nearly 8%…and effectively kill a primary source of domestic income.
If the Detroit 3 fall, it will have a resounding impact on the country…suspend your emotions and eggerated hate for these companies and support the loans. Ask serious, hard questions later.
Tomoe1
Wendell,
I don’t believe it’s the same situation. Sure if the US plants of the Big 3 were bombed to rubble I’m sure a new company or resurrecte (in name only) would pop up. How successful would it be depends on whether unions get a foothold or not. My point was if MB, BMW and VW were teetering on bankrupcty causing widespread mayhem to ensue AND the German Government was in a position to help support their livelihoods don’t you think they would?
An arugument could be said that the Japanese Government was/is indeed practicing in some form of local subsidy of their auto industry by having an artificially high Yen and a closed market.
Scott M
I’ve bought GM cars all my life and will probably continue to buy them. However, I can’t help but think that a government bailout would prevent the useful restructuring that a bankruptcy court would force on GM. GM union workers shouldn’t be compensated more than non-unionized Toyota workers, and a bankruptcy court could tear up union contracts that should have been rejected from the beginning. Chapter 11 provides for rebirth; a govt bailout provides for continuity of union bullying and continuity of failed management. Regardless of what polls say.
peteMT
People need to take a deep breath. You can’t expect companies the size of GM to turn things around overnight. It takes years of hard work. And, nobody could have predicted what has happened in the last few months and its effect on the automakers. Detroit needs to survive - for our economy, for our workers, and for national security. They’re on the right track; I’m convinced they ‘get it’ now and have programs in place that will surprise us in a few years. So, even though I support the bailout, it must be LOANS, and if things fail, there must be accountability. And GM should set the example with executives taking home salaries of $1 until they have EARNED the turnaround. No multi-million dollar stock options, no golden parachutes. Merit and performance based bonuses - for all workers.
Edwin
Glad to see the poll supporting aid to the US auto industry. Let’s hope Congress acts soon. We have great confidence in the American auto company executives, they are the best managed, most talented companies in the world. They’ve dealt with more than virtually any other industry.
There won’t be a recession if Congress helps the auto industry. There would not be a banking crisis today if Congress had helped the auto industry after the 9/11/01 attacks. The American auto industry was making strong profits before 9/11/01. Those who are spinning their wheels over $700 billion for the cost of the banking crisis need to realize that Congress could save the banks even faster by helping the American auto industry. A vibrant auto industry will restore the economy. It will benefit all. You can count on it.
edvard
The White House is apparently now supporting the passage of a separate 25 billion loan for the auto industry. Interesting how this changes on an hour-by-hour basis. In regards to the Japanese and German auto industries after WW2. The US had a large part in that transformation. We opened innumerable patents to be used by German and Japanese companies and did much to help reconstruct their economies. The lesson learned from WW1 was that a poor postwar country with a poor economy was more likely to fall back into chaos and government anarchy. What better way to avoid this by jump-starting their economies? Secondly, Many Japanese companies are heavily protected by the Japanese government. In other words- they cannot fail. Ever wondered what happened to Mitsubishi after their bankruptcy? Well…. they’re still around and introducing new models as we speak. Government protectionism is nothing new.
Ironic that countries who were former enemies, whom we helped pick themselves up should prosper not only at home, but on our own soil.
Marcos A B
I see that GM is now spending money on new Websites and Facebook pages that solely concern themselves with pleading for a bailout (nice to see someone from ad agency Digitas the creator of the Facebook astroturf.) So I guess my tax dollars will be used to compensate this effort.
Would our world now be worse off if we let Chrysler die in 1979? I’d suggest quite the opposite - Ford & GM would’ve become so scared they might’ve actually become far better, more efficient companies.
The bailout of Chrysler didn’t exactly halt Detroit’s slide, now did it? If anything it accelerated it.
Taxpayer
That is obviously a push poll (designed to manipulate) and it was funded by GM.
There are two questions asked BEFORE respondents are asked whether they support the bailout. They were asked how important the auto industry is, and then how damaging it would be if the industry went bankrupt.
Asking those questions first is a psychological trick designed to make answering the next question - support for the bailout - a lot harder to answer objectively.
Lies and manipulation - that is just how GM likes to do business. This is a company that simply does not deserve tax payer support.
Ghibertii
From an American taxpayer to GM management:
“No”
As in, no way I am bailing you out from your poor management and lack of foresight that you have shown over the past few decades. I find it appalling that you use your workers as pawns to bribe the American people into giving you money. Also, no way will I give you any money for your poorly designed gas guzzling cars.
RIP, I look forward to the Phoenix that rises from the ashes.
Brett J
Will GM still be offering financial services? Will GM be an insurer? Will GM be supporting expensive dealerships over a competitive retail industry and future e businesses? Will GM outsource competitive research? Will GM be entering new foreign markets? Poll answering is fine for the simple questions but does the US model support GM’s business over the next five years and beyond if it doesn’t match emerging market/consumer trends. I don’t think GM needs a grander vision considering all this has been seen and done recently and reponsiveness is becoming a staple of the GM brand again but good luck settling today’s problems and looking for those new niches!
Joe Gakenheimer
Ala Chrysler of the 80’s, should this loan package be granted, I believe all executives should take large pay cuts and Rick Wagoner should take no salary at all until the company became profitable again. Beginning in 2010 the union has taken the pay cuts, now it needs to be the upper brass’ turn.
Tim Bennett
I’d like to know if Bob Lutz really said in February in D Magazine of Dallas that global warming is “a crock of (expletive)” and whether he stands by this comment today. If so, it says volumes about GM’s commitment to making environmentally viable automobiles for the future.
Gerard
These are not the General’s best years. I’ve had to face a torrent of harsh criticism from a surprisingly varied group of individuals on the Web opposed to the bailout. Much like the overall treasury bailout plan, people are grudgingly accepting the nation’s greater need to keep the industry alive. You have environmentalists condemning the Detroit Three for focusing so heavily on light trucks over passenger cars. On the other hand, you have the business class embracing Darwinian economics: the Detroit Three have become obsolete in the face of rapidly growing Asian firms.
I’m disappointed the outgoing president and his party cohorts are choosing to do nothing. Even though there’s fair complaint about big labor and its role in the Detroit Three’s decline, the impact of having our old “arsenal for democracy” shattered would only fuel the anti-American zealotry pervasive among our country’s adversaries. That’s the political effect. The economic effect would be devastating, crushing investor confidence and causing consumer panic. (I do recall reading a foolish post saying automaker involvement in WWII was minimal. This is what happens when we have a failed public education system.) It’s tragic that we have to see our automakers pleading for a handout, but a lot of us in America are doing just that.
There must be a bigger plan. This cannot be a restructure that helps push GM, Ford, and Chrysler along for another decade, and then lead to another downward slide. There must be a final solution to the pension crisis, a growing infection in our auto industry. There must be common ground between organized labor and corporate management in comparison to non-unionized foreign-based assembly plants in the Southeast. Though our empowered Democratic Congress and incoming president are eager to assist Motown, I don’t see them as being willing to reign in the union demands. Both labor and management are going to have to work hand-in-hand in slimming down our companies to their leanest forms since the 1920s, and rebuilding corporate structure, facility management, business operations, and products.
I just worry the GM I see in the next decade will become so watered down meeting strict fuel-efficiency standards that we have a re-hash of the bland and bleak 1980s. Please: anything but that.
Gereon (Germany)
Wendell,
I think comparing the situation of German manufacturers after WW II and the Detroit 3 nowadays is comparing cherries to apples. In this context you shouldn’t forget the Marshall-plan which has been granted to my country. Just yesterday the Prime-Ministers of the affected German states (Hessen, Thüringen, Nordrhein-Westfalen and Rheinland Pfalz) declared, that they won’t allow Opel to go down and signaled their support of a loan guarantee, worth 1 bln Euros.
In my opinion GM demonstrated with its recent car-developments its serious commitment to bringing those vehicles to the market, which are required now. And I think also the crosstown-rivals of GM, Ford and Chrysler, are going this direction. IMHO, it makes little sense to deny a bail-out, considering that a collapse of the US-car-industry would be even more costly by far. Who should support 3 million more jobless? BTW, to my understanding, a federal loan would be tied to clearly defined conditions regarding the future policy at the Detroit manufacturers. So I do think, a bailout would be the only solution, just avoiding further deterioration of the US-economy and skyrocketing unemployment-figures.
Gereon (Germany)
Laramie,
you are overlooking, that the situation of VW and the US manufacturers is totally different! Over here the pensions and health-care-costs are funded by official insurances, which are mandatory to ANY employee. Consequently VW and the other German manufacturers don’t have to carry this enormous financial burden like the Detroit 3. Comparing GM to VW, BMW or Daimler is just senseless. This has to do with completely different systems in the US and Europe and goes far beyond policy of manufacturers. BTW, the German car-companies still are reluctant to hybrids. I’d like to hear you talk, if the Detroit 3 still would behave that way. Their Diesels are becoming increasingly unattractive in the meanwhile over here, as Diesel-fuel becomes more expensive, due to rising demand on the world-market. After all, the US-companies are offering some models with hybrid-technology already. Did you know that the German state of Niedersachen holds a decisive stake in VW? So anyway VW could be sure, that anything necessary would be done in case of a severe crisis.
Nudge
Sorry, gang, here’s to voting no for the bailout.
As a taxpaying citizen, I would first demand to see an accurate accounting of the first $25Bn that General Motors has apparently burned through. Having something of a billing / accounting / auditing background, I would specifically like to know what portion of that first $25Bn went into the stated purpose of the bailout, viz, helping GM retool its SUV-making plants so it can produce the same fuel-efficient flex-fuel compact sedans it makes everywhere else but here. Did any portion of it go into AIG-type corporate junkets for the high mucky-mucks?
Can anyone from GM comment on thia? Was there even so much as a single email to GM Worldwide asking them to email back the plans for some of the models that sell well in, for instance, Brazil or Germany? TIA.
Nudge from CFN
Nudge
Wendell M (above) had the right of it: often rebuilding something out of the wreckage results in a better outcome than incremental improvements to the original pre-wrecking thing could have ever resulted in.
Although the US smokestack economy considered itself fortunate to emerge relatively unscathed from the ravages of WW2 (compared to the rest of the industrial world, which basically got bombed to rubble), this later proved to be a disaster for us since our international competitors were able to rebuild from scratch (with some financial assistance from us, to be sure) using the state-of-the-art technology of the era. Look where the US manufacturing position was, relative to international competitors, by as early as 25 years after the end of the war ~ they were eating our lunch, and have been ever since. Doing better than them means being more efficient (and cost-efficient) and smarter than them. We can do this, of course, but it will require a quantum leap ahead and not just incremental improvements to what we’re already doing.
dean
Are you kidding me with this bailout? Let them die. Yes, it will be painful in the short term but we will get through it. What is 25 billion going to get them? They will hobble along for another 6 months and then what? Ask for another 25 billion? Look, you can have 25 billion, you just need to gut management and the board, as well as send the UAW packing. Those 3 groups combined have killed this company. RIP.
Phil
We should NOT bailout GM…The management has no accountability and in the past 10 years, even in good times, they never made money…In GM, it’s all about taking caring of Friends..there is no merit/talent management. Its ill managed and not making right products.
All the tax payers pay for this..and in 2-3 years they will come back again for Money…We still do not hear, how they paln to do differently ? what’s their winning strategy ? they should bring the case to people..they will take money and waste…every company is in trouble in this economy…let them figure it our and come out of this mess.
Nate
I agree, if GM had a real plan and was presenting it to the public… you know something to the effect of:
Within one month we’ll do this or that and cut this operation and that etc… maybe I’d be more understanding…. but coming from an industry that couldn’t read the writing on the wall in advance and actually do something about it… what makes anyone think GM is going to be new, improved or changed. Its been the same thing for almost 20 years. And the leaders at GM don’t say a whole lot to make their customers and potential customers think they are doing anything.
I also find it laughable that it has to be explained to people. To me that tells me there is something wrong… the truth should be obvious… GM might be intertwined in a lot of things country wide and world wide… but thats no reason to make bad decisions… continuing to run GM as they were wont’ work unless the US prevents the competition from selling their products. And I hope that never happens. The best thing the US could do is provide a directive to research and develop cars in a certain direction…. Other then that if GM fails I’m not that worried… the rest of the country needs a good dose of reality and a wake up call on their spending habits. If GM’s downfall cascades to cause me to lose my own job, I will do what most Americans SHOULD be doing, looking for another one and if one can’t be found, make a job in a market that has demand. This whole country seems to have lost sight of where it has come from and where it is headed. Perhaps the only thing to fix it is a harsh dose of reality.
If GM is responsible with a government bailout thats fine… but they better damn well get enough of a bailout to put their R&D beyond what Toyota and Honda have… and to that we need to give them a specific investment greater then that which other governments give their auto makers.
All in all though I think the market is saturated… sell less new cars and more parts for old ones…. maybe that’d be a better way to go. It sure would be cheaper to do, as less people are needed to sustain legacy products then are needed to design new ones.
Its to bad this issue doesn’t go out on national vote. I’d vote no since GM lacks any kind of public plan to remedy their “problems”.
That said… here are the conditions I would want to see to favor a GM bailout:
1) A required pay cap. Cap all employees to 125K /year including all management. Offer stock incentives for those that work hard.
2) A plan to update all facilities to meet or exceed the technology level provided by other competing car companies.
3) Reduction in brands…. chop GM US down to 3 brands plus 1 brand of truck and Corvette
4) A plan to create produceable future technology that won’t get put aside when fuel prices drop. This would be an oh sh*t backup plan. In the event fuel prices go up again GM would be able to put new future electric/hybrid/diesel/hydrogen cars into production within 6 months of price increases beynd $4.00/gallon.
5) A plan to make production more efficient (lean manufacturing practices)
6) A dropping of all legacy platforms
5) A dedication to higher quality standards on interiors
6) A dedication to producing two cars (entry level) and midsize that are on par with european and japanese cars. This includes specifications, styling and quality.
7) A dedication to its new legacy products. This means better warranty services to its customers, and a realization that cars need to last longer…
I’m sure I can think of a few more things but I think thats a good start.
Hawkshaw,
Does that mean sending more money to Toyota or Honda? Because from the auto industry perspective they are doing well. Wouldn’t it be easier to just tax the heck out of foreign auto makers and provide some water treading money for GM? That way they can be competitive without any change. (I do not like this idea but with what you said it is the easiest to implement).
Personally I’d rather see the money go to the upstart car companies… or at least availability of money for small companies. Or incentives for young, bright, motivated young people to start new companies. As it was GM and other auto makers had a chokehold on smaller companies. All the government regulations, and insurance costs makes it nearly impossible for a small company with new and innovative ideas to get into the market at a competitive cost. I would rather see a few billion dropped on things like that then on GM.
If GM was smart they’d disband the company and spin some of their top stuff off into “new” startups and let it mature on its own.
Tomoe1,
A little pain in the short term can be good in the long term. I’d rather see new companies start making cars.
I would hope ANY government would know when to invest and when to bail. I don’t think any other government would bail out their industries if they were in the shape that US industries are in. Although I’d be willing to bet that in other countries the legacy costs and technologies aren’t there. Additionally other countries probably have the intelligence an foresight to invest in their auto industry AS it goes. That way they are able to be successful and solvent and stay on top of their respective game.
If GM’s demise is so far reaching then where are the other companies like China and Japan offering to lend GM a hand to keep them afloat. If I see Toyota or Honda giving to GM to help them stay around then I would feel better about the US giving them help… but I doubt that’ll eve happen…
GM was foolish with its practices, people, products and investment. They need to be adult about it and deal with the consequences.
Pierre Roberge,
I agree… though perhaps with recent events the note should have read:
“My fellow Americans,
Let us agree on one thing:
We are not in the business of making a great country:
We are in the business of making MONEY!”
I think that better reflects the economic policies and decisions made in this country in the past 10 or so years.
I agree, the plants aren’t going to goto waste… some other automaker (probably Hyundai) will buy the plants and put the people to work. And things will be different but from the ashes will come a new auto industry.
Wendell Mercantile.
There’s a difference between collapse and blown up.
For that matter it was the US that rebuilt the Japanese and German industry. It allowed their manufacturing industry a clean start and also allowed them to continue to update their facilities and production capabilities with the latest and greatest. So while the US funded the rebuilding of Germany and Japan, our own manufacturing technology was left behind and in the relative stone age. Of course almost 70 years later you can see the aftermath of that.
Of course its not quite that clear cut…. but……
From the rubble will come a new car company… and it will work well as long as we can keep the old GM mentality out of it. Old culture will kill a new company. A new company needs to be started to make new culture and figure things out on its own in a new way.
Taxpayer,
Yeah Lutz is kind of the typical guy that way… he apparently likes to tick off his customers.
Abe,
In the US we just happen to have a huge sandbox… its called the Mojave Desert. Perhaps if we drop them there……
Unfortunately what we are talking about here is the power and dangers of capitalism. It can work very well if not abused… but… look at it now…
Nonymous
Ironic, isn’t it, that “Shazam” posts “it’s about time we wake up as a country and understand the impact of doing nothing,” when doing nothing to improve mileage standards - and actually fighting against them - is ultimately what wrecked GM?
If all the money GM wasted on lobbying for lower CAFE standards and to advertise ridiculously over-priced out-sized gas guzzlers had been used, instead, to create attractive designs for cars that saved the buyers money, the company would be in much better shape.
What we are witnessing is the classic Innovator’s Dilemma - by focusing on the high-margin sales and ignoring the low end of the market, innovation by others at the low end has created the wedge that eventually drives the established old-school businesses out of the market.
GM management messed up in a big way, and now they want us to foot the bill for their folly. I know tons of jobs are at stake, but even if the economy hadn’t crumbled, GM was still on the verge of bankruptcy, and those jobs would still be at stake. The company should be put into receivership, the management tossed out on their collective behinds, and some bright innovators should be brought in to turn it around. A hand-out will simply be a waste - throwing good money after bad.
GMisCARKING
I guess it’s too late. The Senate vote is on Monday. The Senate GOP wouldn’t pass it. If they could stop thinking about it as a blue states’ problem and being partisan about it. Henry Paulson will be remembered as the man who befell GM, just like he befell Lehman. He could have just loaned $15 billion to GM from the $700 billion bailout package or even to GMAC. Instead, he chose to give the legislation BS and watch GM flounder. Goldman Sachs is the “golden child” of capitalism. I wonder if he’s happy to see it 100% foreign owned. That’s what will happen to GM when it liquidates.
Taxpayer
Tim Bennett -
Bob Lutz did indeed say that global warming is “a crock of sh**” and he has not apologized nor changed his mind.
He’s the VICE CHAIRMAN FOR GLOBAL PRODUCT DEVELOPMENT.
Can you imagine a global warming denier running product development at Toyota? Me neither. Call your Representative and Senator and say NO BAILOUT FOR ANTI-ENVIRONMENT AUTO EXECS.
james-t
can i ask something..why GM dont want to downsizing…why GM dont want to sell SAAB,mercury??
because i think bailout is only relevance when you got nothing left to do…but in this case i dont think so
they just want the money by making up story like they did all this for the sake of the country
Scott Overholt
Let GM die. They didn’t learn from 1976. Let them die. Same bad cars on same bad chassis dressed up to look marginally different. The world does not need GM.
getalifeagain
The base of the “Arsenal of Democracy” is the Big 3. Let it go, and the last vestige of large scale manufacturing on a huge level goes. Bailing them out is imperative.
However, bailing out the finance firms is throwing good money away and is only staving off the “Greater Depression.”
Barry
While I fully support some type of assistance, part of that assistance requires accountability. That means new management at GM capable of executing a sound business plan. GM has been trying to turn itself around for forty years. It now produces less autos than forty years ago and market share losses have occurred every year. That is preposterous and outrageous.
Let’s see the moderator grow some moxie and approve a post that needs to be discussed.
Nicholas
We were interested in saving Detroit years ago, primarily from themselves. Efficiency standards were laughed at not long ago, in spite of the fact that this was where I always got the most power increases as a youth. I support the initiative, but it will be fascinating to watch to see if they/you can retool by next year.
Personally, I support a healthcare initiative that pulls in automaker employees first, as a test of wider deployment, allowing Detroit to stop bleeding cash. Then I support massive allocations of funds towards rail, efficient buses, and hybrids. Does GM still own their rail divisions? Cash would come as a result of investment rather than cash flows that will only prolong the inevitable.
I don’t think that cars sales are going to increase substantially for quite a while. And, when they do, it will break towards small efficient cars. How are you going to make 8 quarters, at the very least, with perhaps 4 subsidized? Good luck!
David Rosstad
GM. Listen up! Please! If you do not act now, to educate each and every lawmaker on Capitol Hill you are not going to get what you need and what you want to survive. You need a team of 20 -40 presenters to go to Congress with your case for survival. Admit your flaws, show your changes in management and retooling. Show them the Future. You need to give the sales pitch of your lives and show them your confidence, pride and humility.
Edwin
Let’s recall for the misinformed and the naysayers that GM, Ford and Chrylser were making strong profits in the years and months prior the 9/11/01 attacks. Let’s recall that the American auto companies helped keep the American economy moving after 9/11/01 with concerted efforts. Its time for Washington to return the favor.
For the misinformed, GM already offers twice as many models that get more than 30 mpg than any other automaker. A Chevy Malibu get better highway mpg than a Toyota Camry.
Government caused our current economic crisis, so it is government that must own up to its responsibility and pay for the damage it has caused American business since 9/11/01. Government helped the airline industry after 9/11/01. But the auto industry is even more important and the people must be confident. People are withholding purchases waiting for Congress to act.
The cited studies on current job losses of 3 million jobs that could occur if the government fails to act are vastly understated, since 9/11/01, under President Bush, the US has already lost 4 million manufacturing jobs. A vibrant American auto industry would not only save 3 million jobs, but also go a long way to restoring the 4 million manufacturing jobs lost under President Bush’s failures. We do not want to hear one negative word about this matter from President Bush or his aides. PERIOD.
This economic crisis lays squarely on President Bush’s shoulders and the Congress as well, not one penny of the problem comes from the American auto industry which has carried the American government’s bills on its collective back since President Bush took office.
And the politicians in Washington should heed the advice and act quickly to help the auto industry. With a vibrant auto industry the recession will end quickly. There wouldn’t be a banking crisis today if Congress had helped the American auto industry after 9/11/01.
Other governments with an auto industry around the world are giving their auto industries aid from the economic crisis.
EVERY TAX PAYER SHOULD SUPPORT THE AMERICAN AUTO INDUSTRY:
The American auto industry collectively generates between $600-$700 billion tax revenue, about as much tax revenue as the cost of the entire banking bailout of $700 billion.
What’s more the American auto industry could generate even more in tax revenue if Congress acts.
The cost to the taxpayers in lost revenue from caused by a Chrysler bankruptcy could reach $175 billion in lost revenue to the government.
GM, Ford, and Chrysler are the world’s leading innovative force and spend more than $10 billion a year on research and development.
The appalling level of ignorance of these issues from certain journalists, politicians, and pundits is astounding.
The pay per year for an American auto worker is relatively comparable to a Japanese auto worker, the difference added cost for the American auto companies is in the health care benefits.
Do not believe the media figures circulated in cost of a worker per vehicle which can be manipulated based on sales gains and losses.
The government made money from the Chsyler loan guarantees in the 1970s from the stock options.
The politicians and their parties would be advised not to play politics with American jobs, or they will lose elections just the politicians who have lost since 2006 including those in the Senate and the Presidency.
Pay no attention to the frivolity of the naysayers in the media, if the recession continues or deepens the people will grow angrier.
Help the auto industry - no strings attached.
Dr. Turkey-Belly
There are a lot of strong opinions here.
As an economist, I wonder how many bloggers here will be impacted by the collapse of the Detroit 3. My opinion is that it will affect more of you than you realize. You clearly do not realize the widespread, economy wide fallout.
Regardless of your profession, you will be affected or know somebody that will. A collapse of the Detroit 3 will make this recession, that we are just on the cusp of entering, very, very long and very, very severe - the likes of which you have never seen, provided you are under 80. We are talking at least a percentage point off of GDP and in excess of 3 mm jobs lost just due to the automakers.
Even if you bought junk from these firms in the 80s and 90s, they are making some great cars now. I realize the desire to say “screw you” to the D3, but with utmost sincerity, you are really saying it to:
(a) yourselves
(b) the US manufacturing sector and
(c) the US dominance as a world power
There will be no new startups to fill in the void, it will be filled in by the Jpy and Dem manufacturers. These jobs, once lost, are lost forever.
Dr. Turkey-Belly (PhD economics)
I read the venom spewed here, and it really scares me.
Robert Farago
This poll is a fraud, bought and paid for by GM and the unions (also clients of Mr. Hart’s). (Check the numbers of domestic car owners in the polling sample.) I am not surprised that GM has turned to lies and deception to make its case to the American people, but I am saddened that it’s come to this.
Gereon (Germany)
“If so, it says volumes about GM’s commitment to making environmentally viable automobiles for the future.”
Nate D
While it’s true that the demise of GM would have a negative impact on our economy, I too believe that they have what is coming to them - especially the Purchasing organization led by Bo Andersson. The entire executive management team has been isolated from reality, ignorant to their shady dealings, one sided metrics, and outright extortion of their suppliers with demands for money now with the idle promise of future business. The supply base was crumbling at their hands before the credit crisis took place. GM buyers squeezed every last cent they could, and bankrupted many top suppliers. There was no government to step in and help the suppliers, and GM never gave it a second thought. They didn’t care about the thousands that they put out of work, careers that they destroyed, and lives that were changed forever. All they have ever cared about is the source of their next cost reduction. And now we the taxpayers are supposed to care about saving GM?
Well GM management, take a good hard look in the mirror because if you don’t like what you see, you only have yourselves to blame. Credit crisis or not, you were already on a downward spiral and were not doing anything fundamentally different to manage your business. Nobody at your organization works together as a team - the engineers look for the least amount of work, buyers want the lowest cost regardless of reliability or sales impact, and the UAW only cares about their overpaid jobs - not the quality of what they build. It’s all about entitlement - and guess what - you’re not entitled to anything. The credit crisis only brought about the inevitable sooner. From top to bottom, GM is a very poorly managed and disfunctional company - period.
After you file for bankrupcy and screw your suppliers one last time, liquidation won’t be far behind. Then when you all have to go out and find real jobs, make car payments like the rest of us, and really work for a living, maybe then you’ll get it. Too bad it will have cost you your company to learn that life lesson. Too bad.
bob
I used to buy GM cars. The last four were perfectly awful cars. It was like at 75000 miles there was an internally built self destruct button. I’ve had three inports of different brands and all ran well over 150000 miles without serious problems. When GM can trim its pork and actually design a car that will last (notice i’m not blaming the workers) and not drop 50 percent of its value in 3 months, i’ll be the first one in line to buy. Until then, we the people should not be subsidizing failure.
Gereon (Germany)
“If so, it says volumes about GM’s commitment to making environmentally viable automobiles for the future.”
Tim, regardless, whether Bob Lutz actually made that mentioned statement about global warming, it doesn’t change the fact, that my brother’s Pontiac G6 (3.5 V6) obviously shows a better fuel-economy than my neighbor’s BMW 3-series, even with a smaller engine. Also here in Europe are people, partly respected scientists, who have certain doubts regarding the theory of global warming. Anybody has an own opinion, which should be respected. If Bob Lutz’ statement meant, that building environmental-friendly cars is not worthwhile, GM for sure would have scrapped all plans for the Chevy Volt. BTW, Bob Lutz is just one executive and doesn’t represent GM alone. At the moment I clearly can see more commitment at GM than at our manufacturers, regarding “green cars” or however you’ll call it.
If we have had the same situation here in Germany over the last decades, as it used to be in the US, do you seriously believe, VW, BMW or Daimler would have done without less efficient, but high-margin SUVs or Trucks…? BTW, without these types of vehicles, the financial situation of the Detroit 3 would be even worse now.
Manufacturers like VW and Porsche are even impertinent enough to ask our government for support of their car-loan banks, whereas they reported record-profits at the same time!
Jack Kagel
As a prior GM dealer and a regional training manager, I have a delemna. Everytime dealers are poised to recapture lost market penetration, GM always keeps the money and operates same same. I’d advise no money without serious legal documentation to out the current “non leadership.”
Three reorganizations have not really downsized the top levels of management. The goal of the company should be soley “how to build a better product now”. The dealer network will do the rest; we do now how to move the product. The ROI boys and production people should stay out of that end of the business. It’s way over their heads.
martin
The problem GM has is not a lack of money and giving them more billions won’t fix the problem. GM started decades ago as the strongest and best capitalized company in the world. It took decades, but they went though all that money.
The problem GM has isn’t the economy. GM has been losing market share for years and years. They didn’t just start having problems due to the recent economic problems.
Letting GM burn through additional taxpayer billions after they have burned up all their own billions will just cause more waste and delay.
Bankruptcy, while scary, is the best way to force changes and get back on the right track. Nothing else has worked.
Charlie H
Sorry, no.
First, in spite of your protestations to the contrary, this IS a bailout. Second, this is not a result of the tanking economy, you were in serious trouble last year. The handwriting has been on the wall for years. Third, these are all self-inflicted wounds.
How?
First, you’re pouring billions down a rathole called “The Volt.” You haven’t done what’s necessary to compete in the conventional small car arena, why would any rational person expect “The Volt” to be competitive? As for providing some overarching benefit to the US as a whole, your own forecasts call for negligible quantities of Volts (perhaps 60k/year by 2014) when Toyota and Honda, between them, will be prepared to field close to a million hybrids per year. I mean, look at this… a compact car that costs $40K? Toyota’s vehicle was much closer to mainstream capability and pricing than the Volt will be, so it could sell. In low volume, at first, but they kept at it. All the while, GM slept.
Second, you haven’t done what you can to make your conventional vehicles competitive. The Cobalt XFE project was long overdue… and you haven’t extended the benefits of that program to the automatic. The Cruze, allegedly based on a “world car,” turns out to be not-so-worldly. We can have it until… well, whenever. Will it sell at a profit?
Third, your marketing and product development are horrible. Your hybrid program is made up, at present, of two types of vehicles: hybrids that have the added bonus of being described as “gas guzzlers,” and hybrids that are hybrids in name only and cost thousands more than a real, effective, top-notch hybrid from Toyota. Who allowed this? Your near-term (but long-delayed) flagship product intro, the New Camaro, is a two-door coupe muscle sports car. I like the idea of a sports car but who’s going to be particularly interested in a car that needs a V8 to power it into sports territory? Without a “new paradigm” in its sports essence, who will buy this? Why was the Camar/Firebird program cancelled? Poor sales. That’s the death rattle of the muscle car flavor of sports coupe. Yet, you produce another? Mustang sales have stagnated for the last few years (and declined precipitously in this). That’s your market and it’s evaporating. Who allowed this? Your new idea in people-haulers, the Lambdas (in all their badge-engineered excess) are nearly as big and thirsty as that which they replace. These vehicles are the Yukons and Tahoes that they replace. Nobody needs these. Who allowed this? If we grant that large, two-mode hybrids are a good idea, why can’t the Lambdas accomodate the two-mode transmissions? Who allowed this?
Fourth, quality continues to be unimpressive. In 2003, Bob Lutz claimed there was no gap. Later analysis proved him wrong. In 2008, we’re hearing the same claim. Initial figures show that the gap has not closed - and that’s just initial quality. Most people can tolerate a few warranty repairs (but don’t get me started on dealer abuse on warranty repair) if they can feel that the car is a long-term winner. No progress there.
Fifth, who in their right mind would trust current management with this money? A few months ago, you were all set through the end of ‘09. Now, it seems you’ll run out of money within 3 months. You dodn’t realize this sooner? Who over there is in charge of figuring out what your books look like? Did you artificially engineer this emergency? Or delay it to increase the urgency?
Yes, it’s probably a good thing to do something to help with GM’s rebirth but, first, GM must die. Stockholder equity wiped out. New equity issues to debtholders and the federal government. An infusion of government money to encourage the creditors to sign on help for a short time. The current management gone. A shock that kills the current culture administered. The dead weight of duplicate brands, excessive dealers and employee liabilties cleared away. Then, a profitable car company can emerge.
Bailout before that is nothing more than corporate welfare.
steve
No bailout for automakers.
41 states of 50 require bailouts, mostly to sustain basic health and human services.
These are more important than shiny new cars.
The auto manufacturer economy needs to get down to basics, same as the states must do.
Shirley
As a retiree I certainly hope the government sees clear to help the auto industry.
However, GM in particular must restructure and replace the current management. Why should the company executives continue to receive huge salaries when all their decisions got us to where we are today? I have witnessed the waste firsthand and it is deplorable. During my 39 years it has been one bad decision after another.
MARK T.
Overall, we should stop calling a loan package, a “bailout”. Loans and credit are the oil of finance, and General Motors, Ford and Chrysler need these ow interest loans now to re-work a better slate of programs t hey have outlined going into the future. Let’s face it, vigorous world competition from Japanese, Korean, British and German automakers have created intense competition at all levels of industrial production and distribution. It’s not at all conclusive and true that american manufacturers produce substantive lower quality vehicles, but competition shows that international efficiencies in labor, steel and materials production, dealer distribution and advertising have created unusual inequalities for U.S. national products. In this world of free trade, we gave great inadvertent incentives for overseas manufacturing and t his really did and still does come at the expense of large american enterprises. So while it sounds theoretically sound to keep free trade as an instrument of economic policy, it is more practical now to consider what industries are considered to be in protective mode. The automotive and engine building industries can become financially sound again if we face up to the reality t hat like our defense industry, vehicles and motors are critical to our way of life in all the Americas. Overseas automakers are driven by export sales and t hey have found a way to destabilize the U.S. industry with fine export products that have no U.S. national import protection. We are being assaulted by international firms who are
building their products on U.S. territory . It’s time to look at this issue again and again,congress needs to recognize and keep free trade only for nonessential industries and allow a new sweep of protectionism for automotive and other industrial manufacturers. Now, a good way to start is to recognize that congress got us into this mess with allowing the invasion of nationally subsidized auto and truck manufacturing from overseas. The solution is to allow a good financial structure right away while we press upon our lawmakers to reconsider selective tariffs and protection for large scale american enterprises. It’s not easy and its a a two lane highway approach because with protection here at home what sacrifice do we give when we export ? Complex problems require smart and sophisticated solutions, and if we stop and think what a bankrupt auto industry will do for american companies;then we should also stop and think what a better solution financial oversight and trade regulation will mean for the american industrial freeway.
Samuel
Has anyone seen anything that vaguely resembles a recovery strategy on how things will be turned around if / when funding is received? You know, like clear measurable goals & objectives and timing to achieve said items? Until that is offered and validated, no taxpayer money should be given.
Jim
I have just finished writing to my senitor urging him to support the loan. I support a loan only if it comes with the provisions that the UAW and management work together to make the car companies competitive, and profitable for the long term. I do not support just handing the automakers G.M. included money to continue business as usual. Management, and labor will have to make concessions and changes or the money will be gone and the car companies will be back in the same position. That would be a waste of money. I am not going to be so bold and arrogant to believe I have the answers. I am too ignorant of all the causes, and what the day to day operations of an automaker is like. I DO know that there must be as our President elect says CHANGE. I also know I like what G.M. has done product wise. The management must be doing something right. They as well as their counterparts at Ford and Chrysler working with UAW deserve a chance to make the right changes for a long lasting profitable for all U.S. auto industry. Our economy depends on it.
motorman
most people against the govt loan look at it as a bailout of the unions. that is why the democrats are in favor because the unions back them and the republicans are against because the union campaign against them.
Terry
Why do you think you are entitled to my money?
Why do you want to have the government steal from me?
Are you criminal parasites and not men?
I know the UAW Parasites have killed off the US auto companies but that does not entitle you to steal from me or anyone else.
Eric
If GM built quality vehicles, there would not even be this issue. Giving GM another few billion will only delay the inevitable road to bankruptcy. Let the free market run as normal and let the quality car companies survive. If this means the death of GM, Ford and Chrysler…so be it. Screw these bailouts.
Stan
I am sure you will get your bail out passed, but keep in mind the american people who are footing the bill will roll their eyes for decades to come. This might make us want to buy foreign cars even more for spite. The only bright spot is the new Malibu and Cruze. Why did it take so long to get serious after trying to match the Japanese and Europeans since the 80’s. Twenty years later we have two great cars. They seem to have counterparts the world over which was the idea from the beginning - Hello…! I never understood why safety standards can’t be unified between US, Europe, and Japan / Korea. Why not lobby for that GM and reduce your costs.
The Volt is a good marketing ploy if you really do make it, but is is not viable for many years because of the cost. Why do you keep mundane and in these parts ‘red-neck’ brands like Pontiac around? Chevy has enough sporty all american spirit to take away the need for Pontiac. Buick is forever laden with old people’s car. The Enclave is a triumph but where are the small and medium sedan - a la Lexus?
Keith AO
GM is now seeing the culmination of more than 20 years of management in the hands of people who have had no clue how to properly run a car company. From the late Roger Smith to Rick Wagoner, these people have shown no guts, no vision, and no leadership. And they have all conspired to run this great American company into the ground.
I would give a bailout to GM, Ford, and Chrysler, but not before:
1. CEOs Wagoner and Nardelli resign immediately, with no bonuses, no “golden parachutes”, just pack up and get out.
2. White collar executives give up their perks and priveleges. If you haven’t done anything to improve your company’s standing or performance, then you don’t deserve a bonus.
3. The UAW sacrifices some of their perks as well. Equality of sacrifice for the greater good.
4. All three companies eliminate their dead weight. That means GM discontinues or sells off Saturn, Saab, Hummer, GMC and GMAC Mortgage; Ford jettisons Mercury, and Chrysler eliminates anything not related to its core business.
5. The boards of directors of each company tender their resignations. After all, they are the ones who ultimately approved some of the dim-witted decisions their companies have made. Maybe new boards would do better.
I gave Mr. Mullally of Ford a partial pass, because I believe that he and his team are doing what it takes to bring Ford back from the brink. Wagoner and Nardelli have shown no such leadership.
I am a car enthusiast and a big fan of the American car companies. I want desperately for them to succeed. But they have to prove to everyone that they really deserve to survive. And that means making better decisions, and showing more real leadership, than they have over the past three decades.
Chris
I put my thoughts on a recent blog post here http://investintrends.blogspot.com/ but here is the crib notes version.
1. Throwing good money after bad money doesn’t make any sense, it never did.
2. The “too interconnected to fail” argument sounds good on the surface but it is a little misleading. A bankruptcy does not mean everyone at the company loses their jobs immediately. There should be something in place to help the workers who eventually lose their jobs, not the company.
3. The business model is broken. Not a dime should be handed out until it is fixed. The last thing we want is a business model like Amtrak that sucks our tax money year after year.
4. GM talks about a “bridge loan”. A bridge to what? To another bailout? Even taking the huge union liabilities off the books doesn’t change the poor perception of American cars.
I supported the TARP in its original version. Now I am changing my mind.
Chazz
The thousands of small businesses in America that seek bank loans every day are expected to show up for the loan officer interview with detailed business plans in hand. Those plans must show how, in a worst case scenario, how the business will be able to turn a profit and still repay the loan. Where is GM’s detailed business plan? As your loan officer/taxpayer, I’d like to see it posted on this website.
Gary Dikkers
Nate said: “Does that mean sending more money to Toyota or Honda? Because from the auto industry perspective they are doing well. Wouldn’t it be easier to just tax the heck out of foreign auto makers and provide some water treading money for GM? That way they can be competitive without any change.”
Nate,
Instead of taxing the foreign carmakers, perhaps the bailout money should come from those companies that made their biggest profits in history the last few quarters ~ ths oil companies.
And actually, aren’t the oil companies and the automakers already essentially tied together? Would the oil companies had made that huge profit if not for the cars the Detroit Big Three built?
Why not have the Big Three bailout come from the billions in profit the oil companies have recently made?
Redell Walton
I am amazed at the lack of knowledge of our politicians. These guys are running around talking about compensation paid to Industry management people. There is a pld saying, “money do not make employees better employees, it simply allow you to go out and hire talented individuals better than what you already have. Most of these career pols have never had to work on a meaningful job. Community jobs do not make good managers. Most of these guys have had money passed down to them. The politicians might be the biggest problem that business have to deal with. They could start by getting rid of many of the expensive records that we have to keep. Regulations are only used when you get into trouble. I would like to ask each top business to pick out a politician to run their business. We waste a ton of money on useless politicians. If we need to outsource anything we need to load up as many pols as possible and send them to whomever will take them.
John
The way that I see this is the Big 3 have put themselves in this position and now with our backs against the wall, we are told that without a huge bailout to fix our mistakes, they will wreck havoc on our economy. How will this money fix the problem? The bloated inefficient union contracts will still exist and I see this bailout as nothing more than a start to corporate auto welfare.
35 years ago when the Japanese manufacturers started to make inroads to our automotive marketplace, the Big 3 could have addressed the union problem. What did they chose to do instead? They went after their suppliers with a brutal cost cutting program. I don’t dispute that there were efficiencies to be gained but, they used their tremendous leverage to beat most suppliers to the point where they barely were able to run their business. In fact, they drove many into insolvency. They demand and get their 5% yearly cost reductions for fear of losing the revenue they provide and guess what? They still are at a huge cost disadvantage to the foreign manufactures that now produce in the US in Tennessee, Alabama, South Carolina, Indiana, etc. How do they do it? THEY DON”T HAVE A UNION ANCHOR AROUND THEIR NECKS. There is no way that we can ever be competitive as long as you have a union that is more concerned with filing greviences than helping the company become competitive. I don’t know if anyone has ever worked in a union plant but I have and let me tell you, there is nothing more frustrating. A job that would normally take 2 hours takes 2 days. Have to get the union electrician to terminate that wire(wait 2-3 hours), have to get the union pipe-fitter to connect that fitting (wait 2-3 hours) and on and on. Add to that the outrageous wages and limits on amount of work that they are allowed to do (most do it in 15 minutes and then read a book for the rest of the hour) and here we are.
I lived through the painful decline of the union steel mills in western PA in the 80’s and don’t wish that on our country but again, they became too bloated with the oppressive union and if you look at the steel industry today, it again is vibrant and operates on a much different basis. Take a look at Nucor. Mostly non-union and one of the most efficient steel producers in the world. Employees make a good living but, here is the key, they work for it. Bonuses are paid for tonage produced and when you visit a plant, there is always a sense of urgency.
Of course, you can’t look at the union without looking at the corporate greed that exists in upper management as well. Outrageous pay packages, golden parachutes, generous stock incentives all while the company is being driven into the toilet. Anybody below a VP find this just outrageous? I know that I do. “I won’t take a salary this year” Gee thanks, but what about the $15-20 mm in stock awards. Please, spare me the disenguous sound bite.
I say no to the bailout unless there is a serious efforts made to completely restructure the way that all of these people are paid. You can’t ruin the company while sucking out multiple millions of dollars and expect that the American taxpayer will bail you out.
jinwa
Why is GM so set against bankruptcy? Many large companies and even industries have gone through reorganization under the protection of bankruptcy. From telco to airlines they have come out surviving and even stronger. Maybe not the behemoth they were before but fiscally and operationally stronger.
I am not in favor of any bailout or loan. This “poor GM” PR stunt is irritating. Why didn’t GM use this website and the video to do what “Nate” did above - explain how they would restructure to survive. I have been a loyal GM customer - maybe not anymore.
Nome
i agree to the statement “Are you kidding me with this bailout? Let them die. Yes, it will be painful in the short term but we will get through it. What is 25 billion going to get them? They will hobble along for another 6 months and then what? Ask for another 25 billion? Look, you can have 25 billion, you just need to gut management and the board, as well as send the UAW packing. Those 3 groups combined have killed this company. RIP”
Chuck Dye
Global warming is “a total crock of sh**”
- Bob Lutz, February 2008
Not one penny until Lutz is out on his arse. Putting him in charge of the plugin car is like putting an atheist in charge of a divinity school. Sure, he can do the administrative duties. But to Lutz, it’s clearly just a matter of a new, albeit important, product line.
GM should appoint someone with credibility among the general public (a Colin Powell-type figure) who can convince us that GM is going to make a tidal shift toward creating a full line of plugin hybrids and quickly transition to making cars that are “Good for America.” There’s your next slogan fellows. Don’t you realize it’s patriotic to use less foreign oil for economic, and yes, environmental reasons. Keep Lutz and you lose the latter rationale. Get the right evangelist NOW and put them on air NOW.
During football Sunday all I saw from GM was pickup trucks and Caddies (including Escalades). Is this your future? Not one cent from me. Have you ever considered trying to sell the kinds of cars kids in college today want? Do you think they want anything you make? Be serious.
Chris R
Nate said: If GM is responsible with a government bailout thats fine… but they better damn well get enough of a bailout to put their R&D beyond what Toyota and Honda have.
That won’t work under GM’s to many hands stirring the pot/design by committee structure. GM is dead unless it reorganises and actually becomes a car company again. Right now it’s a marketing company that happens to build cars. Which is why it’s failing.
Marty K.
I vehemently OPPOSE the auto corporations cries for a bailout.
First of all, I oppose it in principle — we simply cannot reward bad behavior. The US auto industry has been declining for YEARS, long before the economy decided to perform a bowel movement. The industry has kept producing large, inefficient SUVs and trucks and has essentially marketed them to soccer moms while the cost of gas steadily increased, and even did so after the cost of gas skyrocketed upwards several months ago (and have you seen the new commercial for the Hummer H3T circa, oh …. 2 weeks ago?).
The industry has a short-sighted vision of just looking at the next fiscal quarter’s projected sales and has therefore allowed greed to take precedence over a sustainable, long-term vision. Some would argue that the Big Three are just being good greedy little corporations and are looking out for their shareholders. But with all three on their respective deathbeds, is shortsighted greed really a good business strategy?
GM in particular has done an excellent job of building ugly, uninteresting cars with poor gas mileage and resale value.
Second of all, I oppose the bailout from a pragmatic perspective. If we keep Detroit on life-support, it’ll continue to hobble along and there will be no impetus for change, and so we essentially put a down payment on the status quo. If we deny the bailout, Detroit will probably be bought out by a foreign competitor, or come back as a smaller American industry, both scenarios will involve the radical change that the industry needs. And they’d employ former GM, Ford, and Chrysler workers.
And regarding the poll that this blog entry talks about — remember that polls can be manipulated, especially by how the questions are phrased. Also, its worth finding out who footed the bill for that particular poll.
David
Nate,
Specifically to your 9 points.
1. Worthy of consideration - no one is asking for help without conditions.
2. Done.
3. Need billions for that that GM does not have.
4. Volt, Hybrid vehicles, etc. etc. done.
5. Done - Long ago. Please review the last 6 or 7 Harbour report releases.
6. What is a “legacy” program?
7. Done - Malibu, GMT900 Trucks, CTS, for examples.
8. Malibu, Cruze, CTS, Aura, - this list goes on.
9. Done - quality of GM products is on par with the top two or three foriegn car companies.
Patricia T
I watched Bob Lutz on Colbert Report dismiss global warming and suggest those of us who want more fuel efficient vehicles were a different caliber of woman who wears no make-up and lets their legs grow hairy. If the rest of management mirrors such idiotic views I understand exactly how the GM is in such deep trouble right now.
GM has ignored the changing world around them, they’ve decided they know better what the American consumer wants rather than looking at purchasing trends and trying to either emulate or top their competitors like Honda, Toyota, & Subaru.
Their own arrogance has lead to their downfall and unless they purge management, especially those with the views of Bob Lutz, I am all for letting them go under.
No bailout is deserved here, you shouldnt be rewarded for shoddy cars and a poor and ill educated business strategy.
miker
There is something really bothering me here. I have read and kept up with the auto industry for years, so I haven’t just started with the crisis. Everybody is pointing fingers at the big 3, laying the blame on them for everything from inflexible manufacturing, Union capitulation, failure to read the tea leaves, etc… Some of it is well deserved, however people are overlooking something important.
People keep claiming two things I take issue with in particular. One is that the big 3 does not make vehicles that people want. This is just untrue. I still see far more domestic automobiles on the road today than anything else. People are buying Taurus’, Foci, Cobalts, Malibus, Chargers, and Grand Caravans. Up until very recently the most popular automobile as far a vehicle sales went was the F-150. The Corvette, Mustang, Silverado, F-150, Focus, Challenger, Charger, Sky, Malibu, well the list could go on but people do buy these things and they usually like them. They just don’t hop the internet and blog about them much. The internet and product reviews kind of act like a self fulfilling prophecy. Perception is a …well you know.
The other thing bothering me is the whole SUV/Truck blather. “Why did the domestic auto makers keep pumping out these gas guzzling vehicles?” You want to know why? BECAUSE PEOPLE BOUGHT THEM! People like them. If you run the Super Happy Burger restaurant and your best selling menu item is the “Awesome Fat Burger”, guess what? You are going to make as many fat burgers as you can. We, the consumer, should shoulder some of the blame here. point one finger and there are three pointing back ya.
Officially we should help out the big 3. Yes they have made mistakes but they can go forward, I think they have some interesting product in the pipeline and they are “our” companies and heritage. Make no mistake Toyota, Honda, VW, etc… they enjoy the support of their governments. Don’t be blind here. ( BTW I have three children an Accord, Camry, Corolla, Civic do not meet my needs. I have a Minivan, a Dodge. Not all needs can be met with tiny @$$ cars!)
gregg
ITS NOT THE CAR’S PEOPLE>>>>ITS THE UNIONS…All I buy is GM car’s and I have always gotten well over 150000 miles on them with NO MAJOR repairs…I had one Toyota Celica once and it was the BIGGEST piece of JUNK….These union employees a killing GM….the blue collar works make twice what the avarage non-union worker makes….I am a blue collar worker and I get paid good money and I am not taking advantage of my company…My wife is a VP for a Big insurence company and these guy’s are making 150000 a year and thats what my wife makes….IT’S INSANE
Noel GM FOREVER
Hmmmmm. My feelings are I support a bailout. We did it for the greedy banks who gave loans to any one who knew how to sign their name,regardless of if they could pay it back or not.
GM has been making excellent cars and I put them right up there with the imports. I work for a Chevy dealer,I only drive GM and I love my cars. I drive an 07 HHR loaded and I love it.I am getting 31 mpg on the HWY and 25-29 city.
GM has been very competitive lately in fuel efficiency. Most of the cars are getting 30 or more. The trucks still lead all others as far mpg goes. They are headed in the right direction,why let them fail??
GM has answered the consumers demands for SUV’s since 1992 because thats what you,the consumers wanted,and when the gas hit the high mark…..you(the suv buyers)abandoned and condemned GM to die. Maybe GM took it farther and let the imports run away with the cars,I wont argue there,but GM always had cars for sale too…not just trucks……
Keep buying your Toyotas and Hondas and keep sending 25.7 Billion annually back to Japans economy…….I’ll keep buying here for as long as I can.
Now……Ias much as I believe in GM and their cars…..upper management is another issue…..As with any Corp,the CEO’s are usually overpaid and usually ….how should I say it…..blind? Stupid?
If there is a bailout,the guys making millions should be salary capped……If the business is not profitable,the ceo should not be either.Sacrifices should be madfe in management positions.
Rick needs to go and I am sure he would have been if there was a suitable replacement. I am sure there are many overpaid suits in GM’s headquarters who dont deserve their salaries right now.The unions need to meet the execs halfway also. Basically,if there is a bailout,GM needs to change their ways of doing business severely and let the public know they are more than just SUV’s.
Since I work for a Chevy dealer,naturally I want to keep my job.If the bailout does not happen and GM is allowed to fail,it will be extremely bad for an already bad economy.We dont need another 2-3 million more out of work. If GM files bankruptcy,it will cause a domino effect for dealers worldwide,they wouldnt last as consumers will not generally be drawn to dealers. This cannot happen. If they get a bailout,there should be rules set up for management as to how they are going to do things differently.They are goining in the right direction but the timing sucks right now. GM needs to gain the publics acceptance again. Market yourselves better,work with the people and dont think because you are the largest automaker that that is where it ends……strive to be better,listen to what the people want and go one step ahead of your competitors……you can do this GM!
Lower some of your prices….while Toyota could not keep enough Prius’s in stock…..Chevy gives us the $55,000 Hybrid Tahoe……not a good move…great on gas for its size,yes,….competitive? No!
Now we(I have mentioned this once here) we have the new Traverse……nice truck,no doubt about it…..but a fully loaded LTZ going for $46,000 ??? Get rid of Saturn,Saab,Hummer and GMC(No need to keep competing against yourselves with a Chevy truck). If people want Denalis,just offer it in a Chevy package or something to that effect.
I am speaking for A LOT of GM dealer employess when I say we dont want to lose our jobs…..we still stand by your cars/trucks……..
GM Salesman
Lest we not forget that during WWII General Motors shut down all of their domestic operations to build planes, tanks, and artillery. Is it so unreasonable to think that after they put their operations aside to help bail out the country that they could recieve a little bit of retribution?
M. Fortune
Well well well, what a predictament we have here. I could care less if the car company’s go under. The bailout is only going to help the owners keep their pockets hefty, when the GM eventually goes under… It is the taxpayers money helping out these automobile companys, but the taxpayer can’t even afford to buy a car these days. I don’t understand why they think giving these companies money will help, because you give them the money, and then turnaround and lay off some 40,000 people. I don’t want to say this, but their is no hope for America…
Melrose
Actually it was the government that is responsible for killing the Big 3 with their taxes and laws…especially Labor Laws that allow parasitic unions like the UAW to use legal violence to steal GM Shareholder property.
Does not entitle you to my money…Just move your headquarters offshore and prosper elsewhere…You owe it to your Shareholders to leave this parasite society and throw the UAW to Burger King.
I AM GM
Gary Dikkers wrote “Would the oil companies had made that huge profit if not for the cars the Detroit Big Three built? ”
You know Gary it gets very annoying hearing how the Big 3 held a gun to consumers head and FORCED them to buy trucks and Suvs. Your state of Wisconsin has lots of both. And guess what Gary, if you get your way and the big 3 go down, guess who will be making , advertising and selling trucks and Suvs then. And theirs get extremely lower mpg fuel efficiency. If you take one player out of the game another one will be there to take its place. We’ll still be buying trucks and Suvs because that’s what consumers chose to buy when gas was $3.00 or less. That’s were alot of opposition got started with the eco friendly folks. They ignorantly believe if the Big 3 go down they have triumphed victory. The same big vehicles will continue to be built. But now profits for R and D will go to foriegn countries. The US can not be a technological leader without money to develope new technology.
Send millions of workers out of jobs in a very fragile enviroment and all you’re going to do is put an additional burden on the mortgage institutes. I give most 6 to 9 months before they throw their keys to the house and or their cars back to the banks. Then the banks will be going back to our Govt asking for another huge bailout consisting of billions. And trust me it’ll be alot more then 25 or 50 billion the auto industry is asking for in a low interest loan.
Watching the events with the Wall Street bailout of 700 billion and the actions of AIG it is apparent some of our poloticians should not be running this nation. When they believe throwing out 700 bil into a “system” and not 25 bil into manufacturing is the right thing to do. They will understand when it is too late. Once we start down this road there is no turning back. When you take jobs away from workers you take away their cash. Cash to pay for mortgages on cars and trucks. Manufacturing means cash and cash is KING. No cash means no mortgage payments will be made to mortgage companies.
And for those who are against a bailout, you better becareful what you wish for, you might find yourself standing in an unemployment line. I guarantee alot of you who are saying “no”, WILL be affected. If you don’t lose your job it will hurt your personal finances.
Does no one ever wonder why so many Countries have auto industries. Could it be because an auto industry that creates jobs has a strong economy. Japan just announced they are in an official recession. Their vehicle sales have plummetted like others. They would have been in a recession much earlier if they practiced fair trade. Instead they close their doors to other foriegn car competion.
A country without an automotive industry can not be a super power country. Japanese Govt must be sitting back rubbing their hands together saying ” It won’t be long now” thanks to the American Govt and their people. It just sickens me!!
I AM GM and an AMERICAN
Sheth
Its hard to believe any sane person could come here and post that all of this is on the backs of the current management. Reading the comments here its apparent that at least 50% of those posting have no idea about what GM makes, what changes have been made to the UAW contracts or how the credit crisis has impacted GM. Instead what we have is a long list of GM haters who are trying to outdo one another by posting the most hostile message possible. Some people here have so much disdain for GM management and/or the unions that they don’t even care about the jobs of millions of people. It’s pretty sad that people are taking this so personal. I don’t think for a second that the hostile comments here are representative of the general public because many of these commentors appear to be dedicated GM haters who spend a lot of time posting here. These people seem to think they will get some sort of satisfaction from watching an industrial icon collapse and a million people put out of work.
Any objective business analyst (not that there are many) would agree that many of the structural problems have been addressed. Any car guy would tell you that GM’s products are fully competitive with the class leaders. There is so little objectivity on display here that you have to disregard half of what’s said. We even have people who run anti GM blogs posting on here about GM “begging” the government.
Those asking about GM’s plan should note that they have made their plans known to a large degree. They are not planning to redesign their V8 SUVs, they are working on the Cruze with a 1.4L engine that may return 40mpg, they are working on the Volt, they are rolling out new hybrids, expanding the use of direct injection engines and 6 speed automatics, etc. They have a plan that isnt centered around V8 powered trucks. The CTS and Malibu show you the direction GM plans to go in the future.
Those talking vaguely about “restructuring” need to offer specifics. They have cut their workforce, consolidated engineering and closed plants. Isn’t that restructuring? If its not people need to explain what they want GM to do. The truth of the matter is most people have no specific advice, they are just stating what they have heard and read many times before. If GM slashes much more of its workforce it will probably barely be able to design and build new cars. GM and other automakers already have to meet new CAFE standards so all of this posturing about GM needing to build the vehicles America supposedly wants is moot. GM will have to build more efficient vehicles to comply with the law and that’s what they plan to do. Even if gas prices stay low for a while the Federal government has effectively killed the large SUV market via regulations.
Canadian-American
First of all, the bailout or loan is all about the credit crunch, not the normal state of the business for which GM to name one, had a plan leading to much better results around 2010 (I’ll get back to this later). When the North American automobile market suddenly drops to less than 10 million units per year because of a major recession and lack of credit, I bet that even Toyota is losing money right now.
Some of the reasons the US Manufacturers have been in trouble in the last few decades, other than some miscues, is that they’ve had to manage a constant downsizing of their operations, which is totally normal when you dominate a market that welcomes so many foreign manufacturers with very aggressive strategies, very competitive products, and also a new business model. In the end, people buy a little bit of everything, and of course more of what’s better. US car manufacturers offer very competitive products in most categories and they do it while they’re downsizing their operations. So far, they treated the people the had to let go and their communities with a lot more respect and social conscience than others would do.
What’s been killing older US corporations is the old business model where they’ve to support most of the heath care and retirement burden, especially when their number of active employees is outnumbered by their number of retirees, when the cost of health care is growing out of control. This old business model created the middle class and the prosperity of this country. This is why all the new corporations operating in the US don’t offer anything close to those benefits, and operate without unions. The US is the only industrialized nation that left (and still do) the burden of health care to its corporations and that created an uneven playing field that’s killing our manufacturing sectors, one by one, in the most open market in the world. This is where this country needs to adopt more competitive practices.
As a Canadian, it amazes me that this country is willing to send their people to war to protect their freedom and way of life, right or wrong, but on the other hand, just allows its competitors to win the economics “war” so easily. As a Canadian living in the US, I’m proud to buy US engineered and made products.
This bailout needs to be seen as a loan (with interest I hope) to survive a market that’s well below the threshold that those capital intensive industries need during this crisis. The automotive sector is not and will not be the only one, but the more vulnerable at this point in time. Many mistakes were done, but never forget also the right calls.
.
sh
Moderation, common sense and reality are the first victims of emotional politics. There’s enough blame to go around from the greed on both sides and the U.S. automakers need to take immediate action to restore some faith in their business and their products, ya think?
A few suggestions:
Look at the best sellers and trim. Let’s say, keep the Corvette, Malibu, Cobalt, G6, G8, Enclave, CTS and DTS.
At the least, dump the STS and LaCrosse; decide between the Torrent and the Vibe, the GMC and Chevy truck lines, and the Solstice and Sky.
Put pressure on your retail frontline to start providing some service and satisfaction, fer goodness sake! I just bought a car from a megadealer subsidiary and have never had a less pleasurable experience… and that was on a $40,000 CTS! Shame on their “policy” that works only when it benefits them.
John
GM has come to the American people to help get support for their much needed bail-out. It seems funny that over the past 20 years they have stopped supporting the American public by buying parts they use to build their cars (and corporate empire) overseas. AMERICANS NEED JOBS. I guess as you look into the possible unemployment mirror you may see youselves in, in the near future, you will come to the realization that you are finally seeing what many outsourced job seekers have seen for a long time. AMERICANS NEED JOBS. You probably won’t want to publish the percentage of parts that go into American cars that are manufactured overseas, but I would guess its close to the percentage of Americans who oppose your bail-out.
Dennis
Well you have lost at your own game, If the rules don’t work lets change them to fit our need’s.To bad I say.No bail out!! It comes a time when we as the Americans just have to say no and except the pain that will come with this but it will be short lived because we will buy cars and they will not be from the big three.Their will be 100.000’s of new jobs from the foreign Companys to build cars here that will be needed to take up the slack.This will be a endless black whole of money that will only prolong what needs to happen anywayThis is not our fault you have put yourself here!There will be a back lash in this country against companys that get a handout at the tax payers cost and I for one will be at the front of the line! I am sorry but I will not buy a UAW built car.
Lisa
Even though I’m a californian and believe having a car is a human right, I don’t think that the automakers’ bad strategic decisions in focusing on gas guzzling cars should enable them to get bailed out. All you have to do is look at the last few years of success Toyota and other companies had in making fuel efficient cars.
Yes all large ticket item companies are suffering but if there is any assistance it should be on a sliding scale related to the economy, NOT to the losses suffered by any one company who had a misguided product strategy. Sort of like I feel people shouldn’t get additional welfare every time they had a baby if they were already on welfare.
Michael J
You’ll never be back on solid ground until the UAW is out. File for Chapter 11, lose the contracts with the UAW, hire non-organized labor, and work from there. Maybe the feds can loan you money on the condition of Ch 11 reorganization.
Of course, other measures will be needed…..downsizing/combining brands, dealers, etc.
This is the only choice left.
Steve
I can really understand why General Motors is in the financial condition it is in from some of the ignorance displayed on many of these blogs. General Motors has more 30 mpg vehicles than any other manufacturer. In the past few years General Motors has won awards for Car of the year and Truck of the year. General Motors has many of the most productive auto plants in the world in the United States and Canada. General Motors lead the way after 9/11 with its Keep America Rolling Campain. General Motors Factories ran production on 9/12 while the rest of America stood in shock, Gm people are proud people and they don’t quit. They overcome obsticles and adversity. They will overcome these challenges too!.. General Motors has built vehicles that the public wanted. Who predicted gasoline going to over 4 dollars a gallon. The current 2 mode hybrid Tahoe gets better city mpg than a toyoto camry. General Motors restructuring was well under way when the time bomb in the housing market hit. Builders no longer were in need of trucks and the credit markets froze. Gm has spent billions of dollars on restructuring in the past few years. They spend billions of dollars on R&D each year. The credit crisis has crippled sales. All Gm needs is a loan from the government so it can get past this credit crisis.
Stan
I just wish the USA made cars as desirable as Mercedes, BMW, Audi, Porsche, and VW. These companies cars are desired all over the world and provide something for every personality and economic class. This is coming from a small country called Germany that just happens to have the second or third largest economy in the world. Where is the the innovation here.
If I were GM I would invent a brand new brand and distance it from GM. Think: Toyota to Lexus and Nissan to Infinity. The marketing really helped them compete against the Germans in the US. Saturn’s image is too marred already - so you need a new brand. Sell the brand through the web and stake out some territory on some of the huge GM car lots for a cool mobile pre-fab sales office. The salespeople would be like Apple store employees helpful and low pressure since the products will sell themselves. Gradually, this brand would take over and you could drop Pontiac, Buick and even Chevy.
Dr. Turkey-Belly
Miker said,
” “Why did the domestic auto makers keep pumping out these gas guzzling vehicles?” You want to know why? BECAUSE PEOPLE BOUGHT THEM! ”
Damn right ! If people didn’t buy them, then I doubt Toyota would have invested 5 billion $ (yes, billion) in a new plant to build full size Tundras and Sequoias. These vehicles, incidentally, were on a par with GMs classmates i.e. were no better in the styling, interior, reliability fronts, yet got SIGNIFICANTLY less fuel economy. Oh, they also have MASSIVE incentives on them right now - because people are not buying.
Think Toyota is not affect by the US economy and the current credit freeze ??? Look at their share price over the last 7-8 months and guess again. They just slashed there profit targets by 70 %.
Never before have a seen such venom toward a firm. Never. Especially since the industry provides, directly or indirectly, 1 in 10 jobs in the US. And all because the Malibu or whatever you bought way back in the 80’s sucked. I almost WANT these firms to fail, so you will see how dumb and shortsighted you all are. And how it will take your economy several decades to recover. Decades. Crumbling roads ? Cut social services ? Reduced summer camps for kids ? Higher taxes ? Etc etc all of these things are related, and all are affected by the economy of the US.
Get wtih the program. The vehicles GM makes now are light years ahead of the old crap, and are on a par with, or better then, the Japanese counterparts. Do you research, boneheads.
This is not about giving tons of loot to a bunch of crooks, this is about your standard of living. Think big, think long term and maybe, just maybe, you will see what is at stake here.
This is your wake up call.
– Tubbs
jinwa
GM must do more than this desperate plea for taxpayer bailout. They must restructure union contracts and legacy benefits, eliminate duplicate models and brands, streamline operations, and reduce dealerships. Sounds like a perfect Chapter 11 scenario. NO BAILOUT.
Nancy Girl
You have NO way to survive without 100s of billions in taxpayer money!
You know it as well as I do!
You have to file Chapter 11 to get rid of the murdering liabilities with UAW and Dealers before you even have a CHANCE to survive!
You know it as well as I do!
Consider moving offshore to Caymans, Bermuda, or Dubai to get the parasite voters and their government parasites off your back!
-Nancy
BobT
Dont waste time writting GM.
Write and call your Senators and congressman.
I AM GM
Sheth wrote….. “Reading the comments here its apparent that at least 50% of those posting have no idea about what GM makes, what changes have been made to the UAW contracts or how the credit crisis has impacted GM.
Indefense for the 50% spewing garbage out of their mouth Sheth they only know and believe what they read in the media. It’s much more easier that way instead of looking for accurate information.
It’s too bad GM has to spend money and time trying to tell the real story. That’s one thing Rick Wagner has always said,”level the playing field for all and we’d stand head and shoulders above everyone”. Just like we are in emerging markets.
It’s all kind of ironic……….the Japanese brought us into WWII by attacking our Naval ports in Hawaii, the USA military responds by going overseas to meet the enemy face to face. GM, Ford and Chrysler convert factories into building military supplies helping win our freedom. America funds Japan to rebuild itself after the war. And now Japan is coming back to win the real battle with the help of American citizens and politicians. Who ever rules the automotive industry will rule the economic powers of the world.
Patriotic blood runs very thin in this country.
MN
When you were properous, people want to be a part of you. When you go down, no one want to be around you, especially your friends and family. Fact of life. In this case, the FED is who I am talking about.
If the FED refused to help, what is the back up plan?
If Fed agreed to help, what is your plan? Do you have one?
Here are some of MN foolish advice:
1. EXPAND R&D.
2. Hire true engineers to built better cars. The engineers that have the passion to built cars, not pushing paper work.
3. Start praying.
Good luck.
PS> Who signed off the release of the Aztec? Have you fire this guy yet, or is he/she still around? Aztec was a disaster for you guys!!!
Edwin
Let’s address some of the arguments from the skeptics and the naysayers.
First, the auto industry didn’t cause the economic crisis, the government’s policies (unfunded mandates etc), volitile stock market, credit crunch, and the war caused the present crisis. The American auto industry made strong profits prior to 9/11/01. The American auto industry kept the US out of recession after 9/11/01 with sales incentives.
Senators Kyle and Shelby/other critics are also wrong and placing America’s economic security at risk on this issue. The American auto industry has solid business plans. Government loans to the auto companies to bridge the credit crunch are sound policy. Congress should act to stabilize the auto industries health care funds as well. The health care (OPEB) and pension funds for retirees can run a matched book once balanced and have no adverse affect on the auto industries business model. These funds went out of balance following the volitile stock market after 9/11/01 and the auto companies have worked to bring them back into balance. Failure of Congress and the President to act will cost the taxpayers hundreds of billions of dollars and millions upon millions of jobs.
A vibrant Amerian auto industry helps the entire world economy, the synergy helps the entire global automotive industry. The leadership of GM, Ford, and Chrysler has helped to drive innovation and competition in the world economy.
I’m qualifed to concur with Dr. Turkey-Belly’s assessment above that the recession could worsen far beyond what is predicted if Congress does not help the Big Three American Auto companies. Double digit unemployment is possible. However, if Congress acts to help the auto industry, the liklihood that the recession will end quickly is far greater. And I would go further to say if Congress helps the American auto industry generously there won’t be a recession at all, the banking crisis will be over very soon, and the most of the $700 billion banking bailout money would be saved. I disagree strongly with the rented economists who are quick to abandon the industry, these critics are being highly irresponsible in their commentary and display a disregard for the economic security of the Unites States.
The current Chamber of Commerce numbers project the potential American jobs currently at risk between 3 million to 5 million jobs if Congress doesn’t act. Since 9/11/01, however, the U.S has already lost over 2.8 million manufacturing jobs (correction to my above figure). If Congress acts to help Amerian auto industry, we may not only save the 3 to 5 million jobs, but also see a restoration of many of the 2.8 million manufacturing jobs lost since 9/11/01. Thus, a vibrant American auto industry can impact the standard of living positively in the US, Canada, and Mexico far beyond what the CAR study estimates in potential damages for the next 5 years since it doesn’t include the potential benefits of a vibrant recovery that could add even more jobs. The American auto industy also positively impact the economies of Europe and Asia.
No one will benefit from griping and complaining. Investors have been generally pleased with the union agreements going forward. Let’s not politicize the issue. UAW critics should realize that the most recent agreements are realistic. The companies major problems have been with the unfunded mandates and regulatory burden imposed by the US government that foreign companies do not necessarily have in their home countries. Also, the contradictory morass of CAFE/Emissions/Safety regulations in the US.
Helping the Amerian auto industry, and thereby reviving the American economy, will help the entire global economy and the foreign competition will benefit. Its in everyone’s interest.
GM enthusiasts are not the least bit concerned about how much market share or competition there is, even though auto execs might be thinking about it. We are concerned much more about having a strong economy in the United States. When US saving rates rose in the 1990s, every auto company saw gains in sales and profits, even the foreign competition, there was plenty of success to go around. The American auto companies also saw market share rise during the late 1990s. The American auto industy is the epicenter of global innovation for the future spending $10 billion a year on Research and Development. There is nothing in the world that compares to it.
The auto industry should realize that the sales potential in autos can be more a function of design focus with the inspiration to trade for something new. Auto sales also trend upward when the US savings rate is in good shape or rising. There is plenty money out there, even now, with plenty of people watching/waiting for the right car to come along so that they may trade. Presently, many are watching to see if the economy improves before they buy. The fence sitters need a boost.
A marketing boost might come from offering frequent trader points - similar to frequent flier miles. Frequent traders could receive points to trade. Choosing dealer service could also garner more frequent trader points, building customer loyalty.
Congress can turn the economy around very soon if it does what we hope and that is help the Amerian auto industry with their requests. Equities in the USA are vastly undervalued, helping them balance the funds for their health care and retiree obligations would improve equity value in the USA across the board.
Of all the companies, the American auto companies are among the most trusted, most respected, with the highest integrity - They really are the backbone of the country. There’s no reason to doubt their Execs and their leadership as one might do with other industries. the American auto industry has invested heavily in America and worked tirelessly to satisfy workers needs and consumers. What this industry has endured since 9/11/01 no industry should have to endure. There’s no reason whatsoever for the Congress and the President to delay.
If some are thinking of the retiree costs, remember the million or so retirees also purchase and help the broad economy.
From an economic stand point, we do not believe mergers, consolidations, or downsizings are beneficial in this case. The American auto industry is very lean and efficient. It has already taken steps. The auto companies would do well to stay separate and distinct and Congress should help them.
No past planner/forecaster could have fully anticipated the extent of the rampant health care inflation in the USA with such items as $2,100 CT scans, $1,000 EKG’s, along with the high cost of leasing these space age machines to hospitals, the over-board standard of care imposed by the FDA to require excessive testing beyond what doctors would recommend or think they need to do their jobs.
FREEDOM Fighter
NO BAILOUT
NO NO NO NO NO!
The equity of GM is zero. The owner is the union and the boss is ron gettelfinger. Every dollar you give it is just another extra dollar for lazy shiftless overpaid overperked slobs who should be working for half pay in mexico. Then Americans would get less expensive cars or higher quality for the same money.
Its time to finally break the UAW. NO BAILOUT for this union that spent the last 30 year overnegotiating and hurting the American consumer.
Jerry
I am a GM retiree. I worked for 32 years and I have seen mis-management and waste of all kinds. CEOs in my opinion have been overpaid and are responsible for losing the market. I am tired of hearing about the GM employees’ benefits and how they are over paid. Goverment employees have benefits and pay that is good as or better than the average UAW member. Where is the accountibility for their productivity or lack of. How many gov. employees have you seen fired or laid off? Where does all this end? Where did i all it begin?
Eric Walker
What Gm doesn’t seem to recognize is that its Brand has been recked from years of catering to stock prices rather than a good product for a good price. They preferred to go after workers salaries and benefits rather than putting out a more dependable vehicle. I am not talking about Cadillac’s and Corvettes 50k and up. Their refusal to stand behind their product with a strong warranty (compared to most foreign car makers 5 yr 50K mile warranty).
If your customer does not own a house the most likely next expensive valuable item in their possession is their vehicle. I have owned several GM products and my father worked for GM 30 yrs. I own a 2004 Pontiac Grand prix, 48K miles. The list of problems as of today Heads-up-display will not come since bringing it to the dealer for a burnt out transmission, a new radiator( service manual says to flush every five years or 150k miles) Dealer cost to fix? $2300 to rebuild tranny(yes rebuild), $860 for HUD, $1100 for radiator. A grand total of $4300. It doesn’t matter how much money they are loaned. They will do what they always have done. Raise the price, while giving you the same poorly designed product. I recently saw Mr Bob Lutz on youtube taking about measuring the gaps between the doors and trunks of their cars to those of foreign cars. If your four yr old car does not drive after 45k miles who cares about trim gaps? Their customer base is slowly shrinking and you can add me to that list of former patrons that will never support them again.
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Felix
Dear GM
I have said it before and it certanly bears repeating. It’s the products. After being so bad for so long you can not compete with products almost or just as good as the compertition. There are generations of people who have never owened a GM product and refuse to even consider a gm product. Until you can convince these people to look at and buy your products you are doomed to failure. The best way to get these people to look at and purchase your vehicles is to offer the best products across the board. T he best looking,best built,best performing(acceleration,braking,handling,stopping,gas milage and best riding.) and last but not least the best warrenty,not just powertrain but bumper to bumper. When I say the best warrenty I mean by a lot not just a few thousand miles. In times of desperations you need to take desperate measures to grab their attention.
Edward Hayes
You’re right Stan.
I said before it’s the brand Stan, and GM should give US consumers exactly what they want-FOREIGN CARS - And sure up their existing brands in the process.
Put Buick’s headquarters in China. GM has absolutely nothing to lose here. China loves Buick, America hates Buick. GM sells more Buicks in China, and Americans won’t seem to miss it. China will do a much better job with Buick too, and ultimately sell more in the US if GM gets out of their way. Doesn’t Ford which owns Volvo still have its headquarters in Sweden? So Volvo is not associated too much with Ford and its domestic brands. GM can do the same with Buick.
Put Hummer or GMC’s headquarters in South Africa or the Middle East where there is a market for SUV’s.
Put Pontiac’s headquarters in Australia. Isn’t Pontiac supposed to derive their future product from Holden?
Put Saturn’s headquarters in Europe with Opel.
Just leave Cadillac and Chevrolet in the US. Look American’s want foreign cars let them have them.
Hay it’s better than the other option of just killing the brands like every other unwise pundit and automotive “know it all” has suggested. What is more radical, my idea or theirs?
The automobile industry, like it or not is a cyclical industry and that will never change. Even Toyota lost money in the US last quarter, it might be wise to remind our not so wise leaders of that fact.
What a lopsided world.
Japan has 9 automakers with 12 brands in the US that are GUARENTEED not to go out of business or to be taken over by more than 50% foreign or domestic ownership. Our automakers and brands do not have that guarentee. So in other words, get rid of Mercury so Mitsubishi can stay, survive, and thrive. Mitsubishi which lost over $9 billion the last couple of years. Some Americans are so ill informed that they will be happy to go along with it. That is just what some have suggested, kill US brands, so what, the foreign foreign brands which do financially on par or worse, let them flood into the US which actually enjoy government backing and protection through legislation?
After spending trillions to build our bridges and roads and tillions more to maintain them every year, it sounds like this subsidy will ultimately go to foreign automakers if Republicans have their way.
Edward Hayes has a very different opinion.
Obama! Help GM, Ford, and Chrysler at once. Republicans, get thee to a nunnery.
robert
Just rented a Chevy Malibu for a week for my team - bottom line
radio stop working on second day
dashboard lights stopped working on second day
Driver side seatbelt light wont go off
Shift lever cover fell off
I couldn’t believe how much plastic a company a could actually stuff into a car interior. it looks like a 1970’s Chrysler car, incredible levels of poor quality.
Steve
Here is some food for thought…. If GM is no longer in business who is to say that the Japanese will continue to manufacture vehicles in the United States? The only reason that they are here now is to create the false impression for people that they are helping American workers. Japanese vehicles made in the US are mostly contented with foriegn parts. If Toyota and Honda dont have competition in the United States they will move their jobs back to their own country. You can count on it !
Nate
Charlie H.
While I agree with quite a bit of what you say, I think you miss some of the reality behind a few of GM’s products. As much as I don’t like GM’s decisions at times what you said isn’t really true. Mechanically speaking GM has made some smart design choices… interior and styling though really are lack luster.
GM is addressing the reality of its new situation in a fairly logical manor. People want SUVs. SUVs also have the highest amount of spare weight carrying ability and the most room available. Therefore it is far cheaper and easier for GM to make a SUV hybrid then it is to make a car. Simply by the fact that they have a lot of room and weight hauling ability to use for the hybrid technology. Squeezing much of this technology in current cars isn’t easy and certainly not quick. Additionally since there are such a large fraction of SUVs out there and SUVs have the lowest fuel economy… even a small percentage per vehicle makes a HUGE impact on the US fleet of cars. So the overall national fuel savings goes up.
As far a GM vs Toyota hybrid effectiveness. GM has looked at the total cost of ownership. The higher the gas prices are the better a Toyota seems. But when one looks at costs of ownership GM has done something wise (for the time being) and went with a lesser hybrid in its Aura and other cars. Less up front cost a bit less saving but an overall lower ownership cost. Great move on GM’s part to bad their interior quality isn’t good.
I agree with pretty much everything else you say.
Mark T.
Very well put. I can’t agre with you more. Call it a Loan and I’m fine with that. Heck even all it a zero interest loan and I’m fine with that.
I think on the larger picture that its a mistake for total capitalism to be in the auto industry. If anything the German and Japanese have shown us why subsidizing these industries is so important. The technology sector of any modern civilization is very important. Why not have the government heavily fund certain aspects of the industry. They already fund the whole defense industry which is very closely linked with other transportation industries.
I don’t think taxes are really required as much as the US realizing that it needs to brace up our technology and manufacturing segment to be more competitive. Look at all the grants the medical industry gets….
A bailout… no way… a properly structured loan program ok… as long as GM doesn’t fail us.
John,
Well spoken. I too have worked in a union shop (as a non union employee). It was ridiculous. I had to wait half a day to have a welder plugged into an outlet just because it was 440 Volts. I also had to wait for their welder to weld something. It took them a day to do what I later had to redo (it only took me about an hour or so). Unions had their place long ago but things have gone to far. The pendulum needs to swing back the other way a bit.
David,
Why does GM need billions to drop their brands? it doesn’t cost that much to downsize them or move people around… it might cost billions to create a new brand… but when all their cars are build on the same platform all you do is drop the ones with the most fat and put the energy into one (see my posts below on my rebranding suggestions). If GM used the structure they have now but in a more intelligent way they wouldn’t be in this mess.
I’m not sold on the Volt yet. Its close but not there yet AND its to far in the future.
Legacy….. today… GM has left behind the Legacy products like the older Chevys, Olds, Pontiac etc… the older cars (8 years or older) are no longer supported by GM, yet they are still decent to drive except all the little stuff that only GM sells is starting to go bad with many of them. A dedication to its legacy products means that rather then push new vehicles out designed for sub 100K miles life spans… push fewer vehicles out designed to say 150K or 200K miles, then support it with parts including all the little things that go out like A/C electronics, and other interior mechanical/electronics. Additionally that means a no hassle no BS warranty. None of this business I have seen in the past where a dealer won’t cover a warranty because GM doesn’t cover this or that. If GM offerers a bumper to bumper warranty they better include everything except gas and tires… there’s no reason not to warranty anything that GM makes. I have heard and seen far to many GM warranty claims that GM weasels their way out of and sticks their customer with the problem. Thats not the way to do business especially when you are trying to rebuild your brands.
Even if I believe the quality is on par with the top makers… GM still has to win back our trust by keeping this up for 5 to 10 years.
GM Salesman,
Don’t forget that during WWII GM was paid by the government to produce what was needed. And at that time I believe there was something like 90% taxes!!
That was more then 70 years ago. That was back when the letter GM had meaning. Before they cashed in their value for money. I don’t think GM deserves much of anything without a real plan for success and the future.
Sheth,
First of all I don’t think anyone on here is a hater.
I do think that people are aware and those that aren’t need to wake up to the fact that unions dont’ work that well. They drag a lot of companies down with workers who think they deserve more then they do. Why would we care about the jobs of millions of people or GM for that matter. Its not about the jobs… Its about the people and their continued choice to make poor decisions about their own future and GM’s future. Whether its management or unions. They lack foresight and the ability to think beyond today.
The problem is that any car guy is not the customer base of GM’s competition. GM can’t lift its own weight if the consumers it needs to buy its products to do so, have no interest in GM. GM maybe competitive.. but they are losing the competition. That is what reality is and says.
I think anyone with a rational, sane, objective view point would see what has happened at GM and agree that they messed up big time quite a bit. And why should we bail them out on our expense? So they can get up and do it again? In financing people have credit…. GM lost theirs a while ago.. now just like someone with bad credit GM has to earn its credit back.
GM has made no mention of how they will transition to this new GM and clean out all this old SUVs and unsuccessful products. It has also made no evidence of it plans to move toward the future.
I don’t call the thing you mentioned restructuring as much as doing what they need to to survive. IF GM slashes its work force to the point it can barely design cars it will be right where it needs to be (they call that lean engineering).
The Federal Government has killed the SUV market but why do so many people gripe about CAFE?
sh,
I disagree if GM is going to reshuffle its deck here’s how I suggest: Ax Pontiac and Chevy. Move the Malibu to Saturn (Aura), Move the Cobalt/Cruze to Saturn (new name), Move the Cross Overs and light SUVs to Buick, Keep GMC for the trucks, Keep Caddy, Give Buick the Riviara, Bring in Opel, Move the g8 to the Opel name and bring the Insignia here, Keep the CTS. Move The Astra to the Opel name and the Sky/Solstice to the Caddy name, The make Corvette its own brand name..
It’d be pretty simple to do and work and all thats left are the vehicles worth keeping with none of the old junk.
Steve,
Its not ignorance its reality. GM may have more 30 MPG cars then anyone else out there… but the cars that people like and are interested in aren’t 30 MPG cars…. For instance the new G8 is awesome, so is the new CTS, and a few other cars.. but how many of those are 30 MPG cars? GM simply hasn’t figured out how to make a high MPG car that has a nice exterior and a nice interior. The Aura and Malibu are the closest they have gotten and still have a ways to go.
I don’t know why people keep going back to 9/11… its irrelevant.
GM people aren’t all that proud apparently… They aren’t proud enough to quit their unions and keep their company from going out of business… If I were at that company I’d be working extra hard for less pay to keep it a float.
GM has the Hybrid trucks but the styling isn’t what Toyota has and thats part of what people like. Plus the whole Toyota factor…
If GM had other CARS on the market it wouldn’t’ be having these problems. If GM gets a loan they better have a good plan and stick to it.
Nate D
Steve,
The true ignorance is the attitude of GM executives who, like you, just can’t believe that there is anything wrong with GM. It MUST be everybody else, GM can’t be to blame, right? It’s just a big conspiracy where everybody in the world has gotten together to kick dirt on poor old GM. Even in China where GM was getting some sales traction they have been overtaken by Toyota. Quality and reputation need to be earned, and GM only knows how to cheat, lie and steal.
Poor old GM - all they need is money from somebody else now, because they have mismanaged and squandered any profits that they ever made. And what happens if they get the bailout - they will burn through that too, and be in the same place again. Because GM can’t see past their own noses to make any real changes. They have poor employee practices, horrible relationships with their suppliers (the worst in the industry) and lousy relationships with the overpaid lazy UAW workers. Is it any wonder that the majority of cars that they build are crap? Is it any wonder that the reliability, re-sale values and long term satisfaction of GM cars are among the worst in the industry?
GM needs to hear these hard facts. They deserve where they are, and it IS their fault, credit crisis or not. The entire executive team (except Lutz) should have been fired years ago. Talk about entitlement - most of these idiots have no business being in leadership positions. Good riddance.
SteveG
Here’s the deal:
Theres no way you will win over Congress unless you and the UAW come up with a plan that proves you are serious about getting healthy again.
I suggest:
1. Ditching the Jobs Bank entorely-NOW. I’ve heard that those in the bank can turn down work FOUR times before they stop getting paid! Why are they allowed to turn down a jop once!? Its called unemployment, use it.
2. The current UAW members take a $5.00/hour pay cut immediately.
3. The UAW has NO say in which plants stay or go.
4. No Bonuses for White Collar workers until GM is profitable.
5. Kill off one or two brands-I suggest Saturn immediately. Sell off Hummer and Saab.
6. Reduce the amount GM has to pay towards the Health Care Plan to $20 Billion. How about shopping around for the best priced health care, UAW?
7. Announce the replacement for Rick Wagoner and the entire Board of Directors. All failures, all need to go.
Give this plan to Congress and I believe they would give you that Bridge Loan, As is, I think you are sunk.
Adam
i totally agree with Michael J !
Chris R
Sheth said: Those talking vaguely about “restructuring” need to offer specifics. They have cut their workforce, consolidated engineering and closed plants. Isn’t that restructuring?
No, it isn’t. Consolidation, layoffs and closed facilities are cost saving measures for sure, but what about the overpaid and possibly redundant execs drawing large salaries? It goes against the normal corporate thinking, but it’s also true that the administrative arm of any large company is often one of the places where those companies have the largest fiscal drain. By GM paring down to only essential personnel in their administrative areas, and that includes the replacement of execs with little to no background in the industry (people who worked for ad agencies and companies that made toothpaste or paper towels before joining GM) with those who do have considerable experience in the industry. GM needs a lean management team in order to both save a ton of money, and also be more flexible and quicker to market with new models. Restructuring is also assembling teams of designers, engineers and bean counters to get a new model from concept to production, and then have marketing sell it. Marketing should have nothing to do with the design phases of the cars except perhaps to offer suggestions based on what the competition is doing. GM also needs to get away from brand management. I honestly think this holdover from the 80’s is part of the structural problem of GM’s administrative arm. Chevy isn’t a brand, it’s a company owned by GM. It was started by Louis Chevrolet a long time ago, and actually predates GM. It should be treated with more dignity than it is. Regarding it as merely a “Brand” is quite insulting!
David
“Why does GM need billions to drop their brands? it doesn’t cost that much to downsize them or move people around… it might cost billions to create a new brand… but when all their cars are build on the same platform all you do is drop the ones with the most fat and put the energy into one (see my posts below on my rebranding suggestions). If GM used the structure they have now but in a more intelligent way they wouldn’t be in this mess.”
Because dealers don’t give up their livelihoods and those of the people that work for them without a fight. That fight usually involves some months of legal wrangling and payoffs to each dealer to close their operations or consolidate with other dealers.
Dr. Turkey-Belly
Robert,
That is unfortunate. You might want to consider the fact that your car was a rental, and generally people do not care for those as they would their own.
Speaking of plastic interiors, you should sit in a Honda or Toyota. Equally plastic. Just the name of the game in the mid-size segment.
Just some thoughts.
– Tubbs
D
I’m sorry, but this is absolute crap. I’ve been watching this blog for a while and GM has never owned up to it’s problems. They keep spewing the same line that everything is fine and it’s “consumer perception” or some other marketing BS that keeps them from selling cars.
GM has failed because of their own mistakes. And GM isn’t just Wagoner, it’s everyone, all the way down to the Union guy on the line. This company has failed to pull together as a team and instead everyone has rowed in their own direction, and now we’re seeing the result. No amount of government money is going to change that diseased culture. And besides, in case nobody has been paying attention, our government is ass-deep in debt already. We simply don’t have the money to lend.
So yes it’s sad that so many hard workers will pay for the mistakes off this organization. But just as a forest has to burn in order to clear out the dead brush and make room for new life, it’s now GM’s turn to “burn off” the excess, lean down, and get competitive again.
Concerned Interest
It seems as if people think this all happened strictly because GM, Ford and Chrysler have been doing absolutely nothing for the last decade.
Never mind the landmark changes to the Union contracts that help level the playing field betwen the domestics and imports, the potentially game-changing extended electric vehicle platform (e flex/Volt), which has the potential to be the true future of vehicle propulsion and one of the biggest changes to the automobile since fuel injection or the catalytic converter.
The truth of the matter is that all three have been on the path to meeting and surpassing the imports. The minivan segment was invented by Chrysler. Ford and GM have some of the best trucks - BAR NONE - in the industry. I have driven and now own a new Malibu, and I can tell you from experience that none of the import midsized sedans hold a candle to the Malibu.
This ALL goes back to the collapse of the credit market. In reality, everyday living, everyday consumer joe and jane sixpack and their 2.3 children have three major debts:
1) their mortgage
2) their car loan or vehicle lease, sometimes two
3) their credit cards
Oh, sure, some of them have boat loans, summer-cottage loans, but certainly not many of the average struggling family have these additional loans - especially if they are just working two jobs trying to make ends meet.
The mortgage industry is ABSOLUTELY DEPENDENT on credit. Nobody of average means can make a big purchase that can be 3-6 times their yearly income without it. There are virtually no buyers of houses that pay cash. So, it is no surprise that when credit dries up, the first market to become problematic is the housing market.
Right behind it, though, and the second largest purchase (most would consider necessary) for any family is transportation. If you’re a struggling college grad to the dual income w/ children family to a SITCOM (Single Income Three Children Opressive Mortgage) to a DINC - you ALL need reliable transportation. Even buying used, you STILL rely on credit 90% of the time.
Is it any wonder, then, that a credit crisis leads to a nosedive in vehicle sales? This did happen at the worst time, but a credit crisis still affects two of the largest economic sectors. These are the two major sectors that rely on credit for operation as a ‘normal’ market. There are more people that pay cash for cars, but not THAT many.
So - the domestic auto industry does need, and I daresay does deserve gov’t help through this crisis. How long? Until the credit crisis is over. People can’t buy houses or stay in them if they can’t get credit. People can’t buy decent used cars or new cars without credit. As long as there is unavailable credit, both the housing market and the auto industry will require assistance.
The blame is squarely on those that created the CREDIT CRISIS - the auto companies, all three, were in the process of turning around and were making historical headway in accomplishing a turnaround. Unfortunately, they were sideways to the wave when it hit. We can only hope that this wave does not capsize them.
Steve
GM sold more vehicles world wide than any other manufacturer in 2007. When Toyota Makes Profit in the United States that profit goes back to Japan. It does not support the communities in the United States. GM contributes to the Chatrities in the United States. GM People contribute to Charities and the United Ways in there communities. GM has the only Green award winning Auto Assembly Plant in the States. The LEEDS award winning Lansing Delta Township Plant that makes the Buick Enclave. The National Security of the United States is at risk without GM. Would Toyota convert to Manufacture our conventional war needs. If the National security of the United States is at issue what choice would we be left with?? Pushing a Button?
cliff griffore
I AM STRONGLY AGAINGT ANY FEDERAL MONEY TO HELP ANY BUSINESS.
I OWN A BUSINESS IN MICHIGAN BARELY SURVIVING WITH NO HELP AND NO WHINNING.
IF A BUSINESS CANT GET THE MONEY PRIVATELY TOO DAMM BAD!!! YOU GO AWAY AND
A NEW GOOD COMPANY WILL COME IN AND TAKE YOUR PLACE.
AS FOR ALL THE TERROR THREATS OF JOBS LOST THAT IS ALL GOING TO HAPPEN ANYWAY
BESIDES ITS POINTLESS FOR THE GOVERNMENT TO LOAN THE AUTO INDUSTRY ANYWAY SINCE THEY SIMPLY ARE NOT GOING TO SELL ANY VEHICLE VOLUME TO MAKE A PROFIT FOR AT LEAST THE NEXT 5 YEARS. THATS ALL CAR COMPANIES!!!
D
Edward Hayes, I find it simply amazing that after the last decades of hearing the complaints about Republicans taking care of their rich buddies in big industry at the expense of the little guy, it’s now the democrats calling for these bailouts and criticizing the Repubs for not acting. Partisan thinking at it’s best.
Nate
miker,
The reason you see more domestic cars is because people in the past have had a pride to buy American because its the right thing…. People like my parents who refuse to buy foreign even if they buy cars from GM that continue to break down. Secondly typically the big three have ridiculous sales and price reductions that get people to buy them because they think they are cheaper. They are almost forced by non sales to sell their cars near a loss which JUST puts GM into the running for price against competing brands. At the same time their quality isn’t what it should be at that price point.
Nate
Dr. Turkey-Belly,
As an engineer, I don’t think economists really understand how things really work. They might have all kinds of theories on economics but in reality I don’t think they work in the long run.
Has it ever occurred to you that perhaps GM is trying to sell cars to a public not interested in buying them? There is no easy way out of that one. Capitalism tends to like to ramp up production and produce things in mass quantities that are so huge they are hard to comprehend without scientific notation. Then when no one wants them it takes them 10 years to realize that they are producing too many of their product. By then it is to late. GM simply can’t produce cars that people aren’t buying.
A collapse of this either way is going to happen. If people aren’t buying cars they aren’t buying cars. Its a cyclical loop.
Economists are so worried about GDP, profits and all that other stuff that they miss the fundamentals of how economies work. The US economy has been on a caffeine high for the last 10 or 15 years maybe longer… at some point the high will end and things will return to the proper equilibrium. it won’t be pretty but its inevitable. Its not a bad thing just part of the life cycle of the economy. When that happens people will be forced to re-evaluate how they use their money and resources. Adjustments will be made and progress continue once again. This is what happens with poor over sight from leaders.
Again I’ll repeat this: If the suppliers (the people who you worry will be out of jobs) are in need of GM’s business to have an income… and GM needs to sell cars to pay the suppliers.. and these same people aren’t buying cars (GM or other brands)… then logic would dictate that either way they can’t afford to buy cars, and thus their employers will be unable to pay them…. its a cycle. They can’t afford cars because they aren’t willing or aren’t payed enough and because of that they won’t be paid.
The solution is simple. Let GM go, go through the hard times and allow GM and its workers (and supplier’s workers) to find the demand and thus new jobs.
Jobs lost forever are openings for new jobs to be found and had. There’s a reason human civilizations progressed… there is also a reason Rome is no longer the empire it was. Change has a lot to do with it.
America was built on pride and hard work, I don’t see that anymore. One way to get that back is to re-adjust the attitude of Americans.
Sure I may lose my job if GM goes under… but so what. As long as there are people, there are things (and jobs) to be done. This is the American attitude that I see missing from many people. I’ll find another job if I need to, but what about other people?
And if I can’t find a job I’ll find a need and work at it and eventually I’ll be paid.
Your fears as an economist fuel the inability for America to change. And being dynamic is what keeps America ahead. In order to maintain anything (a car, a house, a power plant, a road, a country) a certain amount of non recoverable effort and resources are needed. I no longer see that attitude in the US or GM for that matter. Things just cost time and money and if it isn’t invested things crumble. Thats just how it is.
The economy fallout is going to happen either way. You can’t just have a giant like GM limping along eating resources and money while no one needs or buys its products. It doesn’t matter how many people are employed there. The fact remains that they aren’t providing a needed service at a price people are willing to pay.
If we go into a recession people just need to snap out of their complacency and get done what needs to get done.
A percentage off of GDP? Are you serious? 1 % off of the Gross Domestic Product!!! That means roughly 1% of our total resource and labor pool. Is that even worth worrying about?
Those 3 million people will end up finding better jobs at companies that need them more then GM did.
I’m not saying “screw you” to myself, the US manufacturers or the US dominance as a world power. I’m saying what many people are saying “Shape up and fly right”. If GM wants to continue operating the way it has then it deserves what it gets.
I don’t see how there will be no new startups to fill the void. (Jpy and Dem manufacturers? what does that mean, I’m not familiar with your abbreviations). These won’t be jobs lost, the people working for GM have certain skills that can be retrained and honed to be used by other companies. Or the motivated and smart ones will push through the red tape and start their own companies.
If you don’t believe that perhaps you are living in an economist bubble and the United States you live in is not the United States I live in. The United States I live in has hard working, innovative people who do what it takes to get the job done and work hard when they need to regardless of pay.
The US auto industry needs new leadership and to rebuild its technical excellence, but that will not happen unless things change. And that needs to happen quickly. Our defense industry spends a lot of money to keep the US on the cutting edge. The auto industry will have to do similar if it wishes to compete globally. How long will the US people allow this to happen?
David
“I AM STRONGLY AGAINGT ANY FEDERAL MONEY TO HELP ANY BUSINESS.
I OWN A BUSINESS IN MICHIGAN BARELY SURVIVING WITH NO HELP AND NO WHINNING.
IF A BUSINESS CANT GET THE MONEY PRIVATELY TOO DAMM BAD!!! YOU GO AWAY AND
A NEW GOOD COMPANY WILL COME IN AND TAKE YOUR PLACE.
AS FOR ALL THE TERROR THREATS OF JOBS LOST THAT IS ALL GOING TO HAPPEN ANYWAY
BESIDES ITS POINTLESS FOR THE GOVERNMENT TO LOAN THE AUTO INDUSTRY ANYWAY SINCE THEY SIMPLY ARE NOT GOING TO SELL ANY VEHICLE VOLUME TO MAKE A PROFIT FOR AT LEAST THE NEXT 5 YEARS. THATS ALL CAR COMPANIES!!!”
LoL! How many customers are you going to have when 50% of the possible customers you might have had are on unemployment.. Might I add that you will be paying for them at that point anyway so it’s either the road to recovery or the hard road. I can scarcely believe that anyone from Michigan would be so against their own best interests.
NO MORE TIME AT THE SERVICE DEPT.
I have owned GM for 30 years BUT WILL NOT buy another, to many problems with this last truck. The big problem is…things break but GM gave me a 36,000 mile warranty and after that I have been paying ,paying paying. The new trucks are Junk!
I say no money until bk11 and a new plan (CEO’s enjoying their millions I”m sure) If you went to get some pizza and it sucked would you go back? Of course you wouldn’t.
WAKE UP its the product and service that sucks, fix it and I will buy another, there are a lot of dealerships and a lot of pizza places out there.
edvard
Concerned Interest,
Perhaps in many ways the fault of the credit crisis itself actually sits on the shoulders of the average American. Sure- banks didn’t help by offering teaser rates and exotic loan products. But the reality is what I saw every single day for years during the boom: Americans willfully buying extremely expensive homes only because they truly believed the magic would continue forever, their homes would be worth more and they would “make money” from their houses.
Americans did this to themselves. They lacked prudence and financial intelligence. As someone who was “priced out” due to my decision not to put myself into serious debt and risk, I feel zero sympathy for any of these so-called “struggling” families. They had a choice to make, and now must face the consequence.
In that regard, yes- I am in favor of a automotive industry package. As you say- they were taken out by the credit crisis- which as I pointed out-was the doing of banks and individual homeowners.
Babcock
Can someone tell me why I would buy a GM car?
All I’ve ever owned are Hondas. They are very reliable, incorporate the latest technology and are fun to drive. Seems like to turn GM around, you need to make a case to people like me that we need to buy a GM car. Looking at the GM Blogs, I see all the arguments for and against the bailout but for the plan to work, you need to convince people to switch loyalties and I haven’t seen any plan to do that.
Wingo Wango
Just heard on the radio that GM is burdened with 7,000 dealers nationwide, while Toyota has only 1,800. Yet they sell about an equal number of cars.
Because of obstructive state laws, the only way to shed themselves of the contractual obligation of that onerous dealer network is to declare bankruptcy, allowing themselves to circumnavigate the state laws.
If they get a bailout and don’t declare bankruptcy, they will be unable to restructure their dealer network.
B
I’m sorry to say I agree with Cliff, LET GM, FORD and Chrysler DIE!!!
This money can’t solve the basic business problems the this industry faces:
1) Labor cost are way to high
2) Way to many product lines and not enough engineering synergy
3) Retirement cost are way out of line
4) Quality is not competitive with ASIA competitors
This is out money, our tax dollars, let these companies close and go away. New companies will grow out of the ashes and move forward.
BW
James N.
Here’s a good one I saw on CNN the other night.
Average blue collar worker for Chrysler is paid 76 dollars per hour.
Average US blue collar worker for Toyota is paid 42 dollars per hour.
Mark Jason
Suppose the Federal government issued a purchase order to the big three auto companies for say 500,000, cars, 50,000 school busses and 50,000 postal trucks to be delivered in 2 years. The price would be, say, 12 billion dollars. The cars and busses would be specified as electric plug-in’s and multi-fuel hybrids, light, efficient, and would in fact define the next generation. This would not be a give-away, but a purchase. There is an enormous difference.
Dan
Providing $25B or $50B loan to the big three will only serve as a short term band-aid. The outrageous $73.00/Hr wage coupled with the high legacy costs is the cause for sinking the big 3. Until the big 3 and the auto workers union ink a deal that is within reason, there’s no way the big 3 can survive long term.
See link: http://mjperry.blogspot.com/2008/11/should-we-really-bail-out-7320-per-hour.html
Sean
I am not in favor of bailing out GM and the rest of the auto industry because the industry has not shown any inclination in the last 30 odd years to sell products which the public cares about nor a dedication to quality and customer satisfaction. Had the domestic auto industry sold products which were valued by customers and lost money selling them, I think there would have been a store of goodwill the industry could have drawn upon in times such as now. That goodwill may well have prompted me to support bailing them out during the current severe crisis since I believe it would be a shame to lose this most American industry. I am not convinced the industry’s current products are really that competitive nor do I think the present management of these companies is being honest in their assessment of the quality of their products since the foreign makes keep increasing their market share at the expense of our domestic brands day by day. As far as I can see, there does not seem to be enough good in the auto industry worth salvaging and laying out big money for.
Buick Diesel
I have always been a GM fan. The name I use on this blog certainly implies that. My daily driver is an ‘83 LeSabre diesel - 261,000 miles and running beautifully. Also, what a classy car!
Please don’t respond by saying what a terrible engine the Olds diesel was, etc. That’s for another discussion. Bottom line. In the hands of an experienced diesel owner and a good shade tree mechanic (like myself), it’s a very fine engine.
Some people say that GM helped out during WWII which is great, but that is the GM of yesterday. GM stock price is now around WWII levels.
I’m usually not critical on these blogs, but why wasn’t GM making money even when people were buying cars?? Why does the UAW demand that GM pay their workers more than Honda & Toyota workers? Yes, they have made significant concessions, but as long as GM workers are grossing $75 an hour (so I heard) and Honda, Toyota & Mercedes workers are grossing $45 an hour, the concession aren’t enough - not even close.
Ron Gettelfinger of the UAW - wake up to reality, quit being a parasite and get your act together - especially if you want taxpayer money! This is 2008 - not 195
Beaugrand®™©
Actually, I believe the snowball that got rolling and crushed the housing and financial markets was the unregulated greed in the credit default swap (CDS) market.
That doesn’t change the fact that GM’s attitude toward “green” technologies, fuel efficiency, and putting “value” into their products has only recently changed, slightly, for the better.
The Honda plant here in Indiana is going to be producing Civics that run on natural gas. They just hired 900 workers.
Dennis
Buying a new car and having problems with it is like your spouse cheating on you, you never forget.All the years of cutting corners has come home now.Promise all you like,but it is very hard to gain back the trust that you have thrown away with the American Public.There are simply to many choice’s now for use to look at and not consider.Bash us if you won’t for not buying American, But how many foreign products do you have in your home?
Chris R
cliff griffore,
please check your keyboard and make sure caps lock is not on before you post next time. Anyone reading this board will surely read your post without it being all caps. When you have all caps it’s like shouting. Think of it as akin to walking into a room and screaming out your comment rather than calmly stating it. This has been an impromptu public service announcement. Thank you.
That said, I was reading several articles examining the corporate structures of the big three. It seems, by some accounts, that Chrysler may be the first to recover from this slump, as despite their current circumstances, they are still much more flexible in their approach to auto making. They’re far quicker to market with their products than either GM or Ford, and are quite good at making multiple vehicles, which outwardly bear no resemblance to each other, from the same platform. Ford is next, as they’re shifting some of their global small car production to the US for sales in the US. With the new Fiesta showing up next year, and the New Focus not long after, Ford will probably be in good shape. GM is apparently in the worst shape. Neither lean, nor particularly flexible, GM is also slowest to market of the three. For those who say “let them go” I’d agree with you except that combined with their suppliers, these three are some of the largest employers in the country. They also represent the bulk of our large item manufacturing capacity. If WWII broke out again, who would we get to build vehicles, aircraft and other things we needed for the war effort on the scale we needed? Cessna? Boeing? No, we’d need GM, Ford and Chrysler around supplying the factories and workforce to get it done. Nobody else could do it. So you see, this is a national security problem. We can’t just let them go. Also, for those saying a new company wuld emerge… From where? When was the last time an independent car company sprang up in the US and competed successfully in the mainstream markets? We have to go way back to before WWII to find them. AMC doesn’t count as they formed after a merger of already established Independents.
EE Auto
I am an automotive engineer. I am distressed by all the animosity toward the US Automotive Industry. There is great hatred expressed in these blogs toward the UAW workers and to the Automotive senior leadership. What about the other employees such as the engineers? Do you think we deserve to be out of a job too? How many engineers will be needed in this country if we have no manufacturing sector in the US economy? Will we need to have the Universities maintain engineering programs when there are no engineering jobs in this country? The automotive industry employs hundreds of thousands of engineers between the big three and the many suppliers.
We have already lost many US industries to other countries. Try to buy electronics made in the US. Look at the label on your clothing purchases. If the US manufactures nothing, we are left with providing services to each other. How will we pay for those services?
Is there the same animosity toward the financial industry? The taxpayers must pay $700 Billion to an industry that has encouraged the average american to take out a mortgage that they cannot afford and use credit cards to enable a life style beyond their means. Those CEOs have taken large bonuses. The automotive companies are asking for a fraction of that help for bridge loans in order to keep a large sector of our citizens employed.
Duke Gromboolian
“What about the other employees such as the engineers?”
EE Auto,
I’m an engineer too (civil though, not automotive) and I certainly have empathy for you. I’m guessing that if Detroit’s engineers could build the cars they wanted and know how to build, and weren’t constantly being overruled by beancounters and executives, the Big Three would not be in the position it is in today.
Engineers in the U.S. are competent and know how to do things ~~ when given the chance.
Technocrats rule!
Buddy Dean del Rio
Babcock: “Can someone tell me why I would buy a GM car?”
How about something called patriotism?
Porky
I own an GM van. Would I buy another? That answer is no, I won’t and didn’t. Until the quality gets up to the foreign quality, why would I pay more for less? I have been out of work for 19 months now and we get along, I even managed to get the wife a 2009 vehicle and paid cash for it. Couldn’t do that if it were American. The auto makers could get along on a lot less than their wages which are through the roof. When I worked for a Chevy dealer and he wouldn’t even drive one, it made it very clear the quality wasn’t there then, isn’t now. Don’t try to save the Big 3, it isn’t worth it to me.
Martin Fee
Lets see how honest GM is. The title of this topic is Public Supports Assisting Automakers.
Well with the exception of those who work in the automotive field or are part of a Union here in Florida. NO ONE supports bailing them out.
Bailing out the Auto Industry is wrong. because it enables Labor Unions to keep extorting money from businesses. The US auto manufacturers are dying for 2 reasons. The first is Government Regulations and the second is the Unions. Between the both of them car makers can not stay competitive. When you throw Union regulations in, all it breeds is laziness. People are “Protected” so Quality and quantity both suffer. It even shows in Japanese cars as the ones manufactured in Japan are of a higher quality and perform better than the ones made in America with Union Labor.
A recent article from the UAW said workers will make NO MORE CONCESSIONS!! . They are about to lose their jobs and still they insist on making 35 dollars an hour to install a few lug nuts. Sorry but assembly line work is not rocket science no matter what some overweight fool with a Union Rep card says.
The sad part is if you speak to most Union people they tell you their Patriotic, yet they have no clue that the very organization they belong to is a product of the Communist Revolution and the teachings of Karl Marx. Although if you ask a Union Rep about that you would receive some belligerent and ignorant answer as I ave received many times.
The point to all this is Until Government and the Unions get out of the way loaning anything to GM, Ford, or Chrysler is just a waste of taxpayer money. You would be better off setting the money on fire than to give a nickel to any of the US Auto Manufacturers. Nothing would change they would just want more the next time.
I just wonder what kind of jobs the union reps will get when the big 3 go under as I don’t see to many employment ads that say…… Useless, lazy, loudmouth individual wanted to sit on their butts smoking cigars while demanding that they be taken care of”
Good Luck to the Big 3. as I have my Durango, My Viper, My Camaro and my GM based Motorhome up for sale and will be buying vehicles not made in America.
Martin Fee
Edwin
We are hearing the knee jerk responses like ‘no bailouts,’ ‘they can find new jobs,’ and so on. This sort of ignorance is what got the United States into the present economic crisis. Some even attempt to give reasons. Doing nothing is not an option when the nation faces a serious economic risk of long term recession. Its just irresponsible to advocate doing nothing.
Citigroup financial just announced it is cutting 52,000 jobs. Who in Washington was not listening? The present recession is very serious and it could deepen beyond what anyone imagines if Congress fails to act. The auto industry supports the financial sector just as the housing sector does.
That the politicians are not acting for the people is beyond belief.
Its true that Treasury Secretary and Federal Reserve Chairman have the authority to help the auto industy. That they are not further shows the plain incompetance at work in Washington. Congress simply must act.
Had the President and the Congress reacted to the economic downturns following the 9/11/01 attacks in a timely manner there would be no recession today.
Of course, loans to the auto companies and bailouts of banks are extraordinary measures, and not a routine. No one is saying that they are routine. But people need to wake up and realize that American cannot afford a 10 to 20 year recession, none of us wants it.
The auto industry is not a small business. It is a major industry, a primary sector of the U.S. econonomy. For the miseducated, a primary sector provides significant support for millions of other jobs in the economy. Its also important to the country’s national and economic security.
The American auto industry drives the world economy. The Americn auto companies produce superior products and are among the best managed companies in the world.
The critics are simply wrong. Those who advocate Chapter 11 are doing so mainly because of their bias against unions. They are being simple minded, and they need to wake up. Keep in mind that the Big Three American auto makers have made strong profits during the past 30 years except when the nation has been at War. During the first Gulf War and then during the present war. Investors have reacted positively to the present labor agreements going forward with the Big Three. The credit crunch and the gas price spike have made this a global economic crisis.
Even if under perfect circumstances, where people continued to buy vehicles with confidence under a Chapter 11, it would not change the fact that American law allows for organized labor and whatever the case organized labor is a going to be around. Thus, it is absolutely absurd for the hard headed to insist on bashing the unions.
GM, Ford, and Chrysler have done a great job with their business restructurings and cost cuttings and on getting major concessions in labor agreements.
There is no sense whatsoever for the Congress to allow the benefit funds to become a liability for the American taxpayer in a Chapter 11. Its just plain stupid. What’s more a chapter 11 would slow the supply chain down and also slow any economic recovery. It makes no sense whatsoever.
For the know it all engineer skeptics, the American auto companies do build the best products in the world. Read the GM blog and you’ll begin to learn about it.
—————–
The American auto companies do have other options if the Congress fails to support Freedom and its own economic and national security. Freedom could move its headquarters to Canada, Europe, or Australia and support their economic and national security instead!
Chapter 11 is not necessary by the way. Taking insults from US politicians are not necessary either. GM, Ford, and Chrysler have many addresses around the world they can use. Freedom can relocate to another land just like it located here. Canada pays for health car for its industry. What if GM, Ford, and Chrysler just moved the corporate office to Canada or to UK or to Germany? Maybe the US Congress would like to compete jobs iike other countries do by offering incentives for companies to stay.
If Bill Ford gave the word, many patriots would be willingly pack up their family crests and go where ever he says to go. Have your passports ready. My family crests have been here since the 1650s too. Boy, it would be a shame to see America become a third world county, without its Sons of Liberty and Daughters of the American revolution.
Then the US Congress will have to find money somewhere to pay for all the jobless people left behind as American transitions to a third world county.
The point is that American auto industry pays American’s bills. Every taxpayer should support the Big Three auto companies because they support America. Those who believe in Freedom should support the American auto makers.
American auto companies saved America’s hind quarter and its allies throughout the two great wars.
Pat
Why not ask Americans via the web for a direct capital injection tomorrow? I’d donate something. Return the money in 2012 with interest as a discount on a new car. If it were mildly successful, it might be a bridge loan to the bridge loan…
Nate
Buddy Dean del Rio
How about not buying GM to be patriotic… how about making a stand to not support the kind of business practices that GM and its Unions practice. How about making a stand for pride and quality int he product.
Don’t stand up for an American product because its an American product. Stand up for an American product because you know its the best there is and because the people that made it worked hard and put all their effort in it.
Back in the day I could say all this about GM… Not so anymore. Sure they make an OK product but if GM stepped up and did what needed to be done to make the kind of products it was capable of they wouldn’t be asking for a bailout.
Nate
Duke Gromboolian,
I’m an aerospace engineer myself. Americans can do a lot of good engineering. I say let GM go under. The motivated engineers that work there that are worth their weight as engineers will rise up and form new companies and create the products they wished GM would have let them. They will seek investment in perhaps a year or so… or less for the motivated ones.
The rest of the 9 to 5ers will go work for Ford, Chrysler or anyone else that will higher them. America these days is about doing what it takes to make the right product the right way. If they aren’t willing to do that then I don’t know what to tell them. Perhaps they can engineer their way out of this one…
Nate
EE Auto,
Respectfully… I’m an aerospace engineer and I work in an industry where at times working 12 hour days and 7 day weeks are required.
No one wants to see anyone lose their jobs. I certainly don’t. But… I feel as an engineer there is a responsibility to the country and company that the products designed are of the utmost quality and are the best that can possibly be produced. Perhaps I’m odd for that reason, but then again maybe thats just how I was raised.
The fact that GM engineers stood by while all this happened bugs me. There is always something that CAN be done.
The tough part to keep in mind is that no one deserves to get paid… No one even deserves to work. It is however fortunate that there is work to do and that you get paid. Engineers should strive to work hard and make the best products they can.
Manufacturing will not dry up in this country. It is you the engineer who needs the motivation and the sense of personal responsibility to find things that need to be improved or engineered (in the country). Sitting in a stagnant company wont’ cut it much longer. If you are worried about your jobs… when the time comes take initiative and find other companies or new work. Certainly your mathematical, science and engineering background is a marketable skill… even if parts of them are a bit rusty. With that type of education you should be able to quickly adapt to new jobs, changing market conditions etcetera even outside the engineering field.
Engineering jobs will not dry up as long as people want to live the way they do and are willing to work hard to do so.
You are right. There are hundreds of thousands of engineers… which makes me wonder why there aren’t a few leaders in the crowd (statistically this should be true). All those engineers with the threat of less work and no one has thought about a contingency or gotten together to start new ventures? Has GM robbed you of your American Capitalistic spirit and your ability to think outside the box and be adaptive and innovative?
Engineers should have the brains to do something to make their futures better no matter what GM does.
We lose industries because our attitudes are wrong. Other countries work for fractions of what we do, we buy their products and enjoy them… but… the math doesn’t work. We can’t do that forever. At some point it comes down to working hard to use the resources we have to sustain the people we do in this country.
I think there is that animosity toward the financial industry. I for one am frustrated with how the banks and real estate treat people and things in general. Perhaps the truth is they perform excessive unneeded services that we can no longer afford. They need to be in jobs that add true and real value to the country not just value on paper.
As an engineer you should realize the real world limitations to the US. We don’t have infinite resources, money, labor, or energy. At some point things have to slow down to their natural sustainable pace.
The harsh truth is that every American will have to work harder and contribute to the countries future and well being… more so then they are now. As a country we are all living outside of our means (in my opinion).
If people at GM are worried about their jobs… wouldn’t the sensible thing be to work more or ask for less pay just to keep GM solvent?
I’m sure your bill collectors won’t understand that… but what else can be done? Adapt, innovate or become obsolete.
If GM does get bailed out, I hope the engineers and product designers have the fortitude to make sure that future GM vehicles are the best in the world. And that everyone strives to own a GM product. I worry though that GM will never aspire to work that hard because of their profit seeking drive and residual culture.
I hope I wasn’t insulting, but a bit of harsh reality is necessary in my opinion. I would love to hear an auto engineer’s perspective on what has happened at GM and why GM’s products are what they are.
Nate
Chris R,
I agree GM is slow to react… they have a lot of mass and little energy or desire to move in new directions.
If WWII broke out again (or its modern day equivalent) I think you would be surprised by what America can and will do. If the money boundary was ripped down and Americans worked for America not for themselves you would truly be amazed. (though I think the circumstances to have this happen have changed quite a bit….).
If WWII broke out today the us within a short few months would snap to action. Old plants would be restored to working order. Old military facilities would be transformed to the bee hives they once were in the hay day of WWII. All the OLD technology, all the NEW technology would come out of the wood work. America would probably increase its current production by a factor of 10 or more. The problem today is that there is no motivation or drive to do any of this… and for that matter little need. But all the old WWII machinery is still around (or at least 85% of it).
In the case of a true World War like WWII was you throw the bean counting aside… people work for far less then they could ever imagine right now. And the country unites to support the cause (not like now). Money no longer is an issue because people aren’t working for money they are working for survival and for their way of life. If this ever happens seeing America at full force 6 months to a year into a war will truly be a sight to be seen. Unfortunately we have lost our sense of need to be ready for that type of thing and have taken on a complacency that is probably not that healthy for a country in our political and economic position.
But I have no doubt that with our man power, resources and energy technology the US would easily be able to build more aircraft or whatever technology we need. We have all the technology tucked away in hiding just in case… and when the time is right to pull the stops out and use it it will be there… GM or no GM… With or without Boeing and Cessna.
As an aside you say let them go as if they are actually going somewhere… do you really think that the GM employees and suppliers are going to pack their bags and move to other countries? I doubt it. They might find new lines of work… but when demand is there those people with their knowledge and skills will be able to make sure our manufacturing capacity bounces back when needed.
How can anyone say a new car company COULDN’T emerge? To say that is short sighted and narrow minded. GM and other auto makers have such huge shadows that its very tough for small companies to get into the market.. but not more then 30 years ago a few japanese companies got their feet wet in the American auto market… and now look at them… You would be amazed what can happen when people put their mind to it. Take a look around… what would happen if all that talent that GM employs has their leashes taken off of them and are free to create and innovate… surely something new would turn up. And why wouldn’t’ it? Don’t you believe in competition and the American free market? Look what has happened to GM because they are unable to properly compete…..
Feel free to comment.. this conversation is getting very interesting indeed.
Nate
Beaugrand,
Its about time someone produces a natural gas vehicle for the masses. We have been squandering our cheap natural gas supply running gas turbines for power generation when we COULD be running cars on them. Natural gas is one of the best next step technologies since going from natural gas to hydrogen is a small step in technology and infrastructure. Apparently Honda has some Insight!!
Nate
Babcock,
The only reason I can think of to buy GM is to keep profits in country… which I think is outweighed by GM having foreign suppliers.
Now that said I’m not saying GM products are bad… I certainly have gotten good life out of them despite continual early transmission failures on the cars I’ve driven and owned made from 1990 to 2000…
Foreign cars seem to be made better, look nicer, and are priced about the same. The thing I like about my GMs are the cheap parts and the fact that if you know how to fix them they are a lot cheaper then a car payment (one of their downsides with resale value works nicely for someone who need decently reliable transportation at a dirt cheap price).
GM could do much better and thats why in the future you SHOULD buy GM. Because if they can turn their act around they Can and DO make some great cars… they just aren’t as nice or pretty as the competition sometimes.
Nate
Edvard,
Well put. The banking industry is only partly to blame. Same with the auto industry. Americans have the right to choose what they want. Many of them bought into the quick money idea of real estate as a traded item. They also were allowed to be fooled by laziness, ignorance and an unwillingness to learn and invest their own time that the real estate products they bought were worth more then they were. Many of them are mediocre quality and worth much less then they were convinced by the sellers. And the sellers walked all the way to the banks to ask for more loans to do it all over again… shame on the US people.
I think though that GM was foolish and shouldn’t be bailed out. They were foolish because they bet on the gold streak of foolish consumers and SUV sales. Meanwhile anyone with an ounce of common sense (or is that uncommon sense) and intellect knows that this behavior can’t go on forever. GM should have foreseen and pushed the next wave of auto technology long ago and should have convinced the American people and government to help push American infrastructure in the direction it needs to go (electric and hydrogen/natural gas). GM could have been appealing to other companies and the government to produce more power plants for electric and hydrogen cars… and they could have been pushing for infrastructure to support these technologies… things like improved electric grid, hydrogen (and natural gas) transportation and refueling stations etc.. and educating its buyers on where the future is going. But instead they chose to sneakily ride the SUV craze for every last dollar they could get from it. Foolish in my opinion and not worthy of a bailout. They need leadership with real foresight and intellect. Not a group of gear heads who haven’t grown past their 20’s yet.
Nate
David,
Respectfully if you aren’t surviving in Michigan maybe its time to find a different city or state that is out of the reaches of the industry. Or try something different. Sometimes demand for a business dries up and the only thing you can do is move on and do something else.
Dennis
EE Auto, I do feel sorry for you,But what you are reading here is years of pent up anger against these Companys.The American people are sick of the words BAIL OUTS! and these Companys don’t deserve it, If I as a small business owner run my business the way these were run, I would be gone and no bail out to help.The tax payer is in no mood right now to give every bleeding heart out there a handout when we are losing jobs at a alarming rate and watching our Government spend us into the poor house.
gregg
Porky…you bought a van….even the Honda van’s are junk…anyway you should have looked at the ford Escape SUV or a Subaru Outback…really good ratings…anyway….what GM needs to do is make the Unions strike and Hire scab workers…they can pay them cheaper wages becaues the Americans out of work will do the job cheaper because they need the work…Its very simple…
getalifeagain
The base of the “Arsenal of Democracy” is the Big 3. Let it go, and the last vestige of large scale manufacturing on a huge level goes. Bailing them out is imperative.
However, bailing out the finance firms on Wall Street is throwing good money away and is only staving off the “Greater Depression.”
Canadian-American
Reading these blogs is pretty depressing. GM has obviously many enemies, some with good reasons, but many display either honest ignorance or are simply dishonest. Constructive criticism is ok, as well as personal preferences in cars, but not recognizing at all that GM, as well as any other automakers, has many very competitive products, and at the same time, less competitive products, for all possible reasons, is not a sign of an open mind and objective view of the world in general. Please read reviews from those who compare vehicles for a living, and it is obvious that GM made serious improvements in the last decade: CTS, Malibu, Cobalt SS, Aura, Astra, G8, Traverse/Enclave, Vue, Silverado/Sierra, Escalade, Corvette, HHR, Solstice, etc. Most other products are very honest vehicles. This is a very competitive market and some undeserving products will succeed while more deserving products will fail. Even top critics have a hard time picking a clear winner.
Kudos to Toyota for the Prius which was a great gamble, but at the same time, they invested billions of $ to develop their truck/SUV portfolio because that’s what Americans wanted and profits were much better. So did BMW, Nissan, Mercedes, VW, etc..
Finally, to get out of this major economic downturn, the last thing that needs to happen is the downfall of the US automakers. That would just deepen the recession and require much more drastic measures and “bailout” initiatives to get back on track. The fastest way to get out of the mess is to provide the loan AND get the credit market to support the economy asap. And remember that the government is always being bailed out by the taxpayers.
bud jolly
It’s still about labor. For years, labor would treaton to strike, and you would give them anything they asked for because you where afraid of loseing your market share. Now their wages are so ridiculous they would have to get nothing for 20 years to get back where the the rest of us are. Why should the rest of us pay to support a bunch of overpayed unskilled workers?
HCase
Bailing out GM and others. Not for it. They could make money if they would get the wages down to where everyone are at.. 14.00 to 15.00 bucks an hour. It doesn’t take 30 to 40 bucks an hour to put on a fender or bumper. Come on. Lower the prices of the cars. Who can afford these high priced cars. Plus get rid of the unions. They are part of the problem.
gregg
I am done trying to put my point across on this blog because it seems nobody from GM is paying attention to what people are saying to them because its time to act….say no to the unions killing you….look at this on CNNMoney.com…this guy is an idiot…when the UAW is dead and gone because US auto companies will keep moving jobs over seas they wont be able to get a job with Toyota, Nissan and Honda because they dont want the unions…they will regret it…man I hate this guy
“Congress must not adjourn with the Bush administration in place without an agreement,” said UAW President Ron Gettelfinger. “If there’s no action, we could see the collapse of one or more domestic auto companies by the end of year.”
Chris R
Nate,
Who would own the factories that you say would be revived? Are you proposing that Heinz would convert some of their canning plants to make missiles? That Land-O-Lakes might stop making butter and start making bombs? The fact is, that should the big 3 go under, foreign owned companies may be the owners of some facilities, and others would either be repurposed to non automotive use, or simply torn down. The workers would have no choice but to find other sorts of work, if any is even available. There are entire communities that depend on their auto plant, and if it closes the town basically dies. That’s a huge responsibility, and one we need to take into account.
As for the new company popping up, there could be one, but it isn’t very likely. Chrysler and Ford are in much better positions than GM is right now if the various financial articles can be believed. So it’s likely we’d only lose one of the 3 entirely, and the second would be scaled back considerably. Right now the one we’d lose looks to be GM. Unless of course they go with Romny’s plan for a controlled bankruptsy, and scale back to just Chevy and Cadillac and reduce their dealer count to something more in line with Toyota.
Edwin
Nate:
The liberal media talking points regarding SUV’s are simply wrong. American auto companies have offered as much more fuel efficient vehicles in the market place as any other auto maker.
GM offers twice as many models that get over 30 mpg as its next closest competitor. American auto companies have led the market on electric vehicle development and flex fuel vehicles. They also offer hybrids. Foreign auto makers offer SUVs too but Foreign SUVs are less fuel efficient than American SUVs.
GM vehicles often lead their class in fuel economy.
The public buys SUVs. Its a free market. Its a free country. Some people have large families with children and need space for car seats. Others have other reasons for utility. Those who don’t have children like to criticize the needs of families. Its all too convenient for them to sit at a computer and ponticifcate their marxist balony.
What if the SUV owners started demanding the small car owners buy SUVs, saying small cars are less safe.
Many don’t want their kids driving small cars, because they are less safe on the road. Just the wind shear from a semi-trailer can knock a compact car off the road.
Some would say that buying small cars are an irresponsible consumption choice.
So you see it can go both ways.
Time for the far left to get off their high horse.
Nate
Chris R,
I’m surprised you even ask who would own them. If GM filed Chapter 11 or 7 (I’m no expert on either but…) it would seem pretty logical that GM would be sold to get as much out of its assets as possible. It would make a lot of sense for another company to buy them up.. or even the government to claim them using some eminent domain act. If that happens though someone will want to use the space. Its very rare that empty space like GM has goes without use. My bet is that Toyota or Honda would buy them up.
I don’t know how they’d reopen them without huge problems with the unions.. but there are no doubt ways around that.
All that said they can produce whatever they want in those buildings and factories. The will still need to be used for labor. And even if they don’t get used some fraction of that manufacturing will be needed in this country for something else. Perhaps a new plant will go up elsewhere in the country that will fill the need left by the closing plant. In a neighboring town where I live there is an old old old factory from somewhere in the early 1900’s that used to be a Fischer body plant. It was shut down because the operation was moved to Detroit. In this case the jobs weren’t lost but were displaced. The town wasn’t happy about it but it wasn’t the end of the world for them.
Why couldn’t Heinz convert heir canning plants to make missles? Its just a building, some equipment and some people. This is especially true today where there isn’t as much skilled labor as there used to be. Why couldn’t Land-O-Lakes make bombs? I don’t see the problem or issue… but then again I’m the engineer.
I don’t see the problem with workers finding other sorts of work. Is there some problem or disease with these workers that makes them unable to do anything but work for GM? If no work is available then they need to go out into their community and find work that needs to be done. Last time I was in Detroit I’d say there is no shortage of work, only shortage of motivation. Parts of the city could use some reclamation. Why not have workers do that? What will happen to our cities if money and time isn’t invested back into them by someone?
The fact is America can’t keep operating as it has. Many of the older cities are falling apart due to neglect… heck Philadelphia has a working tax because most of the people don’t live there who work there. And the ones that do can’t pay enough taxes to support the city. (Which makes me wonder what they do with their time).
Its the town’s responsibility to get other industry in there or do something differently. I’m not saying that will happen overnight but they should already be looking into other businesses that their labor could do etc… I doubt there is that much forward thinking though these days.
Even at that Ford and Chrysler could higher them… though I doubt they could pay them what they think they are worth or hire them all. Then again when I look back on the history of the auto industry… where there was work there were people. And where there wasn’t.. there weren’t people.
The sad truth is either these people aren’t needed or they need to find new jobs. GM created a demand for labor and if there isn’t enough demand for GM then there isn’t a need for that labor. As I read through the history its apparent that GM has lost its way. The very things that made GM great are the things it has traded for profit.
Edwin,
Maybe they have offered fuel efficient vehicles… but quite clearly they missed something…. I strongly suspect quality and features that customers want.. not to mention styling.
Offering twice as many models that get 30 MPG doesn’t mean a thing if people don’t want the rest of your cars. They might have led the development of electric and flex fuel vehicles but they certainly haven’t lead the sales of them (at least electric vehicles).
Generally speaking most small car owners I know don’t complain about fuel prices. Many SUV drivers do.
Sorry but last I looked those people with families in regular sized cars have very little problem putting car seats in them. The problem isn’t the SUVs its the fuel economy that accompanies them, the attitude of the drivers, the wastefulness of the big engines they put in them. And its the energy consumption of people totally unconcerned with it. And as for saftey… if people were better drivers it wouldn’t be so bad. I’ve driven small cars and I have never been knocked off the road by wind shear. You seem to be grasping at straws…. The simple fact is that many (but not all) SUV owners classify a type who thinks little of excess. They are concerned with their child’s safety but could care less about leaving some fuel for their children to enjoy (I’m not saying we’ll run out that soon but it is still as equal a likely hood as not running out is).
If SUV owners declaired small cars to unsafe they would be foolish. The mass difference between SUVs and Small Cars is great enough that it is likely that small cars hitting small cars wouldn’t be that unsafe.. but a small car and an SUV….
Seems kind of a hypocritical argument you make.
Time for the right to wake up and smell reality. If they would treat their fuel like they do their money things would be better.
motorman
wait till congress find out that GM builds a car that has 630+ HP and goes 205 MPH. they will lynch the GM executives on the spot.
Dave
First of all, that was funny what Lutz said about Women with hairy legs, it’s true, all that is crap, it’s just one more reason for people to whine about the big 3 building true American cars.
If you care to to, the guy from above who said, they build them because we buy them, that is 100% absolutely the truth, and it’s also the truth that their has a been a conspiracy for years, started by activists and hippies, well if you call Ralph Nader a hippy, the look something like this, the Japanese and Germans are building high quality cars then America does.
I have worked in shops for over half of my life, and I’m here to tell you, you see as many, if not of those sitting around the repair shops then American cars, it’s a full load of crap, their cars were never better then our car are, and they never will be.
Americans will always want and need full sized trucks that can pull, tow, and haul, and to think for a single minute that the Japanese can build them anything like American would make you a complete fool, I could rant on this all night long, but nobody cares about real car people, and real Americans any more.
Does your wife like that big SUV that she does the shopping, and hauls the kids around in, or would she like something a lot smaller, not that there would be a choice without the big three here.
Sense we all must point fingers, let’s start by pointing them in the right direction here, first to the money grubbing life sucking auto workers union, this is the biggest part of the problem, and then comes all those people in America, you know the one who bought in to the conspiracy lock, stock, and barrel, somewhere between those two things lays the big wigs at the big three, for their bad management during the 80’s and 90’s, but they hold about 25% of the blame, and the rest falls on the other two, there is some finger pointing for you.
Oh ans as to mistakes that are 20 years old, when you make a mistake, don’t you always figure that you should be forgiven, and almost immediately, why should the big three be any different, and no I don’t work for the big three, but I do love those guys, and if you an American, you should to.
David C. Atkin
Nate
Dave,
There is no conspiracy just people. In the past people buy American cars because they didn’t want to support foreign companies. GM never really knew when customers weren’t satisfied because even if their car was a complete lemon they’d typically buy yet another GM car most likely at the same dealer. It wasn’t until the foreign competition started to advertise and make better products and people started to pay attention and even tried them. Once that happened a whole generation of buyers more interested in the product then national pride started buying foreign cars.
If you look at cars over the past 20 years you’ll see that cars made by Toyota, Honda and VW etc.. were thing metaled somewhat boring styled cars compared to some of the American Competition. But if you look now I think most people would agree that foreign cars are much better looking. AND, if you talk to the majority of owners they’ll swear by their car and tell you how many miles their last one had before they got rid of it.
The truth is easy for any reasonable person to see. GM just isn’t making what about half the car buyers want. The rest of them think GM isn’t so bad. But reality is that I can buy a nicer looking car, with nicer options and features at the Japanese dealers then anywhere else.
Don
Let Detroit restructure, just like any OTHER bloated, mismanaged company.
SEO
I think its very imported to support the company (independet of the size) and of cause GM, Ford and Chrysler in this economic crisis. But the condition must be a contractually guaranteed reorganization in trendsetting products (f.e. electronic cars) and the protection of jobs.
Nate
SEO,
I don’t think there will be a way to make a contractual guarantee. How can GM guarantee that people will buy their cars to help pay it back? Maybe if every tax payer got a discount on GM cars it would be worth while…..
But no way should GM get bailed out.
Jackie
No matter what the cause and there is lot’s of blame to go around…starting with the CEO’S right down to the line. That is past history and we need to fix this and go forward. I certainly don’t want to see the alternative because as I figure it there will be many company’s they will take down with them. My parents went through the depression and I heard many stories about it…I sure don’t want that. Let’s work together for a change and get this problem fixed!
Karl Friedrich Unverzagt
“No matter what the cause and there is lot’s of blame to go around…starting with the CEO’S right down to the line. That is past history and we need to fix this and go forward.”
Jackie,
Even though past history, understanding the cause is important. It’s hard to come up with a fix if they don’t understand the cause.
In GM’s case, there are two primary causes:
1. Forgetting that product is supreme. Without a quality, attractive product that beats the pants of the competition it’s hard to be successful. GM has been making progress on this since Bob Lutz has been aboard, but it takes a long time to overcome the legacy of bad experiences consumers experienced over more than two decades.
2. GM let themselves get into the position where they could only make money building and selling large vehicles. In this very blog Bob Lutz has said, “We can’t make any money building small cars.” That is because of legacy costs and being too compliant in meeting UAW demands. Even though GM knows how to make quality, fuel-efficient small cars in Europe and South America, there is no incentive to build or market them in North America. What’s the point of selling cars that lose money?
Frank Drennan
Over the past 38 years I have as General Manager, Vice President and President of my company bought over 1000 General Motors cars, trucks, vans etc. but not another General Motor product will come onto my lot as long as people like Bob Lutz are running GM. His arrogance, self denial and nounderstanding of what most Americans see as the problem with todays Gm are why I have told my two senators to not vote for any bailout of the so called big 3. Mr. Lutz must understand we will not pay for as customers for their mistake with the UAW, there are other products today that do not carry 4retired employees living off my choice of cars, you will not hopefully get the money and will be required to take bankruptcy to protect the future of your company.
len
You people have no idea what General Motors has done for the American economy for the past 100 years. They have invested millions into the economy and now you all want to let them sink . When 911 happened ,who was there with millions of dollars to help in any way that they could for the American people ,General Motors, Ford and Chrysler.Toyota that made the most money that year and gave nothing. The big three have some of the most fuel efficient cars available today, getting better gas mileage than the foreign cars.
And for the amount of money that a G.M worker makes. You all think that we are so highly over paid, your wages are what they are because of the fight that our union has made over the years.
Karl Friedrich Unverzagt
“And for the amount of money that a G.M worker makes. You all think that we are so highly over paid, your wages are what they are because of the fight that our union has made over the years.”
Len,
The question is not whether you are too highly paid. The issue is that the UAW put GM into a position where they could only make money building big vehicles. Vehicles that many people no longer want. The UAW contract does not allow GM to be competitive building the smaller vehicles that consumers now want to buy.
Unfortunately for you, GM is now part of a global economy, and you and your fellow UAW members must now compete with workers in China, Brazil, Mexico, Slovakia, India, etc. Now matter how hard your union fights, GM can’t afford to pay you high wages when workers in Mexico or India will gladly do the same job for less. If they do, they are committing corporate suicide. And that would also be of no help to you, would it?
There is no easy answer — all I can say is it’s not going to be pretty.
Nate
Len,
Either way it is money off all our backs. GM may appear to have done a lot of good but look at how GM stayed afloat during those times. Government money and its customers. Fix the product and the customers will float GM once agian. The situation isn’t as simple as you probably think it is. It is one of resource mismanagement in the US (not just at GM). Unfortunately GM is feeling the first hit of it.
marty bradley
we have a 1998 cadilac deville. unfortunately, we found out after we bought this car with 61,ooo miles on it that the northstar engine blows head gaskets at 80,000 to 100,000 miles. we have 85,000 and are now paying $4,000 to fix blown head gaskets. the cars listed new price was $58,000. I will bet that I can buy a honda, toyota, nissan, or even kia for alot less then that, and it will last for 150,000 to perhaps 300,000 miles before any major work like this needs to be done. never again will we buy an AMERICAN made car or truck!