GM Response to Today’s White House Statement
There’s a lot going on right now in Washington, so we wanted to give Fastlane readers a quick update on where things stand.
On Wednesday night, the House of Representatives passed an emergency aid package that would deliver $14 billion to GM and Chrysler, enough to get the companies through the next several months, until detailed restructuring plans could be developed and approved. It was an emergency, compromise measure that we supported to keep GM going until a more long-term deal could be struck.
Unfortunately, last night, the Senate failed at getting the 60 votes necessary to pass the bill, ending for now hope for a legislative solution.
However, we are encouraged by the White House’s willingness to consider other options, including the Troubled Asset Relief Program (TARP), for immediate aid to the domestic auto industry. We are prepared to work closely with the Administration on possible solutions that could prevent further damage to our nation’s economy and also allow us to embark on an aggressive restructuring plan for long term viability.
More to come as things develop. Thank you for your support in this difficult time for our company.
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It’s simple: Build better cars ~ make them affordable, fuel-efficient, fun-to-drive, durable, easy-to-repair, and green.
I know, it’s a tall order, but it really isn’t complicated.
I see this whole loan issue and the results so far that both sides of the political isle doing as a get even for
1. Republican side getting even for the UAW voting for the other side of the isle
2. Democrats want unions gone so that low level wages and access to non American workers who cannot get into union jobs
3.Those holding office in southern states wants to break unions so that those working for non American nameplates in their states do not form unions or join existing UAW.
4. Get even with GM as them fighting against stupid rules state of Ca’s CARB attempts to push on nameplates
5. Allowing $800 billion plus bailout to so called banking business with no strings attached and public finding out the banks just kept the money so now those in office are taking it out on USA nameplates seen with the demands they have made
6. The spin factor as we see here with posts with the red herring as to fuel mileage when in fact the same people are not bad mouthing non American nameplates here in the USA with worse fuel mileage models.
What these people do not consider is if let’s say china does a takeover of a GM, builds the cars in their country but use American nameplate’s dealer structures to undercut Japan’s pricing in this country.
Demanding reducing GM workers pay ?
No how about the federal arm make non American nameplates to raise their hourly rate, give full retirement and insurance and then see when there is a level field how many cars they then sell.
I’m glad to see that the White House is willing to see the Big Three need this bailout. I find it hard to believe that so many Americans are against the bailout. This make me wonder what kind of America we will have in the next century. They don’t seem to care about what made this country great as it once was.
This is the time for all of us to get behind the Big Three and help make them great once again. I would like to see the Pres. elect make the auto industry a fair playing field for the domestic auto makers. It’s time for the UAW to work hand in hand with GM, Ford, and Chrysler.
Good luck GM . Let help make GM the best automaker in the world once again.
My parents were life long GM buyers. Were. But once again, we believe in you, GM. We believe in the progress you have made over the last several years.
I hope you make it, I really do. If you are around in a few years, pls do not forget this difficult time and don’t let us down again. We almost didn’t forgive you this time.
It may be a blessing in disguise for the auto industry and for the economy if the President helps by directing the TARP fund.
Would be nice to see bond holders take common shares. That would be great for GM.
I should be an ideal prospect for a new car. All four of our cars are over 10 years old, but I’m waiting for more fuel efficient vehicles and I’m waiting for an electric or hybrid vehicle. I watched all the congressional hearings on television and don’t understand why the UAW wouldn’t negotiate with the senate on a rescue package. I voted for Barack Obama but I think Senator Corker of Tennessee was quite fair in his position. I want to retain an American auto industry but I have zero sympathy for a UAW that would rather see GM go into bankruptcy than agree to new compensation terms that take effect in 2009. Furthermore, it is plain rubbish to suggest that i as a consumer will be more willing to buy an automobile once you have your bridge loan (but no firm commitments for financial viability) than I would if you were in Chapter 11 bankruptcy but government backing for the warranty and government debtor in possession financing. If the U.S. government stands behind you in Chapter 11 and I as a consumer know that a judge has the power to force a restructuring then I am quite willing to buy a car from you. But the bridge loan is just a finger in the dike until you put ink to paper on restructuring agreements–and with the bridge loan, no one can force the UAW to accept competitive compensation. In our family, the family you want to buy your cars, we don’t get to retire at 50, we have to work until we are 65. We don’t get free health care, we have to share the cost with our employer, which we see as fair and reasonable. The senate proposal was a great deal for GM and consumers like me blame the UAW for continuing the crisis. They don’t understand that consumers like me who buy your cars are watching their behavior carefully and they can have the greatest labor contracts in the world but if no one wants to support the UAW then a consumer will take their business to more reasonable people–like BMW workers or Toyota workers. The UAW doesn’t understand that most Americans don’t have much sympathy for their plight of retiring at age 50 and demanding free health care and other compensation terms that aren’t competitive. I get to vote–I get to vote against buying a UAW car–and I look forward to that.
14 BILLION for GM and Chrysler – it’s widely acknowledged that GM needs 11 BILLION just to keep the lights on for 30 days – how is that going to help GM for the next several months – and what happens then?
Most consumers are postponing major purchases to begin with – and certainly not buying a vehicle from a company that might be on the brink of bankruptcy – with all the warranty and service/parts issues involved – sales are not going to increase in the next month or two – or even in the next six months. Sorry that is just the reality – but I am sure your own experts are telling you the same thing.
GM needs to announce major changes – NOW – otherwise it will be catch-22 for the company.
Close all the factories for the Holidays – give your employees a Christmas bonus – and rethink your PLAN.
There’s no reason to be producing vehicles right now that you might not be able to give away 60 days from now. At least closing the plants will give you a reprieve and save you 75 Million PER DAY in expenses – which is a significant amount of money.
I am really angry and disappointed at Gettelfinger. This guy has no political wisdom at all. The Democrats may be reluctant to point fingers at him, but I have no doubt it’s his fault. Senator Corker is the only good guy among the GOP, and he genuinely cares about the competitiveness of the Big 3. GM has a huge modern plant in Spring Hill, Tennessee. Why would he want to scuttle the deal? The other GOP Senators couldnt care less about Detroit. And it’s just a matter of time before the UAW wages have to be “competitive” or achieve parity with Toyota. It’s the only way GM could compete and survive. And here are the truths of the political landscape: The power has shifted to the South. Imports now has 54% of the market share. That’s means the majority of American dont care about the Big 3 anymore. The transplants have the advantages in wage, quality etc.(Marysville, Ohio Honda plant is an exception in that it’s not Southern plant.) Why can’t Gettelfinger figure that out the UAW has no more leverage anymore? Just give Senator Corker a date:Dec 31,2009, one year before the contract expires in 2010. It’s just a matter of time you have to cut your wages in order to be competitive with the transplants. The Southern states like Texas has growing population, not the North. They have mass-market brands, like Hyundai, Honda, Nissan, VW, and luxury brands like BMW and Mercedes to choose from. They dont need Big 3 anymore.
And do you expect Henry Paulson to help you? Henry Paulson is never a middle class, and he does not care at all. He was not going to use the TARP money to help distressed homeowners, and sure he’s not going to help the autoworkers. Why haven’t you figured it out? Do you really need to send your kids to medical college with your wages? There are many jobs that makes more money that a doctor. Prestige means nothing to me. I have a psycho ex-gf who’s a doctor and I dont even care about her anymore. You are already making enough wages for a decent living and having all those healthcare benefits, yet you still wont sacrifice for the sake of GM. GM has a debt of $62 billion, according to Senator Corker. Do you want to lose your job in these trying times, or do you still want to hang on to your lucrative wages?
Anyone of you from the GM management, or Congressional Democrats who is reading this please call Gettelfinger to express my view, if anyone of you still cares enough. The money won’t drop from the sky just like that. I am so sick of all this after all the emails I sent to the Senators and Reps these past two nights. Maybe it’s time GM should declare bankruptcy to void all those expensive labor contracts.
Why should my tax dollars go to bailout UAW arrogance?
I’m so sick of the UAW worker, $28 per hour cash compensation plus the additional UAW health and pension benefits, not to mention the jobs bank and early retirement.
The majority of American’s don’t want the bail out. Not because we dislike the US auto industry or want to see it fail, but because the UAW is out of touch and it is slowly killing GM/Ford/Chrysler.
You guys better wake up, if 60% of Americans don’t want the bailout, do you think they will suddenly flock to GM products after a bailout?
How many Americans making less than $56,000 per year are going to look at this wretched excess and ask themselves why? Why should they/I give MORE money to the UAW? When a UAW employee is making $56,000 per year, plus benefits, can’t live with a cut to save their job, let the jobs go. If GM can’t drive that point home, file for Chapter 11, move the plants to right to work states, and pay $20 per hour and restructure the benefits.
I’m sorry to everyone at GM but if you can’t see or won’t say that the UAW is slowly killing your organization, then maybe Toyota is the alternative.
I do hope that GM survives. I would hate to see all those people without jobs, and would also hate to be forced into a foreign make when it comes time for me to buy my next new vehicle. I love my HHR. for me, it is the perfect vehicle. All the room of a small SUV with gas mileage virtually identical to a compact car. Hopefully GM will be around for a long, long time and is able to produce some of the world’s best cars and trucks at comparatively reasonable prices.
Why is it that I can buy a Honda Civic that is powered by Natural Gas? I like my Yukon XL because I need the room. Please develope a Yukon XL that runs on Natural Gas. Honda sells the Natural Gas Civic with the “In Garage Unit” which liquifiys the Natural Gas and away you go.
If you expect my tax dollars to help you, then you need to respond immediately with a Natural Gas powered vehicle, if you don’t I am done buying and driving your automobiles.
You should have moved to Natural Gas 25 years ago, when the first energy crisis happened under the Carter Administration. Please wake-up in Detroit and build Big Cars and Trucks and power them with Natural Gas.
You probably don’t know this, or if you do you are ignoring it, but the Domestic reserves of good clean Natural Gas are huge right here in America. One field in Wyoming, the Jona Field produces 2% of all the Natural Gas consumed in America every day.
We MUST DRILL for NG and Produce NG and run all our Semi trucks on NG. Extremely low Carbon Foot print Mr. Gore!!!!
Wake-up GM, Lead the way, announce that you are going to partner with companies like XTO, EnCana, EOG, Bill Barrett Company and begin converting immediately to Domestically produced Natural Gas.
And how about a plan to get customer feedback to make your products more marketable?
How about more articles on your vehicle development programs and the problems fixed due to customer feedback?
Here is the best plan:
UAW and Bond holders take common shares in lieu of debt, government takes stock warrants instead of a loan. Stock could even go to $100. Economy restored. DOW soars. Health care fully funded automatically. Everyone gains. Problem solved.
Don’t hold back, do it right, go all the way, give them the whole $34 billion up front.
Let’s do this and everyone will rejoice, everyone in America will gain.
Let’s start saying thank you to President Bush in advance in hopes he will do this.
Once upon a time, there was blameless girl called Consumerella who didn’t have enough money to buy all the lovely things she wanted.
So she went to her Fairy Godmother, who called a man called Rumpelstiltskin who lived on Wall Street and claimed to be able to spin straw into gold.
Rumpelstiltskin sent the Fairy Godmother the recipe for this magic spell.
It was in tiny, tiny writing, so she did not read it but hoped the Sorcerers’ Exchange Commission
(otherwise referred to as SEC) had checked it.
The Fairy Godmother carried the straw-derivative at a bargain price and lent Consumerella 125% of the money she needed.
Consumerella bought a gown, a palace and an Escalade – and spent the rest on champagne.
The first repayment was due at midnight – which Consumerella missed (due to comsuming too much champagne) – therfore her credit rating turned into a pumpkin and the spell was broken.
The vaults were not full of gold but straw!
All seemed lost until Santa Claus and his helpers arrived – with names like Paulson and Bernanke – began handing out presents.
But after the New Year Consumerella’s credit card statement arrived and she discovered that Santa Claus had paid for the gifts by taking out a loan in her name.
THE END.
You must have misunderstood. WE DO NOT SUPPORT YOUR COMPANY!!
No BAILOUT!!!!!!!!
Call your Senators! NO CORPORATE WELFARE for anti-environment, suv-loving, greenhouse-gas-denying, crappy-products-building, corporate-propaganda spewing GM!
“Global warming is a complete crock of sh**”
- GM Chairman of North America Bob Lutz
“Make the taxpayers pay for our failed business and bad decisions”
- GM
“No.”
- The American People
I really hope the automakers get the federal loans, not only because of the financial crisis it would put the American economy in, but also I have owned and enjoyed several GM and Chrysler products and won’t want their legacy to face such fates. But, I believe the benefits for current and retired employees should be closer to the rest of the population of the U.S and concessions to reasonable levels of benefits should be done.
I think the most important thing is now, to find ways to assure potential new customers regarding warranties and spare parts-supply, if they would purchase a GM-vehicle now (the same is valid for Ford and Chrysler). Maybe there should be established, preferably in cooperation between the Detroit three (and possibly further car-makers) and the government, any kind of institution, which could act as some sort of “insurance”, that warranties and after-sales-business will be maintained, even if the worst thing happens, meaning that one or more car-manufacturers have to go into Chapter 11. This way, IMHO, it could be avoided, that potential customers might be scared off from buying vehicles from an anyway troubled company, which would build up decisive hurdles for restructuring.
In the meanwhile also European manufacturers ask for loans from the governments, whereas they are talking about at least 40 billion Euros or 53.37 billion $ (!!!) for the development of green technology. WHO… is not competitive, Senator Shelby!?!? Where is the counterpart to the Chevy Volt from the European competition??? Can’t see any. Best regards from Germany.
I have been a teachers union member for 40 years and a GMC and Buick owner for the last 10 years. When the economy is crashing like it is now, it is essential that auto companies receive emergency loans to restructure. This requires to unions to take cuts and all management to take the same % cuts as the unions and to not receive any stock options or bonuses of any sort until the loans are paid back!!! Folks!!! You have to build cars and trucks more economically than you do now or look for your business to suck forever. If you don’t make drastic changes, you may as well go bankrupt right now, because you will never be competitive in the auto industry. I agree with the senates stance and don’t want Bush to bail you out unless you can implement changes that will allow your companies to py back the loan and survive!!!
So what is GM doing to lower its costs, while it sits around “hoping” that the government is going to loan them money? I think GM would be restructuring while it waits for something that may never happen!
I believe that the general public and house of representatives would be slightly more sympathetic if Bob Lutz were to speak with a little (lot) more vision as to where the future of GM lies. In his recent FOX interview, he stated:
“Let me just get one thing straight here: There’s a lot of talk about well, General Motors doesn’t make the right kind of cars or General Motors built trucks too long. At $1.50 per gallon, the American public wants sport utilities and large pickup trucks.”
So is the president if GM really so blind as to be telling us that the future lies with trucks and SUV’s that are only currently a trend item due to a slumping economy and temporarily decreased energy and commodity prices? Perhaps he should stop spoon feeding his **** to the media and general public and fess up with straight facts by saying something along the lines of:
“We realize that GM has been heading in the wrong direction and our slumping sales figures have been driven by nothing more than changes in the market, a complete lack of future vision in the consumer market, lack of perceived innovation, a decrease in the quality of our vehicles and the crippling fact that our unionized workers are (in the grand scheme) overpaid, under skilled and are in some cases being propped up in antiquated positions.
We will change this.”
GM has run into the same problem that Microsoft had in DC,they did not pay enough attention to the politics with BIG money contributions to all elected politicians. Microsoft did not even a political office in Washington till the tide was turning against them. If GM had spent as much $$$ developing a Prius type car as they spent on the SSR,SLR and other niche cars that did not sell well they would have “street cred” in Washington DC with the politicians.
I don’t want to shop at your store because your prices are too high and you make too much money.
I dont want to buy your insurance because you make to much money selling it. I wont eat at your resturant because you make to much money selling food. I wont send my kids to college because the professors make too much money. I dont want calble tv, a cell phone or a toilet because you make too much money selling the services to me. I wont go to the doctor because he charges to much. I wont use toilet paper because the paper mill workers make too much money…. Get real People!!!!!!!!
Regardless of whether you support a bailout or not, its sickening to me to watch this unfold politically almost entirely down party lines. The Republicans of course aren’t going to support it because many of them come from states like Alabama whom paid -along with numerous Southern states- 8 Billion dollars to import automakers to get their business. That’s really what it boils down to if you ask me: Senators trying to protect their own turf versus making considerations to the US workers as a whole.
Secondly, to all you people complaining about Unions, well first of all, if it weren’t for Unions, we wouldn’t have 8 hour work days. We would have to work 10,12,14 or however many hours a company demanded you to work. There would be no worker’s compensation if you got hurt on the job. Many of the safety measures in factories and even offices, such as safety guards for equipment and correctly postured desks are also the result of unions. American unions are what gave America a true middle class, and as more and more of that umbrella disappears, so to does the middle class which has been dwindling away in this country for decades. I’m not totally against the UAW making considerations to wage cuts, or at least consider wages that match those paid by Toyota, but I also don’t blame the unions for GM’s troubles which have been in the making for decades now.
What’s more important than anything right now is to understand that millions of American families work for the Big Three and it is they who are in need of our help- not necessarily GM or Ford, but everyday ordinary people. I give them my full support and hope they will have their jobs for years to come. That is where the focus needs to be instead of bitter political rivalry and finger pointing on every level.
Nate asked: “And how about a plan to get customer feedback to make your products more marketable?”
Nate,
They already have one ~ it’s this blog. Although my guess is, no one at the RenCen pays much attention.
I also suspect GM’s dealer network gets plenty of feedback from customers. Another guess is that GM doesn’t pay much attention to that either.
“I believe that Ron Gettelfinger, was—that’s the president of the UAW—was too unrealistic and too selfish.”
Peter Morici – Economist & Professor, University of Maryland
See see:
http://www.newsbusters.org/blogs/mark-finkelstein/2008/12/12/surprise-early-show-economist-blames-selfish-uaw
What frightens me, and what so few people seem to realize, is that we aren’t just talking about UAW workers suffering. My husband sells cars at a GM dealersip, in an area of the couhtry where most people still prefer to “buy American.” If GM goes under, we suffer, too. And so do the people in the industries that supply GM. And the towns where dealerships provide a large portion of sales tax revenue. That affects schools, roads, police and fire departments.
We’re talking about hundreds of thousands of Americans out of jobs, in an economy that can’t take much more. Today’s NY Times includes an article about how state’s are beginning to run out of unemployment benefits. Can you imagine what will happen if GM goes under?
We were so quick to bailout the banks — who started this whole mess. And yes, the bailout was done poorly. Not enough concessions were granted. But is being angry about that reason enough to harm millions more of American families, in a much more direct and painful way? To me, this is absolutely nuts.
“…then maybe Toyota is the alternative.”
James, do you really prefer a company, where workers have NO representation at all??? Did you ever hear about those people in Japan, who literally have been worked to death? I’d recommend to google the story “The Toyota you don’t know”…
http://www.autoweek.com/article/20081215/FREE/812159997
If that’s true: Dropping the G8 ST would be a mistake. The G8 ST offers the unique opportunity to purchase a vehicle, providing nearly Pick-up-capabilities combined with sedan-fueleconomy. By doing the right marketing this car could be a hit as it is in Australia.
Sam Shephard the restructuring at GM has been happening hard for the last 3 years – salaried headcount has been reduced by 47% and similar cuts have been incurred by UAW represented employees. There is absolutely no spending happening right now.
Believe it is not business as usual.
“I don’t want to shop at your store because your prices are too high and you make too much money.”
> Perfectly rational reasoning. If the product doesn’t represent value, I won’t buy it.
“I dont want to buy your insurance because you make to much money selling it.”
> I shop around for insurance, too, and I get the coverage that, to me, represents the best coverage for the least amount of money- the best value.
“I wont eat at your resturant because you make to much money selling food.”
> Denny’s is fine with me, I don’t need a 5-star restaurant. I’ve been known to order off the 99 cent menu at Mickey D’s too. Mostly I eat the food I’ve prepared myself
“I wont send my kids to college because the professors make too much money.”
> I don’t see this as a problem, but I would also shop around for college tuition rates if it applied.
“I dont want calble tv, a cell phone or a toilet because you make too much money selling the services to me.”
> I also shop around for all those products and services.
“I wont go to the doctor because he charges to much.”
> …which is why I belong to an HMO???
“I wont use toilet paper because the paper mill workers make too much money…”
> I buy the store brand…
“Get real People!!!!!!!!”
> I am real. I comparison shop after I’ve researched my options and make my buying decisions very carefully. I don’t buy into the marketing hype and the advertising campaigns of any manufacturing company.
“Like a Rock” means nothing to me except a catchy tune from years ago. It hasn’t compelled me to buy a truck.
Sharon said: “My husband sells cars at a GM dealership, in an area of the country where most people still prefer to “buy American.”
Sharon,
Don’t let those workers at the Toyota, Honda, Mercedes, and BMW plants in Alabama, Mississippi, Tennessee, and South Carolina hear you say they are not American.
Why would a Mercedes built in Alabama be any less “American-built” than a Buick built in Michigan? Have you got a problem with the patriotism of Alabama car builders?
Charles:
Move to Japan.
Redd,
Aside from the fact that profits from those companies largely go back to Japan what’s American about them other than assembling automobile-shaped widgets? How about the vast majority of the billion or so dollars for a new vehicle on an old platform in engineering? How about the 3-5 Billion for an all-new product on an all-new platform. That money is being spent in Japan, Germany, or Korea.
Easy Redd
All Sharon is saying is US citizens still prefer to buy an American owned automobile. The problem with the comment with “it was built here in the USA” is the profits go back to the foreign countries. Those profits go to their economy and infrastructure. It helps them to find new technologies through research and development that takes lots money. It goes into testing, engineering, advertisment and marketing. It becomes seed money for many other service industries in that country. The sad truth is when folks think of any auto industry they only think about the assembler working the line. As far as the whole scheme of producing a car it’s the end. Go back 4 years prior to that car being produced in the plant and you are talking thousands of auto and supplier workers doing everything from A to Z to get the car ready for the assemblers at the palnts. Wouldn’t you rather keep those profit dollars here in the USA were you live so you and I and every other citizen can reap the rewards from those car profits.
The assembly pant workers for foreign transplants (no matter where they are working) work for a higher standard of living. I can’t blame them. We do what we have to do to support ourself and our family. But I have to believe, and maybe I’m wrong, they would much rather be working for an American owned company then a foreign company. Especially as the south’s history gets into deep roots here in America. These are proud folks who have made many contributions throughout the years to help America be what it is today. I don’t believe one of them would rather salute to the Rising Sun then salute to the American flag.
If our government had been concious of the fair trade agreements with other countries involving the auto industry we would not have allowed the Japanese transplants come into this country until we were satisfied the Japanese government was going to allow the US car industry and other countries set up plants and sell within their borders. Make the playing field even and fair across the board. But again that means our Government needs to get involved 100 % with the auto industry. Our Government can say it was the Big 3’s fault all day but when you compare our Governments involvement with the auto industry compared to other countries our Government is much to blame.
As for the wages the assemblers make in these foreign car plants (and as well as most of us here in the USA ) thank you UAW!. Everyones standard of living is much higher today because what the UAW and all unions has achieved over the years. From our vacation days, to paid holidays, to paid benefits, to safety in the work place, to number of work hours in a week, to being paid over time and on and on.
I wouldn’t be surprised after the UAW, Government and the corporations set new wage scales to be more competitive (above what the give back concessions have already been) the foreign transplants start to reduce wages in the south. Why wouldn’t they? There is no one to protect the workers. If you don’t like it too bad, they’ll simply pull up and go somewhere else.
Try and have a good Holiday Redd.
I AM GM
“Why would a Mercedes built in Alabama be any less “American-built” than a Buick built in Michigan?”
Redd, the answer is quite simple. If you buy a Mercedes the profits go to Sindelfingen and let prosper a GERMAN manufacturer. When you purchase a Buick, the money goes to Detroit and supports an American company. “American-built” is not the point. You simply misinterpret how global economy works. Even if you buy a Korean-built Chevy Aveo, Australian-built Pontiac G8 or a Saturn Astra from Belgium: At the end you still support a US-company.
Economic Stupidity: Does Anyone See The BIG Picture?
Perhaps this should be addressed “To congressmen who are going to get mauled by at least a couple of million angry jobless Americans if they don’t do something now.” So maybe you think that’s a bit extreme, but someone needs to wake up and pay attention to the consequences of doing too little, too late.
No money for the big three, thanks to congress. GM will have to file for bankruptcy, but that won’t help. Few customers will risk buying a car if they think the warranty might disappear. Next stop? Liquidation (death). Maybe as GM officially files for Chapter 11 congress will start realizing that bankruptcy will give the economy a violent shove off a cliff. Then again, congress doesn’t garner much faith anymore. They’re too busy infighting for personal gain hoping to land a good one-liner for the nightly news. So get ready for the bottom to fall out. The economies of Asia and Europe could very well be damaged as well.
If GM files for bankruptcy so will Chrysler, and probably Ford too. Toyota , who shares suppliers with the big three, will also feel the pinch. The big difference? The Japanese will actually help their industries. After a quick recovery, Toyota and Honda will quickly take the 40 something percent of the market the big three still have. You tell me – might this accelerate our trade deficits with Asia?
The problem with bankruptcy is the suppliers, who have done nothing wrong, don’t get paid for their work. If the suppliers don’t get paid, they go bankrupt too. If the suppliers go bankrupt, then the financial institutions (those guys that just got 700 billion and took multimillion dollar vacations) will lose money. They’ll run back to Washington asking for more, and probably get their wish. You will feel the pinch. They won’t. You will be the taxpayers who bail them out again except this time millions of would-be taxpayers are out of work and don’t have money to tax. Those of you who still have jobs will need to pull their weight too. Sound fun?
Have you ever driven down an interstate in Michigan ? If you have you might observe that nearly every business along the highway is an automotive supplier of some sort. If the big three go bankrupt then most of those businesses will shut down. Much of Michigan will become a third world country. The steel mills and automotive suppliers of Ohio and Indiana will be next in line, followed by the mines who supply all the necessary steel.
If the big three are allowed to die the US will have lost its manufacturing base and by most estimates over 3% of the gross domestic product. Manufacturing creates value and adds real growth to the economy. Losing our manufacturing might not only weaken our economic stance but also our military strength.
The positive? You’ll be living history. Your kids will ask you about how busy, progressive, and full of life the Midwest used to be. Maybe they’ll play in these empty assembly plants – facilities that not only built cars but also massive numbers of tanks and airplanes to protect the livelihood of America .
The irresponsibility of short sighted lawmakers failed to keep financial institutions in check, damaging the US economy as well as the world economy. Politicians from Europe are already pointing their fingers at us – and rightly so. Other nations understand the importance of protecting their industries. Yet the US fails to grant their own corporations a loan – a loan that each company would pay back with interest to the taxpayers they borrowed it from. Meanwhile, the banks have relatively few restrictions on their free money.
Lets not ignore the great contributions by our very own media who helped by ingeniously misinforming the public. After all, “Bailout!!!” is a much more sensational headline than “Loan”. Now we look like the idiots…and maybe we are.
I understand some people have mixed feelings, and there are customers who had negative experiences with the big three. There is no doubt that a complete revolution in the way the American automotive industry runs its business is desperately needed. The big three know this and have made significant improvements over the past several years. If you are looking for a new car why not at least give an American brand a fair consideration? You might be surprised. For example, both the Chevrolet Malibu and Ford Fusion have consistently outranked the Honda Accord and Toyota Camry.
Chrysler, Ford, and General Motors have been hampered by outdated contracts they can’t get out of. The effort of congress would be better spent allowing the big three to renegotiate some of these antiquated deals. If our lawmakers brushed up on their history they might discover that ridiculous strings on contracts partially got American automakers into this mess. Tying down automakers even further with excessive requirements will only perpetuate the problem.
It must also be noted that the recent drop in vehicle sales was caused by the recession, which started with a credit crunch caused by the banks. If people could get credit, they could buy a car. If the big three could get credit, they wouldn’t be asking the government for a loan. The economic downturn is not Detroit ’s fault. If anything, their presence should be a sign of hope in an otherwise dismal economy. Who else can provide thousands of well paying jobs so fundamental to our economy?
We have lost representation and we have lost independent thinking congressmen to partisan bickering. Congress needs to put aside their own opinions, and look at the big picture. It is clear that allowing the big three to survive is best for the United States . Not to mention the rest of the world might appreciate a little responsibility from our lawmakers. After all, we live in a global economy. The economic impact of the big three is just too great to ignore.
While I have first hand experience in the automotive industry, and I am an avid car enthusiast, I’m not biased. I enjoy many vehicle marques, some from overseas. Fiscal conservatism has been a cornerstone of my thinking and I believe in a fair but free market. Messing with the natural laws of capitalism terrifies me. Despite all this, other countries have imposed tariffs on US products for years while it has been relatively easy for them to sell their goods here. This is not free trade. This is not conservatism. This is economic suicide.
It is time we leveled the playing field a little for all American industry – not just the big three. We cannot allow the industry that supplied our soldiers through both world wars, the industry that provided a great standard of living over the past 100 years, to simply disappear. These are circumstances requiring unique solutions.
Letting the big three file for bankruptcy is not a sacrifice for the greater good of America . This is just a self-serving agenda posed by hypocritical congressmen. At least one senator gave millions of taxpayer money to foreign “transplant” corporations in their home states. These companies may locate a facility or two here, but remember where the money goes in the end. That was your money – and it certainly didn’t end up in the States.
Congress needs to realize the economic importance of the US auto industry. Maybe you could send this to a congressman? How about just getting your opinion out there? Unfortunately for us all, I doubt they care. They’re insulated from it as long as they keep getting their government benefits. You know that perk they get kind of like social security except a whole lot better?
I’m no expert, but I think congress needs a little common sense and motivation to do what is right for our country. To the average tax payer, the price of not helping the big three is much greater than granting a loan. The famous economist John Maynard Keynes once said, “In the long run we’re all dead”. So listen up and stop waiting congress! In the short run, the big three, along with many suppliers, are going to drop dead in a rapid domino effect. There won’t be a long run.
- J. Fahland
Redd Neckles said,
“Don’t let those workers at the Toyota, Honda, Mercedes, and BMW plants in Alabama, Mississippi, Tennessee, and South Carolina hear you say they are not American.”
The point is that the assembly line workers you mention ALL work for a foreign company. Think: Where do corporate profits go ???
Charles made the statement : You must have misunderstood. WE DO NOT SUPPORT YOUR COMPANY!!
Charles I hope the holidays get you into a better mood. I’m getting concerned your blood pressure is going to have some long term medical issue with your well being.
When you say “YOUR COMPANY”, don’t you understand this is also “your company” Charles. This is an American owned company. Now, unless you’re not from the USA, you reap the benefits from the Big 3. Your standard of living is based from the Big 3 believe it or not. It would be interesting to know what you do for a living. My guess is something to do with the auto industry in some way because you comment on this site more then anyone. And I would guess you are commenting under another name as well like some do on this blog.
If your issue is with global warming and you think the best way you can fight gw is to kill the Big 3 you’re wrong Charles. Help GM , Ford and Chrysler build cars and trucks that are enviromentally safe.
Post your ideas and concerns in a mature structural way on this blog. Christopher Barger and others are reading the comments. But when you go about it the way you do, all that is happening is when they see your name they will skip over it because you come across as going on an irrate rampage. Your comments are welcomed and needed to help GM build their new auto industry.
I know some have personel agendas like gw. But if the competitveness of the Big 3 disappear and opens the market to all foreign cars you will loose alot of your objective. They will start to produce and sell as you say ” those big gas guzzlers” that consumers want and demand. Believe it or not Charles. All I’m saying is be careful for what you wish for Charles. Don’t let anger blind you.
Keep the blood pressure down and enjoy the hoildays Charles
I AM GM
Read this interesting piece about government loans for foreign transplants. Check out the states that are referenced in the article.
Stephen Collins, president, Automotive Trade Policy Council, writes about this subject in a letter published in The Wall Street Journal today. Collins writes:
“As proposed, the requested bridge loans represent roughly $4 billion in assistance to U.S. auto makers, that is, the cost of a low-interest loan. With 240,000 employees spread among the three U.S. companies, that works out to less than $16,000 in temporary taxpayer assistance per job.”
“By contrast, foreign auto makers receive far more from U.S. taxpayers in various forms of government assistance. In Tennessee, for example, state and local authorities offered Volkswagen $577 million in lowered taxes and other benefits in exchange for the plants it is constructing, at a staggering cost of $288,000 per job created.”
“Similarly, Toyota is receiving $300 million in support for its plant in Texas, or $150,000 per job created. Alabama provided Hyundai, Toyota, Honda and Mercedes an average of $111,000 in incentives per job. The list goes on. Unlike the temporary assistance GM, Ford and Chrysler are seeking, in almost all the cases, U.S. taxpayer subsidies to foreign companies never need to be paid back.”
I think the American people need to wake up and start to listen to the real facts instead of the media’s negative spin. I challenge all media papers to write about this and get answers from our southern Republican Senators why they are intentionally misfocusing the real truth. I think we have some politicians that are playing possum on the knowledge or lack of the automotive industry. They know exactly what stakes they are playing for in their own states.
I AM GM
Redd Nuckles –
I’m not saying Alabama car builders aren’t American. And I know that if GM goes under, they will suffer, too. What I’m saying is that, rightly or wrongly, people where I happen to live — my corner of the rural Midwest — cling to the idea of bying an “American” car. I get globalization. But in my neck of the woods, a lot of people don’t. They want a GM or a Ford — nothing else.
“Think: Where do corporate profits go ???”
I think that a lot of the money goes to the American workers who build cars in those auto assembly plants in Alabama, Mississippi, South Carolina, and Tennessee; that those workers buy and own houses in their communities; deposit their paychecks in the banks in those communities; shop at the malls and Home Depots in those communities; buy fast food at the MickeyDee’s and BK’s in those communities; and pay taxes in those communities. (You get my drift, I’m sure.)
Those companies also use some of their profits to support the technical schools, civic groups, swimming pools, youth sports programs, etc. in the communities where their plants are located.
When you buy a Toyota, Honda, BMW, or Mercedes built in a southern state, much of that money stays there and circulates through the local economies, just as it does when you buy a car built in Michigan or Ohio.
There’s no need for us to fight the War Between the States again.
Gereon said: “Dropping the G8 ST would be a mistake. The G8 ST offers the unique opportunity to purchase a vehicle, providing nearly Pick-up-capabilities combined with sedan-fuel economy. By doing the right marketing this car could be a hit as it is in Australia.”
Concur Gereon, but you make a big assumption when you think GM might do the “right marketing.” Both the G8 and the sport-truck version look like surefire winners and would be great competition for European sports sedans and American pickups, but do you really think GM can market it right?
GM seems to have the same problem translating Opel to North America as they do Holden to North America.
Agree with the big picture as noted above, that this is important to the economic recovery. The American auto companies can lead the US out of recession. This supports the US economic and national security. This supports the US manufacturing base in tradeable goods. Its a good idea and its the right thing to do.
We aren’t interested in the ignorant opinions fom the anti-American brouhaa or the drive by media. (it even looks like there are some on the right that are also drive-by media). And we are shocked by how some GOP Senators are Congressmen are acting, so immature, obstructionist, and way out of touch. The GOP may be blamed for the economy. Reagan won elections with the support of middle class voters, and pledging to make America Great Again.
As Sen. Stabenaw pointed out, the wages of the foreign and domestic auto companies about the same. The media have spread terrible falsehoods about the workers and it needs to stop.
The best plan for success is a three part plan where:
1. Bond holders accept a common shares of stock in lieu of debt (or a 70% reduction in debt). They will make it back plus more with the stock.
2. The UAW accepts stock instead of cash for half of the VEBA payment. (They will make it back plus more too).
These two things by themselves would more than do the job right.
3. Then, the government could take stock warrants in lieu of repayment for the TARP funds which would generate a profit for the government and help the automakers lead the US out of recession. This would be a more efficient use of TARP funds since it would free the automakers and the stock would soar giving the goverment higher returns.
This is a free market plan and it will work, no doubt about it.
Just say no to Chapter 11, its a dumb idea.
The President should take action and help the automakers and not hold back because it is the right thing to do and it will work.
http://www.sciencedaily.com/releases/2007/05/070510093248.htm
Above is a link to an article that is about engine redesign. I have heard of urban legends of
carve being able get over 50 or so miles to the gallon. I am not sure as to what GM’s master plan is.
Actually its positivley nuts that Big business has gotten to a point where their asking for a handout.
Anyway, concentrate on being innovative, set yourself apart from the competition. Yes its a gamble and frankly a chance you need to take. What else do you have to loose? Being different is how that Japanese import company has been able to produce quality and have a better financial outlook. Seriously what true innovation exploration is GM funding and experimenting with? Take a look at Cisco. How its current CEO has truely listened to market transitions and trends, thus making products years ahead of their competition. Well GM has always been a family tradition I guess you can say that, all the cars my father owned where GM vehicles. GM Rocks! Hope things turn around….Mr. Wagoner change is a part of life, no one likes change but it happens!
David,
What are you saying?
In all honesty I have no sympathy for GM in this regard. GM’s people (Americans at GM) could have made a stand to make cars that Americans in America want to buy. But they haven’t. Granted there are a large number of Americans that buy American cars… how many of them are happy with their products? How many of them just buy to buy American? Then there are the Americans that buy foreign. They don’t seem that worried do they? How many GM workers drive foreign or non GM?
I AM GM,
The problem with an American built automobile is that people aren’t buying them because they don’t want them. Can’t blame anyone but GM for not figuring out how to fix that.
Sure our money goes to Japan where they develop new products… but why is that a problem? At least Japan is doing something with that money to develop new technology rather then paying it to a bunch of angry, greedy UAW workers.
Personally I’d love to keep those “profit” dollars in the country… except they aren’t profit dollars considering GM’s economic state. They are fat dollars payed to an industry that isn’t keeping pace with the rest of the world. Explain why that is.
If you are worried about keeping profit dollars in the country attack the rest of the businesses importing “cheaper” goods and sending our dollars out of country. Go after the oil consumers that have sent well over 7 to 10 trillion dollars out of our country throughout the past 50 years (yes that number is a crude approximation but probably close to reality considering we use 80 million barrels of oil a day in the US… AND its been growing logarithmically… feel free to correct my math if you want).
if you can do that, then MAYBE we can worry about a few foreign car makers. But the truth is no one in the US has done anything to KEEP industry here. No one has ponied up and said “we are willing to spend the money on our own country even if it costs us a bit more”……
What exactly is America today? is this the America thats debating how to fix its credit problems, and figuring out how to save its manufacturing industry? The America who has turned to its children and grandchildren and told them “Sorry we can’t figure out how to make social security work for you”… Sorry I’m not that proud of that one. The reality is that people all over the country are voting with their dollars. And apparently the vote isn’t always America. To me thats just sad. America could spend its time and resources on itself but it isn’t. We could be 80% energy independent and have a booming economy. But we’d rather spend the money on cheap oil then make the hard decision and reinvest in our own country and way of life.
To an extent you are right our government is partly to blame. But so is are some of the ideals of free market. Free market doesn’t always get the best solution. Sometimes it makes the mediocre or the cheapest. Neither of which I want my money being spent on. If we want to spend on the US why not spend intelligently and look toward the future like our grandfathers and great grandfathers did?
I’ll never thank the UAW for milking the American people dry if GM gets bailed/loaned. The UAW’s demands are ridiculous. Their standard of living may be higher now… but tomorrow it will be lower. And my standard will be about the same maybe a bit less. But my standard was lower then theirs to start with.
It is the attitude that GM owes the UAW that will and has brought America down. America was built on hard work. Not breaks and vacation time. Of course I work 7 days a week if needed… but thats my job and what I’ve agreed to do because its the right thing for the US.
There is no need to protect the workers there (the south). Without the foreign auto makers the workers would make less. Additionally most southerners I know are content with their jobs making what they do. Its a mentality and way of life. As a northerner it took me a while to get it when I was in the south.
Additionally as an aside take a look at Japanese history. Japan was always about taking care of its people until the past 100 or 200 years. Even at that Japan takes great pride in what they do… or used to. I guess I’m just missing something here.
Sorry if I came across strongly… everyone has their opinions I suppose.
Gereon,
You mean support an American company that can’t figure out how to stay afloat?
Jason Fahland,
I would hope GM filing Chapter 11 is more of a shocking wake up call to everyone GM included. Maybe it will shock the country from this profit induced paralysis it is in. The real truth though is that our economy only is harmed if WE the people allow it to be harmed. I don’t hear people at GM or their suppliers volunteering hours to get work done to get the remaining parts in the supply line into finished cars that can be sold. I don’t hear any workers volunteering for pay cuts or anything like that. Clearly they aren’t THAT motivated to prevent this Chapter 11 government or no government. If I was taught the same history of the US that you were… America was built on hard work and people willing to take action. Why wait for the government?
I’d buy an American car next week if I knew GM would say thank you and fix its business practices and make great cars. But they’ve proven time and time again that they can’t do that.
I doubt this will accelerate our trade deficit with Asia beyond maybe 6 or 12 months. In the time GM files chapter 11 a smart, motivated group from within GM will start up to become a new company with new competitiveness. If you don’t believe something to that effect will happen you underestimate the ingenuity of the people at GM. People must be pushed to rise up to meet the challenge these days. Once they realize they can things will be different.
How do you figure the suppliers have done nothing wrong? They banked their business on GM. A foolish thing for any business to do. I would expect they can adapt and retool to build whatever widget is needed by whatever company anywhere in the world….. yet that doesn’t appear to have happened. A good business will downsize and change as needed as well.
Those without jobs will have to pull their weight. I don’t understand where this no job mentality comes from. There are as many jobs as can be created in this country. People need to just realize that they have the power to find and make work for themselves.
Has anyone thought about banding together to produce a new company with what little resources GM has? I just can’t imagine that this is a doomsday scenario. Are you saying it is binary? Its either GM fails and the economy goes down or GM is bailed out and life is a bed of roses? What about GM fails and things change and a different, new economy comes from it? Where are the people thinking that way?
So you’re talking about people needing to change jobs and find a new way to make their skills useful?? Sounds like a not so bad idea. A bit inconvenient but probably a good thing.
The manufacturing Ability isn’t going anywhere. GM’s buildings, factories, machines, tools don’t vaporize when GM goes Chapter 11….. They will be there for the next group of motivated people to use.
Factories do add value but so do motivated people who are willing to work for competitive rates. Growth to the economy? How long do you REALLY think the economy can continue to grow before it must slow down or shrink? Do we have infinite resources, money and energy? (not last time I looked)….
In fact… the biggest thing GM could do is ask its suppliers for a loan… yes thats right ask THEM to forgive the debt they incur while they turn back to profitability. What portion of GM’s debt is owed to their suppliers? I’d be willing to bet that a large portion of GM’s suppliers borrowed money from the credit industry to PAY for GM’s parts they manufacture. How many businesses today operate on a cash basis? You really think GM is going to solve this when the industry that lends the money is falling flat on its face? What portion of GM’s debt is owed to their suppliers? What portion to their employees? And what portion to the engineers and management? Again I don’t hear anyone else talking about making sacrifices or working for less because it is the right thing to do. All I hear is “its going to ruin our economy”. How about “We’ll work for food and a roof until GM is out of this one.” How about GM’s employees asking the government to pause their own bills while they work to help GM back to profitability? I’d favor that one. It is certainly better then giving money away.
Lawmakers failing to keep things in check? What about the institutions that were forced by the law makers to make bad decisions?
Its not about granting GM a loan… its about GM proving it can be responsible with a loan. That means changes… a commitment to fix past problems. It means admitting past problems. NOT denying problems exist.
Apparently other nations AND their PEOPLE understand the importance of infrastructure, energy and industry…. things that it appears America has forgotten.
The US fails to grant their own corporations a loan? You mean the corporations with no street credit? The corporation who hasn’t told any of its new potential investors how its going to pull the magic rabbit out of its hat?
And how does a loan with interest work when the very people buying GM products are the ones loaning the money? Does something not make sense to you on that one? Or is it just me?
Finally you admit that a big change in the way they run their business is needed….. that is what I wait to hear from GM. To hear them talk about how they can fix their problems… talk about what their problems are. How their problems will address the competition’s features and win back the Americans buying foreign.
And then they need to deliver…. then everyone, myself included will applaud and congratulate them…. but not until they show they CAN do it.
They HAVE made improvements but what are their plans for more improvement… are they going to address our concerns or continue to operate the way they used to?
What do you consider excessive requirements?
If people on the whole HAD credit they could get cars. If they payed cash GM would be fine and most likely much smaller….
Of course its not Detroit’s fault for continuing to make cars that half their buyers don’t want. They had no control over that right? At least not in the past 5 years?
Who else can supply thousands of well paying jobs so fundamental to the economy? How about the motivated people who start small businesses when GM fails and work their way up from there.
So you enjoy overseas brands? Shame on you for not supporting the American auto industry 100% of the time.
I believe the proper word is economic warfare. It appears we are losing the battle. Gotta work harder America…..
Has anyone considered the US standard of living isn’t sustainable?
This IS a sacrifice for the greater good.
Stop buying all foreign products including oil and our money WILL end up back in the states…. let me know if you figure out how to do that… I’m still thinking about it.
I do agree with you that congress needs a bit of common sense. But then so does the common person.
Big Burger,
Where do you think American companies profits are going right now? Eventually they are ALL going overseas due to all the imported goods we consume. In the mean time those profits go around the economy a few times before finally exiting the US economy via people buying low priced imported goods. Harsh but most likely the truth.
I AM GM,
This isn’t my company… my company would listen to its consumers.
I’m an engineer, and I’ve been posting my comments for a while. I’d've hope GM has taken them and done something with them but it doesn’t appear to have.
Of course subsidies in other states don’t need to be paid back they bring stable jobs to people in need of work… people who are willing to work for what they are offering them.
Sharon,
Then perhaps you should encourage GM to downsize and continue making its vehicles while another branch of GM moves into the global stage and makes cars that the rest of America wants.
With all this talk of unions, and particularly the UAW I am in agreement on some points: I am not outright opposed to unions. I think they can still do some good. I am opposed to unions that overstep their mandate. Unions are supposed to be for making sure working conditions are decent, working hours are reasonable, and compensation is commensurate to the tasks performed. The UAW has repeatedly gone beyond that mandate, even to the point of shutting GM down at one point, just because they could. Now the UAW is risking the jobs of literally millions of people by not doing everything it can to protect those jobs, or at least save as many as possible. I don’t know why the rank and file workers put up with this intolerable behavior by their union. They shouldn’t. I’ve seen in other industries where the workers, when faced with a union that no longer represents them, have either dumped one union in favor of another, or have gone ahead and formed an entirely new union. Perhaps this is something the rank and file should consider, as the UAW seems to be putting itself ahead of the interests of the workers they are meant to represent.
redd;
“There’s no need for us to fight the War Between the States again.”
Then tell your senators to take their foot off of our throats please.
Nate.
“In all honesty I have no sympathy for GM in this regard. GM’s people (Americans at GM) could have made a stand to make cars that Americans in America want to buy. But they haven’t. Granted there are a large number of Americans that buy American cars… how many of them are happy with their products? How many of them just buy to buy American? Then there are the Americans that buy foreign. They don’t seem that worried do they? How many GM workers drive foreign or non GM?”
1. The basis of nearly all of your arguments is that no one in the US buys American vehicles . First; GM outsells Toyota by more than 1 million vehicles a year… Second; American vehicles make up more than 50% of the total US market. The vast majority of those customers are happier than average, (at least as far as GM is concerned) based on the only measurement available for those statistics; JD Power.
So based on those two facts as the basis for your positions you don’t really have one.
2. Americans that buy foreignand aren’t worried need to wake up to the fact that the manufacturing and engineering prowess that made this country what it is are being supplanted by other countries at our great peril.
3. Very few GM employees drive vehicles other than those made by GM. Most of those have immidiate family members that work for either Ford or Chrysler and by chance they may have a product from one of those other companies. The tiny number that drive foriegn vehicles by choice should be first on the list for downsizing.
“Most of those have immediate family members that work for either Ford or Chrysler and by chance they may have a product from one of those other companies.”
I had a cousin who once worked in a Chrysler assembly plant. This was a number of years ago, but he told me that after seeing how the cars were made, he would never own one — and he didn’t. He drove a Chevy.
It was also interesting that when you driving past the employee parking lot at that particular plant, one saw very few MOPAR cars or trucks.
Chris R,
I agree Unions have their place and time. For that matter I often remind myself that our own abbreviation USA standards for United States. We as a people ARE united.. or were at one point.
In the case of labor unions their trade needs to be respected but they need to respect their employer and the rest of the country. I think the balance is way off right now. Its time they wake up to reality. Many businesses and people working there don’t want anything to do with unions. The place I work is not union and many people feel very strongly against unions. I’m not saying that they are all bad but they tend to get greedy.
David,
If GM sells so many vehicles why is there even discussion of a loan/bailout? The obvious reality is that there is something wrong with GM.. its products.. its practices.. its people. That are keeping them from being self sustainable. Argue all you want that GM has the most sales etc.. but when they are about to file Chapter 11 it tells me they have done something wrong.
Exactly As far as GM is concerned. If GM only has 50% of the market… they should be focused on getting that other 50% while being profitable. If they can’t do that they need to be profitable and stay in business… regroup and try again. That doesn’t mean continuing to try to sell millions of vehicles to cover costs of so many brands and vehicle models. That means downsizing for a while until they figure out what they need to do.
Most people that buy foreign have no concern for the future. All they care about is a car not breaking. Many of the ones I have met can’t even wrap their brains around how their purchasing decisions effect everyone else and even themselves. As a country we have a lot of remedial work to do. People have forgotten some key things about this country.
First on the list for downsizing? Sounds kind of communistic.
Don’t you think things will straighten themselves out in the next few years as people realize how they’ve screwed themselves in the economy with their foolish choices?? I certainly have hope… but don’t expect it.
At least people like you and I are concerned enough to discuss it.
Isn’t Middle East oil that is refined into gasoline in Texas still Middle East oil?
Then why is a Japanese car that is assembled in Alabama, American?
“Then why is a Japanese car that is assembled in Alabama, American?”
The question is whether a car made in Alabama is “American-built?” My answer: If Americans put it together, it is.
As to Middle East oil refined in Texas: Obviously it is Middle East oil, but it is “American-refined,” and by an American company employing American workers.
There is a difference between feedstock and final product.
“You mean support an American company that can’t figure out how to stay afloat?”
Nate, many of the factors, which brought GM, Ford and Chrysler into the current threatening crisis are beyond their control and have a lot to do with the American political and economic system. When a company, like GM, sold nearly 3 million vehicles more than Volkswagen in 2007 and gets in such financial distress despite of this, then there has to be something wrong in your country. Is not to support US-carmakers (and other companies) an alternative at the current situation? How will ever the US-economy be able to recover, when people think the same way like you do? Many of my folks are well aware, that Toyota or Honda may deliver better quality than our domestic German brands. Nevertheless the combined market-share of Toyota and Honda in Germany is ridiculously low at 4%. Ask yourself why.
“…you make a big assumption when you think GM might do the “right marketing.”
Hi Wendell,
as GM obviously was able to market the all-new Malibu in an adequate way, they also should be able to do this on the G8 ST. Sedan-based Pick-Up’s, as I would call these, might be a very compelling offer, when the oil-prices climb again (and they will sooner or later) and there a people, who wish great utility and economy at the same time. IMHO the G8 ST could become a key-product,
later maybe even with a supercharged fuel-efficient 4-cylinder or even with 2-mode-hybrid.
Gereon,
Quite honestly, I think if GM just started making an S10 pickup again, it would serve the same purpose, and probably sell in greater numbers. The Colorado pickup’s big downfall as far as i can tell are the engines. Instead of an economical 2.2 liter four as the base engine, there is a much more massive 2.8 liter four. instead of a powerful, stone reliable and somewhat economical 4.3 liter V6 as the optional engine, we’re stuck with a 3.7 liter inline 5 cylinder which is not more powerful, barely more economical and, according to reports from owners that I’ve read, it doesn’t seem as reliable as the 4.3. The Original S10 is basically responsible for the demise of the El Camino as it was more economical, and designed as a truck from the outset, so it was able to do more and carry more than the sedan based pickups.
Gereon: How can you justify the comment that the “American Political and Economic system” is at fault for the downfall of the big 3 ? I can’t think of many industries, even in a booming economy, that can afford to pay every worker nearly double the average wage for their position, especially one with thousands of employees. It is the fault of the auto-maker, and the Unions that control them by mandating inflated wages, that are causing it. Reducing their operational costs by nearly 25% just by paying normal wages, would go a long way toward getting them back in the black.
“as GM obviously was able to market the all-new Malibu in an adequate way, they also should be able to do this on the G8 ST.”
One would hope so Gereon, but I wouldn’t bank on it. They haven’t done a very good job or had much luck marketing their Opel-based Saturns.
Tim,
Middle Eastern oil is Middle Eastern oil no matter what you do with it. When the US uses 80 million barrels a day with a portion of that imported… at an average of what??? $80.00/barrel do the math an let me know how much money we spend outside the US each day on our beloved American Cars.
Redd Nuckles,
If Americans put it together its Made in America. If it uses American Parts and American Workers and American Designers it is American no matter who owns the company.
Where are the parts from that Toyota made? I be the balance of parts made in America on a Toyota exceed the Balance of parts made in America on any American car made today. I bet GM imports more parts then Toyota does on their cars.
Gereon (Germany),
Well apperently you don’t understand that GM doesn’t need to sell quantity they need to sell quality. You can’t build a few million more vehicles then people want saying you need to build quantity to make the price lower… THEN end up selling many of them at cost or even under and then turn around and sell new cars the next year when consumers know that cars will be reduced the next year.
I guess what you don’t understand is that GM has the wrong mentality. They make more vehicles then needed. They base their engineering costs on that… they make more models then they need and spread their resources to thin. And that is why they lose money despite selling more vehicles.
I never said Americans had the wisdom to look long term in their every day decisions.
______
If you look at Subaru they did just this made a small car/truck. GM could pull it off but they’d have to get a few more things right.
“Well apperently you don’t understand that GM doesn’t need to sell quantity they need to sell quality.”
Nate, that’s what they are already doing. That’s something what you apparently do not understand. Just look at their award-winning models. Even with my 2001 Olds Alero, which I bought brandnew, I encountered significantly fewer repairs in 7 years, than my colleague with her nearly brandnew BMW after 8 weeks! BTW, my car already has 86′000 miles on it, after all.
Your statement regarding the use of American parts is simply WRONG. Most GM-vehicles are made of American parts to a very high degree in contrast to Toyota. You obviously missed that report:
http://www.usatoday.com/money/autos/2007-03-21-car-content-chart_N.htm
It seems, as a German, I am reading more US-publications than you do. ;o)
Nate said.
“If Americans put it together its Made in America. If it uses American Parts and American Workers and American Designers it is American no matter who owns the company.
Where are the parts from that Toyota made? I be the balance of parts made in America on a Toyota exceed the Balance of parts made in America on any American car made today. I bet GM imports more parts then Toyota does on their cars.”
Utterly false. The average content of a GM vehicle built in North America is double the content of a Toyota built in North America..
Most of these vehicles are not designed here… the engineering staffs support compliance and assembly issues; not core design. The exception to that might be the Toyota Tundra and in that case we can clearly see that Toyota engineers are far from infallible.
Nate,
I know Middle East oil is Mid East oil no matter what you do with it. That’s my point. Although, yes, there are some foriegn cars designed, engineered and built in the US, most of them are not. Most are just assembled in the US, with parts from Japan. So my oil analogy was just showing, why is a car that is built with mostly Japanese parts, now American if all those parts are just put together in the US? Toyota is (was) going to build the Prius in Alabama (I think), but I wouldn’t consider that an American car since the entire drivetrain comes from Japan/China.
Plus, even if my GM car has more parts built in Mexico or where ever, if they were designed and engineered here, I would go for that, then a part made here, and designed and engineered in Japan.
I was a GM baby. My father spent 36 years at GM and my brother is a current employee. The entire time I was growing up I saw and heard about executives getting millions of dollars in bonuses after laying off thousands. Management and their families were given brand new cars to drive every few months and GM paid for their gas and repairs. Lavish parties were thrown where imported food was flown in from all over the world. Executives and sales people partied all over the world while making inferior cars, laying offf more people, fighting with unions. Employees were allowed to fake addictions to get bogus treatment. Other employees faked injuries, the leadership knew and did nothing. The entire corporation is corrupt, wasteful, greedy and morally corrupt. I’m sorry for current employees but GM begging for a handout only means that we are bailing them out of their waste and greed for the past fifty years. I say let them hang. The employees will survive, get other jobs, start small businesses and times will be tought for a while. Bailing out the evil and the corrupt is not acceptable and American needs to stand up to the threats of these corporate bullies. Let’s take back the cars, homes, vacation homes, fur coats and jewelry of every GM executive and their family and use that to bail them out. The American taxpayers shouldn’t have to pay for these idiots.
Gereon (Germany),
I wish I could say that about our 2001 Intrigue. It has less then 100K miles on it and overdrive “died” on the transmission. Additionally the windshield wipers got stuck in the up position and cost us a few hundred dollars to fix. The interior despite being pleasing to the eye isn’t very great and the car has a lot of road noise despite a good set of tires.
I certainly think the Intrigue was a step in the right direction for GM. But I don’t think its better then BMWs of the day. And certainly not better then Toyotas of the era.
Yeah sorry I don’t read more reports work keeps me fairly busy.
Tim,
I disagree in some regards with you. First its hard for our country to function right now without oil. On the other hand we’re not doing to bad limping along with japanese cars.
In some regards though I think Japanese engineering is better these days. Its not that we don’t have good engineers so much as we don’t give them the free reign on their projects like we could.
For example a friend of mine got to tour Ford’s engineering department. For had problem with a part on their brake calipers failing. The engineer was apparently told to design the rest of the caliper to fail at the time the problem part does. Now whether that part had a reasonable lifetime or not is unknown. But I hate to think that Ford does that on their cars. But I fear it is reality. Though maybe it is a story and not true. The point is most people are shocked to hear this. I like to think a country like Japan has enough pride to NOT do that. For that matter their executives commit suicide if they make a big mistake. You don’t hear of that kind of personal commitment in the US. Imagine if US company employees took that much pride and personal interest in their work?
“But I don’t think its better then BMWs of the day.”
Nate,
I think it’s more than just an fortuity, when I hear several people complain about their premium-cars BMW, Mercedes, etc. In many cases just the sticker-price seems to be premium. Well, you may have had some bad luck with your Intrigue, however, my Uncle encountered a blown-up engine, blown-up automatic transmission, numerous electrical malfunctions and a defective sunroof with his former Mercedes E-Class. When I am comparing, what he had been paying for his Mercedes in contrast to my Alero, I just can’t stop grinning. BTW, my neighbor’s BMW 3-series can’t match the fuel-efficiency of my brother’s Pontiac G6, whereas his car even has the more powerful engine.
Haeze,
also autoworkers over here often earn much more money than people working in other branches. BTW, dealing with unions is not always easy for companies, as the unions still have the chance to trigger a strike. Did you already forget the strike, as American Axle tried to cut wages earlier this year? However, I agree with you, that for the union the time has come for being more modest. The alternative to lower paid jobs otherwise might be not to work at all.
Gereon (Germany),
I’d never buy a Mercedes. The price to power ratio is rediculous. Additionally I’ve heard the 3 Series is somewhat inferior to the 5 series since they are targeted to a different buyer. To further my point. In thinking about it I realized that only 2 cars my family has owned didn’t have transmission failures. Both of them were trucks. Considering we had 5 cars from GM thats not really that good. Especially with all the transmissions having under 120K on them.
I curently own a 2006 Chevrolet pickup and a 2001 Sonoma GMC pickup. When these are no longer serviceable I will replace them with a Toyota or Nissan product. After mismanaging GM you now come before congress and beg for money to keep afloat. Since this entales a future tax burden on my family and our well being, I will not reward you with any future purchases. If GM goes under, so be it. But you won’t catch me with one of their cars in my garage.
Hi friends…
That’s my point. Although, yes, there are some foriegn cars designed, engineered and built in the US, most of them are not. Most are just assembled in the US, with parts from Japan.and your issue is with global warming and you think the best way you can fight gw is to kill the Big 3 you’re wrong Charles. Help GM , Ford and Chrysler build cars and trucks that are enviromentally safe.
Post your ideas and concerns in a mature structural way on this blog. Christopher Barger and others are reading the comments. But when you go about it the way you do, all that is happening is when they see your name they will skip over it because you come across as going on an irrate rampage. Your comments are welcomed and needed to help GM build their new auto industry.
GM states that it sells so many vehicles. Then why do you need a bailout? The reality is that there is something wrong with the management of the company. When it is not managed properly, the productivity affects and then quality affects and at the end it hurts. So I think GM should put their systems right first rather than asking for bailouts.
Mr. Wagoner made the point some time ago, that GM Healthcare costs equalled or exceeded the costs of steel for GM. I can offer a proposal that integrates healthcare in the GM product line and that resolves this disparity. Further, no one has addressed problems that will be forthcoming in providing healthcare to the potentially GM unemployed and their families. I would be happy to discuss such a proposal with apppropriate GM folks. Such a positive approach would jusify not only the bailout, but would speak to a greater crisis that threatens all industries and their employees.
“GM states that it sells so many vehicles. Then why do you need a bailout? The reality is that there is something wrong with the management of the company. When it is not managed properly, the productivity affects and then quality affects and at the end it hurts. So I think GM should put their systems right first rather than asking for bailouts.”
If only things were so simple. GM has a lot of obligations and they cannot meet them without revenue. GM’s revenue (and the rest of the industry’s) has plummeted in recent months due to the credit crisise. In case you missed it the credit crisis is pretty significant and was not caused by GM. GM could not get private credit lines because banks are not lending to anyone right now and thus the government provided GM with a LOAN. If other avenues were available GM would have pursued them but the financial wizards of Wall Street have done such damage that credit isn’t really available to most companies right now. Wall Street got a bailout- meaning that money was thrown at them with few questions asked because of their own mismanagement. GM got a loan that was necessitated by the crash on Wall Street that led to a collapse of lending and consumer confidence. I do not understand why so many that post here are more angry at GM than they are at the lending institutions and politicians who allowed this mess to transpire.
Chris said: “Quite honestly, I think if GM just started making an S10 pickup again, it would serve the same purpose, and probably sell in greater numbers.”
I have to agree Chris. There are bunches of people with aging Chevy S10s and GMC Sonomas who wonder what they will replace them with.