Do Automakers Deserve a Bailout?

[Dravenhawk]

I am listening to the story unfold on CNBC about the proposed bailout of the Big Three US automakers GM, Ford, and Chrysler. I have to ask if companies that so lack forsight and have had thier lunch eaten by the japanese and other forigen automakers deserve a reward such as this. They had thier chance to make a line of fuel efficient high quality cars and trucks in the late 1970's but chose not to. Instead they chose to make a few token small cars that were of poor quality as compared to thier Japanese counterparts and focus the main thrust of thier resources on large cars and huge trucks that sucked down gas.

In the late 1970's OPEC initiaied the Arab oil imbargo some of you were not around in those days of gas rationing and long gas lines. The automakers were warned over THIRTY years ago to change and make high efficiency cars and alternative energy vehicles. The fact is they chose NOT to do this in the grip of the stranglehold of OPEC, at the urging of ecomomists and environmentalists. As oil prices and supply stabilized they felt justified in thier descision to continue to make cars and trucks that got under 15 miles to the gallon even though geologists were urging that the supply of oil is not infinite.

If there is to be a bailout of the US automakers then those high dollar bonuses paid to the executive level need to be gone. Gasoline only powered cars should only make up 15% of thier product line and the minimum MPG needs to be set to 50 MPG. Electric, fuelcell, compressed natural gas and hydrogen fuel powered cars need to be made and made NOW not 5 or 10 or 20 years from now. If the automakers choose not to do this then the government should not bail them out and should let them go by the way of the dinosaurs who also could not adapt.

Dravenhawk

[fffff]

I agree. Without a huge shift in the automakers' bussiness and product, bailing them out would be essentially the same thing as bailing out typewriter factories in the age of the pc.

Yeah, except dinosaurs didn't serve as a source of income for thousands of folks. There's the rub; the unemployment rate is already higher than it's been in 14 years.

[Zandoz]

This is a tough one...no, for the most part the auto industry management do not deserve rescue...but on the other hand, the country can not afford to loose a large chunk of the few remaining decent jobs left in this country.

I know it's popular to blame the companies for building so many gas guzzlers over the last few decades, but for the most part, they were building what the collective WE wanted. It's not that they have not had the ability to build smaller more efficient vehicles..all three of the "majors" own or are in large scale partnership with makers of relatively state of the art high efficiency vehicles. WE just gave them no sign of acceptance or demand for those vehicles here. If they had built the vehicles without a market, they would have been in the dire straights they're in now, 20 or more years ago.

The part of the blame that does rest squarely on the companies' management is for the poor quality and the corner cutting in the name of profit...the failure to innovate within the style of vehicles the market demanded...bloated management...and the off-shoring of the very jobs that supported the market for their product.

In the end, I think a bailout is going to be a must...but I think it should come with some SERIOUS strings attached.

• Serious limits on management salaries, perks, and the elimination of all bonuses
• The full funding of all retiree pensions and and health care commitments until such time as there are national universal plans to replace them
• An absolute and permanent end to all off-shoring of jobs
• Agreements to accept without objection all future fleet efficiency and environmental requirements...and the setting of those efficiency requirements based on averages of the world subsidiaries' current fleet averages, to take effect in 5 years
• The establishment of fleet level domestic content requirements based on current levels, and with increased requirements at 5 year intervals
• A requirement that government vehicle structural regulations be brought more in line with international standards, to ease the American manufacturers ability to build already developed higher efficiency European and Asian designs here...and to make our products more easily adaptable to world markets
• The nullification of all franchise agreements requiring the the dealers take vehicle quotas
• The nullification of all union wage and work rule contract provisions, to be renegotiated in line with the wage, and work rules in force at the major foreign manufacturer plants in this country...with the department of labor acting as absolute arbitrator
• The elimination of all mandatory overtime, and the setting of limits maximum overtime
• The outlawing of job roll over to circumvent employees eligibility for wage and benifit advancement.

[Dravenhawk]

Originally Posted by saucywench

Yeah, except dinosaurs didn't serve as a source of income for thousands of folks. There's the rub; the unemployment rate is already higher than it's been in 14 years.

Oil comes from the remains of dead dinosaurs which serves as a source of income for just about everyone on the planet


Just had to be silly hope you don't mind

Dravenhawk

[Dravenhawk]

Zandos you make some good points here. I feel that in conjunction to the poor management issues, corner cutting and the like the Big Three failed to diversify thier fleet offerings. The collective "WE" wanted the high milage and superior quality the Japanese carmakers have to offer the proof in that is in the sales figures of Toyota alone which surpasses the combined sales of GM, Ford and Chrysler. In the end it is the complete and total lack of diversification and flexibliity that has caused the American automakers to fail to adapt to the changing needs of the consumer base.

Dravenhawk

[Zandoz]

Originally Posted by Dravenhawk

Zandos you make some good points here. I feel that in conjunction to the poor management issues, corner cutting and the like the Big Three failed to diversify thier fleet offerings. The collective "WE" wanted the high milage and superior quality the Japanese carmakers have to offer the proof in that is in the sales figures of Toyota alone which surpasses the combined sales of GM, Ford and Chrysler. In the end it is the complete and total lack of diversification and flexibliity that has caused the American automakers to fail to adapt to the changing needs of the consumer base.

Dravenhawk

But the thing is, except for brief times after new model releases, there never were any periods where there were shortages of those foreign manufacturer cars...if there had been customers for more, they could have supplied more. Instead, the foreign manufacturers turned to building the same kind of vehicles that the American manufacturers were making...SUVs, larger trucks, not so mini mini vans...they knew where the market was. The difference is that when they built those vehicles, they innovated within the basic style, and paid attention to quality.

[Tommy_Oblivion]

Surely the people who ran the company aground don't deserve a hand out, but on the other hand it's pretty douche baggish for the guys on the ground floor who worked hard all their lives to loose a job and whatever benefits. I Don't have an answer to this problem.

[waldo]

Originally Posted by Tommy_Oblivion

Surely the people who ran the company aground don't deserve a hand out, but on the other hand it's pretty douche baggish for the guys on the ground floor who worked hard all their lives to loose a job and whatever benefits. I Don't have an answer to this problem.

I agree, the UAW mafia needs to be sent packing permanently. Instead they and their union brethren are trying to get this card check / open ballot unionization initiative pushed through in order to bring the non-union Japanese-owned car companies and other non-union outfits down to their level.

[BBW MeganLynn44DD]

No the government should not bail anyone out.Sink or swim.I work in the retail industry and we would NEVER get a bailout.The government can print all the money they want but if there is nothing behind the money than it is useless.Just my two cents!

[LillyBBBW]

For years and years and years our car companies have NOT been able to compete with their foreign counterparts. I'm always hell bent on buying American made cars and face derisive laughter from all of my peers over it. My reckoning is that if something were to happen to the car the parts would be cheaper to replace. Their argument is that I am a lot less likely to need to replace parts with a foreign car and would be much better off. They turned out to be right I hate to say but I've been killing myself ramaining faithful to American cars.

Why can't we seem to produce cars here that are competative? Our car makers here have been floundering in the market for years and can't seem to produce anything that ranks high in safety, gas mileage and all that other stuff. I would be all for a bail out to keep America working but if they're just going to keep pushing the status quo and making junk it's a waste of money. There needs to be some new engineering and a new attitude. Some kind of assurance that the money will be used wisely and they wont skimp on quality and keep making new looking lemons.

[1300 Class]

Actually it was Bill Clinton that stopped the precident of continued federal legislation of the auto industry emessions and fuel effeciency of its products, with this lack of momentum carried on by Bush.

[Imp]

Originally Posted by Dravenhawk

Oil comes from the remains of dead dinosaurs which serves as a source of income for just about everyone on the planet


Just had to be silly hope you don't mind

Dravenhawk

Other than elementary school teachers, NO ONE has seriously thought oil came from dinosaurs since, oh, 1800? The continual perperuation of that myth is a source of amazement to me and is on the scale of European people ever thinking at some point that the world was flat.

[LillyBBBW]

Originally Posted by Australian Lord

Actually it was Bill Clinton that stopped the precident of continued federal legislation of the auto industry emessions and fuel effeciency of its products, with this lack of momentum carried on by Bush.

No that can't be true. I haven't owned a car for years but I do recall I got a rejection sticker on one twice because of emissions testing getting more strict one year. I never had any issues getting my car inspected till that happend and I vividly recall getting angry with Clinton over it because it was costing me more money to keep my clunkers on the road.

[LillyBBBW]

Originally Posted by Imp

Other than elementary school teachers, NO ONE has seriously thought oil came from dinosaurs since, oh, 1800? The continual perperuation of that myth is a source of amazement to me and is on the scale of European people ever thinking at some point that the world was flat.

Imp lighten up, he was making a joke.

[1300 Class]

I believe I read that in Stupid White Men by Mr Moore.

[HottiMegan]

I'm totally torn on the issue. Since I come from a Michigan family, many of my relatives and generations have worked for the auto industry. My grandfather worked for GM for his entire career. My father went to GM Institute. I have an uncle who retired from Ford and another one who still works there. I think about them when it comes to the failing auto industry. But at the same time, they should have been on top of stuff a long time ago on the fuel efficient vehicles.
If they bail out the auto makers, what's next? I can think of two major retail chains going out of business off the top of my head. All but walmart in the retail industry are suffering losses.. Our government only has so much ability to help.

[Mack27]

Do Automakers Deserve a Bailout?

Only if by bailout you mean massive deregulation to un-hamstring them so they can actually compete.

[Zandoz]

Originally Posted by Mack27

Do Automakers Deserve a Bailout?

Only if by bailout you mean massive deregulation to un-hamstring them so they can actually compete.

There are no regulations keeping them from competing here, other than requiring that they stand behind the commitments they made to their workers. It is not fair for the company to just walk away from their contractual commitments, after reaping the profits garnered by the workers' labor for years and decades.

Otherwise, the same regulations apply to the big 3 that apply to all foreign owned manufacturers. And in many cases, the big 3 workers are already building parts for the major foreign manufacturers, being paid the same wages and benefits no mater the destination of the parts. If the foreign owned manufacturers can build decent quality cars here in this country, so can the big 3....there are no regulations hindering the big 3 that are not imposed on the others.

[gaffo]

Originally Posted by Zandoz

If they had built the vehicles without a market, they would have been in the dire straights they're in now, 20 or more years ago.

[/list]

I dissagree.


Domestics fooked themselves out of cowardice - because they REFUSED to roll the dice and CREATE A DEMAND for a car that we didn't want before its introduction.


toyota MADE a market with the Prius.

Mercedes MADE a market with the Smart Car.

........

yes americans hate small cars - their asses are too fooking big to fit in them. Well? guess what, not all of us have huge butts - and we WILL buy small cars from anyone who makes them - only the domestics STOPPED OFFERING EVEN ONE SMALL CAR!!!! 8 YEARS AGO!).

I bought my Yaris hatch because Toyota was the ONLY maker to offer such a small car.......................ford? - sure the Ka - NO WAIT that is only offered EVERYWHERE ELSE, subaru? - sure the R1 - NO WAIT that is only offered EVERYWHERE ELSE.....etc..........

Honda Fit? - too big.

Nissan Versa? - Too big, but I can go buy their Nissan Micra.. NO WAIT that is only offered EVERYWHERE ELSE.

.............................

all these car makers and all but one are utterly ball-less to MAKE a MARKET in the land of plenty.

..................


Microcars are the elephants in the room that we all refuse to see - in the times of 5-buck a gallon gas!!

.............

Chevy makes their "Beat" - even has Americans vote on it (with their "Groove" and "Traks") on tier website last year - then they fook us over by not even offering the fookin car here!!!! (WTF have us vote on your US website fookin assholes?). GM is made entirely of tards - let em fail.

Ford is FINALLY (WTF DOES IT TAKE!!!!!!!!!??????????) wising up. Mullaly is now officially ending the "american versions" (i.e. the ones that look like crap - like the dearborm made Focus) of their cars and will offer the WAY BETTER LOOKING european versions (like their vastly better Focus version).

AND FORD will be offering the European Feista and Ka!!! (THANK THE LORD!!!!)......................NOW JUST DON'T FOOK IT UP BY REFUSING TO OFFER A STANDARD WITH A FIRM SUSPENSION AND WITH A SMALL ENGINE (GIVE US THE SAME ENGINE/SUSPENSION/TRANNY AS EUROPE HAS DAMMIT!!).

I will buy your KA Ford - IF you leave the tranny/engine/suspension alone. If you insist on only letting me have the waterbed suspension/slushbox and gashog over powered engine - I WILL NOT BUY YOUR ALTERED KA.

..............

Chrystler is just a joke. they are stuck in "I'm the pounchy middle-aged guy in my mid-life crisis and want to re-live my charger/challenger days of old - and my harley sit in the same garage" demographic. that demographic works for Harley due to low volume - but for Chrystler and her size it is a dead ender.

.............

of the big three - only Ford seems to have the brains to see that Microcars (Class A) and Class B cars are their only hope. Even if Americans refuse to see it now - in 5-10 yrs they sure as Hell will.


Leaders LEAD - domestics have done everything else but lead. none of them deserve a bailout.

[gaffo]

Originally Posted by Zandoz

But the thing is, except for brief times after new model releases, there never were any periods where there were shortages of those foreign manufacturer cars...if there had been customers for more, they could have supplied more.

uuuuummmmmmmmmm. nope. i can tell you that the Toyota Yaris demand has remained VERY STRONG now for three years, toyota refuse to allot higher numbers to America.

they only make 400 bucks in each one - they make more from the same car if sold anywhere else.

So customer demand means very little to Giants like Toyota, especailly when they know we have no other car maker except may the Smart Car to turn to - since nobody else offers a small car in the US.

It took me 8 months to find a Yaris 5-speed with ANY options. 99.999 are automatics ;-(. And I had to find it myself AND no dealer would do a swap - so I had to drive out of state!!! just to buy it.

........................toyota has the worst customer service I've ever had to deal with. HAD ANYONE - and i mean ANYONE made another small car I would have jumped on it - I really do hate Toyota due to their snooty attitude.

There are thousands of us out there - all of us were given the fisheye for wanting to buy a Yaris - all of us were steered to the Scions/ Corrollas, and none of the dealers had even one Yaris Hatch on the lots!! (80-percent imported Yaris' were sadans (I missed the memo where americans didn't want hatchbacks (oh sorry "lift"back.........oh brother Toyota speak) anymore)).

................


so ya, customer demand is ignored if the corporation is bloated and huge and the profits for the product is low.

...........

as for quality - I think american SUVs/Trucks are every bit the equal to the Importers.

you'll have to shoot me before I ever buy either a Truck or SUV, and hate sitting up on a stool while driving.

[Zandoz]

Originally Posted by gaffo

uuuuummmmmmmmmm. nope. i can tell you that the Toyota Yaris demand has remained VERY STRONG now for three years, toyota refuse to allot higher numbers to America.

they only make 400 bucks in each one - they make more from the same car if sold anywhere else.

So customer demand means very little to Giants like Toyota, especailly when they know we have no other car maker except may the Smart Car to turn to - since nobody else offers a small car in the US.

It took me 8 months to find a Yaris 5-speed with ANY options. 99.999 are automatics ;-(. And I had to find it myself AND no dealer would do a swap - so I had to drive out of state!!! just to buy it.

........................toyota has the worst customer service I've ever had to deal with. HAD ANYONE - and i mean ANYONE made another small car I would have jumped on it - I really do hate Toyota due to their snooty attitude.

There are thousands of us out there - all of us were given the fisheye for wanting to buy a Yaris - all of us were steered to the Scions/ Corrollas, and none of the dealers had even one Yaris Hatch on the lots!! (80-percent imported Yaris' were sadans (I missed the memo where americans didn't want hatchbacks (oh sorry "lift"back.........oh brother Toyota speak) anymore)).

................


so ya, customer demand is ignored if the corporation is bloated and huge and the profits for the product is low.

...........

as for quality - I think american SUVs/Trucks are every bit the equal to the Importers.

you'll have to shoot me before I ever buy either a Truck or SUV, and hate sitting up on a stool while driving.

The cars I was talking about are most notably the Camry and Corolla from Toyota and the Accord from Honda...the big sellers here. The Yaris sales are not remotely large enough for them to build them here...we're still in competition with the rest of the world for them. If demand for them increases to the point of justification, they will be built here to. July 2008 sales figures....Yaris 8,620, Corolla 34,438, Camry 42,131...Prius 14,785 -- http://www.theautochannel.com/news/2...01/095134.html. US production of the Prius is in the works....based on demand. Even Toyota can not afford to build them here and hope the buyers will come.

Back in September when daughter was car hunting, there were a number of the hatchbacks sitting on the lots...I tried to talk her into one..."I don't want a roller-skate". Her misguided point of view is still the prevalent one, unfortunately.

And for the record, the service I had from the dealership back when I had my Toyota pickup was hands down the best I ever got from a dealership....both in terms of getting the vehicle I wanted, and in service over the 200K+ miles we had the truck. Having had mid 90s Toyota and Chevy compact trucks, quality wise they were not even close. Judging by the 2 lemons my sister has had from American truck manufacturers in the last few years, nothing has changed. She works for GM and will not buy another GM product until corporate quality control policies are changed. The line she works on also makes parts for Toyota and Honda, and the quality control is like night and day.

[Wild Zero]

They can get a bailout once their fleets average >55 mpg

...and GM apologizes for every car it's made over the past 35 years.

Originally Posted by gaffo

Chrystler [sic] is just a joke. they are stuck in "I'm the pounchy middle-aged guy in my mid-life crisis and want to re-live my charger/challenger days of old - and my harley sit in the same garage" demographic. that demographic works for Harley due to low volume - but for Chrystler and her size it is a dead ender.

Anyone remember Lee Iococca and the Chrysler Corporation Loan Guarantee Act of 1979? You'd think they'd have learned something in 30 years' time.

http://uspolitics.about.com/od/econo...lerBailout.htm

Oh, and here's some interesting information:

The History of US Government Financial Bailouts

100 Years of Government Bailouts

From Kathy Gill, About.com

Filed In:

1. Political Issues
2. > Economy

The 2008 financial market meltdown is not a solo event, although its magnitude marks it for the history books. It's the latest in a series of financial crises where businesses (or government entities) turn to Uncle Sam to save the day.

• 1907 : Run On Trusts - The last days of deregulation
• 1929 : Stock Market Crash and Great Depression - Although the stock market crash did not, by itself, cause the Great Depression, it contributed.
• 1971 : Lockheed Aircraft is pinched by Rolls Royce bankruptcy.
• 1975 : President Ford says 'no' to NYC
• 1979 : Chrysler - US government backs loans made by private banks, in order to save jobs
• 1986 : Savings and Loans failed by the 100s after deregulation
• 2008 : Fannie Mae and Freddie Mac enter downward spiral
• 2008 : AIG turns to Uncle Sam in wake of secondary mortgage crisis
• 2008 : President Bush calls on Congress to pass a $700 billion financial services bailout

http://uspolitics.about.com/od/econo...s---A-History/

[CleverBomb]

Zan is right -- the bottom line is if they're going to get gov't money (and why not -- we've been handing it out like candy to banks and such) it needs to serve the public interest.
That means products we need (not what they think we need) and good jobs.
If those good jobs and necessary cars aren't quite as profitable as the cars they wish they could sell and the wages they'd like to pay to a non-unionized workforce, well, tough. That's what we're giving them tax revenues for.

-Rusty