Ladies and Gentlemen.........
Registered User
Joined: Mar 2001
Posts: 3,121
From: Houston
With the way I feel, I just can’t even imagine what each of you that work in the industry are thinking every minute of the day.
The stupidity and apathy of the majority of people in this country honestly pains me these days. I don’t even know how to elaborate here. As much as I love it and believe in the American way, I think our country will fail.
This is like watching a plane full of people plow into the ground in slow motion. However most of the people on the plan are reading magazines and not looking out the window. The pilots are just handing out free drinks.
I want GM to succeed. I have no idea how that will work being that I work in the heavy steel fabrication industry. I’m just not too positive these days.
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Joined: Aug 2001
Posts: 2,400
From: Michigan's left coast
And I'm pretty well off, with no kids, a wife who's employed in a separate field, and money in the bank. All I have at stake is a job that I love in an industry that I've dreamed about since childhood. I can't even imagine what it feels like to be one of the folks who work as direct labor in our manufacturing facilities - those would be the few remaining people who haven't seen their jobs sent out of the country by the Big 3's constant attempts to drive component prices down to something asymptotically approaching zero. I promised a lot of them that projects I was working on would keep them in jobs for years to come, and due to circumstances beyond my control, I'm feeling like I lied to them
Last edited by Eric Bryant; Nov 12, 2008 at 09:18 PM.
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Joined: Apr 2004
Posts: 561
From: Ventura County, CA
Originally Posted by Eric Bryant
Note that the snarky tone of this post should not be construed as a desire to see GM fail. However, sh*t has to change before the company deserves any taxpayer money, and that includes some fresh emphasis on keeping auto jobs in the US instead of building cars in Mexico or Canada using Chinese and Indian parts.
I've only really been into the industry and how it works for the last 5 years, and soley for recreation- my job is in the IT sector- (Not safe from an economic blow out, I know, and also know EXACTLY how stars1010 and Eric feel when they talk about losing sleep at night) and all I can do with my own personal experience is compare the GM of 2003 to the GM of 2008 and ask myself, in that time where there were at least 2 energy crisises (crisii? lol) how is GM different now, than it was then?
I don't see it. I see the same exec's, I see it still takes 4 years for a car to go from a conceptual thought to built from an assembly line, and I see GM bleeding money every 3 months with honestly, no end in sight. I realize the importance of their existance, and I can guarantee you that bowties run in my blood, but without seeing some kind of fundamental change in how the company is run, ESPECIALLY when you compare them to their cross-town rival, Ford... I just don't see why giving them $25 billion in tax payer money is going to save the day. I just don't see it. I can't see it. I want to, but I can't.
That being said, I believe we should do everything we can to save them. But I think that if OUR money is going to be the instrument of their salvation, then there needs to be a lot more transparency, a HUGE shift in the company politics as far as bringing a concept car to production, and a large trimming of the fat- even if that means at the executive level.
Hopefully, there will be a Camaro for me to buy in 2012.
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Joined: Mar 2001
Posts: 1,938
As for the oil production issue...I've heard predictions like that for years...informed "experts" in the mid-70s were predicting that the world would be totally out of oil by 1995. Production may indeed be reduced but if for no other reason than greed alone, there will almost certainly be enough oil produced to meet demand so long as the demand is there even while production varies year to year.
That isn't to say that the entire industry needs to keep working on more efficient vehicles; it's only a matter of time before the price of fuel goes back up; maybe not as much as it was a couple of months ago or maybe more but it's unlikely to stay this low for long. So...consumers will demand more fuel-efficient vehicles and the Feds will continue to require it by law so all automakers will have to comply.
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Joined: Jan 2000
Posts: 10,285
From: Albany, NY
At least plants in Ohio would mean more US jobs. We already are not selling in Japan so more American built cars from Honda and Toyota would be better than what we have now.
As for the oil production issue...I've heard predictions like that for years...informed "experts" in the mid-70s were predicting that the world would be totally out of oil by 1995. Production may indeed be reduced but if for no other reason than greed alone, there will almost certainly be enough oil produced to meet demand so long as the demand is there even while production varies year to year.
Registered User
Joined: Apr 2001
Posts: 3,698
From: USA
I want to touch on a few things here-
First off..not bailing out the auto industry would be a tremendous failure where emotion got the better of common sense. If GM fails, the economic ripples will cost the government much more than the $25-$50 billion GM is asking for. Just think of all the revenue the Federal, State, and Local governments make from GM related businesses and employees. Now wipe that out and replace it with negative balances created by unemployment benefits, defaulted pension funds, reduced property tax revenues from increased forclosures and so forth.
There is no way you can in one sentence give AIG $150 billion on the premise "it cannot be allowed to collapse", and in the other let one of the indusrial pillars this country was built that is responsible for one in ten US jobs die. People will not like the bail out..but it something yuou have to do out of social responsibility. Otherwise, let GM fail. and it is the kinda thing people will be looking at in history books 50 years from now scratching their heads.
GM's problem in all honesty is the mindset of the American consumer. The reason American cars do not sell well overseas is because the citizens of other countries are far more nationalistic. Your average Japanese person would never buy an American car because he understands the importance of that industry to Japan and takes pride in it. Same with Germans, Swedes, Koreans, etc. The average American consumer takes pride and confidence in *NOT* buying American cars. Sure American cars were substandard for a period that ended 10-15 years ago. That was largely the result of GM having to somehow meet government mandated innovation standards (CAFE, Emissions, Safety), while also providing an increasingly higher uncompetitive standard of living for employees. Quality and non mandated design/innovation suffered because GM is a business and they had to make money. Imports on the other hand had much cheaper labor, and were able to meet government mandates while still innovating.
However by the same token, Japanese cars were **** boxes when they first came here, and people forgave that. Korean cars were **** boxes in very recent memory..and people forgive that. "Buy my Hyundai has a 100,000 mile warranty on it!". They would not offer it if you did not need it. Why can't American's forgive flaws in American products 15 years ago?
As for China...when you say GM has operations there that is not 100% correct. In order to be in business in China, you must form a joint venture in which a Chinese company owns 50%. So GM owns 50% of their Chinese business while some Chinese company owns the other half. The best part is..this set up is notorious for allowing the Chinese company to figure out how the product is made, and eventually knock it off in a 100% Chinese operation.
First off..not bailing out the auto industry would be a tremendous failure where emotion got the better of common sense. If GM fails, the economic ripples will cost the government much more than the $25-$50 billion GM is asking for. Just think of all the revenue the Federal, State, and Local governments make from GM related businesses and employees. Now wipe that out and replace it with negative balances created by unemployment benefits, defaulted pension funds, reduced property tax revenues from increased forclosures and so forth.
There is no way you can in one sentence give AIG $150 billion on the premise "it cannot be allowed to collapse", and in the other let one of the indusrial pillars this country was built that is responsible for one in ten US jobs die. People will not like the bail out..but it something yuou have to do out of social responsibility. Otherwise, let GM fail. and it is the kinda thing people will be looking at in history books 50 years from now scratching their heads.
GM's problem in all honesty is the mindset of the American consumer. The reason American cars do not sell well overseas is because the citizens of other countries are far more nationalistic. Your average Japanese person would never buy an American car because he understands the importance of that industry to Japan and takes pride in it. Same with Germans, Swedes, Koreans, etc. The average American consumer takes pride and confidence in *NOT* buying American cars. Sure American cars were substandard for a period that ended 10-15 years ago. That was largely the result of GM having to somehow meet government mandated innovation standards (CAFE, Emissions, Safety), while also providing an increasingly higher uncompetitive standard of living for employees. Quality and non mandated design/innovation suffered because GM is a business and they had to make money. Imports on the other hand had much cheaper labor, and were able to meet government mandates while still innovating.
However by the same token, Japanese cars were **** boxes when they first came here, and people forgave that. Korean cars were **** boxes in very recent memory..and people forgive that. "Buy my Hyundai has a 100,000 mile warranty on it!". They would not offer it if you did not need it. Why can't American's forgive flaws in American products 15 years ago?
As for China...when you say GM has operations there that is not 100% correct. In order to be in business in China, you must form a joint venture in which a Chinese company owns 50%. So GM owns 50% of their Chinese business while some Chinese company owns the other half. The best part is..this set up is notorious for allowing the Chinese company to figure out how the product is made, and eventually knock it off in a 100% Chinese operation.
Last edited by formula79; Nov 12, 2008 at 10:59 PM.
Thread Starter
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Joined: Mar 2000
Posts: 2,298
From: Detroit, MI USA
A few questions I have for Scott or anyone who wants to answer them:
1) How long will it take to pay back a loan of, say, $25B (including interest)? We've already seen AIG re-negotiate its terms because repayment would have been impossible. With $36B owed to the VEBA and a cash burn of $2B/month, it seems like loan repayment would be difficult at best, considering the shear amount of money required to keep GM afloat and the fact that GM has destroyed about $70B in wealth over the past four years.
2) What measures will be taken to fix GM's cost structure? If the product is good (and it is), but money isn't being made - then there's some serious back-office work to be done. How does GM intend to develop an army of Lutz-like individuals who are prepared to find and destroy incompetence everywhere it can be found?
3) If US jobs are being used as reasons that a bailout is required, is GM prepared to make a commitment to US suppliers that build parts in the US using domestically-sourced components and materials? This would reverse the prevailing trend of GM telling its suppliers to move to low-cost countries "or else", even when it makes no business sense to source product from a half-world away. I'd like to see someone estimate the number of US jobs that have been destroyed due to the overseas sourcing of components by the Big 3. Extra credit will be awarded for public hangings of GM's purchasing managers.
4) When can we expect clarity in GM's accounting? Part of this problem comes from the fact that GM mis-stated its earnings from 2000-2004, due to improper crediting of supplier "givebacks" (which in any other industry would be referred to as "extortion"). Combine this with the fact that GM racked up $38B in deferred earnings (the cause of the huge write-down in late '05) and statements in the past several months that there was no risk of bankruptcy, and it's safe to say that investors have not been given a clear picture of GM's finances in the past decade.
5) Is GM's board willing to take an active role in corporate governance, including holding GM's executives accountable for the recent past performance of the company?
6) How does GM propose to address the issue of massive overcapacity here in the US by the collective Big 3? We know that the preferred fix was to buy Chrysler, grab the good parts, and throw away the rest (something that would have destroyed tens of thousands of US jobs), which would have certainly taken a lot of capacity off-line. What fix does the Big 2.8 now have in mind for this problem?
Until GM is willing to provide honest answers to these questions, I say that no help should be offered. The picture has been grim ever since the corrected financials were released in 2005, and yet Rick wasn't willing to 'fess-up to the problems until last Friday when the writing was written on the wall in red ink. That's not good corporate stewardship.
EDIT: Let's add a bonus question - how much money in the form of tax credits has GM received as part of the US government's R&D tax credit program? I ask this because there are always a lot of claims about how much money that foreign automakers get from their governments, and yet very little acknowledgment of our tax code's extremely generous allowances for "research and development" activities. Given that the code allows a direct credit of up to 20% of qualified activities and that GM spends roughly $8B on R&D, doesn't this mean that GM already collects over $1.5B a year in federal aid?
Note that the snarky tone of this post should not be construed as a desire to see GM fail. However, sh*t has to change before the company deserves any taxpayer money, and that includes some fresh emphasis on keeping auto jobs in the US instead of building cars in Mexico or Canada using Chinese and Indian parts.
1) How long will it take to pay back a loan of, say, $25B (including interest)? We've already seen AIG re-negotiate its terms because repayment would have been impossible. With $36B owed to the VEBA and a cash burn of $2B/month, it seems like loan repayment would be difficult at best, considering the shear amount of money required to keep GM afloat and the fact that GM has destroyed about $70B in wealth over the past four years.
2) What measures will be taken to fix GM's cost structure? If the product is good (and it is), but money isn't being made - then there's some serious back-office work to be done. How does GM intend to develop an army of Lutz-like individuals who are prepared to find and destroy incompetence everywhere it can be found?
3) If US jobs are being used as reasons that a bailout is required, is GM prepared to make a commitment to US suppliers that build parts in the US using domestically-sourced components and materials? This would reverse the prevailing trend of GM telling its suppliers to move to low-cost countries "or else", even when it makes no business sense to source product from a half-world away. I'd like to see someone estimate the number of US jobs that have been destroyed due to the overseas sourcing of components by the Big 3. Extra credit will be awarded for public hangings of GM's purchasing managers.
4) When can we expect clarity in GM's accounting? Part of this problem comes from the fact that GM mis-stated its earnings from 2000-2004, due to improper crediting of supplier "givebacks" (which in any other industry would be referred to as "extortion"). Combine this with the fact that GM racked up $38B in deferred earnings (the cause of the huge write-down in late '05) and statements in the past several months that there was no risk of bankruptcy, and it's safe to say that investors have not been given a clear picture of GM's finances in the past decade.
5) Is GM's board willing to take an active role in corporate governance, including holding GM's executives accountable for the recent past performance of the company?
6) How does GM propose to address the issue of massive overcapacity here in the US by the collective Big 3? We know that the preferred fix was to buy Chrysler, grab the good parts, and throw away the rest (something that would have destroyed tens of thousands of US jobs), which would have certainly taken a lot of capacity off-line. What fix does the Big 2.8 now have in mind for this problem?
Until GM is willing to provide honest answers to these questions, I say that no help should be offered. The picture has been grim ever since the corrected financials were released in 2005, and yet Rick wasn't willing to 'fess-up to the problems until last Friday when the writing was written on the wall in red ink. That's not good corporate stewardship.
EDIT: Let's add a bonus question - how much money in the form of tax credits has GM received as part of the US government's R&D tax credit program? I ask this because there are always a lot of claims about how much money that foreign automakers get from their governments, and yet very little acknowledgment of our tax code's extremely generous allowances for "research and development" activities. Given that the code allows a direct credit of up to 20% of qualified activities and that GM spends roughly $8B on R&D, doesn't this mean that GM already collects over $1.5B a year in federal aid?
Note that the snarky tone of this post should not be construed as a desire to see GM fail. However, sh*t has to change before the company deserves any taxpayer money, and that includes some fresh emphasis on keeping auto jobs in the US instead of building cars in Mexico or Canada using Chinese and Indian parts.
all -- I AM trying to do several jobs for GM -- so that we can stay in business. (much to some peoples' displeasure -- ) I'll try to answer a couple of questions - then I'm gonna go get some sleep and go back to work.
Eric -- some of your questions are very well thought out --
You do, however, realize that we still have to run a business in the most competitive environment that this industry has ever seen --right? And you DO realize that we -- or any other company would be foolish to open our books and our product plans to the public...right?
This problem is not limited to GM as you know -- Chrysler and Ford are in the same boat. Can all three manufacturers be incompetent all of the time?
I don't think so-- and anyone who understands this business has to ask that question and realize that the answer is 'no'....
What you may have forgotten is this:
GM and Ford and Chrysler have tried to 'right size' themselves -- without firing everyone and putting more and more people out of work.......
Looking at the numbers, we could have weathered a drop from a 17 million unit a year industry to a 14.5 million industry. Why? Because we went thru the company and made huge amounts of change.
But -- we didn't get hit with one crisis.
First - -the housing market went upside down. That crisis in and of itself has a major impact on the economy.
Next -- we see fuel costs soar.
Then there is the banking crisis -- and suddenly GMAC/Ford/Chrysler financial can no longer raise funds on the open market -- (ever take a wild guess at what GMAC has to raise each day to run adequately? Take a guess!)
So -- the industry suddenly goes south of a 12 million unit annualized rate......
This, my friends, is not a crisis - it's a catastrophe. Pure and simple.
The cost structure today has nothing to do with the cost structure of 4 years ago.
We have delayed a couple of programs -- but there are a dozen new products coming in the next 18 months. It's not like we're shutting down the product pipeline. (many people on this site told us we were stupid to do so.....naturally we had'nt a clue - so we listened to them...) (sorry for the sarcasm - it's been a rough couple of months and my patience is wearing thin..)
In terms of suppliers, it isn't appropriate for me to comment, because it isn't my center of expertise - but I would also tell you to simply go and look at domestic content on our cars and trucks and compare it to the 'foreign' transplants - that said, we do have to remain competitive........in an uneven playing field.
You can be assured that we'll be answering a lot of questions to the government - (interesting -- Barney Frank says that the government needs to take over the compensation of executives -- this from the person who allowed the Chairman of Fannie Mae to walk away with a golden parachute of tens of millions of dollars.
By the way - I'm not telling you that I understand everything about our business........unlike some people on this site who think they know this business....but don't
One last thought:
Your quote:
"........Note that the snarky tone of this post should not be construed as a desire to see GM fail. However, sh*t has to change before the company deserves any taxpayer money, and that includes some fresh emphasis on keeping auto jobs in the US instead of building cars in Mexico or Canada using Chinese and Indian parts.........."
So...............we need to "change some 'sh*t' in order to deserve taxpayer money........"
OK.................................so .....I'm gonna ask this question one more time:
You have two choices:
1. You can loan GM/Ford/Chrysler money and get it back with interest........
or
2. We can go chapter 11 and give you all of our pension liabilities - health care liabilities ....and put a whole bunch of people out on the street.......and then we can give you many of our suppliers' pension liabilities and health care liabilities and put even MORE people on the street. (and I won't even go into what happens to the rest of our economy.......and you can pay 20 or 30 times that amount of money with no payback....
What'll it be?
Last edited by Fbodfather; Nov 12, 2008 at 10:50 PM.
Thread Starter
ALMIGHTY MEMBER
Joined: Mar 2000
Posts: 2,298
From: Detroit, MI USA
I want to touch on a few things here-
First off..not bailing out the auto industry would be a tremendous failure where emotion got the better of common sense. If GM fails, the economic ripples will cost the government much more than the $25-$50 billion GM is asking for. Just think of all the revenue the governements make from GM related businesses and employees. Now wipe that out and replace it with negative balances created by unemployment benifits, defualted pension funds and so forth.
There is no way you can in one sentence give AIG $150 billion on the premise "it cannot be allowed to collapse", and in the other let one of the indusrial pillars this country was built that is responsible for one in ten US jobs die. People will not like the bail out..but it something yuou have to do out of social responsibility. Otherwise, let GM fail. and it is the kinda thing people will be looking at in history books 50 years from now scratching their heads.
GM's problem in all honesty is the mindset of the American consumer. The reason American cars do not sell well overseas is because the citizens of other countries are far more nationalistic. Your average Japanese person would never buy an American car because he understands the importance of that industry to Japan and takes pride in it. Same with Germans, Swedes, Koreans, etc. The average American consumer takes pride and confidence in *NOT* buying American cars. Sure American cars were substandard for a period that ended 10-15 years ago. That was largely the result of GM having to somehow meet government mandated innovation standards (CAFE, Emissions, Safety), while also providing an increasinly higher uncompetitive standard of living for employees. Quality and non mandated design/innovation suffered because GM is a business and they had to make money. Imports on the other hand had much cheaper labor, and were able to meet government mandates while still innovating.
However by the same token, Japanese cars were **** boxes when they first came here, and people forgave that. Korean cars were **** boxes in very recent memory..and people forgive that. "Buy my Hyundai has a 100,000 mile warranty on it!". They would not offer it if you did not need it. Why can't American's forgive flaws in American products 15 years ago?
As for China...when you say GM has operations there that is not 100% correct. In order to be in business in China, you must form a joing venture in which a Chinese company owns 50%. So GM owns 50% of their Chinese business while some other company owns the other half. The best part is..this set up is notorious for allowing the Chinese company to figure out how the product is made, and eventually knock it off in a 100% Chinese operation.
First off..not bailing out the auto industry would be a tremendous failure where emotion got the better of common sense. If GM fails, the economic ripples will cost the government much more than the $25-$50 billion GM is asking for. Just think of all the revenue the governements make from GM related businesses and employees. Now wipe that out and replace it with negative balances created by unemployment benifits, defualted pension funds and so forth.
There is no way you can in one sentence give AIG $150 billion on the premise "it cannot be allowed to collapse", and in the other let one of the indusrial pillars this country was built that is responsible for one in ten US jobs die. People will not like the bail out..but it something yuou have to do out of social responsibility. Otherwise, let GM fail. and it is the kinda thing people will be looking at in history books 50 years from now scratching their heads.
GM's problem in all honesty is the mindset of the American consumer. The reason American cars do not sell well overseas is because the citizens of other countries are far more nationalistic. Your average Japanese person would never buy an American car because he understands the importance of that industry to Japan and takes pride in it. Same with Germans, Swedes, Koreans, etc. The average American consumer takes pride and confidence in *NOT* buying American cars. Sure American cars were substandard for a period that ended 10-15 years ago. That was largely the result of GM having to somehow meet government mandated innovation standards (CAFE, Emissions, Safety), while also providing an increasinly higher uncompetitive standard of living for employees. Quality and non mandated design/innovation suffered because GM is a business and they had to make money. Imports on the other hand had much cheaper labor, and were able to meet government mandates while still innovating.
However by the same token, Japanese cars were **** boxes when they first came here, and people forgave that. Korean cars were **** boxes in very recent memory..and people forgive that. "Buy my Hyundai has a 100,000 mile warranty on it!". They would not offer it if you did not need it. Why can't American's forgive flaws in American products 15 years ago?
As for China...when you say GM has operations there that is not 100% correct. In order to be in business in China, you must form a joing venture in which a Chinese company owns 50%. So GM owns 50% of their Chinese business while some other company owns the other half. The best part is..this set up is notorious for allowing the Chinese company to figure out how the product is made, and eventually knock it off in a 100% Chinese operation.
BRAVO Brandon!!! Here's someone who gets it!
Amazing how many people forgave the Japanese and the Koreans for their errors -- but CANNOT FORGIVE their friends and neighbors who build cars and trucks.......
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Joined: Apr 2001
Posts: 3,698
From: USA
FWIW...I do think finally that Wagoner needs to go.
Two reasons...
First off a new face who is regarded well in financial circles may give GM some breathing room. Wagoner has been their a while..and while I do not blame this on him...I also do not think he has the ability to lead GM to a point where they are not a crisis away from bankruptcy.
Secondly...while I know it is different internally...to the public, GM looks like a company who has given up, thrown their hands in the air..and said "Fine..there is nothing more we can do unless the government gives us a loan". Wagoner looks like the captain of a boat that is sinking who is waiting on some magical hand of god to come down and pull his boat out the water. While I do understand that there is very little they can do...there just does not seem to be any type of panic to fix the issue operationally if the government does not loan money.
Two reasons...
First off a new face who is regarded well in financial circles may give GM some breathing room. Wagoner has been their a while..and while I do not blame this on him...I also do not think he has the ability to lead GM to a point where they are not a crisis away from bankruptcy.
Secondly...while I know it is different internally...to the public, GM looks like a company who has given up, thrown their hands in the air..and said "Fine..there is nothing more we can do unless the government gives us a loan". Wagoner looks like the captain of a boat that is sinking who is waiting on some magical hand of god to come down and pull his boat out the water. While I do understand that there is very little they can do...there just does not seem to be any type of panic to fix the issue operationally if the government does not loan money.
Thread Starter
ALMIGHTY MEMBER
Joined: Mar 2000
Posts: 2,298
From: Detroit, MI USA
Scott, Eric makes some very good points:
Let me add that I agree with about 80% of what you have said. I agree that simply letting GM fail is NOT an option, and that only those who are so idealogically blind they'd rather wreck the United States of America than recognize they're wrong are the only ones who are saying "Let GM fail".
However, that 20% I disagree with you, and I think it deserves being reconsidered.
It's true that Germany has high tarrifs against American made cars, HOWEVER you neatly skipped over the fact that General Motors (via Opel) operates out of Germany, and is not subject to tarriffs, and the money from Opel (which is doing far better than GM north America) goes into General Motors here in the US... and their cash burn furnace.
You mention also Japan and it's tariffs. However, Korea and China also have tariffs as well. However, again, you also fail to mention that General Motors has local operations in both China and Korea (in Korea via both Daewoo and Holden), and like Opel in Germany, both are highly successful and are helping fund GM's cash furnace. If I remember correctly, GM still owns Isuzu which is Japanese. I feel that if GM was serious about penetrating the Japanese market, Isuzu would have been the beachhead int Japan the way GM's Buick was successful in setting a foothold in the far more restrictive... and I mean way more restrictive than Japan regarding tariffs... China market. If GM wanted to get Japan, it would have gotten Japan.
From here, it almost appears that you are trying to fog the issue by using examples that have little bearing here. The issue is not GM of Germany not succeeding or GM not succeeding in Asia or China. The issue is that GM North America has wound up in a situation where it is not only sinking fast, it is taking the rest of the General Motors empire with it... even though those divisions are both healthy and since they are made locally, pay none of the tarriffs you mention.
The issue is General Motors North America.
General Motors North America put far too much resources into trucks. It was foolish because everyone has experienced fuel crisis and economic downturns in the past. Each time, GM (as well as other makers) had a broadbased array of vehicles, so they had bases covered. In the 1990s, GM even gained and closed the gap in many instances with imports regarding percieved quality. Yet, because of the diversion of a lion's share of cahs to highly profitable large trucks and SUVs, GM left a vacuum in improving car models that import brands stepped in and filled. Sure, GM has made great strides in improvements, but by then, it's a matter of catching a speeding target. The gaps closing, but the gap remains.
I'm in lockstep with you on the importance of GM surviving. If GM went down, it would wreck the US economy not to mention what it would do to our automobile industry. To be blunt, anyone who doesn't realize this and demands that GM be allowed to go under is a complete jackass.
But at the same time, blaming someone else for the faults that GM has made does not help since it's very clear that there is something terribly wrong with General Motors. As I've pointed out before, GM should be in extremely good shape. It isn't. And it's begining to look like there's alot of financial issues that haven't surfaced.
You mention Chrysler. Yes, people were falling all over Chrysler a few years ago. However, Chrysler also made some terrible moves. The quality they had on the LX cars didn't carry over to anything else they made. Proportionally, Chrysler still apparently has more money than GM.
There is alot of support for GM here, including me. I've never owned a car that had an import based logo on it. I pull for GM, Ford, and Chrysler. However, we also have to be honest about our companies when they make mistakes. GM by all indications is the worse of the batch. No one is predicting Chrysler won't be here this time next year. Ditto Ford. Yet, today, on CNN, there's predictions that GM won't last to January. Canceling a chance to have a normal LA Auto Show doesn't help.
Again, I agree with you and there's plenty of us on your side. But please, lets not blame things unless we're going to lay out the whole story.
The public hears the same "Imports and Tariffs" blame game they heard in the 70s, 80s, & 90s, this time around, they're likely to turn against the US auto industry. And then you're going to hear them supporting GM's demise instead of seeing that GM finally knows and acknowledges what went wrong and if given the public's support for loans, GM will successfully fix it.
Let me add that I agree with about 80% of what you have said. I agree that simply letting GM fail is NOT an option, and that only those who are so idealogically blind they'd rather wreck the United States of America than recognize they're wrong are the only ones who are saying "Let GM fail".
However, that 20% I disagree with you, and I think it deserves being reconsidered.
It's true that Germany has high tarrifs against American made cars, HOWEVER you neatly skipped over the fact that General Motors (via Opel) operates out of Germany, and is not subject to tarriffs, and the money from Opel (which is doing far better than GM north America) goes into General Motors here in the US... and their cash burn furnace.
You mention also Japan and it's tariffs. However, Korea and China also have tariffs as well. However, again, you also fail to mention that General Motors has local operations in both China and Korea (in Korea via both Daewoo and Holden), and like Opel in Germany, both are highly successful and are helping fund GM's cash furnace. If I remember correctly, GM still owns Isuzu which is Japanese. I feel that if GM was serious about penetrating the Japanese market, Isuzu would have been the beachhead int Japan the way GM's Buick was successful in setting a foothold in the far more restrictive... and I mean way more restrictive than Japan regarding tariffs... China market. If GM wanted to get Japan, it would have gotten Japan.
From here, it almost appears that you are trying to fog the issue by using examples that have little bearing here. The issue is not GM of Germany not succeeding or GM not succeeding in Asia or China. The issue is that GM North America has wound up in a situation where it is not only sinking fast, it is taking the rest of the General Motors empire with it... even though those divisions are both healthy and since they are made locally, pay none of the tarriffs you mention.
The issue is General Motors North America.
General Motors North America put far too much resources into trucks. It was foolish because everyone has experienced fuel crisis and economic downturns in the past. Each time, GM (as well as other makers) had a broadbased array of vehicles, so they had bases covered. In the 1990s, GM even gained and closed the gap in many instances with imports regarding percieved quality. Yet, because of the diversion of a lion's share of cahs to highly profitable large trucks and SUVs, GM left a vacuum in improving car models that import brands stepped in and filled. Sure, GM has made great strides in improvements, but by then, it's a matter of catching a speeding target. The gaps closing, but the gap remains.
I'm in lockstep with you on the importance of GM surviving. If GM went down, it would wreck the US economy not to mention what it would do to our automobile industry. To be blunt, anyone who doesn't realize this and demands that GM be allowed to go under is a complete jackass.
But at the same time, blaming someone else for the faults that GM has made does not help since it's very clear that there is something terribly wrong with General Motors. As I've pointed out before, GM should be in extremely good shape. It isn't. And it's begining to look like there's alot of financial issues that haven't surfaced.
You mention Chrysler. Yes, people were falling all over Chrysler a few years ago. However, Chrysler also made some terrible moves. The quality they had on the LX cars didn't carry over to anything else they made. Proportionally, Chrysler still apparently has more money than GM.
There is alot of support for GM here, including me. I've never owned a car that had an import based logo on it. I pull for GM, Ford, and Chrysler. However, we also have to be honest about our companies when they make mistakes. GM by all indications is the worse of the batch. No one is predicting Chrysler won't be here this time next year. Ditto Ford. Yet, today, on CNN, there's predictions that GM won't last to January. Canceling a chance to have a normal LA Auto Show doesn't help.
Again, I agree with you and there's plenty of us on your side. But please, lets not blame things unless we're going to lay out the whole story.
The public hears the same "Imports and Tariffs" blame game they heard in the 70s, 80s, & 90s, this time around, they're likely to turn against the US auto industry. And then you're going to hear them supporting GM's demise instead of seeing that GM finally knows and acknowledges what went wrong and if given the public's support for loans, GM will successfully fix it.
You just made a whole list of assumptions - of which about 90 percent are wrong.
Go look at the financial results again.
Thread Starter
ALMIGHTY MEMBER
Joined: Mar 2000
Posts: 2,298
From: Detroit, MI USA
And the protectionists laws that the Big Three and the UAW have lobbied Congress for and received have done exactly the opposite of what was intended.
Tariffs do not work. Artificial barriers to free trade do not work.
Level playing fields are wonderful in theory and sound so "fair", but until we have a one-world government, they aren't likely to exist.
Tariffs do not work. Artificial barriers to free trade do not work.
Level playing fields are wonderful in theory and sound so "fair", but until we have a one-world government, they aren't likely to exist.
Our government has proven time and time again that Japan manipulates the yen.
It isn't only Automobiles. Look at the airliner industry.
The european union subsidizes Airbus Industrie so that they can park 'white tails' in the field.............
Thread Starter
ALMIGHTY MEMBER
Joined: Mar 2000
Posts: 2,298
From: Detroit, MI USA
People -- I'm done.
We can argue til the cows come home - (oh wait - they're about out of business too.....)
I don't have time to continue this argument.
I can only share with you my views and my experience within this industry.
One last comment and then I'm done with this:
The climate we find ourselves in is NOT a game. You cannot reboot the computer when it's GAME OVER. If even one of the big three go chapter 11, you are going to see massive massive massive destruction. YOU CANNOT RUN FROM THAT.
Good night.
We can argue til the cows come home - (oh wait - they're about out of business too.....)
I don't have time to continue this argument.
I can only share with you my views and my experience within this industry.
One last comment and then I'm done with this:
The climate we find ourselves in is NOT a game. You cannot reboot the computer when it's GAME OVER. If even one of the big three go chapter 11, you are going to see massive massive massive destruction. YOU CANNOT RUN FROM THAT.
Good night.
Last edited by Fbodfather; Nov 12, 2008 at 11:07 PM.
Lounge Moderator
Joined: Aug 1999
Posts: 357
From: Mi Scusi!
Eric and Ryan really hit on some of my internal feelings on the subject. I won't be nearly as concise in expressing them, I'm sure. But here's the jist of it.
First of all, I am a domestic owner. So I don't carry a prejudice against US-made vehicles.
My emotions on these "bail-outs" stem from a few different sources.
My finances have crunched sharply due to the economy and I'm not getting squat in terms of relief. So at a base, knee-jerk response level, it is a bit offensive when someone speaks down to me for questioning them wanting billions of dollars in tax money to save them for what is often the bi-product of a chain of poor decisions. I have to live with the effects of my decisions and any luck (good or bad) that may come my way. But if a company is high up enough, it seems they feel entitled to a "get out of jail free" card.
These gargantuan loans inspire fear in me. Only so much water can be taken out of the reservoir until we're all thirsty. And I guess in a lot of ways, I see the people asking as the same folks that didn't have a second thought about screwing Joe Blow American if it would save them a buck.
Countless jobs outsourced to other countries because it looked great on a Six Sigma project. Companies that must be argued with and forced into doing the right thing when you have concerns on warranty repairs. Hell, the cart kid at a local grocery store rammed into my girlfriend's back bumper and now no one from management will even call her to talk about making it right.
I don't see a tangible, distinguished reward from me giving more money that I don't have to folks that live in way nicer houses with big-screen tv's and don't have to work their asses off just to make ends meet. It's not like I'm going to help out, walk into a dealer in 5 years, and have them go,"Wow, we appreciate your help in keeping us afloat so much that we're going to give you any car at invoice -- not a penny over. Thank you." GM, should this plan prosper and launch it back into the black (which to me is questionable -- more money doesn't automatically equate success), is not going to do one thing for me. Just like AIG isn't going to lower the amount of my home loan out of gratitude.
Now that might make me a "short-sighted idiot" in plenty of your eyes -- both friends and otherwise. But I do know that I'm not the only one that feels this way.
It's offensive when Americans are being told to fend for themselves, then asked to dig into their pockets because companies are "too big to fail."
First of all, I am a domestic owner. So I don't carry a prejudice against US-made vehicles.
My emotions on these "bail-outs" stem from a few different sources.
My finances have crunched sharply due to the economy and I'm not getting squat in terms of relief. So at a base, knee-jerk response level, it is a bit offensive when someone speaks down to me for questioning them wanting billions of dollars in tax money to save them for what is often the bi-product of a chain of poor decisions. I have to live with the effects of my decisions and any luck (good or bad) that may come my way. But if a company is high up enough, it seems they feel entitled to a "get out of jail free" card.
These gargantuan loans inspire fear in me. Only so much water can be taken out of the reservoir until we're all thirsty. And I guess in a lot of ways, I see the people asking as the same folks that didn't have a second thought about screwing Joe Blow American if it would save them a buck.
Countless jobs outsourced to other countries because it looked great on a Six Sigma project. Companies that must be argued with and forced into doing the right thing when you have concerns on warranty repairs. Hell, the cart kid at a local grocery store rammed into my girlfriend's back bumper and now no one from management will even call her to talk about making it right.
I don't see a tangible, distinguished reward from me giving more money that I don't have to folks that live in way nicer houses with big-screen tv's and don't have to work their asses off just to make ends meet. It's not like I'm going to help out, walk into a dealer in 5 years, and have them go,"Wow, we appreciate your help in keeping us afloat so much that we're going to give you any car at invoice -- not a penny over. Thank you." GM, should this plan prosper and launch it back into the black (which to me is questionable -- more money doesn't automatically equate success), is not going to do one thing for me. Just like AIG isn't going to lower the amount of my home loan out of gratitude.
Now that might make me a "short-sighted idiot" in plenty of your eyes -- both friends and otherwise. But I do know that I'm not the only one that feels this way.
It's offensive when Americans are being told to fend for themselves, then asked to dig into their pockets because companies are "too big to fail."