Cars That Go Boom: Detroit's Big Three & Me

[Posh]

I am getting very concerned for US automakers. And not just at the idea that they may go under but what it could do to the economy of our nation (and perception of our economy) right down from Wall Street to the oft-invoked Main Street. The shock waves of a failure of any of these firms is as economist David H. Wang said to BloggingStocks "economically and psychologically unacceptable."

But did I help a little in their slide recently? I don't think I did but it doesn't help that I at least feel that way right now because I'm not driving a Detroit piece of luxury iron. But before you say that I'm an unpatriotic, femiNazi liberal socialist (I'm actually a capitalistic, Marxist Surrendered Wife-ist), let me say this: just before I graduated from college, my bad ass drove a Chevrolet, a gift from my parents. Not just any Chevrolet but this:

It was an automatic, don't worry, or else it would have needed a new transmission! And while I like and love fast cars, not that I want to actually drive one myself, most I would never want to live with on a daily basis, the Z28 SS included, and really just prefer being driven in one. It chewed up any little Rice Rocket people and Mustank owners easily, and that was fulfilling, but it should have been a weekend car not a primary car so I sold it a little while ago and got myself a Mercedes. My parents drive Jaguars, ones made during Ford's "stewardship," and also have a Ford F-250 King Ranch to pull my mother's horses. So they're not traitors. But are the rest of us?

I was speaking with some colleagues in the financial industry recently, each of us representing the automotive, retail and luxury sectors, and we all agreed that nothing bad has really come out of Detroit since the 1990s, except for maybe Eminem. These three companies face many problems but bad product isn't really one them. They face rising legacy costs (which I had no issue with because of the time at which they were struck but find problematic now), import competition which was allowed to flourish unchecked (while in their home countries our products faced numerous financial hurdles put in place by their governments to protect their national firms) and they also face the seeming contempt by many Americans against their rescue (something no other country's citizens would seem to do if one of their industries were failing).

The failure of any company is bad but the failure of these American institutions would be disasterous for not only themselves, but for many people who depend on them worldwide for income, money infuses many communities and local governments with revenue. This is not the same situation Moore's Flint, Michigan encountered in Roger & Me. The impact of losing Ford, Chrysler and General Motors could be far more cataclysmic than the loss of companies like Stearns and Lehman Brothers where over 50% of their profits were paid out in bonuses to fewer employees than make up even one shift at Chevrolet's Bowling Green, Kentucky plant.

What is everyone else's thoughts and feelings on this? Please, let your ideas or opinions be heard!

[Pugwash]

Let GM die.

They make cars nobody wants and do so badly.

Why do they get special treatment from the US Government? How many bail-outs have they had?

[Posh]

Let GM die.

They make cars nobody wants and do so badly.

Why do they get special treatment from the US Government? How many bail-outs have they had?

They haven't ever really had any, Pug. Chrysler had one in the early 1980s and the government ended up making almost $350 million on the deal. Recently, Chrysler actually was making a sound profit but the costs of their pension funds and healthcare costs eroded much of it! The same with all three, really.

It's easy to say let GM die but what's your reasoning behind it? That's what I want to get to, the thought processes behind why people think these multi-national companies should be alllowed to go down, taking so many people down with them.

[Pugwash]

the thought processes behind why people think these multi-national companies should be alllowed to go down, taking so many people down with them.

Is GM really a multi-national? They're a US company that owns a few foreign brands.

Right, you have one car per person who can drive in the US. Should the money really be pushed into trying to make more? If it's just the jobs you're wanting to say, then say so, because the companies themselves are screwed.

A good solution I heard was to give GM a government contract to make the federal car (or something) that would be a hugely efficient car/truck used by all government forces and partly paid for in advance like is done with the defence industry. Or tell them to make some military stuff.

If they're being propped up purely to keep jobs, don't do it. Create new jobs.

[R2D4]

A good solution I heard was to give GM a government contract to make the federal car (or something) that would be a hugely efficient car/truck used by all government forces and partly paid for in advance like is done with the defence industry. Or tell them to make some military stuff.

If they're being propped up purely to keep jobs, don't do it. Create new jobs.

This is a great idea and it's not new, in fact this has bailed out many other types of manufactures all the way from cars to toasters. Thanks for posting this Pugs. They should restructure themselves and work on something that benefits all of us like my self-winding car idea.

[Posh]

In my vacation time I finished devouring several books and have been managing to catch up on the posts and articles of many of my favorite blogs. I only have a few because there's so much detritus vying for attention that I tune almost all of it unless I find they have information I can actually use or its written by someone who gives a sh*t about the "content" they choose to provide. NEWSFLASH: some bloggers, sites, etc. don't really care about the topics they cover. Good old apathy and advertising mixed together to form a sludge that clogs the Internet. The media analysts I'm friends with have their cheesey little slogan which I'm certain you've heard. "Content is King." Well, I believe most content is Crap.

But someone sent me this link to a site called Motorobilia which is a blog about the automotive industry that actually is extremely intelligent and written from a standpoint of DIRECT experience with industry itself, particularly the domestic side, something that most wannabe pundits don't have at all.

This blog post, Of Apples and Automobiles, is so good I had to share it because it definitely suits this topic. Here's an excerpt:

Nobody buys Apple computers. People have voted with their wallets and they just don't like Macs. They're disenchanted with recalls, years of poor customer service and now won't even consider an Apple product. Apple's share of the personal computer market is a fraction of what it once was. What's that you say? "Apple sold about 8 million computers last year, how can you say nobody buys Macs? Apple has one of the best consumer reputations in the world." It's true that Apple sells millions of computers, about a 3% share of the personal computer market, and has exceptionally loyal customers. How could it be that a company that sells so many products could be seen as a complete failure? Of course it's not true, but bear with me.

Riled up yet? Here's another:

Remember that 3% market share for Apple computers and how ridiculous it sounded when I said that nobody buys Apple computers? Well, somehow 55% of car buyers, 400,000 people, must not have gotten the memo saying nobody buys American cars anymore because that was the market share of the domestic brands in October. When 97% of consumers choose other products, Apple, with their cutesy Mac vs PC commercials, is regarded as a marketing success with a great consumer image, but when 55%, a majority of car buyers, choose domestic brands, those brands are presumed to have the stench of death about them.

And here's something I've been silently saying under my breath for some time and it's finally been said aloud: STOP ARMCHAIR QUARTERBACKING THE AUTO INDUSTRY! LOL

Both great. I suggest bookmarking Motorobilia. What do you think? I think it's great to have critical thinking on the issue when clearly isn't much on it at all.

[MrZoSo]

They haven't ever really had any, Pug. Chrysler had one in the early 1980s and the government ended up making almost $350 million on the deal. Recently, Chrysler actually was making a sound profit but the costs of their pension funds and healthcare costs eroded much of it! The same with all three, really.
It's easy to say let GM die but what's your reasoning behind it? That's what I want to get to, the thought processes behind why people think these multi-national companies should be alllowed to go down, taking so many people down with them.

Oh my. So you are saying it's the unions fault that Chrysler (and the big 3) is having trouble turning a profit? lol...
Oh me oh my oh...
Actually for the first time in almost 2 decades GM is putting out a halfway decent product. In fact Buick is the biggest selling import in China. This theory of the workers pay and benefits is what is costing the big 3 to tumble is an out right ridiculous lie. Gm's CEO is capping almost 10 mil a year base. Don't cry for me Mr. Wagoner. 7 years on the job and still not a penny earned. Wait until you see his golden parachute. This problem cannot be debated as to why, that's already been determined, but more as to how come. How do you take advantage of a buyer for 20 some odd years and then in the aftermath of being destroyed by your competition ask for loyalty, and in the same breath, blame the working man who really in turn is your loyal base buyer? The big 3 have treated the American buyer and worker like a red headed step child. You don't fix that over night. It is fixable IMO, but lets face it. CEO's need to be paid, and sellouts need to be divided, and the common man/buyer/worker, needs to be blamed, and pay for everything first. No, the government should not bail out any of the big 3. They have a huge market who has been dying for a quality product at a fair price just waiting for them to make a move. Whats even more shocking is, they have the capability. Unfortunately, there counterparts dominate that market. How did they do this? Media hype? Cost effective cheap labor wages and non paying health care? lol...Please.
Corporate greed Mrs. Gekko, is your answer.

[onzenuub]

Nice question Posh, because of letting the companies go not only the people working in those companies will be affected but also the companies which deliver to those 3. So a lot of families will have been affected by this and because of that a big part of economy in USA and worldwide. So for now, support the 3.

[Pugwash]

Nice question Posh, because of letting the companies go not only the people working in those companies will be affected but also the companies which deliver to those 3. So a lot of families will have been affected by this and because of that a big part of economy in USA and worldwide. So for now, support the 3.

So, the US people should give money to GM workers so they can sell them crappy cars?

Save something worthwhile; not GM.

All those sailors put out of work when the slave trade was shut down, the coal miners in the UK, telegraph operators, valve radio companies ...

Things end, prolonging them artificially causes more long-term damage.

[bpumod]

maybe we should just condense the big three into one. merge or die. i grew up in detroit and pretty much everyone i knew worked for the auto companies. any one of these companies dying would be absolutely catastrophic for employees and familes, local and national. i really hope we can figure out a way to make them successful.

[BigWatchPilot]

Let GM die.

They make cars nobody wants and do so badly.

Why do they get special treatment from the US Government? How many bail-outs have they had?

I have many thoughts on this but I have to take the family out for a bite to eat so I will keep this short for now. Pug...do you feel the same way about the only Government subsidized aircraft manufacturer? Perhaps we should let Airbus go out of business and leave the airplane making to Boeing. Airbus has proven this time and time again...and most recently with the A380.

BWP....if it aint Boeing, Im not going!
A300 Pilot

[$~mLuMaN83~$]

I dont buy domestics and I dont care about the bailout. I keep my money and "investments" in safe places. Which will never be discussed with the likes of you fools.

Hope they have a great time cuz I dont give a sh*t. Mean to say but I dont.

[opak]

I dont buy domestics and I dont care about the bailout. I keep my money and "investments" in safe places. Which will never be discussed with the likes of you fools.

Hope they have a great time cuz I dont give a sh*t. Mean to say but I dont.

[Posh]

[quote=$~mLuMaN83~$;485272]I dont buy domestics and I dont care about the bailout. I keep my money and "investments" in safe places. Which will never be discussed with the likes of you fools.

Hope they have a great time cuz I dont give a sh*t. Mean to say but I dont.[/quote]

I think I know who chose 'I don't care.!' And what don't you like about domestics in particular that would make you choose a foreign brand?

i want to know why the big companies will wait until there is no oil until they change the product they make. just because there is oil left doesnt mean we have to use it. yes they have made token efforts to produce green cars, but if they really committed to them, they might be able to reproduce the market dominance they once had. if they get US government funds they should come with some pretty serious strings attached and a repayment plan as well.
i feel very sorry for those who stand to lose a job, regardless of the types of cars they make.

The money will come with serious strings, Lou, and some of them the automakers don't like but not for the reasons you would initially think.

Pug, taking them down the road of government contractor sounds pretty good actually. Would it solve problems long-term or only temporarily?

[Pugwash]

Pug, taking them down the road of government contractor sounds pretty good actually. Would it solve problems long-term or only temporarily?]

That would depend on the quality of work they did.

If they kept doing what they're doing, it would be a short-term fix and then you're back to where you are today.

Face it, if they made decent cars, they'd not be in trouble.


ps. http://pacificgatepost.blogspot.com/...m-friends.html

[Posh]

That would depend on the quality of work they did.

If they kept doing what they're doing, it would be a short-term fix and then you're back to where you are today.

Face it, if they made decent cars, they'd not be in trouble.


ps. http://pacificgatepost.blogspot.com/2008/11/solution-for-detroit-gm-friends.html

What exactly is wrong with their cars? Which cars do you feel are 'indecent?' There seems to be a stigma attached to them that is entirely based on their product which is the best its ever been, eclipsing many import products in certain categories.

[R2D4]

I keep my money and "investments" in safe places. Which will never be discussed with the likes of you fools.

Luman, I don't think your mattress is a safe place. Try putting your money in a safe. LOL

[louisruby]

i want to know why the big companies will wait until there is no oil until they change the product they make. just because there is oil left doesnt mean we have to use it. yes they have made token efforts to produce green cars, but if they really committed to them, they might be able to reproduce the market dominance they once had. if they get US government funds they should come with some pretty serious strings attached and a repayment plan as well.
i feel very sorry for those who stand to lose a job, regardless of the types of cars they make.

[$~mLuMaN83~$]

The only dometics that I would buy would be a Roush Mustang, 67 Camaro SS, Viper, GM or chevy truck (If I couldnt have a Toyota truck), and thats it.

I think the newer stuff, besides GM trucks, are expensive, poorly made, and most importantly, for the most part have a very generous dose of ugly put into each vehicle with pride.





Piggy bank?...


AAAAAAAAAAAAAAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!!!!!!!

If you only had a clue brother. LOL!!!!!!!!!!!!!!

[rAc]

no.

[collector26]

Throwing money at Detroit is like new needles for a junkie.
You can't shine s**t.
Starvation is a great motivator for innovation.

[$~mLuMaN83~$]

Throwing money at Detroit is like new needles for a junkie.
You can't shine s**t.
Starvation is a great motivator for innovation.

WOOO!


Btw... Any word for a new gtg? Zach starts stuff and never finishes. He always takes credit for everything I do. I'm not kidding one bit either.

[Jetzeus]

The bailout is inevitable! It has to happen for the government. What is cheaper? Throwing a $40m-$50M bone to the automakers to get their act together, retool them to make a cleaner, more fuel-efficient BETTER product OR let it die and watch 3,000,000+ people industry-wide lose their jobs. The unemployment/welfare tab on that one alone, over time, might be waaaay more than $50M.

As with the other recent bailouts, it would be an investment we would all (hopefully) reap the benefits from in the future, although I wouldn't hold my breath. If you are not a fan of government interference, then this would be a bad bailout for you. That's what is going to HAVE TO HAPPEN. All facets of the industry will have to change, but the primary focus will be busting the unions, unfortunately. The unions have played a very large part in the industry's demise, much like the airline meltdown that has seen THAT industry cave in over the past decade (people flying airplanes into buildings notwithstanding). Given the stubborn-ness and pride of unions, this is why the bailout might be doomed to fail. HUGE concessions will have to be made by the UAW and that is simply not likely to happen. At some point, though, a union member must look in the mirror and ask themselves "would I rather take a concession to save my job (career) or just screw it and let the f#$%er burn". For the record, I am a union employee...I am sure I do not sound like it, but I am! The bottom line is, if you don't study history, then you are doomed to repeat it. The UAW should take a quick study of the current plight of the airlines and realize that some of their problems can surely be avoided with some common sense practices currently not being employed. The average salary of an airline pilot has probnably gone down 35-40% over the past four years and retirement plans have been decimated. Has it helped the industry???? Well, airplanes are still in the air, despite the fact that fuel costs have more than doubled in that time period...at some point, something has to give! Pilots realised that cutting off your nose to spite your face doesn't bode well for job security. That being said, the quality of their product is pathetic, at best. The airline "experince" is a shadow of what it used to be in the good old days.

I digress...bring on the bailout, but with a REALLY good, forward thinking plan that highlights a transformation to fuel cell and hybrid technology, responsible pay and benfit packages for union employees going forward and upper management payscales that depend soley on company performance.

[tomhorn]

Unfortunately, bailing out the automakers is necessary. It's not about saving the companies, it's about saving the jobs.

Whether or not anyone agrees the jobs should be saved, if they are not we will be looking at the DJIA at 5,000, and the current economic situation will seem like a walk in the park.

Should the bailout have conditions? You bet. But it's got to get done.

[Dave123]

I have owned 3 Trans Am's,1 Z28,2 Vettes a Grand Prix and i own a Charger R/T,though i don't really like Dodge,the plant that makes the car is down the street from me,just supporting the local guys...i rarely drive it.

I will always buy Chev's,never had a problem with mine,i just won't do the asian thing,aside from doing my wife,who is asian....after that i draw the line

She drives a C350,an o.k car,but not one of my Chev's.....i love em and they are a part of our history here,will leave it at that.

Like a bumper sticker i have seen many times 'Out of a job yet?...keep buying foreign!'......keep it up,you guys are hurtin as it is.