Consumer confidence test
Would you buy a car from a company that may no longer be in business in as little as three months? Just the idea of a disappearing warranty makes me cringe.
The auto bailout is GM's sole hope and they're smartly promoting their campaign on YouTube:
Simply put, I believe an auto bailout would be throwing money into a black hole industry that needs a complete overhaul (umm, of course that's a relative statement at this point in time). However, letting them Chapter 7 would make American cars untouchable to most consumers. Best solution might be a merge, a purge and a government commitment to keeping a single united entity in business to maintain that consumer confidence.
The auto bailout is GM's sole hope and they're smartly promoting their campaign on YouTube:
Simply put, I believe an auto bailout would be throwing money into a black hole industry that needs a complete overhaul (umm, of course that's a relative statement at this point in time). However, letting them Chapter 7 would make American cars untouchable to most consumers. Best solution might be a merge, a purge and a government commitment to keeping a single united entity in business to maintain that consumer confidence.
Pat,
I could not even finish watching that propoganda video... For some reason the thought of a new car company called TESLA that is putting their heart and soul into breaking new technology with about $300 Million and giving the archaic dinosaurs $25 billion just to keep their doors open makes me want to puke.
Put $25 Billion into Tesla and you have a far better managed company that really will move America Forward....
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I agree that bailing out the US auto industry would be akin to throwing money into the proverbial black hole. The industry is fundamentally broken in the US and has been for a long time. Even when GM was making money several years ago all their profits were coming from their finance arm, not selling cars.
The one point I want to argue though, is consolidation is the last thing we need. One of the fundamental problems with the car industry in the US is there has been too much consolidation. We need faster innovating companies not dinosaurs which is often what companies become when they grow to large.
In my opinion merging any of the big three would permanently kill the US auto industries ability to do what is needed to compete on the world stage which is innovate.
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Well, considering all of the people that will, in fact, have to find new jobs -- this video is definetly scarry. Surely GM, Ford and Chrysler have their -- world market bases covered, it's the workers in the US that we have to concern ourselves about, and not just in Detroit. Where will they go to find a living? Really something to think about. The video was way too long to be effective though. Chop it marketing department!!
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Such an awful catch 22... Where does it end and how does this help them? If they continue developing the same product and keeping the same overhead and payroll, it's just a temporary fix. Like Paul said, the money could be better spent on other innovative companies who promise hope and a solid future. If the government does bail them out, there needs to be a line drawn in the sand and it ends here. No other hardships can cross that line in the future.
There also needs to be specific guidelines in place in order to make sure these top three don't continue down their out of date path.
I say bail them out, get rid of the top-end failures that brought them to this place, reconstruct management and CEO payrolls, develop new efficient systems and new regulations on what they can and can't make. I hate the idea of a complete reign, but if someone doesn't step in and tell them what they can't continue doing, I fear there's no point in trying to help them.
SUVs should be outlawed anyway. There is so much technology right now to make us less dependent on oil and nobody is using it. This is the time to make big changes...
It's like an addict for a sister wanting to borrow $20 for food. You can't give her the $20, you have to give her the food.
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I think Paul and you have it exactly right... a new agenda needs to be established that will ensure the survival of a leaner, meaner industry. Unfortunately the car industry's DNA seem incapable of it. Your perspective from Ohio is better than most I've seen from pundits.
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Here's a pretty eye opening video about one of Fords state of the art production facilities in Brazil.
http://info.detnews.com/video/index.cfm?id=1189
It really gets to one of the heart of the problems in that they can't modernize with the UAW contracts in place. The ONLY way they are going to able unsaddle themselves from these contracts in a bankruptcy filing. Don't get me wrong the unions served a purpose at one time, but they've become a parasite that has ended up killing it's host. The sad reality is that restructuring the big three to where they can modernize and compete will in itself require absolutely massive layoffs.
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I have to weigh in here for a moment...
Everyone is blaming the big 3 for building SUVs, which they follow by saying that they weren't building what the people wanted... and they fail to remember the fact that just about EVERY maker rushed to get a bigger SUV to market just a few years ago. They were EXACTLY what consumers wanted.
People complain about the quality of the American cars... but they are beating the Europeans and holding their own with the Japanese cars in the quality rankings.
Lord knows there are certainly some management problems at the big 3, but saddled with the rules, not to mention the costs, of the UAW is what's killing the American car industry. The biggest problem management has had is telling the UAW no. Of course, the only way to tell them no is to stop proucing cars, because most fo the states they have been building in have union protective laws in place (company can't fire striking workers).
Tesla? Please. Their car has gone up from being unbelievably expensive to being absurdly expensive. And they haven't managed to hit ANY target they have set... price, performance or timing. I could build a car in my garage for less than what they have sunk into the company... and anyone that wants to send me a few hundred million dollars to to see if I am full of it is welcome to do so...
They NEED to go bankrupt. They need to kill the union contracts and be free to modernize plants and lay-off workers without having to pay them for 30 years. They also need to get on the stick and not take 5 years to launch a new product. Especially if it is going to still be a flippin' BETA when it hits the street.
Finally, they need to get rid of bean-counters at the top of the chain and put car guys in charge. Accountants don't know what people want in a car. An MBA does not make one qualified to make decisions about cars... Cars are not widgets. Home Depot is NOT where you look for a CEO. Lee Iaccoca didn't come from Handy Hardware.
Look at any successful growing company. It will be run with passion... MBAs do not deliver passion for cars. Car people do.
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Lane, you said it and you're right! I get the impression that every American holds their tongue before say the "U" word based on their historical standing to fight for the working class. But today's unions are not in sync with today's globalized economy. I touched on articles pointing to the horrendous costs associated with the relationship between the Big Three and the UAW and the outrage surrounding the auto bailout at Media Transparent.
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