Big Three Bail out

Discussion in 'Prius, Hybrid, EV and Alt-Fuel News' started by orracle, Nov 12, 2008.

  1. orracle

    orracle Whaddaya mean "senior" member?

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    This has a Prius mention, albeit a snotty one.

    http://www.nytimes.com/2008/11/12/opinion/12friedman.html?_r=1&emc=eta1&oref=slogin

    How to Fix a Flat






    By THOMAS L. FRIEDMAN
    Published: November 11, 2008
    Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?†If we give you another $25 billion, will you also do accounting?




    How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.


    This included striking special deals with Congress that allowed the Detroit automakers to count the mileage of gas guzzlers as being more than they really were — provided they made some cars flex-fuel capable for ethanol. It included special offers of $1.99-a-gallon gasoline for a year to any customer who purchased a gas guzzler. And it included endless lobbying to block Congress from raising the miles-per-gallon requirements. The result was an industry that became brain dead.



    Nothing typified this more than statements like those of Bob Lutz, G.M.’s vice chairman. He has been quoted as saying that hybrids like the Toyota Prius “make no economic sense.†And, in February, D Magazine of Dallas quoted him as saying that global warming “is a total crock of [expletive].â€


    These are the guys taxpayers are being asked to bail out.


    And please, spare me the alligator tears about G.M.’s health care costs. Sure, they are outrageous. “But then why did G.M. refuse to lift a finger to support a national health care program when Hillary Clinton was pushing for it?†asks Dan Becker, a top environmental lobbyist.


    Not every automaker is at death’s door. Look at this article that ran two weeks ago on autochannel.com: “ALLISTON, Ontario, Canada — Honda of Canada Mfg. officially opened its newest investment in Canada — a state-of-the art $154 million engine plant. The new facility will produce 200,000 fuel-efficient four-cylinder engines annually for Civic production in response to growing North American demand for vehicles that provide excellent fuel economy.â€



    The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote. That shielded General Motors, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt long ago.


    Indeed, if and when they do have to bury Detroit, I hope that all the current and past representatives and senators from Michigan have to serve as pallbearers. And no one has earned the “honor†of chief pallbearer more than the Michigan Representative John Dingell, the chairman of the House Energy and Commerce Committee who is more responsible for protecting Detroit to death than any single legislator.


    O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.


    “In return for any direct government aid,†he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company ... Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.â€


    I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol.



    Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.
     
  2. malorn

    malorn Senior Member

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    There was a great letter written to an unknown person by an exec of bmw or a fromer exec of bmw in support of the detroit 3. I will try to get it on here. There are some good points in Mr Friedman's article, but there is not a level playing field. If the Detroit 3 went declared bankruptcy, it would be the end of the union movement in the United States, the democrats know that and will never let that happen.
     
  3. joe1347

    joe1347 Active Member

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    If the US Government is determined to be in the bailout business - why not just nationalize GM and Ford (let Chrysler rot) and sieze all of their assets instead of shoveling (wasting) $25Billion down the drain?
     
  4. danatt

    danatt New Member

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    I have to agree with Friedman.

    What ever happened to the concept of success?

    There's something very wrong with our system when huge institutions that are failing hold the health of the system itself hostage. These are worse than bailouts. They are ransom payments.
     
  5. ibmindless

    ibmindless Member

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    Imagine what Tesla or Aptera could do with a fraction of $25B. Giving that kind of money to Detroit is no different than giving a drunk $10K to get his life in order. Detroit is hooked on trying to make a quick buck.

    For example, take a Tahoe, plaster on some body cladding, gussie up the interior, and call it an Escalade. Woo hoo! Raise the sticker price by $20K - $30K and there's more quick bucks. This has been the culture for the past 50 years. Meanwhile, the Japanese manufacturers stick to Kaizen (continuous improvement) and create reliable, quality products.
     
  6. andyprius

    andyprius Senior Member

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    Is life to be taken seriously, OR is life a joke. Certain auto execs have ridden the gravy train along with unfortunately some auto workers. An empty sealed body compartment may have a coke bottle in it, to drive the eventual owner crazy. Assembly lines had to keep moving, no matter what, even if 25 parts or procedures were absent ( to be accomplished later, sometimes NEVER) Absenteeism on Monday and Friday was infamous, temps would replace the regular line workers on these days, sometimes missing even more parts and procedures. My biggest concern for the big three is the loyal, steady workers and retirees that may not continue to receive thier benefits and health coverage. And there were and are many good workers also. There are new auto companies coming, as mentioned, Aptera and Tesla. They will provide jobs to some of these Big Three workers that lose thier jobs. Maybe even more revolutionary ideas will come about and be an improvement over the Tesla and Aptera. I am personally supporting Aptera and have two on order. So back to my original question, is life a game or serious? The Japanese have shown us what can be done with real effort and seriousness
     
  7. Tech_Guy

    Tech_Guy Class Clown

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    This may sound a bit strange, but Detroit is already being bailed-out. With the very fast reduction in Oil / Gasoline prices, the public is now starting to buy all of those SUV's sitting on dealer's lots. As far as the automobile industry (and the U.S. economy) is concerned, the best thing that the government can do is to do nothing.

    The idiots in Detroit who run the automobile companies need to stop whining and get to work. Detroit needs to seriously focus on developing automobiles for the 21st. century, no the 20th. century.

    The beauty of the free-enterprise system is that it has the intrinsic ability to effectively weed out those businesses that no longer provide a useful product or service, or no longer operate in an efficient manner. The intervention of government only reduces the efficiency of the free-enterprise system.

    Keith
     
  8. cycledrum

    cycledrum PSOCSOASP

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    I have noticed from Consumer Reports car guides that many big 3 cars are 'No data, new model' or only 1 or 2 years old in the reliability ratings chart.

    To wipe the slate clean, start from scratch and probably throw away the things that work is a poor recipe for success.

    Meanwhile, Toyota and Honda keep of long history for successful cars and also keep the attributes/designs that work while making careful, incremental changes to improve.

    Wanna know what's new from GM? The new, improved 2009 Chevrolet Camaro, 2 door, 6-cyl or whopping 6.2 liter V8. Wow, such a useful car. Yet there will be plenty to buy it for its looks alone.

    Toyota and Honda will suck in many more buyers with the sportier looking Insight and Prius starting in 6 months. GM will compete with a new, improved Aveo I guess. :rolleyes:
     
  9. john1701a

    john1701a Prius Guru

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    Not really. Aveo is an import from their overseas production.

    Detroit turned their back on fuel efficiency and the inevitable crash happened sooner than they expected, catching them totally unprepared.

    It's so frustrating.

    What will be bail money be used for?

    .
     
  10. lordbah

    lordbah Junior Member

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    Any bailout is a slap in the face of free enterprise and a hostile act against others in the industry.

    Would GM crashing and the loss of many jobs hurt? Yes. Quite a lot. And that negative feedback is exactly what the system requires to get rid of things which no longer work.
     
  11. FL_Prius_Driver

    FL_Prius_Driver Senior Member

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    Note how it is assumed that a bailout will pull the US automakers out of the fire. No discussion of how it will pull the US government into deeper problems.
     
  12. malorn

    malorn Senior Member

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    Show me some figures on fuel efficient vehicles that the imports build other than the Prius that the Detroit 3 can't compete with.

    2009 yaris(29/36) vs aveo(27/34)
    2009 corolla(26/35) vs cobalt xfe (25/37)
    2009 camry(21/31) vs malibu 4cyl(22/33)
    2009 avalon(19/28) vs impala(18/29)
    2009 tundra(13/17) vs silverado(14/20)
    2009 highlander(18/24)vs traverse(17/24)
    2009 sequoia(13/18)vs tahoe(14/20)

    These numbers represent 80-85% of all Chevy and Toytoa sales in a given month. Please show me how one company builds fuel efficient vehicles and one does not. I listened to some of the commentators on televison last night and I could not believe how misinformed they are.
     
  13. EZW1

    EZW1 Active Member

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    Rather than an immediate bailout, I think the Government should drive the automakers to consolidate production lines. That is, shut down any production line for vehicles that get less than 20mpg, and concentrate future designs on efficient hybrid cars... not the ones that take a 15mpg vechicle up to 19mpg.

    This process is called slimming, trimming, or whatever. The point is, any other business would do the same thing to stay afloat, why not the big 3?
     
  14. malorn

    malorn Senior Member

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    Which ones would you recommend? See the post above.
     
  15. richard schumacher

    richard schumacher shortbus driver

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    There's nothing wrong with GM that bankruptcy proceedings can't fix.

    If we really want a bailout the sensible form of it is to make all of the "Big Three's" employees, retirees and their dependents eligible for Medicare. That would immediately cut the carmakers expenses by billions and level the playing field with respect to foreign carmakers. We're going to have some form of universal healthcare within a few years anyway; the only question is of timing.
     
  16. PriuStorm

    PriuStorm Senior Member

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    I wouldn't argue that the companies don't produce fuel efficient cars... my issue is that our domestic companies produce cars that aren't as reliable or long lasting as the Japanese imports. At least that has been my experience. I know when I have a Honda or Toyota in the driveway, it's going to fire up every time I go out there and turn the key (or push the button), and that the only time it's in the shop is when I've conveniently scheduled it. I can't say the same for any of the domestic cars I've owned. And this was the complaint Americans had with the Big 3's cars back in the late 70's/80's when the push was for fuel efficiency. Nothing's changed in 25 years. That's kind of sad.
     
  17. thepolarcrew

    thepolarcrew Senior Member

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    Hate to say it, but maybe we should be looking at all industries - companies with union ties and big health care problems.

    The union had its time and place, like I stated earlier. The department of labor now can handle most of what they have done in the past.

    I think now is a time to do across the board assents of this sort of overlap. The cut is going to be deep and painful either way. (do something to help - let them fail and pick up the pieces)
     
  18. hill

    hill High Fiber Member

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    Unions
    Obscene exec' pay
    health care
    etc.

    Not the problem . . . rather it's our credit based society and that it requires more debt being piled onto tomorrow's generation. Financial musical chairs. Google Chris Martenson and crash course. Watch all 20 chapters, then come back and talk sense. This is a great FHOP topic. oh, wait! We're in hybrid news? whoops!
     
  19. priusFTW

    priusFTW Gen III JBL non Nav

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    My experience too.
     
  20. taggart

    taggart Member

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    plus one. This has been my biggest complaint for many years. I've owned many different cars from many different manufacuters over the years. The American models have ALL been much worse quality-wise than the Japanese models. Just the way things are.
     
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