According to the highly credible “Ford and GM set to merge” journalists over at Automotive News, The General has agreed to pay bankrupt parts supplier Delphi’s remaining union workers an unspecified amount of money for an unspecified amount of time to avoid a planet-killing strike. Yes, it’s The Mother of All Extortion Pay-Offs– providing you don’t count that huge pile of money GM’s already agreed to pay twenty thousand not-so-dearly departed members of the United Auto Workers (UAW) who labored on behalf of Delphi. And here’s the funny part: that’s the good news.
As always, you gotta read the fine print. As part of this deal, Delphi will renegotiate or dump 5,472 unprofitable GM parts contracts. Let’s be clear: by “renegotiate” I mean Delphi got GM to lock-in the contracts the parts maker wants to keep, at a price that will earn them cash money. So there’ll be no more of that margin squeezing routine GM’s been using to torture its other parts suppliers. So Delphi can now afford to pay the base salaries of those UAW employeees that GM didn’t pay to leave, whose paychecks GM is about to top up so they don’t go on strike and kill GM. So it’s win, win, lose. The General's cash flow takes another massive hit and everyone goes back to the business of pretending the next group of vehicles down the line will pay for, well, everything.
Let's get to the really exciting stuff: the looming proxy fight between investor Kirk “The Las Vegas Lion” Kerkorian and GM CEO "Red Ink Rick" Wagoner. The way the Institute of Shareholder Services (ISS) sees it, Kirk stooge Jerry York’s recent resignation from GM’s Board of Bystanders was the first step in his any-day-now nonagenarian boss’s plan to stir up a shareholder’s revolt. For those of us who can’t tell a rabid dog when they see one buying 9.9 percent of the world’s largest automaker, the ISS took a look at York’s resignation and decided them’s fightin’ words!
To paraphrase the document in question, things suck at GM and they might not get any better. And then… “But frankly, to get to the crux of the matter, I have not found an environment in the board room that is very receptive to probing much beyond the materials provided by management (and too often, at least in my experience, materials are not sent to the board ahead of time to allow study prior to board discussion).” Well now we know. GM’s Board of Bystanders is a board of bystanders who take Rabid Rick Wagoner’s assurances at face value and don’t mind if those assurances aren’t in writing, or, if they are, that they arrive too late to read and digest. Who’d a thunk it?
Only anyone who’s been watching The General’s market share sink like a stone thrown into a deep, dark, well. Mr. York’s description of GM’s most excellent rubber stampers shouldn’t come as any surprise to readers of this series, nor should York’s terse description of GM’s chances. York’s letter adds GM’s negative market share with its negative cash flow to come to a negative conclusion: “I have grave reservations concerning the ability of the company’s current business model to successfully compete in the marketplace with those of the Asian producers." Join the club.
Of course, Jerry's in Kirk's gang. Which makes his final parting words especially ironic: “I will shortly make arrangements to return the confidential company materials in my possession to the Corporate Secretary’s office.” This from the board member who swore to the SEC that he won’t reveal inside information to any third party, then jets off to France to meet with Nissan Prez Carlos Ghosn to offer him the keys to the GM castle on behalf of The General’s largest stockholder and chief boardroom protagonist. Does anyone seriously think Mr. York didn’t use his time in GM’s inner sanctum to gather-up enough damning evidence of management incompetence to convince outside investors to decapitate the capo di tutti capo?
Like I said, this is going to get ugly. And so it should. It’s hard to believe that the man who lost GM more than a dollar per person on planet earth and prestiged GM’s amazing shrinking market share is still large and in charge over at The General’s tower of power. The battle for control of GM is a yin yang thang– only there isn’t any yin. In fact, everyone who wields power in this sad saga of missed opportunity and unbridled greed is their own evil triplet; Kirk Kerkorian, Rick Wagoner and union boss Ron Gettelfinger are all as bad as each other.
The conflict between these three forces will eventually reveal the exact nature of their pernicious perfidy– at least to us. For them, it’ll be last man standing. Whoever wins will oversee a kingdom of sand, washed flat by an tide that’s been forty years in the making.
recall king?
maybe they are now feeling the heat of huge volume sales?
http://www.bloggingstocks.com/2006/10/09/could-toyotas-growth-challenges-bring-a-ray-of-hope-for-gm/
Strategic Vision is a highly dubious provider of skewed, unreliable and corrupted (check their client list) data.
Toyota’s rep for quality has a LONG way to fall. GM’s has a mountain to climb.
I checked their client list and here are the automotive clients names : Acura, Austin – Martin, BMW, Cadillac, Chrysler, Dailmer Chrysler, Dodge, Ferrari, Ford, General Motors, GMC, Honda, Hyundai, Jaguar, Jeep, Land Rover, Lexus, Lincoln, Mercedes – Benz, Mercury, Mitsubishi Motors, Nissan, Oldsmobile, Pontiac, Renault, Subaru of America, Toyota, Volkswagon, and Volvo. These seem like almost all the automakers out there so how could you say “Strategic Vision is a highly dubious provider of skewed, unreliable and corrupted (check their client list) data.”?
As for Toyota’s rep I was just pointing out that the media is starting to look at them very closely now. I believe that most of these companys build excellent products now a day including Toyota and General Motors but the later has a rep they built in the 70’s and 80’s that is stickiing to them.
General Motors now builds more quality vehicles than any other auto builder.
the proof is in the puddin!
Another classic example of the UAW sh1tting in their own nest. They still really do believe that there's a healthy money tree in the court yard of each of the 2.5 Rotten Ronny's been all over the news the past couple of days – No to Delphi, No to Chrylser healthcare discussion, No to discussion over GEN, etc. Call it contract year chest thumping if you want, but in any event the UAW is simply a self defeating entity at this point. Gonna been an interesting year. I've got the popcorn and my front row seat ready to go…..
So because all the automakers pay Strategic Vision money that makes them unbiased. Oy vey.
And let’s not turn this into yet another debate about GM’s “quality.” Back on point people.
If I’m not mistaken didn’t York vote against Kirks grand plan of a GM-Nissan merger? I think that sends the message that Rick is right and Kirk is an idiot. The fact that York did not vote on behalf of his boss don’t you think that had a little bit to do with the resignation? I know one vote would have not mattered but it would have made a statement.
Jerry’s vote with the board against the Nissan – Renault merger meant nothing. His letter is clear on the point:
The combination of these various factors _ ongoing market share pressure and negative cash flow, and all parties’ mutual objective of shareholder value creation _ was what lead me to propose that the company pursue alliance studies with Renault and Nissan.
And while from a narrow legal perspective the company may have properly conducted its assessment of the potential benefits of the alliance, to use a contract law term, there was certainly not a “meeting of the minds” regarding my views as to how the study was conducted. I thought I made that clear in the executive session at the end of the board meeting, but apparently I didn’t.
The right thing to have done here _ from a governance perspective if not a legal perspective _ would have been for the board to have hired its own independent advisors, who in turn, could have designed the study process to more fully get at particularly the potential procurement savings.
So in summary, I want to be sure I’m entirely clear regarding the reason for my resignation. It will undoubtedly be interpreted by many as being driven by the outcome of the Renault-Nissan matter, but that is not the case. Rather, it relates to the board room environmental situation I discussed above.”
Robert:
You said, that there is no yin. This might be the case, but still I’d think that Kirk is the best bet for the General. I mean he’s the only one who might actually LOSE money here. All the others have their golden parachutes set and ready.
Point taken.
My favorite on the GM-Renault/Nissan talks was a report on the business page of the NY Times that talks broke down because GM wanted Renault/Nissan to pay them several billion dollars for the “benefits” GM would bring to the merger. Can you imagine that Renault/Nissan balked at this???
If this report is true, it can only mean one of two things: the delusional ‘happy juice” is still flowing freely at GM, or that GM was never serious about these talks to begin with. I favor the later.
I agree with RF, Kerkorian is going to find a way to get his agenda established at GM management. He can do more as a hostile shareholder than one with a guy on the inside.
A shareholder revolt is possible but I guess the question is does he have both the financial leverage and political weight to make it happen?
Secondly, is his agenda to get GM and Renault to merge and is that such a good thing? Nissan is not exactly at its best right now. Its quality control is terrible, its new models haven’t exactly wowed the automotive public in the last two years. I don’t know squat about Renault but I don’t think they dominate Europe like a colossus. Besides, its a little easier to convey strength when you know the French government will always bail you out and give you preferential treatment in your home market.
One more point/question I’d like to throw out there: has anyone noticed the increased presence of Toyota and Nissan in daily rental fleets these days? The last three times I have rented cars, I have been given two Altimas and a Camry. In the past, this never happened. When I walk the rental lots to get my car I see a lot more Nissans, Toyotas, Hyundais and Kias than before. Domestics are still there but they are not the only options. My evidence is purely anecdotal but:
(A) Does this mean some of Toyota’s, Hyundai’s, Kia’s and Nissan’s market share increase is due to increased fleet business and some of the domestic’s share declines are due to that as well?
(B) Long-term, what will large fleet business do to the resale of these cars especially Toyota where resale was one of the key elements in customer satisfaction?
Just thought I’d ask.
CJ
As silly as the GM-Renault/Nissan talks were, a GM-Ford merger is surreal. Ghosen has shown the ability to lead a car company in the past, NO ONE at either GM or Ford has shown any ability to lead their company profitably in decades. Any merger would be assured of bad management.
If hardly anyone on Wall Street believed GM-Renault/Nissan merger made any sense, do you think Wall Street or anyone else is going to think a GM-Ford merger makes any sense???
Profitable car companies have shown you need two divisions: your main division with inexpensive/ mid-priced cars and a luxury division. And each divisions needs a number of cars people actually want to buy and as few dogs as possible. That’s it. GM and Ford’s business model is outdated and merging two outdated business models will not produce a current model.
Not to belabor an obvious point, CJ, but re: the resale value of “Japanese” cars (more about which in a moment), well, perhaps the rental car companies are finally getting wise to the fact that their customers can put 23,000 miles on a car and then they can sell it on with LESS depreciation, thus costing them LESS money in the long-run.
As for “Japanese” cars, what is that, now? The Camry, Altima, Galant, most Subarus, Accord, Civic, Mazda 6, most Corollas etc etc are all built in the United States.
The “American” Ford Fusion is based upon a Mazda 6 but built in Mexico.
The “American” Buick LaCross is built in Canada.
You surely all get the point I’m trying to make here.
Kirkorian is a dick. The only thing he wants is another sweet DCX like deal and Kirk could care less if GM recovers or fails. What the hell does he need more money for; he is like what 105 years old? That corpse should just move to Florida and retire.
Here is GM’s response to a possible fight:
http://www.canada.com/nationalpost/financialpost/story.html?id=5ef3c50d-4ce1-427c-9031-cb481dea646c&k=13708
Glenn,
Implying that manufacturing location dictates what is “American” is a delusion that foreign companies have been trying to instill in our brains from the beginning of time.
Where does the largest portion of the money go and where are the parts built? Just because someone can round up some non-union monkeys to screw in bolts to avoid an import tariff doesn’t not mean Toyota is “American”.
Can you please refer Kirk as “Cancer Kirk” as he is well known to attach to a host company and destroy it for his own profit. Anyone remember DCX? Board / shareholder fights for the sole purpose of increasing his battle chest that slowly destroys the company.
A nice movie to watch to look at this saga is OPM – Other Peoples’ Money with Danny DeVito. One of the best & funniest movies of corporate / hostile take over. Some great one liners too! But one major difference is the CEO of the takeover company actually cares about their customers and their product.
1984 –
If I’m not mistaken, most of the Lordstown, Symrna, and Georgetown parts are provided by American suppliers.
Gives pause to the distinction of “American” manufactorer.
In glancing around dealerships these days, no one has a “100% American content” sticker in the window.
Glenn,
My question wasn’t to discuss the nationality of a vehicle but to posit the idea that by increasing fleet sales, these companies run the risk of increasing supply of their vehicles to the point where resale takes a huge hit. Perception of quality aside, the main factor that drives resale value is supply and demand.
Rental car companies will always take the best deal offered to them by corporate fleet departments and most daily rental vehicles are flipped every six months meaning that these cars will initally have good resale at auction but as supply increases, the resale will slip.
As for where a car comes from, who cares? The important factor is where the companies are based. Do not kid yourselves, Toyota is a Japanese company and decisions on what happens are always made in Japan by Japanese executives. Same goes for Korean companies and American companies (or any other firm I suppose)
CJ
If an automobile is conceived of and positioned by Japanese executives, bankrolled by Japanese banks and financiers, designed by Japanese engineers, styled by Japanese stylists (except in the occasional cases were American and European stylists get involved via the company’s California or Barcelona or wherever studio) and marketed under the direction of Japanese marketers, how does the fact that the various pieces are bolted together by Americans make it “an American car”?
If thinking that Toyota is “American” makes you all warm and fuzzy inside than fine, go ahead. Parts content of US cars are normally over 65% US built and Japanese are under 20%. If the profit goes to Japan and taxes are collected and paid to the Japanese government, guess what? It’s not American.
Many people seem to have ideas as to why the domestics are in the trouble they are. I believe the answer can be summed up in 2 points.
Quality & Reliability: The domestics’ golden era of the 50’s & 60’s, was only achieved by one principle, there was virtually no competition! Apart from GM, Ford or Chrysler (before they got a German husband) who else was there? Because of this, they could sell any thing they liked, knowing there was no-one else to turn to. Now in the days, of globalization, the competition is forcing the domestics’ hands. The imports (Especially the Asians) had an extremely bad reputation in terms of reliability. But they didn’t just accept defeat; they went away, re-invented themselves and came back as the domestics’ worst nightmare. It took the best part of 30 years for the Asians to be held in high regard of quality and reliability. Now that the domestics have this to contend with, their hands has been forced to re-look at their product and wonder how to make them more reliable. Now a domestic fan boy will wave a JD power survey in my face and say “If you look carefully, Buick, Cadillac and Chevy came higher in the JD power survey than most Asian brands†and therein, lies one of the Domestics’ problems. Their reliability has only improved recently. You do not build a reputation (let alone one for quality and reliability) overnight! Because of this the domestics need to hope that they can stave off chapter 11 long enough for the reputation to build. Because they only waited until their hand was forced to make their products more reliable this could be extremely counter productive.
Brand perception: Because of the quality and reliability problems, the domestics’ brand took a bit of a hit. The phrase “once bitten, twice shy†springs to mind. Despite living in the UK, I have read and done research on domestics’ horror stories. The story always involves moving to an Asian brand and never looking back and this is the nub of the second problem. Cars are the second biggest purchase an adult has to make. Therefore, people are not going to run a risk spending a small fortune on a brand that could give them problems. A lot of people criticize Toyota for creating blandly styled cars, but it’s no coincedence that vanilla is the popular flavour of ice cream! Although small section of the market talk about fast cars and beautiful styling, the majority of the market need a modest, comfortable car which will give them the least amount of problems. Unfortunately, the domestics do not have a stellar reputation in that department, but our Asian friends do. Case in point, you have £8000 to spend on a small hatchback to run you around town. Which do you go for? The brand which everyone has horror to tell about, but recently they seem to be improving or the Asian brand, which has a 5-year guarantee and consistently scores high in reliability surveys?
The main point I am trying to make is this, if the domestics build a quality product at a good price, the customers will come. But when no-one comes, they can’t complain because “are biased to Asian brandsâ€. If they had a supplier who constantly sold them poor quality products for 30 years, then, left to use another supplier, then the previous supplier said “Come back our quality has improved!â€, would they be so quick to go back to the original supplier?
I, for one, do not want to see the domestics to go away, but I would like them to come back stronger, leaner and more aggressive. Because strong competition means only one winner, the customer. But the domestics need to realize that although they are making savings by cutting jobs, if no-one is buying their product, then all the job cutting is ultimately pointless. To leave on a humorous but rather scary note as to why the domestics are in the trouble they are in, Bob Lutz was recently quoted saying he even acknowledged that GM made a “tactical and possibly even strategic mistake” in not bringing its hybrid technology to market sooner. He also doesn’t think hybrids will lose their luster because the “public is permanently sensitive to the volatility of gas prices.†Mr Lutz also added that the “Sky was blue and the grass is greenâ€. Though I might have made that part up!
P.S. This was the forum I wanted to post this opinion to! Sorry if you’ve read this before!
Let’s see:
– Kerkorian is worth 9 billion dollars, far richer than you or I will be, unless Bill Gates, Warren Buffett, et al are TTAC readers.
– Kerkorian at age 89 has blown away his life expectancy, probably because playing these corporate mindgames and putting down billion dollar poker chips are keeping him going.
– Being able to marry a ex-pro tennis player 1/3 your age isn’t shabby, either, although being worth billions helps. Too bad Steve Bing got her pregnant.
Face it, guys, his detractors all just jealous.
I think the topic about what an American car is, is somewhat off topic here but still somewhat relevant since GM may end up moving much (more) production offshore and ditching the UAW in that manner, slowly.
I would summarize by saying we live in a multi-national global culture whether we like it or not.
It is no longer 1962, when GM was at their peak at 51% of the US market and did not even bring in Canadian built cars for sale in the US (this being before the auto trade pact of 1965 with Canada).
GM executives are no more pro-American than Toyota executives are pro-Japanese. Both are pro-business.
GM, Ford and Chrysler whined and bitched about “unfair competition” in the 1970’s after the fuel crisis, all the way through the 1980’s, and pushed for the Japanese to open plants in the states to “even the playing field.”
Well, guess what? You really must be careful about what you wish for, you just might get it. Now the Europeans are “getting it” too – Japanese and South Korean companies have been and continue to build plants there for the manufacture of cars for those markets.
The Japanese and South Korean manufacturers are getting better and better, Detroit is still struggling, the Europeans haven’t much of a clue (except for BMW).
Wow Robert. That last part was especialy poetic. I dig it.
US trade policy is why Toyota manufactures a percentage vehicles in the states. I’m sure they would rather have the cars assembled with cheaper labor but they cant. The tariff would be too high. They don’t care about you and never will.
Ok, ummmm…..what was this editorial about again?
Stephan,
Your statement concerning Japanese vs. American goes a little too far. Let’s examine:
“conceived of and positioned by Japanese executives,†Actually, most of the new models being developed at Toyota, Honda and Nissan are in response to the needs of markets outside of Japan. It is the American execs at these firms who are pushing for Ridgelines, Sequoias, and Titans, not vice-versa. It is Japanese execs who approve of their development.
“bankrolled by Japanese banks and financiers,†The debt and equity markets for big multinationals are global. Honda has been listed on the NYSE for over 2 decades now, and these firms raise and invest cash in the countries that offer the best deal, just like their peers all over the world. I, personally, am an American investor in Honda, and if you own mutual funds that invest in automotive stocks, you probably own several “Japanese†automakers as well.
“designed by Japanese engineers, styled by Japanese stylists (except in the occasional cases were American and European stylists get involved via the company’s California or Barcelona or wherever studio)†Actually, it is the rule, not the exception that models which sell in large volumes in the US are designed in the US. What I think you mean is that the platform engineering is done in Japan, which largely remains the case.
“marketed under the direction of Japanese marketers†Marketing is typically the charge of local markets, and America is no exception. Do you really believe that Joe Isuzu was the creation of a marketing exec in Japan?
1984: your statistics date from the year of your pseudonym. Mainstream models like Accords and Camrys are built in the US. The % of American content is often determined by where copmmodities like the tire came from, which is also a global market. As Glenn pointed out, many of these vehicles have a lot more content built in America than do the Canadian and Mexican sourced vehicles sold by Chevy, Ford and Dodge.
1984: The reason that Toyota et al manufacture in the US (as well as elsewhere around the world) is that they view themselves as global companies, not Japanese exporting machines. Due to the historic strength of the Yen, it makes economic sense to manufacture in the markets you sell – it protects earnings from currency swings.
US trade policy with Japan has been developed in the context of America’s global trade policy, which is to reduce tariffs wherever possible, with the long term goal of eventual elimination. Nissan builds cars here (and designs and markets cars here) because the US is the largest market in the world, and Americans want to buy Nissans.
No one posting on this board is under the illusion that Toyota loves us. Or Honda, or GM. These are companies that do business. Period.
I am not making the following statement about anyone in particular: Sometimes, posts that are anti-Japanese appear to come a lot closer to being ethnically-based than automotive based. If you want to say that the Aura is a better car than the Galant, go ahead. But if you are saying that Japanese companies collude to destroy American industry, you should stop getting your information from war bonds posters from the early forties.
Joeshpoilshport is right, let’s get back on track here.
Can someone answer me this question?
Why is that the same people who are most concerned about whether or not a car is “American” are also the most anti-UAW, which employs American workers at good wages?
Anyone?
Good question, Jonny. While it is relatively easy to throw stones at the UAW they, more than anyone else I know of, are responsible for the increase of lifestyle we (the middle class) once enjoyed and are losing, in this country. But we are off topic. Hey Mr. Farago: a UAW deathwatch?
Face it, guys, his detractors all just jealous.
No way. I admire the Henry Fords of the world, people who build a business, create a product/service and make it big at the same time. No love for the Corporate Raiders, leveraging their way into other people’s hard work.
That’s not the America my parents immigrated to.
jaje: Cancer Kirk, I like that. Almost as good as Chainsaw Al.
Back on track:
Kirk and his cronies are in it for short-term profit, which isn’t neccessarily a good thing for the long-term health of GM.
It appears that ‘shareholder value’ is synonomous with ‘quick buck performance’ to Wall Street. A fickle short-sighted bunch.
That’s the problem with most of Corporate America…short term profits and pleasing Wall Street. Heaven forbid you actually focus on making the best product in the world, ensuring long term stability.
Great Site. I like your writing style. Reason combined with clever wit. Remindes me of P.J. O’Rourke.
Anyway.
You are all hacking at the branches of GM stupidities which are all just symptoms of THE root cause stupidity.
The 1935 Gov’t-Gun backed Wagner Act enacted into law by Mein Kampf-er FDR. Think about it.
You just callede FDR of all people a Nazi and you expect any rational person on earth to take you seriously?
Welcome to TTAC!
FDR was not a Nazi… He was a Fascist. FDR spoke very highly of both Mussolini and Hitler until he couldn’t.
Actually I wanted to prompt people to read the 1935 Wagner Act. Who really controls/owns GM. Hint: His first name is Ron.
Thank You!
The Wagner act caused GM and others to offer non-wage benefits and pensions to lure workers. Those ‘legacies’ are now choking the U.S. automakers. So, yes. But FDR was not Hitler.
I quit
Japanese companies are not American companies; most of the money does not stay here. Everything else is just another way to make you feel better about your purchase. I really could care less what anyone buys but don’t do it in the name of apple pie and baseball because it’s not.
If Ross Perot couldn’t budge GM, Kerkorian doesn’t stand a chance – Perot was wilier, smarter and more passionate about actually fixing GM instead of just making money. The GM machine gobbled him up and bought him out and off and they’ll find a way to do the same to Kerkorian. No and I mean no outsider will ever penetrate GMs inner sanctum. GMs stock is actually up – they’ll find a way to get the money to make the egotistical old fool go away.
I’ll go on record to say that GM is poised to make it through this. They have products here and coming that will be (just?) good enough to keep loyalists from defecting and may even win back some previous defectors. Wagoner isn’t the shmuck he’s made out to be, and GM’s plan isn’t as weak as the short-term-thinkers opine.
It is where the corporate profits go. For Toyota, Honda, etc- money goes back to the land of the rising sun, where it pays for their schools, roads, health care, retirements, infrastructure… NOT yours, mine and ours.
Why are we so excited about Kirk? It only costs $3 billion to buy 30% of all of GM, someone will buy the company, or it will close.
My guess as to who really runs GM- Someone said Ron? It must be L Ron Hubbard of Scientology fame-
Most of the “outsiders” hired to freshen the GM marketing ranks under the Zarella brand management regime and the eGM project (including me) have since been forced out or left GM for greener pastures. Hard to say that any outsider can be successful effecting changes with the lousy track record at GM thus far.
Ghughes,
Not exactly. Corporate taxes are paid where the income is incurred, so if Toyota makes $1,000 selling a Corolla in the U.S., the tax on that profit is paid here to the U.S.
Returns to shareholders — through dividends or stock appreciation — go to the people who own the stock. As I own Honda stock, I will use my returns to pay for my daughter’s education, and not to pave roads in Japan.
I wonder what the real motivations are behind the whole argument that you should “buy American” to prevent your money being used to pay for Japanese schools.
In other news, FDR was a Nazi and a fascist (who just happened to save the world from Naziism and fascism). Yeah, and Jonny and I are celebrating Sukkot with our buddy Mel Gibson.
GMrefugee: Ah, Zarella. Another Ron, no ? (you don’t have to live like a refugee !)
BEFORE Kirk’s big fight with DCX over the “takeover premium” and all that, didn’t he attempt a coup with plain-old Chrysler wherein Kirk would put Lee Iaccoca back in charge, just as “the Bobs\'” strategy of Viper/Ram/Intrepid/Stratus/Neon was getting traction, and Lido’s Imperial designs were fading (New Yorker/Dynasty/Acclaim) ?
Imagine what Kerkorian would do “for” GM !
ghughes, 1984:
If we must discuss this here, remember that the transplant’s “profits” going back to Japan are likely a tiny percentage of the total investment, less than the electric bill, a token sum.
Or, if you think that your American purchases’ dollars stay here, and your Japanese purchases’ dollars go there, consider:
How did GM buy Daewoo, Opel, Holden, etc ? With the money of Chevy buyers.
How did Toyota, Nissan, Honda, build US plants ? With money from selling Celicas, Sentras, Civics !
Was not the Wagner Act a Fascist idea/policy ?
Am I missing something ?
Sorry for that reference in my original post, it was not nessesary in its context. It is just my distain for all things “Socialist” coming out. Ill control my emotions in the future.
The Wagner Act gave ultimate power to Labor Unions. The owners of GM (Shareholders/board of bystanders) do not have final discission authority since the UAW has final veto authority. The UAW controls GM without the financial risk. They use other peoples money… For Free… And use it to enrich their members not necessarily to create better products. Better products are a secondary “necessary evil”. In fact there really is no incentive to build better cars since they want to sell you a new one sooner rather that later. Global auto competition put an end to their milk-the-customer mentality. The UAW is in servival mode now which is why they are backing off. A little.
This same dynamic applies to Gov’t roads the only difference is the Gov’t stops others from competing using gun-backed “laws”.
pglide – lube ref? Right, buying a japanese car is sooo good for Amerikkka. So is our nearing $1 trillion annual trade deficit. So is the 500,000 lost auto jobs. BTW,
are you a cost accountant who knows the intricacies of japanese corp. tax policy?
Hey, I got an idea! Perhaps if you can confuse yourselves long enough to actually start believing Toyota was founded by Henry Ford!
Doesn’t that make you all feel all warm inside!
Arguably Toyota builds a better car and you should be able to buy that better car. I can’t justify buying a product I do not believe in baised on American pride, they should compete just like everyone else. But don’t think for one second that the Japanese contribution to the US economy can hold a candle to the domestic contribution. If you think I’m wrong you’re delusional.
Do you think all that money GM is loosing is being burned in trash barrels? No, it’s sucked up by the outrageous North American structural costs… guess where that money goes?
Do I feel sorry for GM or anyone else… Nope.
When I was a college student in the late 70’s studying business, the one comment that was consistently made about the cultural differences between US and Japanese businesses is that the Japanese do not make major short term changes. All decisions are made on the basis of long term impact. The US business community is hung up on short term profitability, because of concern for share holders and stock prices. This leads to the accounting practices that Enron used to used.
Not much has changed. Toyota has a 5 year plan to become the world’s largest car manufacturer and plans to get there by 2010. Kerkorian wants GM to be profitable NOW. If GM follows the old man’s plans, there will be no GM in 5 years. This does not absolve GM of the horrible vehicles they have been building. GM may not be salvagable in the long haul, but Kirk’s involvement is a death sentence.
Toyota was not founded by Henry Ford. Cadillac was, but Ford ran it into bankruptcy
Luther,
I think you’ve been meaning to say communist, not fascist. Socialism is equated with communism, not fascism.
In fact, Fascism is the opposite of communism/socialism. Fascism is a far right-wing government (combining corporatism with authoritarianism) while communism is a far left-wing government (combining socialism with authoritarianism).
Historically, Fascism rose as a response to the spread or communism in the 1910s and 1920s.
This whole argument of what is an “American” or “foreign” car company is rather amusing. Get with the times people. The companies involved are all global. There is no such thing any more.
The whole Kerkorian soap opera brings to mind the image of vultures hanging out around an elephant that is slowly dying. Except the vultures are pondering whether or not to go find blunt objects they can use to help the elephant along further before something happens and it starts to feel better.
Cowbell, may I correct your correction? Fascism, which is largely considered to be synonamous with Naziism (with good reason) is actually a form of socialism.
Nazi was a short german form of words which loosely translate into National SOCIALISM. Nationalism + Socialism.
Adolph’s government TOOK OVER factories and companies just as post-war Britain’s and France’s socialists TOOK OVER factories and companies. It’s called “Nationalizing industry.” It’s what the Communists did in Russia, I might add.
Here is an illuminating article which gives light to current US political events. Remember to vote in November. You may want to consider voting Constitutional Party or Libertarian Party after reading this, but by all means, vote.
http://www.conservativecrusader.com/articles/1267/1/Some-Choice-Socialist-Democrats-Or-Fascist-Republicans/Page1.html
Nazi = National Socialism
Left-Wing – Right-Wing… The two wings on the same bird of prey. Both ideas of totalitarian Gov’t. No-Gov’t – Total-Gov’t are the actual opposing ideas.
Right-wing=fascism= means of production privately owned but controlled by the State.
Left-wing=communism=means of production owned/controlled by the State.
Both are refered to as Socialism which is a sugar-coated political word for “Legalized Theft”.
Lets please stop now with the “Socialism” stuff.
IM SORRY! for bringing it up. Sorry Jonny. Rookie mistake.
I feel like Danika Patrick at her first run at Indy. At least I wish I felt like her.
ghughes: Buying a Japanese car is great for that part of America that buys Japanese cars.
That those Americans so choose establishes that at least, they THINK they’ll be better off.
In that sense Japanese cars have been incalculably great for America. Similarly, does the trade deficit, in this sense, even exist ? If Sam spends $ 20,000 on a Japanese car, it’s cos he deems it worth at least $20,000.01. His transaction is a gain. The seller also shows a gain.
Where is the deficit? The dollars spent elsewhere, by other Americans, don’t enter in to this…
SWEEET!!!!
Ever since I saw York’s letter of resignation I’ve been waiting for RF to pounce. Once again, he did not disappoint…
Why is that the same people who are most concerned about whether or not a car is “American†are also the most anti-UAW, which employs American workers at good wages?
Well Johnny, for most products the nation of origin means absolutely nothing to me; I only care about buying a satisfying product at a good price.
But for cars, I’m absolutely committed to NOT supporting the UAW and its overpaid, whining wards, and so I’ll steadfastly avoid a Big 2.5 car. Of course I’m no fan of the incompetent executives with their ossifed bureaucracies either, call me a liberal. They’re all reaping what they’ve sown.
Fortunately the two goals appear pretty well aligned.
Excellent comment powerglide.
Japanese get money, I get car. No deficit I can see.
I have a trade deficit with my barber. Ive given him lots of money and he has never given me a penny. I will continue to trade with him though at least until all my hair falls out and then he will complain of unfair competition from my DNA.
Quick Econ 101 points from the master (me). A producer’s country of origin and trade deficits mean nothing for the wider economy. Much ado about nothing from pundits and journalists who don’t understand economics. It’s productivity that means everything.
But those of you praising Japan’s supposed long-term strategic thinking should learn that Japan has about 5 highly productive industries and a hundred terribly unproductive industries constrained by foolish and short-sighted policies. Their overall economy is very unproductive compared with the US’s, and as a result Japanese are much less wealthy than Americans.
However, Japan shines in automotive and auto parts (a small part of their economy, sadly for them) — they are more productive than the US in every sense of the word. Kudos to them. And they export that productivity to the US when they build factories here, which is good for us. (Usually it’s the U.S. that exports productivity.)
Too many American unionists making too much money and benefits, producing cars that earn less money on average that Japanese cars — that is a prime example of the relaitve poor productivity of the U.S. auto industry. Sorry. Those wages are great for the few unionist (til the implosion comes), and purely bad for the remaining 99.95% of us who are not unionized auto workers.
Thank you, I’ll be here all week.
“Can someone answer me this question?
Why is that the same people who are most concerned about whether or not a car is “American†are also the most anti-UAW, which employs American workers at good wages?”
Simple. The UAW is the single worst thing for the “American” (Ford, GM, Chrysler) auto industry and American auto workers. Yes, even worse than management.
Without writing a dissertation to back my assertion, let me just say:
1. As everyone knows, at least some detrimental strategic management decisions were forced by UAW’s unreasonable compensation levels / work rules.
2. The UAW isn’t even good for the American workers they claim to help. The cost of (unreasonably) good wages and protections that UAW members received for decades are immense. To wit:
a) Tens of thousands of jobs lost in a couple of decades – some due to efficiency gains and some due to competition. b) Tying the hands of management – net outcome of lower quality cars, less competitive corporations->probably less auto industry employment in U.S.
One can always argue that management culture is to blame. But really the U.S. churns out the brightest engineers and management talent anywhere. So are the engineers and management at Chrysler, Ford AND GM all idiotic?
Or is it maybe not a coincidence that the 2.5 chronically struggling automakers have more than just being “American” in common? That thing being the UAW.
Back to answering your question… I’m not a jingoist; I don’t care where any car comes from. But I do care about America and American workers. The UAW stands for just about everything that I don’t. That’s why I’m anti UAW.
Another stimulating TTAC thread. Robert, I think you have pretty much defined where GM (and the other 1.5) are today and why. The UAW isn’t helping, but let’s also remember the the upper level management, their perks, bonuses/options, and most of all, golden parachutes. I consider myself lucky to have lived through Detroit’s Golden Age (the 60s) and I still have trouble getting my head around how it all came down to this. The words of Charlie Wilson continue to echo in my brain “what’s good for GM is good for America.”
Hmmm. Death Watch 95. You think maybe they’ve earned a different name for this column?
Simply amazing…
Anyone care to explain to me how the UAW made Cadillac import the Catera?
Or forced Pontiac to green-light the Aztek?
Or led to Saturn?
“I don’t care where any car comes from. But I do care about America and American workers. The UAW stands for just about everything that I don’t.”
Black is now white, apparently.
Do folks here actually believe that buying a Ford, GM, etc. and sending profits to stock holders actually improves our roads, schools, etc.? You think those folks actually pay taxes on those gains?
Now if you are saying that Toyota and Honda invest more into their communities from profits than American car companies…I couldn’t agree more. It’s about like saying shopping at Walmart is actually beneficial to a small community. Since when? Business is business…companies don’t care about the middle or lower class…just squeezing pennies out of them. Push GM back into the 50% market share and you and I won’t see a penny of the profit. Schools won’t see it, etc. Those days are long, long gone.
Mr. Lieberman,
It’s safe to say that you’re in UAW’s camp.
And for the record, I never said that the UAW made GM green-light the Aztek or the Catera per se.
“Black is now white, apparently.”
We have different perspectives regarding the UAW.
I guess you’re implying that somehow being against the UAW is un-American?
I and many other people think otherwise. And is the UAW good for the American auto worker? Maybe for the individual, but certainly not to the pool of workers at large.
No doubt U.S. schools turn out some of the best Engineers and businesspeople. I would suggest however that they do not want to work at GM because every move they try to make can/will be vetoed by the UAW. The best and brightest will quit GM and go where they can have more control over their own destiny. This no doubt will eventually lead to a “bad” management situation where the people that dont quit will resign (phsycologically) at their desks. This is just a symptom of the root cause… The 1935 Wagner Act… Which transfered control from the GM Owners to the Labor Unions. (Transfered control not ownership but really… What is the difference ? You control it, you own it without the burden of having to pay for it.)
I re-quit
Come on. Don’t quit or re-quit.
Yes, management at Ford and GM have made horrid mistakes and yes in retrospect in the late 80s when GM was making about $4billion in profits (despite the UAW), they should’ve plowed more money and devoted more effort into R&D.
But when GMs UAW labor costs are HUNDREDS of millions of dollars more than they should be (if they had a non-union force), management, designers and engineers currently have no choice but to put cheaper plastic in car interiors, out-dated powertrains under the hood and figure out how to compete despite.
It’s tough for engineering and design talent to go work for a company and realize that you’re making less than an assembly line worker.
So Jonny, you support an organization that forces a company to pay for employees it does not need (jobs bank)? You support an organization that would rather bankrupt a company instead of helping it survive? You support an orgnization that simply exhorts a company to get its way (submit to our demands or we strike!)? You support an organization that protects inept and lazy workers (just try firing a union, much less UAW, employee)?
I agree that management is responsible for deciding the direction a comany takes. However, it is the unions who control a companies overhead through extrmemely generous (and onerous) pension and health care programs, as well as pay.
My dad had a ’98 lesabre, engine died ar 40K, 4K out of warranty. I went to GM to plead his case, they laughed at me. In the mean time , my brother still has the ’94 corolla that the buick replaced, has 150k on it, purrs like a kitten. My 95 Golf has 195K mikes on it, its still fun to drive, no rattles, no squeaks, paint still looks good everything works! – it replaced a mustang that died at 85,000. Lots of people have stories like this. If GM or Ford went out of business tomorrow, im not sure i would notice. Im quite sure i would not care. Except for car shows, they both died for me a long time ago.
No love for the Corporate Raiders, leveraging their way into other people’s hard work. That’s not the America my parents immigrated to.
Sadly, Sanjeev, there have always been, and will always be predators in the corporate food chain. Their names are well known – Ebbers, Lay, Skilling, Kozlowski are only the most recent in a long line of sharks.
Yep, our family also immigrated here to the States in search of better work and education opportunities which fortunately panned out.
I just wanted to bring up the OP again. I just don’t see Kirk wanting anything other than a quick exit without a big loss. A proxy fight would be more in.
Ah, nothing like a Deathwatch article to get everyone frothing at the mouth.
Why is everyone jumping on the UAW? It is the Union Executive’s JOB to get the best deal for their members. Contracts are negotiated and it takes “two to tango”. GM (and other manufacturers) conceded all the health care, job banks, etc, etc over the years. Asking the union to retract those benefits voluntarily is ridiculous (especially if the salaried senior staff have benefits up the wazoo and are armoured by gold-plated buyouts). If the UAW execs gave these up, they wouldn’t be the exec anymore.
Until management starts to lead by example and put the best interests of the company first and communicate their plans to the employees to inspire the acceptance of sacrifice then the UAW will have no cause to relinquish their gains.
Everybody should win in the UAW’s mind or everyone will lose.
As always, the ball is in management’s court.
The Toyota quality decline situation is frustrating. If they cared about being number one, they’d fix their cars. With well over 50+ years of building the modern type cars as we know them, today’s accurate machining and manufacturing techniques, procedures, and abilities, not to mention the good understanding of metallurgy today, there is no excuse for anyone to build sub par vehicles.
What is the problem? Poor design? Too much complexity?
What’s good, what’s solid? Amazingly, the part all these OEM’s seem to be best at is the design and construction of the spot welded sheet metal uni-body. The design of that structure blows me away on a daily basis that it holds up for as long as it does. Have you ever done ~60mph over railroad tracks and caught air or drove over a dip or hump in the road and went airborne(briefly)? The fact that the uni body holds up to that forever and 200,000+ miles later still no structural failure. I never hear about uni-body failures. Car’s breaking in half or falling apart like that. Absolutely amazing that to me, the largest, most complex(and seemingly delicate(collision wise)) part of the car is what they are best at.
Wheels, tires, suspension, brakes, glass? The Firestone situation was a bum deal.
What are the major reliability problems these days? What types of specific problems are people having with new cars? Fuel pumps going out? Bad alternator? Auto trans letting go? Gasket’s leaking? What could it be?
I think this has been referred to before, but I echo the belief that it will become less and less an issue as to WHERE cars are made and there will be MORE choices of cars in the process.
GM, Ford, and DCX are headed, if not for disappearance, nearly complete irrelevance. They don’t “get it” and never will. “American” cars? It’s an increasingly quaint concept.
Detroit responded crisply to the energy crisis with the Vega, Chevette and Pinto – and GM finally came forth with the Cavalier, a true piece of junk that only sold because it was CHEAP. Then, they stepped up to the mediocre at best Cobalt whose sole virtue seems to be that it’s not a Cavalier.
I bought an ’03 Sonata with low mileage because I researched the car and used with low mileage can make sense. And the “lure” of low financing for American cars I have no interest in wasn’t enough. Hyundai “gets it” and so do the other Asians, with Toyota and Honda with a strong head start.
Quality cars that are fun to drive and offer good value.
That’s what most people would probably say they’d want in a new or used car. It’s what I wanted and believe I got.
GM and its’ Detroit cousins will continue to make what they can via rental fleet sales. Cars like the Dodge Stratus, which really can’t sell under any other circumstance.
As much as I would prefer a strong American Automotive industry (it’s certainly better to have industry than to lose it,) it’s out of the hands of common sense. This isn’t just Union.
Folks who weren’t union came up with the Cavalier, the Cimarron (“almost a Cadillac”) X-Cars and some incredibly oversized SUVs that probably only go offroad if someone isn’t driving well.
To CSJohnston:
Gold plated salaried buyout? I just left Ford because the “buyout” for anyone with less than 4 years was 1 months pay. Capped at 12 months for, you guessed it, 20 years of service, ignorant tool…
Take your Communist innuendo and cram it pal, the blue collar workers aren’t taking it harder than the white, we’re equal.
“It is the Union Executive’s JOB to get the best deal for their members.”
Some might argue that it is the market’s job…
But point taken.
“Communist Innuendo.”
I love that.
Stashed in the lexicon
Oh, I’m strike
I own auto repair shop . I LOVE Gm ,Ford and Dcx . Those three keep my shop full . Out of those 3 , Ford is the best made .Beside 3.8 l (Windstar ) we don,t work much on Ford engines . Every Dodge Neon needs head gasket at least once ($ 1000 ) . Gm used to have best engine (3.8 l ) untill they installed plastic intake manifold . The way they charge for parts , i don’t think Gm will go broke .They just rape you !! For example , wire connecting to ABS sensor (14 inch long ,Sunfire)will cost you over $300 Can , where aftermarket sells it for $13 etc.Someone said that rental fleets have more and more Japs on inventory .No suprise . Ever since GM ,Ford and Dcx started installing rear disc brakes on trucks my bottom line just got better . I see rental trucks with 14k -40k needing complete rear brake job .I am talking rotors ,calipers and pads .I don’t think rental companies are happy to dish out $2k for a brake job . Hope this is not much of topic .Regards
While I truely do enjoy reading these GM Death “Watches”…in truth, GM is already dead. Morally, spiritually, and ethically…
Dead.
I have a GM and it truely is the trashiest POS I’ve ever owned. I bought it from a family member because I needed some wheels. Sounds desperate? Well, it was. But never again. Anyone…ANYONE who buys one of these pieces of ^%&$ takes it in the tail pipe. And it’s one of those “gifts that keep on taking”. Transmissions, roof liner, clutch, head gaskets…on down the line.
Yes, I agree with the above poster in saying that I’d consider a Hyundai over anything GM puts out…and that included EVERYTHING. An Azura with it’s 3.8 puts to absolute shame GM’s 3800.
So while the Death Watch count continues to climb, it’s kind of a moot point…as GM is already dead. Here in Cali, I believe they have a 14% market share. How pathetic is that?? Is it any coincidence that Cali also has a fairly high percentage of people with a lick of sense?…I don’t think so.
The greatest insult to anyone / anything is not to say they “suck” or are somehow underperforming…but to say they are “irrelevant”.
GM, as GW said….you ARE INDEED irrelevant.
Blow away with the tumbleweed…we don’t need you anymore.
…and take your hotdogs with you too…the latest ruling is that they now cause cancer. Leave the sushi behind, along with the Soporro and saki (ok, fine…leave the apple pie too!! :)
Gold plated salaried buyout? I just left Ford because the “buyout†for anyone with less than 4 years was 1 months pay. Capped at 12 months for, you guessed it, 20 years of service, ignorant tool…
Take your Communist innuendo and cram it pal, the blue collar workers aren’t taking it harder than the white, we’re equal.
Perhaps I did not put enough emphasis on the word senior in “senior salaried staff”. As for me being a communist, wow, wait’ll I tell my friends in the Alberta Conservative Party about this one!
I have several friends that work, or have worked for Ford in management and those that remain are all very concerned about the future. I am concerned for them too.
The fact remains that the senior negotiating teams for Ford, meaning senior VP’s, CEO’s and ultimately, the Ford family itself agreed to every single benefit and wage the UAW received. They could have stood firm years ago (it does not take a genius to forecast how more retirees might use more health care for example) but instead they chose to avoid confrontation, keep those factories humming, keep the money flowing and of course, their stock options growing.
Yes, blue and white collar staff are now suffering but not because the UAW did what it was supposed to do, it was what leadership failed to do… lead.
I do apologize if I offended anyone, that’s just the way I see it.
I’ve prepared some math. I hope Jonny is still listening.
In the plant I recently left the Building Chaiman’s pay is described as:
“12 hours pay per day, 365 days per year, at the highest rate in the plant (Mold Maker Leader – used to work for me – about $34) at midnight shift premium (10%)”
So –
Average paid holidays/year = 16. Pay is 8 hours holiday pay plus 12 hours X double time = 16 X ((12 X 2) + 8) = 512 hours.
52 Sundays at 12 X double time = 52 X 12 X 2 = 1248 hours.
52 Saturdays at 12 X time and a half = 52 X 12 X 1.5 = 936 hours.
“Regular” work days = 365 – 104 Sat and Sun – the 16 paid holidays = 245 days.
245 days at 8 hours straight time plus 4 hours at time and a half = 245 X ((4 X 1.5) + 8) = 3430 hours.
So the Building Chairman is compensated at 6371 hours a year at $37.40/hour ($34 Mold Maker Leader pay at 10% premium) for a total of $238,274.40 a year.
This is for a guy with a high school education who was driving a fork lift before being elected.
Yes – management signed this contract. The name of the game is take what you can get no matter who you are – I certainly do.
Still – think about this before you walk into a Big 2.5 dealership in the name of “Buy American”
On the other hand – Autoworkers are really good at pissing away every dime they make – so this is good for the economy in any event.
And – no offense Jonny or anyone else – until you’ve lived it you can’t know it. I was dues paying card carrying back in 1988.
So why do folks harp so much about the little guy’s pay and pretty much ignore the stratospheric salaries of American executives? These issues can’t be looked at in isolation; workers will be more inclined to be self-focused in their negotiations when it seems like everyone else is doing the same.
That’s why York called for sacrifices by labor AND management. The Chrysler bailout plan arguably worked pretty well partly because a decent effort was made to spread the pain evenly.
So the obvious question: How evenly is GM and Ford distributing the pain? (Of course, what matters is both actual and perceived reality.)
Rastus:
Your sole experience with GM was a well-used hand-me-down?
Judging any company on past products may not give you a snapshot of where they are now. My friend’s 2002 Acura TL went through TWO transmissions in 80K miles, as well as other little problems, so should I stay away from Honda and Acura forever?
kaisen,
My purchase had 12K miles on it at the time of the “transaction”. And I come from a GM family…where family …time and time again throughout the period of over 20 years…has without FAIL screwed his/her family members.
So…as far as GM’s mountain to climb…I will not be there to cheer or even support them on their trek.
People don’t like to admit it…but biases come about due to at least “some” element of truth. And yes, I am a complete GM biggot…they are trash and as a young individual I will never support them again.
You see…I come from a different fram of mind…where family actually “support” one another…not screw them.
And no, I’m not bitter…I made that last transaction on my own accord. But you can only help a junkie so much before he/she needs to be locked away.
I currently own a 1997 Pontiac Grand Prix GTP (Supercharged 3800 V6) that just turned 255,000 miles this week. Sure, I had to replace the transmission at 226K, but other than that it has been small wear items. Runs great and my family commutes hundreds of miles a week with no problems.
I also owned a 2000 Chev Cavalier (with the 4 speed auto) that I sold to my sister and it now has about 220K miles. I replaced the alternator at about 200K, and did wheel bearings twice. Never left me stranded.
I also owned a 1992 Saturn SL2 auto that I sold with 175K miles and is still happily puttering around town. Had to do a window motor and a motor mount.
My 1999 GMC Suburban 4×4 was sold in 2002 with 127K miles and also had alternator failure at 117K, and a broken U-joint about the same time. First set of tires at 85K, first front brakes at 88K, never did rears, never did anything else. No leaks, no issues. Great truck.
I also had a 1992 Toyota Camry LE 2.2L that I drove until 214K. It was also a great car, with similar ‘small’ fixes. And my 1990 Nissan Maxima SE was pretty good when I sold it with 186K, although it did go through SEVERAL injectors, a speedo, multiple CV joints, and three radiators. Still a good car.
My 2002 Audi A6 2.7T 6speed, however, needed $6800 in warranty work in the last 10 months of my ownership. Sold it soon after warranty ran out. My earlier Audis (all 5 cylinder turbo quattros) were great.
My last two BMWs (750 and 325 conv) were also horrendous.
As they say, your mileage may vary.
If I remember correctly, the US State Department went to bat for US built Hondas and Toyotas a few years back when EU quotas against Japanese cars limited their importation into the EU. The US State Department said that US built Hondas and Toyotas were AMERICAN PRODUCTS and thus not subject to EU quotas. They were successful.
And another point, American built Toyotas and Hondas use American parts to the point that domestic content is around 75% to 85%. That means that the majority of the money stays HERE.
I’m guessing that when GM starts importing Chinese built cars like they do their Chinese built V6 engines to put in their Mexican built cars, they’ll still be “American” to you.
The idea that “buying American” is a good thing because the profits stay in the US might have merit, except for the fact that the medium 2.5 lose money on every vehicle they sell.
So when I buy a Honda, I’m actually doing GM/Ford/DCX (and, therefore, America) a favor by not increasing their losses further!