Walt Disney’s deathbed request to his brother Roy: don’t change my plans for the Experimental Prototype Community of Tomorrow (EPCOT). Walt spent his final cancer-fighting years planning EPCOT’s every detail, from housing to commuting to garbage collection. When Walt was cold in his grave, Roy did the sensible thing. He tore-up Walt’s work and built a cod-World’s Fair. The idea of EPCOT as a company-run city rather than an amusement park was fundamentally flawed, doomed to controversy and failure (Celebration anyone?). Detroit reminds me of Walt’s unrealized Disney world (small “w”): a place where corporate culture dominates the community’s mindset. Brock Yates chronicled this “Grosse Pointe myopia. As does Autoextremist Peter DeLorenzo, in his own way. Or, more precisely, in a David Koresh kinda way…
“Unbeknownst to the legions of people out there in ‘fractured’ America, the ones who fill the Internet with bile and who project such a level of viciousness and unbridled glee at the thought of the collapse of our domestic automobile industry as if it were – amazingly enough – some warped opportunity for celebration, there are countless towns, big and small, scattered all across this nation that have grown up with GM as their main employer and the main source of income for thousands of American families.”
As some TTAC commentators have pointed-out, it’s Detroit’s that’s being selfish, not the “outsiders.” Why should the rest of America prop-up an insular, self-righteous industrial theme park that had every opportunity– and plenty of profit– to clean-up its act? An industry with a justified reputation for screwing the very customer whose paychecks they now seek to raid? And why should they do so when Motown boosters like Sweet Pete are spitting on them?
“Even though we as a nation don’t seem to have the stomach for hard work and sacrifice any longer – hell, I’m not sure those words and their meanings are even in the lexicon of vast swaths of our population – we must get tougher in the midst of this global economy, and we have to steel ourselves for the kind of battles we’ll face.”
We’re all in this together but you suck? Nice. I, for one, am tired of hearing all this Bill O’Reilly-esque “back in MY day” nostalgia about how America (i.e. the “fractured” bit) is becoming a lazy, contemptible, corrupted, stupid, amoral society where no one knows the value of a good day’s work. I look around me and I see people working their asses off to make ends meet, who wave me into traffic and stop to help complete strangers when needed. I saw the faces at my wife’s immigration ceremony, and I felt nothing but pride for THIS generation of Americans.
Americans are a generous people. They do not deserve the contempt that Lorenzo and Co. believe– mostly in their imaginations– that non-Detroiters feel towards them. If I was a trained psychologist, I might even wonder if Fortress Detroit isn’t guilty of “projection.” As an automotive journalist who wants to see a strong American automotive industry, I despair.
“As I’ve said repeatedly the time for all of the idyllic, ‘let the free market run its course’ hand-wringing is over. It’s far too late for that. This country’s leadership needs to get these loans to GM and the rest of the domestic automobile industry in the next 60 days, or life as we’ve come to know it in this country – and I mean every part of this country – not just here in the Motor City, will be severely and unequivocally altered.”
Threats. Is that all you’ve got? In truth, DeLorenzo’s increasingly hysterical rants do his cause no favors.
“To arms-the Holy Brand is besieged”
Let it go Peter.
I doubt most of us want them to fail.
We are just pretty sure they will with or without our tax money.
We prefer without.
Love & bullets.
Bunter
Did you mean David Koresh?
Also, while I’m thinking about it, the tools to fix Detroit already exist: It’s called bankruptcy. And it’s already been discussed at length that these tools are probably the best hope of effectively making the changes that need to be made. So no “bailout” is necessary; Detroit could choose a Chapter 11 “bailout” if they were so inclined.
It seems that what Detroit is really looking for is a bailout of its management’s pride.
I agree…the Big 3 do not deserve any form of a bailout. Their bailout should be chapter 11. That does NOT mean that they are going away…hell, I doubt there would be any disruption of manufacturing at all.
The American pubic does not want to support Ford, Chrysler or GM. If they did, they would have bought their products.
That being said, I hope to pick up a slightly used Cobalt SS or G8 GT/GXP CHEAP in a year or so.
It seems to me that there are going to be a fixed (relatively) number of new car sales in any given year. That being the case, if GM goes totally out of business, another automaker(s) will sell more cars. That other automaker(s) will have to employ more suppliers, dealers, parts people, etc.
All this talk about GM’s demise costing millions of jobs is hogwash. Another automaker will employ the vast majority of them.
Another automaker will employ the vast majority of them.
Are you REALLY sure about that? What if they’re already staffed full?
Dorns saying that 20% of the market won’t disappear and someone will step up to fill that void.
Of course given the market, GM dying would just bolster the rest of the companies sales back to normal.
All I know is that just handing the Small 3 a pile of cash won’t cut the cheese. For my bailout bucks, I want Red Ink Rick’s head on a pike at the very least.
Given the (not unreasonable) assumption that a certain number of new cars will be sold, those new cars will have to be built, and the manufacturing capacity has to come from somewhere.
That said, the scenario in which GM completely closes up shop seems unlikely, so one of those “other automakers” would likely be the new GM entity/ies.
This is to funny. This reminds me of turning my TV channel to Fox. Everytime it comes on I find my TV drifting to the right of the room. Only way I can the TV back to its original position is quickly turning the channel to MSNBC and watching drifting back to the left. Once the TV is back to the original position I turn it off.
Same thing here. I go to Autoextermist and my computer screen moves across my desk. I click on TTAC and it starts moving in the other direction.
I am rooting for the big 3 to fail – before January 20.
I voted for Obama, but he unfortunately has some union political liabilities that might make him hesitant to allow bankruptcies, so I am hoping that the big 3 BK before January 20 (by the way, McCain wanted to pay financial institutions full value for bad loans then write them down, so unless you voted Barr or Paul F-off on bailouts).
GM, and possibly Ford, need a Chapter 11 reorganization to dump their excess dealers and brands and effectively deal with legacy costs and the UAW. Chrysler needs a Chapter 7 liquidation so that its various units can go to the correct buyers free of UAW, dealer and legacy cost burdens. And so that Cerberus faces the capitalist consequence of a horrible investment.
Anyway, someone who did marketing then became a blogger (Pete De Lorenzo) can screw himself talking about “the value of a good day’s work” (no offense to present company). “You kids don’t know how well you have it with your word processors, back in my day I had to type up my ad copy on an electric typewriter.”
Possibly a nation of people working cutthroat day-to-day contract and temp jobs, often with no benefits, don’t want to bailout an increasingly niche industry that killed itself by overpaying incompetent management and UAW workers that, after seeing the incompetent management get overpaid, forced the companies to overpay them also.
The problem with socialism applied to corporations is that it puts all those CEOs back in junior high, at the junior prom, desperately hoping they’ll be asked to dance. They watch as the captain of the football team is beguiled onto the dancefloor. Then the editor of the student newspaper. Then, when forced to watch the captain of the wrestling team being asked to dance, it finally becomes too much to be the last loser left holding up a wall, watching everyone else get paid to dance.
Bonjour, tristesse!
Hey TonyT,
And Wassila Sarah is your nightly wet dream ain’t she?
Be careful for what you wish for. In addition to the blue collar labor force that works either directly or indirectly, there’s the white collar jobs in engineering and production management. Like or not – the pay has been better at the domestic brands. That will change post Chapter 11, but hey it was a good 60 year post war run.
While in the opinion of many folks, the blue collar tradesman and assembly workers seem under skilled for what they make. The white collar work force does require a post high school degree and practical experience. The domestic automakers hire more college grads for design and production management than do transplants, which shift this type of work to their home country, with Kia and Hyundai being two of the worst.
Folks, the day will come when the US finds itself in a war that will make Iraq and Afghanistan seem like police actions. Chances are that country that we’ll be fighting will be in Asia. Do we really want to depend on overseas transplants to supply our troops?
For everyone living in a large metropolitan area your favorite overseas transplant doesn’t always have much market presence in demographically challenged rural areas. This is the heartland of the Detroit Three’s market. Try getting a part for your Audi, BMW, Hyundai or Subaru in one day in a small rural town. Better yet, watch as the local mechanic in Dalhart, TX or Portales, NM guess his way through the vehicle’s problem. I’ve been there and done that with both a Volkswagen and a Volvo. I loved the cars, but the long 500 mile drive between Denver, CO and Lubbock, TX wasn’t always Euro friendly.
Hey ra_pro;
And yours is Barney Frank?
Seems to me the only one being hysterical is you Farago. You can’t seem to take criticism on an issue like this, and this post just shows it.
Regardless of what your opinion of the bailout is, one thing that cannot be denied is the impact that this will have on the economy. Millions of jobs will be lost should GM go under due to a cascade effect; GM’s death will cause suppliers to go under, suppliers going under will cause raw material suppliers to go under, and so on and so forth.
Don’t fool yourself into thinking that other automakers will just step up and fill the void; if suppliers go under ALL manufacturers with US plants will be affected. It will very quickly spiral out of control. You can debate whether the companies themselves are worth saving, but don’t for a second think that there won’t be some very serious and devastating consequences.
I don’t think Autoextremist is that far off in deriding the American public, great patriots that the Americans are as long as it doesn’t cost a penny.
Hardly ever anybody mentions here at TTAC that regardless of one’s feelings towards the automakers themselves, should they fail, they will ruin decent middle-class livelihoods of tens of thousands of people, throw incalculable number of children into poverty. And children poverty is already among the highest if not the highest in any developed world. Why is almost nobody bothered by that?
On the contrary, it seems like quite a few people take pleasure in the upcoming economic and social debasement that will result if the automakers are left to die. Is that a sign of the generous spirit the Americans like contend they possess?
Bunter1 sums it up best, at least for me.
I want GM to survive, but don’t see how they can without tearing up their contracts with labor, suppliers, and whoever else keeps them from being viable in a 10-12m car market. Can this be done without bankruptcy?
Blaming the unions for everything is such classist BS. They unions didn’t design the cars. They’re not the ones who failed to stand behind the products when things went wrong. Beyond this, these companies got the unions they asked for, based on the stance they took towards labor.
Labor costs and constrictions are only a huge problem because Detroit failed to develop competitive products, and then lost share year after year for decades.
Droid’s right… no one should want these guys to fail. I think that the real argument is whether a “bailout” will do the trick, or whether it’s some Chapter WHATEVER restructuring. It seems to be clear that they can’t survive without one or the other. They don’t want to restructure through bankruptcy and there are those who say it’s too late to do so. I don’t know. All I know is that handing them taxpayer money without a lot of change isn’t going to take care of the Big 3’s structural problems.
Now I don’t know what world Tony T is living in — while these guys have been going down the tubes we’ve had a republican president for 20 of the 28 years, and a republican congress for a good chunk of that time as well (including 6 of the last 8 years). And it’s a republican president who’s not wanting to do the bailout. Not that I think politics is the reason for this (rather it’s a good excuse for those liberal haters out there to blame them (us) damnable “wimpy latte drinking godless communist un-american libruls”). But if you bring that up, well that’s the case.
And Karesh is right that it’s tough to pin the blame on the unions here. Yes, they’ve got contracts that are untenable. They share the blame. They need to get real (and I doubt they ever will). But management and the BOD of these companies have just been plain stupid for longer than is reasonable.
At this point, I don’t know how these companies don’t fail. The major bit of politics that I see is that the management and BOD of these guys wants to preserve their power and they’re not willing to talk openly about how they could restructure. They’re just plain crazy if they think that they can’t lose a LOT of people and a LOT of plants and a LOT of dealers and a LOT of existing contracts and stay in business. They MUST know this. I don’t understand how the boards can keep these guys in management (and hey — I went to Duke, I should be a Rick fan).
To those who support a bailout of the Detroit chapter of the auto industry, I have yet to hear an answer to this question: Let’s say the Feds give Detroit their $25 billion. What happens now?
@ Michael Karesh
You’re missing one huge thing; the reason WHY the Big 3 products have been sub-par is because they’ve had to cut costs due to increasing labor and healthcare costs. Yes, it all had to start somewhere. (in this case with automakers mistreating workers)
However, in the here and now, those labor costs ARE the reason why so many products have been sub-par. On cars with already thin margins, suddenly automakers have to add in several thousand dollars worth of healthcare and pension costs, and those cars suddenly become unprofitable. So they had a choice; either cut costs or take a loss. (in many cases, both)
Unions are not the main problem here, but they’ve contributed more than their fair share to them.
I am going to type this very slow…hoping it will get through to some of you people:
JUST BECAUSE GM FILES FOR CHAPTER 11…DOES NOT MEAN THAT THEY ARE “GOING OUT OF BUSINESS”.
There will still be jobs, there will still be suppliers.
And yes, the unions have a VERY LARGE HAND in the current state of the Big 3. Why? Because they’re extremely greedy. The big 3 could not/cannot afford to use quality materials in their automobiles because of the costs resulting from greedy union deals.
Christ, the manufacturing employees of the Big 3 get better pay and benefits than police officers, fire fighters and others who do a much more important job.
That ain’t right…
Wow, Pete, pass over some of what you’ve been smoking, won’t cha?
Seriously, I had to laugh when Pete wrapped that big old ‘Merican flag around the Big 3, thanking them for their valiant efforts to “muster the strength to fight both world wars.”
Yes its true GM and Ford were arms manufacturers in WWII. So important were they that they supplied both sides of the war effort. Oh, Pete, did you conveniently forget which side of the war Opel and Ford Europe were working for?
Anyhow, I really don’t have a problem sending money to Detroit, but I want to see a plan for getting it back. The bottom line is that any firm we invest in should have a credible plan for returning to profitability.
I really don’t think that GM’s current leadership can make a credible claim that it can lead GM back to profitability, let alone a state of generating cash, which Robert has rightly shown to be the right measure. They’ve had too long and done too little.
And I don’t think Chrysler can get there either — white collar job cuts have gone so deep that they have zero capability to engineer and deliver any product going forward. Re-badging Cherrys, Nissans and Tatas isn’t going to cut it.
Ford, maybe. I like Mulallay, and I think he’s done most things right, just happens to have joined just before this mess. They seem to have a solid plan to bring good product to market and to coordinate their resources globally. I could see investing in Ford.
But that’s the key word: INVESTING.
I read the whole DeLorenzo column… there’s no mention to TTAC. Ninguna, CERO.
And I read both sites, this one everyday, that one every Wednesday.
He’s right, the domestic industry HAS to be saved.
I read this windbag of an apologist this morning, and well…I got what I knew I would:
A mouthful of how “WE” (the U.S. taxpayers) OWE this sorry ass excuse-ridden company a living.
Sweet Pete, I’d say “blow me”, but I’m a girl.
Most women have more balls and a gruff business sense than this so called “high octane” joker.
Sweet Pete, You act as if it is all OUR FAULT…and that the turd swirling in the toilet is of OUR making.
Sweet Pete, your beloved GM is the PWT of automakers…why you glam on to such a company the way you do is disgusting. And as far as the ENTIRE UNITED STATES going to POT *WITH* GM, go to hell…your false accusations are …again, utterly tasteless and disgusting.
Once your beloved GM is dead, I can see you becoming a predatory “Man of the Cloth”, using your same techniques to prey upon the elderly to “donate” as a way to reach heaven. You, sir…coming from a homeland-dwelling humble abode, are utterly repulsive in your tactics. But then again, …I knew what I was getting when I read you. You see, I read you as a source of yin/yang…TTAC for truth, you for “how the other-half life, breathe, think, and swindle”.
@Luscious
How does 3 million+ lost jobs sound to you? Because that is a guaranteed reality if GM goes under. Like it or not, automakers are the core of our domestic manufacturing sector. As they go, so goes the rest of the economy.
Don’t be so smug and ignorant, it makes you look like a horse’s ass.
“JeremyR :
November 12th, 2008 at 7:17 pm
To those who support a bailout of the Detroit chapter of the auto industry, I have yet to hear an answer to this question: Let’s say the Feds give Detroit their $25 billion. What happens now?”
The thinking here, accurate or not, is that GM and Ford have already done a lot of what they need for long-term viability and that they need the government money just to get through the current credit crisis and recession until sales pick up again – hopefully in 2010. After that point, success would begin to feed off itself.
Ford’s Mulally even says he thinks the Blue Oval can sqeak through without taxpayer money – but having a line of credit in case the economy does much worse than expected next year would be a great insurance policy.
GM and Ford may have a point: Both firms have a lot of new products in the pipeline. Quality is already up on the stuff they’re making now. If you believe Consumer Reports, Ford is in the ballpark with Toyota and Honda. The new UAW contract lowers salaries for new hires (some workers at the transplants make more). The Big-But-Threatened-Two have also bought out as many union workers’ contracts as they can, laid off thousands of white-collar employees and closed plants. The VEBA thing for health-care? That might still be a problem. Unfortunately, I cannot advocate death squads for surviving retirees. But I’m sure shares of GM and Ford would spike if such measures came to light.
Anyway, you asked a question, I’m trying to answer.
Steve Biro
I freely admit that I eagerly anticipate Chrysler and GM going under. They brought it all upon themselves. For them to get bailed out would be like Batman capturing the Joker and busting him out of jail afterward.
Jobs will be lost? The economy will be damaged? Welcome to real life. Things have to die so that new life can grow. These companies are diseased and corrupt, it’s time to slash and burn, baby.
I made my vote when I bought a Mazda. I don’t see how anyone buying “import” brands could support a bailout. I guess you made a big mistake?
What happens next with a Bailout ?
1) Odds are that part of that bailout unfreezes auto loans so people can actually finance a vehicle again.
2) The acceleration of packages for the older workers out of the business replaced by new “non core workers” who make half of what the old UAW workers made.
3) Shoring up of the VEBA account so that the retirees are not dumped on the U.S. Medacaid rolls.
4) The corporate bonds and debt of 100’s of billions of dollars that currently is held in every corner of the U.S banking industry continue to get paid.
fyi Peter Delorenzo has been an Extreme Critic of the Detriot 3 since 1998. Long before the TTAC hatched from its leathery egg. The nice thing about reading this blog is after I do it I know that nothing worse is going to happen that day.
As for the haters, we know they are out there and it only makes us stronger. We know who really is working in the interest of our communities. And it ain’t those folks at Hyundai, or Honda, or Toyota or Daimler.
@Demetri
Hi, you must be new here. Ford owns 30ish percent of Mazda.
Droid800
Didn’t you see that I wrote “Chrysler and GM”?
If you believe in writing a check to the “Big 2.whatever” then please tell us how it’s gonna help.
Tell us how this is going to make 3 unprofitable companies profitable.
Tell us how this is going to change a nearly 40 year track record of management failure to produce the products that more and more customers want.
Tell us how this is going to change the untenable cost structure the ‘domestic’ producers have STILL not chosen to address.
Then tell us how all this is going to happen without at least a chapter 11.
Pete is just trying to cheerlead the buggy makers, and curse those damnable people who went to the horseless carriage. Steel industry. 70’s. Life goes on. The world keeps turnin’…
Pete is just an old voice angry that his undying love for GM is ‘dying’. The company that is. What a load of baloney he is. And likewise the Rencen crew and their band of accomplices. They really screw over the american public and then expect the same public to bail their sorry asses out of a jam. These guys deserve the hard times they have coming. But our sorry ass politicos will bail them out and think nothing of sticking us taxpayers with the bill. Taxation without representation.
Droid800 and ra_pro:
If you spend billions here and billions there because otherwise jobs will be lost, you end up with grossly inefficient and ineffective industries AND a huge pile of debt.
I don’t think anyone where would object to a bailout package that didn’t reward those who have made bad decisions and that yielded an effective, efficient auto industry. Most here just don’t see how this could possibly happen.
Steve, thanks for biting!
I might be convinced that Ford might pull through. Maybe. It has an almost-manageable number of brands, although Mercury might be redundant anymore. And their cash burn seems to be, again, somewhat manageable (although we’ll see what the economic conditions of the next year do to that). They just might be able to weather the storm and may not need a bailout to do so–particularly if market selection is allowed to run its course, sending more sales Ford’s way. Mulally has been given a lot of credit for trying to right the ship.
As for GM, I just don’t see it. Let’s assume that Chrysler gets nothing of the hypothetical $25B, and Ford and GM split it two ways. I don’t see how $12B and change can do much more than let GM keep the lights on for another few months, given their cash burn. They still would have too many brands competing with each other. Too many models. The same inept management team. And a renewed appetite for taxpayer dollars. So I’m not sure we wouldn’t find GM in the same situation a year from now, or less.
While I have no doubt that quality may have been improved in the later models from GM and Ford, I wonder if it’s going to be enough. Not to belabor the point other have made numerous times, but these companies have spent decades alienating a lot of customers. They will not come back easily, if at all–so Detroit is going to have to remain afloat for many months to come in the meantime. Maybe the new UAW contracts will help Detroit to be more competitive. Maybe not. Time will tell, but a bailout isn’t going to buy them a lot of that.
In short, I don’t see how GM can survive on a cash infusion without shedding at least half its brands and maybe its labor contracts, which a mere bailout won’t accomplish.
Thanks for your well-measured response!
I’d only add to Michael’s last point that the “effective, efficient auto industry” this bailout is supposed to yield would, by definition, be leaner and more agile. Jobs will be lost, bailout or no.
I can picture it now:
The Titanic is steaming along and all of a sudden it strikes an iceberg. As the water starts pouring in the government appears and quickly puts a temporary patch over the hole, so the ship can set sail again. The ship continues again to make it’s way towards the safety of port. Then up out of the depths appears a wolfpack of Asian submarines, which surround the ship and torpedoes it, sending it to Davy Jones’s locker.
At least the government can say it tried.
Droid800, P71_crownvic:
Have you checked labor costs in Japan and Europe lately?
Healthcare costs — that’s a result of employing way too many people years ago then losing market share year after year. The ratio of retirees to workers is way out of whack.
The U.S. healthcare system is a mess, no disputing that.
But I spent over a year inside GM, studying how decisions were made. And they weren’t made well.
Greed has been a problem, but not union greed. These companies, like most American companies, reflect an ethos where everyone should grab as much as they can, and if you don’t you’re just a fool. Think they care about the communities? I never saw a sign of this.
The problem is, when the real game is to see who can fight their way to the top, great cars do not follow.
gmbuoy:
Only the first two of your points actually address the viability of the Detroit automakers, so I’ll stick to those:
1) Odds are that part of that bailout unfreezes auto loans so people can actually finance a vehicle again.
Before the economic crisis came to a boil, wasn’t GM already having to put a lot of cash on the hoods of new vehicles to move them?
And, to the extent that a bailout would be used to help unfreeze credit for auto loans, which cars should eligible for loans underwritten with bailout bucks? All of them? Just those built in the US? Just those with a Detroit badge on them? Just those with a Detroit badge on them and built in the US?
2) The acceleration of packages for the older workers out of the business replaced by new “non core workers” who make half of what the old UAW workers made.
This will eventually have some impact on cost, but what about other costs that add up to, in GM’s case, $3B+ per month? Even if it got the whole $25B all to itself, this wouldn’t keep GM afloat for even another year.
Given that Rick Wagoner’s current post-bailout plan would be to keep the current management team in place, how would the injection of a few billion or tens of billions actually restore profitability?
I also thought this was interesting:
We know who really is working in the interest of our communities. And it ain’t those folks at Hyundai, or Honda, or Toyota or Daimler.
Are you saying that the manufacturing presence of these companies in the US, along with the numerous jobs they provide here, are unwelcome? Or that if they were to close up shop in the US tomorrow, the economic impact on our communities would be negligible?
@Droid800
However, in the here and now, those labor costs ARE the reason why so many products have been sub-par
PURE BULL CRAP.
I have own both american and imports. I put my family in the super reliable imports(made here in the states) and I usually drive the Detroit steel(built in Canada or Mexico)myself. I just like Detroit cars(Mustangs,Magnums,SSImpalas etc.)better.I have learnd to live with the typical problems associated with driving american cars. The detroit 3 CHOICE to build subpar vehicles.
1.The Union refuses to cut back while sucking their host dry.
2.The upper management spends too much on bonuses and saleries etc.
3.The work force love making their middle class paychecks(little job skills) with the best pension and benefits the other 98% of the population can only dream about.
The imports concentrated on improving their products while Detroit seems to be more concern on ways to cut corners to not have to cut back on gold plated benefits/saleries/perks.
I love American cars BUT I think Detroit needs to do chapter 11 so than they can have my tax money to rebuild/restucture to compete in the 21 century against the imports.
You don’t give money to your alcoholic/gambling problem/conman inlaw until he/she shows you they have changed their ways.
It would take years to replace the lost jobs if GM were to fail. The transplants simply don’t have the capacity to hire leftover Detroit workers. Not gonna happen. Toyota, Nissan, Honda, and Mercedes are all making labor cuts and are not going to be adding a great deal of workers any time in the near future.
“The American pubic does not want to support Ford, Chrysler or GM. If they did, they would have bought their products.”
I wonder how many American purchasers of GM products were akin to me in 2004 when I averted my eyes from the Toyota I knew I should have bought and, instead, opted for the Ft Wayne-built Chevy Silverado?
I went with the “home team.”
The reviews and “scores” for the Silverado were not bad but were not great, either.
Appeared to be an average quality truck but the components were mostly USA-built and it was assembled within the USA and, as a plus, in the proverbial “heartland” of mid-America parts and repairs are easier and cheaper to obtain, especially in the more rural areas (where I attempted to relocate but jobs are tough to find in the rural areas).
I have written repeatedly in the past of the severe let-downs experienced regarding the near-criminal (in my opinion) inactions from Chevy dealerships AND the attitude of corporate GM regarding the numerous supposedly warranty-covered defects shunned via the oft-heard mantra of “Can not replicate the problem” so I will omit those numerous agonizing details.
Having heard and read of others stating the similar tale regarding lack of care regarding those buying their products, and with folks such as I returning the “favor” by informing as many possible GM customers what they MAY face themselves, how COULD GM possibly make a come-back, even with billions of taxpayer dollars handed over to the over-paid set-for-life rascals at GMC who earn more per year than most of us do in a life-time?
If GMC DOES receive corporate welfare I will continue using every venue possible to continue informing the American car buyer of what happened to me when trying to assist the “home team.”
Just label me disgruntled.
“Free market” is so often used to excuse the class warfare I believe that has been long underway within the USA. The “free market” that has sent an enormous amount of wealth into the hands of the few atop the socio-economic pyramid and is used to excuse the transfer of wealth away from the bottom of the pyramid.
So, what about the “free market” allowing firms to fail?
“Tell us how this is going to change the untenable cost structure the ‘domestic’ producers have STILL not chosen to address.”
Absolutely false. In 2010 labor costs are competitive with the US transplants.
Droid800,
I’ve never heard more “unmitigated bullshit” from the “intelligentsia” in all my life.
The “we will lose 3M” jobs line is Just SO MUCH BLACKMAIL as I’ve ever heard in all my life.
So…here it is…a company who has made a LIVING off of raping their customers….so it is those VERY RAPED CUSTOMERS who MUST PAY, else….why, else…3M jobs will be lost!!
Go to hell to ANYONE who supports such twisted logic…each and EVERY ONE OF YOU pathetic slobs!!
Besides, you got nothin’ coming….any more than those slobs who bought your cars/trucks and had to fight tooth-and-nail to get their piston-slapping SUV repaired.
Blackmail is considered morally repugnant…and it is illegal. Don’t YOU come to me and tell me I owe you anything, got it?
@micpl30,
On direct labor costs *alone* the domestics aren’t even close. Union work rules (nobody but an electrician can change a light bulb), the pensions, the gold-plated health insurance… The list is longer than the Amazon River.
That’s only direct production labor.
Overhead is the proverbial much, much, (much, much) more. Especially in DET.
Beyond the line employee perqs and legacy costs, there’s a whole ‘nother pile of pork once you get to the management level. Then the exec pay and -private jet to Florida commute anyone?- little ‘extras’.
This stuff really is easily gleaned, even from the MSM. You might have to read between the lines, but you don’t need to do a full analysis of GM’s P&L to know it costs them WAY more for them to make a car than, say, US Honda.
@luscious,
You seem a little perturbed. Perhaps you have owned a GM product? Or two?
How many airlines have gone Chapter 11? Damn near every single one of them last I checked. Most are still around. The world didn’t end.
Detroit has to face the music: They have mismanaged themselves into the ground. Failure is not rewarded with tax money guys.
Suck it up and fix yourselves, or die.
–chuck
@Chuck,
Southwest and, IIRC, Mesa. Other than that, yup pretty much all have gone BK at some point.
The best part of the airline “business model” is that if you add up every freakin’ penny that the entire airline industry has put to the bottom line since planes started flyin’ – it has not offset the losses.
The airline business, in aggregate, has not made a profit from day one till right this minute.
Chuck, I think you may have stumbled onto something here…
P71_CrownVic :
JUST BECAUSE GM FILES FOR CHAPTER 11…DOES NOT MEAN THAT THEY ARE “GOING OUT OF BUSINESS”.
There will still be jobs, there will still be suppliers.
Thank you! A lot of people seems to think if GM goes C11 everyone employed (directly or indirectly) by the company will be immediatley laid off, and a giant vortex will open up and suck the Ren. Center, dealers, and every factory into oblivion.
A few points.
1. The Baltic Dry Index has fallen 98% over two months. That’s the indicator showing what it costs to hire a bulk ship per day, to ship stuff around the world.
This fall means that no one is shipping much these days. The average cost of chartering a ship has gone from over USD220.000/day, to USD5.611/day.
What this means is that the world has stopped buying, because there’s no money to borrow to keep buying.
2. Which takes us to GM. If their stuff was worth buying, it’s still tough to get money to buy their stuff. (There’s a reason why GMAC is tanking.)
As GM is presently run by a wrecking crew, and this crew clearly intends to keep wrecking GM, there’s really little point in giving them any more money. The place is thoroughly wrecked as it is.
At any rate, even if they could keep building their crappy, oversized and under-engineered cars, there won’t be money around to buy them with, at rates that people are comfortable with. (The sharp drop in the oil price is due to the fact that the world economy has run into a wall, not because a lot of oil has been found …)
3. The World Economies are headed for a major recession next year, and while we’re in the doldrums we might as well rethink the automotive equation from the bottom up. We’re fond of using the Titanic-analogy when speaking of GM – the Titanic was actually a great ship, but it was run badly because of a desire to beat a record. The true analogy for GM would be of the Tall Ships companies that were competing with steam ships for trade, they probably also sought a bailout at the time.
Yeah…I can think of MANY reasons to buy GM over Ford or Chrysler:
Cobalt:
Sure it is a cheap car…but it gets the best mileage in it’s class – 36MPG. Add to that the astonishing Cobalt SS, and you have a great little car.
G8:
V8, RWD…need I say more?
Lambdas:
The best, most capable, most efficient “Crossovers” on the market.
The CTS:
The CTS and CTS-V are some of the best cars in the world. But that CTS-V…DROOL!
The Malibu:
Bar none, the best mid-sized car on the market.
It is all about perception. Now one could argue what Ford, Chrysler, and GM had to do to obtain that perception, but none the less, GM has taken the BIGGEST strides of any domestic to changing that perception. And the models above support that case.
The US owned tire manufacturing business has nearly disappeared, with Goodyear the only remaining major brand player. Did Detroit do anything to help out Firestone, General, BF Goodrich or Uniroyal? Not a thing, they were happy to see ownership pass into the hands of Japanese and European companies.
Name me one time when ANY of the CEO’s of the 2.8 have made a significant personal sacrifice on behalf of their customers, employees or country. Even now we have Rabid Rick publicly saying that he wouldn’t step down as a condition of a government bailout. Guess what folks, if a bailout happens then it needs to be in the form of a receivership and reorganization with new blood at the top. And while we are at it, tax the living daylights out of the hedge fund creatures like Cerberus which have been wringing the lifeblood out of American manufacturing whilst one-upping each other over ever more massive paydays. The majority of income these hedge fund managers pay themselves has been taxed at the low 15% “long term capital gains rate”, even though they are just getting a paycheck from the company. Check this out: “Alpha Magazine reports the compensation for hedge fund managers each year. The top earner for 2006 received $1.7 billion, the second highest received $1.4 billion, and the third $1.3 billion. That adds to $4.4 billion for three people. The top 25 hedge managers received, on average, $570 million for a total of $14.25 billion.” http://www.epi.org/content.cfm/pm120 Cerberus is the largest of the hedge funds. Why isn’t Cerberus kicking in the cash needed to turn around Chrysler?
I don’t want the companies to shut down and all the workers to be tossed on the street. I do want the executives who caused this mess to be thrown out on their butts. I want the hedge fund vultures to be the ones to pick up most of the tab for fixing the mess.
It’s kind of puzzling. If the CEOs had been able to, they would have moved every single job in automotive manufacturing to low-cost countries long ago. It’s only union and political resistance that has prevented them from doing so – though they have moved as many as they and their lobbyists could get away with.
And now they ask to be saved by tax-payers?
@ John Horner
Name me one time when ANY of the CEO’s of the 2.8 have made a significant personal sacrifice on behalf of their customers, employees or country.
For Red Ink Rick that’s a fair criticism. For Mullaly and Nardelli, I’m not so sure. Both of them came in after the damage was already done (as opposed to Wagoner largely being at fault for GM’s current issues), and have been tasked with making the hard decisions. In Mullaly’s case, he was lured away from a comfortable job at Boeing, and took a huge risk taking the helm of a corporation whose future was far from assured. In fact, I’d say that if there’s any CEO in the automotive industry that actually deserves what he’s getting paid, it would be Mullaly. Unlike Wagoner or Nardelli, he has actually forced Ford’s internal culture to change to match the 21st century automotive business, and he has also been unafraid to sell brands that were preventing Ford from producing the best products that they were capable of.
You probably disagree, but I don’t think its quite fair to paint the CEOs with as broad of a brush as you have. Rick deserves the criticism; Mullaly, not so much.
ive owned GM vehicles all my life and i have never had a problem with any of them except an occasional starter or alternator.. i dont get it… where are all these people that have problems? are they shills for the japs? most everyone i know drives AMERICAN and none of them have problems… puzzling…… i do know my neighbor had a honda oddessy that has had 4 transmissions last count i knew.. another neighbor had a toyota camrey with an engine that had to be replaced due to some kind of sludge problem, another bought one of those turdra pickups and it broke the crankshaft soon after he bought it.hmmmm.. strange isnt it?
If the CEOs had been able to, they would have moved every single job in automotive manufacturing to low-cost countries long ago. It’s only union and political resistance that has prevented them from doing so
+1
Americans only need be as loyal to GM as GM has been loyal to them.
@jakkkflash
Well, I think you’ve got a point — in so much as there certainly have been plenty of issues with imports (amazingly your neighbors seem to have all had the three most common import problems — honda trannys, camry sludge and tundra v8s!!). I also think that you need to think of these things (as Peter DeLo often says!).in the longer term. Honda and Toyota seem to have earned their rep even if it appears to be slipping somewhat with current cars.
I come from a family that always (ALWAYS) drove GM until a fateful ownership period with a Chevy Celebrity… which was such a piece of crap in so many ways that it drove my folks into a Honda. They’ve never bought another domestic since…
I guess my point is that a car company’s rep is like a ship — it takes a long time to turn it around. I don’t think it’s just “shills for the japs” that have made people think that a lot of domestics are crap — it’s that a lot of domestics HAVE been crap. Meanwhile, I’ve been driving my Miata for 19 years as of tomorrow, and nothing has EVER gone wrong. Wait, a pop up headlight module had to be replaced in 1992. Besides that nothing has ever gone wrong. Hope that doesn’t make me a “shill for the japs”
I personally drive a BMW now (which just went through an expensive auto tranny rebuild — another one of those “everyone knows about it” issues) and I’ve been considering a CTS when the time comes to get a new car. I sure as hell hope they’re still around to sell me one when the time comes!
jakkkflash :
The proof is in the pudding. The majority of Americans want an import/transplant model. If Detroit cars have been good all along, then the only explanation is that there is some kind of mass conspiracy against the Bailout 3.
@Demetri
Ehh, not quite. Ford, GM, and Chrysler make up around 53% of the market. Add in Mazda, which Ford owns, and that number goes up to 55%. (I tried to find Volvo figures, but they’re small enough to not matter)
The imports are closing in, but they still only control 45% or so of the market. (the lion’s share of which is Toyota)
But does that include fleet sales?
@Demetri
Yeah, but so do Toyota’s, Honda’s, and pretty much every other brand.
Automakers don’t break fleet sales out.
jakkkflash
ive owned GM vehicles all my life and i have never had a problem with any of them except an occasional starter or alternator..
Uh-oh! Some guy on the internet who can’t even spell the word “Camry” right has posted contradictory information to my own experience! Some of it might actually even be true! I’d better disregard EVERY GM CAR FAILURE I’ve ever experienced (all $12,000 worth) and run right out for a Cobalt!
Also: ha! Did you REALLY just say “Japs”? OMGLOL1945!!
ajla :
Thank you! A lot of people seems to think if GM goes C11 everyone employed (directly or indirectly) by the company will be immediatley laid off, and a giant vortex will open up and suck the Ren. Center, dealers, and every factory into oblivion.
You forgot the locusts.
And the equal number of people who seem to believe that writing Detroit a multi-billion dollar check will suddenly cause every factory to start cranking out highly-desirable, efficient cars (I am picturing a Honda Fit with a Saturn badge on it) that Americans will stampede out and purchase, instead of simply delaying our exact current situation a couple months or so.
Look guys the sky is NOT falling…
The world has collectively put it’s credit drunk ass behind the wheel of the Rolls-Royce. And driven it into the swimming pool.
Take your personal guess as to length and depth of the recesssion/depression we’re entering. The allusory picture I’m sharing is one of the Marianas Trench, but I digress…
Ford and Chevy will always sell trucks. There’s still plenty of gubment types who ‘need’ to roll up in a YuSuburbaHo. There’s police cars, and rental cars, and corporate fleets, and lions, and tigers. Oh my.
Someone will always buy a Jeep, a Vette, or a Viper. Just not so many. Sorry.
It ain’t gonna be pretty. But C11, reorg, firing pretty much every white collar, and a whole lotta layoffs is the only chance they have of remaining solvent.
But the DET orgs will always have some market.
Droid800 :
I’m positive that taking out fleet sales puts them well below 50% though. The Bailout 3 sell huge percentages to the fleets. There are a lot of articles about this on TTAC. Check it out:
https://www.thetruthaboutcars.com/chrysler-to-cut-fleet-sales-to-just-20-percent/
https://www.thetruthaboutcars.com/fleets-in/
Crown Vic
You need to look at the road teat mileage of Cobalts. They are at the bottom in mileage in nearly every comparison. Edmunds got 25mpg (high tank of 29) from an XFE. Yippee! I think the Focus gets better mpg (though worse than Civic and corolla) in virtually every test.
GM is just good at massaging the EPA test (opinion). Well at least they are good at something.
EPA mpg is a very vague guideline for the real world.
Just some thoughts buddy.
Bunter
Ooops, road test mileage.
Too much bailout talk?
So, the small 3 need a taxpayer bailout because American families working for them need a form of socialized government welfare? I.e. above average pay (compared with the transplants) for below-average products (again, witness the terminal market share decline)?
Wow. Who’d have thunk that the last desperate bid to prop up failing private corporations would be emotional appeals for social welfare for same? Cause, you know, it’s for the children.
C11 is the better answer, Autoextremist. Anyone should be able to see that clear enough.
C11 is the only answer for GM. They are bankrupt and a bailout just buys them a little more time. The billions required to get them to the coming sales recovery and then earning enough profits to pay off all the debt, is more time then we as a country can give them. They have a proven track record of talking that recovery is just around the corner. The new SUV’s, new truck line, the new Malibu, the Volt, the Cobalt, etc, have all been the next new product that would save them. The major shakeup that C11 will provide is needed. Well that and purging of the upper ranks are the only way that they can be saved.
I’m not a Big 2.5 hater. Far from it, we currently own two American brand trucks. And I have purchased only one non-American nameplate car in my lifetime, a used 1965 Datsun Roadster. But I have owned too many poor quality and engineered products from the big 2.1, taking losses to get rid of them. People talk about how they are getting better, but look at how long GM built V-6’s with gaskets that started leaking, if you were lucky, while still in warranty! I was not one of the lucky ones. I feel that my family has already done our part to bailout Detroit.
When GM goes C11, Ford has to follow. Ford will not be able to compete, if GM gets the advantages that C11 provides. MOPAR is dead man walking, but Jeep will survive. At least I hope, I need a source for replacement parts for my 2007 Wrangler!!
While I’m not poo-pooing any and all calls for GM to go the C11 route… the problems with that option are real. Here are some headlines from Bloomberg News today:
GM May Enter `Roach Motel’ in Bankruptcy, Gimme Credit Says
GM Bankruptcy May Mean Liquidation for Former Parts Unit Delphi
GM Said to Struggle on Asset Sales on Concern It Won’t Survive
But there is also this:
Auto Union Reluctant to Cede More in GM, Ford, Chrysler Bailout
One possible way for C11 to work for GM still involves the government: Most market experts seem to agree GM would have a big problem trying to get debtor-in-possession funding – particularly in the current financial environment. But if the government provides that funding, it might be doable. Still, the impact of a GM bankruptcy on suppliers and the potential reaction of the consumer is dangerous territory.
Steve Biro
Man, do I hate those lazy people down in Tennessee, Alabama, Mississippi, and South Carolina who are just sitting and not building cars that people actually want to buy.
Oh wait, we can, and do, build cars down here. Cars people want, and frankly, the fact that the HQ is a Germany or Japan, as opposed to Michigan, has absolutely no bearing on my life, or my buying decisions. Which is probably why I have a Fit.
When the domestic fanboys come out blasting the insults and racial slurs at Japanese and the AMERICANS that buy cars with japanese names on them, they only reenforce these peoples desires to not have anything to do with the Big2.3 and the type of people the still buy those products.
The type of people that still refer to people as “japs” are generally assumed to also call folks niggers, spics, ragheads, etc. IS there any wonder why GM and Ford can’t sell jack-shit on either coast of this country!
It really does not help that GM and Ford like to use “America” and patriotism to sell their products. “This is our country”! This kinda makes a lot of “us” say who is the “our” that they are referring to?
This train wreck has been years in the making and TTAC’s reporting of it did not create the impending crash as the locomotive fell off the track. However, folks in the U.S. and elsewhere that need cars will still continue to buy them and somebody’s going to build them. Bankruptcy means only that the “deal” is going to change somewhat for those who were riding on this train.
It is sad to watch it happening, but there were those in the 1970’s, 80’s and 90’s who were screaming loud and hard that something drastic needed to be done in Detroit. Chrysler’s original failure was the canary in the coal mine, but no one in Detroit wanted to notice, so continued along their merry path. As the best selling car in the U.S. became a Japanese nameplate, Detroit decided they could get by on the truck market and got their friends in Washington to help them out by ensuring that trucks remained the same old 1970 POS which required little investment to remain profitable.
I think that GM or Ford might survive, but their survival will require some really bright and dedicated folks who are currently in short supply in the Detroit environs.
As a nation, we might also wonder about where the lack of strategic planning came from, since it was not invented by the auto industry. Oh, wait, maybe it’s also the fault of “investors” who want to be lied to by idiots like Wagoner et al; they pretend to have an organization which will take the company into the future, and the investor pretends he doesn’t know better.
“Even though we as a nation don’t seem to have the stomach for hard work and sacrifice any longer – hell, I’m not sure those words and their meanings are even in the lexicon of vast swaths of our population – we must get tougher in the midst of this global economy, and we have to steel ourselves for the kind of battles we’ll face.”
I’ve said this before, but it still bugs me. Peter’s writing smacks of ageism: somehow, gods walked the earth in 1962 and it was a golden age of powerful, decisive, supermen who dreamed big, talked loudly and killed bears with their teeth.** Somehow, everyone spawned after that point is a lilly-livered weakling.
Must have been something in the water.
It’s very much angry old man syndrome. I’m sure people in 1962 were saying that America had totally devolved since 1932. Every generation thinks this, I’m sure that, when I turn 50, I’ll do the same thing: music sucks nows, kids are ruder now, there’s more crime now, the sun is dimmer and the stars don’t twinkle. Except that it’s not the case. People are people, and largely haven’t changed their attitudes in centuries.
Yes, there’s no leadership in Detroit. Yes, America has moved away from them. Guess what? There are still larger-than-life leaders in American industry–quite a number–and they do demand and delivery success and innovation. But here’s the trick: they don’t work at GM, Ford or Chrysler; they work and Google, Microsoft, Apple, Oracle and hundreds of others. I’m sure the next generation of business leaders is waiting in the wings in whatever’s coming next, but I think the problem isn’t America, or people in general, but that the existing leadership at GM, Ford and Chrysler has been dysfunctional for years, and the kind of up-and-coming talent that might have helped had long since fled elsewhere.
** There is a newly-enabled middle class as a result of the postwar boom and subsequent f_cking of the the rest of the world, but that’s an exception, not the rule. Peter grew up in economic and social conditions that were largely unsustainable. But people were still people.
To imply that people just aren’t willing to work anymore ignores that a lot of people have it much, much tougher even finding gainful employment now than they did in Peter’s day. When he was a young buck, it was relatively easy for dropout wageworker to walk in to any given company and get a good enough job to support a family of five; today it’s much, much harder to get a job even with post-secondary education. That’s one reason why the unions fight tooth and nail: the kind of jobs these people have just flat don’t exist anymore.
If Peter was just getting out of school and/or was in technology and not automotive or marketing, I think his take would be somewhat different.
psarhjinian : Pretty good thoughts. I got sick of “sweet Pete” and his attitude long ago.
Here’s a weird thought.
What if we take the #$(^% 50bil and put it in a fund to help those who DO get laid off (50k per for 1 million people) and let the Debt3 work out their problems?
It would provide help to bridge to new jobs (I frankly dout it will be close to 1 mil in need) and the money stays out of the paws of people who clearly have little ability to do anything usefull with it.
Feel free to pass this on to Barry, Nancy and Co.
Any thoughts?
Thinking alternatively,
Bunter