x_atlas0
Well-Known Member
Since we are a fairly diverse group here on the board, I was wondering what some of the opinions were about the proposed US automaker bailout.
Bailouts?
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blumax
(deceased)
Auto Industry Bailout
Bailing Detroit based auto makers with taxpayers money will not correct the underlying problems that exist--they must.
Elect Chapter 11 for all Three--reorganize, send all members of present Board of Directors home, re-populate Boards with knowledgable "car people" with no Union Reps, re-negotiate UAW contracts that provide cradle to grave benefits (has been a noose around "rust belt automakers" neck and pocketbook since I was there 50 years ago), get Havaad educated (oxymoron) " Bean Counters" out of top management as they are not "car people", change top management leadership to best Engineer they can find within or without their present population. Then, re-introduce European models of GM and Ford cars to the US. If done now, quickly and surgiacally there may still be a chance of survival for the domestic car-makers.
Bailing Detroit based auto makers with taxpayers money will not correct the underlying problems that exist--they must.
Elect Chapter 11 for all Three--reorganize, send all members of present Board of Directors home, re-populate Boards with knowledgable "car people" with no Union Reps, re-negotiate UAW contracts that provide cradle to grave benefits (has been a noose around "rust belt automakers" neck and pocketbook since I was there 50 years ago), get Havaad educated (oxymoron) " Bean Counters" out of top management as they are not "car people", change top management leadership to best Engineer they can find within or without their present population. Then, re-introduce European models of GM and Ford cars to the US. If done now, quickly and surgiacally there may still be a chance of survival for the domestic car-makers.
acat2002
Well-Known Member
Alright, you asked for it.........
Although my first thought would definately be to let them fail, there is obviously a bigger picture to be seen.
Regardless of where you sit on the issue, a strong case could be made to stabilize the weak US automakers. Aside from the obvious cost of further wealth erosion in the stock market (both in short term and long term), one would also have to consider the cumulative cost of a 1) a HUGE spike in unemployment and the taxpayer cost associated with benefits, 2) further weakening in credit markets as the newest wave of unemployed inevitably fail to make their household debt payments and the corporate debt payments that will become write-downs, 3) further weakening in consumer confidence. Bottom line is a failure of the US auto industry will at a minimum push any economic recovery out two more years (in my very unscientific and unsupported guess). The more important (and alarming question) is....as our country evolves into a service&knowlege-based economy, will the lack of global manufacturing presence and might weaken our ability to defend ourselves in the event of (god-forbid) another war? We, as a country are simply not as efficient at large scale manufacturing as we used to be. Whether you blame the cost of labor (Unions), NAFTA, or whatever.
Okay, so now that we've established the pro-bailout position, some of the most succesful innovations were born out of previous failures. This country needs to wake up and take some bitter medicine. That will mean some extreme short term pain, but hopefully this will be sort of a slash-n-burn afterwhich we can grow a new "crop" of perhaps highly specialized car companies, smaller, more individually-focussed. (as an aside, read this interestting viewpoint on auto specialization
http://seekingalpha.com/article/109701-the-case-for-making-bigger-cars?source=headline1 )
As much as I hate to concede, we're moving to a socialist government. We, the filthy, faceless huddled masses, have proven tha we cannot responsibly handle credit, so the good ole government will step in and regulate for us. My kids will have free healthcare and an 85% tax rate when the enter the workforce in 2026. "it will be like Sweden, but will a less attracttive general population".
I'll sum it up by stating for the record that I am hoping for complete and utter failure of the US auto industry. I have hated american cars for as long as I can remember. From my parents shitty International Scout, to every time I see a Pontiac Aztec I'm reminded why I buy German cars. I'm willing to take my lumps with a terrible economy for the next 4-5 years so that we can evolve into a better economic nation.
I'm not an economist and don't have stats and numbers to back up my thoughts. THis is just one guy's personal opinion.
Although my first thought would definately be to let them fail, there is obviously a bigger picture to be seen.
Regardless of where you sit on the issue, a strong case could be made to stabilize the weak US automakers. Aside from the obvious cost of further wealth erosion in the stock market (both in short term and long term), one would also have to consider the cumulative cost of a 1) a HUGE spike in unemployment and the taxpayer cost associated with benefits, 2) further weakening in credit markets as the newest wave of unemployed inevitably fail to make their household debt payments and the corporate debt payments that will become write-downs, 3) further weakening in consumer confidence. Bottom line is a failure of the US auto industry will at a minimum push any economic recovery out two more years (in my very unscientific and unsupported guess). The more important (and alarming question) is....as our country evolves into a service&knowlege-based economy, will the lack of global manufacturing presence and might weaken our ability to defend ourselves in the event of (god-forbid) another war? We, as a country are simply not as efficient at large scale manufacturing as we used to be. Whether you blame the cost of labor (Unions), NAFTA, or whatever.
Okay, so now that we've established the pro-bailout position, some of the most succesful innovations were born out of previous failures. This country needs to wake up and take some bitter medicine. That will mean some extreme short term pain, but hopefully this will be sort of a slash-n-burn afterwhich we can grow a new "crop" of perhaps highly specialized car companies, smaller, more individually-focussed. (as an aside, read this interestting viewpoint on auto specialization
http://seekingalpha.com/article/109701-the-case-for-making-bigger-cars?source=headline1 )
As much as I hate to concede, we're moving to a socialist government. We, the filthy, faceless huddled masses, have proven tha we cannot responsibly handle credit, so the good ole government will step in and regulate for us. My kids will have free healthcare and an 85% tax rate when the enter the workforce in 2026. "it will be like Sweden, but will a less attracttive general population".
I'll sum it up by stating for the record that I am hoping for complete and utter failure of the US auto industry. I have hated american cars for as long as I can remember. From my parents shitty International Scout, to every time I see a Pontiac Aztec I'm reminded why I buy German cars. I'm willing to take my lumps with a terrible economy for the next 4-5 years so that we can evolve into a better economic nation.
I'm not an economist and don't have stats and numbers to back up my thoughts. THis is just one guy's personal opinion.
acat2002
Well-Known Member
.....also, there is a whole other side to this argument where our own government hamstrung the 'big' three by CAFE standards. Ford and GM had several cars that sold very well in Europe and S.America. Ford also has a state-of-the-art "green" factory in Brazil where it is completely almost completely automated by robots cutting production costs to ridiculously low levels.
CAFE standards, UAW and as Blumax aptly stated companies being run from the top-down by bean-counting nerds, not car people are perhaps the biggest reasons for the BIG, ehem, sorry 'Lil Three inevitable faliure.
but to redirect, the original question was "should we bail them out", not "how to restructure". Good idea for another thread perhaps.....
CAFE standards, UAW and as Blumax aptly stated companies being run from the top-down by bean-counting nerds, not car people are perhaps the biggest reasons for the BIG, ehem, sorry 'Lil Three inevitable faliure.
but to redirect, the original question was "should we bail them out", not "how to restructure". Good idea for another thread perhaps.....
chicane said:It's a load of crap. I don't see BMW or Toyota plants in the U.S. needing a bailout. I would appreciate a bailout for my E9 though.
Hey, there's an idea. We could put in for some earmarks! Or, how 'bout a $25k stimulus package for each E9 owner!
The following is from a book called 'Play to Win' by Larry Wilson - a book which I highly recommend to everyone.
---------------
James O'Toole, professor of management at the University of Southern California, studied General Motors' leaders in the 1970s. He attended their meetings, interviewed managers, and researched the company. As a result of his extensive work, he developed a list of operating assumptions, the underlying (made-up) maps shared by GM senior managers in the 1970s:
* Managers should be developed only from the inside.
* GM is in the business of making money, not cars.
* Success comes not from technological leadership but from having the resources to quickly adopt innovations successfully introduced by others.
* Cars are primarily status symbols. Styling is therefore more important than quality to buyers who are, after all, going to trade up every other year.
* The U.S. car market is isolated from the rest of the world. Foreign competition will never gain more than 15 percent of the domestic market.
* Energy will always be cheap and abundant.
* Workers do not have an important impact on the production or product quality.
* The consumer movement doesn't represent the coners of a significant portion of the U.S. public.
* The government is the enemy. It must be fought tooth and nail every step of the way.
* Strict, centralized financial controls are the secret of good administration.
------------------------
Obviously a lot has changed since the 1970s but if prof. O'Toole's observations of GM back then are correct, I suppose that these attitudes and assumptions are part of the reason why the US car industry is in dire straits in 2008.
The question about whether the industry should be helped is simple for me: Yes it should - simply because the US cannot be without a car industry!
It becomes a lot more difficult to answer the question what this 'bailout' should look like. I tend to think that the management of the 3 companies carry the bulk of the responsibility for current situation ... possibly because of attitutes similar to those described above .. so a bailout should either remove these individuals or at least make sure that they start to listen to the market and indeed wake up and realise that the world is changing - rapidly!
---------------
James O'Toole, professor of management at the University of Southern California, studied General Motors' leaders in the 1970s. He attended their meetings, interviewed managers, and researched the company. As a result of his extensive work, he developed a list of operating assumptions, the underlying (made-up) maps shared by GM senior managers in the 1970s:
* Managers should be developed only from the inside.
* GM is in the business of making money, not cars.
* Success comes not from technological leadership but from having the resources to quickly adopt innovations successfully introduced by others.
* Cars are primarily status symbols. Styling is therefore more important than quality to buyers who are, after all, going to trade up every other year.
* The U.S. car market is isolated from the rest of the world. Foreign competition will never gain more than 15 percent of the domestic market.
* Energy will always be cheap and abundant.
* Workers do not have an important impact on the production or product quality.
* The consumer movement doesn't represent the coners of a significant portion of the U.S. public.
* The government is the enemy. It must be fought tooth and nail every step of the way.
* Strict, centralized financial controls are the secret of good administration.
------------------------
Obviously a lot has changed since the 1970s but if prof. O'Toole's observations of GM back then are correct, I suppose that these attitudes and assumptions are part of the reason why the US car industry is in dire straits in 2008.
The question about whether the industry should be helped is simple for me: Yes it should - simply because the US cannot be without a car industry!
It becomes a lot more difficult to answer the question what this 'bailout' should look like. I tend to think that the management of the 3 companies carry the bulk of the responsibility for current situation ... possibly because of attitutes similar to those described above .. so a bailout should either remove these individuals or at least make sure that they start to listen to the market and indeed wake up and realise that the world is changing - rapidly!
blumax
(deceased)
Have a look at the profiles of present day
Members of the Boards of Directors at GM, Ford & Chrysler--any car people or top Engineers visible?--soap makers, College Presidents & similar types, yes--now contrast that with BMW & Toyota Board Members--just a hint of many underlying reasons for those melting icebergs that are adrift--and not due to AlGores "global warming" theory.
Many statements from the report of the PhD who had conducted the study of GM in the 70's--as referenced by DJ Simca--were already showing across the industry--especially at GM who then enjoyed an overwhelming 50% market share--and their corporate arrogance was visible everywhere that--GM knew best--even when I spent my nearly 7 years in the Detroit auto environment from 1955 to 1962. The public be damned--we know better attitude--was well entrenched.
The attitudes of just build a shiny "throw away appliance", etc., combined with the lack of Managements backbone to stand up to unrealistic UAW demands had started spreading everywhere by the time I decided to leave and enter a different field--and were among the several reasons I chose to resign from a good position in that industry--as even then--I had recognized them to be a very short sighted business value system that would have other than positive long term consequences. They have certainly come home to roost!!
Members of the Boards of Directors at GM, Ford & Chrysler--any car people or top Engineers visible?--soap makers, College Presidents & similar types, yes--now contrast that with BMW & Toyota Board Members--just a hint of many underlying reasons for those melting icebergs that are adrift--and not due to AlGores "global warming" theory.
Many statements from the report of the PhD who had conducted the study of GM in the 70's--as referenced by DJ Simca--were already showing across the industry--especially at GM who then enjoyed an overwhelming 50% market share--and their corporate arrogance was visible everywhere that--GM knew best--even when I spent my nearly 7 years in the Detroit auto environment from 1955 to 1962. The public be damned--we know better attitude--was well entrenched.
The attitudes of just build a shiny "throw away appliance", etc., combined with the lack of Managements backbone to stand up to unrealistic UAW demands had started spreading everywhere by the time I decided to leave and enter a different field--and were among the several reasons I chose to resign from a good position in that industry--as even then--I had recognized them to be a very short sighted business value system that would have other than positive long term consequences. They have certainly come home to roost!!
chicane
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dang said:chicane said:It's a load of crap. I don't see BMW or Toyota plants in the U.S. needing a bailout. I would appreciate a bailout for my E9 though
Hey, there's an idea. We could put in for some earmarks! Or, how 'bout a $25k stimulus package for each E9 owner!
I'm down with that. Just think of the contribution to the economy in manpower and supplies. I heard one commentator suggesting that instead of bailing out special industries, just give each taxpayer $100,000...doesn't sound all that crazy now.
abe3.0CSi
Well-Known Member
The Titanic is sinking...let it sink and not allow more to go down with the ship. Unless, they restructure eliminating their biggest overhead..union labor that is not adapting to our depressed economy...its going to be the tax payers who are going to pay for it. Let them go bankrupt...companies do that all the time and they are still around. If they keep the same structure...you will have the same thing happen to the US auto industry as what happend to the steel industry. When times get better, then they can ask for more $$ and benefits.
abe
abe
pamp
Well-Known Member
Bail out
Don't get me started!....
Why is it that when an industry is in trouble, non-union management types rally to the defense of their short sighted, over-paid, and incompetent brethren? "Sure, let the working man take it in the shorts, as long as I don't lose that golden parachute!" The size of your unpaid college loans should not bestow a "right" to an oversized income. Pay for performance doesn't seem to apply, while we who turn wrenches for a living are considered to be ignorant slaves to those who have the benefit of higher education. Where is the "We" in "We the people" these days? Solidarity... There are so many who cannot continue on to college for many reasons that are self evident. Our work is what generates the bottom line buck. Please show me the money generated by paper...or not. Unions are here to keep things in balance. Sure, there are excesses on both sides of this coin. But without the ability to negotiate, the men with the benefit of power, will abuse that power, to their own benefit, every time. (Read history, any book.) Have we all been asleep for the last eight years? Last go around was Reaganism, voter Alzheimer's? The unionist, Lech Walesa ("Solidarity"), heralded as a hero, while air traffic controllers and other union workers in our own country were vilified. Hypocrisy on a national level. Many died in this country (unionists) for work rules that most of us now take for granted. The next time you hear someone complaining about the excesses of unions, ask them if they would like to live without that which the unions made possible -- a 40 hour work week, paid over-time, paid holidays and vacations and medical insurance( being imbattled, as it were.) If you choose the 60- to 80 hour week, and work for yourself, than so be it. Just don't expect your employees to feel your pain. Unless you kick in on their e9 repairs.
The problems with the economy today, in my opinion, are the direct result of the price of energy, plain and simple. The current drop in the price of the barrel will not undo the rape of the last two to three years. In addition, can anyone say "SUV?" All manufacturers jumped on this band wagon. CAFE restraints you say? Can't sell your Escalade ? Wow, I feel for you. The SUV craze is dead and there is a void, nationally, in the ability to produce sensible, efficient, and cost effective transportation for the masses. My daily driver sedan looks like a golf ball due to all the soccer moms who switched from mini-vans to over-sized behemoths to keep up with the Jones'. Who needs a massive 4X4 in the sunshine states? Did the guys who paint the parking lot space stripes change their size dimensions to accommodate this switch in "consumer preference?" I get pretty ragged to see the new dents that appear on my daily driver, almost weekly, that line up to high ground clearance vehicle door levels. But, I rail and ramble...
The economy will take time to recover from the money that is "missing" due to Big Oil, Wallstreet, and the "war on terror." Where is the money? Not in your 401K, this much is for sure!
Please forward the e9 stimulus package petition for my signature. Hit up Halliburton and Exxon-Mobil for the cost of the bail out(s). (Plus contributions to my D.O.A. 401K.)
Realistically, my vote goes with the "No Bail Out " crowd. That applies to Wallstreet as well. Leave AIG et al, to their own devices. We boomers have been truly screwed... by ourselves. Let the suffering begin...
Don't get me started!....
Why is it that when an industry is in trouble, non-union management types rally to the defense of their short sighted, over-paid, and incompetent brethren? "Sure, let the working man take it in the shorts, as long as I don't lose that golden parachute!" The size of your unpaid college loans should not bestow a "right" to an oversized income. Pay for performance doesn't seem to apply, while we who turn wrenches for a living are considered to be ignorant slaves to those who have the benefit of higher education. Where is the "We" in "We the people" these days? Solidarity... There are so many who cannot continue on to college for many reasons that are self evident. Our work is what generates the bottom line buck. Please show me the money generated by paper...or not. Unions are here to keep things in balance. Sure, there are excesses on both sides of this coin. But without the ability to negotiate, the men with the benefit of power, will abuse that power, to their own benefit, every time. (Read history, any book.) Have we all been asleep for the last eight years? Last go around was Reaganism, voter Alzheimer's? The unionist, Lech Walesa ("Solidarity"), heralded as a hero, while air traffic controllers and other union workers in our own country were vilified. Hypocrisy on a national level. Many died in this country (unionists) for work rules that most of us now take for granted. The next time you hear someone complaining about the excesses of unions, ask them if they would like to live without that which the unions made possible -- a 40 hour work week, paid over-time, paid holidays and vacations and medical insurance( being imbattled, as it were.) If you choose the 60- to 80 hour week, and work for yourself, than so be it. Just don't expect your employees to feel your pain. Unless you kick in on their e9 repairs.
The problems with the economy today, in my opinion, are the direct result of the price of energy, plain and simple. The current drop in the price of the barrel will not undo the rape of the last two to three years. In addition, can anyone say "SUV?" All manufacturers jumped on this band wagon. CAFE restraints you say? Can't sell your Escalade ? Wow, I feel for you. The SUV craze is dead and there is a void, nationally, in the ability to produce sensible, efficient, and cost effective transportation for the masses. My daily driver sedan looks like a golf ball due to all the soccer moms who switched from mini-vans to over-sized behemoths to keep up with the Jones'. Who needs a massive 4X4 in the sunshine states? Did the guys who paint the parking lot space stripes change their size dimensions to accommodate this switch in "consumer preference?" I get pretty ragged to see the new dents that appear on my daily driver, almost weekly, that line up to high ground clearance vehicle door levels. But, I rail and ramble...
The economy will take time to recover from the money that is "missing" due to Big Oil, Wallstreet, and the "war on terror." Where is the money? Not in your 401K, this much is for sure!
Please forward the e9 stimulus package petition for my signature. Hit up Halliburton and Exxon-Mobil for the cost of the bail out(s). (Plus contributions to my D.O.A. 401K.)
Realistically, my vote goes with the "No Bail Out " crowd. That applies to Wallstreet as well. Leave AIG et al, to their own devices. We boomers have been truly screwed... by ourselves. Let the suffering begin...
If I had to vote, I'd vote for no bailout. I get really tired of hearing about all the businesses that would be affected if the "big" three go under. Propaganda! Besides, if businesses that rely so heavily on one customer go out of business or suffer badly, who's fault is that? Isn't that the "all your eggs in one basket" thing? I work in the auto dismantling industry, am I also considered one of those businesses that would be affected? Who knows, but if we are its because it makes the number sound better.
I think it has more to do with big companies that can't or don't change with the times. I worked for HP for a long time, long enough to see it change dramatically over the years. It went from a large company that did things its own way, a special way for the most part, to a huge company that tried its best to be like all the other big computer companies. Is this a bad thing? Its never nice when things are taken away from you, but if you back up and look at the big picture and the reason things are being changed, it makes sense and is easier to take. HP changed because it had to to survive in these times. Lay employees off, offer early retirement, severance packages, drop product lines, whatever it takes to stay competitive. How has the auto industry changed to stay competitive?
I think it has more to do with big companies that can't or don't change with the times. I worked for HP for a long time, long enough to see it change dramatically over the years. It went from a large company that did things its own way, a special way for the most part, to a huge company that tried its best to be like all the other big computer companies. Is this a bad thing? Its never nice when things are taken away from you, but if you back up and look at the big picture and the reason things are being changed, it makes sense and is easier to take. HP changed because it had to to survive in these times. Lay employees off, offer early retirement, severance packages, drop product lines, whatever it takes to stay competitive. How has the auto industry changed to stay competitive?
abe3.0CSi
Well-Known Member
This got so nasty at the slw113org (230/250/280sl) that they had to close down the thread. It brought the worst of some of us...including myself, in what is one of the most civil sites I participate in. Keep in mind that there are many points of view....just happens that my view is the right one 
abe
abe