Steve Parker

Steve Parker

Posted: November 24, 2008 11:22 PM

Eleven Other Countries with Big Auto Industry Problems

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What this post does, I hope, is create awareness of how huge and crucial the car-making business is throughout the world. Here's some of what's happening (mostly with GM) in Europe and Asia, two markets outside the U.S. hit hardest by the slowing automobile business:

1- Poland

General Motors has been making informal approaches to the Polish government for financial help. Officials in Poland also are bracing for huge job losses, maybe as many as 10,000 in their auto sector. Suppliers in Poland are likely to be hit hard because most of their products are exported to western Europe, where production and sales are falling sharply as a result of the global economic slowdown. Renault dealerships will remain open in Warsaw (more on that below).

2- Belgium

GM is also having informal discussions with the Belgian government in Brussels about receiving financial assistance for keeping GM facilities in that country open. Also, the vice chairman of GM's union said he was speaking to GM management in Belgium about approaching the Belgian government for funding to support the carmaker's plant in Antwerp. He said the talks focused on pushing forward GM's Antwerp factory production start date for a Corsa-based small SUV, which has been postponed by a year to 2012. An investment of €100 million (USD $127,000,000) to €120 million (USD $152,000,000) will be needed to bring the launch date of the vehicle forward to January 2011.

3- Spain

Another country where GM is trying to open discussions with the government in Madrid to help keep their production facilities in Spain open and producing cars.

4- Great Britain

British Member of Parliament Andrew Miller said there had been contact between GM and the UK government. He said the talks likely involve support for funding to develop environmentally friendly vehicles. Said Miller: "If the recession continues and it becomes necessary for GM to have financial support in the UK, it is something I would support." Miller represents Ellesmere Port in northwest England, where GM builds the Astra compact car.

5- Sweden

GM has made contact with the government in Sweden, the home country of GM's Saab brand. Jan-Ake Jonsson, Saab managing director, said both Saab and Volvo have talked with the Swedish government. He declined to say whether Saab has asked for money or loan guarantees in the talks (yeah, GM buying Saab really worked out well for both parties).

6- Germany

Germany is home to GM's biggest European brand, Opel. Discussions and meetings there between the government, suppliers and GM management have been fast and furious. On November 17, GM Europe President Carl-Peter Forster, Opel Managing Director Hans Demant and Klaus Franz, chairman of Opel's works council, met with Germany's Chancellor Angela Merkel in Berlin. Franz said Opel had to assume that its cash flow would be frozen if GM applied for Chapter 11 bankruptcy protection in the US. "At the moment we're solvent, but we need a state guarantee to refinance our investments," he said, referring to 20 new models GM Europe plans to introduce by 2012.

7- Hungary

Renault has pulled its company-owned dealer network out of Hungary and plans to do the same in the Netherlands by year-end. The decision is part of the carmaker's bid to focus its Renault Retail Group (RRG) in about 25 major urban centers across Europe. "The majority of Renault Retail Group's sites should be located in large cities, where real estate is expensive and it is difficult for independent dealers to operate," RRG General Manager Gilles Messier told Automotive News Europe. Hungary is also home to many supplier companies in the automotive sector.

8- Czechoslovakia

Thousands of supplier jobs could be cut in central Europe as the global slowdown in auto production hits the region. "It could be 10,000 jobs as a worst case scenario," said Jiri Kyncl, a spokesman for the Czech auto association, SAP. Suppliers in the Czech Republic are also, like those in Poland, likely to be hit hard because most of their products are exported to western Europe for use in car-making plants which are cutting production. "We will be cutting jobs. It could go to about 10 percent," said Petr Gabriel, the finance director at Belis, a maker of pressed metal components that employs 150 people at a plant in Ceske Budejovice, 150km south of Prague.

9- France

Home to Renault/Nissan, the company already has closed about 60 dealerships since 2007 as part of leader Carlos Ghosn's austerity program. At the same time, the group has reinforced its presence in key urban areas. It opened new showrooms near Bordeaux in France; near London and Liverpool in the UK; in Zaragoza, Spain; in the Czech capital of Prague and the Polish capital of Warsaw. Renault wants its company-owned dealerships to control a minimum 75 percent of brand sales in the urban areas where it is present.

10- China

In China, carmakers are asking for government assistance, but they don't want cash to bail them out; what they seek are new rules, regulations and some protection for their sector of the economy, according to Business Week. That support, they say, could come in the form of subsidies for technology development, easier-to-meet standards and better protection from intensifying competition; in other words, some good old-fashioned protectionism!

11- Japan

Japan is officially in a recession and most all Japanese carmakers have slowed production of most models. In the U.S., Japanese and Korean "captive imports" have also cut back on production. Japan has an interesting way to "prime the pump" for their home market carmakers, though. Every year, Japanese car-owners must bring their prides-and-joys to an approved testing facility for an expensive and nit-picking inspection. Since chipped paint or a dented bumper is enough to keep a car or truck off the road, many people get tired of paying big bucks for these inspections, and wind up buying a new car. The non-passing cars are sent to Southeast Asia and sold as used cars. This also explains, for those of you who have visited Japan, why almost every car on the road appears to be in showroom condition.

Follow Steve Parker on Twitter: www.twitter.com/autojourno

What this post does, I hope, is create awareness of how huge and crucial the car-making business is throughout the world. Here's some of what's happening (mostly with GM) in Europe and Asia, two marke...
What this post does, I hope, is create awareness of how huge and crucial the car-making business is throughout the world. Here's some of what's happening (mostly with GM) in Europe and Asia, two marke...
 
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Steve:

You're right about the car inspection regime there. And a lot of the older cars that no longer pass inspection end up in Russia.

But it also has to be said that having a car in high density urban areas like you see in Japan (especially Tokyo) make no sense because of a well developed and safe subway system. Moreover, when you buy a car in those areas, you have to prove that you have secured a place to park it. But parking spaces are scarce enough that many folks get on the train to get to where they have their car parked. It's bizarre.

Cars make sense in Japan in rural areas like where I used to live in Shizuoka Prefecture, but I can understand how Japanese officials in a resource poor country would want folks to use the trains in the larger cities and thus use the laws you wrote about to discourage auto ownership.

By the same token, however, that makes their automakers more susceptible to international economic vicissitudes.

    Favorite    Flag as abusive Posted 09:22 AM on 11/26/2008

Add Canada to the list
GM is also talking to the Canadian government about help to keep their Canadian plants open.
Bankruptcy of US auto makers would hit Canada hard also.
Particularly hard hit would be the province of Ontario which is already in worse shape than it has been in over 50 years due to a slow down in manufacturing and expecially in exports to the US.

Although lower oil prices are being felt in Alberta and Saskatchewan, they are not low enough to cause problems yet. So many oil related projects were under development that it was impossible to staff them. Some projects have been deferred, making the pace more sane. The economies of Alberta and Saskatchewan together with oil off the coast of Newfoundland are now the biggest drivers in the Canadian economy, even at $50/bbl

    Favorite    Flag as abusive Posted 12:57 AM on 11/26/2008
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The automobile as we know it is a legacy problem that is now way out of date.

It's too wide
It's to heavy
It's too dangerous
It's too complicated
It's too poluting
It's to congesting
It's too expensive to buy
It's too expensive to run
It's too expensive to maintain/repair
It''s too expensive to insure

We could, for the most part, be running around, in a redesigned electric wheelchair

    Favorite    Flag as abusive Posted 10:27 PM on 11/25/2008
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In Germany " we need a state guarantee to refinance our investments," he said, referring to 20 new models GM Europe plans to introduce by 2012". You have got to be kidding! They can not sell the models they have now and they are going to come out with TWENTY (20) models in 2012. This assumes they can live through 2009 and 2010 of course. In no way do I want my tax dollars shoring up this bunch of TOTALLY clueless dimwits......

    Favorite    Flag as abusive Posted 09:29 PM on 11/25/2008

Gas and oil mega trillion dollar corporations need to return 50 billion dollars to the auto industry, and return the super battery patent used in the 1990's electric car built by GM. Exon/Shevron bought the patent, and all these fantastic rented electric race cars were called back in and crushed. Even though they worked much better than gas burning autos, Exon/Shevron demolished the competition, and have until recently made record billion dollar(s) profits, making them the richest corporations in the world.

Remember the old electric street cars? The oil industry lobbied to have them removed in favor of gasoline powered vehicles. Tillions of dollars in profits later, until most recently, massive profits have been gained by this conspiricy to control and monopolize prices and energy sources.

Now that American auto production industries are going under, the great oil barrons and robbers are hiding out of sight and out of mind. They do not want GM to retool and make electric and gas fuel efficient vehicles - that would mean less profit for the Cheney/Bush Administration, their business buddies, and for their families.

In conclusion, the rich oil barons need to show their good faith by returning the electric battery patent to the Government as a gift to the tax paying citizens of the United States of America, and to bail-out the auto industry with no strings attached.

    Favorite    Flag as abusive Posted 06:22 PM on 11/25/2008
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With only about 20% of the market share, GM has eight brands as oppose to Toyota's single brand.
While Toyota continues to push GM out of the competition, GM continues to make cars that it does not sell. It makes no sense. Of course GM can always depend on Uncle Sam for a bailout because GM is a very large employer and it would affect a dispproportionate number of employees if GM were to fail.

Now, Uncle is backed into a corner while GM strong armed it for money. It is moral blackmail.

It would be unfair to a lot of peopel if the government does not bail out GM. However, if the government bails out GM, the government endorses GM business practice. A bail out is not call for restructure which means that GM can and most likely will eventually fail. Bad business practice, bad management, lack of directions and unrealistic expectations are the recipes for failure.

    Favorite    Flag as abusive Posted 05:15 PM on 11/25/2008
- MajorKong I'm a Fan of MajorKong 381 fans permalink
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Toyota has 3 brands (in the US). Toyota, Scion and Lexus.

    Favorite    Flag as abusive Posted 10:37 PM on 11/25/2008
- tssent I'm a Fan of tssent 34 fans permalink

PART 2
It doesn't take a rocket scientist to figure out where the little man's
wage increase went.

Similarly, it doesn't take a genius to know better that a CEO -- make that
3 CEOs -- shouldn't be flying corporate jets to D.C. in the middle of a recession
to ask for money. No one in his right mind would do that except someone who
considers the little man too stupid to notice or say to anything about it.

How about this, how about CEOs agreeing to work for $20k a year, each, for
the next 10 years while the little man gets wage increments each of those
years?

Where is it written that because a man is born with greater intelligence than
others he should not only make more but work overtime to pay off lobbyists
to make all he can even if it makes poor people and uninsured people?

The gluttony of corporate America is an embarrassment. It wasn't enough
that it raped the little man, the middle class and turned a blind eye to the
rape of the Constitution, it then disassemble whole factories and sent these
to China and Malaysia where $5.15 would buy it not an hour's work but
2 week's (slave) labor.

    Favorite    Flag as abusive Posted 03:10 PM on 11/25/2008
- Herkybird I'm a Fan of Herkybird 3 fans permalink
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It does not take a rocket scientist to figure out that a golfer by the name of Tiger Woods needs to be getting $7mil from GM to use his name either when taxpayers will be footing the bill! How bout Tiger gets zilch from GM?? Same goes for Citi. And for any other athlete getting money from a corp on a bailout list.

    Favorite    Flag as abusive Posted 01:02 AM on 11/26/2008
- tssent I'm a Fan of tssent 34 fans permalink


I say forget any idea of a bailout for the Big 3
and force a sellout instead.

That's right. A sellout.

A sellout of the Big 3 to someone like Nissan
Nissan or Toyota who anyone at all who knows
hot to make a car, manage money and earn a
profit without contributing to the gutting the middle
class in the process.

Isn't that what happens when you're inefficient
and incompetent? You get bought out ?

And we tell Toyota or Nissan, whoever ends
up owning the 3, "You can't fire anyone while
you're re-tooling Detroit's archaic assembly
lines."

Anyone wanna bet they wouldn't jump at the
chance? Anyone wanna bet they couldn't pull
it off?

They can still call them Fords and Chevys and
Dodges, just make 'em like Nissans and
Toyotas.

Jim Lacey
Austin, Texas

    Favorite    Flag as abusive Posted 01:47 PM on 11/25/2008
- SShaw490 I'm a Fan of SShaw490 37 fans permalink

If Toyota or Nissan want to buy 'em out, show them the money. Only problem is, they don't have any. Nissan and Honda are both saying they're going to need Japanese bailout money next year and Toyota just lowered its annual earnings estimate 70% for this year. So maybe those bastions of efficiency aren't in any better shape than our companies.

Actually, our companies would be in fine shape if they didn't have the costs they're carrying for retiree benefits and health care costs. Take that out of the picture - in other words, make a comparison that's apples to apples, and GM would be wondering if they should buy Toyota, not the other way around.

    Favorite    Flag as abusive Posted 02:29 PM on 11/25/2008
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You seem to be saying that the Union is at fault. For insisting on these legacy expenses...

I am not trying to start up another argument, but if these old union contracts are the cause of the problem, doesn't it behoove the UAW to SEE this and make some sort of concession regarding it??

Michale.....

    Favorite    Flag as abusive Posted 02:48 PM on 11/25/2008
- tssent I'm a Fan of tssent 34 fans permalink

PART 1
I would like to know the source of your information on Toyota and/or Nissan
requiring "Japanese bailout money." I've Googled the Internet far and wide
and don't find a single suggestion that they need help.

Further to such a suggestion, the connection they have to "lowering their
annual earnings estimate 70% for this year" has everything to do with
Americans not being able to buy a bicycle -- let alone a car -- and nothing to
do with inefficient automobiles, passe engineering, gutton management
or running around in corporate jets in the middle of the worst recession in
70 years because they're counting as a given that Elitist D.C. will bail them
out.

There are countries (Denmark, Sweden, Norway) in plenty of numbers to
prove that you can support national health 100%, have zero poor people,
all of whom are college/university educated and degreed and none of whose
names you hear associated with the recession. What is they know that we
don't?

The minimum wage was $5.15 in 1997 and CEO's made 25x as much as
their employees. For 10 years later, though minimum wage remained
frozen, CEO's continued to receive an average 37.5x increase, so that
by 2007 they were raking in 400x the minimum wage.

    Favorite    Flag as abusive Posted 03:10 PM on 11/25/2008
- BuckeyeGal I'm a Fan of BuckeyeGal 4 fans permalink
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Note second paragraph.
“The severity of the current situation is like nothing we have seen before,” Mitsuo Kinoshita, a Toyota executive vice president, said. “The global financial crisis has affected the real economy, and the auto markets, particularly in developed countries, are contracting rapidly.”
On Thursday, the chief executive of rival Honda Motor, Takeo Fukui, called on the Japanese authorities to intervene and help drive down the yen, which has risen to about 98 yen to the dollar, from about 120 a year ago.
Such pleas for government help have also been echoed by Detroit’s Big Three, which are lobbying Congress for more aid atop $25 billion in low-interest loans already promised.
The global slowdown has struck Toyota just as it finishes introducing a full lineup of vehicles, including larger eight-cylinder models like its Tundra pickup truck, in a bid to overtake G.M. as the world’s largest automaker. Thursday’s results suggested the slowdown was hurting sales of Toyota’s entire lineup, including popular, fuel-efficient models like its hybrid Prius and Camry sedan."
http://www.nytimes.com/2008/11/07/business/worldbusiness/07toyota.html?_r=1&partner=rssnyt&emc=rss

    Favorite    Flag as abusive Posted 10:36 PM on 11/25/2008
- Herkybird I'm a Fan of Herkybird 3 fans permalink
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But Jim, do we REALLY know who owns what any more?? And who's parts go into an American made(really?) car?. As far back as 1986 when I bought a used 1979 Jeep Grand Cherokee I found that the motor was made by Ford...the Carb by GM and the tranny by Chrysler.(not necessarily in the correct order...but all 3 were involved) True they were still all American owned companies at the time. Who knows where the main components of these so called American made cars are from now? My 2005 Jeep had a Mercedes tranny. WOW...great huh? NOT!!! It had less than 1,500 miles on it and they had to overhaul it due to a defect in design! So no matter who the American brand is you could also be bailing out any number of foreign manufacturers. Nissan..To­yota...Hon­da...KIA..­..Hyundai.­....Merced­es...VW...­.the list goes on.

    Favorite    Flag as abusive Posted 01:20 AM on 11/26/2008

The Jeep was an extraordinary example; AMC did indeed outsource many of its parts. Transmissions were Chrysler Torque-flites, Carbs were GM Rochesters, and many other parts were outsourced. I do think AMC made their own engines, though.

    Favorite    Flag as abusive Posted 08:20 PM on 11/26/2008

"(yeah, GM buying Saab really worked out well for both parties). "

Actually it hasn't worked out as badly as many think, for either party-- Saab was a family-owned company that would have ceased to exist without GM's development cash. Now many of GM's most promising new cars are based on a saab platform design: the G6, the new Malibu, etc.

it's funny how often people say that GM should dump saab, then add that they should start focusing on smaller and midsize cars.

    Favorite    Flag as abusive Posted 01:37 PM on 11/25/2008
- BBackSoon I'm a Fan of BBackSoon 38 fans permalink
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I am a car guy. I have lived and breathed cars since I was 10. But I have to ask just how many cars do we need? I agree that these are massive corporations and the loss of all those interrelated jobs would be massive but this can’t go on!

I worked at a car plant for a year in ’96 and ’97. That plant built around 1000 SUV’s and mini-vans 5 days a week and the occasional Saturday. That is around 50000 vehicles a year. Where do they all go? That was only one plant and from what I heard it was a small one.

Where do they all go? Do we really need them?

I will hate to see the Big 3 gone but every industry must evolve or die and Detroit is known for fighting change it doesn’t want.

    Favorite    Flag as abusive Posted 01:25 PM on 11/25/2008

You have a good idea of the problem: cars are getting less "disposable" and have relatively higher initial costs compared to before. Insurance is very costly, something no one mentions. Depreciation of vehicles that last longer, require less maintenance, is not as severe. What does a "saturated market" look like?? We're seeing it. After all, GM cannot cut costs to stop losing $1 billion per month..they can only sell their way into profitability, and it won't happen. It won't happen, because the market for vehicles is essentially saturated. I have a 2000 Ford Ranger, no electric windows, no GPS, manual transmission. I got it with 9000 miles on it, and now have 134,000 miles. Consumers like me, and there are tons, are hurting with the cashflow. The marginal utility of buying a new F-150 for $23,000, marked down to $18,000, is simply not there. I can be very happy driving my Ranger, which =always= starts, never had any mechanical problems but -one- wheel bearing and a brake job. I don't need GPS, MP3, all the other add-ons...they have no utility! I would have waaaay higher insurance, worse fuel economy.

No money for GM IMO. Or the others.

    Favorite    Flag as abusive Posted 12:10 AM on 11/26/2008

Legacy costs = Retiree = 87 years old = Alzheimer's patient = pays for own health care = 41 years with GM. Who pays your dad's pension? Why shouldn't mine get what he was promised? Do you really want his care on the government's back?

    Favorite    Flag as abusive Posted 11:38 AM on 11/25/2008

"Do you really want his care on the government's back?"

Yes. I do. It's better than he's on your back. It's better for him, it's better for you, it's better for me and it's better for all of us. In an ownership society we need to stand up and own the responsibility for society as a whole.

    Favorite    Flag as abusive Posted 12:19 PM on 11/25/2008
- charleydan I'm a Fan of charleydan 2 fans permalink

False. If one cannot generate his retirement and health insurance in a free capitalistic state (have not had one here since the early 1900's.)they will get far less going through a politicians hand. Hawaii's fund is already broke. Oregon, well, some patients there got handed a pill and said, easiest way to go, your care is over the state can not afford it.

That is socialistic for you and loss of freedoms. No thanks, I will make my own choice. Even when I am short on funds, I will decide.

It has been the bureacracy that has run health costs up to outrageous. In the 50's most did not have health insurance and did just fine. Government has been adding regulations since and well, you got government care. Just they do not totally pay for it yet.

Most of what you got has been through printed money. Next year the financial disaster caused from inflation of printed money. Well, just remember, that came to you via government also. There is nothing Obama can do to save economics, but he can spend and cause hyperinflation or disinflation. Now standing at 17 trillion debt with only a 42 trillion GNP. Brought to you via government, total war only 500 bn, human services 800bn. yearly and growing. Not counting retirement services.

    Favorite    Flag as abusive Posted 10:11 PM on 11/25/2008

Its cheaper for everyone involved if the government funds healthcare for every US citizen, without making a profit on it like Health Insurance companies. Its cheaper for taxpayers, businesses, and hospitals. Its much more efficient as well. We are only 100 years behind the rest of the world on this.

    Favorite    Flag as abusive Posted 01:40 PM on 11/25/2008

I agree 100%. My main point is that real people who have no control over their own situation are dehumanized by being called "legacy costs" or "pension obligations". We can't just hang them out to dry.

    Favorite    Flag as abusive Posted 02:09 PM on 11/25/2008
- Archie1955 I'm a Fan of Archie1955 13 fans permalink

In actual fact in answer to your question, yes, I really want his care to be on the government's back. Not only because the care of society's most fragile is simply reasonable payback for all the years of service to the economy that people like your father put in. As well, if his care and the healthcare of all others were under the auspices of the government the automobile companies would be much more competitive with foreign auto makers who don't have those costs attached to every car they make. You see most other countries, first world or third, have national, universal,­healthcare and guess what they aren't Communist nor ever expect to be. No, they are capitalist democracies with common sense and moral scruples!

    Favorite    Flag as abusive Posted 02:04 PM on 11/25/2008
- LeftRight I'm a Fan of LeftRight 106 fans permalink
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To be totally honest, YES, I would LOVE to have his health care on the govt's back! Just like I would like to have my own father's health care and my grandmother (Alzheimer's, osteoporosis, dementia) and my own and my children! The fact of the matter is that single payer health insurance is the way to go!!!

    Favorite    Flag as abusive Posted 08:12 AM on 11/26/2008

You left out Canada. There is a serious risk of massive job loss (some already scehduled with plant shutdowns) in Southern Ontario due to closing of Big 3 plants, and there has been some talk from Ottawa about some kind of bailout, maybe

    Favorite    Flag as abusive Posted 11:31 AM on 11/25/2008
- JackWOrf I'm a Fan of JackWOrf 10 fans permalink

Time for a 3-million THUNDERCAR march on Washington! I'm getting sick and tired of hearing these dorks in Congress, and even Obama, complaining about how the horrible CEO's have had the AUDACITY to come to Washington on CORPORATE JETS! Oh-mi-God!!! How extravagant.

Helloooooo-oooo. There are 11,000 U.S. corporations that use private jets. Most large corporations (and the Big 3 are among the largest) REQUIRE their top execs to take corporate jets. The reasons are: time-efficiency, security, fast access across global locations, ability to talk by phone or e-mail during flights, ability to have meetings in-flight, ability to sleep in-flight. Does anybody suggest that OBAMA give up Air Force One because the U.S. government is 8 guh-zillion dollars in debt?

After watching "Thundercars Indiana" last night, my suggestion is that the 3 million auto-workers whose jobs are on the line should descend on Washington in their Thundercars. And their Harleys. And in anything else.

Then these Congressional MORONS would not be so fast to ignore the Big 3. Hey. Don't like corporate jets? See how you like 3 million Thundercars on the front steps of Capitol Hill. A-HOLES!!!

    Favorite    Flag as abusive Posted 11:21 AM on 11/25/2008
- krabby I'm a Fan of krabby 5 fans permalink

Well said!!!

    Favorite    Flag as abusive Posted 12:13 PM on 11/25/2008

"There are 11,000 U.S. corporations that use private jets."

And how many of those are asking for $25 billion with no strings attached?

;-)

    Favorite    Flag as abusive Posted 12:20 PM on 11/25/2008
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Actually, they are begging for 50 Billion..

25 Billion they were already getting, but want to use it for bailing them out, not for the new green technology it was meant for.

And another 25 billion on top of that..

Michale.....

    Favorite    Flag as abusive Posted 12:41 PM on 11/25/2008

You can do all those things in first class commercial flights.

    Favorite    Flag as abusive Posted 01:42 PM on 11/25/2008
- rjcrane I'm a Fan of rjcrane 15 fans permalink

I totally agree. It gets tiring having to correct all of the misconceptions about the US auto industry because idiots keep repeating old out-dated talking points. I heard Robt. Reich, an economist complain again that these companies need to start making more fuel efficient cars that everyone wants to buy. How utterly stupid is that statement? First most Americans don't want tiny fuel efficient small engine cars except because of high gas prices. What Americans really want to drive are bigger safer and more comfortable cars. But you can't make big cars as fuel efficient as smaller ones because there will always be a trade off between size and power and better fuel efficiency. Secondly, the Big Three already make more fuel efficient vehicles than most of the other companies combined. And Ford has the largest lineup of cars with the highest safety ratings too.

What's missing from this discussion is that many more Americans who have auto company stock in their portfolios will lose big time too if any one of these companies go bankrupt. The amount of this loss will affect more Americans than just those employed with the car companies or their suppliers and could be in the billions or trillions. And this loss will affect other sectors of the economy and tax revenue adversely.

RJ Crane, topplebush.com

    Favorite    Flag as abusive Posted 02:07 PM on 11/25/2008
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The fact is, the auto companies PUSHED the "big comfortable roomy" cars (trucks and SUVs) for one reason and one reason only.

Because the profit margin was larger..

It is that "push" that causes Americans to "want" those vehicles..

We saw the effects of marketing and lack thereof with the EV1 program that GM killed.

Make no mistake. What the American public "wants" is molded by the auto companies.

And, as our current predicament indicates, it was very short-sighted of the auto companies.

Michale.....

    Favorite    Flag as abusive Posted 02:54 PM on 11/25/2008
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Seems the word "Freedom" is used quite extensively except when it comes to freedom of choice for an American citizen who has the right to buy what they want with their own money.

    Favorite    Flag as abusive Posted 05:09 PM on 11/25/2008
- charleydan I'm a Fan of charleydan 2 fans permalink

Before one talks bailout to anyone. Weather auto, banks, and mortgage holders. The list goes on.

Maybe one should really seek the truth of what our economy is doing.

1.We owe 6 trillions abroad.
2.There is appoximately 32 trillion in circulation that the world wants to come back to us so they can get paid. That means more exporting and fewer imports. Or deflate the dollar.
3.In bailouts done and planned so far. We now have a national debt of 17 trillion.

America generates about 42 trillion GNP yearly.

Bottom line the USA is broke.

That is all external, shall we talk internal debt. Consumers have spent so much they can not take on anymore debt. In the last great depression we had a 250% debt to GNP. Right now it is 350% of GNP. And the government is overly debted this time, too.

Now tell me, does any bailout matter. Personally, my opinion is we are going down. What percautions have you taken or do you even have a clue? You can blame all this on government printing money to fullfill your socialistic wishes, weather they be humanistic welfare or corporate welfare.

    Favorite    Flag as abusive Posted 10:26 PM on 11/25/2008
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@SShaw490

}}}}
Do you care that GM sells more cars than any company in the world, and has done so for the last 77 years?
{{{{

Since it hasn't prevented them from failing and crawling in their private jets to beg and whine to the American people for handout, what's to care about???

}}}}}}
The US auto industry is going to be reshaped
{{{{{{{

And that is EXACTLY what I have been advocating all this time.. They need to "reshape" or die...

You use "reshape" I use "innovate" but it's all the same...

The auto companies will FAIL if they proceed business as usual...

I am glad we finally find common ground...

Michale......

    Favorite    Flag as abusive Posted 09:43 AM on 11/25/2008
- adamsmith3 I'm a Fan of adamsmith3 17 fans permalink

We'll bail them out without making them dismantle their crippling legacy costs. You hear Democrats in congress whine and whine about corporate jets and CEO pay, but not a peep about the obstinance of the UAW in refusing to concede to a reduction to the ridiculously over-paid workers (with pensions that don't exist for anyone else anymore). On top of that, we'll now tell them what kind of cars they have to make, making them have to spend more money on improving technology. If this course happens, then we'll be bailing them out again later because we'd be throwing money at a failed business model; a model with unrealistically high wages and pensions that prevents global competition.

    Favorite    Flag as abusive Posted 09:31 AM on 11/25/2008
- SShaw490 I'm a Fan of SShaw490 37 fans permalink

Barack Obama has specifically said he thinks we should help them with their "legacy costs" (i.e. benefits that are being paid to retirees under the UAW contract) and help them with retooling, but only if they are going to restructure their business.

The US auto makers estimate that an average UAW member costs them about $70/hour - but the actual pay to the UAW member is more like $28, and when you add that employee's health care cost and an allocation for future pension, he's about a $41/hour cost. The difference between the $41 and $70 is the "legacy costs", or benefits that are currently being paid to retirees under the UAW contract. If we pay that out of the government coffers, and simultaneously insist there are controls on executive compensation, those auto makers will be back in the black and will be very viable, solvent enterprises. The fact that they can break even at all is a miracle with the legacy costs they're covering.

US auto makers are crippled by retirement obligations that reflect the way the world used to be - when a person would go to work for a company, work there for 35 years, retire at 55 or 60 with 70% pension and paid health care benefits until Medicare kicked in. The world doesn't work like that any more - now, your company provides a 401K and some kind of contribution match and if you retire early you can by Cobra or just take your chances.

    Favorite    Flag as abusive Posted 09:57 AM on 11/25/2008
photo

PE Obama has also put forth a pre-packaged Bankruptcy program for the auto companies as well...

Michale.....

    Favorite    Flag as abusive Posted 10:18 AM on 11/25/2008

You are absolutely right, take away the healthcare for all the retirees, and, starting tomorrow, we'll pay all the workers .25 an hour, because that's what they do in china. Why don't you accept what is paid in a third world nation? If it's a dollar an hour, hey, you are just living too grandly, and need to cut back. Oh, and just so you know, unions have taken a 50% reduction in wages. Would you do that?
Why is it that right-wingers want people in this country to work for slave wages? Well, everyone except themselves anyway, and then they don't want any taxes taken out at all.

The right wing wants to destroy unions because unions, or micro-democracies, have been the ones to stand up to the corporate masters, and win.

    Favorite    Flag as abusive Posted 11:27 AM on 11/25/2008
- EinChicago I'm a Fan of EinChicago 33 fans permalink

"You are absolutely right, take away the healthcare for all the retirees, and, starting tomorrow, we'll pay all the workers .25 an hour, because that's what they do in china. Why "

Works for Toyota.


I agree teh UAW unions earned their benefits. The problem is slimey companies like Toyota manipulating state constitutions to avoid unionization and create an unfair playing field. Any person buying a Toyota with one hand and then defending the unions with the other is a hypocrite. Pure and simple.

I agree the unions need to be defended, but there needs to be sufficient punitive defensive steps taklen against slimy companies like Toyota who manipulate that unfair advantage to level teh playing field.

    Favorite    Flag as abusive Posted 11:52 AM on 11/25/2008

The government should fund all healthcare in the US which would make healthcare cheaper, and more organized. Other countries don't have healthcare tied to employers. If we had universal government funded non-profit healthcare, employers would have a lot more money, people would have a lot less stress, and america would be healthier.

    Favorite    Flag as abusive Posted 02:25 PM on 11/25/2008
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