Journal nizo's Journal: Why aren't the other American automakers in trouble? 16
Article:
Less than three weeks ago, while the Detroit Three were begging a skeptical Congress for financial relief, Honda unveiled a new assembly plant in Greensburg, Ind. Anybody wondering who stands to gain from terrible conditions in the U.S. auto industry need only visit the small town near Indianapolis.
Article:
There's already a "new Detroit" flourishing in states like South Carolina, Alabama, Mississippi, and Tennessee--where Toyota, Honda, Nissan, BMW, Mercedes, and Hyundai turn out cars built by Americans for Americans. These mostly nonunion factories have sprouted during flush times and could get a bigger boost as the Detroit 3 shrink--or become 2 or 1.
Are we sure we want to hand billions more dollars to people who obviously have no idea how to run automobile companies? Again, I think that the best use of the money would be to help people losing their jobs to get new ones, not hand cash to the idiots in charge of these companies.
personally... (Score:2)
I'm sick of the government rewarding the incompetent assholes who are causing untold misery to working people; the bankers, auto execs, etc.
Bad management gets a big company in trouble, they lay off workers, management all gets fat bonuses. Then when the "too big to fail" company is about bankrupt, government steps in and hands them incredible amounts of money while the laid-off workers are losing their homes.
A couple things (Score:2)
Second, the big 3 are asking for a ton of money, no doubt. However, unlike the wall street barons who asked for free money, all the money that Detroit has asked for is in the form of loans. Detroit wants to pay back the money but has no way to raise the money immediately. They are asking mo
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Nationalizing General Motors could potentially lead to a better run corporation, and could be a far better investment for the US government.
I'm not convinced nationalization is such a great idea, either. When's the last time you said, "hey, this x is broken, let's get a Government committee to fix it?" Me neither.
A nationalized corporation will likely not be run well. It has every incentive to run worse, actually. In a capitalist company, if they do well the executives get paid well, and if they do poorly they're supposed to get fired. In a nationalized company, the executives get paid regardless of performance, and their potential pay
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If the infrastructure of manufacturing is not owned domestically then it becomes difficult to convert in a crisis...
I think that boat has already sailed (literally, with our factories onboard, over to China). I am heartened that other car companies are opening plants here in the US though; that means they are under our control, if the serious need arises (imminent domain springs to mind). However, my guess is we are banking on the fact that the rules of engagement have changed; WWIII won't be fought as much
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Personally I think loans to the "Big 3" are a good idea, but what's needed isn't the useless crap they're spouting for "plans for the future" ("Electric cars nobody can afford!" "More red cars!") but how they're planning to keep what happened to them this time from happening again ("we're going to rebuild our assembly lines so that we can retool them quickly to meet shifting consumer demand instead of continuing to churn out crap that nobody wants because it's the only thing we can build without closing the
yep (Score:2)
While I didn't hear the full story; CBC radio reported this morning that one of the "foreign" car manufacturers (I think it is Toyota) just announced that they will build a new car manufacturing facility here in Ontario, Canada. Meanwhile the other 3 are asking for handouts.
As for GM, they've had amazing benefits payouts to their employees (which is certainly one small factor in their continuing financial crisis, that was going on long before the bank failures, I remember talking to one retired GM worker m
Labor Unions (Score:2)
The key phrase in your article is "non-union". They can afford to pay fewer workers lower wages to build cars.
Labor unions led directly to the offshoring of automobile production. They did this several ways: by forcing the Big 3 into anti-competitive pricing allowing the imports to slip in, through causing manufacturers to indirectly outsource the production of parts overseas, and through direct outsourcing of labor such as the maquiladoras.
Labor unions rely completely on solidarity: everyone's a m
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Well some of them must be paying decent wages, because they are opening plants right here in the US.
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The definition of "decent wages" varies by region. We also don't know the full extent of their benefits packages, which add up to a significant amount of the expense of an employee (especially unions.) If a factory were to open up here, I know they'd be overburdened with people willing to work for $12-16/hr, even though the going union rate might be $30-40.
By way of example, my wife just posted an ad in the local classifieds for a "yard worker" for her boss. They were looking for a high school kid to
moof (Score:1)
The "other American auto makers"? You must've meant Tesla. They're in trouble too.
So are even the much-worshipped foreign makes (including foreign made cars assembled here). Nobody's buying cars in America right now. Neither domestics nor foreigns. For example: [talkingmotors.com]
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In Europe, Mercedes is not luxury-only. I've seen that misconception a lot with people from the US. They only sell the Luxury version to you guys. Mercedes does have middle-class models and even a line of "small" cars, called the A-Class. My wife used to have one like that. Fine little car.
Porsche, however, does make only luxury cars and they are crying out loud because they don't know how to survive.
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Interesting, MB apparently exports here only their C-class and up, and that there is also an A-class. Thanks for the perspective.
But I've heard that in Europe you/they always get the better small cars (or better versions of them), even from American names like Ford. I wonder why. And I wonder if that's part of the reason Americans buy fewer small cars.
I don't understand what's going on with Porsche, but apparently while everyone is down 30-some to 40-some percent, they are claiming to be up 46% [ft.com] I guess from
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Well, let me fill in your lack of knowledge ;-) Just kidding. About 10 years ago, I had the luck to talk with the guy responsible for sales at VW US for the Jetta. He explained me that your ideas of how a car should be are completely out of touch with the technology used in Europe. He told me that the only car Jetta they were able to sell in to sell in the US was the VR6. That's the biggest engine, I think 6 Cylinders and 250HP. A 1.6l Jetta would never sell, even if it has 120HP. No American would w
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BTW, I started a reply to this, but it was getting long (and off-topic here), so I bloated it into a long-winded (as is typical of me!) JE. The summary is that, while I think there are additional factors, I believe you are very right in your observations and conclusion.
BTW... GM & Ford are GLOBAL AUTOMAKERS (Score:2)
Let GM & Ford sell foreign assets to fund USA operations.
I am sick of all this corporate/plutocrat-welfare/socialism/communism.
If they are to big to fail, they will not fail, unless they are a poorly run monopoly.
Smaller car, insurance, finance... companies with partnerships, technology, "Open" standards/design... is best for Capitalism economics, more competition, faster innovations, better quality....
Let the big three automakers bail their own incompetent asses out by liquidating GLOBAL assets.
Welfare
What we should have done... (Score:2)
We don't need to *nationalize* the big three.
1) Loaned the UAW enough money to buy the big three automakers outright, and use right of eminent domain to do so. That's like 8 billion, a fraction of the 15 we just shelled out.
2) *Insure* the UAW's pension fund, saying - go ahead and invest the pension fund in the car industry right now, and if you don't break even we'll cover your pension obligations.
This has the *advantage* that it leaves investors out-to-dry, which is exactly where they *should* be