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Riding GM To The Poorhouse
New York, 3:10 AM
Mon Dec 7
13 posts in the last 24 hours
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Riding GM To The Poorhouse |
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11/14/08
I see more foreign vehicles on the road than domestic. The only domestic I ever see is the occasional Buick driven by elderly people, or a Ford Mustang. I don't think GM, Ford or Chrysler can ever really shed that mantra of "Crap" they earned back in the late 80s.
A bailout toward domestic eco-friendly vehicles won't change anything. Japanese and Germans are way ahead of the curve when it comes to fuel efficiency and auto technology.
11/15/08
11/14/08
11/14/08
11/14/08
Fuck Steve Jobs. What they need are the people that buy Steve Jobs's stuff on plastic to be able to get credit again. They need the freewheeling debt market of 2003-2008 to return, and it never will.
11/14/08
11/14/08
Right now, it doesn't even matter. This is about more than having the right product - even Honda and Toyota sales are falling. The bottom line is that without cheap credit, the overall demand for cars in North America is vastly less than what the current output of the auto industry puts on the market.
They need to shrink their business to avoid just burning through a bailout, so the idea of saving jobs is just wrong. Those jobs are gone anywhere, unless you plan on giving out "go buy a car, but ONLY FROM GM!" credits to consumers.
11/14/08
I know it props up a lot of other things. But is that really the best solution? To keep sponsoring a type of business that fundamentally doesn't work? Why not just allow the manufacturers to fail, and let other smaller businesses take up the slack, appropriate their machinery and facilities, and start to make products that can be competitive?
Ad revenue will come again from the new businesses. Probably in greater quantity for smaller, less expensive, non-television media outlets.
11/14/08
I know it props up a lot of other things. But is that really the best solution? To keep sponsoring a type of business that fundamentally doesn't work? Why not just allow the manufacturers to fail, and let other smaller businesses take up the slack, appropriate their machinery and facilities, and start to make products that can be competitive?
This.
Of course, the REASON the business fundamentally doesn't work is because the cost base is too high. Because automaking is a blue-collar job that paid well! UAW workers were getting 29/hr., medical, and pensions.
Japanese competitors that have built factories ON AMERICAN SOIL pay less than that and offer far fewer benefits, allowing them to have serious margin advantages in important sectors like small cars. For a while Detroit's SUV profits/advantages masked their competitive deficiencies, but that's over now.
We've propped it up for some time because we wanted to preserve the blue-collar ideal of jobs that you could reasonably support a family on in America without higher education. That's not our model. You cannot do unskilled labor in America and live an American lifestyle; you are competing with India and China and Taiwan and someone living in a grass house who makes a hundred bucks a month can do your job! American manufacturing simply cannot compete against the supply of low-cost labor in emerging economies because domestic politics and compensation expecations in our labor force make it impossible, and anyone that isn't in the educated service model has been and will be left behind.
11/14/08
I still think it's more complex though. From what I understand though, the whole business has always been based on american consumption and irrational success (like most other businesses). Isn't the model something like... every american buys a new car every 3 years? That's what afforded the auto makers such great profits. I don't think it's entirely the fault of unions. Unions are sort of parasitic creatures, which exist to drain as much blood from the host as the host can stand. So when auto makers enjoyed really inflated profits, the unions were able to get more out of them.
11/14/08
It's been based on consumption, yes. But it's really all part of the same long essay you could write on how GM is no longer a functionally competitive entity.
1.) Too much production
2.) Bad vehicle design
3.) Reliance on a flawed suburbanized model of car-based transportation
4.) Exposure to commodities, notably oil, that are exploding in price
5.) Untenable cost structure with the autoworkers unions and suppliers' unions
11/14/08
11/15/08
11/14/08
Fuck GM. One of the various experts said the feds should step in and bail out the big 3. But, with that they should also oust everyone in top mgmt. I absolutely agree. They've put out crap products for years. They've put all their eggs in the big truck/SUV basket, and now millions of people are going to suffer horribly as a result of their poor decisions.
11/14/08
11/14/08
That's hardly the only reason. Toyota and Honda create efficient, modern vehicles and their sales are collapsing. This is not just a design problem, it's like a pork company waking up one day and suddenly half of the population decided to go kosher overnight.
11/14/08
What I can't get with this situation is why the companies just don't declare bankruptcy. Airlines have filed Chapter 11 and manage to survive--granted, they're dragging their nails through flesh, but they survive.
I'll just default to the trusty "don't buy things you can't afford." Companies, people, countries, it's a universal mantra.
11/14/08
The thought is that a bankruptcy would be deadly, and this is actually GM propaganda, but the thought is that consumers wouldn't buy cars from bankrupt car companies.
As for actual bankruptcy, since GM requires so much commercial paper, so many bond issues, etc. it would be very hard for them to operate in an environment where credit was hard to come by in ANY capacity.
11/14/08
11/14/08
I wish I could come up with something to say about this, but I'm completely speechless.
11/14/08
OK, so maybe-probably it'd be less, but you get what I mean.
11/14/08
11/14/08
And it wasn't just a sales person cold call - it was from a professional house-o'-cold-calls (you can always tell by the background noise). That and I could smell the desperation.
If friggin' Toyota dealers are struggling enough to sell cars that they are cold calling former buyers, the whole auto industry is hurting.
11/14/08
Come on people, get out there and spend some money!
11/14/08
cue fetal position curl here.
11/15/08
Damn.
11/14/08
11/14/08
Part of me sez GM, Chrysler and Ford should be allowed to fail if the businesses aren't being run efficiently, aren't creating quality products that people want to buy, aren't keeping up with the times. You know, survival of the fittest and all.
But millions of people will be out of jobs if these idiots go under. So, we'll have more housing foreclosures because people won't be able to pay their mortgages, more people out of work and unable to find work, and consumer confidence taking more of a nosedive. Then I think that they should get some help.
This entire bailout plan is confusing me. The goals and definitions keep changing, and no one is really explaining where the money is going, and has gone. And now American Express is seeking A Very Special Bailout.
Where can I apply for mine?
11/14/08
[www.npr.org]
11/14/08
11/14/08
I think it's the flawed finance / government system causing the biggest problem here.
11/14/08
11/14/08
11/14/08
11/14/08
Damn it.
11/14/08
11/14/08
Sounds good to me.
11/14/08
God, I'm so tired of this tired, misinformed line of thinking. GM et al built big vehicles because that's what people wanted when gas was $1/gallon. Toyota and all the other "genius" carmakers couldn't build SUVs and full-size trucks fast enough to catch up. Now the credit market collapses and gas spikes and it's suddenly GM's fault for building what people wanted to buy? Puh-lease.
11/14/08
Sorry, I wouldn't buy any GM product right now. Toyota, on the other hand, makes great cars that last forever. And if GM didn't know that the price of gas might go up someday, they were pretty stupid.
11/15/08