GM facts and fiction

[mistral blue]

Originally Posted by GreatPumpkin

BTW - they've already been approved for a $25 billion loan. They now want an additional $25 billion! The first loan was supposed to be help for building more fuel effecient cars. Shouldn't a viable, realistic business plan have already been put in place to address that very issue? If a company is to survive they can't just continue to do business as usual. To many companies out there fail to realize that simple idiom.

Perhaps the auto companies should be allowed to use the $25b "fuel-efficiency" loan any way they see fit with a promise to refund it in short order, with interest. They would get the $$ they so desperately desire and a final opportunity to prove themselves (or hang themselves once and for all ).

[Gene]

Originally Posted by mistral blue

Perhaps the auto companies should be allowed to use the $25b "fuel-efficiency" loan any way they see fit with a promise to refund it in short order, with interest. They would get the $$ they so desperately desire and a final opportunity to prove themselves (or hang themselves once and for all ).

That may be a compromise that would work. I think they have never gotten the $25 B fuel efficiency loan even though it was passed months ago—seems Treasury has been sitting on the thing for whatever reason. Perhaps a loan should be structured so that it can used to provide credit so people can buy their cars and speed up production of fuel efficient vehicles at the same time. Maybe they can put the corporate jets up for sale. I know that is a distraction, but then the execs can teleconference.

Gene

[jimmini]

Where is UAW they are not doing much to save GM and there members jobs.If I was a UAW member I would be out there raising hell with the union to help save GM.Not looking for a Government loan.
Dont forget thay make poor quality cars and that will not change.
So let them die.Someone will take their place and maybe just maybe run a better company and make better quality cars.Someone has to make the cars to fill the market so all the jobs will not be lost.

[Gene]

I was reading a NY Times column from last week (Nov. 12) by Thomas Freidman while on the treadmill. We get the Times about 5 or 6 days late since they haven't mastered the US mail yet. Even though we have broadband here, mail is an issue. But I digress. I think this column sums up a lot of my issues with this whole thing. As I write I hear on CNN Congressional leaders are asking the Big 2.5 to come back Dec. 2 with a detailed concrete plan and they'll look at it again.

Gene

Here 'tis:


Last September, I was in a hotel room watching CNBC early one morning. They were interviewing Bob Nardelli, the C.E.O. of Chrysler, and he was explaining why the auto industry, at that time, needed $25 billion in loan guarantees. It wasn’t a bailout, he said. It was a way to enable the car companies to retool for innovation. I could not help but shout back at the TV screen: “We have to subsidize Detroit so that it will innovate? What business were you people in other than innovation?” If we give you another $25 billion, will you also do accounting?

How could these companies be so bad for so long? Clearly the combination of a very un-innovative business culture, visionless management and overly generous labor contracts explains a lot of it. It led to a situation whereby General Motors could make money only by selling big, gas-guzzling S.U.V.’s and trucks. Therefore, instead of focusing on making money by innovating around fuel efficiency, productivity and design, G.M. threw way too much energy into lobbying and maneuvering to protect its gas guzzlers.

This included striking special deals with Congress that allowed the Detroit automakers to count the mileage of gas guzzlers as being more than they really were — provided they made some cars flex-fuel capable for ethanol. It included special offers of $1.99-a-gallon gasoline for a year to any customer who purchased a gas guzzler. And it included endless lobbying to block Congress from raising the miles-per-gallon requirements. The result was an industry that became brain dead.

Nothing typified this more than statements like those of Bob Lutz, G.M.’s vice chairman. He has been quoted as saying that hybrids like the Toyota Prius “make no economic sense.” And, in February, D Magazine of Dallas quoted him as saying that global warming “is a total crock of [expletive].”

These are the guys taxpayers are being asked to bail out.

And please, spare me the alligator tears about G.M.’s health care costs. Sure, they are outrageous. “But then why did G.M. refuse to lift a finger to support a national health care program when Hillary Clinton was pushing for it?” asks Dan Becker, a top environmental lobbyist.

Not every automaker is at death’s door. Look at this article that ran two weeks ago on autochannel.com: “ALLISTON, Ontario, Canada — Honda of Canada Mfg. officially opened its newest investment in Canada — a state-of-the art $154 million engine plant. The new facility will produce 200,000 fuel-efficient four-cylinder engines annually for Civic production in response to growing North American demand for vehicles that provide excellent fuel economy.”

The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote. That shielded General Motors, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt long ago.

Indeed, if and when they do have to bury Detroit, I hope that all the current and past representatives and senators from Michigan have to serve as pallbearers. And no one has earned the “honor” of chief pallbearer more than the Michigan Representative John Dingell, the chairman of the House Energy and Commerce Committee who is more responsible for protecting Detroit to death than any single legislator.

O.K., now that I have all that off my chest, what do we do? I am as terrified as anyone of the domino effect on industry and workers if G.M. were to collapse. But if we are going to use taxpayer money to rescue Detroit, then it should be done along the lines proposed in The Wall Street Journal on Monday by Paul Ingrassia, a former Detroit bureau chief for that paper.

“In return for any direct government aid,” he wrote, “the board and the management [of G.M.] should go. Shareholders should lose their paltry remaining equity. And a government-appointed receiver — someone hard-nosed and nonpolitical — should have broad power to revamp G.M. with a viable business plan and return it to a private operation as soon as possible. That will mean tearing up existing contracts with unions, dealers and suppliers, closing some operations and selling others and downsizing the company ... Giving G.M. a blank check — which the company and the United Auto Workers union badly want, and which Washington will be tempted to grant — would be an enormous mistake.”

I would add other conditions: Any car company that gets taxpayer money must demonstrate a plan for transforming every vehicle in its fleet to a hybrid-electric engine with flex-fuel capability, so its entire fleet can also run on next generation cellulosic ethanol.

Lastly, somebody ought to call Steve Jobs, who doesn’t need to be bribed to do innovation, and ask him if he’d like to do national service and run a car company for a year. I’d bet it wouldn’t take him much longer than that to come up with the G.M. iCar.

[purman]

Look,,, I stand by what I said on another Thread,,,, American car companies make JUNK,,,, And now Toyota, and Honda are following in there wake since they have been built here....

Look,,, Reliability aside.... There all just plastic on the inside. and now my Toyota is too.... I think Toyota and Honda said "boy those americans will buy crap so we can lower our standards and still sell cars....

My 1989 Jaguar is 100 times nicer on the inside than a new Cadillac.. For one there is no fake plastic wood.... REAL... Power everything and I mean everything... And this is a 1989 remember... what were Cadillac in 1989 (BOATS) Rides nicer and can go around a conner without putting you in the ditch... It has handling...

Americans make great cars for going in a straight line... And sucking down the gas.... (till a few years ago, they got a bit better))

And then there is these huge 3/4 ton trucks...???????? OK we here use them for towing but 99% of them are people just driving them around.... Man you need to see the back doctor after being in one...... and go on a curvy road,,, NO THANKS....

Drive a BMW, MERCEDES, AUDI, SABB, and you will see what the quality difference is...

There is just no comparison.... NONE>> and they don't cost any more than the big 3 high end cars and trucks...

But I don't believe it's all the Big 3 fault....

WE bought the crap in the first place, and kept on doing it... So now other companies like Toyota and Honda have lowered there standards.. to follow suite....

So you may think I'm WRONG.... Well I'm sorry to say I'm not.... If you have spent any time in Europe and driven there cars you would now...

Problem is,,, Americans think we are it!!!! well were not....... and we don't make that great of stuff anymore.....


We sit here in our big country thinking we are the best at everything... WRONG>>>

We are 10 years behind Europe in Cell phone technology... to start with...

Now The big 3 need a wake up and I hope the GOV.. Doesn't give them free money, It doesn't look like they will.....

And it's not a matter of national security... DOOM SAYERS Come on .....


Bottom line... They made JUNK, we put up with it and bought it.... They are just starting to come around but it's just too late...

They shouldn't have gone around buying foreign car companies,, that money should have been spent on the own development.... BUT,,,

Being American like the rest of us they had to have it all..... so lets buy all the other car companies.... It's the American way....

And "GENE" NICELY SAID>>>>>>>>>>>

So all you american auto lovers, get over it.... you build rubbish and it will pile up and start to stink after a while... Just took 50 years...

I would like to keep my money, , let them sort themselves out, or another company that knows how to do it right.... Because they don't....


Sorry to be blunt, But this is getting old, and this is the way it is....

[wheel interested]

We like our 2000 Expedition, never gave us any problems. I think it's nice. And our 2007 Suburban it too is very nice and rides very comfortably and it handles exceptionally well. I can't imagine what would make them rate comparatively as junk. But if so, then I guess we are just a couple of junkies from Michigan who bought a bunch of crap because we love to pull our crappy trailers.

Yes but the more important question here is... do you use Grey Poupon? Puleez.

[GreatPumpkin]

Originally Posted by CrawfordGene

That may be a compromise that would work. I think they have never gotten the $25 B fuel efficiency loan even though it was passed months ago—seems Treasury has been sitting on the thing for whatever reason. Perhaps a loan should be structured so that it can used to provide credit so people can buy their cars and speed up production of fuel efficient vehicles at the same time. Maybe they can put the corporate jets up for sale. I know that is a distraction, but then the execs can teleconference.

Gene

Actually they want permission to use that $25 billion as they see fit AND the additional $25 billion "loan" they're asking for. The word "loan" being in quotes, because if they have no way to repay it, it's not really a loan is it?

[85MH325]

Originally Posted by purman

My 1989 Jaguar is 100 times nicer on the inside than a new Cadillac.. For one there is no fake plastic wood.... REAL... Power everything and I mean everything... And this is a 1989 remember...

Hmmm... and electrics by Lucas were good? Ever drive an MGB? Your Jag likely has Bosch electrics... if they're the same Bosch electrics that were featured in my four Volvos in the '80s, they weren't anything to write home about either.

I remember the original 1973 Honda Civics. As a matter of fact I drove a Honda N600 and then later the Z600. I've owned and driven American iron from the '70s, euro-cars Opels, Fiats, & Volvos... and all manner of modern conveyances from the Big Three, Honda, Nissan and Toyota over the years.

They've all had clunkers, and they've all had winners in the past twenty years or so. None of them were exceptional across their lines, neither were they horrible across their lines. It's unreasonable to characterize an entire brand as junk (except perhaps for Yugo) nor is it reasonable to say that a manufacturer's entire line is stellar (although Honda is probably closest to a home run there...)

IMHO, the Big Three are in the trouble they are because of greed, pure and simple. Greed on the part of union management. Greed on the part of the companies' management. Greed on the part of shareholders. Greed on the part of lenders. Greed on the part of the oil companies. Together they have managed to kill mass transit in our country. Passenger rail is almost dead. Resurrecting public transport is excruciatingly expensive, causing further dependence on autos and oil for personal transport. Big industry "plants" in the highest levels of government have overseen the systematic dismantling of environmental protections, killed innovation in alternative fuels and energy, and done their best to kill mass transit, all in the name of the auto manufacturers and oil industries, all for the expressed purpose of supporting the price per share for the stockholders of the corporations, unreasonably high wages and benefits for the workers, and outrageous compensation packages for CEOs, CFOs and other top-level managers. And we're just as at-fault because we've let those folks dictate our transportation system for fifty years, rather than taking a stand that we need to do what's right... not necessarily what's convenient.

We are now at a juncture where the house of cards we've allowed government and industry to build is wavering in the wind... and the next breeze will take it down, and our economy with it.

No one knows quite what will "fix" the problem, and the truth is, there isn't a single fix. We didn't get here overnight, and we're not going to "fix" it overnight. We need to look at the basics of what we need, and figure out how much to spend and where to spend it to move us back on track for useful, affordable, safe, reliable transportation for the masses in whatever form that takes, and the personal automobile and ever-expanding network of public highways may not be that form any longer in the U.S.

It'll be years before we see this shake out, but overly simplistic, single-solution proposals aren't going to fix our problems.

[RedSHED]

Originally Posted by purman

Look,,, I stand by what I said on another Thread,,,, American car companies make JUNK,,,, And now Toyota, and Honda are following in there wake since they have been built here....
...

Drive a BMW, MERCEDES, AUDI, SABB, and you will see what the quality difference is...

....

The grammar, capitalization, and punctuation compel me to ask if this was tongue in cheek perhaps?

It's worth noting that up until about a year ago Chrysler was owned by Daimler (the Mercedes people) and their current product portfolio is a direct result of the whims of their Stuttgart overlords. During the first 3-4 years of ownership, as I recall, it was Chrysler that kept Mercedes afloat.

Saab (or SAAB) is wholly owned by GM and has been since the late 1990's. I believe the current 2.0L i4 that proliferates around the General's product lines (Opel, Vauxhall, Saturn, Chevy, Pontiac) had its origins in Trollhatten.

BMW has other issues, not the least of which is the perennial porcupine joke.

[RedSHED]

Originally Posted by 85MH325

Hmmm... and electrics by Lucas were good? Ever drive an MGB? Your Jag likely has Bosch electrics... if they're the same Bosch electrics that were featured in my four Volvos in the '80s, they weren't anything to write home about either.
....

(slightly OT, for which I apologize)
Ah yes, Stan, the Prince of Darkness. AKA the chief engineer for Lucas.

[Edit, and back on topic: Don't forget greed on the part of the consumer who demanded a big return on their IRA and who also demanded cheap fuel. Had fuel stayed at $2 this past summer, there'd be less of an auto crisis now. We probably should have been complaining about that years ago. Why should the home team in the world's largest auto market produce fuel efficient vehicles when SUV's and trucks are more profitable and the electorate has no stomach to make it otherwise? All of the companies that are doing well this year (or at least less poorly) are based in countries where fuel is expensive. This is not a coincidence. I hate that it's so, and I really wish that it wasn't. But I really do think it is so, regardless of my feelings in the matter. ]

[jimmini]

Originally Posted by wheel interested

We like our 2000 Expedition, never gave us any problems. I think it's nice. And our 2007 Suburban it too is very nice and rides very comfortably and it handles exceptionally well. I can't imagine what would make them rate comparatively as junk. But if so, then I guess we are just a couple of junkies from Michigan who bought a bunch of crap because we love to pull our crappy trailers.

Yes but the more important question here is... do you use Grey Poupon?

My 2000 V10 Excursion pulls my Airstream grate if you can keep the spark plug from blowing out and the last of the electric door locks has quit,the tail gate will not lock electricaly or with a key.We now have 51,125 miles on it since we only use it to pull our Airstream with it. Just hoping it does not die before I do.It just all the little stuff you have to keep fixing because it plastic junk poorley put together.We will not even talk about are GMC Van with 125000+ miles it is a real sad junker.Never towed one thing yet has had 3 transmistions and one flat cam replaced.
The front door systems have worn out and been replaced and the door handles keep braking.
Let the big 3 die someone will pick up where they left off.They might be better if we luck out.

[85MH325]

Originally Posted by RedSHED

[Edit, and back on topic: Don't forget greed on the part of the consumer who demanded a big return on their IRA and who also demanded cheap fuel.

Yep. We're just as culpable. (I had edited my original post about the same time you edited this one...) we wanted personal convenience at low cost to us. That's fine as long as we can afford it. Unfortunately we haven't built anything to use in the place of personal convenience at low cost now that we can't afford it any more.

Roger

[hampstead38]

Greed (or more delicately) self interest is what drives markets. Most people want to earn more money, live in larger, more comfortable houses, etc. The counterbalance to greed is free market competition. I want a good job, but must compete with others who want the same job. I want to sell shoes, but must compete with other sellers of shoes.

The problem occurs when competition does not exist or is stifled by government. Look at cable television. Comcast, for example, has effectively a monopoly in many areas. If you are a Comcast customer, I don't need to explain how they can increase the price for basic cable at four times the rate of inflation and have a lower customer service rating than the U.S. Postal Service and the IRS.

The simple answer to most problems in a market economy is simply to let the economy work. Unlike at NASA... in a capitalist society failure is always an option. The way we (individuals and businesses) learn to behave better is to suffer the full, unmitigated consequences of our choices, good or bad. It does not help anything to teach poorly managed companies they can be "too big" to fail. It does not help anything to reward home buyers who made particularly bad decisions related to mortgages while punishing those (by raising taxes) on those who behaved more prudently. There is a saying in economics, "People respond to incentives, all else is commentary."

For a nice piece on the bailout, try this.

Oh, and to Gene, the government really is responsible for the Great Depression. If you want to hear a thoughtful but very digestable piece, try this FRB speech by Ben Bernanke on the auspicious event of Milton Friedman's 90th birthday. Contrary to Nixon, Gene, we are all not Keynesian's now.

[mrmossyone]

Originally Posted by 85MH325

Yep. We're just as culpable. (I had edited my original post about the same time you edited this one...) we wanted personal convenience at low cost to us. That's fine as long as we can afford it. Unfortunately we haven't built anything to use in the place of personal convenience at low cost now that we can't afford it any more.

Roger

Not true. We have been building very fuel efficeint motorcycles for a long time. It's just in this land of the free most people don't want to use them for personal transportation.

[cooperhawk]

Uh, excuse me doomsayers. Remember what gas cost a year ago? Remember when Detroit couldn't sell the little cracker box high mileage models. I surely don't want one. That was just a year ago.

Then the cost of fuel went through the roof. Oh horrors! How could this all happen? Oh woe is me, woe is me. We all must buy the cracker boxes now. What, Detroit can't make enough of them. Oh my, the Congress must crack down on those slackers! We must have the little green weenie machines right away.

Okay, Detroit says loan us some money and we'll retool. Well, Okay, as long as what you build is GREEN! GOTTA BE GREEN!!!!!!

What, gas is now less that two dollars again. Oh woe is me, woe is me. Now people want the big vehicles again. What to do, what to do.

Let's all run around like chickens with our heads cut off and yell, "THE SKY IS FALLING, THE SKY IS FALLING!" That'll help!

We own one American car and one European. They are both fine vehicles. No door handles are falling off or transmissions going out. My last American car was a 95 Explorer which my son is now driving. It has nearly three hundred thousand miles on it and the engine has never been touched! Neither has the transmission. No rust either. What could be the difference??????

Anytime you get the Congress involved it will turn out badly. Let the Manufacturers determine their own course. They know what they can sell better than the Congress. If some must go bankrupt and re-organize, so be it. Let the chips fall where they may.

[purman]

Originally Posted by 85MH325

Hmmm... and electrics by Lucas were good? Ever drive an MGB? Your Jag likely has Bosch electrics... if they're the same Bosch electrics that were featured in my four Volvos in the '80s, they weren't anything to write home about either.

Yep, your right.... The electronics are junk.. The door locks don't all work, the heater fan went out, and it only has 98,000 miles on it...

BUT I did say reliability aside. It does drive and handle better than a modern Cadillac, and just about any other car the big 3 make... It will out corner a new mustang now problem. It is just made to go in a straight line. My father in law has an 02' Lincoln I think thats the year. And I would take the Jag over that any day.

Look at the whole car. Even Toyota and Honda are cheeping out now.
Look at the way the insides are put together. Are the seams lined up, are they even, does it rattle?


But I'm glad sensible heads are prevailing here... It was greed.. not only the Big 3 but us. We bought them. We didn't now any better but now we do...

Sure they make great tow vehicles, but as far as a nice drive, well I think we should all go out and test drive a BMW or Mercedes. Then we would know what we are missing...

Don't make a bunch of POO and expect me to clean up your mess..............

PS: and yes I say all this with a grin on my face But it doesn't mean I don't believe it...

[wheel interested]

I think the car industry is in trouble because sales are down 45% and I think sales are down because gas was too high to buy a car then no credit available to buy a car with the economy plummet.

I think they need a loan because they don't have the money to pay it back now, er, then they wouldn't need a loan. There have to be large lines of credit for consumers and companies and we know about the banks and credit dried up. There is the real problem.

But neither here nor there why, if you don't pull them back out of the hole it wont be long until the connected leg chains drag you right in too.

[85MH325]

Originally Posted by mrmossyone

Not true. We have been building very fuel efficeint motorcycles for a long time. It's just in this land of the free most people don't want to use them for personal transportation.

We have? The only domestic motorcycle company that I know of remains Harley-Davidson. Correct me if I'm wrong. I don't think any of their models get significantly over 40mpg, and there are a dozen cars on the market now that get a solid 32mpg or better. In the days of 10mpg cars, 40mpg looked pretty stingy, but why would I want to ride a motorcycle for daily transportation when I can be out of the weather, heated and/or cooled and relatively safe from road-rash in a sedan?

Further, motorcycles don't work for the elderly, the very young, or for families. They're OK when it's sunny, scary on wet pavement, downright uncomfortable when it's cold out, and useless on ice or snow. They're difficult to carry groceries on, and frankly, unless you're very skilled, even on the best of roads they're not all that safe. I just can't see motorcycles as the panacea to the dilemma of mass personal transportation in the U.S.

To give my remarks some perspective, you need to understand that I rode motorcycles for twenty-five years. I rode a lot of miles on bikes. I commuted, traveled, shopped, and vacationed on bikes. I put 60,000 miles on my '82 BMW R100RT from '83 to '86, so take my comments as those of a rider, not merely a car driver.

What I was talking about were viable nation-wide mass-transit systems... high-speed trains, commuter trains, bus systems, subways, elevated railways, bike/pedestrian trails or paths... in other words, transportation that is more efficient per person moved, and systems that don't require a personal motor vehicle moving down a street dedicated to personal motor vehicles.

Roger

[Larry in MO]

I thought it was a little ironic and, sadly, true to form that the US Congress was ragging the CEOs of large companies regarding the wasting of money. Congress of all groups of people! I'm in complete agreement that the CEOs might have made a better impression by riding a bus to the meeting.

My thoughts have turned from "who cares?" to "a lot of people will suffer because of all manner of mismanagement". The unions should be willing to give back a lot. The CEOs should be replaced w/ no bonus. The money should be LENT w/ shares of GM for collateral, and there better be a good plan when the companies come back to the table.

Jeez, what have I done? I've agreed w/ Sen. Harry Reid! Please don't tell anyone.

Many years ago, my older boy (then 17) asked me for a car loan. He stated that the credit union had turned him down. I told him that I would not loan him the money as he was a bad risk. He didn't understand and I explained that if the financial institution thought he was a bad risk, how was I to judge any differently? Unless there are vast changes, the car companies are a terrible risk.

[purman]

COOPERHAWK Well said.. they make what we want to buy, but a ford explorer, Oh my, you did get one of the good ones though.

I just feel the whole SUV thing is junk, it's either a 4x4 or like the BMW a glorified 4x4 for the road.. Most of the SUV's try to do both and suck at it..

Range Rover did a great job. Ever drive one? Great on road and great off.

Well if you ever did drive one it wasn't far from the dealer as thats were it spends it time getting fixed. But as an off and on road 4x4 it's one of the best.

Look, Trucks are built to haul stuff right.. But then everyone wanted one just to drive around, and now there all soft and try to be comfortable..

You can paint poo and dress it up but it's still poo..

Same with a truck, dress it up, but it will still bounce you down the road. And if it doesn't, it's no good for what it was designed to do (haul loads)

So when someone says, "my truck is comfortable" I think, "compared to what? a roller coaster?"

Now, I have my Sequoia and like it. But It's a nice ride, will tow my AS pretty well, but would I take it off road, I mean really off road. NOPE. forest roads yes..

My 4 runner rides hard, and I take it off road... It does a nice job, but rides the road and corners like a wet worm. It good at one and not the other.

But we all wanted both and got junk. (by junk I mean they weren't good at either one.)

Look at a Jeep (wrangler) Great off road.. on road, well it does roll into the corners well, and thats not a good thing. It doesn't do much on the road well, and if it did it would suck off road.

Look, the point is they shouldn't get free money, I don't even think they should get the loans. It's not going to fix the problem, just postpone what trouble there in now for a few years while they waste more money, but this time it's our money.