Should we have an auto bailout?

[Sailer]

I voted for the bailout of all three. But I would want some conditions put on the bailout, like 1). a cut in wages and benefits for the UAW workers, 2). Mercedes surrenders its interest in Chrysler so that Chrysler can make cars the way it wants without a nanny overseas telling it no, and 3). an emphasis on better MPG.

Like it or not, we need those car companies. They provide a vast amount of jobs, not only in the car companies themselves, but in all the industries that make parts for them or otherwise service them. Another thing, I don't think the country should be held hostage to car companies in other companies. If we make no domestic cars, we then subject ourselves to whatever other countries dictate, both in models and in price.

I don't think the US car companies cars are necessarily junk, but rather that such attitudes were made years ago when their quality was not so good. As for my own experience, I have a 1990 Ford truck that still runs good, a 1998 Ford Cobra that runs great, and an older Plymouth that does well. These vehicles do well mainly because I maintain them, something that too many people don't bother to do. And yes, they have made cars and trucks which people wanted. Just because people changed their minds as to what they want during the past year is no reason to blame the car companies.

[logainofhades]

Yea the company that i work for has made cuts where needed also. The stupid union prevents much of what the big 3 could do and needs to do. There is nothing really in my general area other than where I am that even pay remotely decent wages for the area we are in. 1 in 10 jobs depend on the auto industry from an article I read on yahoo recently. That is an awful lot of people.

[SuperFly03]

Alright bear with me. This may become a long involved response. I know people hate them and I do too.

Originally Posted by prozac26

Everyone sees it differently, but more people that I talk too tend to prefer Import cars. Most of my relatives have bought imports, and say they will never buy American again.

I know many people like that but I also know there is more to it than that.

I will not disagree that for the longest time foreign cars were the most reliable and domestic were pretty shotty, there was a large gap. Ok now let's take a step back and look at that. Reliable. Doesn't mean it was what people wanted, it doesn't mean they were the coolest cars, it doesn't mean they were the most efficient. What it does mean is that they were prone to less mechanical problems over the long haul than their competitors.

You didn't say say why those people prefer imports but that is my guess why along with the perceived notion of better build quality/luxury.

The problem is that in general (not all) Ford and GM have made huge strides as of late in reliability and build quality, Chrysler to a lesser extent and Toyota has slipped. Toyota is usually considered the benchmark... but the benchmark is falling, not alot, but it has come down and when that is coupled with the rise in domestic quality (again in general, most GM and Ford cars) has narrowed the gap considerably. They aren't equal but there is no longer the huge glaring distinction there once was. The image is still there and that's what they are riding. You are trying to dent a 20 year reputation which is freakin hard to do.

Originally Posted by prozac26

What people want now is different than what they wanted 18 months ago (or so), and Imports, like the Camary and Civic, have been proven to be much better choices (overall) when price of gas went up.

When push came to shove Toyota was definitely positioned better in terms of historical vehicles (fuel economy of older established vehicles). However, Detroit responded with a phenomenal turn around on new more fuel efficient vehicles. Before this mess erupted it wasn't a close contest but again with the spike in prices causing a shift in demand, Ford and GM responded with new models faster than most could probably imagine. What Chrysler is doing is beyond me. Someone go stab them with a fork or something. The saying "hind sight is 20/20" is very applicable here. Sure now it looks like Toyota was smarter but over the past 15-20 years the Big 3 have sold more cars than Toyota could ever have wished to sell and there's a reason... they catered to the American market extremely well.

Originally Posted by TechnologyCoordinator

I believe the automotive bailout is a loan, not free cash. Right now the big three are having MAJOR issues with the credit crunch, they are unable to obtain funds.

Correct. It is an equity stake (including warrants) that will come with very large restrictions on executive comp, fleet fuel economy, etc etc.

Originally Posted by CapnBFG

I don't think these statements are accurate, especially the part about not making what people want. They were making exactly what people wanted: trucks and SUVs. If they weren't selling well then they wouldn't have been the focus of development and production. If you remember this headline, it was only this year that the F-150 was finally dethroned as the #1 selling vehicle in America.

Word. That says more than I can (the stat about the F150). Detroit sold what the people wanted. The only reason for the light vehicles was to pass CAFE. Only reason.

Originally Posted by CapnBFG

I'm not sympathyzing with them or saying they shouldn't have had a backup plan, but it's inaccurate to say they didn't make what people wanted.

Let me be clear I am not speaking at you BFG with this but to the market as a whole... don't you think it is a bit hypocritical to demand trucks after trucks, suvs on top of suvs for years and years and then one run up in gas prices and everyone turns their back on Detroit?

Just some food for thought.

Originally Posted by CapnBFG

People's preferences and spending habits just changed drastically this year. Yes there has been a trend towards gas economy for a while now, but the costs of inefficiency didn't become a serious issue for people until recently.

One phrase.... paraphrased from Melty explains that whole inefficiency mess:

F@CK THE UAW

Having said all that, the Big 3 need to exist. We need the manufacturing here and we need the jobs tied to the auto industry.

However, they need to get smaller, they need to shed the UAW entirely (not eliminating retiree benefits but going forward), they need to close more plants, they need to become right sized for their market. With the increase in competition coupled with the economic downturn... they just need to be smaller.

[SuperFly03]

Originally Posted by Sailer

I voted for the bailout of all three. But I would want some conditions put on the bailout, like 1). a cut in wages and benefits for the UAW workers, 2). Mercedes surrenders its interest in Chrysler so that Chrysler can make cars the way it wants without a nanny overseas telling it no, and 3). an emphasis on better MPG.

Mercedes sold their stake to a PE firm as I recall. Chrysler is now entirely private.

[Ches111]

Nice rational response SF!..

I voted all three!! But Chrysler really needs to get back in the game. They have a start with some of their new offerings but they have several ailing segments.

[TechnologyCoordinator]

Originally Posted by SuperFly03

F@CK THE UAW

+1

The UAW, in my opinion, has the most blame for the current state of the auto industry.

If Ford, GM, and Chrysler are going to sell their cars in the free market they need to get their labor from the free market as well.

[SuperFly03]

Originally Posted by TechnologyCoordinator

+1

The UAW, in my opinion, has the most blame for the current state of the auto industry.

If Ford, GM, and Chrysler are going to sell their cars in the free market they need to get their labor from the free market as well.

Yes. The UAW had its place and it was necessary at the birth of the auto industry due to the lack of labor laws at the time but now we have well documented and rigid labor laws to protect workers.

These days the UAW gets workers paid to sleep, because they have no work, they get their workers paid whose jobs were lost to automation, they get their workers paid $25/hr+ to put tires on a car or to bolt a joint to the frame. It's ludicrous. The UAW workers get paid way too much for the work they do. Period.

What needs to happen is the abolition of the union and workers wages set more inline with the skill set necessary to perform the job.

Originally Posted by Ches111

Nice rational response SF!..

I voted all three!! But Chrysler really needs to get back in the game. They have a start with some of their new offerings but they have several ailing segments.

Thank you Ches.

Chrysler... oiy. They are turning upstream but their frames are just so large and heavy that they can't made a mid-sized sedan or even a fuel efficient large sedan. They have the looks down on some new cars... the Challenger and Charger come to mind but damn? 4200lb 2door coupe? Ouch!

[xpresso]

I voted no bailout. I simply believe if there is a parachute for every failed business plan/execution we will not get out of this mess that we're in, let capitalism work its course. The auto industry stopped being competitive long time ago, the time maybe has come to let it fail and regroup.

[SuperFly03]

Originally Posted by xpresso

I voted no bailout. I simply believe if there is a parachute for every failed business plan/execution we will not get out of this mess that we're in, let capitalism work its course. The auto industry stopped being competitive long time ago, the time maybe has come to let it fail and regroup.

What do you suggest? Letting it go into Chapter 7 or 11?

I'm interested in your view point.

[TechnologyCoordinator]

Originally Posted by SuperFly03

What do you suggest? Letting it go into Chapter 7 or 11?

I'm interested in your view point.

The economy is incentive based. If the government continues to bailout company after company there may actually be an incentive for strugling companies to fail so they get government money!

Just imagine, you're a giant struggling company, what's easier, a giant restructuring or a government life-preserver.

[logainofhades]

Originally Posted by xpresso

I voted no bailout. I simply believe if there is a parachute for every failed business plan/execution we will not get out of this mess that we're in, let capitalism work its course. The auto industry stopped being competitive long time ago, the time maybe has come to let it fail and regroup.

Too many people rely on the auto industry to let it fail. it is not just the auto workers. it is the suppliers as well

[beerandcandy]

cars are too expensive as it is dont bail them out
maybe things will change for the better maybe not but dont reward failure

[SuperFly03]

Originally Posted by beerandcandy

cars are too expensive as it is dont bail them out<