Do we really need 3 American auto companies?

[88Comrade2000]

For all this auto bailout talk; do we really need 3 American automakers?

Why not just for one new American auto company that takes the best of the 3 automakers.

[Springfield]

Yes. Let's have one US automaker. One US automaker to rule them all! It would almost be like a monopoly. Not quite a monopoly, just a monopoly on crappy cars and really nice gas guzzlers.

We could combine all of that debt, poor management, total failure of unions and combine all of that into one super huge disappointment! Instead of 3 companies down the drain we could have 1 super huge company into the stinkiest, nastiest drain.

I think that would be a very bad idea. Sorry.

[Special K]

I don't care if it's one American auto company or 10, I seriously don't.

I'm just completely against bailing them out.

I was hesitant about the bank bailouts because they were moving so quickly and legislation seemed like it was just thrown sloppily together on a rushed basis...that's proven to be true. However, I eventually was pretty neutral and leaning toward supporting it because its intent was to increase the liquidity in the market and free up credit. Everything in our economy hinges on this, so I was okay with bailing them out.

But the auto companies, HELL NO. These CEO's are so damn out of touch they flew to Washington to beg for money in their private GULFSTREAM JETS! That's absurd. Just on that basis alone I wouldn't lend money to those morons because they clearly don't "get it." It would be like flushing money down the toilet while delaying the inevitable, the fact that they would be going under anyway due to their operation on a terrible business model and are beholden to these frickin unions. They make way too many models of cars Americans DON'T WANT and make way too many concessions and pay WAY too much to these unions.

If they decide to follow in the steps of the foreign automobile companies that SUCCESSFULLY operate in the south, I might be willing to consider it...but I probably still wouldn't give them any money. They need to get their act together and learn how to run a frickin company successfully and not expect to be bailed out for all the terrible management decisions they've made.

So no, we don't need 3 American auto companies and NO, we shouldn't bail them out.

[Springfield]

I agree with Keeastman (for once).

This is where my fiscal conservative comes out. I don't think anybody should get a bail out. If you can't run a company, then you lose money and you FAIL. Plain and simple as that, OK not so simple but you get the point. If you can't manage the company that you run than you don't deserve to be in business.

This should be a lesson to all of the mismanagement and get rich quick schemes going on. It shouldn't be a get out a jail free card. There will be no lesson learned here if we just give them our money. Believe me, we will be screwed again by these schmucks.

[88Comrade2000]

I was talking about the general need of 3 American automakers. The market doesn't support it; so they should just merge.

Actually, the world automobile industry needs to consolidate.

I would still have at least one American based manufacturer. How you get that? Let them file for bankruptcy and start over.

Pat Buchanon had an interesting column:

http://www.realclearpolitics.com/articles/2008/11/who_killed_detroit.html

>>>Who Killed Detroit?

By Patrick Buchanan

Who killed the U.S. auto industry?

To hear the media tell it, arrogant corporate chiefs failed to foresee the demand for small, fuel-efficient cars and made gas-guzzling road-hog SUVs no one wanted, while the clever, far-sighted Japanese, Germans and Koreans prepared and built for the future.

I dissent. What killed Detroit was Washington, the government of the United States, politicians, journalists and muckrakers who have long harbored a deep animus against the manufacturing class that ran the smokestack industries that won World War II.

As far back as the 1950s, an intellectual elite that produces mostly methane had its knives out for the auto industry of which Ike's treasury secretary, ex-GM chief Charles Wilson, had boasted, "What's good for America is good for General Motors, and vice versa."

"Engine Charlie" was relentlessly mocked, even in Al Capp's L'il Abner cartoon strip, where a bloviating "General Bullmoose" had as his motto, "What's good for Bullmoose is good for America!"

How did Big Government do in the U.S. auto industry?

Washington imposed a minimum wage higher than the average wage in war-devastated Germany and Japan. The Feds ordered that U.S. plants be made the healthiest and safest worksites in the world, creating OSHA to see to it. It enacted civil rights laws to ensure the labor force reflected our diversity. Environmental laws came next, to ensure U.S. factories became the most pollution-free on earth.

It then clamped fuel efficiency standards on the entire U.S. car fleet.

Next, Washington imposed a corporate tax rate of 35 percent, raking off another 15 percent of autoworkers' wages in Social Security payroll taxes

State governments imposed income and sales taxes, and local governments property taxes to subsidize services and schools.

The United Auto Workers struck repeatedly to win the highest wages and most generous benefits on earth -- vacations, holidays, work breaks, health care, pensions -- for workers and their families, and retirees.

Now there is nothing wrong with making U.S. plants the cleanest and safest on earth or having U.S. autoworkers the highest-paid wage earners.

That is the dream, what we all wanted for America.

And under the 14th Amendment, GM, Ford and Chrysler had to obey the same U.S. laws and pay at the same tax rates. Outside the United States, however, there was and is no equality of standards or taxes.

Thus when America was thrust into the Global Economy, GM and Ford had to compete with cars made overseas in factories in postwar Japan and Germany, then Korea, where health and safety standards were much lower, wages were a fraction of those paid U.S. workers, and taxes were and are often forgiven on exports to the United States.

All three nations built "export-driven" economies.

The Beetle and early Japanese imports were made in factories where wages were far beneath U.S. wages and working conditions would have gotten U.S. auto executives sent to prison.

The competition was manifestly unfair, like forcing Secretariat to carry 100 pounds in his saddlebags in the Derby.

Japan, China and South Korea do not believe in free trade as we understand it. To us, they are our "trading partners." To them, the relationship is not like that of Evans & Novak or Fred Astaire and Ginger Rogers. It is not even like the Redskins and Cowboys. For the Cowboys only want to defeat the Redskins. They do not want to put their franchise out of business and end the competition -- as the Japanese did to our TV industry by dumping Sonys here until they killed it.

While we think the Global Economy is about what is best for the consumer, they think about what is best for the nation.

Like Alexander Hamilton, they understand that manufacturing is the key to national power. And they manipulate currencies, grant tax rebates to their exporters and thieve our technology to win. Last year, as trade expert Bill Hawkins writes, South Korea exported 700,000 cars to us, while importing 5,000 cars from us.

That's Asia's idea of free trade.

How has this Global Economy profited or prospered America?

In the 1950s, we made all our own toys, clothes, shoes, bikes, furniture, motorcycles, cars, cameras, telephones, TVs, etc. You name it. We made it.

Are we better off now that these things are made by foreigners? Are we better off now that we have ceased to be self-sufficient? Are we better off now that the real wages of our workers and median income of our families no longer grow as they once did? Are we better off now that manufacturing, for the first time in U.S. history, employs fewer workers than government?

We no longer build commercial ships. We have but one airplane company, and it outsources. China produces our computers. And if GM goes Chapter 11, America will soon be out of the auto business.

Our politicians and pundits may not understand what is going on. Historians will have no problem explaining the decline and fall of the Americans.

Copyright 2008, Creators Syndicate Inc.<<<

[Special K]

I was talking about the general need of 3 American automakers. The market doesn't support it; so they should just merge.

Fine, then the answer would be no.

[twa]

I believe we would be better served with more (smaller)companies specialized in different technologies that can more easily adapt to local or niche markets and changing technology....similar to what we had in the past.

The ever increasing federal guidelines for autos makes this difficult though.

[88Comrade2000]

Actually, maybe should be heading towards the elimination of the automobile; at least as we know it.

Having everything automated.

[Dictator]

First, the brainless repetition of the idea that American cars are not worth buying is a bunch of crap.

Secondly, the american auto makers are doing very well in countries outside of the US.

Partially it has to do with the vehicles they offer in other areas of the world that for some inane reason aren't available here. But also because many in other countries don't hold on to a bias that was formed in the 1980s.

[Special K]

First, the brainless repetition of the idea that American cars are not worth buying is a bunch of crap.

Secondly, the american auto makers are doing very well in countries outside of the US.

Partially it has to do with the vehicles they offer in other areas of the world that for some inane reason aren't available here. But also because many in other countries don't hold on to a bias that was formed in the 1980s.

Yeah, well the other countries don't have union workers demanding insanely high pay and pensions which is a major factor that is bringing these American auto makers down...

And I don't think it's a matter of the American cars not being worth buying, it's the matter of American people not wanting to buy the gas guzzling cars and SUV's that are the bread and butter of the big 3 auto companies.

[Dictator]

Yeah, well the other countries don't have union workers demanding insanely high pay and pensions which is a major factor that is bringing these American auto makers down...

And I don't think it's a matter of the American cars not being worth buying, it's the matter of American people not wanting to buy the gas guzzling cars and SUV's that are the bread and butter of the big 3 auto companies.

I agree about the Unions. They didn't seem to care the strain that their demands would put on their employers.

Again, american cars aren't any more "gas guzzling" than japanese cars. Look are the entire Chevy line-up of cars, and they rival honda or toyota when it comes to fuel economy. Their major failing was just not jumping on the highway to hybrid technology...which isn't the end all be all either. You pay a higher premium up front for the technology. Those people who bought a prius during the summer would be better off financially right now having opted for the traditional engine.

Additionally, the big three were giving the american consumers what they wanted in SUVs. Hell, even Honda and Toyota saw that and began to design larger SUVs to try to keep pace. Hyundai saw this as well and entered into the SUV craze. This only became a bad thing because the american consumer was too short-sighted to see that gas prices don't always remain the same.

This is not to say the big three weren't short sighted as well. But in the end they were giving the consumers what they wanted.

[Campbell4Clipboard]

I could care less how many US automakers there are. They shouldn't be getting any tax payer $$$ for making crap cars and being mismanaged. They have been turning out these V8 gas guzzlers for decades now. Take for example Ford Mustang, it has the build quality of a sardine can with wheels and a V8 engine. It doesn't get good gas mileage and gets outperformed by many V6 and even V4 sports imports lol.

[TheKurp]

I'm smart enough to admit that my ignorance dictates that I keep an open mind.

My instincts tell me that bailing out the U.S. automobile industry is a bad idea. On the other hand, what happens to not only the thousands of direct employees that will now be unemployed, but to all the peripheral people whose livelihood depends heavily on the existence of the Big Three?

Can they be absorbed into the workforce? Unemployed, they undoubtedly will create an added burden on social services - which are funded through, you guessed it, our tax dollars. Even if they do find other jobs, what is the likelihood that they'll find comparable paying jobs? Remember, the more money one makes the higher their income taxes and the more equal the shared burden among all tax payers.

Whether the Federal Govt. bails out the auto industry or not, there will be a cost to every tax payer in the U.S. If the industry is bailed out at least there will be a return by the employed paying taxes on their earnings. If there is no bailout and thousands go unemployed or under-employed, thousands of people will cause a drain on social services and you and I, through tax dollars, will support these people for the forseeable future.

With no other skills other than auto-related, there will be few jobs for these people in the private sector. Which means the Federal Gov't will have to come up with ways to employ these people if they want them to be productive tax payers instead of siphoning off of social services. Federal building and highway construction projects seem to be the most logical fit for these people. The question is, is the Federal Gov't any more adept at running efficient businesses than the Big Three?

[Rudechain]

There is plenty of blame to go around in this mess. Unions high pay and benefits, short sightedness of the management and consumers interest in large gas guzzlers are just a few.

But one thing that stands out are the CAFE standards and how the US is behind the curve on this. (CAFE is corporate average fuel economy) Other countries have higher standards for fuel economy and more stringent restrictions on CO2 emissions. Funny thing is the technology is available for this but it's been very slow to come to fruition here in the USA.

The International Council on Clean Transportation did a report and it's quite revealing.

Take a look at this graph of fuel economy by country

http://www.theicct.org/documents/Update_FE.pdf

And the article can be found here

http://www.marketingcharts.com/topics/asia-pacific/us-last-among-major-countries-in-car-fuel-economy-standards-1141/

[Campbell4Clipboard]

The biggest problem is the fact that gas in the US has always been much cheaper then Europe/Japan which pushed fuel efficiency way down on the big 3 "to do" list. When gas was at $1-1.50 a gallon driving a Hummer and getting 10mpg didn't put much of strain on people's budgets however once the gas prices started skyrocketing domestics had nothing to offer. I remember my friends laughing at how homo the Prius is when it first launched but when gas was at $4 a gallon they'd give up their testicle to have one.

[da#1skinsfan]

US Automakers have ALWAYS been behind the times.

From the pixelated radios to the cardboard dashes to the bench seats to the ugly colors to the lack of features to the poor designs....they are consistently out of touch. THIS is what killed the US automakers, not gas, not SUV's, not anything else. They simply failed to outdo their competition.

Look at any feature on any US vs Euro vs Japanese car and I guarantee you 9x out of 10 the foreign car's feature is easier to use, better to look at, and accomplishes more.

[twa]

The biggest problem is the fact that gas in the US has always been much cheaper then Europe/Japan which pushed fuel efficiency way down on the big 3 "to do" list. When gas was at $1-1.50 a gallon driving a Hummer and getting 10mpg didn't put much of strain on people's budgets however once the gas prices started skyrocketing domestics had nothing to offer. I remember my friends laughing at how homo the Prius is when it first launched but when gas was at $4 a gallon they'd give up their testicle to have one.

Cheap energy has been both a blessing and curse here.

W/o it we would not be where we are today....cheap energy is not the problem....we are

[Campbell4Clipboard]

US Automakers have ALWAYS been behind the times.

From the pixelated radios to the cardboard dashes to the bench seats to the ugly colors to the lack of features to the poor designs....they are consistently out of touch. THIS is what killed the US automakers, not gas, not SUV's, not anything else. They simply failed to outdo their competition.

Look at any feature on any US vs Euro vs Japanese car and I guarantee you 9x out of 10 the foreign car's feature is easier to use, better to look at, and accomplishes more.

Yup and instead of producing cars that rival the quality and dependability of imports they continue to add useless doodads as "standard". I don't care if a year of onstar comes standard on every GM car if it looks like crap, drives like a casket or wheels and sits in the repair shop every month.

[ChocolateCitySkin]

after watching pepco shut off the power to an entire building with four separate corporate entities in it because one guy didn't pay his electric bill.... uhm not a good idea.

[ChocolateCitySkin]

how about this thought... american auto manufacturers have idiots for engineers and idiots for designers and idiots for CEOs?

now i don't know how far the union reaches but innovation seems to have supplanted with lobbyists in these companies. and i absolutely agree with pelosi that they won't get a dime until they explain how they are going to be a functional company. which i personally can't see happening unless these companies clean house and fire these fossils for designers and engineers.

[Seabee1973]

Yeah, well the other countries don't have union workers demanding insanely high pay and pensions which is a major factor that is bringing these American auto makers down...

And I don't think it's a matter of the American cars not being worth buying, it's the matter of American people not wanting to buy the gas guzzling cars and SUV's that are the bread and butter of the big 3 auto companies.

Its the unions thats the problems. From what i hear most of teh money woudl go to help the unions out and not really teh car companies per say.

[big#44]

hmmm....

[Special K]

how about this thought... american auto manufacturers have idiots for engineers and idiots for designers and idiots for CEOs?

Oh, I can almost gaurantee they'll get bailed out by Pelosi & Co. if they show even the slightest hint of improvement that they can rationalize their bailout on. I would expect this too happen in the next couple months. I'm totally against it, but I'm not trying to kid myself here, it'll go through....and that's just ridiculous.

hmmm....

Yeah, the ripple effect sucks. You know what else sucks? Dumping money into a failing company. You know what sucks even more? Using the taxpayers' money to prop up these failing companies. And even worse? Continuing to set the precedent to bailout other poorly run, failing companies instead of letting them suffer the consequences of their own ineptitude, fail, restructure, and be forced too adopt better business models and not be so beholden to these ridiculous union demands in order to succeed.

Where do you think the line should be drawn to bailing out? There are a lot of industries that are integral to the U.S. economy, if they start going belly-up, are we supposed to bail them out too? With our money? Putting us even further into debt that our future children are going to have to bear the burden of?

My opinion is no. Let these companies fail. It'll hurt our economy in the short term, absolutely, but I think it will be better for us in the long run.

[Springfield]

Yeah, the ripple effect sucks. You know what else sucks? Dumping money into a failing company. You know what sucks even more? Using the taxpayers' money to prop up these failing companies. And even worse? Continuing to set the precedent to bailout other poorly run, failing companies instead of letting them suffer the consequences of their own ineptitude, fail, restructure, and be forced too adopt better business models and not be so beholden to these ridiculous union demands in order to succeed.

:notworthy

And that is the truth.

[Springfield]

There is no reason for me to think that if the big 3 fail that the Japanese and European automakers won't fill the void left from the American automakers. They will build more cars here, sell more cars here and generate more profit here. My only question is, do they pay taxes to our American government?

All that said though, I don't think that the big 3 will fail to exist. Even without the bail out money there are other ways to operate. They can file for bankruptcy protection (my knowledge on this subject is lacking) like US Air did a while back. US Air is still flying planes. Filing for bankruptcy would allow them to negotiate with or eliminate the unions entirely. With that accomplished they can focus on creating a better business plan and refine the process in which they make cars, streamline everything basically.