Post article on Big3 asking for clams.

[bakerhillpins]

washingtonpost.com has free sign up so I suppose a direct link shouldn't be a big deal:

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/19/AR2008111903669.html?nav=hcmodule


I wasn't for giving these guys money in the first place but this kinda crap really gets me bent. Its clear to me that they don't have any other plans than business as usual. Its too bad the folks that always get screwed are the ones working for a living.

I never did hear why the Chrysler - Nissan Renault merger crashed.

Bryan

[Ghoste]

I think all the merger deals crashed because A) the banks just aren't lending them the money like they want/need? B) they were beginning to smell free money from the government and couldn't resist trying that first.

Personally I do not in any endorse the whole "screw 'em if they can't survive then let them die it's their own fault" followed by the armchair economist finger pointing where you blame either the union or the execs because I believe the American automakers dying will be the start of an economic meltdown like we can't imagine.  BUT... that being said, I agree with the above, it truly appears that the Big Three are absolutelly determined to speed up their death as much as possible.  The unions will not even consider what they can do and the execs very obviously could not care less.  Sometimes you just have to accept the consequences and it looks like manufacturing is pretty much over in North America.

[bakerhillpins]

Unless I am mistaken, there are several automotive manufacturing/assembly plants that are doing quite well in the US. I guess its just that they happen to be owned by foreign companies. Which, I suppose isn't all that surprising now that even Anheiser-Busch is foreign too. So I don't know that I would say its pretty much over. Its like a lot of other industries, they must adapt to survive. I find it interesting that we never rushed to the US textile industry when it was dying.

[Ghoste]

Probably because the auto industry impacts the entire continent on some level and brand loyalty tends to polarize feelings more?  I don't know really.  As far as the auto plants remaining, they are more like token plants in my view but I'm no more qualified than anyone else.
Driving may a privilege not a right, but it's a damned beloved privilege in North America where distances from town to town can be so vast.  It's a very ingrained part of our culture even to the greens (the ones who drive at the very least) although they may not know it or acknowledge it.  Seeing it go is sad.

[bakerhillpins]

You make a good point about the automotive industry being a central part of our culture but propping it up isn't going to help it either. I think a good parallel discussion to this would be to look at the rebirth of Harley-Davidson. They were junk in the mid 80's and falling apart. They lobbied the govt to restrict the influence of Jap bikes and that still didn't save them. It finally took a overhaul at the top to fix the company and turn it around. I am not a huge fan of the bikes myself but they have done a good job with repairing the name, the machine, and the icon. And they are still with us. Indian, however, is not. The loss of them didn't alter our societies grasp of the iconic motorcycle though.

I don't think they (all three anyhow) will disappear from the North American landscape, but I do think that one at least will, which will wake up the others and get them to make the changes they need.

[The70RT]

I think at this point every manufacture is thinking of their selves and talk of any merger is questionable. Now with the bailout they have to come up with a restructuring plan and no time for outside talks.

[Ghoste]

I think the Harley comparison is apples and oranges though.  A very tiny segment of the population are affected by HD both as users or employees direct and indirect.  Indian was gone loooooong before the HD crisis too so I can't see their reorg as being all that pertinent to what is going on in Detroit.  In fact, I'd offer that Harley found a niche very very different from the bikes coming out of Japan and were able to capitalize on it.  Detroit is being hammered because they won't build Camry's and Civics.  Until the money all went bust they seemed to have found a niche market and now we criticize them for building SUVs and pickups but somebody had to buying them while times were good.
My problem with them isn't about what they build anyway, it's the way they are on the twilight of collapse but everybody still wants their full compensation.  No one is prepared to belt tighten.  Both sides are greedy, it isn't just the union.  In all of the hearing I have yet to hear of a single auto exec that was willing to give up his millions.  It's time for the union to give some back and for the execs to accept a base salary (a modest one too) and reduce costs on the smaller vehicles to get folks into them.  I think the product is good but they need to undercut the competition.  

[bakerhillpins]

I guess I wasn't trying to make a size comparison between HD/GM but rather key in on your point about the connection folks have with automobiles. Plus you have to consider that if you looked at the number of people passionate about cars and bikes I bet your not too far off in numbers. For LOTS of people cars are utility or status, not passion.

As for the idea that the whole country is connected in one way or another to the automotive industry, I don't buy it. You could say the same thing about Health Care, Taxes, Agriculture, etc. If one, two or all three fail, then there will be a hole in the market, a demand. Someone will move in to that hole and fill the demand because there will be money to be made. If that's Honda/Toyota/etc it will be filled. And it will be filled by those better able to compete and we will all win.

Detroit lost because it bet the farm on large vehicles and lost. Just like all of us who were not diversified when Bear Sterns fell. It's not rocket science to figure out that when gas prices go up, thirsty cars go down. They were just content with the big profit margins. That's not to say that they haven't made some good cars lately, its just too late, and those better diversified are able to hang on.

[Charger_Fan]

As much as I hate to say it, I think the big 3 should get no money...and the funding for AIG should be yanked as well. This whole bailout thing is just idiotic...and at the very least, socialistic.

If the big 3 are actually going to go belly up, then go ahead...let the chips fall where they may & everyone hang onto their shorts. I think it was Glenn Beck the other night that said if the big 3 go belly up, then all the current self inflicted ankle chains will go with them. There HAS to be enough smart folks currently working in the automaker plants right now to be able to start their own American auto company fresh...without all the ties that have bound the big 3 for the last 50 years!
I think that's a good point & could see it work. A lot of people would lose their jobs when the automakers initially go belly up & the whole country will feel it for a while, but the ones who worth their pay (i.e. none of the same-as-usual union minded folks) will get those jobs back if & when another manufacturer rises from the big 3's ashes.

[Ghoste]

And naturally the people who have run those companies will get to keep their hundreds of millions and go one living life as usual.  Who knows, maybe they'll be the ones who will start new companies only they'll find employees who will work for the kind of wages they pay in Mexico or China and then they can get even more hundreds of millions, because after all, they must be worth their pay?

[The70RT]

Maybe it would be good for them to go down? A million more people without jobs. Mostly people that were making 25-35 dollars an hour. Those people couldn't survive on 10-15 dollar an hour jobs....if they could find one. On the average with all benefits the average wage is over 70 dollars an hour for all of the big three, Chrysler being the highest. Toyota workers under 50. If they all go under maybe these people will come back to reality check and think about striking next time....if there is even a chance for one.

[Ghoste]

What we are missing here because of our polarized glasses is that both sides have feeding their greed.  The union AND management have overfed.  The saddest part is that if ALL of the Big Three employees would take some of the pain and the general public could somehow get past the perception that GM, Ford, and Chrysler only build gigantic lemons that only get about three mpg, it would go a long long long ways to helping put the North American economy back on track.  In my own uninformed opinion anyway.