Article after article outlines the arrogance and ignorance of the Big3.

Try to remember back to a time when all three of them could be considered exemplary businesses?? Shoot...even one of them?

They are bad business models...period.

Can all three survive...absolutely not. Maybe the new economy can only facilitate one or perhaps two of them.

What's so difficult about admitting that US car manufacturers simply cannot compete with foreign manufacturers? Why don't we build TV's in the USA? Perhaps the same reasoning applies to building cars.

Problem is the US economy is in the crapper and quickly headed to the sewer and it CANNOT possibly tolerate the hit that will come from one or all of them closing their doors.

Therefore, against every ounce of logic and sound advice, Obama and Congress will write them a few blank checks.

In my opinion it is the wasted postponement of the inevitable...that they are not good business and there is no longer room for three of them.

What are they going to do with $25 or $50 or more BILLIONS? First, they will continue down the same path they are currently on. Second they will eventually design new technology cars but let's guess how many of them will cost below $25,000? And with this recession expected to last another two years, and credit being tight, and people being gun-shy, how many people will be in a position to go out and buy one of these cars...who is the market?

Now if Obama and Congress wish to nationalize the Big3 with debt money, and they wish to crank up the economy with more debt money in WPA-type programs, and in this scenario, as in the past couple of decades if we don't give a rip about adding trillion$ to our federal debt, then all of this conversation is moot.

Here's the brain-trust of America; the Big3 will get $50 billion, status-quo will continue, unions will want more, employees will want more, health care and pensions will increase, productivity will be questionable, and after five years of wasted time and more federal debt, the Big3 will finally have what any number of foreign car manufacturers already have today!

Does this make an ounce of sense???

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Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

And brilliant, as usual.

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The average UAW auto worker with high school makes well over seventy dollars an hour not including benefits. Some build homemade planes in their heated garages for a hobby.
They make twice what Toyota/Honda workers make. Something obvious about this picture?

A little math Puffin;

$70/hour equals $145,600 annual pay and this does not include benefits??

In my opinion, it's not about the unions...it's about the entire business model, including the unions, and employees, and suppliers, and management, and business policy, and government, etc.

If the USA cannot compete in car manufacturing...then let's face reality and move on. To dump $50 BILLION and more in a dying business model is one fine example why in the USA we can't get our heads out of our asses and do something right for a change...

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Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

They are definitely mismanaged, much like the airline industry. You can make money manufacturing cars in the US just like you can make money flying planes. You just have to be organized well without burdensome union contracts and you have to be well managed. Which is why Southwest airlines makes tons of money and why foreign auto manufacturers make tons of money making cars here. I agree, a bailout does nothing but continue to the mismanagement. Time for them to go under and be bought out by better managed and structured companies. Who cares if GM is actually owned by BMW or some other manufacturer.

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Obama The Naive: “To those who cling to power through corruption and deceit and the silencing of dissent we will extend a hand if you are willing to unclench your fist.’’ The Iranian response? “The Great Satan now has a black face.’’

It's a simple thought-process for me; either we can compete or we cannot. And even if we can compete in the domestic markets, it is doubtful we need the Big3...maybe the Big2...or perhaps just the Big1...

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Did you know both our problems and the solutions can be found simply by looking in our mirrors...and...Never confuse the extraordinary stuff I think and write with that of a well-balanced person...

What's obvious is that you don't have the correct data. Even Rick Wagoner's best negotiators wouldn't release that foolish figure for public consumption.

According to an analysis performed by John Russo of Youngstown State University, for 2006, the average UAW hourly wage was $27.81 for assembly line workers and $32.32 for skilled trades. These figures do not include shift premiums or benefits and are based on straight time.

What you may be referring to is a piece that came out in 2007, which stated:

The three American automakers generally pay about 30 percent more per hour in wage, pension and health care costs than Japanese automakers.

Ford, according to its annual report, paid $70.51 per hour in wages and benefits to workers last year. GM’s annual report says its labor costs average $73.26 per hour, while Chrysler’s costs average $75.86 — all well above the average $48 hourly cost incurred by Toyota, Honda and Nissan.


One thing many people either neglect to mention, or do not realize, is that as newer workers are brought in and older workers retire or are bought out, the average rates decrease for the Big 3. There is not a huge amount of difference between what a new hire UAW worker makes and what a new hire Toyota or Honda worker makes. The last time I was in Toyota's Georgetown facility, the average worker was making about $24 per hour in straight wages. That's been several years ago. It may be more now - I don't know. That's within about 10% of what workers make at a Chrysler/Jeep plant that I visit.

What is really hurting the Big 3 right now are the legacy costs from long retired workers. This is (IMO) the key area where the UAW is going to have to give in, and that's also the key area where they appear to want to draw the line.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."

I think that Food and Wine magazine is geared towards people that don't have to worry about the cost of vehicles or how much gasoline it uses. I realize that not everyone that reads the mag are wealthy, but they all read it because they want to live a wealthy lifestyle. Hence, the Caddy ads.

Legacy cost, lots of which has to do with health insurance. So a properly implemented national healthcare system reform should be good for the country in the long run.

yes no?

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The United Church of the Latter Day Tangential Tarts
"When I'm in command, every mission is a suicide mission!" -Capt. Zapp Branigan
"Did you know that Republicans are stupid and evil?" -Bill O'Reilly, Feb 2010

I'm glad that I waited before responding to this thread. From your original post about Food & Wine magazine being an indicator of, well... anything besides food and wine, to where we are now is good. I have tried to read as many posts as time would permit. But I'm sure that you've now given more thought to it and realize that what you saw in Food & Wine was only indicative of the demographic groups thought to read that magazine, and nothing more. If you read Cosmo, I'm sure you'd see car ads very different from those in Car & Driver, Road & Track... or Food & Wine.

But anyway, it's hard to argue anything about this situation and be consistent. I'm talking about myself here. And I noticed that you also admitted a counter point to your original argument:
But then you go on to say:
As I believe you may be finding, this can turn a person into Sybil rather quickly. I spoke with a friend of mine in Detroit yesterday, who is also in automotive. For 30 minutes, each of us went from being pro to anti, anti to pro on this bailout. Especially for those schooled in conservative economic thought, this is very hard to work through. One can say that those who cannot succeed should fail. But then one must realize that the collateral damage could cripple the U.S. economy for many years to come. And anything that the foreign companies would do to meet lost Big 3 capacity and remaining American demand would initially have to come from existing transplant operations and foreign plants. You do not retool an auto plant to produce a totally different platform in six months or less. And planning and building a plant takes years. As for DIP financing, the players in that market have gone from several dozen serious players to less than half a dozen recently. That too is a victim of the credit squeeze. What's worse is that the supplier base is where more jobs would be lost than at the assembly plants. These are nonunion operations for the most part. And most would not survive a failure by GM (Ford or Chrysler) paying its bills in the initial phase of a bankruptcy.

So part of the conumndrum for me is considering the efficiency that the free market eventually provides (economic Darwinism), versus the prospect that the American economy could be pushed into a very deep and lengthy recession by 2.5 to 3 million being added to the unemployment rolls. That's 2.5 to 3 million more houses and apartments, where the rents and/or mortgages may not be paid in a timely manner. One estimate that I recently read puts the estimated total cost to the U.S. economy at $200 billion+. How that figure was arrived at, I don't know yet.

I don't pretend to know the correct answer to this one. But it is clearly not a simple issue to fix. As Wilbur Ross said earlier in the week, speaking about the prospect of a GM bankruptcy: "This would be a mess!" And Ross has made a fortune taking automotive and manufacturing related concerns through bankruptcy to clean up their balance sheets.

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"Tweeter was a Boyscout before she went to Vietnam and found out the hard way... nobody gives a d@mn."