Jack_Diane_Freedom
Lindsay Ont, and Gulf Coast Florida
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Joined: 05/11/2005
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I am not pro union but remember GM, Ford, and Chysler Management all said 'OK' to the union demands so we cannot entirely blame the unions.
I would like to point out that NO amount of bailout or subsidy will sell vehicles around the world. What are these workers and management going to get paid for after the bail out, sitting around doing nothing since no one is purchasing the vehicles.
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DannerFamily
Dallas
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Joined: 11/06/2007
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Hmmm....let's take a minute and look at the TWO REASONS the big three automakers are having trouble right now.
1.) LAST YEARS INCREDIBLE FUEL PRICES
2.) TOTAL FAILURE OF THE US FINANCIAL SYSTEM
The big three build great vehicles - most of which are large with massive engines with lots of power. Exactly what we love!!! They build em because we buy them!!!!
The big three need a couple of years to adjust to the new reality that Oil might become expensive again after the recession is finally over....and without loans available it doesn't matter what they build.
Our goverment is at fault for BOTH REASONS listed above. So I find it laughable that Mr. Dodd has the balls to criticize the big 3.
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ernestfortier
Palmdale, Calif.
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I'm not pro-union either but I feel sorry for the people that worked for the union for a long time and retired on a union retirement. If the big three do go bankrupt then that breaks the union contract and might stop all retirement payments to some people that have been retired for years. I don't think that many of them qualify for Social security, so where will that leave them. It was not necessarily the employees faults that the union and management ruined all these companies.
I will also say that I haven't bought a new car or truck for at least 20 years because I couldn't afford one. I had to buy used because of ultra high prices.
Ernie Fortier
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itsalleasy
USA
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Joined: 07/20/2007
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Contrary to popular opinion potential purchasers did not suddenly decide to quit purchasing from the domestic manufacturers all at once because of quality and/or mileage issues. The actual problem is a lack of credit brought on by decisions made years ago and outside the auto industry. The import manufacturers sales are in as much trouble as the domestic manufacturers.
Chapter 11 strategy
A survey was done and 80% of the respondents said they wouldn't buy from a bankrupt manufacturer. Would you?
Some facts
The U.S. auto industry employs 239,341 people, there are 775,000 retirees and surviving spouses.
In 2007 $156 billion was purchased from suppliers in all 50 states.
Suppliers employ 610,000 people with wages of $54 billion.
2,000,000 people depend on the auto industry for health care.
Pension and health care for retirees is the responsibility of the auto makers. Should they declare Chapter 11 and dump their legacy costs (as is the popular solution) pensions will likely become the responsibility of the the U.S. taxpayers. Pensions are guaranteed by the Pension Benefit Guarantee Corporation. Currently this is funded by employers. Do you think it will survive with this funding if 775,000 retirees are added?
In 2010 a payment to a UAW run VEBA is due from all auto manufacturers. This transfers all medical costs to the UAW. Funding for this is from the UAW employees, there have been no raises over the last 2 contracts to cover the payment. The employees do care about the future of the manufacturers and their own futures.
There are 14,000 dealers with 740,000 employees who earn $35 billion in wages. These dealers generate $693 billion in sales and $10 billion in taxes.
The domestic auto industry is the largest purchaser in the U.S. of
Iron
Steel
Plastic
Copper
Aluminum
Electronics
Computer chips
The domestic auto industry accounts for 10% of the U.S. manufacturing capacity and 4% of the GDP.
The first year after failure personal income will be reduced by $150.7 billion, $398.2 billion over 3 years.
Government will loose
$60.1 billion the first year
$54.3 billion the second year
$42.0 billion the third year
That's $156.4 billion over 3 years.
3,000,000 jobs will be lost in the first year.
239,341 at the automakers
973,969 at suppliers
1.7M spin off
The current economic situation was caused by a .3% drop in the GDP. What will happen if the automakers fail and there is a 4% drop?
What will happen to national security if we loose the ability to produce heavy vehicles required for defense? Do you think the Chinese will build them?
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Popsie
Livingston, TX, USA
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Joined: 04/04/2003
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Read this thoughtful article by Mitt Romney. He actually knows a lot about the auto industry.
curious Bob - we fulltime with our Cairn Terrier, in 01 National Islander, and 00 Saturn LW2
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nickthehunter
Southgate, MI
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Joined: 07/18/2005
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You all keep talking about how a auto company can go to bankruptcy court and be reorganized and stay in business. I just have one question. Are you going to buy a new car from some company that may not be around to take care of the warranty work? I wouldn't. I'd buy my new car from a company that I figured was going to be around for a while so i could get warranty work done, parts 10 years down the road, etc. And a company in bankruptcy wouldn't fit that bill.
Now there is plenty of places were cuts need to be made, negotiations need to occur, and timely decisions made. But Bankruptcy court is going to be the death knell for any auto company that goes there. And when that snowball starts down the hill, it will mow down a lot of people.
* This post was
edited 11/20/08 06:52pm by an administrator/moderator *
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Gale Hawkins
Murray, KY
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Joined: 07/22/2007
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I have to say Mitt really got my attention for the first time and impressed me. A read of it will show why some of the posts here miss the mark.
The sky is not falling. We are not going to loose the war because we shut down our war making machine makers. 
GM is not failing due to high fuel or credit crunch because they were were failing when the boom was going up and up. They just failed to see what VW selling $1500 cars in the mid 60's meant for the future.
14,000 US dealers? A dealership every 20 miles is stupid today. People can and will drive 100 miles to buy a car. I mean it is 100,000 miles before the first tune up is due.
GM workers are not evil people but they were given the cash where they could have saved for their retirement outside of the system better than the average Joe and Jane across America.
When I bought the only used car of my life I went with Nissan in 1973 vs the Vega or Pinto from GM or Ford. GM has known since that time they were going to fail because they lost more market share year after year.
Bluntly GM decided to close their doors 30 years ago and milk the system for all they could on the way to going broke. They are still trying to get that last $25 billion drop of milk out we saw this week in DC.
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Gale Hawkins
Murray, KY
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If we had Mitt's money it would tell me we knew as much about business as he does. Someone does not understand the nature of skills a good investment banker applies.
We can slam success all day but it does not make it go away. Look at those who slam WM and they show a 10% increase in profits while the others are trending in the opposite direction.
* This post was
edited 11/20/08 07:04pm by an administrator/moderator *
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nickthehunter
Southgate, MI
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What does having money have to do with knowing beans about the auto business?
Do you have any clue as to where he got his money from? Let me give you a clue. He got his money from leverage buyouts of companies going bankrupt. Anyone wonder why he opposes loans to auto companies? Must be he smells another profit for himself
* This post was
edited 11/20/08 07:09pm by an administrator/moderator *
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Gale Hawkins
Murray, KY
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nickthehunter wrote:HUH!!!
What does having money have to do with knowing beans about the auto business?
Do you have any clue as to where he got his money from? Let me give you a clue. He got his money from leverage buyouts of companies going bankrupt. Anyone wonder why he opposes loans to auto companies? Must be he smells another profit for himself
Nick I agree with you Mitt is an expert on why companies go bankrupt and knows how to fix them.
This is why he was able to write such a to the point take on GM today. I like the sound of your thought of Mitt being able to put together a leverage buyout. That could save a lot of the jobs of these auto workers.
Mitt is one of those guys the more you learn about the more you respect. Clearly business is more his cup of tea over running for office.
* This post was
edited 11/20/08 07:11pm by an administrator/moderator *
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