Should the government bail-out include domestic automakers?

[Inzane]

Myth: GM doesn’t make cars that people want to buy



Fact: GM cars and trucks have improved significantly over the past decade. Critics are taking note, and customers are responding.



In 2007, the Saturn Aura and Chevy Silverado won North American Car and Truck of the year.



In 2008, the Chevy Malibu was named North American Car of the Year, The Cadillac CTS was Motor Trend’s 2008 Car of the Year.



Customers have responded just as enthusiastically as the critics. Although total U.S. vehicle sales are down almost 13% so far this year, a number of GM cars and crossovers have enjoyed significant sales increases:



Saturn Vue +5%

Chevy Cobalt +6%

Pontiac G6 + 8%

GMC Acadia +8%

Saturn Aura +10%

Cadillac CTS +25%

Chevy Malibu +36%

Pontiac Vibe +39%

Buick Enclave +124%



Customers these days are watching their pennies, and they recognize the style, quality, value and fuel efficiency of new GM vehicles.



There is also the matter of national pride.



We are also proud that American brands like Chevrolet and Cadillac are known and admired around the world.

Do you work for General Motors?



I will admit that the new Malibu and CTS have made great strides at becoming very competitive in their classes. Those are but two examples in GM passenger cars that stand out from a sea of mediocrity.



But the Pontiac G6... they are crap.





I can`t say I know anyone who "admires" the Chevrolet brand. WHO around the world admires them? :think: (Other than within the Corvette niche? Corvettes are special in their own way and don`t deserve to be lumped in with the rest of Chevy most of the time.)

[Mr. Clean]

...I`ve been out of work for fourteen months, barely getting an interview every six weeks. I may be assuming here, but I think you`d be a bit bitter as well...

LenA, you`ve made a huge mistake in ASSUMING, that I have not been in your shoes. And I can tell you that we are not alone. Men in our demographic seem to encounter these circumstances with some regularity.

...and there is no Chicken Little here. What I say is based as much on a quarter of a century of direct industry experience. Is what you posted based on exact experience or is it an opinion, based on something else less tangible?

And those 25 years of industry experience have lead to to be able to state that...

I guarantee that if any of the Detroit 3 file bankruptcy, it`s game over for auto manufacturing of any kind in North America...

Sorry LenA, but my bet is it was just an apple falling from the tree...



I still say let Chrysler go if they can`t make it on their own. We`ve bailed them out once and they are back again. What part about operating a business for profit didn`t they understand?

[Lenny]

Do you work for General Motors?



I will admit that the new Malibu and CTS have made great strides at becoming very competitive in their classes. Those are but two examples in GM passenger cars that stand out from a sea of mediocrity.



But the Pontiac G6... they are crap.





I can`t say I know anyone who "admires" the Chevrolet brand. WHO around the world admires them? :think: (Other than within the Corvette niche? Corvettes are special in their own way and don`t deserve to be lumped in with the rest of Chevy most of the time.)

MotorCity works for one of the auto suppliers I listed. I have twenty-five years experience as an industrial sales rep, as an auto supplier, with both MBO and OEM experience. My wife is a senior paralegal, working for Michigan`s largest law firm, in their automotive practice group, with Ford and Chrysler as their only automotive clients. There is a bit of auto industry experience and expertise speaking here.



Chevy, Cadillac, and Buick sell very well in China - it`s been reported that they are status symbols there. Business in China has taken a serious hit, as the get their first taste of declining consumer confidence.

[Lenny]

LenA, you`ve made a huge mistake in ASSUMING, that I have not been in your shoes. And I can tell you that we are not alone. Men in our demographic seem to encounter these circumstances with some regularity.







And those 25 years of industry experience have lead to to be able to state that...





Sorry LenA, but my bet is it was just an apple falling from the tree...



I still say let Chrysler go if they can`t make it on their own. We`ve bailed them out once and they are back again. What part about operating a business for profit didn`t they understand?

I didn`t assume that you haven`t been in my shoes. Go back and read what I said - "I may be assuming here, but I think you`d be a bit bitter as well." Who wouldn`t get a little bitter, and perhaps a little cynical after over a year out of work?



Apparently I`m not alone in my assessment of the supplier situation. Those with European operations have had their cover (insurance canceled) in Europe if they do business with Ford of Europe, or GM of Europe (Adam/Opal), because the insurers are afraid that any failures in North America would have negative financial effects on the European operations as well. Cover insurance covers suppliers against the risk of the car companies failing, and is not written in the United States. According to the Financial Times of London, GM & Ford are the biggest companies to ever be blacklisted.

[Setec Astronomy]

A lot of great companies have gone bankrupt, but I`ve always admired GM.



There is the famous story here in NJ about when in WWII, many industrial plants were converted to manufacture war equipment, the GM Linden plant was switched over to building Navy aircraft (forcing construction of the now-defunct Linden Airport across the street to allow the planes to fly away). According to a local newspaper story years ago, the plane in which George H.W. Bush was shot down in was built in the Linden plant.



GM (as well as Ford and Chrysler) stayed in the military/defense/aerospace business after the war, including participation in the Apollo (moon landing) program. The peak of their aerospace involvement probably came in the 80`s when they bought Hughes Electronics (yes, Howard Hughes` company), a major player at the time (since split up and sold to Raytheon and Boeing).



GM covered the waterfront in capability, with their own captive divisions making really every part of the car, Harrison Radiator making radiators, heater cores and A/C condensers, Delco making batteries, plugs, electronics, starters, Rochester making carbs and later fuel injectors. I can`t remember the name of the div. that made the wiring. Transmissions, axles, you name it. Their New Departure-Hyatt division made wheel bearings (as well as plenty of other bearings). It`s sad enough the mfg. capability and expertise that has been shed by the closure or sale of these divisions, but it will be a very sad day if this industrial icon falls.

[Lenny]

A lot of great companies have gone bankrupt, but I`ve always admired GM.



There is the famous story here in NJ about when in WWII, many industrial plants were converted to manufacture war equipment, the GM Linden plant was switched over to building Navy aircraft (forcing construction of the now-defunct Linden Airport across the street to allow the planes to fly away). According to a local newspaper story years ago, the plane in which George H.W. Bush was shot down in was built in the Linden plant.



GM (as well as Ford and Chrysler) stayed in the military/defense/aerospace business after the war, including participation in the Apollo (moon landing) program. The peak of their aerospace involvement probably came in the 80`s when they bought Hughes Electronics (yes, Howard Hughes` company), a major player at the time (since split up and sold to Raytheon and Boeing).



GM covered the waterfront in capability, with their own captive divisions making really every part of the car, Harrison Radiator making radiators, heater cores and A/C condensers, Delco making batteries, plugs, electronics, starters, Rochester making carbs and later fuel injectors. I can`t remember the name of the div. that made the wiring. Transmissions, axles, you name it. Their New Departure-Hyatt division made wheel bearings (as well as plenty of other bearings). It`s sad enough the mfg. capability and expertise that has been shed by the closure or sale of these divisions, but it will be a very sad day if this industrial icon falls.

New Departure-Hyatt division and Delco were combined into Delphi division, which was spun off. Delphi ended up in Chapter 11. Bloomberg News reported that Delphi may end up in Chapter 7 liquidation, if GM goes Chapter 11. Delphi may have ben spun off, but GM is still so dependent on them, that Delphi`s been financially supported during it`s bankruptcy. Been a rough time in Detroit.



The former New Departure-Hyatt division plant in Sandusky, OH was once an account of mine. Lots of good memories of some great sales calls there.

[Lenny]

LenA, you`ve made a huge mistake in ASSUMING, that I have not been in your shoes. And I can tell you that we are not alone. Men in our demographic seem to encounter these circumstances with some regularity.







And those 25 years of industry experience have lead to to be able to state that...





Sorry LenA, but my bet is it was just an apple falling from the tree...



I still say let Chrysler go if they can`t make it on their own. We`ve bailed them out once and they are back again. What part about operating a business for profit didn`t they understand?

How much do you know about the automobile manufacturing business model here in North America? Just curious.



Business has been rough for quite a while. Some suppliers have been getting "sustainability payments" from GM,Ford, Chrysler, and Toyota. I`m not sure about Honda or Nissan. "Sustainability payments" are company handouts to keep a key supplier out of Chapter 11 or worse. It contributed to Toyota`s $336 million loss in North America last quarter. I wonder how bad this quarter is going to end up.

[Setec Astronomy]

The former New Departure-Hyatt division plant in Sandusky, OH was once an account of mine. Lots of good memories of some great sales calls there.

Well, the NDH plant here in Clark closed a long time ago, it`s now a brownfield with a municipal golf course on top.

[Mr. Clean]

I didn`t assume that you haven`t been in my shoes. Go back and read what I said - "I may be assuming here, but I think you`d be a bit bitter as well." Who wouldn`t get a little bitter, and perhaps a little cynical after over a year out of work?

...

Well, I don`t want to belabor the point of grammer, but your sentence structure stated otherwise. And even for the part that you did assume, you were/are wrong. I wasn`t bitter, I didn`t whine. I have moved on.

How much do you know about the automobile manufacturing business model here in North America? Just curious.

...

I think it is pretty obvious that I am not in the industry, or I would have said so. I am a consumer and have worked in the business world for over three decades. So, I have a pretty firm grasp about the principles of business and the benefits of profitability and the detriments of the contrary. Do you have a point? Or, are do you wish to argue that if one is not in the industry, you can`t possibly have a clue and therefore a valid opinion?

[Lenny]

I think it is pretty obvious that I am not in the industry, or I would have said so. I am a consumer and have worked in the business world for over three decades. So, I have a pretty firm grasp about the principles of business and the benefits of profitability and the detriments of the contrary. Do you have a point? Or, are do you wish to argue that if one is not in the industry, you can`t possibly have a clue and therefore a valid opinion?

I was curious. I wouldn`t say that people not in the industry don`t have a clue, but I will go so far as to state that whether we`re talking about GM, Ford, and Chrysler, or Toyota, Honda,and Nissan, the steps in bringing product to market, and a lot of the industry`s practices, don`t mirror other consumer products, or a lot of other business models. A lot of it mirrors industrial products in how long it takes to get to market, with the added complexities of changing consumer tastes coloring and complicating all of the business.



Trade credit is one area I found the auto industry deviates from a lot of the business world in a way that`s somewhat unhealthy. Almost every area of the business world I`ve been exposed to is that payment terms are Net 30 days. The auto industry pays it`s tier one suppliers net 45 days. Except for tooling. Tooling for the plants is net 45 days after job one. Anyone who supplies equipment for an assembly plant, or and other OEM plant, like an engine or a transmission plant, is often waiting for months after delivery, to get paid, for something that may have had raw materials delivered to the supplier three, four, even eight months before project completion. machine tool builder doesn`t get paid until the car, that the equipment was designed to help build, starts production.



And that`s not just a Detroit practice - the other auto makers do it as well.



It`s a dysfunctional business model all the way around, in ways too numerous to list. It`s a wonder anyone makes a buck in it anymore, and Toyota`s $336 Million third quarter North American loss may show the cracks in their armor.

[Lenny]

Well, the NDH plant here in Clark closed a long time ago, it`s now a brownfield with a municipal golf course on top.

Sandusky is gone now, too.

[Mr. Clean]

I was curious. I wouldn`t say that people not in the industry don`t have a clue, but I will go so far as to state that whether we`re talking about GM, Ford, and Chrysler, or Toyota, Honda,and Nissan, the steps in bringing product to market, and a lot of the industry`s practices, don`t mirror other consumer products, or a lot of other business models. A lot of it mirrors industrial products in how long it takes to get to market, with the added complexities of changing consumer tastes coloring and complicating all of the business.



Trade credit is one area I found the auto industry deviates from a lot of the business world in a way that`s somewhat unhealthy. Almost every area of the business world I`ve been exposed to is that payment terms are Net 30 days. The auto industry pays it`s tier one suppliers net 45 days. Except for tooling. Tooling for the plants is net 45 days after job one. Anyone who supplies equipment for an assembly plant, or and other OEM plant, like an engine or a transmission plant, is often waiting for months after delivery, to get paid, for something that may have had raw materials delivered to the supplier three, four, even eight months before project completion. machine tool builder doesn`t get paid until the car, that the equipment was designed to help build, starts production.



And that`s not just a Detroit practice - the other auto makers do it as well.



It`s a dysfunctional business model all the way around, in ways too numerous to list. It`s a wonder anyone makes a buck in it anymore, and Toyota`s $336 Million third quarter North American loss may show the cracks in their armor.

Spoken by an industry "insider"....And so why again should the American public want to cast their dollars to an industry that doesn`t have a logical/healthy business model/plan? Note, I`m not singling out just the automakers by this statement. But, to argue that "our industry is special" "we don`t conduct business the way others do" well tdb. If you don`t and they do, they are profitable and you`re not, you wouldn`t have to pay me $16million (or whatever the numbers are) to figure out something is wrong and we need to fix it. Don`t wait until the ship is up to the gunwales in water before it is decided that there are holes in the hull that need to be repaired. Instead, again basing this on the Chrysler situtation, we`ll just hail down the public to help us bail.

[Spilchy]

I don`t have the heart or stamina to read this whole thread. Sorry if what I say has been mentioned. In no way should we bail them out. Why on Earth would we give billions to the exact same people that screwed it up to begin with? That`s crazy. The bozo that heads Chrysler received a $200 million golden parachute when he was FIRED from Home Depot. He was a schmuck to begin with.



Einstein said the definition of insanity is doing the same thing over and over again expecting a different result.

[dave40co]

I say they should file a BK and renegotiate the Union contracts. Hourly cost for an American automaker worker is $70 but for foreign automakers it is $40. The unions have priced them selfs out. I know how it works since I was a union worker for UAL when it went under. I also believe the upper management should take HUGE cuts.

[Lenny]

Spoken by an industry "insider"....And so why again should the American public want to cast their dollars to an industry that doesn`t have a logical/healthy business model/plan? Note, I`m not singling out just the automakers by this statement. But, to argue that "our industry is special" "we don`t conduct business the way others do" well tdb. If you don`t and they do, they are profitable and you`re not, you wouldn`t have to pay me $16million (or whatever the numbers are) to figure out something is wrong and we need to fix it. Don`t wait until the ship is up to the gunwales in water before it is decided that there are holes in the hull that need to be repaired. Instead, again basing this on the Chrysler situtation, we`ll just hail down the public to help us bail.

Name another business group that not only gets a lot of government regulation, but gets as much conflicting regulations? NHTSA gets safety standards going, which tend to increase the weight of the car, making the gas mileage standards more difficult to meet. Then their`s the whole problem of emissions.



And this problem doesn`t just hit GM, Ford or Chrysler. Toyota`s recent (by recent I mean since 2003) problem with engine oil sludge in everything from Corolla 4 cylinder`s to Lexus V-8`s. Problem has been traced to increasing engine operating temperatures to lower emissions. Let`s not even forget Toyota`s transmission problems, in the 2007 Camry and Avalon, Honda`s oil filter related engine fires in the CR-V, etc. And for all of Chrysler`s quality problems, assuming they survive, Nissan is basing their next generation full size pick-up on the new Dodge Ram platform and it will be built by Chrysler. Nissan isn`t talking about what they plant for their very young Canton, Mississippi plant.



Then on top of all the regulation, there`s conflicting consumer tastes - sporty ride verses boulevard smooth, how aggressive the transmissions shift, basic transportation (no matter what size segment) verses loaded luxury. Plus changing market conditions, liek the run up in gas pries taking even Toyota and Nissan by surprise, hit the market with high gas prices just as their five year product plan of getting into the light truck market was coming to fruition.



Which consumer product business gets nailed like this - Federal government interference, Federal court interference (give my wife her job), and then market factors changing faster than you can bring a new product to market?



Then what other industry is reported to affect 1 in 10 jobs (and that`s supposed to include the dealers and all the businesses that depend on them)?