And Then There Was One

(continued from previous post)

The US Government, via NAFTA, free trade agreements, lack of aggressive reaction with Japan's (and others') unfair trade practices, minimal funding of advanced research in propulsion technologies, and lack of a cohesive energy strategy has been a major part of the disintegration of the domestic auto industry. Without a doubt, the management teams at the Big 3 have been beyond inept since about 1968, but terrible public policy on the part of the US has been at least as damaging as poor management and the UAW strong-arm tactics. To believe that every country honors "free market" ideals is absurd, and yet the US government seems to expect US based manufacturers to compete on an uneven playing field against an imminently stacked deck. If all markets were truly free and open, I would have no problem with the US saying "you succeed or fail on your own". However, no other country treats their manufacturing base this way, and therefore, the US cannot afford to either. We as Americans are at a crossroads: do we try to hold on to the ideals that got us to this point, or do we return to the policies that were common after WWII during the 50s and 60s that sought to push American manufacturing to the forefront.

You're forgetting a couple of key points. First, in the aircraft industry, the only real competition was Airbus. No Asian manufacturer has ever emerged to challenge Boeing and Airbus (which is actually owned by EADS which is in turn owned by the governments of France and Germany, and a private corporation - Daimler). In automobiles, the Japanese alone have 4 major manufacturers: Toyota, Honda, Nissan, and Mazda. Germany has 3.5: Daimler (owner of Mercedes, Smart, and Freightliner), BMW (owner of BMW and MINI), and VW/Porsche which counts as 1.5 because they are technically separate companies (owners of Porsche, VW, Bugatti, Audi, Lamborghini, etc). Italy has Fiat SpA with brands like Fiat, Ferrari, Maseratti, Alfa Romeo, etc. France has Renault (yes, I know that it's got an equity tie-up with Nissan). Even Russia has several auto manufacturers (albeit they're a decade behind technology wise). China has about 30 brands but really 3 big manufacturers, none of which have brands sold in the US. Yet. India has Tata which also owns Jaguar and Land Rover.

To say that the US has "too many" manufacturers despite being the largest vehicle market on the planet is absurd. What really is true is that the United States has the worst political backing of its' manufacturing base of any country in the developed world. For decades the Japanese government has supported Japanese manufacturers through restrictive trade laws on its domestic market and keeping the Yen artificially low versus the US Dollar and the British Pound (and now the Euro). The currency manipulation of the Yen boosted profits for Japanese manufacturers while making it much more expensive for US and European based manufacturers to import vehicles into the Japanese market. This currency manipulation was not officially recognized or admitted as policy by the Japanese until the recent comments of Honda's president admitting that not only was currency manipulation a common practice, but that if the Japanese government didn't begin interfering more forcefully, he would consider moving all of Honda's operations overseas.

How do you merge three companies into one? Who decides how much each company???s stock is worth? What about the dealerships, some of which are next to or right across the street from each other. All three have similar but different contracts with the union; how do you resolve those differences? Who decides which factories close and which stay open? Who decides which brands disappear and which remain on the market? So many questions but still an idea that needs to be seriously considered.

Good idea, BUT how do you merge three companies into one? How do you create one stock and convert the stock from the three companies?Who decides what each share of common stock is worth? And what happens to all the dealerships for the Big 3--some next to or right across the street from each other? Same with factories. Who decides which ones close and which stay open? All three contracts with the union are different. How is that reconciled?

why did the government not act on these problems, was she oblivously to the signs which have brought these companies to the brink of distinction, now, everyone is screaming "we need help", the detroit free press, the supplies who are ripping off the industry with their high profits, the mis-lead management who have been telling the country that they are on the right track, we have heard all this rhetoric before, now we see the fools in congress say we must help them. the "big three", have brought this upon themselves, have them step down, bring back ghosn(sp) and make him the over-sight for these companies, nationalize them, the only way i would support any bailout of these failed companies

If the automakers are allowed to go down, the past 30 days will be looked upon as the Good ol days.

AMERICA WILL BURY ITSELF WITH ALL ITS GREED OVER THESE PAST DECADES WHEN THE WORLD AROUND US DID NOTHING BUT ENVY US, WE HAD EVERYTHING, THEY HAD NOTHING, WELL, THE TIDE IS CHANGING, AND NOW IT IS US, THE GOOOD OLD U.S.OF A THAT WILL SEE THE CHINA, INDIA, BRAZILE, RUSSIA, AND OTHER COUNTRIES START BUILDING THEIR ECONOMIES, WE ARE ON THE DOWNFALL, THE GUY WHO DECIDED TO SKIP COLLEGE AND WORK FOR GM BECAUSE IT WAS MORE LUCRATIVE, WELL, HE MAY BE UNEMPLOYED NOW, STOP BLAMING EVERYONE AND ANYONE FOR THE FAULTS OF THIS AUTOMOTIVE PROBLEM AND THE GOVERNMENT OFFICIALS WHO YOU CONTINUOUSLY PUT BACK INTO OFFICE AND WHO CONTINUOUSLY KEEP SUPPORTING AND HAVE DONE NOTHING, ABSOLUTELY NOTHING FOR YOU OR ANYONE ELSE IN THIS COUNTRY

AMERICA WILL BURY ITSELF WITH ALL ITS GREED OVER THESE PAST DECADES WHEN THE WORLD AROUND US DID NOTHING BUT ENVY US, WE HAD EVERYTHING, THEY HAD NOTHING, WELL, THE TIDE IS CHANGING, AND NOW IT IS US, THE GOOOD OLD U.S.OF A THAT WILL SEE THE CHINA, INDIA, BRAZILE, RUSSIA, AND OTHER COUNTRIES START BUILDING THEIR ECONOMIES, WE ARE ON THE DOWNFALL, THE GUY WHO DECIDED TO SKIP COLLEGE AND WORK FOR GM BECAUSE IT WAS MORE LUCRATIVE, WELL, HE MAY BE UNEMPLOYED NOW, STOP BLAMING EVERYONE AND ANYONE FOR THE FAULTS OF THIS CUNTRY AND THE GOVERNMENT WHO YOU CONTINUOUSLY PUT BACK INTO OFFICE

LET THEM FILE FOR BANKRUPCY, I WISH I WERE ABLE TO FILE AN INJUNCTION AGAINST THE FEDERAL GOVERNMENT PREVENTING THEM FROM LOANING THE AUTOMOTIVE COMPANIES ANY MONEY, NOT A DIME, "LET THEM EAT CAKE"

LET THEM FILE FOR BANKRUPCY, I WISH I WERE ABLE TO FILE AN INJUNCTION AGAINST THE FEDERAL GOVERNMENT PREVENTING THEM FROM LOANING THE AUTOMOTIVE COMPANIES ANY MONEY, NOT A DIME, "LET THEM EAT CAKE"

Like the idea of consolidation of auto's Big 3. That is exactly how it works in other industries. But consider this as well: Might it cost less to pay monies directly to workers rather than to the execs who have been unresponsive to market conditions for 20+ years. Pay workers for 10 years - salary, benefits, pensions.
Continue manufacturing replacement parts for 10 years. Then the existing cars on the road as out-of-luck. Many companies end-of-life their products in such a manner. Meanwhile, retrain workers, redesign vehicles and retool plants to produce more competitive products (less emmissions, more reliable, better fuel efficiency, alternative fuel sources). Possibly convert some plants to manufacturing public transit vehicles.

Consolidation of the Big 3 Auto Industry is an interesting idea. Does follow what other industries have done. Another thought, maybe works in concert with consolidation.......How much would it cost to pay 10 years
expenses directly to the auto workers - salary, benefits, pensions. Then during that time period, continuing manufacturing replacement parts for the cars on the road. Consumers who still have those vehicles after 10 years would then have to replace them, but 10 years ownership/running for American-made vehicles is a really long long time. Also take those 10 years to refit manufacturing sites to make other products and maybe more competitive vehicles (emission standards, non-gas powered, higher fuel efficiency...

let them "fail", let them file for bankrupcy, redo the union contracts, do away with this farce job works program, work your contracts to be more competitive with other mfg's, also, and the biggest obstacle of all, lower the parts pricing, they are too high, too much profit costing the mfg's too much money to sell these vehicles, also, why am i bailing out a private entity like chrysler, they will do nothing but take this money and put it back into their own pockets and still let the company fail, venture capitalists, you gain you lose, you fail you go out of business

Distilling the Big Three into a single player in Detroit my be the best answer to save our ailing auto industry. It is an interesting concept. Perhaps it has application to other industries as well. Like newsweeklies. P

You know, the concept of distilling the Big Three into a single player in Detroit is smart. It may be the one alternative that can save the American auto industry. The concept probably has application to other industries as well. Perhaps there is value in investigating distilling the Big Three Newsweeklies (now of course there are really two because of US News) into one super newsweekly. Call it U.S. Timeweek. Maybe the government would even provide a subsidy to help save jobs in the publishing industry. With all due respect, why would you combine three incompetent companies into one large incompetent company. Remember when Piedmont, Repbulic, and another airline (I cannot remember) became US Air. That has really worked well hasn't it.

One item of interest that this situation brings out is that so much of the Japanese manufacturing is now in the US that buy 'US made' and buy 'Detroit' are no longer that same thing. We can now buy cars made, at least as much as the big three, in the US and buy Toyota/Honda/Nissan. The US customer may be willing to buy US, but when that no longer means 'buy Detroit' alone then the US consumer may have a change of heart. We may no longer be willing to support a Detroit worker with retirement benefits beyond our own when we can 'buy American' and support a Toyota worker with benefits more like our own, and get a better car at lower cost in the process.

I find irony in the potential closing of Saturn, the company that was supposed to bring US car manufacturing into the overseas manufacturing paradigm. It sure looks like Detroit has still not adapted to the Japanese methods, even when that adaptation is the difference between success and failure.

I don't have a clue as to what Congress will do now. So far Congress has done with Detroit what should have been done with the financial bailout mess. Congress needs to make clear to the medium sized three that bankruptcy IS an option. As soon as the view that bankruptcy is not an option is taken then the companies and UAW can use that as a lever to make fewer concessions than they otherwide would, at the expense to the US taxpayer. Keeping bankruptcy on the table holds the companies, UAW and dealerships up to harsh cuts and ways out of contract obligations. I do question whether avoiding bankruptcy now would actually benefit in the long run. It may do nothing more than delay the inevitable and leave the US debt much larger in the process. As much as it hurts now, cutting one loose now may be better in the long run, and Chrysler has been the weak link for a long time.