And Then There Was One

Consolidation, bankruptcy and DIP financing may be the only way to save US automobile companies. There will be a shrinkage and a very rough patch, but what could emerge is a cutting edge, energy efficient, highly competitive automobile industry business model of the future producing the highest quality, energy efficient, hybrid and hybrid-electric cars of the future that can be sold anywhere in the world. If Detroit cannot get this done, they will become obsolete which will be a disaster for our country.

The merger will only delay the inevitable. Perhaps if the firms were acquired by Japanese auto makers, our managers will be forced to discard practices that were discredited a century ago. Years ago I worked a summer at a Chevy plant where management and unions maintained a constant state of warfare, and the customer always was lowest on the priority list. Somebody posted a bumper sticker saying "Every foreign cra you buy costs an American his job. " Somebody penciled in "Can I choose who?"

Why would we want to make three failing disasters into one major disaster? The big three have put out nothing but poorly made, and unreliable crap for the past 15 years now. There may still be one in Detroit when its all done and said. My guess is that without government intervention, Ford will be the one to survive.

Madness running amuck. We keep making bigger so as to keep it going. But bigger eliminates everything that keeps the system going. Yoy need to push to smaller, leaner , inventive, quick reacting companies taht can compete. Out of this you get new ideas, better products, better pricing, and you employ more peoipel at all levels to provide a population thayt can buy what you make. So you say how can this compoete in a global market. Well you use a coop plan to pool the smaller companies for the big jobs, just like construction workers are pooled for the big projects. The plan idea of bigger is killing AMERICA and the American employee and taxpayer. The small guys that can't cut it will go by the way side and not stick arount sapping tax dollars, that's called socialsim and it doesn't work as well as a true Capitalic, Democratic System

Joe_Schmuckatelli : I think your heart is in the right place, but the problem is that in order for the US automakers to sell their cars at cost, they would actually have to raise prices. Right now they are losing money on every vehicle they sell. The problem right now can be broken down primarily into labor, and marketing. I think everyone knows by now that the powerful labor unions are the most responsible for runing the US auto industry in the same way they ruined the steel industry and many others. When people say that "foreign competition" killed the steel industry, what they are really saying is that the labor unions made it impossible for these companies to produce their commoditized product as inexpensively as non-union foreign competitors. That is what happened here in the US automobile industry. Non-union plants owned by Toyota, Honda, Nissan, and others don't have to pay the rediculous wages that these corrupt unions have been demanding. They can then take the proffits from their car sales (something detrroit doesn't currently have) and put it towards further R & D, as well as improving quality. It's a domino effect of sorts. The unions make it impossible for detroit to make enough money to put towards R&D.

With that being said however, that brings me to my next point. The 'Big Three' are actually making some of the best and highest quality cars around, but the "perception" of that fact isn't resonating with the public. The Japanese cars are perceived to be of better quality (for quite sometime this perception was well deserved) and that has stuck in the psyche of the car buying public regardless of the fact that the quality of most American cars have improved so much as to be comparable. The US car companies need to promote discounts and price less, and promote quality and value more. That is the only way for them to increase their market share.

To summarize: 1) Dump the union contracts! 2) Get better PR and advertising!

Well I think the above article makes a whole lot of sense. There are way to many dealers across Americia. They can cut up to half. Way to many brands to choose from. To much in comp to exeuctives and workers. Due away with that blood sucking jobs bank, would be a first start. Corral the union and start over.

All that is needed is to stimulate sales as opposed to giving them money. This will alleviate dealers' inventory and keep factories producing while they work on their business model. Here's what will work:
About 11 million new cars will be sold next year, instead of the typical 16 to 17 million of the past few years.
Let's take 12 million for example, at an average sales price of $25000. That's $300B in gross sales dollars.
At an average of 5% state sales tax nationwide that would be collected, it would be $15B in tax revenue to the states. I suggest suspending sales tax on automobiles for 2009, and since the federal government has already agreed to help with $25B as long as it will legitimately help, let it pay the states on behalf of the purchaser(s). Even at a normal 16 million units, which if this is implemented it could go back to that number, that means just $20B in federal aid as opposed to the $25B now being requested by the automakers in Detroit. That's fixing the problem and saving $5B to boot. You could even have the states compete in sales objectives for the extra $5B. This already works big in Texas where one month out of each year they suspend sales tax on autos. It certainly would get everyone talking about and focusing on something positive to stimulate the economy without costing states their sales tax revenue. It will work.

America made the most beautiful cars.The cars of the 50's 60's and 70's are to this day still in the hightest of demands. Why not make the cadillac cat eye convertibles, the little red covette's and the thunderbirds. We don't need to reinvent the wheel, we just need to make it with quality. Half gas, half hybrid cars can be made internally to fit our current needs.

America can save it's self , if we all realize we need to stop buying every cheap piece of junk that the greedy advertising manics freed us. In the 30' and 40's it was called propaganda well now we call it advertising . It's the same thing, some fool trying to get you to do what they want you to do. And as cattle being lead to the slaughter house we follow.

And for us soccer mom's who really think we need those big ,ugly , 8 or 12 cylinder only can go 25mp around school and park square trucks we call SUV's. Well let's face it, these dinousars need to be put to rest.

Here is my poorly thought out plan. Take current inventory and sell them at cost. Ideally this would cover burden. People don???t care about ???quality??? when the price is right. Reduce production by 35% for 2009. Re-negotiate labor contracts with the union. They can afford to give up a little bit as the rest of the country has. Give me a break, when assembly plants have a 25% absentee rate on a daily basis something has got to give. Address the compensation packages for the people ???leading??? the organization to its??? demise. Simply stated, Wagoner, Henderson, and Young (GM Execs) rake in 11.745 million in base compensation and incentives. On top of that they have a combined 292,496 shares of GM stock, plus 750,000 + stock options, and 135,000 restricted options. Yet, the company lost 38.7 billion in 2007.

Once that is complete, take the savings and invest in R&D and market research. Find out what people want and make that, whatever ???that??? is. They need to re-tune their organization so they are a little more nimble when comes to changes in the market.

Ultimately, stay out of my kids??? pockets!

I think we need to find our passion for making cars again. Great cars, Classics the cars that are made today look like the wooden box cars the any 8 year could put together.

I think we should pas laws requiring all vehicles sold in the U.S to meet a set standard of interchangeability in parts. Particularly in the Safety, drivetrain, electrical, and fuel systems..
So it wont matter whose engine you choose, ANY engine from any mfr. of the same class will fit seemlessly.

Let the Govt set these standards, and make everyone selling cars here adhere to it.

comment: the writing on the wall has been there for some time. We do subsidize the foreign makers with our defense budget. We have been sending american money to countries that are well lets just say buying the united states one state at a time. I live in what was once California and now it is called "New Found China". Every where you look you don's see the signs in english.

Saving the big three is like saving an american tradion. America is not as old as the rest of the world, but we do need to do something. Some of you may not think the car industry is worth saving but pretty soon there will be nothing American left to save.

You're kidding, right? Lee Iacocca got it right - you put two weak companies together, you get one big weak company. Put *three* weak companies together and you'd have a mess - from power struggles in the boardroom (which of the three CEOs keeps his job?), to overlapping product lines that don't share parts, to brands that cannibalize each another (Chevy and Ford, Lincoln and Cadillac, etc.), to wildly oversized dealer networks that can't easily be pruned, to the massive pension liabilities that hurt any longtime U.S. manufacturer. Probably Chrysler must go, GM and Ford will pick up some of their sales.

Unfortunately, "Buy American" is a slogan....it should be a way of life. No, you aren't obligated to purchase American made cars, but if you can't see what the effects of a bankrupt auto industry would be, you are blind. This country has gone from a manufacturing giant to a nation of Walmarts. We have the freedom to choose, but eventually we won't have anything to choose from, nor the money to afford our choices. If you think your job is safe from being unimportant, think again. As we become a less powerful nation there will be plenty of careers that will simply vanish....and eventually we will become a third world nation.

The quality of the Big 3 is improving, although still a bit behind the Japanese. I wonder, though, what Japanese German and Korean cars would cost if we were not subsidizing them by way of covering each of the national defense of each country? Do you think a Kia or Hyundai would cost the same if the Koreans had to pay for their own national defense instead of subsidizing THEIR car makers? (and not allowing most US parts manufacturers to compete there, I might add. Same for Japan and German. Let's get our troops out of Korea, Europe and Japan and THEN we will have a level playing field. If the Koreans can't defend themselves from their 3rd world neighbors to their north after 50 years, they DESERVE to be overrun! Wake UP PEOPLE!! We are indirectly subsidizing the countries that are stealing US jobs!

Combining the Big Three may save american made cars from extinction, but it won't solve the problem. Rather than three companies that are "too big to allow to fail", we'll have one company that is "too big to allow to fail." Maybe they should break up the Big Three into several smaller companies, say Jeep, Dodge, Chevy, GMC, Cadillac, Ford, Lincoln, Mercury, Saturn, etc., and let them battle it out in the free market. Let the strongest companies survive, without government help. Let the rest disappear.

I am 43, my wife is 41. Between us we have owned over 20 GM vehicles and have been very well satisfied with both the initial and long term quality of the product. Are the imported vehicles superior? It is a matter of taste and opinion on a miriad of individual items. But that is not my issue. I would really hate to see our country lose more of it's manufacturing capability and the associated jobs. But, we (as Americans) can not continue to support the UAW. In the global economy of today, they are killing us. Years ago, unions served a purpose and their members. Today they serve only themselves(IMHO). I would love to say "Get rid of the F***ing unions!" . But that gives the manufacturers the upper hand with employees and abuse can (and probabily will) happen. Something about "absolute power and corruption" comes to mind. When the pendulum of control swings that far back at one time someone will take advantage of the situation. So, I don't see how we can completely get rid of the union. I WISH I COULD! I hate unions! So, I would support a GREATLY (make that TREMENDOUSLY) reduced union influence and a merging of the Big 3 to utilize synergies and assets and hopefully become a profitable entity. Will people lose their jobs.. yes, unfortunately. Will it work? I think the answer is yes.