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GM/Ford debt

Started by Porter 21919, May 12, 2005, 11:17:46 PM

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Porter 21919

http://www.safehaven.com/article-3051.htm TARGET=_blank>http://www.safehaven.com/article-3051.htm

It doesnt look good.

I for one grew up thinking America basically invented the automobile, or at least we created/designed the American version, that we all grew up with.

Your comments are welcome, seems to me no matter how good the American cars are they will be bashed by the critics and Americans will buy the foreign brands without even considering the American cars. Apparently GM/Ford is at such a labor cost disadvantage they cant compete with the foreign brands that build their cars here now with non union labor.

The politicians are a sad joke in America, they have sold us all down the river. (to the highest bidder)

Porter, (never owned a foreign car, never will)

Bruce Reynolds # 18992

Gday Porter,

Well, All I can say is that there is enough misery going on in the world without having to have the bean counters causing more strife.

Maybe, the Bosses should have closed the factories down in the 802 and 902 when the Unions were negotiating for better wages and conditions and the current trouble might have been avoided.

But, we wont mention the bad decisions made by Governments, all over the world, who artificially prop up an economy for their own agenda.

Bruce,
The Tasie Devil(le),
60 CDV

P.S.  Nothing wrong with foreign cars. I have had a few and anything beats walking.

Rob Gerace #16100

The thing to ask, is:  Do you want to support American Companies, or American Workers?  Here in Ohio, there are now more Honda Employees than there are GM.  Plus, the Honda employees are non-union, which I think is better.  So, everyone can decide who they want to support.  Thats just how it is.

Rob

Porter 21919

Bruce,

It appears to be an evolutionary event, the good business environment eventually gets destroyed and capital moves elsewhere.

Not always so in the past but in these days of the global business environment expect more of the same, until shipping costs become prohibitive and domestic manufacturing is profitable.

All part of the global leveling of wage costs FWIW.

Free trade is a joke, until they level the playing field, which will only bring down the standard of living in the industrialized world, as we have been witnessing for the past few decades.

Porter

Ed Dougher

Oh, if only we could eliminate the foreign competition so that we could return to the glorious days of brand-spanking-new Plymouth Volares that leave the dealership with mismatched, cracked parking lights and front wheels that fall off after 600 miles!

Ed Dougher

Burying your head in the sand and isolating yourself from your competition works wonders.... Just look at the rip-roaring success the Soviet Union had!

Porter 21919

Ed,

The German and Japanese auto manufacturers are subsidized by their socialist governments.

Unless you have a socialized level playing field dont expect the American auto manufacturers to survive. Many Americans would like to see our country socialized even more so than it is now, I would do away with all of it, it is completely unconstitutional. We had the greatest country in the world before we let the socialists/communists infiltrate the government.

I will never own a foreign car as long as I can buy GM, even if it is of slightly lesser quality, they still offer some unique products that the competition doesnt offer, in many respects better.

I dont buy into this global free trade  nonsense, I am not that naive, I am an American.

They say "support our troops", well , support GM and Ford too, they are building good products and they need our support now. Probably too late now anyway, the debt load is crushing their balance sheets.

Wasnt that Plymouth Volare from many years ago, pretty irrelevant in 2005.

Porter

Ed Dougher

Irrelevant???  No!!!  The reason that cars are so much better now than in 1976 is because of competition.  

P.S.  My father was a UAW member who worked for Chrysler for 28 years.  After being stuck with a 74 Plymouth Scamp that would never start, a 76 Volare whose front crossmember fell apart at 600 miles, another 76 Volare that was recalled 12 times, rusted out at 2 years old, had a bad transmission, burned oil, etc., etc., a 1985 Horizon that was just an unmitigated piece of crap, and a 1988 Escort that was another unmitigated piece of crap, EVEN HE switched to Japanese cars and never had trouble again.  He just parked a few blocks away from his UAW meetings.

P.S.S.  The American workers at the Nissan plant in Smyrna, TN, and many other places reject the UAW at every turn.  Whats that about?

Ed Dougher

Come to think of it, that 88 Ford was so crude that the only way to drain the radiator was to pull the bottom hose, and you couldnt wash that thing without cutting your hands to shreds.

And you want to know why the American manufacturers keep losing ground to their competition????!!!!

Porter 21919

He should have bought a GM product.

Randall McGrew CLC # 17963

The blame goes all the way around.  THe UAW and unions in general were not only good, they were necessary but they got out of hand.  Management has been in the driver seat and has made as many poor decisions as the union shops when it comes to the industry.  They all forgot it isnt us against them...we are all in it together.  Most of it boils down to greed and corruption.
Unions were infiltrated (openly in many cases) by organized crime.  So what do you expect?  The little man working in a union shop is screwed blue and tattooed no matter which way he turns.  Management and the Industry would reduce the worker to an insignificant cog without aid or support if they could to reduce cost (they are doing it beautifully now).  Business drives itself ultimately, and no matter which way its fortunes go, the top boys get their cut of the pie.  Just look at Enron.  Sure it was crooked.  ANd yes, it was unfair, but ultimately the worker was blamed to not diversifying in the face of threats from management that meant termination if they did not comply.  I remember that clearly as I had applied to Enron for a job before it crashed when I lived in Houston.  
The government is also culpable for so many reasons it is hard to list here ... so I wont.  But when you get right down to it, it is in our laps as consumers.  We make the demands and buy what we want, when we want it.  Our consumption is enormous for even our high living standards.  Its ridiculous what people have to have, be it cars, utility items, clothes or houses.  American expectations have gone wild since 1950.  Everyone has to have a house, two cars, or more, and a TV in every room....why?  Its pure materialism for its own sake.  THe industry keeps up, makes a bundle as does the credit card companies while young families buy their way into credit hell.

So I really do not believe it is only the Unions or the Government, or the management...its all of that and our repacious desires for more, more, more.

This is an old story.  I heard it in 1973 and throughout my working life.  I only wish I had really understood it sooner.  This trolley is on its own momentum now...I doubt there is a thing anyone can do to change it.  We will simply have to make the best of what comes and use our ingenuity as Americans, something we still have in abundance, to make it good for our selves, our families and partners world wide.

Porter 21919

Too much credit, courtesy of the privately owned Federal Reserve bank and their fiat money printing press.

Where does the endless mountain of debt end ? The economy is dependent on an increasing of the debt, a Federal Reserve Note is a debt instrument, look at the bills in your wallet. To keep the economy expanding you must increase the credit and the debt, print more notes.

Since GM and Ford are in debt up to their eyeballs I consider this discussion relevant.

To quote Bob Lutz " At some point people will have to decide whether we want to manufacture cars in America", or at least American cars. Not a direct quote but close enough.

Porter , 66 & 67 CDVs




Mike #19861


 It seems we have so many parties involved with deeply varying interests.

 First we have the money men that invest and create the investment environmnet. Their interest is to make money on their invesments. Make the bottom line look good, no matter the eventual cost. They do it for bonuses on good short term performance.

 Second, we have the government that create fiscal and social policies that will help them become re-elected in the next election, They do not care much of what comes down the road in 10 to 12 years. They care only what happens on the next election day.

 Third, we have the unions. They are self indulgent in their power. Infiltration of crime, and the power and glory of the top members. Payoffs and fat paychecks are the main concern. They prey on the worker with the context they are helping them.

 These three groups all have disparaging interests, but are hopelessly intertwined with one another. It really is a deadly situation. One that has come home to roost.

 Our polititians really have no qulifications to do what they are doing. They are incapable of taking on the complex job of running our countries. A great example of that is to look at the mess that is going on with the federal government here in Canada. One that smacks of greed and corruption. They work on their own interests and political oppourtunities. Rarely ever in the best interest of the electorate. Then they have the audacity to warrant calling themselves "The Right Honourable..."

 I am not one to fully understand the workings of the financial community. But what I do see is profit taking and the drive to better ones personal financial status, no matter the cost to others. Even those who work with the finances do so not for the betterment of that corporation, but to get the bonuses that are provided them for showing "good numbers". Lately many companies and individuals have been called on the carpet for such "creative" book cooking. Im sure that it continues on within many corporations with varying levels of severity.


 The unions have not been for the good of the companies. Their single mided approach to going head to head with the companies will be their own ultimate ruin. Union members are taken into the union propoganda that they would be paupers in the streets if the unions did not stand up to the giant companies. They individually want the best they can get, and the unions contiuously say they deserve more. After all, they have to legitimize there dues. Organized crime has been integral with many unions, perhaps more so in the past than in the present. This results in payoffs and skims off the moneys paid to the unions by the members.

 A good example of generous union agreements was the demise of Studebaker-Packard. They had agreed to generous union contracts in order to keep the lines rolling. They could not afford to lose market share to the big three by having a plant shutdown. These contracts eventually bled off money that would have otherwise gone to updated plants amd product development. Their labour cost were so high that they could not compete with GM, Ford and Chrysler.

 Really, these three interests must me integrated to work with one another for the long term. If they do not, and keep working on their own self interests, it will lead to the ultimate demise of not only GM and Ford, but that of our own economies. Isolation is not the answer. All those countries that set up trade boundaries suffered. Even Japan has been plunged in and out of economic strife continuously for the last 10 years.

 We all have to realise that the road back will not be an easy one. We all have to deal with it, even thouh individually it may not be our fault. But in a environment of instant gratification, I do not see that coming and the outlook is indeed bleak. And in the meantime the results of individual greed and self interest will wreak havoc on our society.

  Mike

Ed Dougher

Hey Porter,

We might not agree on politics, but we have something in common:  Ive got a 67 DeVille Convertible.

One thing that really stands out is the drop in overall quality between my 67 and my 79 Coupe de Ville.  As much as I love the 79, the difference is VERY noticeable.  In many places where the 67 has die cast parts and machine screws, the 79 has self-tapping screws into plastic.  The assembly quality and paint finish are also noticeably diminished.  In all fairness, however, my 79 is an early production example from the CA plant.  Perhaps ironically, Ive left a bulletin in place under the inflatable spare in the trunk announcing an upcoming UAW meeting.  Its replete with original factory Crater Lake Blue overspray!

Porter 21919

Ed,

No doubt about it, I can see the difference in my 66 CDV versus the 67, basically the same car, it has sharper body lines and a little more stylish, Im sure the dashboard was nice when new but it hasnt withstood the test of time like my 66. The instrument cluster has rusted inside (granted the car sat outside for many years) , many parts have broken on the dash too, knobs, etc. My 66 dash is much better quality, although it functions quite differently due to the different design, the 67 was the forerunner to the new not straight across dashboard. it was a Ca. car,(it was offered to me for free) I have removed the A.I.R. system,appears to be original 49K, no wear on the brake pedal and the engine runs strong and smooth. For 68 at least they came out with an even better engine, the 472 zenith powerplant.

They brought  back the straight dash in later years on various models, last one being the Fleetwood series (93-96).

The common denominator is we like our old Cadillacs , warts and all.

GM is still a powerhouse but their future is up in the air.

Free trade and free markets are fine and dandy, not if the domestic companies are at a disadvantage though, I think GM is manufacturing good products once again, people must buy them or at least consider them.

Porter




Porter 21919

Mike,

Very well stated comments, I will sum it all up with one word, greed, among all parties involved.

I recall the last UAW strike against GM back in 1999 or there abouts, probably the last strike we will ever see in North America. These days they cant close the plants fast enough, the GM and Ford balance sheets are a testimony to how poor their bottom line really is. Once your debt is rated junk status your borrowing costs become prohibitive, since all the foreign manufacturers now have non union plants here there is no way GM and Ford can compete, regardless of how good their products are, the cost disadvantage for health care and pensions are too great to overcome.

Recently United Airlines (in bankrupcty) has been granted the right to default on their employee pensions by the courts, GM and Ford wil be next.

Meanwhile Toyota is posting record profits, deservedly so, they build fine autos, GM and Ford still sell all the trucks to the contractors though, for the time being.

Waiting for the next shoe to drop,

Porter

Mike #19861


 I have some deep down concerns as to what will happen to GM over the next 10 or so years. If they can pull out of this financial crisis, thet will be a much chnged company.

 GM, as has Ford, is a global company. They need not build cars on this continent for our consumtion. They have recently released 2 models to compete on the low end, with the likes of Hyundai and Kia. These cars are built offshore by Suzuki, and have no union baggage. The only way they can compete in this low end sector. Hyundai and Kia have come to the market as well financed and agrresive marques, well built and well equipped. And at bargain basement prices. The same way Toyota, Nissan and Honda got a toe hold in our market.

 There is a Toyota plant around the corner from where I live. They build the Corolla, ES300 and Matrix there. I have many friends that work there. They make a very good living and are happy in their work. No union bul***t. The unions have repeatedly tried to get in, but have been voted right back out to the street. The only interest for the union is to get another 1500 or so brainwashed dues paying members. The only ones that have any interest in getting ther unions in are those that have been spoiled by Toyota and it is the only job they ever had. They simply do not know any better. Toyota provides them with good steady employment with no threats of layoffs.

 Toyota is recording record profits. Their products are of industry leading quality and durability. They are doing it right.

 GM and Ford have been stuck in the union ruled quagmire for too long. They have had to give up too much to the unions, now to the point where it threatens their very existance. On top of that, the money men have further worsened an already bad situation by lack of foresight and greed.

 GM has made efforts to break the unions by shuffling their captive parts suppliers names around and scourcing more parts which can meet the quality demanded at the price needed. No more second rate union made products that cost too much.

 Now, they need to break the unions in the main plants. Im sorry, but there is no reason why someone that does not even have a high school education and absolutely no training in anything should be making $75,000 per year. And on top of that be fully convinced that they do not have enough. I see it all too often in my own backyard.

 GM and Ford can provide a decent living for the workers, just as the Japanese manufacturers do, but without the lingering high costs of extended healthcare and the constant worry of union actions whenever a contract is due. Everyone that works for a living is entitled to that, but not to the point where they make much more than educated people in very denmanding jobs.

 The UAW (and CAW here--listen Bud Hargrove) must realize that unless they stop their militant and threatening ways they are doomed. If the unions are to survive, they must wake up to these realities. They are bankrupting the very hand that feeds them. They must realize that they have to be partners with the domestic manufacturers in aiding production efficiency and preventing any actions. The members must also realise that they must make concessions if their employers are to survive, and turn off the rhetoric that the unions seem to be all to good at.

 Im sure that GM realises that the domestic palnts are important. They provide much to the economy that makes it possible for them to sell the very products they manufacture. I doubt they want to pull out of domestic manufacture. They have far too much invested. But if the climate does not change, they will be forced to do so in order for them to survive. It will come gradually with phasing out of older less efficient plants (St. Ignace, Quebec is an example) and scourcing more offshore most likely in the Pacific hemisphere where they can count on good quality with lower labour costs.

 Now, does anyone really want that? I dont think so.

 And, the government must get on board too. These overgrown hippie tree huggers should shut their yaps for long enough for them to realize that it is the automobile industry that drives our economy. Stop the ridiculous selfish lobbying that is cutting down the very morals and values that made us strong. The government should sit back and take stock as well. Stop the nonsense of trying to develop pie in the sky and dead end technologies that in the end have no benefit to us as a society. Electric cars are such a technology. They are in bed with the mass media that pollutes our brains with such nonsense all in the interest of ratings. They do this for public favour, which in the end gets them re-elected. Again, nothing accomplished except a further erosion of our society. These politicains must work with the majority of the people to help better us and stengthen us. Shut off the fringe groups that seem to be so vocal, but really have only their own particlar narrow interests in mind.

 The automobile industry is the single most powerful industry in the land. It has to remain strong not only here, but now overseas. These groups that are destroying it must be stopped and refocused. If this industry fails, it will be the beginning of the end for our own economies.

  Mike

Mike #19861


 Cadillac has regained much of its glory, at least in the area of performance and quality. Also, for many it has become a desireable brand to own.

 Now, the mass media, and the general think population has to consider what GM is building. I find many people will not even consider a domestic product because of the aura of the import. The media constantly touts imports as being the best. From the general newspapers right to the enthusiast magazines. Here in Canada, the media has this strange fascination with Subarus and Hyundais. They almost always seem to come to the top of their selections.

 The fact is, the General is building some pretty good cars. At least as good as some of the benchmarks offered from overseas. If some of these import shoppers would even consider the domestics, and look at them with a clear mind, they may be surprised at how good they are, and the fact that they can often be purchased for much less than a competitive brand. They have really narrowed and closed the gap in quality and reliability.

 We are all in on it, now we have to educate the wags in the mass media. Get them off the greenie crap like hybrids and electric cars.

 The hybrids are a Rube Goldberg machine if there was ever one, particularly that of the Toyota Prius. Who can repair them effectively? What happens when they get a few years and a hundred thousand miles on them? What happens to the battery packs when they expire? What will be the cost of replacement? And they do not offer the real world benefits that the manufacturers go on about. Mileage is not that much better around town, and often less on the highway than the similar gas powered model. On top of that, they are subsidized by the manufacturer to the tune of $2-3,000 per vehicle. How can they sustain that? The buyer will not be willing to absorb that once the subsidies come off. Maybe the economies of scale in higher nimbers will off set it, but will they ever sell in numbers big enough?

 Electric cars really are a dead end technology, and fuel cell cars are still in the development stage, and so far do not have any promise of becoming what the greenies say they will be. Perhaps they will be perfected the year after the perpetual motion machine is introduced to the market, and about the same time St. Lucifer experiences a cold snap.

 So, what we have is the good old internal combustion engine. It is so well refined that it is almost pollution free and very efficent, both in its use of fuel and cost.

 And, the domestic manufacturers are building some of the best of these cars in the world. We have to realise, as does the media in all forms, that to continuously slam them in favour of the imports, not matter how good they are, is shooting their very industry in the foot. If the big three ever fold, it will plunge our economy into depression, and nobody could afford a new car, domestic or import.

  Mike

denise 20352


   When I first started driving, cars got 7-10 mpg.  Now the biggest ones get 17/25, and some econoboxes can actually get 40 or more.  So why are the liberals still raising Holy Hades about miles per gallon?  I dont think that they would be happy if cars got a thousand miles to the gallon, they just want something to complain about.

-denise

Mike #19861


 Attacking cars is an easy target. No matter how good thay are, no matter how clean they are and no matter how efficient they are, they will continue to attack them.

 I suppose they will not be happy until personal cars are eradicated from the landscape. Then they can wonder why no one can get anywhere on the inefficent mass transit system and why unemployemnt is so high. But, I suppose then they will find some other "cause" to flog.

  Mike