isolator42 - 2008-12-10 08:25
I'm not making any political comment about this (but nationalising the British car industry went well, didn't it?
), I'm just going to comment thus:
When the bigwigs from all the car companies went cap-in-hand to the US Government for money, they were asked if any would relinquish the private jets they few in on & fly back commercial. None said they would do this.
Says it all, really.
Actually, they did say they were going to sell their private jets. Still - this whole situation just makes me angry. If I f*ck up at work - I'll get fired. But those execs nearly destroyed the entire US auto undustry - and they get to keep their jobs - instead of going to jail.
In 2005, GM was listed as $300 billion in debt. Today, GM is carrying $43.3 billion of debt and paying $2.9 billion a year of interest on it according to J.P. Morgan Chase estimates.
The deal that was just reached for the Big Three automakers only includes $15 billion. If GM were to get all of that money, they'd still be $28 billion in debt!
WTF?!?
I can guarantee you that they'll be coming back for more money. Just like the $700 billion "bailout" ballooned to over $1.5 trillion.
quote:
Originally posted by vladi123456:
...If I f*ck up at work - I'll get fired. But those execs nearly destroyed the entire US auto undustry - and they get to keep their jobs...
There's some wisdom right there.
The CEO that presided over a company I work/worked for is a good example (no names, no pack-drill
). When he joined, the share price was high, as the company had great prospects, but had yet to become profitable. A few non-profit-making years later, someone else bought the company because the share price was in the toilet. He (& all the other directors on the board) went, with a fat payout of course.
Surely a way of measuring the effectiveness of a CEO is the company's profitability & share price? In that respect, this CEO was total rubbish & he still got paid. However, other employees got the minimum possible severence when they were made redundant as a result of the buyout
Oh.
Apparently the CEOs of GM, Ford and Chrysler have said they will work for a dollar a year in a bid to receive loans to help save the auto industry.
Who here believes for a moment that's actually all they'll get for the next year? No other sideways payments, no making up for it before or after?
Pull the other one, it's got bells on...
Let them go bankrupt and reorganize.They could renegotiate union contracts and sell off unneeded resources to become more efficient and competitive.Why simply prop up a business model that is not working in the first place?Congress is loving this power trip.They will be telling the companies what kind of cars they can make and how much to pay who.The auto industry was so weighted down with regulations and taxes in the first place.Just like with the mortgage crisis our congress caused the problem and now are in charge of fixing it.Government get off our backs and let the market system work!
quote:
Originally posted by Jovie:
Let them go bankrupt and reorganize. ... Government get off our backs and let the market system work!
quote:
Originally posted by vladi123456:
Actually, they did say they were going to sell their private jets. Still - this whole situation just makes me angry. If I f*ck up at work - I'll get fired. But those execs nearly destroyed the entire US auto undustry - and they get to keep their jobs - instead of going to jail.
You also forgot that even if they do get fired they get massive payments for their "excellent service" while at their company.
quote:
Originally posted by 928GTS:
quote:
Originally posted by vladi123456:
Actually, they did say they were going to sell their private jets. Still - this whole situation just makes me angry. If I f*ck up at work - I'll get fired. But those execs nearly destroyed the entire US auto industry - and they get to keep their jobs - instead of going to jail.
You also forgot that even if they do get fired they get massive payments for their "excellent service" while at their company.
The execs didn't destroy the auto industry.This is a talking point for those who want more governmental control of industry.Through regulation the government actually greatly influences the types of cars these companies produce.In fact,this and other governmental involvement caused a great deal of the problem to begin with.Given this the auto companies mistake is going to the government for any kind of help.If they take bailouts,the government can tell them
EXACTLY how to conduct themselves and what to do.This will not end!It's called state capitalism.
Though I agree with the comments on bonuses and jet use at this point,it really misses the bigger picture.These things didn't destroy the industry as congress would like you to think.This reminds me of the earmark issue when it comes to legislation.Though earmarks should be cut out,these amounts (though they look huge to you and me) pail in significance when compared to recurring taxes paid by individuals and corporations.These are also what actually stifles economic growth and damages the economy.In a similar way the recurring expenses of legacy pay and union wages are a good portion of what end up costing thousands of dollars more per unit of domestic cars over foreign makes.Sure,tame the bonuses and jets but it's not going to actually fix the problem.It's a tiny part of the whole pie.That's just a fact.
When it comes to design, Dodge/Chrysler is really the only innovative one out of the bunch. GM and Ford have bludgeoned us to death with highly uninspiring cars for years. Ford Taurus anyone? Blech! Pontiac Grand Prix? *vomit!!*
It's sad for the true workers of the companies, but American car manufacturers can't compete with European or Japanese companies when it comes to looks. They've designed themselves right into a sh!t bucket.
even if the govt bails them out how are average people supposed to buy a new car if everyone is losing their job? i say let them sink. how many of us can afford a 60K Escalade living paycheck to paycheck?
quote:
Originally posted by Fatdog:
When it comes to design, Dodge/Chrysler is really the only innovative one out of the bunch. GM and Ford have bludgeoned us to death with highly uninspiring cars for years. Ford Taurus anyone? Blech! Pontiac Grand Prix? *vomit!!*
It's sad for the true workers of the companies, but American car manufacturers can't compete with European or Japanese companies when it comes to looks. They've designed themselves right into a sh!t bucket.
gm still has one or 2 cool vehicles
I still blame everything on the CEOs. They were bribing the unions instead of the Congress - so the Congress didn't stop the Japanese and the Koreans from coming to the US with their cheap cars. How can it not be the CEOs' fault that all three companies have now market share less than GM alone used to have just a few years ago. There are many reasons our car companies are in trouble, but 99% of the fault is on CEOs. Just look at Nissan for example. They almost went bankrupt a few years ago, but the French bought them and now Nissan is profitable again - thanks to the new management.
And Chrysler - how could they hire the Home Depot guy? Especially after what he had done with Home Depot.
I think I would be a better CEO than all of those Ivy league graduates combined
The car companies had no choice in dealing with the unions.They need to go bankrupt to restructure that relationship.The unions will give up little to nothing until that happens.
All good points.
1. The auto industry in the U.S. grew far too powerful due to the massive debt owed them from wartime manufacturing and a country starved for cars with freshly released GI's and war era factory workers flush with cash to spend after World War II and Korea. Innovation gave way to bigger, badder, and the now famous GM line from lead designer turned president of GM, Ed Cole, in the 50's, "We dictate to the people what they want, and they don't want foreign cars." This was when the Volkswagen first started appearing in numbers significant to warrant a movie, "Herbie The Love Bug". And of course, people needed jobs, and the auto companies didn't want to play fair with salary, which made...
2. The unions grow far too powerful and make demands on the future no one took a serious look at since they could hold the companies hostage. Mob involvement, payoff schemes, you name it, led to other issues. Disgruntled workers in the late sixties and seventies were notorious for "nickleing" or "washing" cars. This is when you toss a couple of nickle sized washers in various places along the production line. Now you know where the term "mystery rattle" comes from. And not that they needd help rattling as pieces would fall off by themselves since build quality was poor. This stranglehold would not end until Ronald Reagan stood up and said unions would no longer hold this country hostage after the Airport Tower Control Strike of the early eighties. And while we were listening to washers rattle...
3. The Honda Accord and Toyota Celica were moving like hotcakes after two gas shortages and price hikes. And this was after we saw Rabbits (nee Golf) multiply in the mid-seventies. And we got the rusty Vega, explosive Pinto, and John Denver's favorite(it should have been a crime), the Pacer in the mid seventies. In the meantime Chrysler was sucking wind, since their cars, really well, sucked. The others too, but not like Chrysler. Reagan's congress bailed them out and we got the K-Car and Minivan. At least Chrysler paid it back with interest. Helps that they got that contract to build the M1-A1 Abrams Main Battle Tank also. And another funny thing happened as well in the mid-eighties. Globalization started. And in a sleepy litle town named Marysville, Ohio, a Honda was born. And they treated employees with dignity, respect, listened, and encouraged teamwork. And we were inroduced to Acura, Lexus, and Infiniti in the late eighties. GM and Ford scoffed, saying that no one would want a Japanese luxury car. (I'm sure they remembered their disaters in the late seventies/early eighties based on Chevy Malibu's and Ford Granada's respectively.) Chrysler bought and finally killed AMC (American Motors) gave us Eagle(Another rebadge job that eventually died too.) to keep us proud. Meanwhile of course the Japanese were doing it cheaper, better, faster, and prettier to boot. Oh, and Hyundai? Yes. Hyundai. Which led to...
4. U.S. automakers having to cut costs. But they owed the unions! How do we save money? We will have 25% of the content from outside the U.S.! (This is the "Honda Rule" which states that for a car to not be considered and import it must have 75% domestic manufactured content.)
Bye-Bye jobs! Plants close, unions fight!!! By making more demands!!! And of course now we have NAFTA (North American Free Trade Agreement) which blew the 25% out the water. Which led to more "domestic" cars being made in Canada, and Mexico. This reduced costs for the "Big Three" and dragged the sorry soap opera further along. Even rebadging Japanese imports! (Remember GEO?) Until...
5. The Korean & German auto plant invason of the late nineties and 2K! Of course Honda, Toyota, and Nissan were firmly entrnched. While this was going on, the "Big Three" went away from innovation (though they did well at using others ideas) for the "Sport Utility Vehicle". Even the poor minivan, which actually was a good idea, was treated like a bastard.
6. Now the "Big Three" are in hock for retirement and medical costs to the union which maintains a lock like a pitbull. You can buy a U.S. brand pickup truck made in MEXICO!!! Of course the so called foreign invaders set up shop mainly in the south where unions are hated. And they pay well more than supporting the cost of living here. I admit, U.S. brand quality has nearly caught up if not matched more often than not with foreign makes. And design and innovation are making a comeback. Too little, too late?
My wonderful Senator Richard Shelby said it best...
"Why in the hell would an auto worker in the south who it cost $40.00 per hour to support, at a well run company want to pay his/her tax dollars to support a failing company and their workers who makes more than they do, to do the same damn thing at a 70.00 per hour support cost because of the damn union and corporate ignorance."
It boils down to greed. Until old stodgy companies let go of their ways, and the unions are dismantled, they'll just kill each other off.
oldskool69,you always seem to make very good points.Your knowledge seems pretty extensive on many things.Always...again and again...amazing posts.Hats off to you!
Oldskool - excellent post!
I'm with you on that Oldskool, but it's everyones fault from Ceo's, Unions, Healthcare and most of all GREED the nature of the beast!
I think this country will go through some kind transition to make it work for the people I hope.
Why do the designers have to look to the past for real styling inspiration?In the 20s,30s,40s,50s,60s they were always looking ahead.Now we have the most advanced technology but no real imagination or inspiration.This kind of reminds me of a musician or band who has been at it too long.They become technically very skilled but run out of ideas.
