quote:Why? Lots of companies have come back from bankruptcy, lately including Kmart's notable return
I'm sorry, when was the last time you bought something worth 15,000 dollars from Kmart?
Kmart's stock plunged after they declared bankruptcy. Ford's would as well. But it goes further than that. People will be leery about buying a car from a company that they might think won't be in business in a few years. A five year warranty is useless if the company goes out of business in a couple years. They wouldn't bother with the risk when they could just buy a GM, or Toyota, or Honda. There's too many other options to even bother with the hassle or risk.
Posts: 21898 | Registered: Nov 2004
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quote: What type of health care system would remove the burden from companies? I'll admit that my knowledge of economics is nowhere near as extensive as yours fugu, but it seems like common sense that someone has to pay for health care. If you're talking about government, then it must come from taxes, right? And those taxes will either be on individuals or companies or both I would imagine. So from your statement I don't understand how this will make it cheaper. Could you please elaborate on what you said?
You're talking about shifting who pays for the system, he's talking about a drastic reduction in the cost of health care itself. The changes coming in the next few years are going to eliminate billions of dollars in administrative costs from the healthcare companies, and those savings will be felt by everyone, especially large corporations laden with huge healthcare obligations.
Posts: 21898 | Registered: Nov 2004
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BQT: right now, companies have to manage health care. This introduces extensive costs and complexities not felt in societies utilizing less company-centric and medieval healthcare than our own. Additionally, companies are (rightly) bearing a small part of the overall tax burden -- a good bit less than 10%. Even were health care costs all shifted to taxation, the costs to companies would be made lower (and the costs to consumers more equitably distributed). However, its almost impossible to see how there wouldn't be large savings in administration, since that's what every country shifting to a non-corporate health care model has seen, and since we have so many health care fiefdoms each with its own vertical administration.
Dagonee: no, its a sunk cost, but its not all paid off. Payments on debt aren't part of the marginal cost of production.
Posts: 15770 | Registered: Dec 2001
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You didn't even try to explain away the inherent difference between consumer confidence in a banktrupt oversized convenience store and a bankrupt car manufacturer. You're just talking about the general idea of bankruptcy, I'm not.
That's what it really comes down to. What will the consumer do?
You skipped everything after I said "but it goes further than that."
Posts: 21898 | Registered: Nov 2004
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I feel sorry for those who will lose their jobs in the American companies' restructuring, but I'll be honest. Our car is a Honda Civic. In over 120,000 miles, it's had fewer problems than my father's Impala has has in its first 20,000. If the American auto companies were making a comparable product, I'd not only pay as much for it, I'd willingly pay slightly more. But I'm not going to sacrifice the time and money that goes into the repair of an inferior product for the sake of keeping them in the business of making that inferior product.
I don't know what it is. Have we somehow, cross-market, gotten into a mindset that all products will be disposable? That of course the owners of a car will trade it in every two years, before any problems crop up? I want a car that gets at *least* 30 mpg, won't break down frequently, and will actually fit into a parking space, and they keep designing new SUVs!...
Posts: 3826 | Registered: May 2005
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*shrug* feel free to make assertions, but I suspect they won't be born out. Its also part of the "popular wisdom" and mildly supported by a recent survey, but there's no way to know without things happening. Daewoo's the only recent case, and they were otherwise troubled.
Note, however, that being in bankruptcy also offers the company a notable cost advantage -- you might not buy from them at the same price, but would you buy from them at $3k (to pick a somewhat random number) cheaper on a comparable car?
Furthermore, we're talking very long term. A car company doesn't have to do spectacularly in bankruptcy, just limp along, recovering from debt problems -- even based on the commonly cited survey, they should be able to maintain at least a quarter of current marketshares. Furthermore, one US automobile company hitting bankruptcy would likely trigger at least another, reducing sales reductions since they would constitute most of the options for "buying American" (a substantial market segment).
After a bankruptcy ends the company will be in perfectly good shape to compete, and may well be viewed as a "survivor".
Posts: 15770 | Registered: Dec 2001
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*high fives* I like mine too. I have a stuck open thermostat, but that's getting fixed under my warranty, which is 50,000 miles/4 years. It's just bad on a cold day, because my car takes forever to warm up now. Even if it wasn't, the part is only $50.00 w/ new seal.
Big problem with American cars: Warranties. They're too short. Say you crack a head (the component of your engine that controls the valvetrain) on your v8 engine in say... a Chevy Suburban and it's not covered under warranty, but your car only has 35,000 miles on it. That's at least $1,000.00 to replace. Most foreign warranties will cover that, while most American car manufacturer warranties will not, unless you paid extra for an "extended warranty", which still has a lot of footnotes and addendums.
American cars also simply don't use as high quality parts. I don't know why that is, but they simply use bad parts. You can replace spark plugs on a Ford/GM for 5-7 dollars each. My car, a european car, is much more pricey. VW calls for NGK laser platinum plugs for my model, which are 17 dollars per plug. I have an inline 4 cylinder engine, so that's $68 plus tax for a simple spark plug replacement on a 4 banger. The major benefit though is that my plugs last longer, and they ingnite the air/fuel mixture within the cylinders better, which is good.
Also, everything on VW, Mercedes, MBW, Volvo, and I believe Saab is mostly Bosch components. Meaning all your O2 sensors, tp sensors, alternators, oil filters, etc. Bosch, while high in quality, is incredibly expensive for replacement parts.
Basically, American car manufacturers are having to cut their prices because the final product that they offer is simply substandard to most import vehicles. It's all about the parts. That's why the factory warranty is short, they don't want to pay for replacing all they components that wear out.
<big tangent rant> One of my biggest pet peeves about people who complain about their cars is when they whine when they simply don't maintain it. I maintain my car because I know what happens to an car that is not properly maintained.
Are you checking your oil level every fill-up? It's not that hard. Are you checking your tire pressure every 3 fill-ups or so? Your power steering fluid? Your coolant level? The amount of power belt tension/cracks in the belt? All of these things only take less time than the gas pump takes to fill your car, so don't complain about your power steering pump burning up if you don't check it every once in a while.
Are you changing your oil every 3,000? I know that Mobil 1 with its synthetic oil says you can wait because their oil doesn't break down as quickly. It's true that their oil doesn't break down as quickly, but that doesn't mean it's harder to contaminate, which is the greatest cause of "engine sludge" there is. Change your oil every 3,000 miles people, that's the easiest way to save a lot of money later.
What about automatic transmissions? They need to have filters changed, they need new fluid too. Nobody gives their auto trannies any love. I prefer manuals anyway.
I'm sorry for the long rant, but I'm a auto technician for a living, and it drives me CRAZY when people get mad at dealerships for charging so much money when they haven't changed their oil in 12,000 miles, and all they can say is, "I just thought you only had to do anything to the car if it wasn't running right!"
That whole, "Maintenence section" in your owners manual for your vehicle, that really isn't just a a suggestion. Although some of the stuff in there you don't need to have a dealership do, but you didn't hear that from me...
I will say one thing that irritates me about American cars: Get with the rest of the world and use ALL metric fasteners for crying out loud! </big tangent rant>
*edited due to stan's nitpickiness*
[ January 25, 2006, 11:47 AM: Message edited by: Nick ]
Posts: 4229 | Registered: Dec 2002
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I am in agrrement with a lot that is being said here, but I thought I'd offer up some articles to think over. I picked ones that don't necessarilly agree with me, but I thought were interesting.
Again, this is just to support or to aid in this discussion. I personally am a Dodge person, but would buy a Toyota in a heartbeat if I could drive it alive (I'd be skinned alive by my grandfather).
Posts: 2208 | Registered: Feb 2004
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quote: I will say one thing that irritates me about American cars: Get with the rest of the world and use metric fasteners for crying out loud!
They do. Problem is that they have been mixing standard and metric. At least in the past they have. I hated that.
Posts: 2208 | Registered: Feb 2004
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I really liked those "If you sold your soul in the '80's" commercials for VW. After they had the problem with catching on fire, I would wander around saying "If you sold your soul in the '80's... YOU'RE GONNA BURN!!! Posts: 880 | Registered: Nov 2005
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Saab is now owned by General Motors. If anyone owns a Saab, don't ever lose your car keys. When I worked at GM Roadside assistance, we had to tow the car to the dealership, so they could order new keys from the factory.
The new keys take 3 days to arrive and cost close to $700. Posts: 4569 | Registered: Dec 2003
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Derrell, a lot of european cars are like that. My car keys are 350 per key as well. I believe Saab's keys are laser cut in the same fashion as Mercedes-Benz and Volkswagen.
Some keys have a resistor in them that have to be a certain ohm rating for the computer to accept them and allow the ignition to be powered. Some have to have a code. My VW is that way.
The cool thing is, it's very high security. You're not paying all that money for no reason. It basically means that a car theif will have to do more than break into your car and break the locking cylinder and steering column lock to steal your car. Posts: 4229 | Registered: Dec 2002
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I just saw this article on CNN today. It sums up my feelings on the perception of the quality of American cars rather nicely.
Posts: 9945 | Registered: Sep 2002
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Hmmm, with the Ford and GM plants in jeopardy, we know it will affect the US economy. But what will be the effect on the economies of Canada and Mexico, both of whom benefitted greatly from NAFTA's impact on car manufacturing.
Both companies do a fair amount of their manufacturing in those two countries.
Posts: 2848 | Registered: Feb 2003
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It's just bad on a cold day, because my car takes forever to warm up now. ![[Frown]](frown.gif)
Even if it wasn't, the part is only $50.00 w/ new seal.![[Roll Eyes]](rolleyes.gif)
The major benefit though is that my plugs last longer, and they ingnite the air/fuel mixture within the cylinders better, which is good.![[Cool]](cool.gif)
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(I'd be skinned alive by my grandfather).
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