posted
The Big Three (Ford, GM, and DaimlerChrysler) have been clamoring for months that they want a meeting with Bush over the future of the auto industry. You can't blame them, the government has bailed out the air carriers, amtrak, and others in the past, why not them?
There was a big fight in Michigan over who was best for the economy in this past election: Democratic incumbent Jennifer Granholm vs. Republican challenger Dick DeVos. Devos said he was the one who got a meeting between the Big Three and Bush, though Bush refused to commit to a specific day. Devos ultimately lost, and anyone concerned about this issue should breathe a sigh of relief.
Bush has agreed to meet with the CEOs of the Big Three, and he will do so tomorrow, in the Roosevelt Room of the White House, for 45 minutes. The entire Michigan congressional delegation, which varies across the political spcetrum (all of whom, btw, wont their reelection bids on the 7th) are coming together in a bi-partisan way to pressure Bush to take this issue seriously.
Bush will NOT talk to the CEOs about their two biggest issues with the government: Healthcare and Trade reform. Instead, Bush wants to talk to them about the future of energy, and about making next-gen cars.
The Big Three says: "How do we compete against foreign companies, when their government provides healtcare for them, but we must spend billions of our own dollars on it?" "How can we compete against foreign companies, when their governments punish us for trying to sell cars there?" "How can we compete against foreign companies when they place tariffs against our cars, deny our access to their markets, then turn around and steal our technology and patents, and sell their cars in America with relatively very few restrictions, for half the price?" "How can we compete against foreign companies when their governments artificially change the value of their currency to benefit them, and make our products more expensive?"
And the response from our president is: "We can't help you. BUT, what we need you to do is invest billions in next generation technologies that may or may not work, and we can't guarantee that we'll be able to protect you from foriegn competitors once you do develop those technologies. So, hurry up."
Ridiculous. I like that this is forcing the US Autos to streamline production, and clear the rot off their backs that has formed in the last fifteen years. And I like that this will force innovation, and that it forces Michigan to diversify its economy. But it's still ridiculous, because after all that innovation, and after all that streamlining we're still going to be at a huge disadvantage, and this is before India and China enters the market.
The Big Three are dying of dehydration, and the White House is asking them for a glass of water.
posted
I agree that our government should toe a tough line with countries that aren't fulfilling the terms of free trade agreements. I'm not aware that the US is currently imposing tarriffs on any country's car imports. Which countries are imposing tarriffs on our auto exports?
(I am, however, quite opposed to the idea of bailing out any of the Big Three automakers. They're in bed with the oil companies, IMNSHO.)
Posts: 1813 | Registered: Apr 2001
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posted
Pretty much every nation who doesn't have a free trade agreement has tariffs on our auto, and auto parts exports. Japan, Europe, Korea, China, India, etc.
But just as important is restriction to markets. South Korea in 2002 sold more than 600,000 cars in the US, while the US sold just under 8,000 cars there. It's not because they don't like our cars, their government's protectionist policies are protecting their home markets, while ours are wide open to them. Our government keeps telling us that we have to adapt to globalization, but how do we do that when the modern world doesn't want to play fair?
Threatening to close off our own markets to mirror their own practices is frequently treated with scorn, but we never hold THEIR feet to the fire, regardless of agreements they've signed and ignored.
Posts: 21898 | Registered: Nov 2004
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posted
We have enough difficulty getting Americans to buy domestic cars. Are we really going to have better luck with foreigners?
Much of what you state about where American automakers find themselves may be true. But it is also true that American automakers have had the benefit of significantly subsidized gasoline and more lenient environmental restrictions, possibly the only things that ever allowed the SUV to get off the ground in the first place. The inability of American automakers to produce a hybrid car as efficient as those produced by Honda or Toyota seems to have as much to do with the inertia of the status quo as R&D dollars or a lack thereof.
Posts: 3826 | Registered: May 2005
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American car companies aren't, as a rule, selling Escalades and other American models in other markets. They design separate cars for different markets, and there usually isn't a whole lot of crossover. The most recent exception being the Ford Focus, which has been wildly (surprisingly) successful in Europe.
Finally, US automakers have to meet fuel economy requirements in foreign markets, ALL of which are more stringent than our own, so you can't use that argument either. It's not about the fact taht people over there don't want to buy our cars, we aren't allowed to sell them to them.
Also, Toyota AND Honda as of late have had rather big problems with recalls on their hybrid models. The more their marketshare expands, the more recalls you'll see as well. It isn't just limited to US automakers.
Posts: 21898 | Registered: Nov 2004
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quote: The inability of American automakers to produce a hybrid car as efficient as those produced by Honda or Toyota seems to have as much to do with the inertia of the status quo as R&D dollars or a lack thereof.
The thing is, confirmed by my family car dealer when I asked him, is that the Big Three have had the tech for a while, but due to their corporate cultures and betting their money on cheep fuel the focused on SUV's and the like. But now the market has changed and because of said slow corporate culture they did not. Now they are playing catch-up...and it takes some time to change the factories around.
Regardless, the Big Three are important to the US and need to be saved. Remember it was their factories that built the war machines that let us win WWII.
Posts: 4953 | Registered: Jan 2004
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quote:Originally posted by Lyrhawn: Finally, US automakers have to meet fuel economy requirements in foreign markets, ALL of which are more stringent than our own, so you can't use that argument either. It's not about the fact taht people over there don't want to buy our cars, we aren't allowed to sell them to them.
Hang on. Saying that an auto manufacturer has to adhere to a stronger standard is not remotely the same thing as saying they're the leader in that class.
I poked around on a British fuel efficiency site (http://www.vcacarfueldata.org.uk) and noticed that in the higher classes, the only vehicles that Ford has in the highest MPG ranges are diesels. In the somewhat lower classes, Ford performs better, but a disproportionate number of those vehicles are still diesel, and most of them (both diesel and petrol) fair more poorly on CO2 emissions than their Japanese counterparts.
Additionally, a number of my searches noted an increasing frustration with SUVs in Europe, including motions to add additional taxes to parking for such vehicles in London.
This is not to say that American car companies aren't adapting to foreign markets in many respects; as you note, the Focus has done well in Europe (and indeed a version of same exists there which is completely unavailable to American consumers.) Or that tariffs (or, as in the case of Japan, other taxes and restrictions) don't play a prominent, even dominant role in car sales.
However, American cars do frequently lag behind their Japanese counterparts in fuel efficiency, at least at the upper range. And with the price of fuel in many of the most promising markets at more than double what it is in America (http://money.cnn.com/pf/features/lists/global_gasprices/), I wouldn't agree that fuel economy can be dismissed entirely as a factor.
Posts: 3826 | Registered: May 2005
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quote:"How do we compete against foreign companies, when their government provides healtcare for them, but we must spend billions of our own dollars on it?"
Well, same way all the US companies that are doing really well are, maybe? This also ignores that US companies have the big advantage of far lower taxes, meaning they have to shell out a lot less to pay the same effective wage.
quote:"How can we compete against foreign companies, when their governments punish us for trying to sell cars there?"
Examples of punishment, please . Also, see the if everybody jumped off a cliff argument. That other people are being stupid and pursuing protectionist policies doesn't mean we should too.
quote:"How can we compete against foreign companies when they place tariffs against our cars, deny our access to their markets, then turn around and steal our technology and patents, and sell their cars in America with relatively very few restrictions, for half the price?"
Last I checked, we had 'stolen' at least as much Japanese car making tech as they have from us. See above about jumping off a cliff with our friends. Also, the countries we're competing with in cars are pretty strong on international intellectual property rights (Japan, some of the EU, and SK) and don't sell equivalent cars at half US prices, so this is a straw man twice over as well.
quote:"How can we compete against foreign companies when their governments artificially change the value of their currency to benefit them, and make our products more expensive?"
This is my favorite straw man. None of the countries we're competing with in automobiles have appreciable currency distortions. Perhaps this is an attempt to hit on China? That would be China, the country that's so far completely unable to compete with US, European, or Japanese car companies in international markets.
And of course, many of the 'foreign' cars competing with US cars are made in the US by US workers, making none of those arguments apply, and making it very clear the US auto manufacturers aren't failing to compete due to lack of protection, they're failing to compete because they aren't as good at business.
Note that US auto-manufacturers aren't asking for bailouts for their close friends the US auto-part companies, who are facing much more real competition (including from China). Why are the auto-manufacturers in special need of this assistance instead of other industries in similar positions?
Re: air carriers and amtrak, the air carriers were bailed out to prevent US air capacity from collapsing -- it wasn't a bail out for them, it was a bail out for the rest of the economy. Those companies weren't failing because of more successful foreign competition either, so it would be an extraordinary stretch to say the bail out was against foreign competition. Amtrak's 'bail out' is tiny, period, and especially tiny compared to the government subsidies for its primary competitor -- roads. Also importantly, it isn't a bail out in the same sense. Amtrak is government-funded, making payments to it adjustments to its budget as part of a larger 'firm'. I think there are lots of changes that should be made there, but right now it cannot be viewed in the same way.
One of the worst parts of the new Democratic Congress will be the pressure for protectionism. Protectionism often looks like a good idea, but strangely enough there's a high correlation between decreasing protectionism and increasing economic growth, and a high correlation between increasing protectionism and decreasing economic growth. Not only that, but in any country that institutes protectionism the losers are always the consumers of whatever is being 'protected' -- so we 'protect' the US auto industry in order to give worse deals on cars to US consumers.
Returning to one of the 'arguments' above, imagine someone in the US came up with a way to make equivalent cars at such a low cost they could actually be sold at half price. Would we give the auto manufacturers who refuse to adopt this method a subsidy so they didn't have to deal with his unfair competition? Would we tax auto manufacturers using the method so that auto manufacturers refusing to use the method could survive with the unfair competition?
Also, think of all those medical jobs lost by the invention of good, cheap vaccines. Our medical professionals need protection against them!
Posts: 15770 | Registered: Dec 2001
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quote:Regardless, the Big Three are important to the US and need to be saved. Remember it was their factories that built the war machines that let us win WWII.
That is only evidence that they were important, in the 1940s.
Posts: 8120 | Registered: Jul 2000
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posted
If they're so utterly unable to compete in traditional vehicle markets, why not innovate? I know I'm chomping at the bit to have an electric car, and Tesla Motors is sold out in preorders.
The plug-in Prius aside, this is a market utterly untouched by foreign competition. If Ford and the rest want to dominate the world, start selling these technological marvels of cars with incredible power, dirt-cheap fuel, and impossibly less pollution. Or keep whining for government handouts. Whatever works.
Posts: 3293 | Registered: Jul 2002
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quote:Originally posted by Lyrhawn: Also, Toyota AND Honda as of late have had rather big problems with recalls on their hybrid models. The more their marketshare expands, the more recalls you'll see as well. It isn't just limited to US automakers.
I can't speak for Toyota, but my Honda Civic Hybrid got one notice for a "recall", which was really a software bug that they fixed. I haven't gotten any other recall notices...
posted
Europe has massive endemic unemployment, slower growth than the US, and a higher cost of living (though not as high as Japan's). Why would we want our government to enact similar economic policies? We might get similar results!
Posts: 1877 | Registered: Apr 2005
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posted
Ugh, I hate doing the pick apart a post with quotations and such thing the SECOND time, so I'll respond, and leave it up to you guys to find what I'm referring to.
Sterling -
That doesn't mean that US cars are automatically unpopular or automatically suck. The fact that is that in many, many places, they don't have access. If they had the access, and it turned out no one wanted them, then that's fine, then we have to go back to America and see what they are doing wrong and why everyone is choosing a different car than theirs, but they can't even get in to sell their supposedly crappy cars. Open the market and US car companies no longer have anyone to blame.
Fugu -
Isn't it true that a lot of those air carriers are collapsing because they can't afford to pay the healthcare and massive pensions their older and retiring workers have? They collapse, and low cost air carriers come in who don't have to pay all those things, so we don't really have to worry so much about the air business, there will always be someone there to take up the slack. They declare banktrupcy and the government takes over paying for their pensions so the workers don't get screwed over, and the air industry keeps on trucking.
The Big Three can only stay competitive by slashing worker benefits and wages, which they can't do with unions on their backs. The loss of US automakers means the loss of billions spent on alternative energy research for nextgen cars. If we want to be out of the business, then fine, keep things as they are and we won't have the Big Three in a couple decades, then we can let East Asia and Europe control what happens in the auto industry.
Examples of punishment? Tariffs.
Examples of stolen tech go to China. Everyone's friendly neighborhood intellectual property thief. They stole outright a design from GM. Not a strawman at all, it's called a fact. Look it up. The story, not the definition of a fact.
The next argument goes to China as well. Before the end of the decade you'll see Chinese cars in the US selling for around 8,000 dollars.
And actually, US car companies aren't asking for a bailout at all. They don't want one, not for them anyway, they want help for their workers. Why? Because after this round of buyouts of workers, they're going to have to cut healthcare benefits and wages to stay competitive. Too bad for the workers.
And why would they need to ask for bailouts for their parts suppliers from China? We make parts here cheaper than they do there. Part supplies is one of the few ways that helps to negate the vast advantage China has in low paid workers.
I never argued that we SHOULD enact protectionist policies in America. I can see why you'd assume that, but you'd be wrong. I don't want us to enact punitive tariffs on other countries. I want those countries to lower THEIR tariffs, and to open THEIR markets to us. And I want the US government to make them do it. If they refuse to, then I think we should consider mirroring their own trade policies. It could hardly be considered unfair. But that is far from my first option.
I understand the argument that cheaper goods for US consumers is good for them, but when does it come to the point where we don't make anything of our own, and only buy from cheaper manufacturers around the world? I know that's a vast overstatement, but do we EVER draw a line for the sake of keeping manufacturing jobs at home? If the US auto industry collapses entirely, you can kiss a few million jobs goodbye.
quote:Returning to one of the 'arguments' above, imagine someone in the US came up with a way to make equivalent cars at such a low cost they could actually be sold at half price. Would we give the auto manufacturers who refuse to adopt this method a subsidy so they didn't have to deal with his unfair competition? Would we tax auto manufacturers using the method so that auto manufacturers refusing to use the method could survive with the unfair competition?
So, you advocate the Big Three offering zero benefits to workers, or cutting their hourly wages to $2 an hour? You said they should adopt the practices that make their competitors so successful. Well, Japan does so well because they have government help. China and India in the very, very, VERY near future will do so well because they pay their workers the equivilant of two doublecheeseburgers from McDonalds an hour. Is it a strawman when you invent a magical solution to a problem that ignores the real world reasons why one side has advantages over the other?
What's your solution?
Lalo -
Those things take three and a half hours to recharge. Great for suburb driving when you can recharge it everynight, and in fact would be perfect for someone like my mom, who only drives to work and back every day. But A. What average consumer can afford a $100,000 car? B. How do they travel further than 240 miles a day?
Until the price drops dramatically, it's hard to get excited about them. I'm more excited about the new GM plug-in hybrid coming out in the next year (or two, can't quite remember). Someone recently posted about (I think in the disappearing fish thread) a new car that has a ceramic battery? Something like that, but it charges in like 20 minutes, is high performance, and has the capacity to drive for 300+ miles.
And as a rule, they are innovating. All three are working on hybrids, GM and Ford I think are ahead of Daimler in that way. And they are working on Fuel Cells, which again, I think GM leads the pack in, maybe even ahead of the Japanese Big Three.
Bok -
All the car companies, that's US included, recently with their hybrids have had issues, with everything from engines overheating (for some US cars) to software and parts issues (for some of the Japanese). It varies from company to company, but pound for pound Japanese companies have had more recall issues in the last three years than in the previous decade.
posted
I'm perfectly willing to wager $5 to a charity of the winner's choice that we will not see cars from China sold in the US that are roughly equivalent to cars from US manufacturers sold for double the price anytime before the end of the decade. I'm open to suggestions on judges .
Posts: 15770 | Registered: Dec 2001
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posted
The auto parts manufacturers aren't experiencing high competition, including actual competition from China instead of the supposed competition that we haven't seen with automobiles? http://china.seekingalpha.com/article/14725 . Do tell.
As for the japanese gov't subsidizing auto manufacturers, they don't give them direct payments and they don't subsidize them otherwise (beyond the sorts of tax breaks we also provide to our auto manufacturers): http://waysandmeans.house.gov/hearings.asp?formmode=view&id=4513
Yet they do pay their workers well, do provide good benefits, and do well in business. So yes, I would suggest operating similarly.
Heck, they can go closer to home. As noted, Japanese companies have significant production inside the US, paying US workers competitive wages and offering competitive benefits. Those plants are turning profits (hence why Japanese companies keep opening more of them). So US companies have an excellent local example of well-operated businesses they can emulate .
I completely agree that pensions and the government backing of them were stupid ideas. Backed assets are the way to provide for a retirement, not promising to pay for them out of future earnings. That's not a reason for the government to send in money to put off their downfall and the accompanying pain even longer, for when it will be worse.
Your 'example' of $2 an hour seems particularly silly, as wages for workers in countries that compete with the US in automobiles are similar. Stop buying into the FUD. China (much less India, which has nowhere near the manufacturing capability) is in no situation to compete on such terms in the near future.
BTW, that the big three plan on opening plants in China themselves makes this even more amusing.
Here's the ultimate surprise, though. You know what will happen as Chinese products are increasingly competitive with US products, requiring similar degrees of skill to make? Wages will go up. Tech wages are currently skyrocketing in India due to shortages of tech workers. SK's wages went through the roof as they revolutionized their economy. Eastern european wages are climbing steadily. Heck, Chinese wages are already rising rapidly. The better China becomes at making automobiles, the less advantage they have on cost. This is the reason scare stories about foreign workers (like the japanese) never/almost never bear out in reality. The Big Three were doing fine while they managed to keep making cars people in the US liked a lot. When they stopped being able to do that as well, they stopped making as much money. Its that simple.
Posts: 15770 | Registered: Dec 2001
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posted
The guy that brought Subaru to America is already in the works to bring Chinese cars to America. It's in the making, and it's a little scary. We aren't just talking regular cars here. We are talking little red sports cars type (and they do look nice, admittedly) for about 8 grand.
Posts: 2208 | Registered: Feb 2004
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quote:Originally posted by Lyrhawn: Also, Toyota AND Honda as of late have had rather big problems with recalls on their hybrid models. The more their marketshare expands, the more recalls you'll see as well. It isn't just limited to US automakers.
I can't speak for Toyota, but my Honda Civic Hybrid got one notice for a "recall", which was really a software bug that they fixed. I haven't gotten any other recall notices...
-Bok
My 2001 Prius has had no recalls. And the Prius is one of the most reliable cars on the road today, according to a top ten list on CNN a couple of weeks ago. I've got almost 80,000 miles on mine, and the only thing I've needed to replace are oil and filter, air filter, and tires. The brakes look like they're going to make it well past 100,000 miles.
I do have a slight problem with my defroster vents, however...
Posts: 3735 | Registered: Mar 2002
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quote:Originally posted by Stan the man: The guy that brought Subaru to America is already in the works to bring Chinese cars to America. It's in the making, and it's a little scary. We aren't just talking regular cars here. We are talking little red sports cars type (and they do look nice, admittedly) for about 8 grand.
I've been looking for a cheaper sports car. And red, you say? My favorite color.
Posts: 413 | Registered: Apr 2003
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posted
Red was used for the ease of saying the type. I have seen pictures of what cars China has to offer. They have 8 (I think, I know it's more than us) major car companies in China the last I checked. However, the price is what I remember from earlier in the year. It may have changed, but I doubt by much. Their goal is to way undergo our prices. I should probably look this up again, now that I think about it. I own stock in Daimler Chrysler, and I don't want China screwing up my retirement plan.
Posts: 2208 | Registered: Feb 2004
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quote:The Big Three says: "How do we compete against foreign companies, when their government provides healtcare for them, but we must spend billions of our own dollars on it?" "How can we compete against foreign companies, when their governments punish us for trying to sell cars there?" "How can we compete against foreign companies when they place tariffs against our cars, deny our access to their markets, then turn around and steal our technology and patents, and sell their cars in America with relatively very few restrictions, for half the price?" "How can we compete against foreign companies when their governments artificially change the value of their currency to benefit them, and make our products more expensive?"
If you didn't mean to suggest that the things you have the Big Three touting as advantages really *are* advantages, well, my mistake.
Posts: 1877 | Registered: Apr 2005
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posted
First of all, I never really suggested much of anything until my post to fugu, in which all I ever really suggested was that we get the government to force foreign countries to open up their markets to our goods and stop using tariffs to punish us.
The US automaker problems with healthcare and wages will be solved in the next couple years. The Big Three are going to majorly slash the amount of money they put into healthcare benefits, and they'll cut starting wages for new autoworkers. The UAW will have to give in. Sucks for workers who are going to be making a lot less, but hey, welcome to the new world order.
Japanese carmakers and Japanese autoworkers are doing just fine in their economy. Their sales are flying high, and some of the advantages I talk about above that the Big Three mention help them, and don't harm their industry, which makes your point moot. And quite frankly, the car companies in Europe that sell in America are doing pretty well for themselves too. We're a quarter of the world's car market.
Regardless, I never said we should jack up our tariffs on foreign imports. And I never said we should provide the kind of healthcare that they do in Europe.
posted
Show me one of the advantages (some of which have been ripped to shreds) that would make one plant in the US operated by US workers paying competitive US wages offering competitive US benefits using mainly US parts able to do better than a similar plant in the US just because one of the plants is owned and operated by a Japanese company.
Posts: 15770 | Registered: Dec 2001
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posted
There is only one way to compete in the auto industry: offer a better product for less money. Attempts to succeed in other ways have proven to be quite limiting.
US auto makers have still got a ways to go to catch up on quality. They're getting better, but it's track-record that counts, and they disappointed consumers so much in the 1970's and 80's (and even into the 90's) that they are now in a position of having to recapture market-share by convincing people that they've finally learned a lesson.
In the meantime, they have to adopt new technology and deliver great styling, etc., etc.
Cost cutting a fact of life in that industry and ultimately that is going to affect workers no matter how you slice it. Either the wages and benefits drop, or the companies build the vehicles elsewhere, or both.
It's actually debatable what's best for America in this global market. Are auto worker jobs essential to our success as a nation, or are we just as well off, if not better, if those jobs go to third world countries?
It harms a block of individuals, and some states, to lose good-paying blue collar jobs like those in the auto industry, but it could be said that those jobs are "gone" already. As has been said, wage and benefit concessions are going to happen IF the companies continue to manufacture anything in the US.
I'm not really in favor of all the out-sourcing that's going on, because I think we do have a large population of folks who will likely fall into poverty by having to take successively lower paying jobs as their previous jobs are sent overseas. That is not a good thing for America in general because it creates a two-tiered society with huge barriers between the tiers.
We don't really have that now. But we could in a few decades end up with a huge mass of people living in poverty and not having a real say in what happens to them in life.
It's awfully difficult for people to face the change from a job that pays what auto work used to pay, to the jobs they'll get when the auto plants shut down. We'll see a lot of bankruptcies, repossessions, and so on.
It can get very ugly.
Posts: 22497 | Registered: Sep 2000
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posted
The advantages of being a US owned company against a Japanese owned company in the US?
When did I say they had any?
I'll assume you meant DISADVANTAGES.
Even if the Japanese company and the US company were making THE SAME CAR, the US car would still cost more than the Japanese car.
The best way for the car companies to survive is to cut costs, cut the workforce to match their marketshare, cut benefits (which I suppose is tied to actually getting the UAW to shut up and face reality), and get back to making good cars. A little muscle from the US Gov to open up some new markets abroad might help too, but that won't necessarily save jobs at home.
US companies are pretty much up to where Japanese cars are quality wise. They just aren't as streamlined, and they have billions upon billions more in pension costs to front, which goes onto the price of every car. Japan doesn't have that problem, and still won't even with all it's US workers, because they offer greatly reduced benefits, but workers are taking what they can get.
Posts: 21898 | Registered: Nov 2004
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posted
No, you just failed to parse the sentence correctly.
And I don't even know where this comes from:
quote:Even if the Japanese company and the US company were making THE SAME CAR, the US car would still cost more than the Japanese car.
Well, yes, if the "Japanese" plant in the US could make it for less. But given the plants in the US are competing on the same playing ground as American-owned plants in the US and the Japanese plants are still making cars for less, it underscores my point earlier: the Big Three aren't as good at business, so they're doing worse.
Japanese companies don't have pension problems? In the past several years Japanese companies have been having some of the biggest pension crises in the world. It was one of the major issues in the 2005 elections. The Big Three's pension problems are probably much worse, but there's a reason why: They made extremely large financial commitments based on unsupportable projections of future earnings. They were bad at business, and now they want the government to shore up their decades of bad business decisions.
Yep, American plants aren't as streamlined. See above about being worse at business. Being worse at business is not something that makes government support a good idea.
In fact, the number of auto manufacturing jobs in the US apparently hasn't changed -- what the Big Three lose, Japanese (and over time from other countries) companies are replacing. This would seem to discount the doom and gloom
You know what, it might turn out the Big Three have to reduce pay and/or benefits in order to remain competitive. That's because workers were being paid too much. This is again known as a bad business decision. Its not a happy thing that people sometimes can't be paid as much, but I'd like to be paid more, too. Instead, I get paid at a rate roughly related to my contribution to the bottom line, just like most other people. No, the wages and benefits are not going to become unreasonably low. For one thing, if they became too low, nobody would work there. For another thing, we have the examples of the perfectly reasonable wages and benefits paid at the Japanese plants with which Japanese companies still make profits.
Auto companies need to grow up and get used to having to make good business decisions. Paying them money so they can put off the time until they have to operate within their means is a stupid idea.
Posts: 15770 | Registered: Dec 2001
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quote: You know what, it might turn out the Big Three have to reduce pay and/or benefits in order to remain competitive. That's because workers were being paid too much. This is again known as a bad business decision.
I thought it was known as 'unions.' Posts: 1412 | Registered: Oct 2005
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posted
Wise man once said, "Laying blame only succeeds in allowing one to avoid solving the problem."
Right now there are a bunch of highly paid corporate execs who see that what they have isn't working. So they point fingers at governments, global competition, the Japanese, and their favorites--the Unions.
Who knows, they may be right about some or all of the causes.
That doesn't help them solve the problems, and neither do federal bailouts.
Other execs are facing the problems and working on the solutions. Lets give them credit.
Posts: 11895 | Registered: Apr 2002
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posted
The Big Three aren't asking for a federal bailout. I already said that.
And America, as of August, is still down a couple hundred thousand autoworker jobs from where it was at it's height, and yes, Japan has replaced many of those jobs.
I think the US automakers are probably going to be fine (well, at least GM, both companies have a ton of assets they can sell off to stay in the game). It will come with wage reductions for new workers, pension cuts, buyouts, downsizing, and fine tuning, but they'll emerge competitive in five years, maybe a little more.
They aren't asking for money, and I don't think they should get it. Two Oil crisis's (what's the plural of crisis?) and September 11th sent their sales in the tank over 30 years. Not really an excuse, their sales exploded in the 90's, but 9/11 hit them hard, and they stayed down, which I don't really think was fair. They received unsupported bad ratings from Wall Street when GM (at least) was already making moves to shore up losses.
But I think what they are asking for is fair, or at least fair to take a look at. Take a look at healthcare in this country, which isn't just good for the automakers, it is good for EVERY American citizen and EVERY American business, and will keep us competitive around the world, and force China and others to open all their markets to our goods, and lower tariffs.
Is that not something fair to ask for? They're going to get hammered in less than five years from low cost Chinese imports, and they want to be geared up BEFORE then. They made some poor decisions in the past, and they're working on fixing them. Why all the hostility fugu?
Posts: 21898 | Registered: Nov 2004
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One of their big tickets is they'd like the federal government to spend $200 billion, a large portion of which will go to covering a commitment they made on medical expenses. If it results in them not having to fulfill huge financial commitments they made and offers little benefit beyond that, its a bailout. In this case, those paying for the benefit already would still be paying for it through income taxes, but the Big Three would be freed from their giant financial commitment.
I do agree with removing the steel tariffs . That's not a large contributor to the situation, though.
If the Big Three are ready to talk major healthcare reform, lets talk major healthcare reform. But all I've seen are discussions of how to shift costs they vouched for to the federal government so they don't have to pay for them. Handouts.
I am hostile to the idea that business mistakes warrant government handouts. Saying the money is for the workers when its a way to prevent having to spend it yourself as part of a legal obligation you entered into is known as spin on asking for a handout.
The plural of crisis is crises.
Posts: 15770 | Registered: Dec 2001
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Is it? Thanks. I was creating all sorts of odd spellings of the word to make it look right.
I don't agree with that sort of bailout. I think an overhaul to the healthcare as a whole (likely to cost more than $200 billion, but that doesn't include the massive savings that could result) would be much better for the nation as a whole, rather than a massive bailout for a few companies.
If they were smart, they'd gather a coalition of companies together, both big and small, and rail against the government for better healthcare.
However, they are likely to get hit a lot more than they'll make up from the Congress. Democrats have been pushing for higher fuel economy standards for years. Now they have the power to try and ram them home. They'll get a break from Ethanol, but not really, Ethanol is a horrible idea. I understand what throught process got them there, but it's a stopgap measure, and not even a really good one.
Their big fight is with the UAW. And the UAW is going to lose big time.
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Yep. The auto manufacturers and unions both should never have had the bright idea to guarantee virtually unknowable quantities of money with earnings from the future. Both the auto manufacturers and the unions are suffering for it now.
Posts: 15770 | Registered: Dec 2001
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quote:And I never said we should provide the kind of healthcare that they do in Europe.
quote:Take a look at healthcare in this country, which isn't just good for the automakers, it is good for EVERY American citizen and EVERY American business,
So: what's your plan? Apparently it isn't Europe-like.
How will you force China and others to open all their markets to our goods? You ruled out tariffs. I'll assume military action is also out .
Posts: 1877 | Registered: Apr 2005
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My plan? The Lyrhawn plan? First thing's first, make all records electrionic and secure. It will save us billions in administrative overhead, and will cut down on a lot of errors made by physicians. Records will be easily portable, and easily accessible no matter where in the country you are.
Second, fix the legal system when it comes to medical malpractice suits. There needs to be a cap on punitive damages. People makes mistakes. I know those mistakes hurt real people, but there's a ripple effect. A doctor in a difficult surgery does the best he can, but the patient still comes out a quadriplegic. In response, the family sues the doctor for millions of dollars. His insurnace, and the hospital insurance pay for the suit, but his premium is jacked up so high that he can no longer afford to practice medicine. The end result is that his collective knowledge is lost from the medical profession.
The medical profession is full of open jobs. GPs are in high demand, as are nurses. Nurses require the same amount of schooling as a regular 4 year degree, and command more than 50K right out of the classroom, with huge signing bonuses. There needs to be more support for these professions, despite huge salary opportunities, there are still massive shortages, and it is in the national interest to fill those spots. Wages will rise to meet demand yes, and supply will rise as well, but at what cost to hospitals?
Cap punitive damages, overhaul the whole system. It's ridiculous as it stands. Consider giving general practitioners and general surgeons, and nursing students some sort of tax break, or zero-interest loans, or tax deductible schooling if they go into the profession we (The US Gov) choose, and agree to work at the the hospital the US Gov decides to send them to for two years (maybe four, but the benefit would have to go up).
Allow the government to negotiate with drug companies for reduced prices, and increased production of generics. Drugs in this company, lifesaving drugs (of which most of them are), should be available and affordable for everyone. Keeping everyone healthy without bankrupting them is good for EVERYONE, even the drug companies that are crying bloody murder about what they perceive is an attack on their industry. Get used to it guys. Your multibillion dollar profit margin still isn't going anywhere.
Put more emphasis on personal responsibility. Auto Insurance companies offer to reduce your rates for every year you go without an accident. Health insurance, corporations, and yes, for the time being, government, should get in the game with health. Preventative healthcare will save the industry billions. People who live and lead healthy lives should get a reward. Why? Because they make the healthcare system cheaper as a whole to operate.
If no one in America smoked, or was obese, that would erase billions from the cost of healthcare every year. I know that infringes on personal choice, so fine, I don't advocate outlawing smoking, or criminalizing fatness (despite the advantages), but I'm all for positive reinforcement. Were we to offer a type of national healthcare, there should be greatly reduced rates for healthy Americans. And I think the corporations with the healthiest workers should get tax breaks as well, as a benefit to encouraging a healthy work force.
And really, it only helps the corporations. Companies that offer rewards for healthy employees enable a win/win situation. Healthier workers means a vastly lower cost of healthcare that they have to pay out of company coffers, and also gives them a happier, more loyal workforce. With lower healthcare costs, they can either pay the workers more, or lower their prices, making them more competitive. If the whole US does it, we sharpen our global competitive edge.
That's the closest I can come to giving you the Lyrhawn Plan off the top of my head. And I'm sure fugu will be waiting in the wings like a hawk ready to shred my plan to pieces, which is fine, it's not particularly well thought out or researched, it's just what I came up with in the last fifteen minutes or so. Take from it what you will.
How do we get China to open it's markets? We use the WTO. We finally start taking them to task for a dozen and one flagrant violations they're committing against us. And we don't stop hammering them until we get what we want, and considering all we want is a fair, even playing field, you can't really fault us for that. I think Bush this year will finally start bringing some cases against them. Bout time. I didn't necessarily rule out tariffs, but they are far, far from my first option. If they absolutely refuse to play fairly though, we have to come up with SOMETHING to force them to play fairly. But I don't think it'll come to that. The WTO will get us a lot of what we want.
Posts: 21898 | Registered: Nov 2004
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quote:Originally posted by Lyrhawn: That doesn't mean that US cars are automatically unpopular or automatically suck. The fact that is that in many, many places, they don't have access. If they had the access, and it turned out no one wanted them, then that's fine, then we have to go back to America and see what they are doing wrong and why everyone is choosing a different car than theirs, but they can't even get in to sell their supposedly crappy cars. Open the market and US car companies no longer have anyone to blame.
My original comment
quote:We have enough difficulty getting Americans to buy domestic cars. Are we really going to have better luck with foreigners?
May have been overly flippant. I stress that the factor of emissions and fuel efficiency, in which American companies often seem to lag behind, cannot be entirely overlooked; that doesn't mean I don't think you have some good points about the qualities of markets the American companies are trying to penetrate.
It does seem from my research, however, that the market influences are often sadly more complicated than simply tariffs. What I've read, for example (anyone, feel free to correct me if I'm wrong) is that Japan doesn't really have tariffs on foreign automobiles, but the taxes and regulations on imported automobiles, combined with manipulations that keep the yen weak against the dollar, amount to much the same thing. Currency manipulation, especially, appears to be a powerful inhibitor to sales of American cars, and one that could conceivably be extremely difficult to overcome. No one wants to endanger their economy for the sake of fairness to American manufacturers.
Posts: 3826 | Registered: May 2005
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Ford will put up factories and equipment as collateral in a major $18 billion loan.
Investors view Ford as a "very high risk" company, but I think this is a good move. They'll use the money to cut labor, shutter plants and scale down across the board, fully fund their pensions, and still have enough money at the end to redesign whatever needs to be to fix any latent quality issues (though really, I think they've pretty much pulled even with the Japanese Big Three), and redesign some new models.
I think in a few years, they'll emerge leaner, profitable, and ready to take back some domestic marketshare.
Posts: 21898 | Registered: Nov 2004
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. Also, see the if everybody jumped off a cliff argument. That other people are being stupid and pursuing protectionist policies doesn't mean we should too.![[Wink]](wink.gif)
