Detroit's sputtering Big Three turn to Washington for help......... - Page 3 - Mercedes-Benz Forum

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post #21 of 70 (permalink) Old 11-09-2008, 09:32 AM
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Where in the hell was all this outrage when Wall Street got $700 Billion plus?
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post #22 of 70 (permalink) Old 11-09-2008, 09:46 AM
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Shane posted; Where in the hell was all this outrage when Wall Street got $700 Billion plus?


Ok Shane,let me editorialize my previous post from; American enterprise and ingenuity is disastrously behind the curve when it comes to the auto industry.Welcome to the fallout.

to
American enterprise and ingenuity is disastrously behind the curve when it comes to the Financial Services Industry. Welcome to the fallout.

Last edited by torontomichael; 11-09-2008 at 09:52 AM.
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post #23 of 70 (permalink) Old 11-09-2008, 09:49 AM
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Guy's your car industry is finished, do not try to bail them out. It's a dog eat dog industry at the moment. We Brits tried it with many car manufacturers and failed. Mini is now owned by BMW. Rover was sold to the Chinese. Bently is now owned by BMW.

Let market forces prevail. It may cost many jobs but it's better in the long term.

Your government helping the Banking sector is understandable but to involve itself in the manufacturing sector to such a sum is suicide.

ERIC.

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post #24 of 70 (permalink) Old 11-09-2008, 04:57 PM
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Originally Posted by eric242340 View Post
Guy's your car industry is finished, do not try to bail them out. It's a dog eat dog industry at the moment. We Brits tried it with many car manufacturers and failed. Mini is now owned by BMW. Rover was sold to the Chinese. Bently is now owned by BMW.

Let market forces prevail. It may cost many jobs but it's better in the long term.

Your government helping the Banking sector is understandable but to involve itself in the manufacturing sector to such a sum is suicide.

Let’s see…..

The current credit mess was created by giving homeowners loans they couldn’t afford to pay back.

Now the automakers are asking for bailout loans they can’t afford to pay back.

The U.S. auotomakers got themselves in trouble by making cars that nobody wanted.

The automakers might have liens placed against their property to ensure that the loans are payed back……property that no other automakers would want.

That sounds like a good plan. So when the automakers default on their loans and the companies finally die, does that mean the government will take posession of all their old factories and offices for use as soup kitchens and housing for the unemployed ?

Jim
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post #25 of 70 (permalink) Old 11-09-2008, 05:04 PM
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GM’s bailout boosters will eventually come ‘round to the idea that there must be some kind of radical change at GM for the company to qualify for federal aid. But their idea of “radical change” is likely to be politically rather than economically-driven. Jobs, jobs, jobs will be the order of the day. Not cars, cars, cars. Wagoner, Lutz and the rest of the gang who couldn’t talk straight may be forced out (to survive on the hundreds of millions they plundered from their employer). But the priorities will not shift.

What GM needs is root and brand overhaul, a cathartic cleansing of existing dealer agreements and union contracts and obligations. Not to mention an entirely new mindset regarding product development and brand promotion. As we’ve stated here for the last three years, the only way GM can accomplish these tasks is through the federal protections of bankruptcy law.

Rick Wagoner’s ultimate argument against doing the right thing, the only thing that can save GM: no one will buy a car from a bankrupt automaker. By the same token, no one with any sense buys a car from an automaker headed for bankruptcy. With or without intelligent press reporting, GM’s death throes are becoming clearer every day.

Jim
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post #26 of 70 (permalink) Old 11-09-2008, 05:05 PM
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With respect to General Motors.

Simple mathematics states that less market share should directly correlate to fewer brands. As Toyota and Honda grew larger, they created Lexus and Honda to cater to the luxury segment which their ever-increasing market share did not cover. As GM continued to lose market share, it should have been shedding brands over the years; granted, a tough task with dealer franchise laws tilted in favor of dealers, but ultimately necessary to continue profitable operation.

With eight domestic brands under its watch, GM desperately needs to shed some weight. Even with the renaissance of its luxury brand, Cadillac remains a second rate competitor to its Lexus, Mercedes, and BMW deposers. Buick remains a brand without direction, forever destined to remain in Cadillac’s shadow even if Cadillac leaps upmarket tomorrow. Pontiac no longer “builds excitement,” with the G8 propping up any performance claims the company clings to. The Vibe no longer does, the G6 has become a born rental car, and G5 sales were stillborn. The last vehicles to not be badge engineered for GMC were the Syclone and Typhoon, a decade and a half ago. Saab sales have been dealt a strait flush - down the toilet.

GM faces more trouble near the bottom. Even the once mighty Chevrolet has become the laughingstock of the “value” segment. Honda and Toyota continue to be seen as greater than their domestic counterparts, while the Koreans are often seen as a better value, offering a much greater warranty. Saturn, Roger Smith’s five billion dollar baby was fought tooth-and-nail by GM management during its inception and infant stages. As a result, the once arguably innovative brand has been reduced to hawking rebadged Opels. And yet, Saturn still has yet to make a profit for the mothership.

Saddest of all, perhaps, it the GM has made some downright noble attempts of late to right the ship. Products such as the Malibu and CTS show a striking improvement. New models such as the Enclave (and its offspring) and G8 also show promise (in quality, if not sales). But good product is no longer enough. GM’s financial situation is no so horrible that even having a sales leader in a segment or two can’t save it.

Even Chapter 11 can’t guarantee the survival of General Motors. It very well could help with a much needed reorganization and union troubles. The perception gap will still remain, being magnified by the stigma of bankruptcy. Most likely is a government bailout in conjunction with a government bailout. But the execution must be damn near flawless to ensure GM’s ultimate survival.

There are far too many variables on the table to aptly analyze how the General could stay alive, or even if they will. A few things are absolute. GM MUST shed brands. A Cadillac - Chevrolet duo seems most likely to survive the fallout. The UAW needs to be addressed. Product quality needs to not falter. The damaging and self-serving corporate culture needs to be eliminated.

But even if these steps are taken, GM will still faces some major obstacles during its rebirth. There are many angry ex-owners who will never return, and no amount of product quality or apologies can ever sway them to return from their imports. More still follow the mantra of the still relevant perception gap that’s been thirty years in the making - choosing to believe that import cars are better made than domestic cars, no matter what. This perception gap can not and will not go away overnight. No amount of talk can solve this particular problem; only in years (and possibly decades) can the perception gap become less damning for Detroit, and only with superior product. Until then, Cadillac and Chevy will both considered a second rate competitor to their imported brethren by a great multitude of average American buyers, who fear buying a car from a bankrupted company who previously chose to sell less than competitive vehicles.

Jim
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post #27 of 70 (permalink) Old 11-09-2008, 07:08 PM
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AutoAmerica (American Motors ?) is here.
No new ground here, basically no different from Boeing and yes, Airbus.
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post #28 of 70 (permalink) Old 11-09-2008, 07:14 PM
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... We Brits tried it with many car manufacturers and failed. ..
You brits don't buy nearly enough cars to support one English royalty.
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post #29 of 70 (permalink) Old 11-09-2008, 07:33 PM
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The only problem with "just letting it fail" is the 2 million DIRECT jobs that are part of the American Auto industry and the 3.5 million ANCILLARY jobs that would also be lost. That would be a 50% increase in unemployment over the current "drawing" unemployment rate. Not to mention the "off the books" unemployment rate.

The only way I can see this even beginning to work would be:
  • a harsh consolidation of the brands [do we really need both Chevy and GMC trucks???],
  • stripping of NASCAR type sponsorship UNLESS they are forced to quickly move to hi tech innovative equipment that would actually be part of R&D for the Industry
  • Consolidation of management structure including pay/compensation system
  • Move current Pension obligations to separate entity to maintain their integrity yet eliminate them from budget consideration.
  • Place outside auditors in management and on boards of directors as long as the loan obligation existed with full voting rights to protect interests of the taxpayer.

This is another of those damned if you do and damned if you don't exercises. There are going to be more but this industry is one of the largest and most vulnerable. We have to make sure that, if this industry stays afloat, it is a long term consideration and not just a "til the money runs out" decision.

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post #30 of 70 (permalink) Old 11-09-2008, 07:34 PM
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...
Even Chapter 11 can’t guarantee the survival of General Motors. It very well could help with a much needed reorganization and union troubles. The perception gap will still remain, being magnified by the stigma of bankruptcy. Most likely is a government bailout in conjunction with a government bailout. But the execution must be damn near flawless to ensure GM’s ultimate survival.
...
That's quite a glum assessment. GM will survive as the biggest auto manufacturer come hell or high water because the government will back the industry. Chapter 11 and the resultant conversion of union members to part owners should revitalize the operational aspects of the industry.
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