Ch 11 would normally be the best way to go but surveys indicate that 80% of consumers would not buy a car from a firm in bankruptcy, even a gov’t backed structured filing.

rokemronnie

The way they don’t fly bankrupt airlines,lol? The reality is 80% of consumers wouldn’t have a clue if the company they were buying from was in bankruptcy.

By the way, I have a newsflash for you: the big 3 are already bankrupt. And since they lose $1,000 on every car they sale, they aren’t getting out of it any time soon….not even with a bail out.

It’s one thing to prop up business with government money but there’s a word for telling that business how to manage itself, nationalization.

And you call yourselves conservatives.

rokemronnie

You can’t have it both ways. Conservatives aren’t for the bail out period, but, if it is inevitable, you’re damned right we’re going to tell you to stop doing the same stupid sh*t that put you in this rat hole to begin with. You must be an exec of the union or the big 3. With your intellect, you’re clearly qualified to be one of the two.

And for you car workers, I sympathize with your situation, but not much. Why? Because when your union was pushing for these destructive labor contracts that spelled doom for your companies, did you stand up against them? Did you listen to the people who were telling you such measures weren’t sustainable, and negatively affected your company’s competitive ability?

No, you didn’t. You were likely one of the first ones to the picket line. And now you reap what you sow. And the same goes for those who continued to live in state that was being run into the ground by the politicians you elected over and over again. You placed your bets on the same losing horse, and now, you want other struggling folks to bail you out too.

To hell with that.

But the UAW has a lot of political muscle, and it would have meant a BIG, prolonged fight on multiple fronts to make it happen.

From my position, the current situation is unfortunate, because of all the vehicles on the market a surprising number of the ones I’d actually spend my own money on – the Cadillac CTS and CTS-V, the ‘Vette, the Cobalt SS, maybe the Volt – are GM products.

Now, as for unions – rokemronnie is mostly right. Union work rules and job classifications are nearly as big a part of domestic uncompetitiveness as pure dollar cost is. When a Honda or Toyota plant can use their line workforce to change tooling or move equipment but a GM plant can’t, that’s a cost and a ‘friction’ to doing business that the Big-Two-and-Two-Bit-Chrysler incur that no one else does. Can an engineer in a GM facility plug an Ethernet cable into a desktop computer now? A few years ago that was cause for a grievance filing.

It’s all doubly unfortunate because GM, in particular, has been doing a lot right lately – probably two-thirds of the product out there I’d consider buying is GM. They’re just three years late.

IBD and all the business types can chatter all they want about union concessions, but the Dems are in the unions’ pockets and whatever comes out of all this is going to have to have UAW blessing.

Currently the market cap value of GM is “only” $7 Billion.
The industry can be bought, restructured with such a federally guided transaction much cheaper to both the government and the taxpayer. Note a collapse would cost the taxpayer many 10s of Billions; with millions of UAW workers filing for unemployment, lost income tax revenues and the radiating collateral loss of employment and added cost to the economy.

The key points that both Romney and todays IBD editorial make,can be realized in such a deal analogous to the Merrill Lynch deal that was encouraged by the feds and accepted by B of A.

In 1996, I purchased a brand spanking new Ford Thunderbird. In 1998, the paint started peeling off. After months of dealing with lies, “secret recalls”, and all around BS from Ford, they offered to discount the price of a new paint job so much so that I finally gave up and paid the $400 to have it be done and over with. I hated Ford.

I worked in DuPont’s main paint r&d lab from 1982 to 2002 and we supplied paint to all three of the domestics at the time. The kind of peeling you experienced is usually the result of UV light getting to the primer, which breaks down.

While there are things the car companies can do (like not enough coats of topcoat, which has the UV screener in it) that will cause that problem, none of them would save them 87 cents. The critical steps in the paint process cost a lot more than 87 cents. The paint shop is the most expensive part of the assembly plant so they’re looking to real savings there. Paint can cost hundreds of dollars or more a gallon and so eliminating one coat of color coat, let’s say, would save a lot more than 87 cents.

No disrespect, but the peeling may be true, even the “secret warranty” may be true, and indeed Ford may have tried to cut corners but the “Ford and GM saved 87 cents a car” has the ring of an urban legend. Even Ford’s infamous flaming Pintos saved them $11 a car and that was back in 1971, when $11 made up a little more than 1/2 of 1% of the retail price. 87 cents is such a miniscule part of the cost of making a ’96 Tbird that it might cost them more to implement the savings.

While it’s true that with 15,000 or 20,000 parts that make up a modern car, saving a few pennies on each component can add to real savings, I can’t see that happening with paint.

rokemronnie on November 19, 2008 at 12:01 AM

Could you please list your sources for all of this “information”.

How much is UAW paying you to spew here?

You don’t read very well, do you? Read the thread.

I just think that it’s possible to look at the pros and cons of issues from more than one side. Go ahead and scream about unions and how they are terrible if that makes you feel better. But regardless of how one feels about organized labor and incompetent executives, removing competitive pressure from companies with a 55% market share will mean prices will go up, standard equipment will go down, and the pace of innovation will slow. That’s just basic supply & demand and how markets work.

I’m plenty critical of the UAW, though I don’t think their wage and benefit package are a problem going forward because of the contracts renegotiated last year. Unfortunately, the real savings on those contracts don’t start until 2010. It’s their work rules that hamper the companies from effectively using their labor. A lot of those work rules are covered under local contracts, not the main contract, and they’ll take take to revise. The engine plant in Dundee, Michigan is a JV of Chrysler, Daimler and Hyundai, a UAW facility and they have just two job classifications.

No one is making fun of blue collar workers.

Sure they are. They call them lazy, incompetent, greedy, and that people with that level of education shouldn’t be able to make that much money. Pure class and intellectual bias.

Plenty of people who work hard for a living resent have their tax dollars taken to subsidize overpaid workers in a different industry.

Laura in Maryland

You mean like how tax dollars have been taken from Michigan to subsidize Maryland? From 1981 to 2005, Michigan averaged $0.81 in in-state Federal spending for every dollar it sent to Washington. It was a net drain of ~$200 billion. Maryland, on the other hand, gets back $1.25 for every dollar it sends to Washington. Maryland’s net gain was about $190 billion over that period. Maryland contains some of the wealthiest counties in the country because of its proximity to DC. I think 12 of 15 of the wealthiest counties are in the DC area.

In terms of per capita federal spending, Maryland has never been out of the top 5 since 1981 and in 2005 (the last year I can find figures for) ranked 3rd. Michigan has never been out of the bottom 10 states and currently is ranked 43rd.

So if you want to argue about whose taxes are used to subsidize whom, you’d be better off not mentioning you live in Maryland.

They ended Oldsmobile, why not Pontiac? I have often wondered why Ford still has a Mercury Division. Mercury has always been an upscale Ford, nothing really special. The same is true for GM, all those cars and except for Cadillac, they are all Chevrolets deep down under the sheetmetal. Fancy doodads notwithstanding.

Because of strong state franchise laws, it would cost a small fortune to close Pontiac and Buick. The current credit crunch has a silver lining in that many dealers are closing shop and GM has way too many dealers. Toyota has something like 1200 or 1500 dealers in the US. Chevy alone has over 4000. Closing Oldsmobile cost about a billion dollars to pay off the dealers. Before the 1960s, Alfred Sloans business model for GM was a brand for every price point. The brands didn’t compete with each other and brand identity was strong and distinctive. Even though GM was platform sharing back in the 1960s, the sheetmetal was different as were the engines, some suspension parts and interiors. For a while, Chevy, Olds, Pontiac and I think even Buick each had their own small block 350CI V8s. When GM tried to rationalize production in the late 1970s and early 80s, they got sued because people were upset about having a “Chevy” engine in their Oldsmobile, notwithstanding the fact that the SBC is arguably the most successful engine in automotive history.

Ironically, GM sabotaged Sloans business model first with the Corvette, which cost more than Buicks and as much as some Cadillac and took away the performance crown from GM’s halo brand, Cadillac. The small block Chevy V8 mentioned above made V8 power available to middle class buyers, removing some cachet from Buick and Caddy. Finally, the muscle car era ended up with each division having its own performance car, which didn’t do much for Pontiac’s role as the performance brand. I mean the Hurst Olds, the Olds 442 and Buick GS are cool vintage cars and not your average SS Chevelle, but in the market they competed with each other, just like the Barracuda and Challenger on the Mopar side of the street.

A lot of the brand dilution came as a result of pressure from dealers. Not recognizing the value of a brand identity, they insisted on having product for every market segment, yielding abominations like the Caddy Cimmaron.

Believe me, if I want to catalog the sins of the Detroit 3 and the UAW I can do it in spades. The first car I bought myself was British, a Lotus (still have it, in pieces) and I’ve always preferred smaller, well handling cars.

rokemronnie on November 18, 2008 at 11:07 PM
How much is UAW paying you to spew here? No one is making fun of blue collar workers. Plenty of people who work hard for a living resent have having their tax dollars taken to subsidize overpaid workers in a different industry. Framers, roofers, and some plumbers and electricians don’t make close to what UAW people do, and they don’t have the gimme benefits. Try telling a guy who is busting his butt to keep food on the table that his taxes are going to help keep thousands in jobs that start at over $60,000/year (according to Time).

Laura in Maryland on November 18, 2008 at 11:21 PM

Sorry, I fixed it (blind fury makes it hard to proofread).

rokemronnie on November 18, 2008 at 11:07 PM

How much is UAW paying you to spew here? No one is making fun of blue collar workers. Plenty of people who work hard for a living resent have their tax dollars taken to subsidize overpaid workers in a different industry. Framers, roofers, and some plumbers and electricians don’t make close to what UAW people do, and they don’t have the gimme benefits. Try telling a guy who is busting his butt to keep food on the table that his taxes are going to help keep thousands in jobs that start at over $60,000/year (according to Time).

WHOA! What BS, and before you claim I “don’t understand” please know that I am a Michigan resident. Blame Granholm and her predecessors for partying like it’s 1959 instead of coming up with some legitimate plan for the MI workforce that doesn’t involve assembly lines and unionized labor.

Actually, during the Engler administration Michigan added 800,000 new jobs.

If you don’t believe me that the industrial midwest has been economically raped by Washington to the benefit of the sunbelt you can see the figures for yourself:

Federal Taxes Paid vs. Federal Spending Received by State, 1981-2005

If any part of Michigan gets screwed over by money’s flowing to Detroit it’s the UP, though state Sen. Mack was pretty good at bringing home the pork.

As big an 800 pound gorilla as the auto industry is in Michigan, the state has, or rather used to have a fairly diversified economy. It’s not just the industrial plants of SEMI that have suffered due to a lack of a national industrial policy. It’s the closed pharma plants of what used to be Parke Davis in Kazoo. It’s Whirlpool in Benton Harbor (that west enough for you? any farther west and you’d be wet).

“Hell no I’m not getting a switch, that’s the damned electrician’s job.”

Pelayo

Pelayo,

You’re good at making jokes but can you frame a wall? Plumb a house? Rough in the electrical system in new construction? How about something fairly simple like replace roof shingles?

We haven’t had any kind of coherent national industrial policy since the 1950s at least. Instead of figuring out how we can embrace technology and productivity improvements and still make our own shoes, we let our shoemaking industry die. The same with steel, toys, consumer electronics, and on and on. The list sadly is almost endless.

A healthy country needs industry and manufacturing. We’ve already had weapons programs delayed because machine tool companies went out of business or were acquired by the Chinese.

rokemronnie on November 18, 2008 at 10:57 PM

Agree with that and I think we need a policy that gives a home team advantage for domestic industry. Other nations routinely do this and it is the height of foolishness not to do so for the US. It becomes a problem though when that advantage becomes too large and domestic industries are allowed to atrophy through lack of competition.

Free trade is not the panacea it is made out to be. A total service industry isn’t going to cut it.

Union Workers who barely have the educational and skill qualifications to work at a 7-11 are paid an average of $52.00/hour.

That’s obscene.

No class bias here, nope, move it along.

How dare those stupid uneducated folks have the audacity to want to earn a good living!

What’s obscene is how you think you are better than folks who work with their hands. Can you weld? Operate a knee mill or a turret lathe? Program a CNC machining center?

Do you think you are better than millwrights and machinists? Do you have any idea how skilled that labor is? The auto industry isn’t just high school dropouts tightening bolts. To build, operate and maintain industrial facilities takes intelligence, skill and not a small amount math ability.

You can disparage your fellow Americans and make jokes about how building a hamburger takes as much skill as building a car. Most of the people who disparage industrial or construction workers couldn’t do half the things they know how to do.

In fairness, I would never have expected this to occur either, but mostly because I’ve never heard of Robert Reich.

. How many towns lost a steel mill, or a textile plant, and had to deal with the consequences? Dozens and dozens. They had no bailout, and they had to swallow hard and face the abyss. And their political and business leaders had to adapt for the future. The world has moved way, way past 1955-style industrial arrangements; only in Detroit could people still believe that this system was feasible.

No, only outside of Detroit do people think we can build F-22s without a viable manufacturing base. The country let it’s industrial base wither and hollow out so we could buy cheap shit from China. The baby boomers, my generation, thought we were too good to work in factories, and the children of the baby boomers went to college in huge numbers, not that more than a fraction of them were really capable of true college level work, but the curricula were politicized and dumbed down and everybody thought they’d have a nice office job without having to get their hands dirty or make anything. It’s not just manual or industrial labor they look down upon. We have a shortage of US born and trained engineers because while earlier generations may have thought a guy like John A. Roebling was a role model, nowadays it’s celebritards and politicians. I wouldn’t be surprised if we graduate more lawyers than engineers.

People in the car industry know better than most how technology yields greater productivity and greater productivity means less human labor involved.

Still, while less than 3% of Americans are farmers, until now (as I look at an orange imported from South Africa), nobody has been foolish enough to say we don’t need agriculture anymore just because so few Americans earn their living at it.

We haven’t had any kind of coherent national industrial policy since the 1950s at least. Instead of figuring out how we can embrace technology and productivity improvements and still make our own shoes, we let our shoemaking industry die. The same with steel, toys, consumer electronics, and on and on. The list sadly is almost endless.

A healthy country needs industry and manufacturing. We’ve already had weapons programs delayed because machine tool companies went out of business or were acquired by the Chinese.