US economy faces 'catastrophic collapse' without auto bailout says General Motors

I have been in the automotive repair field for 40 years now and have seen the american automobile go from a  machine built to last, to an over-engineered piece of junk built to fail;

I don't know about this statement. I have owned at least 8 GM cars over the past 25 years and my 2002 GMC Sierra is by far the best built of them all. It currently has 128,000 miles with not even one minor repair and still on the original brake pads (Yeah... I can't believe that last one either, but it's true). Are you saying a 2008 Malibu is a bigger piece of crap than a 1974 Vega? I doubt that.

oops, that should be "retraining" not retaining, although it actually works as well. ;) I would add that some form of investment and economic diversifacation in the affected communities might be worth considering too, in order to better prepare for the coming economic reality, i.e. a post happy-motoring suburban America.

Great, that's just what we need... a parade of Ford salesmen coming to our doors asking if we want to buy some candy so they can keep their jobs.

At least we would have the right to say no thank you we are waiting for chevy. lol

Bottom line is we need to make ceo's accountable if they want to keep the money flowing they need to pay a portion of their fortune to keep the business going.

Lets face it if their not willing to fork over some of what they had gained in profit, then are they truly worth bailing out. I feel bad for the workers who have put years into the job and may lose everything. There should be punishment for ceo's that let their company fail but have billions in their pockets.

I'm right with you Dani.

we all gonna hurt, and the hurtin has to start somewhere.

We have arrived at our current situation due in part to the insatiable demand for American debt. During the savings glut that characterised much of the past decade governments and individuals desired American assets because they viewed them as relatively risk-free. That enabled the government to run up enormous debts, while facing low real rates (especially on longer-dated securities), and made credit a little too easy.

I couldn't agree more.

I actually quoted this article to show how gulible americans are.........sorry I should have added that to the post.

Money is debt...........we are done here. 

The Fed has (apparently) sold bonds with no value and bankrupted this nation.  see Nearings seed by Max Kieser..........it wild.

Thanks Nearing;) was looking for that and then discovered the new announcement on Timmy "I'm the new Tres." Geithner.

Because there isn't any way to compare this to the airline industry. For example; the airlines do not own their own planes - they do a lease back where the banks own (and depreciate) the planes (then sell them to each other for a capital gain - i.e. lower tax rate). The auto manufacturers must own their plants and machines.

It's not the labor contra cts making them non-competitive nor the products; there is a increasing part of the population that grew up with an identification / appreciation for name brands thinking certain ones are "cool" or better.

A clear example of this would be the Chevrolet Nova, which is also known as a Toyota Corolla, same car, same engine, same assembly plant, same workers; yet many people feel that somehow the Toyota was better quality when anyone would see that it would be the exact same quality. The same goes for Chevcrolet's made by Suzuki (tracker) vs the Suzuki counterpart; Chevrolet's made by Isuzu, Honda's made by Isuzu, etc.

The same way we see a picture on a Toshiba widescreen TV as somehow being brighter than the same tube on a Samsung, which makes it.

The cause of their financial problems are simple - demand suddenly dropped by over 15% for ALL car makers; the Chinese car makers are pushing Beijing for a bail out, there are virtual oceans of Toyotas, Nissans, Mercedes at american ports because the dealers can't sell them.

It's not just the American auto companies.

they can't sell them?  NOt enough wealth? or not enough wealthy to buy them all, they are what part of the population?  Had to find a way to make that work out didn't we?

Being as this covers the cheapest Nissans and Toyotas to the most expensive Mercedes I don't think "wealth" is the issue; they are every part of the population. People are afraid to spend money, especially big money on cars; and even when they are ready there is little financing available and some people run in to problems there. remember, GM owns GMAC owns Ditech which is a mortgage lender - GM put a lot of money there.

I was talking to a friend today, and we agreed that no plan is perfect, and if this group of elite have been schemeing and planning and weakening our nation, then it is certain that we will come to attention and attend to it.

There are weaknesses in this progress that has been made, and we will find them and our unity in doing so.  But......my point was that those who have weakened us can not benefit from our productivity alone.  There are not enough elite wealthy individuals in this group to make production possible........we must be part of the consumerism's of those large items.  and in thinking about it.....maybe it is time for the average consumer to turn their back on the gluttenous behaviors and decide that we don't need anymore gas hogs, polluting, pieces of metal to get us from a to b.  I know I would prefer to get where I need to go without the damage that those automobiles as they have progressed, inflict.  So, I change my a to b needs until that issue is addressed.

So we would import american cars made overseas.

Rella,

As I'm sure you know, there are countless products designed and marketed by American companies that are built overseas, so I can't see why cars would be any different. My guess is it has to do with labor union contracts, which are likely designed to keep the manufacturing jobs in the US. A good intention for sure, but the high labor rates and benefits make American cars uncompetitive on the world markets, so there is some amount of "protectionism" built into the auto industry. They only survived the past 10 years because of high profit margins on SUVs and trucks sold in the US. (A Suburban has, or had, ten times the profit margin of a Malibu or Toyota Camry) With demand for those products gone, the high profit margins that were supporting the labor contracts are also gone and they can't survive on the low profit margins of the Malibus and Cobalts. Thus, they are bleeding billions every month to pay their labor contract obligations, while not selling very many high-profit margin cars.

Even if they were allowed to import Opal's (A popular GM brand in Europe) I doubt there would be enough production capacity in overseas factories to supply Europe, China AND the US. I addition, we have different safety standards, so the vehicles would have to be redesigned and tested to meet US Federal Safety guidlines. The point is that it is much more complicated than just putting some vehicles on ships and sending them to the local dealers, so retooling American factories and lowering labor costs is the key for the Big 3 going forward. As a side note, Many Big 3 vehicles and parts sold in the US are currently built in Canada and Mexico, but those countries might have an examption as part of NAFTA.

No.

No.

No.

I can see that you don't have an understanding of how cars / markets / countries laws work. The cars they make overseas do NOT meet safety laws, pollution control laws, etc. etc. - they are made for that specific market (and English cars are right side drive, even)

Further, there is no market for these cars yhere as they are underpowered for the american market, are not designed to do freeway speeds all day then turn around and do 10 MPH on a crowded stop-and-go freeway in Phoenix Arizona in the middle of July. You have no idea what the design parameters are for cars; nor the market - American car companies have cars that are in high demand here from everyone but the Yuppies who buy foreign no matter how poorly they fit the use.

There are articles here including some I seeded that there are virtual oceans of Toyotas, Nissans, Mercedes, etc sitting at the docks because the dealers can't sell them; and that doesn't include the American made models sitting at the factories; the whole indiustry has lost 15% of demand due to the credit crunch. Chinese automakers are looking to Beijing for a bailout as they are having problems in their home market.

This isn't about not having the right products, making bad decisions, bad labor contracts or agreements and everything else you hear; it's about people being insecure about their jobs and dealers not having the financing credit they used to.

It's just like Watergate - follow the money

What do you mean, No. No. No.???? Did you read my post?

The cars they make overseas do NOT meet safety laws, pollution control laws, etc. etc. - they are made for that specific market (and English cars are right side drive, even)

This is exactly what I said. I said in post 11.2 "In addition, we have different safety standards, so the vehicles would have to be redesigned and tested to meet US Federal Safety guidlines. "

Further, there is no market for these cars yhere as they are underpowered for the american market, are not designed to do freeway speeds all day then turn around and do 10 MPH on a crowded stop-and-go freeway in Phoenix Arizona in the middle of July.

I agree... In post 11.2 I wrote: "The point is that it is much more complicated than just putting some vehicles on ships and sending them to the local dealers." Although I did not specifically referemce the performance problem it was one of the complications I was alluding to.

This isn't about not having the right products, making bad decisions, bad labor contracts or agreements and everything else you hear; it's about people being insecure about their jobs and dealers not having the financing credit they used to.

It's both really. Even if the credit is available it is easier to justify the purchase of a Civic vs. an Escalade.

the whole indiustry has lost 15% of demand due to the credit crunch.

American car companies have cars that are in high demand here

You mean WERE in high demand here. GM and Ford sales are off 30-40% so a good part of the high demand is gone and probably won't return. Further if the indusrty is down 15% on average some of the manufacturers aren't getting hurt as bad and will recover sooner. However, you are correct about imports piling up on the docks.

I don't disagree with you at all... it is a very complicated issue, which was my point. I do however think you are underestimating the role of the labor unions.

Naftel - this is comment 11.5 which means it refers to 11 (11.0 if you will)

The american cars are still in high demand, no matter how much you want to deny it. American Trucks (like the larger Nissan Titan and Toyota Tundra) are way down (yes the Japanese companies trucks demand is way way down too!) as well as SUV'sw; but Ford, for example, makes Focus, Fusion, Taurus; etc. which are in high demand.

RE: your civic vs. escalade comment - it depends on the purpose; it's hard to justify a civic for a limousine or taxi; etc.

re: your comment about Labor Unions - one of the undiscussed issues is that workers at american factories have been there longer, have higher seniority (and therefore seniority bonuses / raises in their pay) as well as pension benefits, etc. Too many people want to blame labor when labor costs simply aren't that big a component of total costs (in fact advertising is a bigger share of costs; and if you separate management salaries from actual worker salaries, management is a bigger amount and share of costs)

Gotcha... sorry for the misunderstanding. I agree with what you are saying. It is a multi-faceted problem to say the least.