OT: Election/Politics thread, Part 6

[Rodster]

Yup Ford has been making good cars for the last 10-15 years. I think there were a couple of years that the Taurus was the number #1 selling car in the US.

[wco81]

You know, something like that is a great idea. If you're on welfare, you have to do some sort of service work for their community; otherwise they don't get money. I wonder why no one's proposed this.

Probably easier not to have to think up jobs for them to do, have people manage the workfare recipients, etc.

I remember reading about one program in the '90s was to have them wash buses. People felt better that they were earning the payments but that kind of work didn't really help anyone. The workfare recipients weren't going to develop any useful skills to get jobs which would take them off welfare completely and while cleaner buses were nice, the money they spent -- the payments, the administrative costs, etc. -- didn't produce anything.

Might be like those community service jobs where they have people pick up litter in freeways.

[Naples39]

I think it's a little shortsighted to point to SUVs as signs of mis-management in Detroit. The Detroit auto-makers have been in decline since the late 70s. The only time they were truly healthy and doing a strong business was exactly because of the SUV craze beginning in the late 90s.

Outside of that, the cost of unionized labor in the United States is simply too expensive to compete, and has been for quite a while.

Unless Detroit can strike gold again with something like the SUV craze, giving them more money is just delaying the inevitable IMO.

[XXXIV]

giving them more money is just delaying the inevitable IMO.

I hate to agree to this as I have always tried to do my part, buying American ...but I think you are right on.

Why should anyone pay extra for the same or lesser product ?..

Its time is fast approaching if its not already here.

[wco81]

That's right I blame the unions. The unions are 80% of the problem and 20% the car makers are to blame. Funny how Toyota, Honda, Nissan and the rest of the car companies who build their cars here have no unions and don't want unions because they have destroyed the auto business here in the US.

On average American cars today are just as good as their Japanese counterparts and have been for the last 10-15 years. No company is going to survive pay outrageous salaries to assembly line workers and pay all the entitlements the unions have fought for. You eventually will go bankrupt which is where they are at today.

They were in really bad shape prior to the financial mess as Chrysler almost went under.

Do you have numbers to back those figures up?

Recently, the automakers have been laying off a lot of white collar workers too. I heard that Grosse Pointe, MI was the most affluent enclave in the country for several decades.

The companies weren't complaining when they were making huge profits in the '90s with SUVs. They had several factories running 24/7.

Are Americans not buying cars from Detroit because they don't like union workers making so much money?

Ford for a time went with Total Quality program which improved the reliability of their cars. Then they dropped it.

[wco81]

GM must add approximately $1,500 to the sticker price of every one of its vehicles compared its foreign counterpart to cover its health care costs.

That makes it damn tough for GM to compete without cutting corners in design, engineering and production.

In 2007, GM was paying FULL healthcare benefits for 900,000 UAW workers and dependent spouses even though only 180,000 were actually employed on GM lines. That's right -- GM was providing lifetime healthcare benefits for 720,000 UAW retirees and their dependent spouses.

Again, pretty tough to compete under those circumstances.

Take care,
PK

Guess what though, they have factories in Canada and the amortized health care costs for each car up there is a fraction of the health care costs of their American-produced cars.

GM and Ford also have subsidiaries in Europe and produce cars there as well. It would be interesting to compare those cost structures.

[JRod]

Ya blame the unions.

Stop blaming unions when the big three didn't adapt fast enough and wanted to sell the wrong type of vehicles.

Why isn't it the big three's fault for their failure?

That's right I blame the unions. The unions are 80% of the problem and 20% the car makers are to blame. Funny how Toyota, Honda, Nissan and the rest of the car companies who build their cars here have no unions and don't want unions because they have destroyed the auto business here in the US.

On average American cars today are just as good as their Japanese counterparts and have been for the last 10-15 years. No company is going to survive pay outrageous salaries to assembly line workers and pay all the entitlements the unions have fought for. You eventually will go bankrupt which is where they are at today.

They were in really bad shape prior to the financial mess as Chrysler almost went under.

Then you simply don't understand the market.

The big three went so far to kill off any American efforts to "green" the car industry. Instead they focused on larger vehicles. The market shifted on them.

As for the pensions, what should you do? Cut them off? These people helped to build the American auto industry. So what you have a large amount of people building a huge amount of cars. When the foreign automakers were able to build better cars for a cheaper price, the big three failed to adapt.

They also didn't focus enough investment in their car divisions. That's the biggest problem right now with Detroit. The products they offer are not what consumers want. The big three failed to adapt quick enough and are now behind the curve.


Naples,
The SUVs aren't just the problem. It's the entire big three culture. When Clinton tried to push together a private public cooperation to build greener cars, Detriot offered good ideas. Then within years they quick these programs and focused on SUVs and large trucks, almost ignoring their car divisions. Honda and Toyota, squared the Big Three might be far ahead of them, worked on the hybrid engines. Funny how these hybrids are more successful and many dealers can't sell them fast enough.

Detroit's model was a failure and was based on cheap gas prices.

[XXXIV]

Then you simply don't understand the market.

.

I say he understands it much better than you do.

[Rodster]

Then you simply don't understand the market.

.

I say he understands it much better than you do.

That fact that i'm self employed, never taken a gov't handout and I work with cars all day. Yeah I would tend to agree with that.

[wco81]

I don't know about the merits of bailing out Detroit at this time. If they provide too much, the US might run afoul of the WTO.

But it's kind of hard to argue against it, because we've given so much to the banks and committed far more.

Just heard that so far, we've given something like $200 billion to 10-20 institutions and they're still not lending. LIBOR has come down but instead of lending, these banks are propping up their dividend payouts and some executive compensation.

Some think Paulson isn't bringing down the hammer on them.

If we do give money to the car makers, it wouldn't be the first time. Not just Chrysler but if you think about it, the interstates were funded with tax dollars basically to boost car ownership. And American cities mothballed a lot of public transit systems they'd built up in the first half of the 20th century, to make way for cars.

[fletcher21]

wco81, you're seriously a genius dude.. What do you do for a living? Is it politcs related at all?

[pk500]

That's just two off the top of my head. The new redesigned Chevy Lumina won Motor Track car of the year.

Which means absolutely nothing. Those auto magazines present those awards to the highest bidders and advertisers.

Take care,
PK

[pk500]

Are Americans not buying cars from Detroit because they don't like union workers making so much money?

No, they're not buying cars from Detroit because their cars are nearly $1,500 more expensive than a comparable model -- and often are of lesser quality -- than comparable foreign models, mainly because of the huge health care plans that GM agreed to with the UAW.

And doesn't the UAW have some culpability in the quality of the vehicles that its members produce? It's all Ford's fault because the Total Quality program was abandoned?

Take care,
PK

[wco81]

I'm not so sure that Detroit cars are more expensive.

Despite those costs, they still have to compete. They may not be making profits but I doubt they're selling them at higher prices.

They have those employee price sales which I've never seen Honda or Toyota do.

Reason Detroit cars aren't selling is because they're not perceived as reliable or good as other makes.

[pk500]

As for the pensions, what should you do? Cut them off? These people helped to build the American auto industry. So what you have a large amount of people building a huge amount of cars. When the foreign automakers were able to build better cars for a cheaper price, the big three failed to adapt.

We're not talking pensions. We're talking universal health care for its workers, active and retired. That's unsustainable against competition that doesn't provide such a program AND builds better products.

It would be one thing if Detroit built phenomenal cars that were priced higher than their foreign competitors. Then the UAW extortion could be justified.

But when Lexus, Toyota and Honda clean up on nearly every J.D. Power survey year after year, it's telling.

They also didn't focus enough investment in their car divisions. That's the biggest problem right now with Detroit. The products they offer are not what consumers want. The big three failed to adapt quick enough and are now behind the curve.

What products do foreign manufacturers offer that Detroit doesn't? The Toyota Prius was the seminal hybrid car, but the Ford Escape was the seminal hybrid SUV. You're also VASTLY overestimating the market share of hybrids. What is it, maybe 1 percent of all vehicles sold in America today? I'm not sure of the number, but it's nowhere near 10 percent.

Detroit offers small cars, large cars, mini-vans, small trucks, large trucks and sports cars -- same as the Japanese. In what market segment does Detroit lack an offering?

The problem is Detroit's cars are too expensive for the quality they're offering. And much of that expense is due to the universal health care that the UAW sucked out of the suits in Detroit. It's simply unsustainable.

That's where GM lacked foresight, not in its car lineup.

Take care,
PK

[pk500]

I'm not so sure that Detroit cars are more expensive.

They are clearly more expensive when factoring in quality, such as gas mileage and lifetime repair costs.

Plus Hyundai's entire lineup simply kicks the ass price-wise of anything coming out of Detroit, for example. And the quality is there.

They have those employee price sales which I've never seen Honda or Toyota do.

Honda and Toyota don't have them because they don't need them. They move vehicles. Toyota's "Saved by Zero" campaign is the first zero-percent financing program I've ever seen from that manufacturer.

I've haggled with dealers of foreign and domestic vehicles -- I LOVE the haggling -- for the last 20 years, and foreign dealers usually offer much less wiggle room because they don't have to. They're not struggling to sell cars.

Reason Detroit cars aren't selling is because they're not perceived as reliable or good as other makes.

Yeah, it's all perception. That's it. Take a look at the four-star or higher car manufacturers for overall quality in the initial 2008 J.D. Power ratings:

Porsche -- five stars
Infiniti -- four stars
Lexus -- four stars
Mercedes-Benz -- four stars
Toyota -- four stars
Mercury -- four stars

One American marque in there. One.

Here are the 2008 vehicle dependability ratings from J.D. Power, which surveys problems in vehicles that have been owned for three years:

Lexus -- five stars
Mercury -- four stars
Cadillac -- four stars
Toyota -- four stars
Acura -- four stars
Buick -- four stars
BMW -- four stars
Lincoln -- four stars
Honda -- four stars
Jaguar -- four stars

Foreign 6, American 4.

And of those six foreign marques, two -- Honda and Toyota -- are everyday vehicles, not luxury marques. Where are Dodge, Chrysler and Chevrolet on this list, the American "meat and potatoes" vehicles?

Take care,
PK

[dougb]

As for the pensions, what should you do? Cut them off? These people helped to build the American auto industry. So what you have a large amount of people building a huge amount of cars. When the foreign automakers were able to build better cars for a cheaper price, the big three failed to adapt.

We're not talking pensions. We're talking universal health care for its workers, active and retired. That's unsustainable against competition that doesn't provide such a program AND builds better products.

It would be one thing if Detroit built phenomenal cars that were priced higher than their foreign competitors. Then the UAW extortion could be justified.

But when Lexus, Toyota and Honda clean up on nearly every J.D. Power survey year after year, it's telling.

They also didn't focus enough investment in their car divisions. That's the biggest problem right now with Detroit. The products they offer are not what consumers want. The big three failed to adapt quick enough and are now behind the curve.

What products do foreign manufacturers offer that Detroit doesn't? The Toyota Prius was the seminal hybrid car, but the Ford Escape was the seminal hybrid SUV. You're also VASTLY overestimating the market share of hybrids. What is it, maybe 1 percent of all vehicles sold in America today? I'm not sure of the number, but it's nowhere near 10 percent.

Detroit offers small cars, large cars, mini-vans, small trucks, large trucks and sports cars -- same as the Japanese. In what market segment does Detroit lack an offering?

The problem is Detroit's cars are too expensive for the quality they're offering. And much of that expense is due to the universal health care that the UAW sucked out of the suits in Detroit. It's simply unsustainable.

That's where GM lacked foresight, not in its car lineup.

Take care,
PK

I don't think it's cost. Quality has been a huge problem for the Big 3 for a long, long time. And it's not the assembly line that's been the problem for quite a while. Their cars are just not nearly as well engineered as comparable Japanese cars. When I looked at a car that could do the 50,000 km a year I commute to and from work it became readily apparent that the Ford and GM offerings just couldn't compete on reliability.

Best wishes,

Doug

[Jackdog]

I don't think it's cost. Quality has been a huge problem for the Big 3 for a long, long time. And it's not the assembly line that's been the problem for quite a while. Their cars are just not nearly as well engineered as comparable Japanese cars. When I looked at a car that could do the 50,000 km a year I commute to and from work it became readily apparent that the Ford and GM offerings just couldn't compete on reliability.

Best wishes,

Doug

Ford has done me right by me for the last 15 years. My wife had a 110 mile commute 5 days a week when we lived in Ohio. She racked up over 350,000 on her 96 Escort. We gave it to my sister in 02 and she still drives it.

[wco81]

I'm not questioning that American cars have reliability problems.

Even if they do come out with a good car, they will have to fight that perception.

That accounts for the price differential you see in market prices. The dealers of these brands which are in demand know they can squeeze more from the buyers.

When they get a hot car, like the Prius was for awhile, they can demand over sticker and often get it.

Most of these issues have little to do with labor costs. It's not as if Detroit would try to undercut the foreign makes by under $1500 if they didn't have this health care overhead. They would try to get what the market would bear and keep the rest as higher profit margins.

You want to blame union contracts but who signed those contracts? Those executives who got big paydays regardless of how their cars were selling.

[JRod]

As for the pensions, what should you do? Cut them off? These people helped to build the American auto industry. So what you have a large amount of people building a huge amount of cars. When the foreign automakers were able to build better cars for a cheaper price, the big three failed to adapt.

We're not talking pensions. We're talking universal health care for its workers, active and retired. That's unsustainable against competition that doesn't provide such a program AND builds better products.

It would be one thing if Detroit built phenomenal cars that were priced higher than their foreign competitors. Then the UAW extortion could be justified.

But when Lexus, Toyota and Honda clean up on nearly every J.D. Power survey year after year, it's telling.

They also didn't focus enough investment in their car divisions. That's the biggest problem right now with Detroit. The products they offer are not what consumers want. The big three failed to adapt quick enough and are now behind the curve.

What products do foreign manufacturers offer that Detroit doesn't? The Toyota Prius was the seminal hybrid car, but the Ford Escape was the seminal hybrid SUV. You're also VASTLY overestimating the market share of hybrids. What is it, maybe 1 percent of all vehicles sold in America today? I'm not sure of the number, but it's nowhere near 10 percent.

Detroit offers small cars, large cars, mini-vans, small trucks, large trucks and sports cars -- same as the Japanese. In what market segment does Detroit lack an offering?

The problem is Detroit's cars are too expensive for the quality they're offering. And much of that expense is due to the universal health care that the UAW sucked out of the suits in Detroit. It's simply unsustainable.

That's where GM lacked foresight, not in its car lineup.

Take care,
PK

I think the case for universal health care can be pitched to every employer in the US saying that a universal health care system (not government subsidized) could eliminate a large amount of costs that go to paying for health care.

It's not secret that people and businesses are paying more for health care but getting less in the return. If the US went to system like Germany's where people pay for the their own health care and the government controls cost then I think it's attainable. What this means for huge corporations is in a influx of capital.

Analysts have long said for a while that Detroit has lagged behind in their car divisions in favor of their trucks and SUV divisions. Just because they offer these cars doesn't mean they can compete with the foreign automakers.

[Teal]

Then you simply don't understand the market.

.

I say he understands it much better than you do.

Yeah, but if he doesn't say it, he can't feel superior, and thus, he wouldn't be JRod...

[matthewk]

Detroit's model was a failure and was based on cheap gas prices.

Don't leave out consumer demand. They were producing what the consumers wanted, and they made a lot of money doing it.

The fall of SUV populatity only sped up the inevitable. At some point the weight of pensions and heathcare for retirees was going sink them.

[matthewk]

You want to blame union contracts but who signed those contracts? Those executives who got big paydays regardless of how their cars were selling.

I blame both sides involved in the contracts. That's why I have a hard time saying yes to a bailout for them. The deal was made between the union and the company. The taxpayers were not involved in any of these decisions.

[pk500]

You want to blame union contracts but who signed those contracts? Those executives who got big paydays regardless of how their cars were selling.

I blame both sides involved in the contracts. That's why I have a hard time saying yes to a bailout for them. The deal was made between the union and the company. The taxpayers were not involved in any of these decisions.

I agree. But the union also knew it had the automakers by the balls, as it's not like "The Big Three" could tell the UAW to piss off and have its lines running again within a week. This is skilled labor, not unskilled.

Take care,
PK

[JRod]

Detroit's model was a failure and was based on cheap gas prices.

Don't leave out consumer demand. They were producing what the consumers wanted, and they made a lot of money doing it.

The fall of SUV populatity only sped up the inevitable. At some point the weight of pensions and heathcare for retirees was going sink them.

I agree, their model was predicated on a perfect economic situation for selling their cars. Like I've said, they were too slow to adapt to the changing forces.

The problem is that you have people that dedicated their working life for the big three, what do you do with them? It's easy to say well it's the unions fault. That's the parochial version of a very complicated issue.

There's a case here for a different kind of health care model, with government regulation to keep costs low and focus on the outrageous administration costs.

As for pensions, well that's more complicated. The companies would love to dump these pensions. If they did, they might have lost their work force in a strike. Then they would have had trouble to attract a good work force if they were offering a poor retirement package. Then in a free market system, one company would have offered better packages and another compoany would have offered a better packet to attract better workers. Other companies would have followed suit to keep up by attracting a similar work force. And now you have a true free market system attracting the best possible workforce by having to offer more and more.

I don't know how these companies, or if these companies, made a pitch to the unions saying we need to restructure pensions and health care because a downturn in the market could jeopardize not just pensions and health care but the entire company.

I doubt they did that because like always, when you employ that many people in a sector so ingrained in American life, that they might have had the same attitude as the banks. If it gets really bad, the government won't let us fail.