Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term 44 comments
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Last week, US automakers went to Congress with their hat in hand. The auto executives were all smiles, as was Nancy Pelosi and others. As a US taxpayer, I can tell you that I was not smiling, and I resented their happy demeanor. The automakers' insistence on building non-competitive SUVs and Hummers and the like hurt the US in two major ways: first, it helped increase our reliance on foreign oil. Second, it allowed Toyota (TM) and Honda (HMC) to eat their lunch.
Of course Congress is to blame as well by not raising the CAFE standards, legislating tax-breaks to encourage business purchases of SUVs (?), and by caving to automotive lobbyists on every possible occasion. Net-net, the US imports 70% of its oil, many jobs have been lost, and the economy has suffered as a result. So, now the middle class taxpayer has yet another sector to bailout. Since no one is going to bail me out, I want to insist that Congress get something out of these auto executives for my money:
- Each of the big three must make a natural gas powered truck and car to sell in the US
- *Every* vehicle they make must get over 40 mpg
- Every vehicle they make must be natural gas, hybrid, or electric
In addition, each US automaker must make a home appliance for fueling a natural gas car in their garage. Currently, not only do we have only one natural gas vehicle on sale in the US, but only one maker of this appliance (the "Phill" by Fuelmaker). It is time for Congress to demand competition in this market to bring down the high cost of natural gas solutions and wean us off foreign oil. See my previous articles on natural gas powered transportation:
Please contact your state senators and congressional representatives and tell them what you want for YOUR tax-payers money!
Meanwhile, look at what is happening in the oil patch as a result of the current economic crisis. Investment in the Canadian oil sands is declining as projects get put on hold or are cancelled. Drilling in the lower 48 is trending down. Projects such as the joint Saudi/ConocoPhillips Yanbu refinery are being delayed. All this means the next oil spike will make this year's old spike look tame. Current low oil prices are terrible news for the long-term US economy.
In fact, I would go so far as to advise the US government to raise federal gasoline taxes to help pay for all the deficit spending our government is currently spraying into the economy. Major oil companies are on sale at current prices. I continue to advice snapping up companies such as Exxon Mobil (XOM), British Petroleum (BP), ConocoPhillips (COP), and Chevron (CVX). These companies all pay healthy dividends (except XOM's, which is pathetic), and they are safe. These companies will continue to make money as they all have low-cost oil production sources and they can cut their E&P budgets if they need to. Long term, these companies are going to skyrocket when the economy comes back in the future.
Disclosure: The author owns all of the stocks recommended in this article.
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This article has 44 comments:
The immediate problem is that no one is buying a car. Why not just give taxpayers a $3000 credit to buy a car so the automakers can liquidate their inventories? The Big 3 can get the cash and give them some time to breathe. Then lay on the requirements to improve mileage etc. and loan them the funds to go forward...using their pension funds as collateral.
It is not the companies which need rescuing, it is the employees. Re-training, universal healthcare, new economy investments will help increase competitiveness.
I do agree that giving a tax credit to tax payers to buy a car would be a good way to help the industry. It would be a way that both the consumer and the companies could benefit.
You mention the UAW as one of the problems, I bet you didn't know that the labor cost represents 8% of the cost of a car??? Advertising represents the largest percentage of the cost of a vehicle at 15%. These are facts the average flunky doesn't know.
You can't use pension funds as collateral because these funds don't belong to the company. These are monies the government requires the companies to pay into that are not owned by the company.
Another thing the average "Joe" out there doesn't comprehend is "cause and effect"!! The impact of letting these industries die would be devastating to this country. First of all, if you are jealous of the auto industry workers because they make decent wages, that's fine. You would like to see these people lose their jobs because you think they make too much! Well, I hate to tell you but if these people you are jealous of, lose their jobs, so do the thousands of people who work for the many suppliers that the auto companies use!!
There are thousands of components that go into a vehicle. Nuts, bolts, glass, seats, rugs, wires, batteries, etc, etc. These people lose their jobs too!! The numbers of people that would be affected would be thousands.
Another thing your jealousy blinds you of is the ability to see is how the industries failure would impact of your own tax situation. People making decent wages pay higher income tax. If thousands of people paying a good share of taxes become unemployed, GUESS who would have to make up the void????????? Look in the mirror for the answer, BOZO!!
Well, maybe you could ask Japan to help pay your taxes!! Good luck!
On Nov 09 09:24 AM Joethecarbuyer wrote:
> Why do we keep throwing money at these relics? These cash injections
> do nothing, they'll want another in 3 months. They will never change...the
> UAW has them suffocated. Do you see the Japanese carmakers asking
> for a bailout? No, they have good engineering and no UAW.
> The immediate problem is that no one is buying a car. Why not just
> give taxpayers a $3000 credit to buy a car so the automakers can
> liquidate their inventories? The Big 3 can get the cash and give
> them some time to breathe. Then lay on the requirements to improve
> mileage etc. and loan them the funds to go forward...using their
> pension funds as collateral.
On Nov 09 11:54 AM Lazaris wrote:
> I am so sick and tired of hearing how the automakers insisted on
> making gas guzzling suv's and trucks! The Public wanted them! and
> they still do. Look down your street, every other house has a truck
> or suv as the second or third car in the driveway. People wanted
> them and GM build them for them. It was not GM's fault that gas went
> to $4 plus and people can no longer afford to drive the suv or truck
> they so badly wanted. When was the last time any of you GM and American
> Auto bashers even went and looked at a GM vehicle? GM's quality can
> stand up against any auto maker out there, including Toyota.
I don't have the full facts, but I believe that all, or most all, of the foreign auto makers that are cleaning the clocks of the domestic auto makers daily have STRONG AND VIBRANT UNIONS. I am neither anti or pro union, and I have never been in one or would want to be. I believe that the major elements of our auto/energy problems are caused by a greed motivated group of arrogant, short sighted, nepotistic, paternalistic, and totally incompetent group of auto managers, owners , and marketeers, and not primarily the unions.
The unions do contribute their share of our auto industry problems, but I suspect that a mostly nondiscerning and short sighted general public with little or no concept of energy fundamentals are an even greater factor. Overall, I believe that no bailout funds are justified and would vote against them if given the opportunity. But if it must be done, we must demand and receive MAJOR improvements similar to that suggested by the article.
As much as I hate to say it I think that we went wrong as a society by not taxing gasoline more heavily after the 1970's energy crisis to encourage conservation and fuel efficient designs with new technology. The fact is that when gas is cheap people will waste it and alternative power sources will never take hold. We have allowed our economy to have massive exposure to oil price spikes and have given OPEC a lot of power over us. As painful as it would be over the short term I would suport a gas tax program to keep gas above say $3.50/gallon combined with a massive, government backed effort (partially funded by the gas tax) to promote alternative energy sources. If we let gas prices fall again we will go back to our wasteful ways and alternative energy development will stall out for lack of investment. The result will be a future fuel price spike that we will be unprepared for and maybe next time oil goes to $250/bbl and creates the next great depression. It sounds counterintuitive but cheap gas is bad for the US economy in the long run because we can't insure that it will remain cheap, in fact, we know that it won't. If we could take a highly variable cost and make it more of a fixed and known cost it would smooth out our economy. We didn't learn anything from the 1970's so I hope we learn this time, history will repeat itself. We have seen the tremors, if we don't prepare for the inevitable earthquake we deserve what we get when it happens.
oiltradersblog.blogspo.../
It has been for years, "how goes Gm, goes the United States!". The auto industry is building the type of trucks and SUVs that the people want. The other foreign auto companies are back by thier countries. The money the american people spend to by foreign autos goes back to the foreign countries.
People need to put the blame where it belongs!!!
The problem with American auto companies is they are risk averse and merely make incremental changes to existing technology. The 1928 Ford Model "A" got 25 mpg using a primitive engine with a carburator, distributor based ignition and rear wheel differential. Why is the fuel efficency of an average Ford 80 years later only 28 to 32 mpg using more advanced modern technology like fuel injection, distributorless ignition and front wheel drive ? Toyota is making and selling Hybrid cars, GM and Ford are still talking about it.
The last time I checked, the major method of obtaining natural gas is to DRILL, both onshore and offshore , and heaven forbid it even comes from foreign countries and is shipped to our country in tankers. It will be decades before alternative sources of environmentally friendly energy are available in this country. In the mean time "drill baby drill".
joethecarbuyer: unfortunately, the US is in a situation where the failure of the "little 3" automakers would not only have negative far-reaching effects to the national economy, but also would deprive us of manufacturers of the natural gas, electric, and hybrid vehicles we so desparately need to wean us off of foreign oil. that is why congress must demand these solutions in exchange for middle tax-payer money.
Michael D. : in your competitive analysis, you left out the main one: manufacturing of non-oil (gasoline) based automobiles. without these solutions, not only will the US automakers not be competitive, but the US economy will simply sink into the abyss.
wilson: it is unfair to blame the oil companies for producing the energy the country so badly needs!! if you want to aim your angst at the right source, aim it at congress and the president for energy policy (or lack thereof...) which has done nothing but deepen our dependency on foreign oil and strengthen countries like saudi arabia, iran, iraq, and russia. don't blame the oil companies. you start putting windfall profits taxes on the oil company and they will simply cut back on exploration and production in order to keep their fiduciary shareholder responsibilities. windfall profits taxes on the oil companies would be a disaster as they would simply mean less oil from them.
Lazaris: the public wanted them, true - which is why this country so badly needs congress and the media to take a leadership role in explaining what the US energy situation is and craft intelligent strategic policy like this:
thefitzman.blogspot.co...
Not only that, but what does it say about the wisdom, strategy and even patriotism of GM when they don't take into account america's energy situation? what does it say when GM kills the electric car? their current economic situation speaks volumes about the intelligence and strategic planning at GM. ohh, but yeah, their execs have made millions while driving the company into the ground. you should be as angry as me.
fam62c: hell yes they can force the companies to build fuel efficient non-oil based cars - it's my damn money (and yours too) that they are handing over to them. i tell you what, they use my money to build more hummers and SUV's and you will see some pissed off middle class taxpayers the next time gas goes to $4 (and above, and it will...it's coming). 95% of the american public is completely ignorant of the country's energy crisis. they believe america is entitled to cheap gasoline and big luxurious ludicrous vehicles. this being the case, it is the job and the responsibility of the government to protect the american people from their ignorance and craft policy in the strategic long term economic interests of the country.
pipo: yes, oil is down because of the lack of demand due to the economic crisis. yet, the long-term supply demand situation has done nothing if any gotten worse since the low prices have new production projects delayed or cancelled. how soon people forget the $4.50 gasoline and the $145/barrel oil. its amazing. that is why i said current low prices are a dangerous threat to the american economy due to the vast majority of americans who feel like you do. it isnt only pickens and
rogers who believe oil will come back and skyrocket, listen to the executives of every major oil company in the world who understands the true long-term supply/demand dynamics!
retired/tired: yes, the blame needs to go where it belongs. and everyone is to blame: congress, the president, the lobbyist, the american buyer, and the US automakers. the article is about what to do now, and what to do now is build some hybrid, natural gas, electric fuel-efficient cars and trucks. this is even more so now that my tax money is going to a company that manufactures hummers, and that just pisses me off.
longoil: i am convinced GM and Ford won't make and mass distribute natural gas and electric vehicles unless congress demands it of them.
woodsey: if the US automakers go broke, we simply all keep buying toyotas, hondas, and nissans. then, in addition to our US dollars leaving the country to go to saudi, iraq, iran, russia, and venezuela for gasoline, we will also have more money leaving the country to foreign auto makers.
Remember, one little sneeze from the middle east or Russia, the oil price will jump up 20%. There's no such thing as forecast for oil price. Don't be fooled. Also, when the wind blows a little stronger at the Gulf of Mexico, the oil price will go 10%. History can tell you that.
the percentage of a car price that goes to labor is irrelevent user 13799.
the main condition of any bailout should be getting rid of the unions that are causing large numbers of jobs to be lost and sent over seas.
Bill’s idea for auto makers.
The plan:
1. allow auto companies to downsize toward current demand and clear inventory. Keeping good on retirement packages and so fourth. (private sector will be more encouraged to give them loans to do so if they are showing a profit.)
2. offer a TIF(tax incentive) for the purchase and retooling of these unneeded plants, for the construction of energy sector mechanicals.(wind mills, solar, etc.). this will bring in money from the private sector for funding the projects. Avoid socialism at all costs during tough economic times like this.
3. fed’s already have budgeted money for energy. This would have great use in the need to train this enormous workforce in the new sector.(many employees will be working in the same buildings, living in the same homes that they have for years) There will knowingly need to be assistance in housing for these individuals and families during the training period. This is money well spent, as they will be paying taxes again after their jobs are restored. It shouldn’t take too long to teach someone who can build a fine piece of machinery like the Cadillac, how to build a windmill. And if the unions want to be as involved in the new sector, then they can contribute to the training costs as well.
4. business as usual…. When the energy infrastructure is reaching sufficient levels, these automakers will no doubt be expanding again. At this point they can start buying facilities back to meet their needs. and when you plug in their new car to charge for the night, you can sleep easy knowing that the power used to recharge the battery was from a renewable source built during the recession!
don't just throw money at a company losing over 2 billion a month conducting "business as usual". and I don't believe we need to have the feds own wall street either.
That's where we are right now. Now the current Congress is going to spend hundreds of billions of taxpayer dollars in an attempt to bail them out. But markets are a funny thing. Once consumers develop a perception about the quality and utility of the products they buy, they don't change their minds quickly.
Of course, neither do the people who got us here. Auto managers are busy introducing new TRUCKS and SUV's, despite the fact that they can't unload the ones they've got. And their employees have somehow come to the delusion that the rest of us owe them a living.
So don't look for any changes in Detroit anytime soon. Regardless of how much money they're handed, they're not going to change a thing. The only way they're going to survive (IF they do) is to face the realities they are now confronted with and manufacture products people want to buy.
Once they're cut off from taxpayer gifts, maybe they will.
that being said, it's clear to me that President Obama will have an overwhelming incentive to implement what President Ford wanted to do in the '70's - raise gas taxes to (a) promote the fuel efficiency & energy independence agenda, (b) fund the Big 3 bail-outs, and (c) chop off Big Oil at the knees.
again, the fault is with the lazy American public (particularly the Baby Boomers) and their elected representatives who were too short-sighted to do this 30+ years ago, and would have created a healthy, globally-competitive US auto industry in the meantime.
In my opinion, McCain lost a great opportunity to win the last election by supporting the bail out. Had he stood against it, I think he would had a much better shot at winning the election. Our gov't is headed toward a place where most of us are not comfortable: being the owners of large portions of our major industries/services including banking, automakers, healthcare, etc.
I really like the idea of loaning the automakers money with conditions and I like your NG car conditions. I'd also say they should have to reduce their capacity...shut down some plants, etc. Don't necessarily like the mandate that all vehicles get 40 mpg. I own 4 vehicles right now and none get 20 mpg (2 suburbans and 2 pick up trucks). But I'm not going to sell them and go buy something new. That's just not a good use of my money. I'll keep driving these four (or my wife, myself and my two boys will keep driving them) until repair costs are prohibitive.
I'm not a big fan of the Prius due to the carbon footprint it takes to build and assemble one. Many key components built overseas. But I'd buy a NG powered Chevy pick up truck if I could get a NG hook up for the house or the neighborhood fueling station. Of course the environmental folks will get in an uproar over fugitive emissions and the lawyers will sue the pants off anyone when the first refueling accident occurs. But we have NG in this country and could definetly fuel a lot more vehicles with it versus imports.
Also agree on your windfall profits comments. I work in this industry and I know exactly what will happen should our insane gov't slaps an insane tax on us. We will quit spending money in the US and start spending those dollars in other countries. Just the way of the world. Go XOM, Chevron, COP, etc. They are US companies. BP, Shell, Total are not but they are good investments too. Also, Devon, EOG, etc. on the NG side.
baitshopbilly: the problem with you plan is it misses a very critical component: if the US doesn't make the alternative fueled vehicles that we need (i.e. non-gasoline powered), then either a) we won't have them or b) in addition to sending money overseas for gas, we'll now be sending even more overseas for transportation solutions. big problem.
paulk: agree with much of what you said. however, if american's can get quality, efficient transportation alternatives to gasoline powered vehicles i believe they will buy them. hell, i am looking for a good natural gas powered car right now and can't find it (or the re-fueling centers needed) in my state. that is a pathetic testament to how screwed up the automobile industry and congress are when it comes to the oil crisis.
art rimbaud: thanks for the compliment, but there is not alot of research needed in expressing an *opinion* on what to do with my tax-payer money.
Mmarrkk: thanks, however, wrt your exception: i think the market share losses that GM has suffered, and as a result of the success of toyota and honda in fuel efficient solutions means that someone has to point GM in the right direction. now that they are getting MY tax-payers dollars, yes, i do want the government to tell them what to build as their management teams obviously don't have a friggin clue. wrt mccain, mccain lost because he lost mccain: he caved on all his principles and became mini-bush (taxes, giving in to the religious freaks, etc. etc) not to mention that the american people *finally* figured out that perhaps bush style fascism isn't good for the middle class (ask the germans how it worked out over there). thanks for agreeing on NGV - it's a friggin no-brainer. if i were you, i'd sell those gas hogs now while oil and gasoline are low. in the nice oil price, which i expect to be much worse than the last, there will be no market for those vehicles whatsoever, save for scrap metal.
agree also on windfall with you. note the recent statements by chevron's CEO to the obama folks wrt energy. i have great hopes that obama will adopt a sane energy policy ... but i do fear the windfall profits tax issues. more likely, i believe he will be persuaded to merely cut back on the current tax breaks given to big oil as opposed to instituting actual profits taxes. he's too smart for that, and it was tried before and failed. wrt investments, i think you are going to see some big takeovers in the energy patch in the coming months. these temporary low energy prices, and the decimation of the energy stocks are reminiscent of 10 years ago which led to exxon buying mobil...chevron buying texaco...bp buying amoco. etc. etc. look for big deals in the natural gas market first...i think bp wants to regain its position of #1 natural gas producer in the US and buying CHK would do that...
They problem with giving people what they want, is they will often make the wrong long term choices. When oil prices were low, people bought large vehicles and depleted the remaining global oil reserves even faster. It is only when oil scratched $150 / barrel, that everyone started changing their habits. Even GM was looking to sell the Hummer division this summer. This is very reactive behaviour. We need to be proactive and develop new oil reserves and invest in conservation and alternate energy technology NOW while there is still time.
I think the CAFE standard was in good hands with Ford, Carter, Reagan and Bush 41. It rose from 15 to 27 mpg during this 15 year period. It was when Clinton and Gore (Mr. Climate change) were pandering for UAW votes in the 1990's that they introduced the light truck exemption and killed CAFE and it stayed flat at 27 mpg.
Agree that the market for my 4 gas hogs will get worse when prices go up but here's the decision: spend a few dollars more per month on 4 vehicles or drop $100,000 right now to replace them! I've already factored in virtually no trade in value in the equation and it still doesn't make financial sense. Plus, I love the ride in my Suburban on vacations and I like the flexibility and work I get from the pick up!
And yes, if the taxpayers are giving them money, we should expect something in return. But I'd rather not give them my money, particularly if it ends up in union hands. or bad management's hands.
Agree about takeovers. Big shareholder of CHK and would love to see a takeover. However, look at companies with lots of cash on their balance sheet to do the buying. XOM has enough to buy everyone else, but this isn't their style. BP, CHV, etc. maybe.
Longoil: are you seriously telling me that it is GOOD for the government to tell me what is best for me?? I don't care who's running the gov't, that is never a good idea in a free country. Should they take away all of our forks because lord knows we might stab ourselves with them??? Rather, they should use incentives to get people to use more efficient cars. Tax breaks to buy more efficient cars I can live with. Mandates that tell car builders they cannot build a car? nope, Mr. Jefferson and Mr. Washington would have had a problem with that.
Increasing their benefits will do nothing but increase the cost of the cars to the US consumers. That won't help our overall economy. Guess I'm kind of confused as to why we should increase the cost of a successful company to allow for unsuccessful companies to compete. The overall problem with the auto industry is that we are building too many cars/trucks overall. Reducing the overall manufacturing capacity by 30% would bring supply in line with demand. Building more cars in GM/Ford/Chrysler plants that no one wants won't help. I own 2 GM SUV's, 1 GM pickup and a Nissan pickup (my son's). all 4 vehicles bought at 20-30% below the MSRP. That tells me there is too much supply.
.
I agree with your following comment
>>> they should use incentives to get people to use more efficient cars. >>>Tax breaks to buy more efficient cars I can live with.
But, I think when people are unknowingly (or knowingly and don't care) funding terrorists, the government certainly needs to step in and tell you what NOT to do with laws like strict CAFE standards, 55 mph speed limits, etc in order to promote conservation. Every time you fill up an energy-inefficent vehicle you are sending a check directly to lunatics like Osama Bin Laden (via Saudi Arabia), Hugo Chavez, Vladmir Putin and others hostile to the USA.
Furthermore, I think the USA should stop buying oil completely from belligerent nations like Venezuala, Middle East and Russia. If you going to spend billions of dollars outside the country for oil, then send it to friendly nations like Canada, Mexico, England and Norway who at least send some of the oil money back to purchase US made goods.
Unlike Saudi Arabia and Kuwait who only use the money to buy much needed things like indoor ski hills, underwater hotels, million dollar race camels and fund terrorists. Or Venezuela who wants to turn all of South America into another Cuba or Russia that wants pay back now for getting their asses kicked by Reagan.
no need to set a plan for that since the market will dictate it for me.
after the downsize, they will be forced to engineer top quality electric vehicles because that's what consumers will be buying.(demand)
also, after spending this type of money on energy, it's only natural for the feds to offer incentives on the hybrids of the industry.(income tax from the assembled grids revenues will assist in these rebates.)
thefitzman.blogspot.co...
it's just common sense!
midas1: yup, i have had 3 toyotas, and put over 200,000 miles on the first 2 and have close to 100k on this one. all i ever do is change the fluids and the plugs. oh, and buy and rotate tires.
mmarkk: yeah, at this point, wrt energy, yes, i think the government does need to tell us what to do. apparently, americans and the US automakers are too stupid to figure it out on their own.
oldwizard: well, i never said that GM and Ford didn't have hybrids, i know that they do. problem is they were late, and they never advertised, promoted, and marketed these vehicles until it finally dawned on them (duh!) that their SUV and big trucks sales were tanking. besides, do they have a hybrid to compete with the prius yet? i know they have hybrid caddilac escalades and hybrid SUVs....but do they have a 50 mpg hybrid yet? not sure. either way, their tardiness and overall ideology is, like the republican ideology, simply a result of compound ignorance.
Mmmarrkk: i agree completely. i hate to think what the manufacturing output of the US would be right now with toyota, honda, and bmw manufacturing based inside the US.
wrt buying oil from russia, saudi, and venezuela how in the world could the US survive if we did NOT buy their oil?? that is the point here. we are funding a war to "fight terrorism" yet we fund them by buying their oil. bush's "strategy" is to fight both sides of the same war! it is simply ludicrous. we must adopt a strategic, long-term, comprehensive energy policy and the US government must begin telling the american people the truth about what is going on. think about it, if it were not for Boone Pickens, most americans wouldn't even have a clue...check that..most still dont.
Ability to stop buying oil is directly tied to long and short term strategy for energy. While I like hybrids/electic cars, they are not a total short term solution. Plus, where does all the electicity come from? Again, a comprehensive short and long term energy strategy. Cutting off oil from a few countries, while feeling good, is not a solution that would work. First, it would drive up our price for oil. Second, if we bought the oil from other countries, then other buyers would be displaced and buy oil from Saudi, Venezuela, etc. A global market in a commodity just redirects itself. Third: I would challenge you to go and research exactly where the US imports its oil from. I think Mr. Longoil would be surprised at the amount coming in from those "bad" sources versus amounts coming in from "good" sources. Fitz I know already has that knowledge, so he gets a pass. Others must do the homework.
Back to something that Fitz brought up originally: natural gas driven vehicles! This would actually be a very easy transition and could be cost effective. It is a short-to-medium- term transition solution and would be wholly fueled within the US. A no-brainer...probably why both parties in D.C. aren't behind it! They have no brains. Instead of giveing the automakers billions to go and pay off their bloated union benefits/contracts, why not give them money to mass produce NG conversion kits and develop home fueling devices. I know Fitz, this is exactly what you recommended at the very front end of this long discussion. Just wanted to bump this back up to the front of the discussion.
old wizard: of course the democrats have had a hand in the auto industry disaster. i already wrote how the clinton administration blew it on CAFE standards and caved to the lobbyist from GM and Ford and to the unions. the democrats have also had no spine and let bush do everything he wanted. so there is plenty of finger pointing in all directions. the article was more about what to do now. wrt oil imports, people shouldn't get hung up on exactly which countries we buy it from. oil is a global market. it doesn't matter much which country our dollars directly go to, when the price of oil goes up, it benefits the major producers the most: saudi, russia, iran, iraq, and venezuela. democrats dont agree with Pickens? Pickens is a republican, and he himself says that republicans won't give him the time of day. let's face it, the oil strangle hold on congress controls BOTH parties. pickens is making great in-roads with the american people and many govenors, but congress has been silent on the issue. it's very very sad. wrt obama, i think you are dead wrong. sure, he wants a stimulus policy right now, and i totally agree, and so do all the people standing behind him at the podium. why give all the bailout money to the millionaires he is saying. but, note what his agenda is once he gets into office: tax reform and an ENERGY POLICY. he gets energy (except for windfall profits) and wants to use energy policy related jobs to help pull us out of this economic funk. my bet is that obama will craft an energy policy that is a bit more sophisticated than simply "drill, drill, drill". it's our only hope.
definitely agree on electric mass transit and building out the natural gas infrastructure, first on the interstate highway system. also agree on solar, wind and nuclear energy feeding an updated and expanded electric grid.
On Nov 09 02:31 PM longoil wrote:
> Why is Toyota profitable and GM and Ford, not ? Toyota makes cars
> in Kentucky using American labor that is non-unionized, but paid
> similar wages to UAW workers. This tells me that problem is not with
> worker salaries, but management incompetence.
>
> The problem with American auto companies is they are risk averse
> and merely make incremental changes to existing technology. The 1928
> Ford Model "A" got 25 mpg using a primitive engine with a carburator,
> distributor based ignition and rear wheel differential. Why is the
> fuel efficency of an average Ford 80 years later only 28 to 32 mpg
> using more advanced modern technology like fuel injection, distributorless
> ignition and front wheel drive ? Toyota is making and selling Hybrid
> cars, GM and Ford are still talking about it.
Get real! The products are good, you and many other American consumers just refuse to look at them. Management has been making the right decisions and turning the companies around for the last decade+, but he can't seem to break through the prejudice that the American consumers have due to past sin's like poor quality and slow change in the 80's.
Also, CAFE standards do nothing to drive consumer demand. They only force automakers to build more of what the cunsumers won't buy. The only way to increase general fuel efficiancy is to make the consumers want to drive those types of vehicles (higher gas prices, etc.) People act like the auto companies have chosen to make larger vehicles that use more gas on their own. No auto comapany has held back from making each vehicle they build as fuel efficient as possible for the cost/price the market calls for.
I do agree that alternative fuels are needed for our own economy and the automotive industry in general. And believe me, the US automakers are fighting hard to get ahead of the competition in that arena. The "bailout" loans would be bridging them to be able to do just that.
On Nov 12 09:06 AM The Fitzman wrote:
> Mmarrrkk: you're still missing my point. GM defends itself by saying
> it has been making the cars and trucks that people want. Yet, their
> market share has dropped precipitiously and they are now close to
> bankruptcy. so, do you really *believe* that they have been making
> the cars and trucks that people want? obviously not. so, now they
> need MY taxpayer money. my point is that, if they want MY money to
> bail them out (and let's face it, MY money will go to the pay the
> salaries of the millionaire GM executives that made these bad decisions),
> then I want something out of it. i want to be able to buy a natural
> gas car or truck. i want to be able to buy a home natural gas refueling
> appliance at a decent price. wrt your comments on socialism or whatever,
> look at what is happening now! the bush administration is taking
> over the banking, mortgage, financial, and insurance markets. and
> it's not socialism. socialism for the rich, which is what is going
> on, goes by another name: *fascism*. now you know why the europeans
> held up posters of hitler when bush visited europe. they have seen
> this movie before.
>
> old wizard: of course the democrats have had a hand in the auto industry
> disaster. i already wrote how the clinton administration blew it
> on CAFE standards and caved to the lobbyist from GM and Ford and
> to the unions. the democrats have also had no spine and let bush
> do everything he wanted. so there is plenty of finger pointing in
> all directions. the article was more about what to do now. wrt oil
> imports, people shouldn't get hung up on exactly which countries
> we buy it from. oil is a global market. it doesn't matter much which
> country our dollars directly go to, when the price of oil goes up,
> it benefits the major producers the most: saudi, russia, iran, iraq,
> and venezuela. democrats dont agree with Pickens? Pickens is a republican,
> and he himself says that republicans won't give him the time of day.
> let's face it, the oil strangle hold on congress controls BOTH parties.
> pickens is making great in-roads with the american people and many
> govenors, but congress has been silent on the issue. it's very very
> sad. wrt obama, i think you are dead wrong. sure, he wants a stimulus
> policy right now, and i totally agree, and so do all the people standing
> behind him at the podium. why give all the bailout money to the millionaires
> he is saying. but, note what his agenda is once he gets into office:
> tax reform and an ENERGY POLICY. he gets energy (except for windfall
> profits) and wants to use energy policy related jobs to help pull
> us out of this economic funk. my bet is that obama will craft an
> energy policy that is a bit more sophisticated than simply "drill,
> drill, drill". it's our only hope.
>
> definitely agree on electric mass transit and building out the natural
> gas infrastructure, first on the interstate highway system. also
> agree on solar, wind and nuclear energy feeding an updated and expanded
> electric grid.
>
>
>
My dream is seeing the mideast with a bunch of worthless oil that nobody wants because technology has made it obsolete. Without all that oil money the mideast is just a bunch of desert tribes on camels living in tents and killing each other. Without oil they have nothing; there is no Sadam Hussein, Osama-Bin-Laden, Azerminidjad (whatever) Saudi Royal Family, etc. American sons, daughters, mothers and fathers wouldn't have to be killed or horribly injured in wars over energy. If we don't do something I belive that sooner or later WWIII will be fought directly or indirectly over oil.
It's such a shame; with all that oil wealth in the mideast they could have built the best housing for their people, the best schools for their children and created vibrant, modern, sophisticated societies. If they had put the money to good use I wouldn't feel so bad about buying their oil but to see all that wealth and still all that suffering, poverty, violence, hatred, intolerance and misery makes me sick.
America is going through a rough patch but I believe that when we are focused as a nation and have the will to do something we are unstoppable; energy independence is possible if we want it bad enough. We should be the ones to take the lead and show the rest of the world how it's done. Imagine the benefit to our economy if we could be energy independent and have stable energy prices over the long term; we would have an advantage that nobody else in the world has. We are one of the few nations with the available resources, technology, industrial capacity and real estate to pull it off and we are stupid if we don't. If we had started a massive push to do this after the 1970's energy shocks we would already be mostly there today.
In the long run I think that cheap oil has hurt us more than it has helped us. If oil had stayed (or had been taxed) at high levels after the '70's the market would have forced the Big-3 to adapt and they could have done it before the Japs had a chance to get a massive head start........we would still be the world's dominant auto maker; our society as a whole and our competitive position in the world would be much stronger. The future can be very bright indeed for the USA if we get up off our a$$es and make the committment to truly be free from wild energy price swings. It won't be easy and it won't happen overnight but we can do it.
Oil is going to 50..even thre Russians admit that..i will buy your companies 5-9 bucks cheaper than where they are now! Next year
watch and learn author
so, you are trying to tell me that the auto execs have been making the right decisions and turning the auto makers around for 10+ years? hmm...so, promoting hummer and SUV's and the such was a good thing right? so, how do you account for their huge drop in market share and the fact that they are both in near bankruptcy? perhaps they are making some good vehicles now...but you are right..when i think about a new car i think about a toyota or honda. i watched my dad lose thousands on crappy fords and gm's ... and that wasnt just the 80's that was in the 70's too. i finally convinced him to buy a toyota highlander and he loves it. never been in the shop and has 80k miles on, runs great. as i said, we need GM and Ford (as far as i am concerned the cerberus guys should just take the hit with chrysler...) to make fuel efficient nat gas and electric cars. my problem with the bailout is it will probably be more fascism (or, socialism for the rich), where the executives will take all the money, the firms will still end up in bankruptcy, and we will just have more debt on the middle class tax payer. however, if congress forced GM and Ford to use the money *exclusively* to build the infrastructure for nat gas and electric cars, we have a chance to not only save the companies, but help the US economically, wean ourselves off foreign oil, and save the US taxpayer. it's a win-win, which is probably why it wont happen (am i a cynic? you betcha....after 8 years of bush, is anyone anything else??)
fam62c: the US does have alot of natural gas reserves. futhermore, if we buildout the LNG terminals (as my energy policy suggests...) we will have the capability to readily import it as needed. also, the nat gas pipeline from alaska has loads of capacity and is why it should have been constructed years ago (as my energy policy suggests...) but it only will pay for itself if we put more of the transportation (private and mass) onto natural gas cars, trucks, and trains. all in my policy. NG is now under $7, that is cheap, and is a result of all the new capacity that has been brought online. everything are you are saying about solar, wind, etc. is in my energy policy. here is the link:
thefitzman.blogspot.co...
read it closely, give me feedback, and better yet, send it to your congressmen and senators. with respect to the middle east, please undersand that osama bin laden and sadam hussein were made by your own taxpayer dollars through the CIA. the US can be much more energy sufficient, but we just lost 8 years and time is running out. if you read my energy policy, the first step is for the governement, media, and US american public to ACKNOWLEDGE the problem and have it on their minds every single day. otherwise, we;ll never make it. totally agree with you that cheap oil is a terrible thing for the US right now.
wizard: not surprised pickens is slowing down...funding has got to be a problem, he has lost his ass (as have i) in the energy markets, and i still dont know how he is going to get the wind energy in the plains to the markets that need them since the government is laggin on energy infrastructure work (i.e. transmission lines). also not surprised at all he voted for mccain - he is a lifelong republican and a billionaire - who has been better for billionaires then W? that said, buffet voted for obama cause buffet knows what is best for america in the long run. as far as the bailout goes..i dont like it either...and i hate it if it is done wrong (thus the article), however, as i said, if GM and Ford dont build nat gas and electric cars, toyota and honda will. we need them to succeed.
byforeclosures: well, in this market i think it is safe to assume you can buy everything cheaper later. the US could well end up in a depression. just because oil goes to $50 doesnt mean the world is awash in cheap and plentiful oil - it just means the economic disaster that 8 years of bush has given us will cause oil demand to fall off a cliff (short term). eventually, if the econonmy ever comes back, oil will roar even worse than this year. if the economy doesn't come back..well, we're all 6 feet under eventually anyway.
I agree with your ideas that they must make a natural gas powered car and that they should strive to make cars that get over 40 MPG. That is the most sustainable approach and it also benefits every person in the country by reducing our emissions However, I do not agree that every vehicle must get over 40 MPG or that “every vehicle they make must be natural gas, hybrid, or electric”. Engines and batteries have not reached the level of technology that they are capable of being reliably installed in every vehicle. Did you forget about commercial vehicles that must be used to tow heavy loads? How can you expect vehicles like that to use a less powerful hybrid or electric engine or to achieve such a high gas mileage? Additionally, until there are better ways of getting natural gas to every consumer, it does not make sense for a large percentage of vehicles to be powered exclusively by natural gas.
Once again, thank you for taking a different approach to this issue than many other people do. It is so easy to say no without giving any sort of alternative. Hopefully, the federal government will pay attention to people like you and realize that there are better ways to approach this problem and use this money to actually improve our automobile industry rather than temporarily slow its failure.