Automotive Depression: Government Needs to Let the Weak Fail 96 comments
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February's U.S. auto sales were at the lowest level since 1981 . The Bailout 3's sales were down 49.3% from last year. Consumers do not need a new car, they no longer feel the need to trade up every three years to a new car.
The results mark the 16th consecutive monthly drop in auto sales and come as a deepening recession in the United States and slowing global markets have pushed automakers to ratchet back production, ramp up discounts and seek government financing in a bid to survive.
"In our view, we are in an automotive depression," said Standard & Poor's equity analyst Efraim Levy.
"Shell-shocked consumers fearful for their jobs, the value of their homes and stock market assets are wary of making the sizable discretionary purchases," he said.
Consumers are trading down, finding value in Hyundai, Kia and Subaru whose sales were about flat from last year. A change in consumer behavior is setting in as buyers are more price conscious and spending within their means. Consumers are focusing on their savings versus their spending.
Hyundai, South Korea’s largest automaker, said it sold 30,621 vehicles last month, down from 31,090 a year earlier. The company spent an average of $3,031 a vehicle last month, its highest level, according to Edmunds.com, a provider of auto-industry information based in Santa Monica, California.
Such spending was unchanged from January and is part of efforts to fight the market’s decline and build the brand’s image, said Dave Zuchowski, Hyundai’s U.S. sales vice president.
“In this market, we think flat is the new up,” he said in an interview. “If we’re flat again in March I’ll be happy.”
When will the auto manufacturers realize that we are not headed back to sales levels of 2004-2007? They need to start making drastic changes to their companies today. Instead automakers across the globe are focused on government handouts.
Overall sales fell to 9.1 million vehicles on the annualized basis tracked by analysts, the lowest level on that basis since December 1981.
"These are obviously unsustainable levels and will cause almost every major automaker across the world to seek government aid," said GM's chief sales analyst Mike DiGiovanni.
Toyota, which passed GM as the world's largest automaker last year, said earlier it had applied for a Japanese government loan to help its finance arm cut funding costs.
Even the mighty Toyota (TM) is going to the trough for government assistance as its sales were down 39.8% from last year. Governments need to let the auto manufacturers work through their problems privately, without taxpayer assistance. By bailing out all the auto companies Governments are not allowing the weakest, least profitable manufacturers to fail, making way for the stronger companies to survive and thrive upon recovery.
Disclosure: No position
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If you cant be unbiased and read and think through what someone posts, leave!
On Mar 05 10:14 AM Cobra 1 wrote:
> You clowns give a thumbs down regardless if someone makes a point
> or if it is anti-union. Why don't you for once read what is posted,
> think it through for its merits and then decied if it was a terrible
> post. I have been doing this with 303820 for a couple weeks now.
> I appreciate his position as I think he appreciates mine. Its called
> discussing an issue not hammering a point of view. I think 303820
> is passionate about his point of view as I am passionate about mine.
>
>
> If you cant be unbiased and read and think through what someone posts,
> leave!
On Mar 05 10:14 AM Cobra 1 wrote:
>
> If you cant be unbiased and read and think through what someone posts,
> leave!
I have spent time in the B3 and the transplants and from my personal observations and discussions with B3 engineers, the things I witnessed, I would never tolerate of one of my employees. When asked why this company tolerates this activity, the answer was, "we cant fire them, they don't work for us they work for the union"! That was the point, protect these people whom have literally made a bed in the tunnels of parts of the plants and have TVs and radios with sleeping bags and blankets. At what point should this company be able to fire these misfits? You tell me...
I've presumed nothing, my tone was just fine, thank you. If you do not like what you read because it differs with your point of view, don't make it personal, take it for the point that was made. Challange the point, try and help the other person understand your point of view, this is a discussion not two combatants.
On Mar 05 08:53 AM plumstupid wrote:
> Cobra 1,
>
> Firstly, mind your tone.
>
> You presume I am UAW. I'm not. I am retired from a professional union
> of which all members are college grads and a significant number of
> us graduated from academies. We are required to take many hours of
> continuing education yearly to maintain our certifications and licenses.
>
>
> For one to presume that management does not act unfairly toward its
> employees is to reject reality.
>
> I did not suggest nor do I condone that labor dictate how much profit
> an employer make.
>
> However, demanding and enforcing fair labor practices and fair wages
> and benefits don't affect a company's profit negatively. Unless they
> are a poorly managed company in the first instance. In fact all companies
> I worked for existed for many years before I was employed by them
> and all but one still exist in their original form today.
>
> You seem to condone that unless a worker is popular with management
> he has no right to work for that company. If he does the same top
> notch job as I and everyone else does but management doesn't like
> him because he picks his nose you apparently think its just fine
> to fire him. Sorry, it is not.
>
> One must consider the cost to a company's profit from disgruntled
> poorly paid workers. One worker unfairly treated like a machine or
> commodity by an unhappy manager who's wife is about to divorce him
> can greatly harm a company and its profitability. Consider the loss
> of profit possible when the company has 10,000 employees or more
> and one half of one percent at any given moment decide to get their
> revenge. Cheaper to pay them well and treat them with respect. Its
> convenient to ignore that fact isn't it?
>
> With clearly defined and vigorously enforced work rules everyone
> knows their responsibilities. Enforcement works both ways. If an
> employee doesn't follow the rules he can be dismissed if the employer
> follows the rules as to what constitutes a firing offense. Nose picking
> doesn't meet that threshold.
>
> As a professional I have company rules I have to follow. I also have
> gov't rules and regs to follow from many different countries some
> of which conflict with each other. If the manager du jour is angry
> about some new regulation by a government he doesn't like because
> soldiers from that country shot at him when he was a young man wearing
> the wrong uniform 20 years ago is it fair for him to demand I break
> that law and end up in prison? Furthermore is it fair for him to
> fire me if I don't break the law he doesn't like?
>
> Is it fair for an employer to fire you because when you are working
> as hard as you can you can only produce 400 widgets per shift while
> others can produce 410 working equally hard? Of course not. Everyone
> has different abilities. How about you factor in that the employer
> makes a significant profit when production surpasses 300 widgets
> per employee per shift?
>
> My life is much better because I was a member of a union. Yours can
> be too.
On Mar 05 10:27 AM Cobra 1 wrote:
> So again, I say, you discussed nothing of what I posted, which was
> 1 very well defined point. The us vs them mentality of union vs an
> employer.
>
> I have spent time in the B3 and the transplants and from my personal
> observations and discussions with B3 engineers, the things I witnessed,
> I would never tolerate of one of my employees. When asked why this
> company tolerates this activity, the answer was, "we cant fire them,
> they don't work for us they work for the union"! That was the point,
> protect these people whom have literally made a bed in the tunnels
> of parts of the plants and have TVs and radios with sleeping bags
> and blankets. At what point should this company be able to fire these
> misfits? You tell me...
>
> I've presumed nothing, my tone was just fine, thank you. If you do
> not like what you read because it differs with your point of view,
> don't make it personal, take it for the point that was made. Challange
> the point, try and help the other person understand your point of
> view, this is a discussion not two combatants.
On Mar 05 08:35 AM 303820 wrote:
> Cobra..What has age and background to do with wal mart wages? this
> is not china ...he's of working age.........
On Mar 05 10:27 AM Cobra 1 wrote:
> "we cant fire them,
> they don't work for us they work for the union"!
It is not a fact. Many of my friends own their own firms of one field or another, not one of them mistreats or disrespects their employees, they instead like to reward them for exemplary work!
On Mar 05 10:31 AM plumstupid wrote:
> How does "For one to presume that management does not act unfairly
> toward its employees is to reject reality." not address your point?
>
As one with an enlightened outlook regards labor relations you will of course recognize that there are enough employers out there that are not as enlightened as you are and who do in fact treat their employees terribly enough that those employees are compelled to seek representation and relief.
On Mar 05 10:49 AM Cobra 1 wrote:
> I have been the president of three companies, I have owned four,
> and am currently starting another. In all of these previous positions
> I have yet to see "management does not act unfairly toward its employees
> is to reject reality" is flat out a statement of mistake! I don't
> presume to know where you have been in your working career, I have
> never been in a management position that "didn't" understand without
> our employees, we were nothing. If the engineering we did was not
> executed to the design, it was meaningless. Our employees were what
> made us world-class companies! So to flatly state that every employer
> mistreats employees or in some way treats them unfairly is too make
> this a statement of fact!
>
> It is not a fact. Many of my friends own their own firms of one field
> or another, not one of them mistreats or disrespects their employees,
> they instead like to reward them for exemplary work!
>
>
JMHO
On Mar 05 10:58 AM plumstupid wrote:
> Fantastic! You and your associates are the exception to the rule.
> My hat's off to you.
>
> As one with an enlightened outlook regards labor relations you will
> of course recognize that there are enough employers out there that
> are not as enlightened as you are and who do in fact treat their
> employees terribly enough that those employees are compelled to seek
> representation and relief.
Have a good morning, it was my pleasure getting to understand your point of view. Peace!
On Mar 05 10:45 AM plumstupid wrote:
> Whomever you were speaking to was sadly mischaracterizing the situation.
> The paychecks said GM on them. They are employed by the company.
> They are represented by the UAW. As the son of a former union president
> you of course recognized what he was telling you was patently false
> and you endeavored to correct his error of course.
>
On Mar 05 11:02 AM Cobra 1 wrote:
> As I mentioned, I do not know your back ground nor that of most of
> the posters here. The companies I have worked in were no larger than
> 15 to 200 employee's. If the problem you mention is more rampant
> in larger firms, I am not aware.
>
> JMHO
I have managed union and non-union shops, both can be good or bad depending on the level of trust and communciation. The shop I managed wher the employees felt the most "entitlement" was not a union shop, but a very sucessfull non-union shop that had fell on hard times for the first time. I have been on union shops that the union committee happily encouraged me to talk directly to the rank & file and others that thought that I didn't have the "right" to talk to the employees directly.
They are all different. They can be different and better if management and labor see eye to eye and talk face to face. That doesn't happen at some Detroit 3 plants and it happens at others. It happens more frequently at the transplant plants because of the culture that exists there.
We have some hurdles, legacy costs, retiree costs, health costs, but they are not unsurmountable.
BTW - Farmers are not elgible for 401K plans and most invest the vast majority of their after tax earning into land and equipment. Many never retire, instead working until they are in their late 70's, some because the have to, most because they want to.
On Mar 05 10:10 AM plumstupid wrote:
> Perhaps I have confused the union haters with the facts.
>
>
I'm a well educated guy. A retired professional. A third generation union man. I've worked non-union and despised it, my employer and my co-workers. I've worked union and as a result have had a much better life.
I can't imagine how or why a working man wouldn't want a better life. I don't see how that's possible without a union.
You sound somewhat more enlightened than many. I presume you are management at a non-union auto plant in the south from your comment.
I don't think the following applies directly to you but it works in the greater context:
“It is difficult to get a man to understand something when his salary depends upon his not understanding it.” - Upton Sinclair
On Mar 05 12:14 PM Auto Guy wrote:
> I don't know if you include me in your "union haters" category, but
> you have not confused me with the facts. Actually, you made some
> good points. There is unfairness in the workplace and it is the place
> of management to keep this under control. Everyone does have different
> abilities and it is the place of management to try to help make workers
> safe and help them improve their efficiency (the best methods I have
> see are through Kaizen events with the workers making the decisions
> of what to change). It doesn't have to be us vs. them. If it gets
> to that point then there is not enough communication and trust in
> the organization. No everyone understands the guts of the business
> they are in or the decisions that what is happening leads to, but
> it is management's job to help them understand, answer questions
> and be honest. Perhaps this doesn't happen as much as it should and
> this has led to the us vs. them. If so, we have to fix it.
>
> I have managed union and non-union shops, both can be good or bad
> depending on the level of trust and communciation. The shop I managed
> wher the employees felt the most "entitlement" was not a union shop,
> but a very sucessfull non-union shop that had fell on hard times
> for the first time. I have been on union shops that the union committee
> happily encouraged me to talk directly to the rank & file and
> others that thought that I didn't have the "right" to talk to the
> employees directly.
>
> They are all different. They can be different and better if management
> and labor see eye to eye and talk face to face. That doesn't happen
> at some Detroit 3 plants and it happens at others. It happens more
> frequently at the transplant plants because of the culture that exists
> there.
>
> We have some hurdles, legacy costs, retiree costs, health costs,
> but they are not unsurmountable.
>
> BTW - Farmers are not elgible for 401K plans and most invest the
> vast majority of their after tax earning into land and equipment.
> Many never retire, instead working until they are in their late 70's,
> some because the have to, most because they want to.
I disagree with you that a union is needed to have a happy workforce. I also don't use communication to have "compliance". I actually think that people want to know the status of their company and are more likely to fight for it if they know the real situation. If people don't know they are in trouble, they won't help you. I also think that if you are doing well as a company that you should share that with the employees, both by telling them and through bonuses. Nothing makes me happier than handing out bonuses to our employees, it means we have done well together.
I know the quote by Sinclair. He also wrote a good book on Oil, but not the best one.
On Mar 05 12:55 PM plumstupid wrote:
> The important consideration is that an employer/employee relationship
> is unequal. One party has all the power while the other has none.
> Communication is helpful. When the employee feels respected he's
> likely to be more compliant. That compliance is often at the employees
> detriment.
>
> I'm a well educated guy. A retired professional. A third generation
> union man. I've worked non-union and despised it, my employer and
> my co-workers. I've worked union and as a result have had a much
> better life.
>
> I can't imagine how or why a working man wouldn't want a better life.
> I don't see how that's possible without a union.
>
> You sound somewhat more enlightened than many. I presume you are
> management at a non-union auto plant in the south from your comment.
>
> I don't think the following applies directly to you but it works
> in the greater context:
>
> “It is difficult to get a man to understand something when his salary
> depends upon his not understanding it.” - Upton Sinclair
From your comment earlier "The important consideration is that an employer/employee relationship is unequal. One party has all the power while the other has none." Help me understand from your point of view how this is possible?
From my (thought of what your are saying) point of view (putting it as simplistic as possible) all chiefs or all Indians? But you cant have ether side larger than the other for this to work? Please help me understand your point.
As to the unequal relationship. Allow me to clarify. The nature of the employer/employee relationship is unequal. I did not intend to infer that inequality be the goal. The employer has all the power.
Certainly not all chiefs or all Indians. As I only operated under a formal system of rank I am unable to put forth how these things work outside that system. I didn't explain. I didn't punish. If mistakes were made I counseled the man at a later time and only in private, Officer or crewman. Defended them to the company if the offense was serious. Never had a grievance filed against me.
With my guys I bribed them. I gave them a safe, clean, well maintained ship to work on. I fed them very well, steak and lobster every Sunday. Everyone got their favorite meal at least once a week. I wrote in all kinds of overtime above what they actually worked if they turned out everyday for OT. Once a week they would collect OT while sleeping per my standing my orders. They fought to make permanent crew on my rotation. They only left because of promotion, retirement or family concerns.
My guys would walk through walls for me as a result. Worked hard, long and happily. They are why I was successful, met my numbers and collected my bonuses. I seldom gave an order. I asked my people. Of course they were going to do what I asked but by asking they got it done sooner and better. Officers I promoted all went on to their own commands. Three became port pilots.
Battled loudly and often with the pencil necked geeks ashore that were always trying to scavenge authority away from me. Usually only the newer younger MBA types and not for long. They got their numbers by my getting mine. I filed several grievances against those pricks every year. Never lost. Mutual hatred under a veneer of cordiality. Screw'em. I was right and they were pencil necked geeks.
That's about it.
On Mar 05 01:49 PM Cobra 1 wrote:
> Plum: I am back. I read a bit about your bio, but does not tell me
> the size and scale of where your career took you. Was it purely academia?
>
>
> From your comment earlier "The important consideration is that an
> employer/employee relationship is unequal. One party has all the
> power while the other has none." Help me understand from your point
> of view how this is possible?
>
> From my (thought of what your are saying) point of view (putting
> it as simplistic as possible) all chiefs or all Indians? But you
> cant have ether side larger than the other for this to work? Please
> help me understand your point.
I was in the military and enjoyed my time, loved the rank and file, enjoyed giving commands and taking them.
Here's to you!
Peace!