IXLR8

GM Bailout Would Be Agony for Taxpayers

Uh, Lazaris, the price of new US autos has ALREADY come down. Haven't you noticed the big fat rebates being offered, as well as employee discounts for everyone? Even the vaunted Japanese and German car companies are offering 0% financing and big rebates.


On Nov 16 04:33 PM Lazaris wrote:

>
> Hey John,
> Do you think that after the UAW takes over the retiree health care,
> the wages go down to $14.00, and some benefits are taken away, that
> the price of that vehicle will go down one dime? Do you really think
> that a penny of all that cost savings is going to be passed on to
> the consumer? Dream on, all that cost savings will just go to more
> CEO pay and bonuses to management and to shareholders.
> But you will sure be happy to see those autoworkers take that huge
> pay cut won't you?
>
> On Nov 16 02:18 PM JohnL wrote:

GM Bailout Would Be Agony for Taxpayers

Yeah, and I have a friend who bought a Toyota in the 1970's. The camshaft literally fell to pieces and destroyed the engine. Also, what about those Toyotas with the flaming electric door locks? And what about those Toyotas with the engine sludge problems that they refused to repair until forced to by the AGs of several states?

And what about that new Tundra pickup? $2 billion invested in the plant, way over budget. The poor Japanes manager who brought the Tundra to market 8 months late was fired back to Japan in disgrace. Then, they had three recalls on it in the first six months, including--like in the 70's--blown engines. Then, they had to slap $6000 rebates on them to get people to buy it. Now they have completely shut the plant down for 4 months because no one wants to buy the ugly thing.

Is this what you mean by Toyota efficiency? Or is it their plant in Indiana that is operating at 40% capacity because no one wants their minivan ot Highlander?

Your love for this really average company seems to not be based on facts.



On Nov 16 12:46 PM sportsmadness78 wrote:

> IXLR8 you dont have a case comparing Toyota with GM assembly and
> work ethics. GM does not even hold a candle to the efficiency of
> Toyota when it comes to auto assembly. GM has mis-managed its way
> to eventual shutdown and I dont give a damn. They caused their own
> misery. Remember the 70's. They produced Vega, Chevette, Monza ....
> cmon the company has no clue what the consumer wants when it comes
> to quality. Since the 70's Toyota still has the Corolla and Honda
> the Civic. So you see somebody has kept improving while the other
> became more ignorant.

GM Bailout Would Be Agony for Taxpayers

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PS GM MUST be selling the vehicles that people want to buy.

No manufacturer (Ford or Chrysler) or assembler (Toyota, Honda, Nissan, Hyundai, Mercedes, BMW, Mazda, Mitsubishi) sells more vehicles than GM each year.

GM Bailout Would Be Agony for Taxpayers

C'mon, Benjamin, get real. Another article with all the answers about how to run the auto industry written by a guy who likely can't even change the oil in his own car.

Toyota has sut down its $2 Billion assembly plant where they assemble Tundra pick-ups. The new Lexus SUV's sales are down 50%. Seen the new Toyota Sequoia SUV? Me neither.

Now, there is even talk about Toyota dropping plans to assemble the Prius in the US. But, Benjamin says, Toyota is smart and GM is dumb.

Remember, Benjamin, GM employs more people in the US than all the imports combined.

If GM's labor costs are $73/hour, that's because they are paying the pensions and health care for 700,000 retirees and their families. GM's and Toyota's individual workers are paid approximately the same.

If you would prefer, cancel the pensions, and let them be funded by the Federal Pension Guarantee Corporation, which itself is $50 Billion underfunded to handle its present obligations.

I hope that Benjamin never needs a loan to pay for his house or car or to help his parents with their retirement or health care expenses.

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Do the Automakers Deserve a Bail Out?

Whenever the government mandates the auto industry to achieve environmental, safety or fuel objectives for the "common good", the "common" folks as well as the special interests like Greenpeace and the Sierra Club should pay for them through their taxes.

The most recent unfunded mandate from the Feds is estimated to cost the Big 3 about $100 Billion in just the next six years. To "help", the Feds agreed to 'loan' the Big 3 $25 Billion. (see the math here?)

So the government, representing the "common" folks should bailout GM and their compatriots--AND, AT THE SAME TIME--change some of the truly calamatous government regulations that have caused this mess. And remember, Nancy Pelosi has said that any aid to the automakers should come with strings, like no "golden parachutes".

Changes in the laws affecting the automaker should include:

1. Let the Big 3 shut down excess dealers and brands with no financial buyout (no golden parachutes).

Let the Big 3 get rid of the JOBS BANK and hourly employee buyouts (no golden parachutes).

Let the Big 3 get rid of the UAW.

Allow the Big 3 import small cars from low cost sources the same as the Japanese and Koreans do. NONE of these are is made in the US: Toyota (Yaris), Nissan (Versa), Kia (Rio), Hyundai (Excel) and Honda (Fit).

Also, anyone calling for the resignation of the Big 3 senior management without simultaneously calling for the resignation of the Union's Ron Gettlefinger and his leadership(?) team is deluded.


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Auto Industry: In for a Penny, In for a Pound

Well, John Slater. more great insight about the auto industry from a guy who likely cannot change the oil in his car.

How, John Slater, would you handle the UAW, given the Democrats that the UAW has bought and are likely to stay bought?

How would you handle the fact that state and federal law prohibit the manufacturers from closing ANY dealership, even the rotten ones that you know and hate?

How would you handle the fact that the federal government requires US automakers to build small cars in the zero-profit US while allowing your beloved Japanese to import the Yaris, Fit and Versa from low cost sources?

How would you handle the approximately 1 million people that the BIG 3 are covering for health care? Cut them off?

How would you handle the nearly 600,000 pensions being paid by the Big 3? Dump them on the Pension Benefit Guarantee Corp. which is already $50 Billion underfunded?

How would you handle the most recent federal fuel and environmental mandates which will cost the Big 3 approximately $100 billion to meet within the next six years? PS The government arranged $25 Billion in loans, maybe sometime in 2010. (See the math here?)

Sorry, John Slater. 200 M&A activities with a combined value of $3 billion doesn't even get you a seat at the table for a Big 3 solution.


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Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

If this guy has a PhD, then I am Einstein.

The $73 is NOT the employee's income, it is the cost to the Company for each hourly employee. This cost includes wages, employment taxes, benefits, AND legacy costs--health care and pensions for up to 1 million people.

Now, if all the posters here wish to kill the pensions for the retirees, fine. The PBGP is already underfunded by about $50 billion, so another taxpayer funded bail out for the PBGP will be required.

Medicare is in crisis due to chronic underfunding. If these 1 million people migrate to Medicare, another taxpayer funded bail out will be required.

It's OK, though. Niot to worry. The Messiah will fix it by taxing the rich.

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Auto Industry Recovery Once Again Postponed

Paulk8756, the $50B is NOT a bailout--it is what congress should do EVERY TIME they mandate (no, that's not a Barney Frank term) any action on any entity.

Simply put, if Congress in their dubious wisdom requires any entity to do something for the common good, they should BE REQUIRED to cover the costs with taxpayer funds since the taxpayers benefit from the increase in the common good.

Up until now, we have had to eat a multitude of unfunded mandates, the most offensive being the requirement to sort through a tax code that has more words than the Bible. And, if a mistake is made, it's assumed that you are guilty--penalties include fines and jail time. The total cost of congressional and administration regulation on automobiles is well above $8,000 per car. And the taxpayer is paying for that TWICE--first through taxes and once again in the purchase price.

It's high time that congress remembered who signs their checks.

Impact of GM Destroying the EV1

Mr. Fitz, how many EV-1s did you lease? Why is it news that GM and Ford are presently adjusting their model mix to customer demand?

Toyota is reducing the production of its Tundra, which has proven to be a collosal waste of money for them. One year late in getting to market because they couldn't build the plant properly. They had to fire the Japanese plant manager. Then, the Tundra comes out and is hit with three recalls in the first year of production, including blown engines. To make their modest sales goal, they had to offer $6,000 rebates to get people to buy it.

Toyota this year launched their new LARGER 2008 Sequoia which is based on the Tundra. It also has been a dud in sales. Sales of their Siena minivan are down 50%.

I'm looking forward to reading your insightful analysis on Toyota's product failures.

Impact of GM Destroying the EV1

I would like to add that speculation is being reported in the automotive press that GM will eventually cease production in the US and become an importer of their vehicles produced in China, South America and elsewhere.

So, maybe, they are taking your advice and are starting to think ahead--no more UAW, no more pensions, no more lifetime healthcare, etc. They are probably counting on guys like you to fund these things through your increased taxes.

Impact of GM Destroying the EV1

Well, Mr. Fitz, I think that you are on to something with your article. What a swell economy we would have in the US if GM had kept those 800 cars on the road and killed off everything else.

With only 800 electric cars on the road (and going only 45 miles or so), the roads would never be crowded and would last forever, pollution would go to zero, CARB could furlough all their employees for a huge tax saving, etc., etc., etc.

It is really too bad that GM didn't think of that way back when.

And, since GM would have offered only 800 of these cars, why, Toyota--with their mega-brain management, Honda and Nissan--mighty Japanese companies with really smart management--would have quickly joined suit and each produced their version of 800 electric cars. What a wonderful world we could have had!

You do fail to mention that even the Toyota Prius (I know, I know--it's only a hybrid) wasn't selling in volume until the US government took your tax money and gave a rebate to someone who bought one. How exaclty does that improve our balance of payments?