Fam62c

Protectionism vs. Pragmatism

We should protect our markets to the same degree that other countries do. Sometimes I think that we are suckers for allowing everyone in the world to just load up the ships and send everything they want over here with very few restrictions. Most other countries (especially China and most other Asian countries) are way more protective of their home markets and industries. I've got no problem with allowing foreign companies to compete with US companies but there needs to be a level playing field. I say that every country should be able to send as much stuff to the USA as they buy from the USA. After that if they want additional access to our markets they should have to do what Honda and Toyota do and build product for the US market in the USA.....you want to sell it here you make it here. We would have to make some exceptions for things like oil that we can't produce enough of at home until we can find solutions to those problems. This would result in cost increases on some products but I believe the benefits would outweigh the negatives.

It's our own fault; we wanted to have everything and we wanted things cheap so we could have more stuff. Cheap stuff needs to be made cheaply with cheap labor and that's where it all started. I, for one, would be willing to pay a little more for some items and have less stuff if it meant more decent jobs for my family members and friends.

A little protectionism isn't a bad thing; "free trade" isn't free, it's come at a huge price for the USA. Other countries benefit more than we do from free trade and our wealth gets transferred away. It's a zero-sum game and as the rest of the world begins to have a middle class for the first time we will see our middle class shrink away to nothing. Almost everything that we consume in the USA can be made right here. After WWII we were the producer for the whole world, now all we do is consume all the stuff that's made everywhere else. I welcome competition from foreigh companies ( we don't want to choke off innovation and force people to buy poor quality) as long as they invest in the USA and build plants here, if they are going to take they should have to give as well. We have the most valuable consumer markets in the world and we are stupid to give access way for free with nothing in return for the American people but a large selection of cheap crap.

GE at a Crossroads: Business Model Becoming Obsolete

I can't help but that think that, in the long run, GE would have been better concentrating on it's core technology and infrastructure businesses. Jack Welch went for the easy money when times were good and got deeply into the consumer credit business and GE is paying for that now. I can understand GE having a finance unit so customers can help finance locomotives, jet engines, steam tubines, wind turbines, etc. but I don't think that GE should be in the business of of providing unsecured credit to consumers to buy big-screen TV's, ipods, video game units, etc. Why would GE want to be in a position where they are at risk when Joe Sixpack defaults on his debt? Call me old fashioned but I think most companies are best when they stick with what they are good at. I would like to see GE get back to being GE and lose the entertainment and consumer credit businesses.

Frontline's Earnings Do Not Paint a Clear Picture

Too much capacity in the DBS industry for anybody to make any money.......too many ships and too little work.

Shipping Continues Its Downward Plunge

This article got a little off track. First we were talking about the DB shipping industry then we got into a discussion about the banking problems.....focus.

Microsoft / Yahoo: Round Two

I use Yahoo as my home page and have for years, there's a lot of good stuff on it and I think a lot of people use it. I have to believe that there is value in the Yahoo! brand name even beyond search. I think with the right management team and increased marketing to increase brand awareness Yahoo could be a good company again. The former CEO did a lot of damage to the company and I'm glad he's gone; maybe they will have a chance from here on.

Terex Should Buy Back Its Shares in Place of Fantuzzi

I agree with Eric K. If they can get out of this deal the better plan is to just keep the cash and keep the balance sheet solid. This is a downturn of unknown magnitude and duration, survival is what's most important. It's been my experience that buybacks do very little in this environment to prop up stock prices anyway. Everybody is selling everything and nobody cares about things like buybacks. You can never have too much cash in a recession.

Coke or Pepsi?

Tough call between these two but I own PEP because of the Frito Lay business, I think it gives PEP an important, additional product line and PEP is dominant in this huge market. I don't think that you can go wrong with either one of these stocks in the long run because they have the whole world to sell to and they haven't even scratched the surface in a many places. I love companies that have iconic brand names in product categories that should never go out of style. You can't do better than brands like Coke, Pepsi, Frito Lay and McDonald's. I like DEO and PM for a lot of the same reasons. Who knows what will happen in the future but it's hard to imagine a world where these brands are not well known and widely purchased.

Threats to Under Armour’s Business Worrisome

Times are tough for any consumer discretionary item there's no doubt about that but UA has one very good thing going for it: It's brand name. I see people wearing their stuff all over the place and it's not always athletic looking people if you know what I mean. Consumers can be fickle and brands go in and out of style but I think that UA has done a great job in creating a very well known, visible brand in a very short time. Brand names mean everything in retail because they give you market share and pricing power. The athletic apparel space isn't as crowded as some less specialized retail areas and UA has a good foothold. I looked at this stock a couple of years ago and passed because of the sky-high valuation but I'm buying a little at a time now and hoping that in a severe recession the price will really drop so I can get some more.

I have to believe that brand value will make UA a winner in a strong economy and they are still a relatively small company so they have good growth potential. I also think there's a chance that somebody, like a private equity firm, could make a run at UA when and if the economy starts to improve and the post-recession M&A frenzy starts.

Do the Automakers Deserve a Bail Out?

[HOW CAN ANYONE GO TO THE VETERAN'S PARADE DRIVING A TOYOTA A HONDA A VW OR KIA?

SHAME ON YOU! ]

Turi;

My Dad is a WWII vet who fought the Japs in the Pacific. He drove American cars all his life and was loyal to Detroit. In his 80's, out of the blue he bought an American made Toyota Camry and he says it's the best car he's ever owned. He's had a lot of problems with American cars over the years. Some of the cars were good but some were just terrible. The last straw was a Chevy S-10 (a 2003 I believe) that had a defective transmission at less that 20,000 miles along with some other defects. I'm as American as the next guy but Detroit needs to work extra hard to get people to trust that their new cars are on par with some of the foreign makers. It's not the fault of consumers that Detroit made a lot of subpar vehicles over the years and drove their own customers away. I actually think that bankruptcy might be good for the Big-3 because maybe after they are reorganized people will believe that things are different and give them another chance.

Do the Automakers Deserve a Bail Out?

I don't want to see the US auto industry (all 3 of them anyway) gone because once it's gone it can never really come back; it's almost impossible to start up an auto company from scratch. I don't think a "bailout" or even a loan is the best way to go. If they can't make it, I think that they need to reorganize in Chapter 11 with some type of government backing for dip financing IF the creditors approve the reorganization plan. Detroit is like an alcoholic, it needs to reach rock bottom before it can start over. If we prop up any of these companies with government money outside of bankruptcy they will simply become dependent on support. Chapter 11 has a way of making everybody get serious because they realize that total failure is now possible. In chapter 11 even the sacred cows get slaughtered. If the taxpayers are going to get involved every stakeholder must give all they can possibly give and Chapter 11 is the only way I know of to make this happen. Plants must be closed, people must be laid off, models, brands and dealers must be dropped, assets must be sold off or collateralized, leases must be rejected or renegotiated, labor contracts must be made competitive in the current environment and liabilites must be shed; in short the companies must be totally re-designed. A government loan guarantee isn't going to make these things happen. Where's the sense of urgency? What is a company like GM doing right now on it's own? Is it stopping payment to creditors to conserve cash? Has it announced plans to shutter one or more of it's many divisions? Is it putting assets up for sale? Are they demanding concessions from their unions? Is the management team taking steep pay reductions to set an example? If they think they can just get a loan guarantee from the government they will drag their feet and not act as if their survival is at risk. I know they don't like to use the "B" word but when you are telling everybody that you might not have enough cash to see the new year it's really the same thing. It's time to start planning for a pre-packaged Chapter 11 filing. They will make it through bankruptcy just like the major airlines did because their creditors have too much at stake to let them fail. Remember the old saying; if you owe the bank a million dollars you have a problem, if you owe the bank billions of dollars the bank has a problem.

I'm worried about taxpayer money being used to pick winners and losers among private industry. How do we decide who to help and who not to help? Where was the bailout for, say, Circuit City? The banks were one thing because the government has authority in that area but where do we stop when we decide to help private industry? What if everybody comes forward with their hand out?

By the way, what about Chrysler? They are owned by a private equity company, why should the taxpayers loan them money. Shouldn't the private equity company raise money to help Chrysler since it's their investment? Isn't re-capitalization what they do? They just bought Chrysler I think that it's their problem. Chrysler certainly shouldn't get any government help until their parent company has given every last penny to the effort.

Demand More for Your Auto Bailout Dollar; Oil Patch Should Bounce Back Long Term

Here's my concern with natural gas: I have a gas furnace, stove, dryer and waterheater. If you listen to the media and Boone Pickens you would think that the USA is awash in natural gas, you would think that we have so much of it that we don't know what to do with it. If this is the case NG should be really cheap but my NG gas bill increases every year. They are banking on all this NG that they believe is in the ground and below the sea but nobody really knows for sure. I'm all for locating and recovering all the NG that we have, go ahead and "drill, drill, drill" but let's not kid ourselves and think that it's cheap. As we use more of it the price will skyrocket and the cost to recover these resources will be steep. Don't get me wrong though, I would rather pay more for US NG and oil than buy from the camel-sodomizers as long as we are also going all out with wind, solar, thermal, wave, cleaner coal, nuke and whatever else we can come up with that can be produced "in house" by the USA. Energy independence will mean higher energy prices for years with the promise of reasonably priced domestic enegy in the future; that's a short term sacrifice I'm willing to make.

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.

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

Repper: Good post, and I don't doubt that US quality has come way up but who's fault is it that people don't know that? My point is that the Japs make the same nameplate year after year and constantly improve it creating not only brand loyalty but MODEL loyalty. Everybody knows what an Accord, Camry, Civic and Corolla are because they have been built for 20-30 years. There are Honda and Toyota buyers who have bought the same model for 25 years because the first one they bought in the early 1980's was light years beyond American small cars of that era. I've owned VW Rabbitt/Golfs for 21 years, I've had five of them. The first two (a 1982 Rabbitt and a '84 GTI) had 120+ thousand miles on them when I bought them and were still running well when I was done with them (the Rabbit got killed in an accident and I gave the GTI to my Niece who drove it all through college and then sold it!). Most 1982 small Big-3 cars never lived to see 100K miles. I liked the model and the brand and stuck with it like many Honda and Toyota customers. American makers simply didn't build good or desireable small cars back then (Lee Iacocca was marketing K-cars against really good, sporty Jap cars) and lost millions of customers.


The US seems to make a new small car model for a few years and then it gets dropped for another new model, also, they cannibilize their own business by making the same cars under different brands. You are correct, their is a prejudice against American small cars and I don't believe the Big-3 are trying hard enough to build new, loyal customers. I can't even think of the name of any American small car models so the Big-3 must be doing something wrong with branding and marketing. I know what an F-150, Ram, Escalade, Expedition, etc. are even though I'm not a truck buyer so why am I not familiar with their cars? The answer is that they promote what they want you to buy not necessarily what you want to buy. I guess I looked at a Pontiac Vibe once and thought is was somewhat comparable to a Golf/GTI but even the Vibe is a joint venture with Toyota. I'm not in the market for a new car but give me the name of an American made compact hatchback comparable to my GTI and I'll go test drive it for the heck of it and see what I think, and I better not see any cheap American fake chrome in the interior :)

I hope that the Volt beats everyone else to the market and I hope the car gets good reviews. I still believe that, as recently as a couple years ago when gas was cheap and the economy was good, the Big-3 really only put minimal effort into small cars. It's been that way forever in Detroit because small cars have small profit margins and Detroit's costs just don't allow for profitable small cars.

Another thing to remember is that most buyers start out with a cheap, small and probably used car when they are young and poor. If they like that car they may stick with that brand for a long time, and conversely, if the car is crappy they may never buy a car from that company again. Remember, a 1982 VW Rabbitt purchased in 1987 with 145,000 miles made me a VW customer for 21 years. I don't think that an equivalent Ford Escort or Chevy Chevette from the same era would have made me a Ford or GM customer. The Japs (and VW) understood this and it allowed them to eventually make larger cars and trucks for these buyers as they got older and eventually introduce Lexus and Acura for the buyers as they got older and had more money. Detroit made a huge mistake by dismissing the lower end of the market, when the Jap cars first came Detroit figured the customers who bought them would "upgrade" to American cars when they had more money and if they didn't have more money Detroit didn't want them as customers. Detroit let the Japs in by ignoring the part of the market they weren't interested in and basically gave away a giant piece of market share, the customer erosion continues to this day. The Japs don't have to rely on "cheap" small cars anymore, they get more money for their cars (new and used) than the Big-3 does. The Big-3 will have to try a lot harder than they have in the past if they want to win customers back; they will need to really make a major marketing push in support of one or two small car models if they want custowers to get interested. It's not the customers fault for not buying American, it's Detroit's fault for not paying attention to small car customers for the last 30 years. Detroit isn't entitled to American customer's hard earned money, they have to earn that business.

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

The previous post was interesting. GM actually had an electric car, and unlike many others, I accept why it never went into large scale production. The market for the car would have been very small given the limited range and size of the vehicle. This small market would have resulted in low production and a very high retail price for the car that very few would have been willing to pay. The part that I didn't understand was when GM essentially stopped R&D on the project instead of leaving the leased fleet of EV-1's out there and slowly improving them. They had a base of willing car enthusiasts who were willing to lease the cars and actually pay to operate a GM test fleet; GM could have supplied them with improved versions of the car as the project developed. They had an edge in a future technology and walked away before it evolved into the right product at the right time. GM must have known that there would come a time when oil would become very expensive. GM had the closest thing out there to an actual, marketable electric car. If they had had the foresight to continue on with that type of vehicle development they might have gone a step further and had the first hybrid/electric cars on the market and become known for something new. Instead, Honda marketed the first hybrid (Insight) and Toyota was the first company to make a hybrid that really caught on in large numbers. The fact is, it could have been GM who came out with this technology first and got all the sales to the "early adopters" as well as the recognition as an innovator. GM still has a chance, if they would stop talking about the Volt and get the car to market they would have the first plug-in and could claim the title of being first with the highest mileage hybrid car out there. If GM could get the car out there I bet the Democrats would be willing to pass some sort of tax reabte or other incentive for plug-in hybrids (maybe even specifically for American built plug-ins) that would allow GM to make some money on the cars and get people to buy them. I'm afraid that the Japanese will beat the Volt to market with a plug-in and the Japanese car will be the one to get all the sales. Like it or not, The Big-3 are going to have to find a way to build high quality, attractive, innovative small and medium sized cars that people want. They are also going to have to do whatever it takes to adjust their cost structures to be competitive with foreign products or they will not survive in anything but a booming economy with very cheap gas. It will be hard to compete with Accord, Civic, Camry and Corolla, these nameplates have been out there for 20+ years and the models have been constantly improved. They have a reputation for quality and they are the cars that buyers gravitate to. The closest the Big-3 ever got recently to a car with this kind of following was the Taurus but they let it slip away by not keeping the car updated and competitive. I think a company like GM needs to concentrate their energy on fewer brands and fewer models; get a few things right and get rid of the rest.

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

I don't think the Japanese want any part of the US Big-3, in fact, no foreign maker may want any part of these companies unless they can get it with no attached liabilities. I do agree with the article in that a pre-packaged bankruptcy assisted by government backing may be the only way for GM to shed enough of it's liabilities, leases and contracts to quickly reorganize and start off with a somewhat clean slate. A company like GM will need to close plants, lay off employees, reject leases and modify contracts quickly to survive and this is the situation that Chapter 11 is designed for. A reorganization under Chapter 11 will get everyone (management, unions, vendors, state and local governments, lease holders bondholders, etc.) on board. Simply handing them more money with their current cash burn rates won't accomplish anything other than wasting tax dollars. The Big-3 have proven time and time again that with their current cost structures they can only be profitable selling large vehicles during good economic times with cheap fuel prices. I believe that America has the capability of designing and building good small cars that people would buy but they can't do it profitably with their current costs so they don't apply many resources to these projects. I also agree with the previous poster regarding Toyota's entry into the large pick-up market. Toyota picked a bad time to do it and it hurt them but they are good at adapting and switching production capacity from lesser selling models to better selling models quickly. You can say what you want about the Japanese but their auto companies have much better leadership at the top than US auto makers. The Japs know how to design and build cars and they know how to run an auto company. Many of their advantages were the direct result of listening to American quality, production, efficiency and customer service experts in the '50's, 60's and '70's. These American experts found that the Japanese were very interested in what they had to say when the Big-3 wouldn't give them the time of day. The "home team" hasn't been very smart for a long time.

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

This is the same problem the major airlines have and, frankly, at this point it doesn't matter how the BIg-3 got where they are or who's fault it is; all that matters now is what to do going forward. I think they (GM at least) aren't going to make it with a temporary loan; they need to do a total restructuring quickly that allows them to modify leases, agreements and contracts and transfer their pension obligations to the PBGC like the major airlines did. A pre-planned bankruptcy filing is probably the only way for GM to quickly do what needs to be done. At the rate GM burns through cash they will just burn through any financing that the government provides. Chapter 11 is the only way to stop the bleeding and make fast, permanent structural changes to GM. A band-aid isn't going to help here, GM needs major surgery or the patient will either die or live on in a vegatative state made possible by tax payer provided life support.