Charles A. Boy Jr.

Detroit's Been in Trouble Before - Why This Time Is Different

The Smith story keeps reminding me that Detroit will face severe competition which it had avoided with its product strategy from 1973 up until today. They do not innovate. That is a culture shift I do not think their management traditions can handle. They are bean counters, marketing men, not engineers; Mallaly excepted; finally. People will not purchase their stuff out of patriotism. GM may not survive here, but their Shanghai investment levels indicates they will as a Chinese company exporting product to America. We are subsidizing that evolution. Their treatment at the hands of Washington will make it happen quicker.

Reasons to Bail Out GM

As having spent 35 years in manufacturing management, I am aware of what the finished product says about what is happening within the company. Detroit Iron is trouble. Sloppy design details, loaded with reliability problems. Two nights ago Bill Ackman, on Charlie Rose, said a structured pre-bankruptcy process for all three would work best. He suggested having one company emerge from the three. Absolutely no cash bail out. Retrain the workforce.
Having listened to many opinions about Detroit's needs and much of the bailout debate, I favor the bankruptcy strategy Ackman sees as the best alternative.

Why the Detroit Bailout Should Include Bankruptcy

Good ole Elroy has his numbers wrong. Japanese parts suppliers are here.
Detroit has been buying parts from Korea and Mexico for the last 20 years. Assembly is mostly Canadian. Why? Among other things, Canada has a national health insurance system.
What's left are an overpaid few who make outrageous money compared with other industries doing the same kind of work. NAFTA has benefitted them enormously. What difference did it make? Look, GM and Ford have spent a fortune facilitating Shanghai with plant and equipment. They have Design Centers there! It was expected that both would become exclusively importers of vehicles into this country. How about ending this bail out insanity and get back to real business?

Ben Stein Watch: November 8, 2008

I am awed by people like Ben Stein with such clarity of vision that only they can see things in true color and perspective. I disagree with his choice of cars. As does Consumer Reports. No matter. Its the symbol that counts. I even know Cadillac employees who refuse to buy the junk they are building these days. Those insider facts are unnoticed by Ben.
Truth is, as far as I can research, GM & Ford will essentially be Chinese companies by 2015 whether we bail them out or not. Shanghai will be the largest concentration of design and production in GM and Ford's history. Seems that both are enjoying record profits overseas; Domestic markets are their downfall. Especially now that truck sales, their lifeline, are way down. Ford has, though, opened one shift to make the F150, sales are up again now that gasoline is so cheap. They have no domestic market left. Toyota, Honda, Nissan, Mazda, Hyundai, KIA,
even VW, will insure that. Since the Arabs turned off the spigot in 1973, seems like Detroit could not adapt. In 35 years, they could not abide the "Japs" ever overtaking them and kept putting out "Detroit Iron". We gave them NAFTA and that didn't save them. I will buy a Japanese TV made in China and not think twice about it. When I think back, funny how the Japanese have contributed more positive benefits to my consumer life than any American company. Does Ben care? No bail out for Ford or GM! Help retrain their workers, even help them relocate. We need nurses and doctors in rural areas. We need so many things they could be retrained to do. In WWII, surgical technicians were trained because doctors were in short supply. We can do the same kind of thing this time around.

Driven to Bankruptcy

Hummmm.. Lots of bad ideas here. Labor content has gone from 23% of content in the 1950's to 6% today. The union pensioners are mostly dead. The domestics did well, thank you until one day in 1973, when the Arabs cut off our gasoline. That introduced us to the small Japanese car. Before that the VW beattle owned the second car spot in the garage. The rest follows the old story about buying value and quality. Meanwhile, Ford and GM in every country other than here, where they have been producing and selling for almost as long, both make profits. What is wrong with your picture? Learn more. It is good for your mental health.