Master Blaster

Detroit's Hail Mary: Saving the Automakers

I grew up in Detroit during the 50's, 60's and 70's. Moved to Florida in 1982 to work on the Space Shuttle. I returned to the Detroit area for the first time in 2002 and was TOTALLY amazed at the amount of US auto manufacturing plants that had been shut down. Many were vacant and some were converted to computer hardware manufacturing.
What many don't realize is that many of the GM, Ford and Chrysler autos are no longer made in the US. The Big 3 found out that they could have their vehicles made in countries like Mexico (and others) for a much cheaper labor price. I was disheartened to find out that my first Chrysler product, a 1985 Dodge 600 Turbo Convertible, was made in Mexico. My ex-wife bought a new PT Cruiser when they first came out and paid over sticker for it. It was also made in Mexico. Some Fords are made in Romania! All of this was done to save a buck. The plants had all been built decades ago and were totally depreciated with any upgrades costing millions. The labor prices in the non-US countries is extremely lower than in the US. The Big 3 can blame the UAW all they want, but the vehicle prices continued to rise with the benefit packages provided by new contracts. Prices became about unreachable for most blue collar workers, cutting out a large percentage of their market base.
I'm willing to bet that the UAW workers would gladly renegotiate contracts and take some cutbacks if it would save thousands of jobs, but in these hard economic times, that's a hard decision. Rising medical costs are a result of the AMA, resulting in higher health insurance costs for, in most cases, reduced coverage. When the UAW contracts are so affected by health care costs for current and retired employees, there's not much the Big 3 can do.
In my opinion, the biggest factor in most of the economic problems of US industry in general is the AMA. When a new 1978 full size Ford cost about $10,000, the health insurance was based on $70/day/room hospitilization (worked for Met Life during that period) and cost about $35-$40/month. Now the cost of the room, if you happen to be able to stay overnight, is over $1000. That's somewhere in the neighborhood of a 1400% increase, with the monthly premium being about $1400-$2000/month! The same products, the same medical care.
Who's to blame?
In my deluded opinion, unless the U.S. Government gets the AMA (who's the biggest lobby in D.C.) to do something about their profit structure and attack alternative fuels with vigor, the U.S. Big 3 don't stand much of a chance staying with U.S based assembly plants. Detroit is a ghost town with unemployment lines going forever. Bad enough that they are advertising on TV trying to get new manufacturing companies to come. But Detroit also has an extremely expensive tax structure, not only for manufacturers, but also residents. And for what?

Here's How This Week Could Unfold

It's evident that this whole crash is a result of the decreasing oil prices. In fact, all markets seem to be dominated by the same. Oil goes high, market goes high. Oil goes low, market goes low. Oil goes low, dollar goes low. We are being attacked by hatred. They have defeated our Safety by the ruthless attacks of 9/11. This resulted in the loss of our belief in our Safety. Now they're attacking our economics, and winning. Their intent is to destroy this nation. Unless we find a way to gain back and institute all invention patents that would reduce fuel usage that have been bought up by the Oil Giants, we are looking at total defeat. We've all heard of the gadgets that would make any car get 50mpg. Then that's the last we hear of them. The patents get bought so that the world continues its dependance on oil. Our government should step in and spend some of this money on forcing the patents to be available and implemented. The only way we can win.

First to Bounce Back - Cramer's Lightning Round (10/21/08)

Cramer is always "on the money". His show is extremely informative and entertaining. Buying NUE today, probably along with thousands of others.