Mike InMich

GM Eulogies - Let's Move On

Right on Donaldman. People will discover the value of making products in the US only whene it is too late. They just don't get it. The plan in washington seems to be that everyone should work for the feds or become a slip and fall lawyer and continue to feed off of the carcus of decaying American industry.

Chrysler Gets Its Miracle? Not So Fast

Ford is also bringing the all new Fiesta to North America. It is a nice car but will be a hard sell with $2.00 gas. It is outrageous that the Federal government is subsidizing Fiat to enter an already saturated US car market, especially small car market, to compete with non-bailout FoMoCo.

Besides this outrage, there is another interesting item to play out. I'm sure Fiat would prefer to build the 500 in non-UAW Mexico. If forced to build in the US by their majority UAW owners the value equation is even more out of whack. Look for more federal money over the next few years.

Obama should realize that there it is a zero sum game. UAW jobs lost in a liquidated Chrysler would be offset by fewer losses at GM and Ford. Shoot this dead horse.

Three Main Reasons for GM's Slow Decline

Martin, you are the first commentator to get thi sright. I agree with your 3 items and their order. Few have mentioned CAFE or the fashion aspect of the problem.

A fourth item, or perhaps a subset of item 1, is that the transplants have exploited ridiculous US law that has uneven union rules. Specifically they have gone to mostly right-to-work states. I find it amazing that the left that loves to hate american cars is choosing non-union over union. Go figure.

I'm a little worried that Ford may not benefit as you have suggested. Now that Ford is competing with Obama Motors I fear that the competition will not be fair, as the success of O-motors will be in part a function of their sales. Also, Ford will not be free to benefit from customer demand for their cars because CAFE will be ratcheted up.

Someone above said Toyota and Honda also had to meet CAFE. True, but they were coming from a small car nitch that easily made CAFE and they used their profits (base don non-union labor) to upsize into bigger vehicles. Ford and GM started from a large car nitch and had to make massive investments to downsize into vehicles no one wanted, and not sell vehicles people wanted. CAFE was massively discriminatory to the US auto makers - see item 3 culture comments for some of rationale.

Note also that Ford's largest selling vehicle, the F-series, has commercial applications. To me it makes no more sense to make Ford meet CAFE with these trucks than to force Mack truck meet CAFE.

Chrysler / Fiat Deal Is Horrible for GM and Ford

To correct some of the above comments:

"31october" said Ford and GM don't compete with the FIAT 500:

But, Ford, for one, is planning to bring over small cars from Europe that would compete with the FIAT 500. Specifically their B-car Fiesta in 2010.


Several of you argue that FIAT will not be competitive in the US. I agree this is true after people see what crap they are after a couple of years. Were it not for the federal bailout money they would not even be able to come over here. But if you build a plant with what amounts to taxpayer - bailout money - a certain number of those cars WILL be sold, taking share from Ford and GM.

So the US taxpayers subsidize the further erosion of no-bailout-money Ford's market share. And this with third rate FIAT vehicles. This is beyond anything envisioned by the initial bailout.

I reluctantly supported the bailouts to date because we were told of dire consequences. I don't support the subsidy of a new, third rate, entry into the US market. I now think it is a zero sum (market share) game. If Chrysler losses auto jobs via bankruptcy, then Ford, GM and the transplants loose fewer jobs.

Ford and UAW Working Together

babyray,

Giving back is relative. If you have COLA then giving back is not getting a COLA raise, which few in this country get. If you have total health care coverage then giving back is not getting a 10-15% raise in health care expenses every year. And so on. The UAW baked in so many automatic raises that just staying even was considered a big give back to this crowd.

The fact is the big 3 could fill their plants with happy, productive, and grateful workers for a quarter of what they pay the UAW extortionists. And still the UAW radicals complain.

The Current Stagnation of Natural Gas Vehicles in America

Long after people have downsized their cars, changed over to electrics and hybrids, and moved closer to work, we will still have to heat our homes. Natural gas is the perfect home heating fuel with a grid largely in place. Any attempt to force natural gas to power generation of vehicle use will surely increase the cost of home heating dramatically. This was not mentioned so far in the article or this blog.

Automotive Depression: Government Needs to Let the Weak Fail

I see that the auto experts assembled by the Obama admin are all from the left and east coast, and all drive Jap cars. Fine. Now let the people who actually build stuff from the center of the country administer the bank bailouts. We won't stop until every corrupt Bernie knockoff is living out of the trunk of their Beemer.

Is a Car Produced in Alabama Really an Import?

Here is my data.From corporate.honda.com/am...

Today, Honda employs more than 25,000 people in all 50 states.

From:
cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

A company with only 25,000 US employees did not design, develop and manufacture the cars you have listed. Design could mean styling, which can be done by a couple of artsy types. Develop could mean run a few emission tests. The vast majority of Honda engineering is done in Japan.

From world.honda.com/profil.../

Total number of employees
Consolidated: 178,960 (as of March 31, 2008)

So 25k of 178k Honda employees are in the US. I suspect over half of their sales are in the US. As I have said before, the Japs have calculated what presense is required in the US to make the gulible press and others think they are designing and building in america. The employment data tells the real story.

Is a Car Produced in Alabama Really an Import?

Wow c300man. Great post.

Those who read my posts know I am a fan of the US car companies because I am a fan of the US, and know the two are linked.

While I respect the historical importance of the UAW I think they are currently way overpaid and way over-bearing with their workrules. If these workrules are preventing modern plants like the one in the video from being built in the US by the big 3 then cars will be built elsewhere by others.

You can't stop progress and the march toward efficiency. Lookup the word "Luddite". en.wikipedia.org/wiki/...

Is a Car Produced in Alabama Really an Import?

Good point Deweyp
.
During the auto witch trials in Congress in the Fall a man from the U.S. tooling industry testified that the Japanese transplants, in particular, used almost no U.S. tooling in their final assembly plants. That is part of the reason why the U.S. tool and die industry has been wiped off the map, affecting shops across the nation but especially in the Midwest.

These final assembly plants are a facade calculated to be the least content possible to dupe the gullible (press) to think that the cars are US products. The first loyalty of Toyota and Honda is to the fatherland, which is not the US!

The worse part of this tooling trend are not obvious. I read recently that a man wanted to bring some textile production back to the US. He found that it was more difficult that anticipated because there were no longer tool makers in the US who could support his plans.

There is a lot more to building products, like cars, then the final assembly plant. I hope we can figure this out before it is too late.

Is a Car Produced in Alabama Really an Import?

There is a difference between the Detroit 3 and the two leading imports Toyota and Honda. The Detroit 3 cars are largely designed in the U.S., employing 10s of thousands of engineers, technicians and support staff. These people buy financial services, computers, software and a whole infrastructure that permeates the entire US economy. They also pay those federal taxes that allow our beloved federal officials to buy those foreign cars.

From corporate.honda.com/am.../
Today, Honda employs more than 25,000 people in all 50 states.

From:
www.toyota.com/about/o...

U.S. Direct Employment 36,632

From:
www.cargroup.org/docum...

Detroit Three employed 239,341 hourly
and salary workers in the United States at the end of 2007

Thus, Toyota and Honda employ only 25% as many employees as the big 3, but now make almost as many cars.

Note, I don’t have the data handy, but the multiplier effect in the supply base is much higher for the big three as well, as they tend to make and buy parts in the US.

See uaw.org for a list of union version non-union models in the US and Canada.

Ford Partners to Commercialize Electric Cars

Overall a very good article. Way to go Ford! But this statement needs explanation:

" When driven on surface streets for the first 30 miles following a full charge, the Ford Escape PHEV can achieve up to 120 mpg. "

I see a lot of this 100+ MPG stuff when talking about electrics. The problem is that it is hard to define the MPG for a vehicle using energy from the grid. This is not free energy, and is most likely from fossil fuel (coal) in the U.S. We must be careful to not overstate the "green" aspect of PHEVs. I think there is a net gain for the environment for such vehicles, albeit at a great cost, but I suspect the 120 MPG figure overstates this benefit.

Perhaps the author can explain the 120 MPG figure for the readers.

Also, there is a tendancy for the advocates to suggest that only solar or wind power will be used for these cars. But if such power were availaable in the quantities required, such power could just as well have been diverted to other electricity uses and displaced more coal. I think we should use a factor, something on the order of 80%, that represents the percent of electricity in the US from coal when assessing the effect of electric cars on global warming.

There is a great risk of spending a lot of US resources on a over-hyped technology if we don't get this math correct.

Obama Insists Cars Improve Fuel Efficiency by 40%

good points here_in_Akron.

But we have lost the arguments about why reduce fossile fuel use. So now that politicians have decided that we are going to reduce use to a much lower level then the market would dictate, the question is how.

If the goal is to reduce said fossile fuel it is infinitely more effective to accomplish this by a small, tactical modification of the marketplace. Simply change the current fed gasoline tax to a much higher level. (or better still a fossile fuel tax). This does not require a single new bureacrat and is the most fair across the automakers. Where these high taxes have been used for decades in Europe Ford and GM are very competitive.

And again, the tax has a much bigger impact on the goal of reduced fossile fuel use because it affects existing vehicles as well as new ones, which take at least 10 years to effectively replace. It also affects many lifestyle options as was shown this summer where high gas prices caused people to drive less, plan trips, carpool, use mass transit, and infinite other market driven options to reduce fuel use and save money.

Even we who argue the premise like here_in_Akron should be saying, OK, if you must reduce, then use a tax so you don't wreck the US economy in the process.

Obama Insists Cars Improve Fuel Efficiency by 40%

Will the advocates of CAFE and the California plan please answer the question: why not us ea gas tax like Europe, Japan, and many other questions have done for decades?

I fear the answer is that this direct tax will make the voters unhappy. Using the big bad auto companies, who hide 100 mpg carburetors under their desks, to collect taxes if much mor epolitically expedient.

Note that if the goal is reduction of fossile fuel a gas tax will also:
reduce length of trips, affect existing cars as well as new ones, increase car-poolng, affect other uses of fossile fuel like home heat, and millions of other market driven solutions. With the modifed price of fossile fuel all of this will be achieved with market / pricing efficiency.

CAFE has the affect of disproportionate impact on US based auto companies who make commercial pickup trucks. (why doesn't Mack truck have to meet CAFE?). The California law has an exception for small companies, all of which are foreign, which is no surprise since this crowd hates all things American, except Obama, for now.

Gas tax yes. CAFE no!

Detroit's Biggest Failure: Losing the Youth Market

Yes, support Ford. Buy American while we still can. You others, where do you work where you think that American made does not make a difference?

It is an illusion if you think we can all work in finance, for the government, sue each other, and otherwise support ourselves by "consumption". Making things is essential to the economy, and in case you haven't noticed we don't make much anymore. Cars, in fact, are just about the last thing left, and then we are down to less than 50% designed and built in the US. There are figures out there saying 3 million jobs are tied to the US big 3; I think it is 10 times that when you look at the multiplier effect.

We may find out too late to bring this back. Already I saw a story where a textile compnay wanted to bring back some production to the US. but they failed because all the tooling and supplier infrastructure was gone.

So thanks for the bailout, whether you agreed or not. Now with the UAW facing up to reality we can rebuild the US auto industry. Then the sons and daughters of the current UAW can have above average wages and benefits, and job security as well.