Obama Should Tell Detroit's CEOs: No

Yes, no-nonsense thinking! I saw Paul Ingrassia tonight (Dec 12, 08) and agree with both of you. Let Detroit get themselves out of their self-created mess.

I certainly hope Obama is reading this and decides not to bail out Detroit. Management, not the people who design and build the product, is solely responsible for the direction in which a business goes. Just recently, even the Japanese have commented on the state of affairs in this country and are dead on target. They basically said that Detroit focused in building luxurious, expensive vehicles which are not environmentally friendly. With Bush giving tax breaks to people who purchased a Hummer, who needs enemies? No wonder the economy is in such a sad state. This country was built on hard, honest-to-goodness work, not hand outs to poor performers. Reorganize Detroit and throw the bums out less the billions they have amassed.

To say that Detroit doesn\’t build what consumers want is a bit off.

The vehicle that sold the most units in the US in 2007 was the Ford F-150, a full sized gas guzzler. The majority of consumers didn\’t really want fuel efficiency until gas headed up over $4 a gallon. The majority of consumer also eat up all the gadgets that are going into vehicles now.

I would love to see more basic, fuel efficient and alternative fuel vehicles but I\’m not the majority.

Your simplistic analysis reveals your lack of understanding of the situations faced by American-based Automakers. It\’s easy to pile on the criticism and Monday quarterbacking, with your benefit of hindsight and lack of responsibility for the actual ramifications. What I would like to ask is, \”What would you really have done differently if you had been in charge and knew all the details at the time, but couldn\’t see the future?\”. I wonder if you would have spoken to the any of the Boards with such confidence and wisdom, given the propect of shutting the company down through extended stikes or lack of structural cost improvements. Your opinion that the industry is failing is based on a defeated approach, which no one in the industry will use as a basis for action. There have always been challenges and the current one is truly immense. However, those in the American Automotive Industry will apprroach this challenge with a serious attitude of how to turn the trend around and win, rather than simply give up.

You offer one solution - regarding supplier relations. While it is a critical aspect of the automotive business, do you really believe that has significant relevance to the current situation? The present situation is a lack of demand issue driven primarily by consumer\’s economic concerns and has little to do with how parts are purchased. All automakers are needing to respond and other countries are actively supporting their local industries in developing a response.

You also mention a priority on frills and luxury… While some customers desire frills and luxury, your opinion that this has been the priority in Detroit shows your lack of connection with the industry, which has been focusing on quality, fuel-efficient vehicles in the midst of consistently more stringent gov\’t regulations.

Overall, this has been a very poor advirtisement for your book. It only contributes to the confusion about this subject, at a time when understanding is critical for finding resolution that won\’t cost many times more for the US gov\’t and citizens compared with any risks involved with loans.

The climate crisis is real. Look at the data, it is irrefutable. If you don\’t understand what you are looking at, find someone to explain it to you. Detroit\’s problems can be solved by building cars that people want to buy. Fuel efficient, durable, high quality, and reasonably priced. You are correct that Managers don\’t build cars, Engineers and Factory workers do. Clean out the top drawers and make room for the future.

So, why wouldn\’t you support a $25 billion loan to the \”badly run\” auto companies when a $700 billion loan for the financial industry has already been approved?!? They committed downright FRAUD when they packaged BS subprime mortgages together into derivative securities and sold them as AA and AAA investments. And congress rewarded this behavior with $700 billion of our dollars to make things ok. One of the huge fallouts of the \”financial crisis\” was the immediate tightening of the credit markets, making is very difficult to sell cars. And, the housing slump is also being compounded by this tightening. All because of mis-management in our finanical sector. Is this the ONLY reason the Detroit 3 are in trouble right now? Of course not, but this \”perfect storm\” of the housing slump, outrageous oil prices and the credit crunch have resulted in a bad situation turning dire. If done correctly, I think that these \”bailouts\” will have an extremely positive effect on the American auto industry. And I don\’t think that a little help should come for free. OPEN YOUR EYES and you will see that the cost of doing nothing will be MUCH greater than the cost of doing something. In other words, give them a loan NOW or pay to clean up the mess later when one or two of them fail and put hundreds of thousands of people out of work.

Pelosi Reid Obama McCain = Detroit Bail-out as well. You know McCain is gonna help along with Obama for this bailout.

What about all of the automotive suppliers? Do they get a cut too? You know they have been feeling the financial crunch too. And they are part of the industry. So where does it stop? OEMs, Tier 1, Tier 2, Tier 3? Offshore suppliers of resins and nuts and bolts?

I agree - leave it alone to work out it\’s own problems. If they can\’t - then GO UNDER just like so many of the smaller suppliers that they helped devestate.

I like you contradictory article, but I respectfully disagree.

First of all the reason the automakers are in this situation has to do more with the economy and the fact that we have a saturated market.

Second, it is not necessarily the management that is at fault, or the portfolios of vehicles. GM, for instance has more vehicles getting 30 mpg or better than many.

Third, we have a very high, misreported unemployment rate, I am estimating at greater than 20%, when you count the people ineligible to receive benefits. Why, you may ask. Because, NAFTA and the \”globalization\” efforts have eroded the manufacturing base in this land of opportunity of ours for over 15 years. And, yes the government allowed that to happen without any implications, tariffs, or penalties for meeting a domestically made vehicle content. These jobs will at some point be replaced with lower paying ones in service or other industries, but our manufacturing base will be gone for ever. Welcome to the world of low cost, low quality from China, India and the like, third world countries cost with implications in quality and health for years to come.

To summarize, the market base for many is now unemployed and growing in that direction, which in turn affects the buying power, and the economy, thus the current outcome. So long the projections for selling 16 million vehicles per year.

Doug, you may be right with your suggestion, but I don’t see any suggestions toward fixing this, only that we should let it suffer. And by the way, Japan, Germany and other governments do help their automotive companies.

Do you guys don\’t uderstand how many folks would be effected if auto industry goes under. I agree there needs to be some kind of restrictions on the loans. Remember Chrysler loans back in the 80\’s. that was a good thing.

I partally agree. I just hate the situation it will put so many families in till the market figures out what to do next.

I find it incredible that you can put this title on a magazine aimed at designing components and products for the consumer market. This seems to me to be another example of the liberal press. Do you understand that the American automotive companies are a small part of the estimated 7 MILLION American workers that are dependent on the industry for their income? Get out of your ivory tower and get into a manufacturing plant, large or small and see the real world.

No matter which party won the election \\\”Climate Crisis\\\” nitwits were going to be in charge. McCain was just as anti-coal as Obama/Biden.

We did have a two party election. One of them was the Me Too Party. The difficulty is that no one is completely sure which was the Me Too Party.

We are so ….

Doug,

I vehemently disagree and promise we will will all pay for making the upper Midwest more of a waste land than it already is. Jon Titus - how could the framers envisioned this. Read The Nine for some good insight on how vague the constitution really is. You\’re right - the constitution should not stand in the way of doing what\’s right.

While I agree that GM, Ford, and Chrysler have made some bad product choices, I think we are neglecting some other significant factors affecting their predicament. Those factors are the financial crisis and the run up of the cost of gas. If you can not borrow money at a reasonable rate, then there is only so much you can do. In addition, the increase in the cost of gas had increased at a rate that was unexpected. Even Toyota was caught behind this eight ball. They have shut down their brand new Tundra plant in San Antonio, TX for about a month now. This plant was also a $1.3 billion investment and no one is being critical of Toyota for their lack of "judgement".

Right on, Doug. In fact it is unconstitutional for the government to bail out companies or individuals. But why let that stand in the way of anything.

Pelosi + Reid + Obama = Detroit Bail-out. The clowns are running the circus. It's inevitable now. However, the financial decline from it will be dwarfed by the economic devastation resulting from the policies of the "Climate Crisis" nitwits. Cheers!