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Rob Spiegel
User Rank
Blogger
Re: Too Big To Fail
Rob Spiegel   8/17/2011 12:29:14 PM
NO RATINGS
Good point, Herbissimus. Part of the challenge the Detroit automakers face dates back to the days when they dominated world automaking. It's easy to give in to labor if you can pass those costs on to your customers with no blowback. Until competitors could challenge the cost of Detroit vehicles, management just said yes to the unions. The foreign competitive challenge came a coulple decades after the car boom hit full steam in the 50s. Thus, the workers at those foreign carmakers tend to be a couple decades younger.

herbissimus
User Rank
Silver
Re: Too Big To Fail
herbissimus   8/17/2011 12:23:18 PM
NO RATINGS
perhaps you're right about the car companies not being tough with the workers in labor negotiations, but another factor that looms large is the relative age difference and the attendant costs of health care and pensions, which the foreign car companies with younger labor forces don't yet have.

Rob Spiegel
User Rank
Blogger
Re: Too Big To Fail
Rob Spiegel   8/17/2011 11:22:19 AM
NO RATINGS
While I can understand why the Obama administration propped up the automakers (fear of losing hundreds of thousands of jobs throughout the dealer network), they may have done the industry a disservice. The automakers have caved to their unions for decades, which put them at a disadvantage compared with foreign competition that carries a far lighter labor burden.

If the government had allowed GM to go into bankruptcy, there is a good chance the company could have scaled back its labor committments and emerged a healthier company -- while still paying good wages and offeirng decent benefits.

Mike C
User Rank
Iron
Evs in California
Mike C   8/17/2011 11:15:25 AM
The contiuing efforts of State and other Local govenments in thes nation to "Control" consumer action , choice and interstate commerce is what is incorrect. There is no justification for California to impose a mandate on EVs. There is no justification anymore for differing AQMD regulations for differing parts of the nation. All one has to do is check the air quality records of the past 30 years to see the dramatic improvemnts YET >>>the areas with worse Air QUality are nearly the same now as then noting the higher controls yeaild nothing, because for the most part the issues are due to geography.

Detriot built AND CONTIUES to build on the whole, sub standard quality and value products. As far as the bailout is concerned ..mostly that got the manufactures out of contract driven costs that had little to do with product demand and such.

I am an engineer and would like to buy US product and I do. but they are built by Toyota, Honda and Kawasaki. All made in the USA by USA workers Designed by USA engineers. WHY can't Detriot do the same? Read the Car and Driver , Roadd and Trackks etc. They call all the time for exciting cars. Too bad dull and boring are what make the money. Camrys, Civics, etc that is the bread and butter of the industy. If you do not sell those...well guess what..you are a slave to fashion which changes.

 

As far as the SUV craze...folks do the research.Large SUVs fit into the Accellerated Depricaation cycles allowed originally to help farmers with this beinfit for vehicles over I think 6500 labs GVWR. SO any small businees sees a doubles Depreciation rate, that reduces the tax burden and ...well ya migth as well grab it. SO the IMBALANCE of the vehicle mix that became poison with 5 buck a gallon gas was....WASHINGTONS DOING!!!. SO MAYBE WASHINGTON HAD A RESPONSIBILTY TO HELP???

Does this sound confused? I hope so. here is no simple answer except a good longterm business stratgy managed by people with a close eye on sustainable business growth and a carfeul hand at the wheel with no emotional attachment to the business.

 

TJ McDermott
User Rank
Blogger
Re: Too Big To Fail
TJ McDermott   8/17/2011 11:11:59 AM
NO RATINGS
Every struggling citizen would love a generous-term bailout when they encounter difficulties.

When I'm done here, I'm going to call AmEx, Visa, Mastercard, and Discover to let them know I am raising my credit limit.  Just because I'm spending more than I earn doesn't mean they should be able to put a cap on my credit lines, so I will be asking for a generous increase.

 

OtherThoughts
User Rank
Silver
Frankly, no
OtherThoughts   8/17/2011 11:11:19 AM
I hardly think the automakers deserving of sympathy in all this.  Given their resistance to being asked nicely in the past to reduce fuel consumption, given that CAFE numbers have been falling rather than rising for the past two decades, it's time for some actual consequences to be attached to a necessary action that the automakers clearly have no interest in addressing.  The fine is not a given - it will only apply if they continue to knowingly evade the issue.

Further, I for one have no sympathy for people who apparently think their freedom for an abundance of vehicle choices outweighs someone else's freedom to live in a world with breathable air and a stable climate.  Part of being a responsible adult living in a community with others is to compromise for the greater good - a lesson that parents should ideally be getting across before children leave the home.

 

Beth Stackpole
User Rank
Blogger
Re: Too Big To Fail
Beth Stackpole   8/17/2011 10:57:31 AM
NO RATINGS
I would say it's hard to feel sympathy for the auto makers or the financial companies or the big oil companies or really any company in any major sector these days as average Americans continue to struggle.

Mandates like those around the zero-emission vehicle may be tough on auto makers, but without them, it's likely that there wouldn't be as much progress and resources directed towards EV engineering. It is a double-edge sword, though, and perhaps some day, the general public will have to entertain the idea of mandates or penalties for not embracing some of the more environmentally-friendly technologies, be it automotive or otherwise.

TJ McDermott
User Rank
Blogger
Too Big To Fail
TJ McDermott   8/17/2011 10:42:20 AM
NO RATINGS
I hate that phrase.  It's a cop-out; it says we're too afraid of the consequences, too lazy to prevent them.

If a corporate entity grows "too big to fail" and yet is in danger of failing, many, many people FAILED in management and in legal oversight.

 

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