The once mighty General (GM) is reduced to begging for cash on Youtube. It is estimated that they will run out of cash in mid 2009 or earlier. 100 US auto suppliers are now lining up with hat in hand for a bail out package in anticipation of one of the Big 3 (or 2.5) going under. The Mechanic (from Edmunds.com/insideline) has changed his tune and is now calling for patriotism to buy American. Needless to say, this is a very precarious time for the US auto industry.

My 2 cents:
1. The US autoworker's retiree pension / healthcare will continue to be a huge issue inspite of a bailout package (total comp/benefits for current big 3 employees is $22B and the total pension/benefits for retiree costs $21B a year).

2. The Big 3 can not bring new/truly desirable products to market fast enough before they burn through the cash; I'm not talking about the CTS-V or the ZR-1 or the Camaro or the Viper. I'm talking about volume vehicles; small and mid-sized sedans that everyday people drive.

3. The UAW will not go away anytime soon.

This is only one voice but my concern is not so much for my self but for my kids who will still be paying for this in the future.

 

From an economic point of view they need to be bailed out. That being said they need more than just cash flow. They need help in engineering, design, prety much need help everywhere. Have any of you driven a GM car or any american car for that matter? Although they are a little nicer than they were 4-5 years ago they still pretty much suck. The feel of the way the doors slam, the feeling of their cheap leather, even their "good" leather feels like vinyl. The stereo systems suck, their engine options suck. The platform sharing between GM companies has become a joke...how many versions of a Chevy Trailblazer or Malibu do we really need? I actaully think there were versions of the Trailblazer offered for Chevy, Buick, Pontiac, GMC, Isuzu and the now defuct Olds. What the hell were they thinking when the released the HHR...didn't Chrysler build the same car 5 years earlier? Ya, I think it's called a PT Cruiser. I recently took delivery of a new ZR1 (I flipped it), a somewhat nice car, but poor quality shined through in certain critical areas. The ZR1 is a performance bargain, but it's still $100k car and at that price point people expect a certain level of quality. I own a CTS-V, I thought it was a good looking and fast car, but the quality stunk, it was in the shop for a new radiator with with under 800 miles on the car and I blew my first rear-end at about the 1000 mile mark and then continued to blow it several more times. Theyu are getting so close...yet so far away. I am so affraid to buy another GM product after that. They have managed to create some "buzz" cars over the years, CTS-V, Hummer H2, Z06 and ZR1, but then they seem to get content.

It used to be that only the enthusiest would pick up on these flaws, now even my grandmother who was a die-hard "Buy American" person went out and purchased a Honda CRV after driving the domestic equivilents and said there was no comparison in quality.

Now factor in resale value of american cars vs. Japanesse and Europeon cars and the american car becomes even less attractive (if that is possible). They are screwed. We can bail them out today and two years from now they will be in the same situation.

GM, HERE IS SOME FREE ADVISE; BUILD SOME FUN CAR WITH SOME QUALITY AND PEOPLE MAY WANT TO BUY YOUR CARS, UNTIL THEN YOU ARE SPINNING YOUR WHEELS...BUT YOU ARE RUNNING OUT OF GAS!

BTW; FORD AND CHRYSLER, DON'T GET TOO COMFORTABLE, YOUR STUFF IS NOT MUCH BETTER!!!!!!!!

I wonder if GM executives ever test drive Hondas or Toyotas? You think they would, if they did they would surely notice the difference.

On a recent trip I rented a car, I had the choice of a Chevy Malibue and a Hyundai Elantra...I picked the Hyundai.....Case Closed

 

the oil companies should bail out the big 3, not the taxpayers.

if the Big 3 built a car people wanted to buy and could afford to drive they wouldn't be in this predicament. they were still building hummers and gas guzzlers bc they were getting subsidized by the oil companies, they missed the boat and are now behind the 8 ball but the American people shouldn't foot the bill for their stupid mistakes. that's not how this country works, i don't reach to my wallet every time i see someone make a bad decision.

 

I agree with you 100% ... here where i live, you will see the american cars dealers have big billboards with a 0 downpayment , 0 interest rate on lease or financing, "dont pay for a whole year" ...etc but their show rooms are like ghosts town lol and just walk few blocks down the road to the Honda or the BMW show rooms and see how busy they are.
I think those companies are still with the mentality of 40 or 50 years ago. when the american cars were the most affordable cars for families living in north America.

 

Agree with both of you. These examples might be anecdotal but I took my CLK55 in for maintenance and Star Motors gave me a Dodge Avenger (Enterprise Rental was onsite) for 2 days. I HATED that car; I felt that I needed to take a shower every time I drove the car. The interior was horrible, the drive train even worse (asthmatic V6; stubborn transmission) and 16 MPG when everything was said and done. My father in law (died in wool American - Midwestern, ex Navy patriot) bought the Lacrosse (as his "last" car - he is over 80). The car is falling apart at 40K miles: steering pump failed, gasket leak (the car smells like gasoline), numerous interior trim failures, the car makes horrible noise under 30 mph. He has always bought American but is questioning his decision; he regrets not buying a Lexus (bought my mother in law a RX300 9 years ago and it's in perfect condition with 84,000 miles).

To GM credit, I did like the new Malibu but I still would not purchase one if I were in the market. I agree that the repercussions of a failed GM, Ford, Chrysler would have a huge impact on our economy but another part of me wishes for bankruptcy so that they can get away from the UAW obligations.

 

This is a case where bankruptcy is the best option. It allows companies to restructure and reorganize in such a way that they can again be profitable. This strategy has worked for the airlines so there is no reason it should not work for the auto industry. Both industries are similiar in size, at least domestically.

There is only one real reason why most Americans of stopped American cars in my opinion: Quality. The interior fit and finish, exterior aesthetics and quality, engine intergrity and performance, the list goes on and on. To complicate matters even more when you go to sell the car you get punched in the face again for you decison to buy American. A 2002 Chevrolet Camaro V-6 that probably cost at least $20k brand new is barely worth $5k now. The car is only six years old. My 2004 VW GTI was about $23k new and is still worth about $14k respectively.

No one wants to buy a car this is of poor quality compared to most other options and get hosed when they go to trade it in or sell it.

 

one more thing: the big three keep touting buy american. american cars built by americans. well....the japenese, korean, and german cars may not be owned by americans but they are in some cases built by americans in american factories. Toyota, Hyandai, BMW, Nissan...all have factories in the US.

Sometimes you have to learn things the hard way. The big three had an opportunity to make small cars after the oil embargo in the 70's. They had the technology to make fuel efficient cars before the japenese. Remember the EV1? They got greedy the did not innovate, they did not streamline their business operations, they got caught. We should not have to pay for their ignorance. File for Chapter 13, restructure, and work on getting leaner and better.

This is what happens when you dont pay attention to your competition.

 

The american people should give GM another chance and buy american. My bro has the 04 Pont GTO which is reliable. I guess because its made in Australia. But its still GM. You know most Hondas,Toyotas are built in the USA. Maybe GM should merge with one of them.

 

The Ford Fusion is actually a really awesome car. They're come a long ways in quality (Ford). Unfortunately, it's gonna take some time to overcome the poor image they've attained. Without $$ and a solid strategy to make money, time is not your friend. I'm torn about whether we should bail them out or not. Economically and politically, definitely no in my opinion. I'm all for the capitalistic view that if you work hard, it should pay off, and if you goof around or make mistakes, you pay the penalty.

Unfortunately, there is a huge negative on the social side. Do we really want 3 million American jobs to die out? And for Detroit (or the rest of MI) to become any more defaced?

So, I'm torn here.

 

+1. I think you summed it up on the Auto Industry in the US. They suck in many areas and should have stepped their game up years ago. A bail out would save millions of jobs and many businesses, but they need to re-work how they are developing vehicles.

Hyundai is kicking butt and taking names.

 

Forget the US auto industry's dependence on SUV's and trucks for profits or outdated business models or quality or the credit crunch....here is the heart of what's wrong with the Big 2.5:

From Autoweek:
Without immediate assistance, "Chrysler's liquidity could fall below the level necessary to sustain operations," he said. Such a scenario would mean Chrysler might not be able to meet its $20 billion annual health care obligation, its $2 billion annual pension contribution to retirees, $7 billion in current payables, $35 billion in future supplier business and the $6 billion in wages it pays 56,600 direct employees, Nardelli's testimony stated.

$20B (healthcare) + $2B (pension) + $7B (current payables) = $29B underwater before these guys get out of bed! Are you kidding me! Declare bankruptcy, let the courts restructure the healthcare / pension benefits to a more manageable number and come back stronger.

 

I just came back from a 2 1/2 week trek to Tanzania & Zanzibar.

Discounting the usual big Land Rover and Land Cruiser vehicles that are the staples of the safari tour co.'s, when it comes to passenger cars and non-commercial vehicles, I'd say that at least 95% of the total vehicles I saw in that category in the country were Japanese. I don't recall seeing a single GM or Ford vehicle there at all. While being driven to my hotel in Dar es Salaam, we fell in behind a vehicle from the American Embassy. It was a (consumer) Land Cruiser. Oh the irony.

It seems so simple to fix - the Big 3 should switch to making good, cheap (so a lot of the population can afford it) reliable small cars that get good gas mileage and that're easy to fix, and do this globally so that an ecosystem can spring up around it and ensure that people can get them fixed easily if they have problems.

But at the same time, discounting their world-wide presence for a moment, the US automakers are at the whims of the American consumer. If suddenly tomorrow GM and Ford and Chrysler sent reps to Tanzania and discovered the Japanese blanket coverage there and tried to emulate it, what if consumers back home won't buy them? What if, now that gas is down (to $2.65 for Premium out here in LA; undoubtedly less in other places, and obviously less than that for Regular) a bit, the usual American penchant for overconsumption kicks back in and they decide they want their guzzling SUVs and huge trucks again?

The Big 3 are like a lumbering beast, unable to turn on a dime and do the right thing for the environment and the economy, but it's the American buying public that are equally to blame. I don't have an answer to their ills - it seems like a classic Catch-22. I wish I did - for the sake of all my Detroit friends whose livelihoods are affected either directly or indirectly by the Auto Industry.

 

If you think it through, it is better to let them fail/bankrupt now and be consumed/sold off, the sooner the better. From an economic stand point the big three are no longer players. If you think it is bad now, a year from now will be much much worse.
The bail out is a band-aid on a cancer patient.

Here is a poll thread, please go and vote your conviction!

https://mbworld.org/forums/off-topic...ml#post3177466

 

On one hand I hate the idea of a bailout but on the other hand, no bailout could eventually lead to Ch. 7 which means no more pension for my father. My own father.

GM has been sucking hardcore for a long time, but I couldn't bear the pain of seeing them cease to exist.

 

Not even mentioning about improving their quality, but first,

all stupid employees should stop asking for their benefit! benefit! and benefit! they should start to work! instead of asking so many kinds of benefits!

By myself as an international business man, I see the biggest issue in American company is giving or asking too much benefits even though company isn't doing well. I bet the biggest expense on American automakers' is paying their labor + benefit; while Japanese automakers spend more money on research and development.

And why is their MSRP so high on American cars?? if they are going to give 30-40% discount on their vehicles, why don't they just start of with low MSRP?? Trying to rip off some stupid buyer?

I'm sure their company is running by many smart people.. but I don't understand why they are being so stupid!!