Skip to comments.The REAL problem with bailing out US automakers - Just my opinion
Posted on 12/13/2008 9:54:01 AM PST by texan75010
Is it just me or are there others out there that agree. The real problem with bailing out the big three automakers is that they make a poor quality product for the price. Why on earth would you not let nature take its course and allow the sick and dying to pass on. I am 44 years old and as long as I can remember, Toyota and Honda make a better quality vehicle for the price. I have owned Fords, Chevys and Chrysler autos and they suck compared to Honda and Toyota.
Let these inferior products leave the marketplace and replace them with some quality products. I dont really care if they are unionized or not. Just make something that isnt crap. Toyotas and Hondas cost more that US cars because they make a better product so really, they are not in direct competition with each other. To me, it's like buying something made of cotton or fine wool versus a poly blend that melts in the dryer.
Why would anyone want to put money in to propping up these losers? Lets use the money to build some new auto makers and put some quality back in to the products built.
Bottom line is, it wont matter how much money you put in to a business that sells a product no one wants...in the end, you need someone to buy it. Only the poor saps that cant afford a foreign car are going to be stuck with a US auto....and right now, they are getting qualified for loans.
Let them die a quick and painless death and invest in something new. It's much easier to give birth than to raise the dead.
File Chapter 11. Reorganize and become profitable or die. Another business will fill the void.
The REAL problem is rewarding the ineptitude of the companies who continue to make decisions, and to reward the unions for their strong arm, self serving tactics over the decades.
“they make a poor quality product for the price.”
Ford makes a quality product, made even better by the price. The problem with Ford is not that they don’t produce cars that people want. The problem with Ford is that they make a loss on every car they sell, even though it is a good quality car, and the reason they lose money is that their labor costs are so high compared to the foreign producers.
Taxpayers would be bailing out the auto workers’ union. The unions collect all the dues, and where does the money go? No one buys stocks in a union. No one receives dividends for all the union money collected. Where does all the union money go?
“Where does all the union money go?”
Union bosses and politicians.
Nope, the real problem with bailing out "the big three" is it is a big slap in the face of the freedom to prosper AND to fail.
Freedom is leaving us and not a soul sees it happening.
I’ve heard the entire gamut of excuses for why they should be bailed out:
1. These companies are American icons (really? failed companies are icons of America? I guess they WILL be if we bail them out.)
2. These companies (GM in particular) are responsible for filling very important defense contracts, and if they fail, their defense-related divisions will be in “peril”, and all patriotic citizens waving tiny American flags will be in greater danger from nefarious evildoers.
3a. These companies directly employ millions of people, and indirectly yet more millions. Letting them fail would have a ripple effect in the economy, because the employees would consume less from other economic sectors and the government would take in less tax money (see “fallacy of the broken window”, by Bastiat)
3b. Letting these companies fail would be “bad politics” because of the above millions of people dependent upon their corporate health (A nice, fuzzy kind of fascism).
4. It is the government’s fault for imposing socialism upon and demanding taxes from these companies. So the solution is to compensate with more socialism. I heard this a lot with the bank bailout too.
5. “I work at GM and want my pie.”
Toyota is losing money now, but not as much. Most of it is being lost in the US. Ford made a profit last quarter overseas, so the notion that they can’t compete with the foreign makes is absurd. Even GM is doing better overseas than it is here.
They CAN compete with the foreign makers on the foreign maker’s own turf, and still make a profit. It’s just that they can’t compete with them here at home, where they must contend with the UAW, while the foreign makers need not.
Which leads to a very interesting question.... Congress says they don’t have a plan. If I were the head of a US automaker, my plan would be to close all my US operations and move overseas, where it’s easier to make a profit. I wonder if that plan would satisfy the Democrat Congress?
I have not owned an “American made” auto in many years because they were inferior. My Honda sold for 2K with 250K miles, my Toyota has 103K and drives like new.
I do believe American companies have improved quite a but still have a ways to go. My son just bought a new Tahoe, 3 door handles broke when the temp got over 100.
The probelm is not the American worker, many “foreign” vehicles are made here in the U.S. The problem is unions which reward shoddy workmanship and management which signs the contracts, IMO.
The real problem is nationalization of industry. Why don’t people care to keep America a free country anymore, is beyond me.
I don’t think that “Detroit” makes an inferior product all things considered. At one time, yes, but not anymore. The problem that I see is that they are uncompetitive due to the wage/benefit/retirement overhang & are barely profitable when times are good. Their books bleed red whenever the economy is bad or just so-so.
They should just go Chapter 11 & reorganize without the UAW contract. It’s the only practical solution. The overall economy will not hit bottom until the Feds say ‘no’ to any further bailouts.
You’re missing the big picture. They pushing to keep FOREIGN plants open. It’s not about American workers at all. Ford wants to use bailout money to build plants in Brazil, apparently the first world doesn’t appeal anymore.
They’re traitors to take our tax money and do this.
If the UAW can get past this crisis they will organize the foreign automakers with their “card-check”. That’s another problem going forward.
The union is A problem but not THE problem.
The problem is gullible Americans forking over their hard earned wages government who’ll pass them out to the transnational corporations so that they never risk any of their own capital.
If they CAN'T compete, then they deserve to go under.
You are 44?
Born just when the Volkswagon uber alles crowd discovered Toyota and Datsun. No matter how many parts fell off (I had one) they still insisted that the cars were better built.
What they were was smaller and cheaper than the land tanks Detroit was building. Why land tanks? Because Ralph Nader was successful in literally crushing the US small car industry (yes, I still have a Falcon). It took years for anyone to admit that a small Toyota was just as likely to kill you as a small Pinto. (Corvairs were WAY too much fun but Americans were not ready for an exotic seeming engine in a domestic car and at a time when VW/Porsche had a lock on rear engines)
Also about that time the various government agencies decided that smog was bad (shocked!) and that any damn gizmo that pretended to reduce emissions was a good thing. NOX systems, air pumps, narrow tuning ranges, and general detuning of otherwise OK engines left us with performance akin to an ox cart. (I once drove a 1966 company car for six months thinking it was a weak 6, when it overheated on me I found a full size standard V8)
It didn't help that, even then, nobody built worse junk than Chrysler (OK, fast junk in the sixties) and that image tainted all US products. In their defense, Chrysler once built fine cars and the new ones are certainly designed for sales although I've never been inside one to assess the quality.
My first hand knowledge best covers Nissan (Datsun) and I can safely say the only ones I'd own myself would be the old 1600 and 2000 roadsters or a 240Z from the old days.
As their market share increased, Japanese (face it; we aren't talking about SAAB or BMW here) cars grew to the same scale as US cars shrank down to, Japanese trucks grew to the same scale, and Japanese SUV's took off because they didn't share the same emissions restrictions as did "highway" cars. (No, Chrysler did NOT kick off the minivan parade, nor was it Ford that put a pickup truck or SUV in every urbanite's garage)
About '74 DOT standardized vehicle controls in the Japanese image, acknowledging second or third place for domestic product and shutting the poor UK out of the market entirely (I also still have a '68 right shift Triumph despite having outgrown - aged - the hardtail).
I'm still driving an '89 Thunderbird and getting 20 to 22 MPG in mixed driving. Interestingly enough, I got 26 from my pre-smog '66 falcon 289 - with air conditoning - and we got the same 14 from a Nissan Maxima that we now see in an '04 Explorer.
I don't like the T-Bird use of velcro on panels or....well, actually, there isn't much to complain about beyond the DOT mandated bumpers.
With exceptions, Japanese cars are better because you think they're better.
Does GM need all those brand names? No.
Neither does Ford.
Chrysler has already dumped half of theirs and, best I can tell, they've rationalized the names they have left into specific niches.
Are unions capable of killing off an industry regardless of it's reputation?
Yes, and it helps when the government is on their side.
Is Detroit guilty of following the leader instead of leading the way?
Yes. I think they gave up sometime in the late seventies.
Cars should cost $2000-3000 like they used to, and they would if they didn't have all these 'improvements' like fuel injection, automatic transmission, and CD players.
They can compete overseas. They can’t compete here. But if the only way we can have an auto industry that is profitable is by allowing foreign auto companies do business here, then it’s Congress’s fault, not that of the auto companies.
Tell your son to buy a Ford next time. I’ve owned both GM and Ford. Ford is a lot better than GM.
This is a G-d given opportunity to end the UAW. The government should give the bailout money only on the condition that the UAW no longer represents any auto workers. Get rid of the UAW and US auto makers can be competitive again. Get rid of all unions and America can become competitive again.
Tell your son to buy a Ford next time. Ive owned both GM and Ford. Ford is a lot better than GM.
Remember the comercials where Ford said they had improved quality 81%? That was in the early 80’s. My dad had a 1980 Mustang and even if quality had been improved 81% it still would have been a POS. I know they are better now, but those experiences are hard to get over.
I’ve owned Fords. I’ve owned Toyotas. These days, the quality is not all that different. The reason Ford has a huge loss and Toyota has only a small one is that Toyota pays about 1/2 what Ford does for labor. It’s as simple as that.
I agree on the second part. On the first part I’m still not convinced, but even if true, it’s hard to get back customers which were burned in the past.
“its hard to get back customers which were burned in the past.”
That is true, but it is very doable to fix their problems if you can get their labor costs down to competitive levels. Keep in mind that despite the constant dribble about GM producing cars that people don’t want to buy, the fact is that GM sells more vehicles than any other car company in the world. The issue is not so much getting sales as it is getting costs down to a level where they can make a profit at their current level of sales.
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