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Car companies fucked?

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slimbruddah
Posts: 2611 - Karma: 25
It seems inevitable that the car industry is going to take massive hits in the new year.

So with this fact of people employed by the auto industry... "2008, including 82.6 million men and 71.9 million women"
-Source: Bureau of Labor Statistics (BLS)

So with consumers not buying auto product due to the fact no one wants to buy a new car right now, the auto industry will not make the ideal amount of profits for it to stay healthy.

With thus happening, budget cuts will have to be made which will result directly into laying people off.

Now as I recall the auto industry may be receiving a bailout. Now don't get me wrong, but does it not seem these "bailouts" are just throwing money into certain sects of the economy and creating "slow deaths" for companies? Yes they could try and revive an industry, but who do they know it will revive consumption of product for the industry?

It seems as if the "bailout" concept just digs a deeper hole creating more issue for resolution.

Now some will say, "well if people would just settle down and relax and not let fear run the market everything would be fine." Well, that isn't going to happen, clearly, that will now happen. Fear has already taken over, alongside with the fact numerous amounts of companies are going bankrupt and people are being layed off. Nevermind the fact that mass people already have been layed off.

There is a huge crisis in the USA right now. It is a country run by capitalistic consuming. The consuming is slowing down at an immense rate.

But two and two together?

Please discuss respectively. I don't want any pointless name calling, accusing and all that childish bullshit in my thread. YA HEARD?!
Dec 8 2008 4:37PM
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slimbruddah
Posts: 2611 - Karma: 25
**********************EDITED*****************************

(My bad for being a dumbass and not reading it over... sorry)







It seems inevitable that the car industry is going to take massive hits in the new year.

So with this fact of people employed by the auto industry... "2008, including 82.6 million men and 71.9 million women"
-Source: Bureau of Labor Statistics (BLS)

So with consumers not buying auto product due to the fact no one wants to buy a new car right now, the auto industry will not be making the ideal amount of profits for it to stay healthy.

With thus happening, budget cuts will have to be made which will result directly into laying people off.

Now as I recall the auto industry may be receiving a bailout. Now don't get me wrong, but does it not seem these "bailouts" are just throwing money into certain sects of the economy and creating "slow deaths" for companies? Yes they could try and revive an industry, but how do they know it will revive consumer consumption of product?

It seems as if the "bailout" concept just digs a deeper hole creating more issue, halting resolution.

Now some will say, "well if people would just settle down and relax and not let fear run the market everything would be fine." Well, clearly that cannot happen. Fear has already taken over, alongside with the fact numerous amounts of companies are going bankrupt and people are being layed off. Nevermind the fact that mass people already have been layed off.

There is a huge crisis in the USA right now. It is a country run by capitalistic consuming. The consuming is slowing down at an immense rate.

Put two and two together?

Dec 8 2008 4:50PM
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eastside
Posts: 1744 - Karma: 167
detroit  is just going to become more fucked up than it already is.
Dec 8 2008 4:53PM
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MacMahoooon
Posts: 9009 - Karma: 3,305
If unions would change their rediculous policies and flex with the reality of the industry things could be a little better. Apparently about $3,000 out of the cost of every north american vehicle goes to cover union expense and their inflated labour rates
Dec 8 2008 4:56PM
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49566738265
Posts: 0 - Karma: 7,704
Well of course it will.  With such a huge economic downturn, the last thing people want to do is rack up debt with a car loan.  The housing market sucks too, my parents wanted to sell the house this summer and it's probably not going to happen.  They don't want to lose thousands of dollars by selling in a shitty market.
Dec 8 2008 4:58PM
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ferrinski86
Posts: 774 - Karma: 10
Our economy has been slowing down for the past 2 years, however, people have just started to pay attention this last past couple of quarters. The government is at fault for alot of it, and we dont have to go into that.

to comment on your thread, i believe (and we all know) that congress will pass this legislation to bail out the auto industry. right now they are working on to pass a 15 Billion dollar bailout (and its not a bailout, its a loan that will have to be repaid by feb of next year i believe as stated by Peloski a couple of minutes ago in here speech to the nation) for the industry. the news is reporting like what?..... 35 billion or some figure, but the actual figure is $15 billion because the president said he will veto anything else.

I personally do not want this bailout but i believe it will happen very soon. these are very interesting times and it will be fun to see what happens.
Dec 8 2008 4:58PM
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Ryno
Posts: 31125 - Karma: 336
The unions got too much power and they fucked themselves in the long run.

Shoulda seen it coming...
Dec 8 2008 4:59PM
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slimbruddah
Posts: 2611 - Karma: 25
It almost seems it has come to the point of reaching a negative domino effect.
Dec 8 2008 5:15PM
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skiminnesota
Posts: 9093 - Karma: 429
let them go into bankruptcy. that is what needs to happen to a failing business. let them re organize under new management, and they can emerge as a newer, fiercer competitive auto industry. o and there will be blood spilled by all i realize that, but the way i see it we need to hit the bottom before we can start going up.

what is so bad about bankruptcy? its where a business that has failed belongs... take the airlines for example. they FAILED. people lost jobs, people took pay cuts. my own dad took about a 40% pay cut between actually pay cuts and increase in health care costs. but you know what? years now down the road his company is GROWING! growing at a rate that is allowing him to fly new airplanes, get a substantial pay RAISE and they are highering more and more people.

where did this idea in America come from that we can privatize profits and socialize losses?


o and they should send a big "fuck off" to the UAW. because the big 3 have HUGE legacy costs associated with their names in comparison to the likes of Toyota and Honda. like it or not the world is changing and you probably WON'T be able to retire with health care for life and pension plans. but thats assuming that Americans actually have half a brain when it comes to planning out how they spend their money and actually will have enough of it at retirement.

/rant.
Dec 8 2008 5:16PM
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4frnt_or_die
Posts: 780 - Karma: 3
Pretty much all european / japanese car manufacturers all have increasing sales numbers...



Dec 8 2008 6:05PM
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720skiguy
Posts: 4553 - Karma: 21
not at all
Dec 8 2008 6:57PM
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seeingstars
Posts: 422 - Karma: 14
Wait, hold on, $40 an hour plus $40 an hour in benefits is too much money for a manufacturing job?

And you mean to say that it's stupid to pay people to sit in a room all day?

news to my ears....
Dec 8 2008 7:03PM
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skiminnesota
Posts: 9093 - Karma: 429
its definitely a pretty dam good living. not rich, but FAR from the soup lines.

all before taxes. 40 hours a week at 40 dollars and hour. 1,600 a week. multiplied by 52. 83k a year.

now DOUBLE, that, so 166k a year. yeah ide call that high to be working on the assembly line. but im no one to judge, if the market will bear that sort of cost. then thats awesome for those people! but we as a nation are finding out that  number is to high.
Dec 8 2008 7:19PM
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skiminnesota
Posts: 9093 - Karma: 429
http://www.wftv.com/news/17945476/detail.html#-


lol drew im sure this one has you all worked up ;)  but GM is working on overtime to pump out the SUvs..

haha i dont know about you but in my rich white suburban area i have seen more and more of the Tahoes, suburbans, caddies, ect. they are a nice looking ride too IMO.
Dec 8 2008 8:23PM
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FUUUCK
Posts: 18426 - Karma: 4,888
$2,500 goes toward health insurance in american factories
Dec 8 2008 9:12PM
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seeingstars
Posts: 422 - Karma: 14
so let me get this straight

1) You want progress (in your eyes better fuel efficiency, better for the environment)
2) You want automakers to do this regardless of what people want
3) You expect that automakers will make decisions without considering profit (only progress, again: in your eyes better fuel efficiency, better for the environment)

I realize that you have routinely failed to recognize that we live in a capitalist society but I feel that I must point it out once again.

I am in no way defending the automakers- for years they have been making the wrong cars, with the wrong technology and the wrong engines, and with the wrong workers.

However, you must concede that they made decisions based on what they though (albeit with extremely poor judgement) would make them the most money. In the past SUVs were flying off the lot. If they had made hybrids, however, it could have been even worse.

Even if GM was paid off by what the left likes to call "Big Oil" to abandon the electric car, it was still the right decision to make because they deemed that it was the most profitable. That's what happens in a capitalist society- people do what's most profitable. It's ok if you don't like that but that's just the way it is.

Asking a company for progress that doesn't come naturally (i.e. it isn't driven by the incentives of higher profits) is called communism.
Dec 8 2008 9:59PM
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rhcp
Posts: 2598 - Karma: 18
Are you sure that's not the entire participating labor force in the US?  No way in hell do the car companies employ that many people.


This is the real reason detroit is not sustainable in its current form:

Click for larger image

(source: econ professor Mark Perry)

The only way detroit can fix itself is if it can get rid of some brand names, dealerships (appx. 5000 to Toyota's and Honda's appx. 1000), employees, and most of all pensions.  The only way this can happen is if detroit goes into bankruptcy protection. 







Dec 8 2008 11:24PM
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4frnt_4_life
Posts: 183 - Karma: 10
if we were to help them in any way it would be to create favorable laws and regulations for the american companies such as raising taxes on imported cars so american made would just be cheaper then the rest
Dec 8 2008 11:48PM
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rhcp
Posts: 2598 - Karma: 18
Actually, that won't really work.  By creating tariffs on imported cars we will just further hurt the exportation of our own.  Retaliatory tariffs are a bitch (especially when we have an inferior product).
Dec 9 2008 8:37AM
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A.R.
Posts: 1111 - Karma: 11

i kinda figured when GM dropped tiger woods to save a measly 7 million a year, something was going very wrong.

and now The Oshawa Plant in Ontario is getting shut down. say good bye to 2000 jobs

Dec 9 2008 9:26AM
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seeingstars
Posts: 422 - Karma: 14
now what size company is going to buy that plan when it's all said and done?

probably one needing about 2000 jobs


Dec 9 2008 9:57AM
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fappy
Posts: 2960 - Karma: 15
word.  there are some policies where workers cant even empty full trashcans because they would be violating contract as there are exact duties assigned.  fucking ridiculous
Dec 9 2008 10:01AM
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mrbombsquad
Posts: 35 - Karma: 13
i know... its bullshit... i dont get it though. chevy has not only the plans but the production models already produced of fully gas-independent hydrogen powerd cars, that have been tested in the real world and work just as good if not bettter than normal cars... and all that they emit is a few drops of water. the ONLY and i mean only problem was there was not enough gas stations offering compressed hydrogen... however, that could be easily changed without a doubt... so chevy, what are you waiting for?
Dec 9 2008 10:12AM
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user098123
Posts: 6072 - Karma: 18
You do realize the implications of compressed Hydrogen gas right? Cause if you think it is really that simple then you have no idea.

I'm ok with Hydrogen fuel cells because they use a small amount of Hydrogen gas to create electricity and run an electric motor. However, cars running compressed hydrogen tanks and gas stations all over with compressed hydrogen tanks for fillup is a very bad idea. If you were to ever get into an accident you would be completely fucked, not to mention if any other problems ever occurred with the car in your garage, or people messing with regulators, or with uneducated gas station tenants trying to refill H2 tanks...
Dec 9 2008 10:25AM
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slimbruddah
Posts: 2611 - Karma: 25
yea, that number seemed high... well I think we can all agree there still is a lot of people employed by the auto industry.
Dec 9 2008 11:19AM
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C.R.E.A.M
Posts: 2988 - Karma: 4,581
maybe its time for these people who have been in union protected jobs to finally have to go and find new jobs, be innovative, and be clever. Im not saying in any way that it is bad for these people to loose there jobs, thats unfortunate, but they didnt have any motivation really because they were protected by unions. It is a tendency for union workers to worry less about employment and in turn not work as hard.

and for the auto industry, i think it would be good for the whole thing to be overhauled. the Toyota prius has dominated the hybrid market (which i believe to be a fad, im sorry, wont even discuss in thread) in our own country for the last 5 years? not one American car company has yet to release a car with similar gas efficiency, im sorry but that is a market we should have won in our own country with our high gas prices.

my 2 cents

ur thoughts?
Dec 9 2008 1:52PM
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clrumivier4life
Posts: 2429 - Karma: 9
The problem with American companies not making these innovative products is the costs associated with retooling factories. They clearly made poor decisions regarding SUV's and shitty cars, but they're turning those bad decisions around.

Part of the stipulation of recieving a bailout, which is really just a low interest loan, is that they have to have solid plans in place to return to profitability and stay competitive on a global scale. Without any kind of plan, congress isn't going to do shit. All 3 companies submitted plans to congress last week and had to face the committee again and something they all agreed on was that the government should have strict regulations on the company to prevent more poor decisions.

As far as the amount goes, they were asking for 34 billion, but they agreed that they don't need 34 billion at once. The idea is to give them 15 to start, and then sometime in february or march, see what progress they have made and see what further needs to be done.

I'm fully for the bailout, but with a watching eye to guarantee that the funds are being used correctly. Too many people depend on the auto industry to just let it die. [/rant]
Dec 9 2008 3:33PM
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4frnt_4_life
Posts: 183 - Karma: 10
almost no one in europe drives american made
Dec 9 2008 7:13PM
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seeingstars
Posts: 422 - Karma: 14
right that explains the sucess of the ford mondeo
Dec 9 2008 7:15PM
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DrStrangelove
Posts: 1948 - Karma: 3
hopefully theyre just fucked enough that i can get a new car over christmas for like 40% off, then for all i care they can crash and burn for the next 4 or 5 years

im def not buying a GM or anything though, i want my warranty to be worth something...
Dec 9 2008 7:32PM
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funk.
Posts: 2679 - Karma: 33
a little statistic for everyone:

if Ford, GM, and Chrysler go under one in ten people in the United States lose their jobs.

I agree that they fucked up, and should start again, anew, but I care about the 100's of millions of people who will lose their job because they decided to work for the auto industry..
Dec 9 2008 7:44PM
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Funnel
Posts: 7816 - Karma: 1,534
Yeah, ridiculous amount of money.  Someone who lives in my neighborhood owns a Honda dealership and he toured the Honda factory and the GM factory and he saw a huge difference.  People in the Honda factory were all focused on their work whereas the GM people would just be like :Hey what's Up?  How you been?"  wouldn't even stay focused, they would just start conversations.

I think they need to go bankrupt and work their way back up with a new management who understands what middle class is like.  Not the managers now who don't understand they could fly first class instead of on a private jet.  New management, tell the union to fuck off, and start making quality cars, that are focused towards less emissions.
Dec 9 2008 7:48PM
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Rajna
Posts: 3824 - Karma: 90
The whole situation is fucked.
Being here intside Detroit suburbs gives you a really shitty feeling because almost everyone is employed by the auto industry. A bankruptcy of the big three would continue to fuck over Michigan which has the highest unemployment rate in the country. Luckily, my parents aren't involved with the auto industry but still about 80% of all my family and friends have been able to avoid lay off and still employed by one of the big three. The effects here would be insane, all the local business consists of suppliers and other things involved in the business. But honestly i can completely understand why people are against it but it sucks having such a direct effect of it. Bankrupcty isn't gonna do much for the big three considering who the fuck would buy a car that you can't even lease from a company that is facing bankruptcy and the possibilty of all parts and warrenty dissapearing. Detroit couldn't get any worse either, so many lots have been abandoned that some areas are turning back into forest's and aren't seeing any devolpment.
Dec 9 2008 7:51PM
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Rajna
Posts: 3824 - Karma: 90
but on a good note the ski season has started and my mountain has a ton of snow and already shaped some cool features.
Dec 9 2008 7:54PM
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skiminnesota
Posts: 9093 - Karma: 429
please try and make your numbers congruent. because they dont match.

100s of millions of people? yeah right. there are only 300 million people in this whole country. so by your numbers 1 in 3 people in America would be working for the big 3, GM, Ford, Chrysler..
Dec 9 2008 8:01PM
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720skiguy
Posts: 4553 - Karma: 21
here's an idea.  bailing these companies isn't going to do anything, it's not going to cause people to buy american cars.  these companies need sales to remain profitable.

how about instead of giving them loans that they will just throw down the shitter, spend the loan money on tax cuts to consumers that buy an american car...?  the amount would obviously need to be enough to sway people to buy american, but it seems to me this would be a better way to go about solving the problem.
Dec 9 2008 9:31PM
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slimbruddah
Posts: 2611 - Karma: 25
So what I'm understanding out of this is...

The government is loaning the car companies money. This money will be used to continue production. For the loan to be a success there will need to be profits made to pay this government loan off.

For profits, sales of vehicles will have to be made. As of right now we are in a world with a sketchy economy, housing prices are down everywhere, citizens can't get their retirement money.

No one wants to spend money. Cars are last on their list. Living is first. I.E. - Buying food paying taxes?

I see no way how this "bailout" will have any positive impact? It makes no logical sense!

If one of you seem to see some logic in this "bailout" plan, please explain it to me. I haven't found it.
Dec 9 2008 9:58PM
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seeingstars
Posts: 422 - Karma: 14
they don't need a bailout they need bankruptcy with a congressional provision for getting out of their contracts with the UAW

people are using more of their money to save now, that's why spending is down
Dec 9 2008 10:01PM
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slimbruddah
Posts: 2611 - Karma: 25
And if you look further down the road, for example, saying this bailout doesn't have any positive impact.

There goes $15,000,000,000 down the tube, of tax payers money.

What's next?
Dec 9 2008 10:05PM
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slimbruddah
Posts: 2611 - Karma: 25
What's UWA? And I'm gunna search up what a congressional provision is right now...

And why doesn't the government let this bankruptcy happen if it's for the better?
Dec 9 2008 10:09PM
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slimbruddah
Posts: 2611 - Karma: 25
I can't find out what it is... please explain.
Dec 9 2008 10:13PM
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seeingstars
Posts: 422 - Karma: 14
well the UAW is united auto workers- a union

they have a contract that makes it so they get paid way too much money

they need to be paid less money so that the big 3 can make more money on cars they sell

they also should probably just be dropped from working for the big 3

they can't be dropped because that's part of their contract

if they went into bankruptcy they would have time to reorganize and come back stronger

congress has to pass a law allowing the big 3 to go against their contractual agreements with the UAW and fire them (they would probably hire all these workers back- only at a lower wage)

Dec 9 2008 10:20PM
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slimbruddah
Posts: 2611 - Karma: 25
Ah I see. Thanks.
Dec 10 2008 2:50AM
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ax_murderer
Posts: 3322 - Karma: 30
word,

but in their defense they are getting their clocked cleaned by requirements of the government to have an average mpg in each 'fleet' of cars produced. cars like that actually cost the companies money but they need them to balance out their higher mpg, and more popular and profitable. until widespread public opinion shows an interest in higher mpg cars, it doesnt seem likely to change.

then there is just ridiculous unions, and a regulation that says if any of the three move a percentage of their productions overseas to escape crazy union wages, they have to fork it over t the government.

but agreed, they're just in a whole world of pain, let them go down,
Dec 10 2008 3:20AM
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seeingstars
Posts: 422 - Karma: 14
first off- I don't think we agree on much- and I'll put that out there- but, I do respect you trying to answer in a civilized fashion- and I hope you can credit me with that as well

I wasn't trying to put words in your mouth, I was trying to explain why your argument made absolutely no sense in the context of a capitalist society.

couple things

1) I told you it was fine if you didn't agree with capitalism
2) I agree that there should be no bailout for the big 3
3) I agree with survival of the fittest
4) I agree that car companies made wrong decisions because they failed to sell fuel efficient cars- to some extent - it had more to do with the fact that their cars are less reliable and their labor costs are higher- remember- the bulk of toyota's sales are not the prius
5) To assume that every consumer decision is made by advertisers is bullshit- before buying our Tahoe my parents made a very conscious decision and weighed the pros and cons heavily- we used to have a 28 mpg audi- We needed an all-wheel drive car for the snow with a lot of storage space and plenty of room in the 2nd and 3rd row seats- we got a great deal- it had nothing to do with advertising

you said "next you should work on communism though, because you just butchered the shit out of that one..."

you show me a communist economy that has produced revolutionary drugs that are helping save people in impoverished countries, that doesn't have a high level of poverty, that doesn't have corrupt leadership, that innovates, that cares for the environment, that people flock to because there is a better life there, and I promise you I'll take a serious look at it. Until then, I'm not wasting my time. And if such a country exists- why aren't you living there.

Also- please stop making remarks about how i am this "stupid little kid without any knowledge about how the world works that you take me to be" It's not true. Plus- I used be extremely liberal- I understand where you're coming from, I just disagree with you, that's all.


Dec 11 2008 11:41PM
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rhcp
Posts: 2598 - Karma: 18
Excellent, Drew.

Everyone, I think we've found our new auto industry expert!!!
Dec 12 2008 1:04AM
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Nicholas.
Posts: 10905 - Karma: 60
God I'm sorry but when i think "annoying, condescending, assuming, "all-knowing", liberal, douche" i think of the name drew.
Dec 12 2008 1:09AM
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slimbruddah
Posts: 2611 - Karma: 25
Flaming ALERT!!!


Anyways... I'm thinking the answer to the question of this thread has been answered today...
Dec 12 2008 1:16AM
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Flo_Rida_2016
Posts: 2804 - Karma: -5
its completely the UAW's fault. its absolutely absurd how much UAW employees get paid.

absolutely absurd.

they get paid 75/hour including benefits and wages. whats more is that gm, chrysler, and ford, or any other domestic auto producer, isnt allowed to just arbitrarily fire them. they must employ the UAW and its so fucking dumb. Toyota and honda pay their employees only 30-40/hour and theyre turning a profit.

Also, if a factory is idled the workers get 95% of their wages for doing nothing! Factories get idled for months a time in the auto industry, and these workers still must be paid! What the fuck is that?! Has the US completely turned away from capitalism!? FUCK YOU UAW, its the nature of the beast. you shouldnt get money for when youre not working.

Its not a coincidence that GM is THE leading auto producer in russia and china, the two fastest growing markets in the auto industry.

ron gettlefinger should be sub poena'ed by congress and under go committe invesitgation. FUCK UNIONS. FUCK BLUE COLLAR WORKERS. GO TO SCHOOL, GET A MOTHERFUCKING GOOD JOB AND QUIT UNDERCUTTING OUR, NAY, THE WORLD'S ECONOMY.

If you're not going to go to school then fucking quit whining and work for 30-40 hours an hour.

I know ppl on this forum like Drew. don't believe in hereditary inheritance; he's spoken out aagainst rich people who can send their children to good schools because they have money.

Well drew youre missing a massive point: at the least those "rich kids" still have to work hard to achieve grades to get into good schools.

These motherfuckers working in unions get automatic membership based on next of kin. which is absurd. here is a much more direct example of hereditary inheritance. All you democrats, you want to outlet your rage because of your own shortcomings on someone? turn to the motherucking UAW.
Dec 12 2008 2:19AM
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Flo_Rida_2016
Posts: 2804 - Karma: -5
The auto industry is most like agriculture, not commodities, not electronics, and especially not like the housing industry! That is, the auto industry is one that supports millions of jobs while producing a necessary product. The firms operating the industry often fail to turn a profit, however, due to a low profit  margin to begin with, strict, sometimes impossible (democratic)  regulatory measures on many fronts and diseconomies of scale. Their massive size is necessary however, to provide many products where demand is high.


This has nothing to do with loans, predatory lending, adjustable rate mortgages, blah blah blah.

It has to do with how firms this big suffer from diseconomies of scale and must employ UAW workers while meeting stringent EPA regulations while balancing designed obsletism with coutneracting the publics perception that american car quality sucks.

Heres how it works (lets use GM as an example)
GM is massive with too many brands all competeing intrafirm for R&D investment and labor and monetary capital.

Each of those brands must also invest a lot of money into R&D not to just improve their cars, but also to meet the increasing EPA regulations set forth until like 2024 or something like that. That means every year theyve got to redesign a lot of components which means replacing tons of machinery and tons of prototyping which is mad expensive.

At the same time they have to pay the factory workers, the UAW about twice as much as what their competitors are paying, not to mention they must pay them 95% of wages during idle periods.

At the same time, they need to invest in marketing so the public doesnt associate american automobiles with crap. The only real way to do that is by actually making their cars better and earning like JD awards for best initial quality etc.

But then theres the other side: if you make your cars last for too long, then your customers won't be coming back to you often enough to buy new cars to generate revenue. That revenue is desperately needed to supply the cost of R&D to meet EPA regulations as well as to pay those fucking UAW douche bags. Its a huge problem because a very large protion of GM's customers are return customers. Its common in business to design intentional obseletism into their products but GM can't as fast as they want to because they have to boost quality to instill consumer confidence.

Its a terrible vicious cycle that is being magnifyed highly by the lack of consumerism in this current economy.

Dec 12 2008 2:22AM
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Flo_Rida_2016
Posts: 2804 - Karma: -5
bahahaha drew the business expert! bahahaha

jk i love you ;-)


ps to the thread creator, learn to speak english and go watch half an hour of cnbc before you post.
Dec 12 2008 2:25AM
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