U.S. Moves to Overhaul Ailing Carmakers
 

WASHINGTON ? The White House on Sunday pushed out the chairman of General Motors and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid...

http://www.nytimes.com/2009/03/30/bu...o.html?_r=1&hp

I'm just reading the article so maybe I'll find some hints in there, but:

What would be the best approach to transform the US automotive industry? Are there alternatives?

How long can this take?

How much money will have to be spent to get this anywhere near black numbers?

How could nobody see for years a trend towards the total crash?

Can there be more mergers with other automakers? What can this bring?

How to deal with the trade unions?

Where to find necessary cost cuts?

How many jobs are we talking about?

I sure love the US cars, I wouldn't ever want you to EVER live in a country, where driving an economic shit car with an engine from mowing machine is considered cool.

Here's an interesting graph:

http://graphics8.nytimes.com/images/...uto-graf01.jpg

So what do you think?

Ah damn, I didn't notice there's a thread about this already, but I sure don't plan to post in anything related to "Splum".

But Splum is a political and economic genius. Why would you avoid his threads?
:1orglaugh:1orglaugh:1orglaugh

I think the car companies can again be profitable. They are victim of the down economy and their own success. They succeeded in convincing much of the public that they needed to go out and buy some big ass SUV that will never so much as see a dirt road much less offroad. And it worked. People went out in droves and bought them. For several years it seemed like there was a competition to see who could own the biggest SUV on the block. The car companies loved it because the profit margin on those beasts is huge.

The problem was these cars cost so much people were up to their eyes in dept trying pay for them. Then gas hit $5 a gallon and people really had trouble affording them. Follow that with the economic problems and now people are wondering what to do. People need cars. People want to buy new cars. Those that own the SUVs will trade them in, but right now people are starting to trend back towards the more affordable gas saving cars and the domestic automakers were/are lacking behind some of the foreign companies when it comes to that type of car.

I think if they can put together a line of cars that are of high quality and that people want to buy they can become profitable again. It isn't just the domestics that are hurting right now, most of the major car companies around the world are seeing their sales in a nose dive so part of fixing the auto industry problem is simply fixing the economy. People are not willing to go out and take on a $300, $400 or more a month car payment right now not knowing if they will have a job in 6 months. If the economy improves buyers will return and if the domestic companies can put together some appealing cars they can attract those buyers.

I totally believe so, the question of high profit margins never came to my mind, while cars in US (esp. US, Japanese cars) are usually much cheaper than here in Europe.

Exactly, well I still can't get used to the fact that ANY US car should be small / economic, I actually love US cars, the more valve and more horsepower the better, but the affordability factor is kicking in.

How should their portfolio look like?

For example:

30 pct. big ass cars / trucks / sports cars / limousines

40 pct. middle / working class cars

30 pct. economic cars?

Can those economic cars be produced in cooperation with other producers (say from Europe) that have (even too much) know how with this?

How about those electro cars, is it really a wise bet?

Would anyone in your neighbourhood ever consider buying an electro car?

I guess Volkswagen is about 20 pct. down or something, not a real difference in Europe, they're now subsiding, if you get rid of your old car and buy a new one.

Well I'm not a big fan of those super savy cars filled with electronics that's made in third world countries or Eastern Europe and where you can't replace a bulb without getting screwed by an "authorized" service provider.

I rather prefer older, reliable cars from one piece of metal - but that's what they're trying to avoid, they need to get people to buy new ones and bank on the service.

How is the used cars market these days?

Aren't all of these U.S. brands? I'm curious to see the profits of any Japanese auto-maker.

Well, it sure is an article related to the U.S. automakers.

:winkwink:

I doubt Japanese sales are much better though, but Japanese are masters of reducing costs / crisis management, so I would expect the overall effect of the drop in sales to be more moderate in their case.

Would be interesting to see stats though, would be interested to compare the costs of production, trends in who to, where and what do they sell the most, trends among their different consumer segments.

I don't remember the exact numbers but I saw a while back the amount of profit that the auto makers get from an SUV was about five times that of a smaller car so it is no wonder they wanted to figure out how to sell a ton of them.



I live in a very liberal/enviro conscious city so I know electric cars will sell here, but I'm not sure about nationwide. I personally think if they make an electric or hybrid style car that has a good range, decent power and looks nice they will sell them. They just have to convince the public that the range is not big deal. I talk to friends who will see that the range on an electric car is 200 miles and will say, "That isn't enough. I can't take it anywhere." I then ask, "How often do you drive more than 200 miles in a day?" To which they respond, "A couple of times a year." So I ask, "So you refuse to consider the car be it will only work perfect for you for 363 days a year, not 365? You can rent a car or own a second car that you take on those long trips."

What people don't get is that the electric car isn't meant as the be all end all. It is meant for people who commute every day and will own a second car that hauls the family and that they use on road trips. It is kind of like that little Smart Car. Same deal, if you commute it isn't a bad deal as a commuter car.

I think your market breakdown could be accurate, but maybe even less big cars. I remember back in the early and mid 80's when people bragged about how much gas mileage they got. Now it is just the opposite. Having a car that gets 9 miles to gallon is somehow cool now. Back when gas mileage was cool the US car makers had a good selection of small commuter cars and a nice selection of mid size cars that got pretty good mileage as well. They also had some big trucks and vans for those that wanted and could afford them. In addition they always had 1-2 sports cars. Now I drive by my local Ford dealer and it literally is about 70% trucks and SUVs and the rest is mid size cars. They might have a few smaller cars now than they did a year ago, but they are stuck with a huge inventory of $40K+ SUVs and trucks that they can't sell.

I think they got away from making cars that the average family could afford and find useful. It used to be that a middle class family had a commuter car and an mini van. They were both affordable and worked great. Then the SUV craze hit and they traded the mini van in for an SUV. They liked it so much they traded the commuter car in for a second SUV. A friend of mine (who has no kids) that was married did just that. He and his wife had a truck and commuter car. He has a take home car from work so he doesn't use his own car to commute, but she was going to school and drove about 30 miles one way to school 5-6 days a week. When they got her the SUV they were burning over $100 a week in gas. Before it was about $35-$40 a week. About 3 months into owning it gas shot up to $4.50 a gallon and they were going broke just paying for her gas. They ended up trading it back in for a smaller car again and taking a huge payment on the smaller car because they were upside down in the loan, but couldn't afford the gas.

People need to realize that you don't need a gas hot SUV to be cool.

I like the older cars too. My friends joke that as I get older my cars get older. When I was 18 I bought a brand new car. Since then I have regressed. About 5 years ago I had a 84 Jeep and now I have two cars. I have a small 96 Ford Escort that I drive about 90% of the time (although it is now dented up because we had a bad snow storm and my carport collapsed in on the car. The damage totaled the car, but I bought it back in salvage.) It runs great, it just has a couple of dents in it. I also own a 1967 mustang that sits in storage and only gets driven some during the summer. There is nothing like rolling the windows down, cranking up the radio and hitting the open road behind the wheel of a classic American sports car.

I think our local used car markets are kind of dead right now too. I used to almost never see commercials for used car lots and used car companies on TV. Now there are a bunch of them promising all kinds of different finance offers. Maybe they are hurting or maybe they are just trying to get buyers in who want/need a new car, but don't have the money or credit to get a brand new car.

Here is something that says that Japanese auto sales are at their lowest in 32 years

http://online.wsj.com/article/SB123789055391723961.html

From the article: "For the January-March quarter, Toyota, the world's biggest car maker by volume, plans to scale back production in Japan by 54%. Honda seeks to bring down domestic output by 38% and Nissan plans a 59% cut.

Honda cut its North American output 46% for the first two months of the year, while Toyota said its output outside of Japan for the same period fell 43%."

Not looking good for them either.

I think its a waste of money and time to let them go out of business.

Oh, and can someone please tell me what business model it is that allows you to lose BILLIONS a year, Still have Billions in Cash ON hand and still get a bonus.

I must have been sick that day from economics class.

I disagree. I think it is an industry worth trying to help. There are a ton of jobs that are directly related to the auto industry in this country. I wouldn't be shocked to see unemployment jump 5% if the auto industry went under. Plus cars are a tangible good and they are something that we actually export to help bring more outside money into the country.

It may not be worth doing if were are just going to sink billions into it and never get the industry profitable again, but I think it can turn a profit again and efforts should be made to help them.

be cool if the usa pushed the big 3 into making battery driven cars...or hydrogen etc

anything but oil...that would in itself probably stimulate a whole round of spending across multiple industries

That is an excellent question.

Chevy is supposedly working hard to move the electric Volt car into production next year. It isn't just an electric car, but for many that drive less than 40 miles a day it will never need gas. I think it will be a cool car.

GFY is now a blog.

The Chevrolet Volt is a joke given that it's starting at $40,000 and only travels 40 miles to a charge. No wonder they're in trouble!

Interesting observations.



That's not gonna happen, anyone who has a Euro to spare buys, leases gets somehow the SUV's here too, they're a HUGE trend.

I'm always going nuts when I see blonde bimbos who get their SUV from their older viagra filled sponsor, while they couldn't responsibly ride a bike in a kindergarten, slow poking around and trying to park those monster SUV's, devastating half of the parking lot.

Some of the cars I want to own:

1963 Chevrolet Corvette

1968 Mustang Fastback

1973 Ferrari 246 Dino GT

1973 Stutz Blackhawk

1978 Mercedes Benz SL450

Actually, I'm always buying me Hemmings Motor news whenever I am in States, and I always find some new model I never saw, and that just curses me, definitely one of the things I'll be spending money on if everything works out the way I plan.

DETROIT — The new chief executive of General Motors, Frederick A. Henderson, said Tuesday that bankruptcy was “more probable” than ever for the automaker but that he still hoped to successfully restructure the company out of court.

http://www.nytimes.com/2009/04/01/bu...o.html?_r=1&hp

bankruptcy is what will save the company:thumbsup

Mini-Vans are no longer cool.

I have to agree. I would hope people would see the light that they don't need one of those big cars, but when the economy is good again and things are better people seem to forget the bad times and they spend like crazy and buy cars they don't need and can barely afford. I think it is just human nature.

And here's another point not to be forgotten - the exports - all Right - US is a huge market with huge consumer spending, but where can you even export these cars?

I would guess only central / Latin America, or places with the same or lower gas prices as in US.

Like I would always drive a big ass 12 v in Panama, but very few will do that in Europe, where people are boring in general and mainly drive shit cars not to be different from their neighbors, so they can have a talk about how much did they saved on gas last week again, and about the great performance of their mowing machine.

thanks for sharing! its cool!

DETROIT — Sales of new vehicles fell dramatically in March, with the steepest declines expected to be reported by General Motors and Chrysler, the two automakers restructuring with the help of billions of dollars in loans from the federal government...

http://www.nytimes.com/2009/04/02/bu...s.html?_r=1&hp

The price is obviously a huge factor,

Do you get any tax cuts or something if you would get one of those electrocars outside of California?

Well 40k is impossible, I would rather buy me a used 20k muscle car and spend 20k on gas.

The problem is it is based on an older battery technology. Why they can't just load different batteries is beyond me.

Fix healthcare and get money flowing again. If people cant get a car loan, then no one is going to buy any car. And its time to fix healthcare, we cant compete in the global market when they dont have health care costs and we do. But with healthcare Im planning on them going timidly and fucking it up.

Healthcare is an intensely complex problem, although off topic, let me try to put something down.

Here's something very long that you might find interesting, and that I wrote to the only other board where I write, it's not a porn board, it's normal people there.
--------------
Let me try to be honest and describe what I know or what I expect.

I expect the US healthcare system to be (I never used it):

PLUSES:

+ luxury / greatly equipped facilities for the patients (do not confuse with quality)

+ much better wages for workers in health care, which should theoretically also improve the quality of their performance, their number and availability

+ shorter waiting times, more control over your treatment

+ much investment into research (this has another dark side as well as it obviously supports the drug marketing madness)

MINUSES:

- overpriced meds (about 10 - 15 times more expensive than here as I noticed)

- problematic approach of insurance companies that can cover just a part or even decline a treatment, not even insure you

- extreme lobby of the pharmaceutical and health insurance companies that are turning great profits

- massive marketing of the drugs in media (never seen anything like this apart from US) that pushes people solve problems they might not even have

Here's a short characterization of the, and I start to love the word already - "SOCIALIZED" health care system as I'm using it (well not that much, I was never hospitalized for example):


+/- mandatory insurance (you can always go private but you have to be insured) the standard plan is about $ 70 a month

+/- is the BILLION DOLLAR question to answer

PLUSES:

+ can't get the treatment denied, everything is covered including the most serious cases such as injuries or various long term diseases

+ meds are extremely affordable (unless you buy some overpriced placebo in a nice package)

+ the quality of specialists (surgeons etc.) is extremely good, I was thinking about the reason - here's my thesis:

It's a circle:

there is very few that would go private insured so the best specialists still have say 90 pct. of their work in the government subsided hospitals,

this works the other way too - why would you go private if you get the same service from the same person with regular cheap insurance?

(it's the only real part of the mentality of this country - to fuck with everything)

MINUSES:

- there are indeed longer waiting times with geronts in the waiting rooms coming for a chat to the doctor

- the quality of the underpaid personnel (I'm not talking about specialists) is not that bad, but it's going to decline, as far as there simply aren't money available and improving the effectiveness and organization is something absolutely unrealizable with the national mentality here

- there is a lot of overtimes with the specialists and they also, although they make a good living (say they have a mortgage and drive a little bit above average shitty economic car), are underpaid, unless they know someone rich, who will bribe them a little bit or something

- there are big differences among different cities - they get paid from the insurance company for the number of treatments provided, if they don't have clients they get less money and the quality of the staff lowers, therefore if you want a good treatment with something serious, you better hit some of the cities with medical universities and lot of patients

- the main insurance company with the majority on the market is grabbing everyone by the balls - the government and the hospitals - as far as they keep say 80 pct. of the patients and they hold the money

So how to find a compromise?

The problem isnt getting a loan to buy a car. The problem is HAVING to get a loan to buy a car.

my :2 cents:

fuck US automakers. All they know how to make are trucks for hicks in flyover country. They deserve everything thats coming to them. Its sad that "Roger & me" is a 20 year old flick but it may as well have been made today. Nothings changed. Let the US automakers die.

Fuck 'em & their elite faggots.

I would go with proven used cars, having a reliable mechanic, US would be a heaven to me.

Prices are great, it's just super expensive here in Europe.

I don't get who's even buying those overpriced new cars, apart from companies that can sink a lot of costs on tax deductions.

But yeah, it's also the sheep mentality - 60 - 70 pct. of sheep here drive more or less the same local model (Skoda / Volkswagen) economic turbodiesel (my god diesel belongs to trucks!) cars.

I bought my car from Germany, as it's cheaper, and Germans usually care about 99pct. more about the condition of their cars then the morons here, who are usually trying to sell you polished junk for ridiculous money.