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post #1 of 61 (permalink) Old 12-03-2008, 10:59 AM Thread Starter
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Ed Wallace Asks: Can America Survive Without Detroit..

I think most of you know I'm a fan of Ed's Columns. Some of you are too.

Today's column in BusinessWeek focuses on the Detroit bailout. He is obviously for it, but I think he does a good job of thoughtfully arguing the case for the bailout. Its a good read...

I have bolded some of his points..

http://www.businessweek.com/lifestyl...n_id=rss_daily

Quote:
Can America Survive Without Detroit?
Columnist Ed Wallace argues that letting Detroit fail would cripple not only America's economy but also its psyche

By Ed Wallace

America thinks it's debating the logic of bailing out Detroit, but what we are actually talking about is the future of American manufacturing.

In the current financial mess, General Motors (GM), Ford Motor (F), and Chrysler find themselves unable to sell enough cars to survive into a potentially brighter future. Judging by what's being said in the press, in Congress, and by some of the most respected names in American business, the nation's response so far is a big "who cares?" I hate to point out distressing realities, but we ought to care. And yet, as is true of most of these national crises that seem to be cropping up far more often than they should be, the reporting and explaining of Detroit's jam seem to demonstrate both a profound disregard for facts and little understanding of the interconnected macroeconomics that empower or destroy our civilized world.

Let me ask you two questions:

1. Do you believe we should lend Detroit $50 billion to save itself from this economic turmoil?

2. Do you believe that we should lend the American economy $50 billion to save it for you and your children?

Not incidentally, those two questions might actually be the same.

Comparing Apples to Squid

Some heavy hitters in business and politics have weighed in recently on whether or not Detroit should be helped through this critical period. Jack and Suzy Welch were given column space in BusinessWeek , and the argument they laid out was both intelligent and thoughtful. Still, the Welches judge that Detroit's companies would be best served by reorganizing in federal bankruptcy courts, one day to emerge as lean, mean fighting machines. They say this would be the only way to "galvanize real change."

The Welches point out that many Americans fly on bankrupt airlines without giving it a second thought. To their point of logic, a Detroit bankruptcy would not harm consumer demand for their products and wouldn't lead to sales falling faster than the companies could be downsized.

But there is a huge difference between buying a $300 ticket on a bankrupt airline and signing a five- or six-year note on a new car for $25,000. If the bankrupt airline is flying that day, you can be fairly sure you'll reach your destination—as has in fact been the case with carriers such as Delta Air Lines (DAL), United Airlines (UAUA), and others while they were in bankruptcy. But not knowing whether a major repair would be possible, or covered, on an automobile years in the future would certainly send most potential buyers looking elsewhere for their next ride.


Detroit has it right: If its automakers declare bankruptcy, the likelihood of their emerging as viable businesses is near zero. Their sales will fall faster than they can reorganize.

Look for the Hand

A more vocal critic of Detroit has turned out to be failed Presidential candidate Mitt Romney. The former businessman has strong ties to Detroit, being the son of former Michigan Governor and American Motors Chairman George W. Romney, but his opinion piece in The New York Times on Nov. 19 was so factually challenged that you almost couldn't read it without feeling sorry for him. Romney talks of "insurmountable labor and retiree burdens, technology atrophy and product inferiority." Of course, setting aside money for the retirees' benefit packages should have been taken care of years ago, but apparently he missed the fact that a new contract was drawn up with the United Auto Workers last year that allows new hires in many positions to be paid as little as $14 an hour.

The significance of that was lost on most, but for the first time since World War I we will have people building automobiles in America who won't be able to afford the vehicles they build. Somehow we are led to believe that's real progress.

Romney goes on to discuss how Detroit's labor costs keep it from matching Japanese quality and automotive value one-on-one, comparing a Ford Taurus with a Toyota Avalon. Discussing the labor cost burden for Ford, Romney speculates that there is a $2,000 cost disadvantage for Ford. He says this lets Toyota (TM) add $2,000 worth of quality and features to its Avalon, making it the far more appealing purchase and the better value. Again, there's a fundamental flaw in his premise that five minutes' research could have corrected: In spite of the $2,000 "labor burden" he mentions on the Taurus, its list price is still $3,720 less than the Avalon's.

Using his logic, it's Ford that could add that unknown extra $2,000 worth of features and quality to the Taurus and still sell it for $1,720 less than the Avalon. Both get 28 miles to the gallon on the highway; the Avalon gets 1 mpg more in city driving.

One other important thing: So far this year, 46,167 Tauruses have been sold, down 20.2% from a year ago, while Toyota has sold 37,852 of the Avalon—down 37.9%. So, if he really understood what he was saying, Romney's position should have been: Why is the Avalon not selling better?

He also asserts: "[Detroit] management as is must go. New faces should be recruited from unrelated industries." Great idea, Mitt. Let's pick two of the best-known and most respected American corporations from which to pull the new leaders for Detroit. Say, Boeing (BA) and General Electric (GE)? While you were out campaigning, Ford and Chrysler already did that.

Imagine No Amber Waves

The media make much of the fact that Detroit's dealerships so greatly outnumber Toyota's. This extremely inefficient distribution chain, they say, weakens the average dealer, which in turn damages Detroit. To some degree that may be true, but what the media fail to take into account is how urban-centric that argument is.

One of the key reasons the Big Three have so many dealerships is that they have outlets in cities where Nissan (NSANY), Honda (HMC), or Toyota can't claim any type of business. Detroit's trucks may be taking a pounding right now in the press, but let Detroit go away and see what happens to American agribusiness.

That's right: Detroit has a strong presence across the Great American Midwest. In states like Kansas you will find GM dealers in no fewer than 54 counties, while Toyota dealerships can be found in only eight. The reality is that after a few planting seasons, given reasonable crop prices on the commodities market, one day sales of new pickup trucks will again make more money for Detroit than all of the Chevy Volts they may or may not make.

And are you really suggesting that American farmers be given the choice of Tundras or Titans in the future? What a wonderful parting gift for Japan.

One would think the media might be a bit more sympathetic to this crisis, given how many of that industry's jobs hinge on the outcome. After all, there are years when total automotive advertising can reach upwards of $15 billion annually. But not this year; and already we are seeing jobs melting away in the media—from radio stations to TV and with print publications—because of this automotive downturn. Let Detroit go away, and you're talking about a decade-long drought for the Fourth Estate.

Not to mention the impact it would have on professional sports. GM has already pulled sponsorships at some Nascar tracks and dropped the Super Bowl. In Dallas, Cowboys owner Jerry Jones is finishing up a $1 billion stadium; the almost $5 million he receives annually to make the Ford F-Series the official truck of the Dallas Cowboys could be critical income lost.

Why We Must Care

Additionally, if Detroit fails, the impact on the American psyche in tough economic times could be devastating. Letting Detroit fail will cost us far more than saving it—and the collateral damage will be far worse than anyone has yet imagined. If we are in the last days of Detroit, we will pay for it anyhow—with no chance of getting any of our money, or any of America's pride, back.

Detroit's pensions will go under the government-backed Pension Benefit Guaranty Corp., which will in time overwhelm that agency. Retired auto workers' health care will become a huge drain on our Medicare system, further straining its meager resources, while Detroit's displaced workers will start collecting unemployment. We will lose the income tax revenue from their workers, not to mention the tax revenue from their suppliers' workers, and so on down the line as they all become unemployed. And they won't have much if anything besides food stamps to spend, so there goes all that sales tax and interest income, too.

Cutting Off Our Nose to Spite Our Face

Let me make something perfectly clear: Detroit did not cause this current problem to happen. The automakers are as much victims of this period of financial deleveraging as you and I are. We were led here by 28 years of new government rules moving us toward "anything goes" capitalism—and that brand should never have been confused with American capitalism, in which laws protect buyer and seller and whose dealings are characterized by integrity, honesty, and sanity. I am an American capitalist, and I believe ours is the best economic system in the world—when its rules are not being bypassed for private gain and the public's loss.

But I'll give it to you straight: Let Detroit fail and we may not be able to stop the avalanche that has been burying people and businesses all year long. If you don't want to save Detroit, that's your ideology. But are you willing to risk America?

Americans love underdogs but hate losers. Bankruptcy would move Detroit into the latter column, and America wouldn't be far behind.

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post #2 of 61 (permalink) Old 12-03-2008, 11:12 AM
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Some how we thought that consuming with debt insted of using assets was prosperity. Consumption with debt pulls forward sales, which cannot happen indefinitely. Selling 18 million units of automobiles in the USA a year is not sustainable with only 100 million households. There is about 20% more registered vehicles in the US than there are lisenced drivers.

Quote:
In 1998, there were about 12 million more vehicles than drivers in 1998. By 2006, the difference grew to 34 million.

That kind of imbalance couldn't be maintained, even before the economy fell off a cliff.
http://money.cnn.com/2008/11/30/news...ion=2008120108

There is too much production capacity in the industry. The recession should be allow to weed out the weak companies to allow the strong to prosper.

Anyone notice that the big three asked for $34 Billiion yesterday, which is $9 billion higher than they needed two weeks ago.
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post #3 of 61 (permalink) Old 12-03-2008, 11:32 AM
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Quote:
Originally Posted by TexasDevilDog

There is too much production capacity in the industry. The recession should be allow to weed out the weak companies to allow the strong to prosper.
Quote for truth. Washington needs to get out of the corporate welfare business.

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post #4 of 61 (permalink) Old 12-03-2008, 11:50 AM
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Quote:
Originally Posted by TexasDevilDog
There is too much production capacity in the industry. The recession should be allow to weed out the weak companies to allow the strong to prosper.
Exactly!!!

All I hear is bla bla bla......
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post #5 of 61 (permalink) Old 12-03-2008, 12:11 PM
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I disagree with Wallace. He makes some solid points but does so as an automotive insider that is trying to protect his buddies.

He is pro-ADP, as he stated in an email to me 'If it's ok for you to negotiate down, why shouldn't dealers mark the price up?'

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post #6 of 61 (permalink) Old 12-03-2008, 12:18 PM Thread Starter
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Quote:
Originally Posted by Sean88gt
I disagree with Wallace. He makes some solid points but does so as an automotive insider that is trying to protect his buddies.

He is pro-ADP, as he stated in an email to me 'If it's ok for you to negotiate down, why shouldn't dealers mark the price up?'
You said he makes solid points but you disagree with him? What exactly do you disagree with and why? Just curious...

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post #7 of 61 (permalink) Old 12-03-2008, 12:46 PM
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Quote:
Originally Posted by Sgt Beavis
You said he makes solid points but you disagree with him? What exactly do you disagree with and why? Just curious...
I think he is taking it to the doomsday extreme. If they filed bankruptcy he is saying that the entire US vehicle production future would end. I don't think this is the case.

I agreed with his points on the Taurus vs Avalon.

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post #8 of 61 (permalink) Old 12-03-2008, 12:48 PM
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Nascar won't survive without them............

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post #9 of 61 (permalink) Old 12-03-2008, 01:19 PM
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Originally Posted by grape
Nascar won't survive without them............
You say that like it's a bad thing.
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post #10 of 61 (permalink) Old 12-03-2008, 01:34 PM
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You say that like it's a bad thing.
i think it's funny actually.........i've been called into the big red truck to express my opinions and wouldn't piss on many of them if they were on fire.

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post #11 of 61 (permalink) Old 12-03-2008, 02:03 PM
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The unemployment alone would deal a huge blow to the economy. If this was 1998 and they were failing I would say "fuck em". Letting them go right now is just a really bad idea.
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post #12 of 61 (permalink) Old 12-03-2008, 02:16 PM
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Originally Posted by AL P
The unemployment alone would deal a huge blow to the economy. If this was 1998 and they were failing I would say "fuck em". Letting them go right now is just a really bad idea.
Not for long, if there was a market for what ever the defunct companies produced, then other companies would fill the void and employees would be hired. If not, then so be it, it isn't this countries place to keep supporting companies that cannot support themselves, for what ever reason.

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post #13 of 61 (permalink) Old 12-03-2008, 02:34 PM
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Originally Posted by Stevo
Not for long, if there was a market for what ever the defunct companies produced, then other companies would fill the void and employees would be hired. If not, then so be it, it isn't this countries place to keep supporting companies that cannot support themselves, for what ever reason.

Stevo
Oh yea, with what capital? You think someone is going to buy production from GM and just keep making cars and paying people? That's the craziest thing I have heard so far this week.

Fact is, a few million more people out of work sinks this economy to depths we won't see again for as long as we live. The government gets billions in new pension fund liabilities that we all pay for, many times what the companies are asking for in loans. And to top it all off we lose a massive manufacturing base that could be critical if there was ever a serious war.
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post #14 of 61 (permalink) Old 12-03-2008, 02:46 PM
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Quote:
Originally Posted by AL P
Oh yea, with what capital? You think someone is going to buy production from GM and just keep making cars and paying people? That's the craziest thing I have heard so far this week.

Fact is, a few million more people out of work sinks this economy to depths we won't see again for as long as we live. The government gets billions in new pension fund liabilities that we all pay for, many times what the companies are asking for in loans. And to top it all off we lose a massive manufacturing base that could be critical if there was ever a serious war.
This is your spin on it, my version says if you keep bailing them out, it will never end. My opinion is that the corporate welfare has to end now, regardless of the fallout, unless the country wants to bailout every failed business for eternity. Our government needs to pull back and stop being babysitters.

As for your last statement, THAT is the funniest thing I have read in a while.

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post #15 of 61 (permalink) Old 12-03-2008, 03:03 PM
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Quote:
Originally Posted by Stevo
This is your spin on it, my version says if you keep bailing them out, it will never end. My opinion is that the corporate welfare has to end now, regardless of the fallout, unless the country wants to bailout every failed business for eternity. Our government needs to pull back and stop being babysitters.

As for your last statement, THAT is the funniest thing I have read in a while.

Stevo
Really, why does it have to end now, in the midst of the worst economy in 80 years? Why not five years from now when the economy is sailing along fine and unemployment is low? Nothing justifies that attitude except for the view of the populist sheep which is that the evil rich people are catching yet another break. Those damn rich people are at it again!

99% of the people on this site don't even understand basic economics yet the opinions just overflow. This situation is no different than when AIG needed some help....

"Who cares if hundreds of banks all over the world will fail instantly along with AIG, we gots to teach those rich bastards a lesson at any cost!" That's right, forget insolvent banks, forget Sarbanes-Oxley and how that needs to be modified first, just say no for the sake of saying no.

I'm not sure why you would think the loss of one of our last manufacturing bases is "funny" go ahead an explain that.
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post #16 of 61 (permalink) Old 12-03-2008, 03:13 PM
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post #17 of 61 (permalink) Old 12-03-2008, 04:30 PM
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Quote:
Originally Posted by AL P
Really, why does it have to end now, in the midst of the worst economy in 80 years? Why not five years from now when the economy is sailing along fine and unemployment is low? Nothing justifies that attitude except for the view of the populist sheep which is that the evil rich people are catching yet another break. Those damn rich people are at it again!

99% of the people on this site don't even understand basic economics yet the opinions just overflow. This situation is no different than when AIG needed some help....

"Who cares if hundreds of banks all over the world will fail instantly along with AIG, we gots to teach those rich bastards a lesson at any cost!" That's right, forget insolvent banks, forget Sarbanes-Oxley and how that needs to be modified first, just say no for the sake of saying no.

I'm not sure why you would think the loss of one of our last manufacturing bases is "funny" go ahead an explain that.
Normally I agree with much of what you say, but in these cases you are being too much of an alarmist, and accepting and repeating things that "might happen" as fact. You believing that people opposing the rewarding of poorly ran companies with taxpayer money as "we gots to teach those rich bastards a lesson at any cost" shows how little you truly know.

I do find it funny you think handing over billions to bad companies today will change anything in five years.

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post #18 of 61 (permalink) Old 12-03-2008, 05:04 PM
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Honda, Nissan, Toyota all are seeing increases in production and are fine capital wise. Why is that?

I say let them fail, let the UAW be ousted off this earth.

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post #19 of 61 (permalink) Old 12-03-2008, 05:15 PM
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Originally Posted by 1BAD06
Honda, Nissan, Toyota all are seeing increases in production and are fine capital wise. Why is that?

I say let them fail, let the UAW be ousted off this earth.

You do realize Honda, Nissan, and Toyota posted a large drop in sales last month just like their American counter parts.

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post #20 of 61 (permalink) Old 12-03-2008, 05:20 PM
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You do realize Honda, Nissan, and Toyota posted a large drop in sales last month just like their American counter parts.
They all have across the board, but the difference is they have not had layoffs, cuts in production and dont have to deal with the stupid bullshit of Unions. Honda was actually hiring people recently as I read. They also are not asking, nor in need of a bailout.

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post #21 of 61 (permalink) Old 12-03-2008, 05:24 PM
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You fucking Union people are the downfall of this. How can you protest a worker to make 60.00 an hour to push a fucking broom? Its ridiculous, and now I hope it bites them in the ass.

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post #22 of 61 (permalink) Old 12-03-2008, 05:25 PM Thread Starter
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Quote:
Originally Posted by 1BAD06
Honda, Nissan, Toyota all are seeing increases in production and are fine capital wise. Why is that?

I say let them fail, let the UAW be ousted off this earth.
Last month:
Honda sales were down 30.6%
Nissan sales were down 44.4%
Toyota sales were down 33.8%

Toyota cutting domestic production (in Japan)

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post #23 of 61 (permalink) Old 12-03-2008, 05:27 PM
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Quote:
Originally Posted by Sgt Beavis
Last month:
Honda sales were down 30.6%
Nissan sales were down 44.4%
Toyota sales were down 33.8%

Toyota cutting domestic production (in Japan)
As compared to the American 3?

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post #24 of 61 (permalink) Old 12-03-2008, 05:31 PM Thread Starter
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Originally Posted by 1BAD06
As compared to the American 3?

Ford down 30.6%
GM down 41.3%
Chrysler down 47% (dayumm)

You can see all the numbers here:
http://www.autoblog.com/2008/12/02/b...are-a-dime-ed/

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post #25 of 61 (permalink) Old 12-03-2008, 05:33 PM
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http://www.businessweek.com/globalbi...lobal+business

Honda largely sidestepped the stampede to sell Americans bigger and heavier SUVs and pickups. That has held the Tokyo-based company in good stead, as sales of gas guzzlers have collapsed and helped Honda do better than most this year. While that's not saying a lot, Honda's U.S. auto sales through November are down 5.4% to 1.34 million vehicles. That's not good, but it's better than the U.S. Big Three, which have seen sales decline by more than 20%. It's also better than Toyota (TM) and Nissan (NSANY), whose sales have slipped 13.4% and 9.4%, respectively.

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post #26 of 61 (permalink) Old 12-03-2008, 05:40 PM Thread Starter
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Its looking more and more like we are going to find out if the shit is going to hit the fan after GM and Chrysler go under.. Harry Reid says they don't have enough votes to get a bailout through the Senate:

http://www.msnbc.msn.com/id/28030726/

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post #27 of 61 (permalink) Old 12-03-2008, 05:44 PM
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Quote:
Originally Posted by Stevo
Normally I agree with much of what you say, but in these cases you are being too much of an alarmist, and accepting and repeating things that "might happen" as fact. You believing that people opposing the rewarding of poorly ran companies with taxpayer money as "we gots to teach those rich bastards a lesson at any cost" shows how little you truly know.

I do find it funny you think handing over billions to bad companies today will change anything in five years.

Stevo
Alright well, I give up. Having you say "you are wrong" over and over and over doesn't really give me much to talk about anyway.
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post #28 of 61 (permalink) Old 12-03-2008, 05:44 PM
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Interesting. Honda and Toyota's Market share had increased, small, but still increased.

"Toyota's U.S. market share was 17.4 percent last month, up from 16.7 percent a year earlier, according to Autodata Corp. of Woodcliff Lake, New Jersey."

"Honda's market share was 10.2 percent, up 0.8 point from a year ago."


http://www.bloomberg.com/apps/news?p...yqU&refer=home

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post #29 of 61 (permalink) Old 12-03-2008, 05:45 PM
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Quote:
Originally Posted by Sgt Beavis
Last month:
Honda sales were down 30.6%
Nissan sales were down 44.4%
Toyota sales were down 33.8%

Toyota cutting domestic production (in Japan)
Yea, its not like the foreign companies are doing so much better in sales. The credit markets and the supply of buyers are what they are no matter the brand.
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post #30 of 61 (permalink) Old 12-03-2008, 05:47 PM
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Interesting. Honda and Toyota's Market share had increased, small, but still increased.

"Toyota's U.S. market share was 17.4 percent last month, up from 16.7 percent a year earlier, according to Autodata Corp. of Woodcliff Lake, New Jersey."

"Honda's market share was 10.2 percent, up 0.8 point from a year ago."


http://www.bloomberg.com/apps/news?p...yqU&refer=home
This is something to expect since people are going to be hesitant to buy from companies that may sink.
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post #31 of 61 (permalink) Old 12-03-2008, 05:48 PM
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This is something to expect since people are going to be hesitant to buy from companies that may sink.
True, but it also has to do with world market sales as well. That helps it jump.

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post #32 of 61 (permalink) Old 12-03-2008, 06:17 PM
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Originally Posted by AL P
Oh yea, with what capital? You think someone is going to buy production from GM and just keep making cars and paying people? That's the craziest thing I have heard so far this week.

Fact is, a few million more people out of work sinks this economy to depths we won't see again for as long as we live. The government gets billions in new pension fund liabilities that we all pay for, many times what the companies are asking for in loans. And to top it all off we lose a massive manufacturing base that could be critical if there was ever a serious war.

So pay them so we don't have to pay them? I thought I read there are only 300,000 give or take in manufacturing and 2million tied to the industry (tire shops,mechanics,body shops,etc). I don't think those tied to industry are going anywhere. If anything they would do better if people want to keep the vehicles they have on the road longer.
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post #33 of 61 (permalink) Old 12-03-2008, 07:25 PM
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They all have across the board, but the difference is they have not had layoffs, cuts in production and dont have to deal with the stupid bullshit of Unions. Honda was actually hiring people recently as I read. They also are not asking, nor in need of a bailout.

Why don't you do a search on the Toyota Tundra Plant in San Antonio? It was shut down for over 3 months earlier this year and currently it is running at less than 50% capacity. Tundra sales plumented last month and they are talking about shutting the plant down again. Toyota also has plans to shut down several plants in Japan for a couple days this month due to the huge inventory they have.

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post #34 of 61 (permalink) Old 12-03-2008, 07:40 PM
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Why don't you do a search on the Toyota Tundra Plant in San Antonio? It was shut down for over 3 months earlier this year and currently it is running at less than 50% capacity. Tundra sales plumented last month and they are talking about shutting the plant down again. Toyota also has plans to shut down several plants in Japan for a couple days this month due to the huge inventory they have.
READ: HONDA

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post #35 of 61 (permalink) Old 12-03-2008, 08:00 PM
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Why don't you do a search on the Toyota Tundra Plant in San Antonio? It was shut down for over 3 months earlier this year and currently it is running at less than 50% capacity. Tundra sales plumented last month and they are talking about shutting the plant down again. Toyota also has plans to shut down several plants in Japan for a couple days this month due to the huge inventory they have.
Gas prices... truck and SUV sales took a dump and compact car sales went up.

I really think that the big 3 need restructuring. I dont blame the CEOs and big wigs for everything. I do think their inflated salaries and multi million dollar bonuses while the company is failing is screwed up though.

I really think that IF the big 3 can get down to a REASONABLE wages and a REASONABLE price on their vehicles, that their sales would be better. Im sorry but when the average unskilled line worker is making more than many college educated professionals out there, something is wrong. I posted last month about the average line worker for GM is making $34/hr. I know Texas is the land of low cost living but I feel that when these single workers are making more than the national household income, to do a redundant unskilled job, the company is going to fail. Add on the benefits packages and what not, GM reports it costs over $70 for the average worker.

Also, why would the government have to pick up the pensions? That is the UAW's problem. My next door neighbor is a Delta pilot and when they went under, he lost over 1.5 MILLION in his pension and no one bailed him out. His pension is worth less than 1/5 of what it was.

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post #36 of 61 (permalink) Old 12-03-2008, 08:24 PM
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So pay them so we don't have to pay them? I thought I read there are only 300,000 give or take in manufacturing and 2million tied to the industry (tire shops,mechanics,body shops,etc). I don't think those tied to industry are going anywhere. If anything they would do better if people want to keep the vehicles they have on the road longer.
Take it easy posting the common sense, some people who think they are economic gods will get frustrated and just decide not to post anymore.

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post #37 of 61 (permalink) Old 12-03-2008, 08:29 PM
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Alright well, I give up. Having you say "you are wrong" over and over and over doesn't really give me much to talk about anyway.

If you don't mind, post links to said posts showing I said ""you are wrong over and over and over". I'm sorry if you feel someone posting that they feel you are an alarmist bunches your panties, but shit happens.

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post #38 of 61 (permalink) Old 12-03-2008, 08:52 PM
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Im curious to know how many of the Big 3 CEO's have cut 1/2 there paycheck, then come to the Union and ask for the same?


I mean i understand they get paid alot of $$, but why should the working man take a pay cut when there own CEO is still prolly making 9million on his own salary?

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post #39 of 61 (permalink) Old 12-03-2008, 09:33 PM
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So pay them so we don't have to pay them? I thought I read there are only 300,000 give or take in manufacturing and 2million tied to the industry (tire shops,mechanics,body shops,etc). I don't think those tied to industry are going anywhere. If anything they would do better if people want to keep the vehicles they have on the road longer.

You do realize that with recent contract negotiations the average new auto worker makes $14 an hour. That means for the first time in history the ones building the cars can't actually afford to own one. Make no mistake that this country was built on the backs of the working middle class and you only have to look 500 miles south of here to get an idea of what a country looks like that doesn't have a middle class. If one of the big 3 did fail I'm going to be laughing at half the people that said fuck the big three when they lose their job as a result.


Go ahead and tell me that your company and your job are invincible.

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post #40 of 61 (permalink) Old 12-03-2008, 09:39 PM
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That means for the first time in history the ones building the cars can't actually afford to own one.
Many construction contractors cannot afford the new houses that they help build with their professions, what is the difference?

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post #41 of 61 (permalink) Old 12-03-2008, 09:44 PM
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Quote:
Originally Posted by FreightTrain
You do realize that with recent contract negotiations the average new auto worker makes $14 an hour. That means for the first time in history the ones building the cars can't actually afford to own one. Make no mistake that this country was built on the backs of the working middle class and you only have to look 500 miles south of here to get an idea of what a country looks like that doesn't have a middle class. If one of the big 3 did fail I'm going to be laughing at half the people that said fuck the big three when they lose their job as a result.


Go ahead and tell me that your company and your job are invincible.
Im going into the medical field

Anyways, they are getting paid as low as $14/hr. That doesnt mean they are all making $14/hr. They are starting this business a bit to late.

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post #42 of 61 (permalink) Old 12-03-2008, 09:49 PM
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Quote:
Originally Posted by FreightTrain
You do realize that with recent contract negotiations the average new auto worker makes $14 an hour. That means for the first time in history the ones building the cars can't actually afford to own one. Make no mistake that this country was built on the backs of the working middle class and you only have to look 500 miles south of here to get an idea of what a country looks like that doesn't have a middle class. If one of the big 3 did fail I'm going to be laughing at half the people that said fuck the big three when they lose their job as a result.


Go ahead and tell me that your company and your job are invincible.
I think it is great that people are making good money if their company remains viable while that happens. I just believe that the auto industry needs some serious overhauls to survive. I am not a proponent of any of bailouts. We need to let the market determine what our economy needs . The treasury department is out of control with their printing press.
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post #43 of 61 (permalink) Old 12-03-2008, 09:54 PM
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Many construction contractors cannot afford the new houses that they help build with their professions, what is the difference?

Stevo

I'm willing to bet that the majority of construction contractors that make $14 an hour or less are either in this country illegally or have made some very poor decisions with their lives. I have several friends that are tradesmen and work as building contractors and they all make at least $25 an hour.

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post #44 of 61 (permalink) Old 12-03-2008, 10:05 PM
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Quote:
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Why don't you do a search on the Toyota Tundra Plant in San Antonio? It was shut down for over 3 months earlier this year and currently it is running at less than 50% capacity. Tundra sales plumented last month and they are talking about shutting the plant down again. Toyota also has plans to shut down several plants in Japan for a couple days this month due to the huge inventory they have.
Porshe and the other German companies are temporarily shutting down also.

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post #45 of 61 (permalink) Old 12-03-2008, 10:05 PM
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Im going into the medical field
What happens when the American people and the Government turn their backs on the Health Care Industry and decide they're not going to pay outlandish amounts for healthcare anymore. I don't think we are too far down the road from seeing the begining stages of this. If you claim an Autoworker isn't entitled to make 60k a year what is stopping that Autoworker from claming a Doctor shouldn't make over 200k a year. If anyone thinks the Auto Industry is full of crooks I guess you haven't been to a hospital lately.

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post #46 of 61 (permalink) Old 12-04-2008, 06:57 AM
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What happens when the American people and the Government turn their backs on the Health Care Industry and decide they're not going to pay outlandish amounts for healthcare anymore. I don't think we are too far down the road from seeing the begining stages of this. If you claim an Autoworker isn't entitled to make 60k a year what is stopping that Autoworker from claming a Doctor shouldn't make over 200k a year. If anyone thinks the Auto Industry is full of crooks I guess you haven't been to a hospital lately.
LOL... Dont think it's worth it, dont get it. You have the choice to medical insurance as well as health care, just like you do cars.

The guy at McDonalds is doing the same boring ass job that the guy at an assembly plant does. Same crap day in and day out. Is he entitled to $60k/yr? How about those trashmen who pick up all of our crap day in and day out? They dont make $60k/ year. There are lots of people out there that work much harder and lots of people that work assembly line jobs (other manufacturing) and they dont make near that much. If you cannot realize that paying someone $60k/yr for something that can be done in Mexico for $1/hr, you are a fool. The UAW has repeatedly gone on strike and pulled their shenanigans for so long, they are costing the big 3 WAY more than they should. With the NATIONAL household income at $45k or so, the nation cant afford these cars. The national household makes less than a worker on the assembly line for the big 3. You guys are bitching like $14 is low pay...WELCOME TO THE REAL WORLD. They just got their asses handed back to them and got bitch slapped back to average.

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post #47 of 61 (permalink) Old 12-04-2008, 07:43 AM
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No kidding. I've got guys in my plant doing more technical work than some monkey putting tires on a car and they don't earn $60K.

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post #48 of 61 (permalink) Old 12-04-2008, 08:10 AM
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Originally Posted by 93coupelx
So pay them so we don't have to pay them? I thought I read there are only 300,000 give or take in manufacturing and 2million tied to the industry (tire shops,mechanics,body shops,etc). I don't think those tied to industry are going anywhere. If anything they would do better if people want to keep the vehicles they have on the road longer.
Generally speaking there are a few hundred thousand in manufacturing and then the remaining are in jobs that either distribute parts or work at suppliers that make parts or sub-assemblies for the manufacturers. For example we have a tenant in a 300K sf building in St. Louis that builds instrument clusters for the Chrysler plant right across the street. We also have another tenant in Chicago that does gas tank assemblies for a local assembly plant. Both of these guys run in a "just in time" format meaning they shut down when the assembly line shuts down so they don't hold inventory at all. And none of these are union jobs. Those examples kind of give an idea of how suppliers figure into the equation.

You are correct about paying now or paying later. If the companies fail there will be a massive pension debt that the government would need to assume. Just the pension liability from GM is more than all three companies are asking for in aid. What usually happens though is that the government only pays out a percentage of what the pensioners were originally promised so the amount of that liability is kind of up in the air. Some of the airline pensions they have assumed only pay out 40%.
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post #49 of 61 (permalink) Old 12-04-2008, 08:11 AM
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Quote:
Originally Posted by FreightTrain
What happens when the American people and the Government turn their backs on the Health Care Industry and decide they're not going to pay outlandish amounts for healthcare anymore. I don't think we are too far down the road from seeing the begining stages of this. If you claim an Autoworker isn't entitled to make 60k a year what is stopping that Autoworker from claming a Doctor shouldn't make over 200k a year. If anyone thinks the Auto Industry is full of crooks I guess you haven't been to a hospital lately.
You are going to have to wait a few years. This has a lot to do with baby boomers.
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post #50 of 61 (permalink) Old 12-04-2008, 08:15 AM
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Also, why would the government have to pick up the pensions? That is the UAW's problem. My next door neighbor is a Delta pilot and when they went under, he lost over 1.5 MILLION in his pension and no one bailed him out. His pension is worth less than 1/5 of what it was.
Public outcry. Don't get me wrong, I agree with you about it being the UAW's problem and that the government shouldn't pick it up. I'm just saying the government will pick it up, there are a lot of people who vote straight ticket Democrat in the UAW.
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