GM has wanted to buy Jeep for years, same with Benz when they bought chrysler, if chrysler folds gm will without a doubt buy up the brand because they need something to replace the extremely tarnished hummer brand.

To me it just looks like anti-labor people lining up against pro-labor people and taking potshots at environmentalists when they can (and vice versa).

I think the slow down is temporary.
As soon as the world population regains their financial confidence and security, the same level of purchasing and use of cars will be back. Likewise, it will increase as before.

What I'd like to see is for the OPEC/Oil nations to cut oil production and cause the increase in oil prices again.

This I believe will have a better and longer resulting affect in decreasing the dependency on combustion vehicles and strengthen the global populace in refocusing and strengthening their minds on trying, developing, and using, alternative energy, and transportation.

What will happen to OPEC? Will they get richer? I don't think so, I believe that an act like this will be the nail that seals the coffin. Let's just see how smart and or really greedy they are.

Let's not forget, it was the rise in oil prices that started the dominos falling.

Also, it may steer China now into alternative fueled vehicles. China I forsee will be a big player in filling in the void left by the Big Three here in th US of A.

Americans use to pay $25,000 for a decent, reliable, and safe mid size car, and now the Chinese will be selling them (exporting) at half the cost with little competition. Cheap, less safe, less efficient. They'll cut corners to keep that price down, and I forsee droves of poor desperate Americans getting in line to buy one.

Don't forget the Chinese. The more established car companies have been training them on manufacturing vehicles for the past three decades. They have the technology and know how, but not the ideals and standards the more established car companies have.

The missing link here is that all foreign governments prop up their car businesses, and developing ones are working like heck to create such an industry. They understand that the process of developing cars (not building them) drives a huge center of competence in all kinds of manufacturing specialities.

I'm in a non-automotive heavy industry in Detroit and I can call on hundreds of companies with huge expertise in thousands of subjects here locally because they support the big three. Lose the big three and those companies all go.

Sure, lose the big three and Toyota will still build them in Alabama or Tennesee or whatever. But the expertise will be gone forever.

When this bailout fails, in a few decades the US will be eclipsed permanently in manufacturing by China, India and the E.U. (if they can hang on). We will look back at losing our ability to develop this stuff (and all the other heavy industry we have been happy to shed) as our long decline. We cannot be rich by all becoming expert baristas at Starbucks. We need to know how to create real things.

I'd like to think that the execs are both American and taxpayers.

Crystal ball sez:

Gas tax of a buck and a half coming.
1) partially pays for national retiree health care plan (freeing up some 20 billion or so in lump sum payments to a fund by the automakers - effectively covering the cost of some of bridge loans). To buy a foreign brand car is to accept that nations subsidies to the cost for the health care of the workers. I'm not convinced the US automakers haven't been getting a short deal on this.
2) recover funds for infrastructure
3) demand side assistance for retooled automakers. A big chunk of the problem has been cheap fuel. It probably needs to be expensive enough (around $3.20/gal) to drive demand for the efficient cars and even some passenger car diesels.

The US market for passenger vehicles was around 16,000,000 in 2007. This year looks to be around 12,500,000 - comparable to 1982. Next year is forecast to be somewhere in the same range, with numbers not picking up until 2010 or 2011.

Nardelli (Chrysler) has been in the auto industry about thirteen months, having previously been in Home Depot. Mulally (Ford) since 2006. The Ford family pried him away from Boeing where he bet that companies future on a more efficient jet rather than a faster one. These two men are outsiders; only Wagoner has been in the industry any length of time. Those who've suggested that all three should be tossed and replaced with outsiders may want to study on it a little.

As previously noted, the cost of labor should not be confused with the wage of the laborer. Something like $13/hr - I understand - goes toward benefits for retirees.

As far as that goes, BMW, Mercedes, Audi, VW, Peugeot, Renault, etc. are mostly built in union shops. I've seen some stupid UAW excesses (gotta have a "wheelwright" to carry a lunchbox computer 150 ft inside the building, said the three people standing around the loading dock. Forty minutes later, a wheelwright appeared. Cost to the big three? only a couple hundred.) but as much as it pains me to admit it, I don't think the union is the biggest problem here.

http://news.bbc.co.uk/2/hi/business/7763531.stm

Bankruptcy will not happen if we listen to SoH Nancy Pelosi.

I recieved an Email from Tom Regan, one of a few whose working on making a South Eastern Michigan city bike friendly. The city of Royal Oak is about 8 miles West of GM's Technical Center. Below is his latest report on how it's going with the advocacy....

I just want to bring into light how the economy is affecting cycling here in Michigan. I'm sure if one or all the Big Three go bankrupt we can pretty much erase any future progress from the work below off the face of the Earth for a time being.....

Of course, this is just my thinking for the basis for Mr. Hoover's reply, but then again.....


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Biking and Walking in Royal Oak‏
From: Tom Regan
Sent: Sat 11/29/08 10:30 AM
To:

This is an update about our campaign to improve conditions for bicyclists and pedestrians in Royal Oak.

Our task force met with Royal Oak City Manager Tom Hoover and members of his staff on Tuesday, November 25th. We discussed four items.


We gave Mr. Hoover and his staff literature from the League of American Bicyclists on how a city can seek certification as a "Bicycle Friendly Community," http://www.bikeleague.org/programs/b...a/communities/ . We suggested that winning this certification should be our long-term goal.
We asked Mr. Hoover if the city would hire an outside consultant to write a Non-Motorized Transporation Plan. We estimated that this would cost about $40,000. Mr. Hoover and his staff agreed that Royal Oak would benefit from writing a non-motorized transporation plan, and that it should be done by an outside consultant. However, Mr. Hoover noted that Royal Oak (like nearly all Michigan cities) faces an extremely tight budget. Mr. Hoover stated that our task force should investigate thoroughly if any outside funding sources exist before asking the city commission the question. Several task force members agreed to investigate possible funding sources.
If you know of any possible funding sources please let me know immediately by responding to this email.
We asked Mr. Hoover about scheduled street repavings that offered immediate opportunities for making streets more bicycle-friendly, such as road diets and bike lanes. The city engineer agreed to investigate this.
We discussed special needs and opportunities along Woodward Avenue. Heather Carmona of the Woodward Avenue Action Association agreed to investigate potential funding sources and potential cooperation with neighboring cities.

The task force will meet again in mid-December to report on our separate searches for possible funding sources.

Reminder, please join us at the next Royal Oak School Board meeting to speak at public comment. Our purpose it to explain why a Non-Motorized Transportation Plan would benefit Royal Oak school children and to ask the school board to support the effort:

Thursday, December 11
7:00 pm
1123 Lexington Blvd., Royal Oak, MI 48073

Reminder, please write letters to the editor and call on Royal Oak to take steps to improve bike and pedestrian safety:

Royal Oak Mirror ksmith@hometownlife.com
Royal Oak Review clangrill@candgnews.com
Royal Oak Daily Tribune editor@dailytribune.com
Oakland Press vop@oakpress.com

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What happens when your tax base starts to dry up?

http://www.radioreference.com/forums...&highlight=Gas

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In fact, not to long ago when gas was at $4.00 the Michigan State Police were put on a limited mileage of 40 mi/day.

What about your local police, Fire Department...etc..How about the National Guard?

Draw your own conclusions...

The fact that as a taxpayer I may end up funding the bail-out of auto companies who have been struggling with cost, quality, marketing, and labor relations issues for my entire adult life (I'm over 50) is very troubling to me.

Most of the media coverage and PR by the auto industry in my opinion confuses the issues of employment levels with the survival of the companies. If the corporations survive, that still doesn't mean we'll be able to save all the job of the hourly workers in plants and at suppliers. Production needs to continue falling until production meets near-term demand; that will mean more jobs disappear. So a lot of the "domino" effect of problems of the auto industry are going to occur anyway (at least until the economy improves). I hope we aren't going to bail out the car companies so that they can keep producing cars no one needs right now. Nor do I see why we should help support so many domestic car dealerships when clear the car companies could efficiently distribute cars with many fewer dealerships than they have today.

For that matter, if they're going to use taxpayer money to support the companies, do the taxpayers get a say in what kind of cars are made. Do we need cars that produce over 200 horsepower or go 0 to 60 in less than 8.0 seconds? Do we need sunroofs? Should people with bad driving records be able to take out an 84-month car loan for a high performance sports car, or should they be forced to buy cheaper, used, beater cars until they clean up their records? Is the engineering talent at GM really focused on an energy efficient car of the future or how to squeeze yet another cup holder into the next generation of minivans?

I think if it's a slippery slope - if the industry wants public money to stay alive because having them alive is a public good than the taxpayers should force them only to build "good cars," and then sit back and watch while we figure out no one can agree what "good" is.

In the end, seems to me that the market makes better decisions on what kind of companies should survive than governments do.

Here's another reminder....when a gap forms between the haves and the havenots....

http://en.wikipedia.org/wiki/12th_Street_riot

The american taxpayer has been dictating the cars to build all along. This may not jive with your personal aesthetic, but the reason the car companies all built huge trucks and fast sports cars through the past fifteen years was because these are the vehicles people wanted to buy. Those buyers were these same 'taxpayers' that you now think wanted something else.

This assumes that a bailout means that congress needs to start deciding on product development. It makes no sense.

How about this. Realize that the big three have been competing for the past 40 years with car companies that are nurtured and protected by their governments in their own markets. Realize that we have even built a two-tiered structure in our own country for manufacturing by sustaining old rules in the states where the big three are strong while other states where the transplants set up are right-to-work and much more lax on work rules. Maybe it's a testament to the big three to have survived so long with one hand tied behind their back.

Maybe. But once we cannot make our own steel, cars, airplanes, trucks, mining equipment, ships, construction equipment and weapons systems then we won't really be an industrialized nation anymore. What are we going to do? Sew swooshes onto Nikes for $1 a day for Chinese and Indian consumers?

I think it would be hard to make money hand-over-fist with one hand tied behind the back.

To put it in more familiar terms:
If we're going to use taxpayer money to bail out the housing industry do taxpayers get a say in what kind of houses are built? Do we need houses with central air conditioning? Do we need cable? Do we really need houses of more than 1200 square feet? Are the architects really focused on energy efficient houses or on how to squeeze yet another electric appliance in the next generation of particle board and celotex McHouse?

The fact is we can demand they build a certain type of vehicle (and Ford's quality is at the top of the industry, BTW, so that tired argument doesn't fly), but that isn't going to help. In fact, one argument goes that we have effectively regulated what the 3 produce. The toxic combination of CAFE and cheap fuel has long made it such that it is more profitable to build high-markup trucks and "give-away" cars than to build efficient cars. As someone who has a 401k, I've tacitly played along with this, however much I might disapprove. I want my retirement fund to make money.

The other manufacturers have, in their home market, somewhat more expensive fuel. This favors the small car, although it allows production of things like a Ferrari, an NSX, or an Aston Martin. The same company that brings us the Smart also brings the Unimog and various V-12 powered monsters.

In the pipeline from Ford, due in the next 12 months, is a B class that should average over 40mpg combined and a hybrid Fusion that's alleged to get 39mpg city. Chevy is bringing the Cruze here soon - late '09, early '10, I think - which should be similar, plus the 2010 or 2011 Volt for which they are negotiating with the EPA for a 100mpg rating.

The top two contenders for European Car of the Year were from GM and Ford. One will be here in a year or two, evidently to be sold as a Buick, the other the previously mentioned B class Ford.

It really helps further the discussion if we can speak in specifics about which things are or aren't in the pipeline rather than issue generalities.

Classic "rebuttal" from someone who is too lazy or too afraid to address the argument. BTW I agree with most of what you say, but disagree with your conclusions about what it all means, and definitely disagree with your snotty remarks to me.

Oh, and by the way? "The auto industry" != the Big Three, and Michigan is not the first or only US state to have an industry vanish on it. Ignore that if you like, though, since I'm "completely uninformed".

It's a wee bit more complicated than that. A lot of consumers bought a product that was marketed to them, very skillfully. These consumers, for the most part, are also taxpayers. Other taxpayers chose not to buy that product because we looked at it and said, "Wow, only an idiot would buy that." Now it's the taxpayers -- not the consumers who "dictat[ed] the cars to build" -- who are being asked to foot the bill. So, since I didn't "dictate", can I get a pass on paying for the bailout?

This is good in concept, but how much does this really help? The first people to get the axe when times get rough are the ones hired at the lower wages. In effect, the agreement does nothing to help the company today.

The largest costs are not the wages, but the benefits...full healthcare (so I've heard), generous pensions, are far more damaging to the companies cost structure than straight wages because they are variable in terms of what's needed to fund the obligations, and the need to increase funding is in an opposite cycle to the success of the car companies.

The real sacrifices that need to be made are the sacred cows.

I don't let the execs off here either. They are failing to deal with the true risks to the company, and paying themselves a boatload of money for the privledge. Nice deal if you can have it I guess.

At any rate, I am not a fan of bailing out the big 3. There is way too much value in what the companies have for all the jobs to vanish, but as a taxpayer, I see no need to make an investment in a comapany that I don't see as having a viable business model. If I thought they did have a solid buisness model, I would already be invested in their future.

It's true that the big three were building cars that people wanted. But most people realized that market was going to go away in time. The big three's mistake was in assuming they'd have plenty of time to change later.

They now have two problems: the market changed FAST and it takes probably 6 to 8 years to get a car from drawing board to the showroom. The other is that they are not known for building small, fuel efficient vehicles. If you're looking for a 45 MPG car, you don't generally start out by going to the GM dealer.

If they had any sense (people have been saying this for 20 years) they would have continued to build those big cars that many people were buying, but pumped some of that money into researching and designing smaller cars. There has always been a market for small cars, they just weren't interested in it, even though everyone realized that someday the small car market would be the only way a big company could survive. They just never planned more than about 2 years ahead.

There are a lot of blue collar auto workers where I live. Our neighbor was absolutely scandalized a few years ago when they suggested that she might have to pay for some part of her full-ride health insurance (it was like $50/month), and perhaps have a deductible.

She and her spouse and their families and friends have been auto workers for so long that I had a hard time convincing her that what they were asking them to downgrade to was still way the hell better than most other people got. They just take full blown, free health insurance for granted.

This goes to what I was saying about OEM's being nurtured in their home markets. Toyota and BMW do not pay for health care of their workers in their home markets.

You want to talk about a political mistake? The Big Three joined the lobbying against 'Hillarycare' in 1994. They actively campaigned to not have literally hundreds of billions of dollars in long term obligations taken off their hands.

I would say that Chrysler is doomed. They cause the least ripples when they fail, they have the least favorable product line going forward and the political opposition to bailing out private equity firm billionaires will be huge. Let Chrysler fail.

Ford is easy. They can almost make it without help if the recession ends by summer. Stand by with short term loans and guarantees and see Ford through.

GM is the middle tough call. The will not see spring without cash. The also can survive on the other side if they are seen through this current downswing. That is what we are talking about really, loans to see them across the recession until they can remake themselves into what they always knew they would eventually need to be.

Were they building cars people wanted, or cars that billions in ad campaigns had convinced people to think they wanted?

Ever try smoking? The first few cigarettes are darn hard to take... yet millions do it and think it quite the thing... I wonder how they get started in the first place?

It is quite amazing what a steady stream of ads and peer pressure can do.

There is a difference between rebellious 15 year olds and adults that need to haul their families.

If you have a typical family with 3 or 4 kids, busy weekends with projects and sports and stuff and gas costs $1.50 then an SUV or Pickup looks perfectly logical. It's ridiculous to think that millions of americans bought cars that they hate because they got talked into by a slick sales pitch. Really. And then they kept buying those same SUVs and trucks over and over even though SUVs and trucks contain no addictive chemicals and form no habits.

Here is a better analogy based on a real situation. They just busted a guy in my city for stealing electricity. He had wired a second box into the house thay bypassed the meter. His normal box billed him a regular $80/month but he was really using $800 worth per month. Who needs $800 a month in electricity? Someone who does not pay for it.

Who drives a huge vehicle just because it is convenient to have the hauling space and it is comfortable to have the room? Someone who is shielded from the cost of driving it by low fuel prices.

The type of thinking you wrote about is behind the misguided CAFE standards. This tells automakers to build fuel efficient cars and trucks even if that is not what people want. The different mileage targets are actually what moved people from cars to trucks and SUVs. As the CAFE standards shrunk their cars, americans simply started buying trucks with higher CAFE limits instead. What congress should have done if they were serious about improving fuel economy was dramatically increase fuel taxes. This is the European route to fuel efficiency and it is noticeably more effective as it aligns buyer goals with the governments.

...if you don't bother to think it through.

There is no set of needs -- none -- for which there is not a better solution than an SUV. That includes hauling "3 or 4 kids" (which, by the way, is not a "typical family" anymore...but I digress). A wagon beats an SUV for that job any day. So yes, people did get sold a line of crap. It's their fault they bought it, because -- just as with cigarettes -- there was and is plenty of information out there telling you that this is the wrong choice. But how many people ever avail themselves of that information? Some of us do, but most people don't.

I meant "professions pursued by people with higher education", not "university professors". You must have thought I misspelled "professor" as "professions". I did not.

I don't expect a mass exodus away from cars. However, when gas prices got outrageous in the summer, I personally decided to live car-free to the greatest extent possible. It's my small contribution to the green movement, and it's a protest against the price-gouging of the oil producers. Besides, it just feels good to ride everywhere.

Now that it's getting cold in N. California (yeah, go ahead and laugh!), it's putting me to the test, but I haven't faltered yet. I recently even mounted fenders on both my commute/utility bikes.