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a company that will not will not make anything but gas guzzling cars.
Oh really?
In that case, why does Honda make Ridgeline, Toyota make Tundra and Nissan trying to get the Patrol here in 2010? Do you seriously believe that these are fuel efficient just because they wear a Honda/Toyota/Nissan badge?
You kniow what is sad? GM makes more cars with better mpg than honda or toyoda, but people still think that the American car companies only build gas hogs. But it's funny when my Parents Grand Marquis gets 28 mpg, super comfortible, and is big enough to protect you in a crash, that people driving grogery carts are getting no better mpg and getting beat up in ride quality at the same time. My 95 T-Bird with the Mark VIII engine (same as Cobra mustangs) gets 24-25 mpg with my lead foot. Which begs the question, why would you buy a little car like an accord or camery that gets no better mpg and doesn't ride/drive half as well as the Ford crown vic/grand marquis, or the Chevy Impalas?
Also, even if American cars have arguably improved in quality, the public's perception is that they are still low quality cars. The problem is that I'm not sure if that perception is ever going to turn back. (Disclosure: I currently own a Toyota and Mercedes after having owned GM and Chrysler cars, and personally, I doubt that I'll ever be buying an American car again after comparing the performance and maintenance costs). In turn, that negative perception has made the resale value of American cars depreciate so fast that anyone that acts rationally in his or her economic self-interest will buy a Japanese car over an equally-priced American car every single time.
Finally, the number of redundancies between brands, particularly within GM, is ridiculous. Toyota sells just under the number of cars as GM in the United States with only two main brands (Toyota and Lexus), one smaller brand (Scion), and around 1,400 dealers. For about the same number of sales, GM has Chevy, Buick, Cadillac, Pontiac, Saturn, GMC, Hummer, and others spread across 7,600 dealers. Think of the overhead expenses in terms of management, marketing, executives, and workers with all of these redundant brands and dealers. GM should be cut down to two brands: Chevy and Cadillac. Specialty nameplates such as Hummer and Saab might be sold off since they provide niche products. Buick, Pontiac, Saturn, and GMC, though, really don't provide much differentiation from what Chevy and Cadillac already provide.
A government bailout of the American automakers will not make people want to buy American cars or spur those companies to restructure in ways that would fundamentally alter their businesses - if they haven't done it since the 1970s, then I have absolutely no confidence that they will do so in the next few months. Let them go into Chapter 11 restructuring (which is NOT the same as going out of business - case in point, United Airlines still operated business just as normal when it was in Chapter 11 and is now in better position to survive the current economic downturn as a result of the restructuring) and force them to change their approach to business. Government money here would be a complete waste.
Yep, Been burned by American cars twice, never again.
I think the bail-out will totally backfire. Americans will be resentful for having to subsidize $32/hr paychecks, Viagra and phat-ass pensions on their $12/hr wages. Not fair. That's all there is to it.
You kniow what is sad? GM makes more cars with better mpg than honda or toyoda, but people still think that the American car companies only build gas hogs. But it's funny when my Parents Grand Marquis gets 28 mpg, super comfortible, and is big enough to protect you in a crash, that people driving grogery carts are getting no better mpg and getting beat up in ride quality at the same time. My 95 T-Bird with the Mark VIII engine (same as Cobra mustangs) gets 24-25 mpg with my lead foot. Which begs the question, why would you buy a little car like an accord or camery that gets no better mpg and doesn't ride/drive half as well as the Ford crown vic/grand marquis, or the Chevy Impalas?
Whether a car drives as well as another is completely subjective - I've owned Chevys and Toyotas, and my experience is that the rides in the Toyotas are much better. That's just my opinion.
Regardless, even if the American cars have closed the gap with Japanese cars on objective measures such as mileage, it's a matter of "too little, too late" when there have been over three decades of neglect. As I alluded to in a previous post, it's a vicious circle in terms of perception of American cars. Bad perception means that American dealers cut their sale prices in order to try to move vehicles off their lots, which in turn kills the resale value of those cars (since used American cars become essentially worthless with new cars being sold so cheaply), which in turn reinforces the perception of low quality. Thus, on a pure pocketbook basis, it makes no economic sense to buy American car when a comparably-priced Japanese car is going to hold its value a whole lot better over the long-term. When a car is usually either the first or second most expensive item that the average person buys (depending on whether you own a home or not), people as a whole are going to act rationally in their economic self-interest and will be very skeptical of purchasing any brands that have had poor quality for decades.
Just as some people still see Detroit as the Murder Capital of the World 31 YEARS after it lost the crown to another city, they are going to hang onto the perception that Detroit rolling iron is not as good as Tokyo's, even if the Tokyo cars are being made on Michigan assembly lines.
But let me tell you this. I owned an Escort for about 6 years; bought it new. It ran like a top until the muffler went one day, and my dad took it to the dealership by his place to get it fixed. The mechanic there said that the dealership mechanic in my town, the place where I bought the car, had not done ANY of the maintenance I'd paid for for SIX YEARS. This was a matter of THOUSANDS of dollars. They didn't even rotate the tires or change the oil. It was because of THAT that I went next door and bought a Honda. I mentioned it to someone I knew, and he said, gee, why would I go there in the first place? EVERYONE knows that that Ford dealership rips people off. Except there wasn't a single complaint at the Better Business Bureau when I checked.
I don't hold this against Bill Ford personally. In fact it says a lot about the quality of that car that it ran so well for all those years with zero maintenance. But it's not unusual to have a crappy experience with Ford, on some level, and it's that kind of crappy experience that keeps the Big Three's reputation smelling like a Dumpster on a hot day.
Also, even if American cars have arguably improved in quality, the public's perception is that they are still low quality cars. The problem is that I'm not sure if that perception is ever going to turn back. (Disclosure: I currently own a Toyota and Mercedes after having owned GM and Chrysler cars, and personally, I doubt that I'll ever be buying an American car again after comparing the performance and maintenance costs).
In turn, that negative perception has made the resale value of American cars depreciate so fast that anyone that acts rationally in his or her economic self-interest will buy a Japanese car over an equally-priced American car every single time.
Just think 10 years ago had we been having this discussion I doubt you would have bought a Toyota, and others probably wouldn't of bought a Honda either, especially on the basis of resale value. If you wanted reliable you bought German or Swedish (Volvo/Saab).
Late 80's to mid 90's Toyota and Honda cars (and Nissan's as well) were made with extremely light (read: cheap) metal that was prone to rusting. Not just body panels but structural components as well. Of course they got better gas mileage, they weighed considerably less. Anyway all that rusting significantly decreased the value of those cars.
Yet I highly doubt today you are worried about your Toyota rusting out from under you. It's clear Toyota's (and Honda/Nissan) mistakes in the past are a non-issue.
The same will happen for the American cars.
Quote:
Let them go into Chapter 11 restructuring (which is NOT the same as going out of business - case in point, United Airlines still operated business just as normal when it was in Chapter 11 and is now in better position to survive the current economic downturn as a result of the restructuring) and force them to change their approach to business. Government money here would be a complete waste.
Chapter 11 requires companies secure DIP financing. UAL and the other airlines filed bankruptcy prior to new Bankruptcy laws went into effect, some just days before the change. So your argument about UAL doesn't hold much water. FWIW, UAL also came out of bankruptcy almost as bad as it went in, but that's for another thread.
I highly doubt a company as large as Ford or GM would be able to secure financing in todays credit market. Food for thought.
GM should be cut down to two brands: Chevy and Cadillac. Specialty nameplates such as Hummer and Saab might be sold off since they provide niche products. Buick, Pontiac, Saturn, and GMC, though, really don't provide much differentiation from what Chevy and Cadillac already provide.
Also, it's funny you want to get rid of GM's "other" insignificant brands as you call them, like Buick. Did you know that Buick was the number 1 car seller in China? I bet you did not know that. If you kill Buick you kill their Brand.
Do you really want GM to kill the fastest growing brand in the fastest growing market in their history? Good thing you are not at the helm!
GM sells cars worldwide. They do very well in Europe as well. I agree with consolidating brands but you cannot make such sweeping changes and just sell under Chevy and Cadillac. It will destroy any advantage they have in other countries.
I owned an Escort for about 6 years; bought it new. It ran like a top until the muffler went one day, and my dad took it to the dealership by his place to get it fixed. The mechanic there said that the dealership mechanic in my town, the place where I bought the car, had not done ANY of the maintenance I'd paid for for SIX YEARS. This was a matter of THOUSANDS of dollars. They didn't even rotate the tires or change the oil. It was because of THAT that I went next door and bought a Honda.
I'd say it's impressive a Ford Escort went 6 years without a single oil change or tire rotation. Says a lot about the quality of the internals.
FYI the same kind of Americans that work at Ford dealerships as mechanics also work at Honda dealerships. I very highly doubt your story where your local Ford dealership did not do any work on your car. They may not have stamped your warranty book but to go 6 years without an oil change? Really? You believed this guy?
I hope but do not think it will happen that the bail out dies. The US auto manufacturing got into this mess by building 20k SUVs and selling them for 40k with no reguard for the future. They did not give a nickel to the tax payers when they were cutting the fat hog, so why should my tax $ go to them now?
I hope but do not think it will happen that the bail out dies. The US auto manufacturing got into this mess by building 20k SUVs and selling them for 40k with no reguard for the future. They did not give a nickel to the tax payers when they were cutting the fat hog, so why should my tax $ go to them now?
GM and the others contributed quite a bit to the tax base, both in federal and state income tax as well as property taxes. In addition the jobs that the Big 3 generated essentially created the beginning of the middle class in America. The middle and lower class derive the majority of spending as well, and since America is now ~70% service you can infer that the lower and middle class also drive America's growth.
If you give the low and middle class jobs you'll see America grow and prosper. Take those jobs away and you'll continue to see America shrink as a world leader.
I think most everyone is against simply subsidizing the Big 3 and artificially lowering their cost by giving them a check every quarter. I think that is what people think of when they hear "bailout". The Big 3 especially GM and Ford also have a large international presence and do quite well overseas. GM for example sold more cars internationally than in the US.
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