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Some think that the companies (including Mae/Mac) should file for bankruptcy, pretty much leaving the companies open to a hostile takeover by other companies sitting on cash. This is what I agree with..
With regard to the auto industry, a lot of economists have said the US could address some trade inequities. It wouldn't solve their immediate fiscal crisis, but it would make the US competitive in the long run.
First, Asian countries keep their currency artificially low -- thus creating an artificial trade imbalance. They also subsidize their industries in a lot of sneaky ways. And since foreign companies don't have to pay for their employees' health care, they aren't saddled with the massive trade agreements our companies are.
Address those things and American car companies might be able to make cars that people want to buy at prices they're willing to pay.
Some think that the companies (including Mae/Mac) should file for bankruptcy, pretty much leaving the companies open to a hostile takeover by other companies sitting on cash. This is what I agree with..
Yeah, that was the theory with Lehman Brothers, only problem was no one stepped forward to buy them.
I have read interesting alternative bailout plans but very few alternatives to bailouts.
With regard to the auto industry, a lot of economists have said the US could address some trade inequities. It wouldn't solve their immediate fiscal crisis, but it would make the US competitive in the long run.
First, Asian countries keep their currency artificially low -- thus creating an artificial trade imbalance. They also subsidize their industries in a lot of sneaky ways. And since foreign companies don't have to pay for their employees' health care, they aren't saddled with the massive trade agreements our companies are.
Address those things and American car companies might be able to make cars that people want to buy at prices they're willing to pay.
But it isn't just about price. Many people are buying luxury cars, so cost isn't the primary issue, it's what you are getting besides price (features, resale value, reliability, quality, etc...). Those are major factors in purchasing a car.
The american makers problem isn't their foreign sales which are their promising markets ;its sale in the USA. They have just become a SUV maker since the 70's when the embargo put them in this same postion. Now they are facing several years of overall decine in all auto sales which they must survive before facing their non-competitive issues in the US.They also can't raise any real cash it seems in the markets but have top go to governamnt. That would last long if they don't turn around quickly and regain profitablity soon.
What is so unfair about these bail outs is the countless small businesses who have employed countless and have gone out of business do not get a bail out and in future will not .
They get NOTHING because they don't have lobbyiest buying off the politicians.
The automakers issue is FAR more complicated than the apologists or the antagonists make out.
This is a surface list.
1) Ford is probably best positioned to survive. It has decent products in most segments and the longest cash position. In a normal market Ford probably would have gone very slightly into the black by 2010.
2) GM is a middling case. They are burning through cash too fast OTOH have a decent product line and at the very least LACK A GOOD SMALL CAR and that is a big hole.
3) Chrysler is probably hopeless. They have jeep while disticntive and successful has low ranked quality, RAM trucks, one of the last successful minivans, and some specialty cars. Mercedes drained them dry and the new owners have not done much better.
Quality is closing but perception is lagging Quality ratings improve for domestic automakers | ScrippsNews
2008 Initial Quality Study | J.D. Power and Associates (http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?id=2008063 - broken link)
Note in the last link Ford beats Nissan and is within the margin of error of Honda. Yes really. Now perception is a totally different beast. I see all sorts of links of "all American cars are crap" and "my moms aunts friends daughter bought a Ford and it ate her children type posts. Quite frankly in many circles its cool to bash domestic. The Fusion is one of the best built cars out there period. Ford Fusion (North America - Wikipedia, the free encyclopedia)
How many do you see compared to Camrys? PERCEPTION COUNTS!
While currency has some things to do with it. It is not the be all end all. Toyota builds most of their cars in the US.
People say no no no. Fine. Are you prepared for 3 million more unemployed almost instantaneously? Unemployment in MI is near 8%. Are you prepared for 20% in MI 14% in OH 12% in IL and MO and 10% nationally? Toyota does NOT want the plants. They do things their own way. OTOH when is enough? Can GM turn around? Swords cut TWO directions.
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