So a little background first because i don't know how familiar all of you are with what is going on. The three main US automakers, GM, Ford, and Chrysler are not doing great. And by that I mean GM is supposed to be bankrupt by Christmas, Chrysler was rumored to be being bought by GM and is reducing its workforce by 25% by the end of the month, and Ford isn't doing quite as bad (not saying much).

Now since they are in trouble, they are asking for 25 billion from the government to save themselves. Whether or not this should happen is a one-sided issue where I live. This is probably due to the fact that I live in Detroit, where all three companies are based. My dad works at Chrysler, so I know quite a bit about one side of the issue. I would like to hear other opinions on this situation, both from in the US and from the rest of the world. Should they get the money? Will they save themselves? Will their collapse destroy the US economy even more?

As you may guess, I am pretty firmly on one side, but I am always up for a good debate as long as things remain civil.

they can always sell their most high profile brands and just aim to survive the crisis, a bail isn't going to be enough, just merely delaying the issue, however for the fundamental imcompetitiveness of these companies they really have no one to blame.

I don't mind they get the funding (cos it YOUR money not ours) but it won't change the fact that these companies ain't turning out enough quality products, although recently there seems to be a change of mindset but maybe it's too little too late.

me waits for the TATA Corvette or Proton SRT11.

They should definitely get a bailout. The effect of their down fall would be catastrophic and would send us into a deep recession that it would take decades to recover from. The only upside to them failing would be that they would no longer have to pay the bloated pensions of the workers and they could start fresh with no unions to deal with. I put the blame solely on the unions. The reason the Japanese do so well is because they have company unions that are not detrimental to the company. The japanese business model is near-perfect and I would accept letting the gov. not bail them out if it meant they would come back with a replica of the Japanese business model and no unions

Another problem is that people only buy japanese cars. They are better in some ways, but not enough to justify their sales compared to usdm cars (2000 and newer). People are buying japanese cars for a certain stigma of "good mileage". I think its funny when people buy a toyota sequoia with a 5.7L V8 and expect to get good gas mileage "because its japanese"

Quote :

Another problem is that people only buy japanese cars. They are better in some ways, but not enough to justify their sales compared to usdm cars (2000 and newer). People are buying japanese cars for a certain stigma of "good mileage". I think its funny when people buy a toyota sequoia with a 5.7L V8 and expect to get good gas mileage "because its japanese"

Yeah I agree. and on the whole no unions thing, there is one main union for all three companies pretty much. I am generally against it, as my dad is salaried, not an hourly worker. This means that the union does nothing to help him while destroying the company he has worked at for over 20 years...Luckily he works in the electric car division, so maybe his job is safer than the others?

Oh! found this last night. This is a good vid of what the future hold for car enthusiasts: http://www.youtube.com/watch?v=ZjmrHVs1bCk Granted, the challenger srt8 lets off in the second angle, but it was getting smoked. The dodge EV can go like a bat out of hell.

damn unions messed up the whole thing.


workers are making $40 an hour to tighten lug nuts on car



Let 'em fail, file bankrupcy and start over, too much greed in those businesses.

Just start making good cars, then we'll see.
I don't get why almost every car in the US must be bigger than in Europe or different from one in Europe.
I mean, I can't name a single American car I REALLY like... (except from the ones of the early 70's and such, but I was talking about new cars)

I'll give you my view, which is slightly above non-educated (I contracted for a few years to the auto industry in the UK, and I have a good family friend in Detroit who is with one of the 3 car companies you mention at board level - I'm not saying which, or who). I've bought new USDM and Japanese cars in the US and I've bought both new Japanese and UKDM cars in the UK.

I don't think they should be bailed out, I think they should be bought out by the government. Rather than just getting free money from the taxpayers, I think the taxpayers should get something worth having in return. Shares. $25bn in bail out will make a lot of people grunt, but $25bn and a majority stake will mean that everyone will have a stake in the future success of the companies. That, in turn, will inspire them to buy USDM instead of EuroJapanese.

You can't blame the unions for this mess. They haven't had anything to do with it this time around. While the USDM has concentrated on increasing their corporate cash cache, they have almost completely dismissed the importance of innovation in the last 20 years in favour of meeting the short-lived domestic SUV demand. They put all their money behind a fickle market that was dependent on a volatile variable - the price of oil.

No major US car manufacturer has anything to offer like the Prius. They can look forward to absolutely no technological RoI because they haven't made the investment at all. Instead of being able to licence their own new technologies, they are having to buy new technologies from Japan and Germany etc. This situation has been coming since the days of the Chevy Caprice (vs the Audi 80) and the US hasn't deviated at all from that philosophy since then, despite every opportunity to do so.

Even Hollywood has long-recognised the current anti-USDM buyer's market. Young kids are far less inclined towards an oily Harley and more interested in a screamer like a Yamaha or a Suzuki. They're less interested in Knight Rider and more interested in Tokyo Drift. The truth is that Tokyo Drift (target age 19 == $25K/a), for all its ludicrous self-indulgence, is far closer to any reality and thus far more likely to influence the car-buying market than the latest Knight Rider (target age 13 == $pocket money).

If Hollywood could see it coming, Ford could have if they'd cared to. The fact is that they DID see it coming, but they opted for a more profitable short-term instead. And now it's bitten them, because the youth of today that has BUYING power does NOT revere NASCAR technology. No matter how you pump it, NASCAR will not sell cars. The innovation that we saw (past tense, not future) in F1 translates directly to end-market improvements and buying appeal (KERS, anti-locking brakes, fuel injection, new brake technologies, new aerodynamics knowledge, new cooling systems and heat dissipation models, engine configurations, construction materials, etc etc). These are all areas of innovation that the USDM has to buy into instead of sell on. This, in turn, has meant that the USDM (with the exception of the Chevy PT Cruiser - way to go, guys, show 'em what ya got :really has remained entirely domestic, but also why it continues to shrink even domestically.

So don't even try to blame the unions this time around. This is entirely management-driven, fast-profiteering short-termism.

Quote from RiseAgainstMe! :

So a little background first because i don't know how familiar all of you are with what is going on. The three main US automakers, GM, Ford, and Chrysler are not doing great. And by that I mean GM is supposed to be bankrupt by Christmas, Chrysler was rumored to be being bought by GM and is reducing its workforce by 25% by the end of the month, and Ford isn't doing quite as bad (not saying much).

Now since they are in trouble, they are asking for 25 billion from the government to save themselves. Whether or not this should happen is a one-sided issue where I live. This is probably due to the fact that I live in Detroit, where all three companies are based. My dad works at Chrysler, so I know quite a bit about one side of the issue. I would like to hear other opinions on this situation, both from in the US and from the rest of the world. Should they get the money? Will they save themselves? Will their collapse destroy the US economy even more?

As you may guess, I am pretty firmly on one side, but I am always up for a good debate as long as things remain civil.

I'm in trouble too.

I'm only asking for a $2m dollar bailout for myself. And I can make a damn sight better car than Detroit can. I chose not to, and so should they.

If it's really going to hit the economy hard then they should have thought of that a long time ago. I have no sympathy - not even for the workers (who are, of course, partly responsible for the fact no human being on the planet wants to own an American car).

Hahaha, they're all going to have to drive round in Toyotas.

Perhaps the American motor industry will eventually die just like England's did, which would be a shame.

Quote from SamH :

I don't think they should be bailed out, I think they should be bought out by the government.

Americans dont like doing things like this do they? They call it 'socialism' which is probrably a swear word in the US of A.

They need to save the US auto economy, so as to decrease the trend of a financial-based economy.

Economies become unstable as we see them become more dependant on the house of cards of financial-driven economics.

They need to return the economy to one that better balanced making stuff with financing stuff. Sure, they should have bailed out textiles before it all went overseas. They should have slowed the loss of electronics. But because they didn't save those industries doesn't mean that they shouldn't now--particularly given the lesson of the financial collapse--work to save what manufacturing they have left.

I think the only thing that is booming in america at the minute is the defence sector

Bail out or not, people aren't buying cars. If they are bailed out, it doesn't mean people are suddenly going to purchase cars again.

It's also the US motor industry failing to build appropriate cars - and kissing the UAW's arse. Maybe they should have considered building the cars in not so great parts of Mexico where it would actually be economically viable to build non-luxury cars ...

I agree there should not be a bailout. The US govt ought to buy them just before they go tits up, at a near nominal value - by just before I'm talking about a matter of days/weeks. Then they should stick the profitable sides on eBay (Ford of Europe, Vauxhall and Saab for example) to fund it when it's appropriate.

What the US motor industry should be doing is stop building the cars in the US and do what the European industry has had the brain cells to do : build them somewhere where it's actually cheap.

Quote from SamH :

You can't blame the unions for this mess. They haven't had anything to do with it this time around. While the USDM has concentrated on increasing their corporate cash cache, they have almost completely dismissed the importance of innovation in the last 20 years in favour of meeting the short-lived domestic SUV demand. They put all their money behind a fickle market that was dependent on a volatile variable - the price of oil.

No major US car manufacturer has anything to offer like the Prius. They can look forward to absolutely no technological RoI because they haven't made the investment at all. Instead of being able to licence their own new technologies, they are having to buy new technologies from Japan and Germany etc. This situation has been coming since the days of the Chevy Caprice (vs the Audi 80) and the US hasn't deviated at all from that philosophy since then, despite every opportunity to do so.

Even Hollywood has long-recognised the current anti-USDM buyer's market. Young kids are far less inclined towards an oily Harley and more interested in a screamer like a Yamaha or a Suzuki. They're less interested in Knight Rider and more interested in Tokyo Drift. The truth is that Tokyo Drift (target age 19 == $25K/a), for all its ludicrous self-indulgence, is far closer to any reality and thus far more likely to influence the car-buying market than the latest Knight Rider (target age 13 == $pocket money).

If Hollywood could see it coming, Ford could have if they'd cared to. The fact is that they DID see it coming, but they opted for a more profitable short-term instead. And now it's bitten them, because the youth of today that has BUYING power does NOT revere NASCAR technology. No matter how you pump it, NASCAR will not sell cars. The innovation that we saw (past tense, not future) in F1 translates directly to end-market improvements and buying appeal (KERS, anti-locking brakes, fuel injection, new brake technologies, new aerodynamics knowledge, new cooling systems and heat dissipation models, engine configurations, construction materials, etc etc). These are all areas of innovation that the USDM has to buy into instead of sell on. This, in turn, has meant that the USDM (with the exception of the Chevy PT Cruiser - way to go, guys, show 'em what ya got :really has remained entirely domestic, but also why it continues to shrink even domestically.

So don't even try to blame the unions this time around. This is entirely management-driven, fast-profiteering short-termism.

Very well said. I agree with all of it, except one bit - they shouldn't be bought out by the govt. As mrodgers says, people aren't going to suddenly start buying cars again once the govt has rescued them. The companies are fundamentally flawed.

It's difficult to find any sympathy whatsoever for the Big Three. Look at the tat they've been producing for the last 15 years, and compare it to the rest of the world, especially the Japanese giants, and it looks antiquated. Look at Ford, relying on churning out millions of cheap but badly made, enormous F-150s with even more enormous engines. I don't even know what GM manages to peddle these days, and Chrysler has been in trouble for some time now.

It's obvious to the outsider, with no connections to Detroit or even the US, that although the big three introduce new model years every, well, year (duh!), they don't do anything new. They just change stuff, and that's what they've been doing for the past decades or two. I could go on, but I'd just continue repeating what Sam said.

I'm really having trouble deciding whether I would vote for a bail-out or no. The effects of a bankruptcy of any of the big three would be tremendous, and we're not only talking about economic effects, but also millions of jobs lost, along with double digits unemployment rates. Keep in mind that's only if one of the three goes (GM probably, but Chrysler isn't far behind).

Ford's CEO said they don't need money, but they still came to the hill to nod at GM's and Chrysler's bail-out plan, for the effect on Ford if any of these two went would be tremendous.

On the other hand, why give a bail-out to them? Do they deserve them? Haven't they been making crap cars for, what now, the last 20 years (or more)? Haven't they had no Insight (!) whatsoever to stop producing gas-guzzling SUV's and begin the production of what the people want, small cars?

Let's assume they get a bail-out, how much will it give them? Maybe, 30G$? That's not so much considering GM is spending at least 3G$ every month. Besides, will they be able to fix everything they need to in order to get some profits? Let's see the list, they need:

- Small, more fuel efficient and Eco-friendly car (the latter of the two the Prius isn't);
- A better product quality;
- No more SUV's

Besides, even if they achieve all these things, they still have to account in the story that they have the Union on their backs, fat checks to give to their CEO's, CFO's and what-not, and that it will takes years, if not decades before people trust them and their products again. Just look at Ford. It is said that Ford's product are now almost on match with Asian products on the matter of quality, and they have the only good small american car (the Focus), but does that really help them?

Something else that bugs me, there's so many products these corporations sell abroad that they should have been selling in NA for at least 5 years, and that they will never sell here, or wait until 2010 to do so. For instance, the european focus, which is much better than the american one (better looks, better chassis, better quality, etc) will be sold here in 2010, but why haven't they sold it in NA the moment they designed it? Because "it didn't fit the NA regulations"? or because "it wasn't what NA people wanted"? That's bull-shit. Something else that should have been sold in NA for ten years, the KA. Although I agree it is rather a woman's car, Ford still doesn't have something smaller than the Focus to offer in the US.

Quote from boosterfire :

- Small, more fuel efficient and Eco-friendly car (the latter of the two the Prius isn't);
- A better product quality;
- No more SUV's

They have those under their noses (OK, the second only moderately), which is the silly thing. They're called the European models with sensible sized engines, plenty of space and decent fuel economy. And they look better.

I think GM and Ford and Chrysler should get rid of some of there car companys that they own for example i think GM should get rid of Saturn and other companys that just arn't bringing in anof money but keep Cadillac cause Top Gear likes them and ask Top Gear they will tell GM what to do. And if GM, Ford, and Crysler go bankrubt and quit alow some european cars into america becuase there much better quility and we don't need those 0.5MPG GMC Denalis, Escaleds and stuff because there complaining about gas being so expensive but there making it so expensive driving those gas gossling trucks. end of rant or what ever yoou call it.

Quote from duke_toaster :

They have those under their noses (OK, the second only moderately), which is the silly thing. They're called the European models with sensible sized engines, plenty of space and decent fuel economy. And they look better.

You know, I could go out there and buy a Saturn Astra! Isn't that magnificent? A wonderful, 100% American car, full of American goodness, and Amer - wait, what, it's an Opel? Oh, ya, that's true...

It's a good concept, but at some point the NA people will realize that they're being bullshitted in buying believing that what they're buying is really made by the big three. And when they realize that, they still won't trust the big three, because they'll know what they sell really is European or Asian cars.

Quote from swisscosmo :

I think GM and Ford and Chrysler should get rid of some of there car companys that they own for example i think GM should get rid of Saturn and other companys that just arn't bringing in anof money but keep Cadillac cause Top Gear likes them and ask Top Gear they will tell GM what to do. And if GM, Ford, and Crysler go bankrubt and quit alow some european cars into america becuase there much better quility and we don't need those 0.5MPG GMC Denalis, Escaleds and stuff because there complaining about gas being so expensive but there making it so expensive driving those gas gossling trucks. end of rant or what ever yoou call it.

They already have sold parts they own in other car builders to get some cash on hand. I think Ford got rid of a third of their actions in Mazda, and GM sold something too, but I can't remember what

Quote from STROBE :

Very well said. I agree with all of it, except one bit - they shouldn't be bought out by the govt. As mrodgers says, people aren't going to suddenly start buying cars again once the govt has rescued them. The companies are fundamentally flawed.

I agree entirely. It won't change buying patterns overnight, but it will shift impetus. The difference between a $25bn bail-out and a $25bn buy-out is that of public interest. The historic problem with these companies has, as you say, been the way they've been run. They need restructuring from the top down. As with the UK government's decision to buy banks instead of just give them free money, what will ultimately be served is the public interest.

One of the most offensive issues with these 3 manufacturers is their deliberate disregard for road safety. They all have a shameful legacy on that front. I, for one, will never buy another Ford while it's still under its present ownership/management. I owned a Ford Explorer. Our US members will remember the tyre recall in 2001 (or thereabouts) after Ford got caught once again deliberately choosing customer risk of death over defect recall. I even had to buy the tyres first and claim back afterwards. Lucky for me I could afford to do that.

I disagree with duke_toaster about manufacturing abroad. The US car manufacturing industry is incredibly important to the midwest. Michigan and Ohio particularly.. these companies are huge employers. Whatever solution they find must include job security in domestic manufacturing or there is nothing to rescue except the brand names, and they're not worth $25bn.

Quote from SamH :

I agree entirely. It won't change buying patterns overnight, but it will shift impetus. The difference between a $25bn bail-out and a $25bn buy-out is that of public interest. The historic problem with these companies has, as you say, been the way they've been run. They need restructuring from the top down. As with the UK government's decision to buy banks instead of just give them free money, what will ultimately be served is the public interest.

One of the most offensive issues with these 3 manufacturers is their deliberate disregard for road safety. They all have a shameful legacy on that front. I, for one, will never buy another Ford while it's still under its present ownership/management. I owned a Ford Explorer. Our US members will remember the tyre recall in 2001 (or thereabouts) after Ford got caught once again deliberately choosing customer risk of death over defect recall. I even had to buy the tyres first and claim back afterwards. Lucky for me I could afford to do that.

I disagree with duke_toaster about manufacturing abroad. The US car manufacturing industry is incredibly important to the midwest. Michigan and Ohio particularly.. these companies are huge employers. Whatever solution they find must include job security in domestic manufacturing or there is nothing to rescue except the brand names, and they're not worth $25bn.

From what I heard, if GM only goes bankrupt, it's somewhere around 3 million jobs directly and indirectly lost. That's not counting the impact on the American economy.

Also, here's a quote from Fight Club. It might not be true, but the fact that it is in a movie is still interesting:

Quote :

A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.

Either let the free market regulate itself or bail them out in return for a significant share. Throwing money at them so they're able to continue their mismanagement just because bailing out failed companies is the latest fad would be the worst course of action. Crash, burn & rebuild, or save and get rid of whomever/whatever caused the failure. Each has its pros and cons.

Quote from boosterfire :

Also, here's a quote from Fight Club. It might not be true, but the fact that it is in a movie is still interesting:

It is true. It's so true, in fact, that when it came to light in a courtcase about exactly how true that is, the jury were so disgusted with Ford that they elected to award something around $5bn against them.

I'll buy ford for £1 if i get a free mustang gt500kr
oh and google says £1 = $999999999999999999999999999999999999999999999

Quote from boosterfire :

You know, I could go out there and buy a Saturn Astra! Isn't that magnificent? A wonderful, 100% American car, full of American goodness, and Amer - wait, what, it's an Opel? Oh, ya, that's true...

It's a good concept, but at some point the NA people will realize that they're being bullshitted in buying believing that what they're buying is really made by the big three. And when they realize that, they still won't trust the big three, because they'll know what they sell really is European or Asian cars.

They could build 'em in the US to the exact same spec. And it would be made by the big three, it's all divisions of one company (some more profitable than others).

PS ... Opels are actually Vauxhalls

Quote :

They already have sold parts they own in other car builders to get some cash on hand. I think Ford got rid of a third of their actions in Mazda, and GM sold something too, but I can't remember what

1% or so share in Suzuki.

Luke, the value of the £ is going down, it recently was nearly a dollar being worth around 50p, now a USD is worth 66! A Euro is worth 83 ... how long before it's rather equal and we wind up joining the Euro?

Since some people are talking about safety on cars in N/A,...
Do you remember Ralph Nader?

For those who don't, this advocat wrote an interesting book on this subject in the middle of the 60s, "Unsafe at Any Speed".

Guess what? Even 40 years after, the problem remains the same.