Rumors In the Car Business

It wasn't just the unions. Management was more than happy to agree to future benefits rather than deal with the issues at the time. It is those future benefits - pensions and medical care - that are bankrupting the company.

Management of the Big Three has historically been quite poor. They have as much of a hand in this as labor.
So labor had them by the balls, and management negotiated the problem into the future, so its managements fault?

Where's Reagan when we need him? He fired the Air Traffic Controllers Union. These CEOs should fire the UAW. Bring in the scabs. Bring in the dogs and water hoses. Bring in the National guard with billy clubs and rubber bullets and run the union thugs out of town.
 
CB agreement?

Collective Bargaining Agreement, the real problem is that these agreements were put into place in the 50’s 60’s and 70’s when healthcare costs and live spans were lower. Now Ford is on the hook providing medical benefits for 20 years longer (per employee) than they had expected and at a cost 10x higher.

The UAW agrees that the provisions in these old agreements are completely unreasonable and have a huge negative impact on Ford raising the cost per hour per worker by $10-$20. Problem is that the Union and Ford entered into the contracts willingly and all there is a problem with amending contracts once benefits begin to be paid under them, even when the UAW wants to amend them.

The principal is that they would be acting against the interest of the union member who originally approved the agreement so what has happened is that the UAW and Ford have gone to the National Labor Relations Board (NLRB) asking for permission to amend the old agreements but the NLRB has ruled that under ERISA that amounts to a breach of the UAW’s fiduciary duty to its past members.

So, even though the unions and Ford want to change the agreements, it can’t be done under Federal law (no matter what the administration) unless ERISA is amended (won’t happen) or Ford goes into a reorg. At that point ALL contracts can be renegotiated.

Air Traffic Controllers were different because it was a going forward agreement that led to the strike. Even if the UAW agreed to $0 benefits and $10/hour now, it wouldn’t the costs for covering retirees or funding their plans.
 
US CAR makers have failed to convince the Bush Administration to allow them to tap the $US700 billion bailout fund to stave off bankruptcy, leaving the troubled industry dependent on convincing Congress to make funds available or waiting until the president-elect, Barack Obama, takes office.

The White House press secretary, Dana Perino, ruled out helping the car makers from the Troubled Assets Relief Program, saying it was "solely focused on financial institutions and making sure that we did not allow our financial system to collapse".

"While the Secretary of the Treasury has a range of tools under this umbrella called TARP, helping specific companies or specific industries outside of the financial sector was not included in that discussion."

No joy for US car makers in effort to tap bail-out fund | smh.com.au
 
.....

So, even though the unions and Ford want to change the agreements, it can’t be done under Federal law (no matter what the administration) unless ERISA is amended (won’t happen) or Ford goes into a reorg. At that point ALL contracts can be renegotiated.
.....
Nice concise info-thanks.

So there you go. There is only one way out. Chapter 11. Then screw the unions. :badgrin:
 
Then they better get used to taking more of our exports. And they may hire $15 line workers, but their engineers and CEO's are all overseas.

And I do understand that Toyota's are built down south and Ford are built in Mexico. That's all lowering our wages. What do you do and what state do you live in?

He doesn't care, Sealy. He doesn't have to.

He's on agovernment pension, and I guess he thinks that he's going to be okay even though people of the USA aren't making enough money to pay his spension anymore.

I find it amazing how so many miliatry people, people who essentially lived in the most socialized sector of society, like to lecture those of us who've been trying to survive in this cutthraot capitalism, about how perfect that capitalist system is.

Do they not understand that our system is so broken by these idiotic policies that we have borrow money from CHINA to pay their pensions?

Apparently not.
 
US CAR makers have failed to convince the Bush Administration to allow them to tap the $US700 billion bailout fund to stave off bankruptcy, leaving the troubled industry dependent on convincing Congress to make funds available or waiting until the president-elect, Barack Obama, takes office.

The White House press secretary, Dana Perino, ruled out helping the car makers from the Troubled Assets Relief Program, saying it was "solely focused on financial institutions and making sure that we did not allow our financial system to collapse".

"While the Secretary of the Treasury has a range of tools under this umbrella called TARP, helping specific companies or specific industries outside of the financial sector was not included in that discussion."

No joy for US car makers in effort to tap bail-out fund | smh.com.au

In other words, to quote an infamous Daily News cover:

BUSH TO DETROIT:
DROP DEAD
 
In other words, to quote an infamous Daily News cover:

BUSH TO DETROIT:
DROP DEAD

This is one case I completely agree with George W. Bush on and that is that The Big 3 David need to head to Bankruptcy court rather than to congress for a bailout. As I have stated more than a few times in this thread, in the end it will result in leaner companies better able to compete in the market. IMO the *bailout * concept * in general is a disaster as can be seen in it's current form and if additional taxpayer funding is given to these companies it will do nothing but stave off a trip to Chapter 11 for a short period of time especially for GM who is losing money at an astounding rate.
 
This is one case I completely agree with George W. Bush on and that is that The Big 3 David need to head to Bankruptcy court rather than to congress for a bailout. As I have stated more than a few times in this thread, in the end it will result in leaner companies better able to compete in the market. IMO the *bailout * concept * in general is a disaster as can be seen in it's current form and if additional taxpayer funding is given to these companies it will do nothing but stave off a trip to Chapter 11 for a short period of time especially for GM who is losing money at an astounding rate.

You should read this.

GM might not be able to get financing it needs in bankruptcy - Nov. 13, 2008
 

With annual American car sales trending toward 14 million or below for 2008, the industry's problems have turned to rapidly falling revenue. If the average vehicle bought in the US costs the consumer $25,000, at least $75 billion in domestic sales could be taken out of the market in two years. With close to 25% of the total pie, GM would be devastated if the present sales level moves into 2009.

GM is likely to find a buyer, if things go that far. The candidates would be VW, which would like to have a slice of the US as large as Toyota's (TM) or Renault/Nissan. Either operation could pull billion of dollars in redundant management, manufacturing, and product design costs out of the American firm.
24/7 Wall St.: A GM (GM) Chapter 11?

Thank you David for the Article, but I rather doubt in Chapter 11 GM would have any trouble finding any financing or for that matter a buyer. What would emerge most likely is one American Car company that is positioned to compete better worldwide and a big surge to fill the 20% of the Market that is GM will leave. Most people think that if GM file Chapter 11 thats it , the sky will fall and thats simply not true, yes many will lose their jobs, but they are going to facing layoffs anyway even if a bailout comes. So why not give these companies a chance to finally right themselves and come out where they can compete. I submit had this route been followed with AIG we would be in a muhc stronger position than we are today.
 
With annual American car sales trending toward 14 million or below for 2008, the industry's problems have turned to rapidly falling revenue. If the average vehicle bought in the US costs the consumer $25,000, at least $75 billion in domestic sales could be taken out of the market in two years. With close to 25% of the total pie, GM would be devastated if the present sales level moves into 2009.

GM is likely to find a buyer, if things go that far. The candidates would be VW, which would like to have a slice of the US as large as Toyota's (TM) or Renault/Nissan. Either operation could pull billion of dollars in redundant management, manufacturing, and product design costs out of the American firm.
24/7 Wall St.: A GM (GM) Chapter 11?

Thank you David for the Article, but I rather doubt in Chapter 11 GM would have any trouble finding any financing or for that matter a buyer. What would emerge most likely is one American Car company that is positioned to compete better worldwide and a big surge to fill the 20% of the Market that is GM will leave. Most people think that if GM file Chapter 11 thats it , the sky will fall and thats simply not true, yes many will lose their jobs, but they are going to facing layoffs anyway even if a bailout comes. So why not give these companies a chance to finally right themselves and come out where they can compete. I submit had this route been followed with AIG we would be in a muhc stronger position than we are today.

Why doesn't the US go bankrupt? Seems like the popular thing to do today!
 
Why doesn't the US go bankrupt? Seems like the popular thing to do today!

David, we keep borrowing from China and running up a deficit and increasing spending while "bailing out" anyone that K Street Lobby groups want us too that's not beyond the realm of possibilites.
 
tarrifs on exporting our cars to china etc., and no tarrifs on our importing cars gives an advantage to these foreign countries....

our car industry is destined for failure unless things change in that arena...
 
tarrifs on exporting our cars to china etc., and no tarrifs on our importing cars gives an advantage to these foreign countries....

our car industry is destined for failure unless things change in that arena...

Care, no offense intended here but how many Chinese car companies can you name? While I see your point, an ever increasing majority of cars from Korea and Japan are made here in this country and would those same tariff's apply on GM, Fords, and Chryslers imported into the United States?
 
Care, no offense intended here but how many Chinese car companies can you name? While I see your point, an ever increasing majority of cars from Korea and Japan are made here in this country and would those same tariff's apply on GM, Fords, and Chryslers imported into the United States?


no offense taken! ;)

HOWEVER....

China's automobile industry is in rapid development since year 2000. In 2006, 7.189 million motor vehicles were manufactured in China, surpassing Germany as the third largest automobile maker, after Japan and the United States.Automobile industry in China - Wikipedia, the free encyclopedia
 
1. You can't force foreigners to do anything. Why not force the unions out, by getting rid of the requirement that you must be part of the union to get a job there? That's what we do in NC and our economy's doing fine relative to the auto industry.

2. Most foreign label cars are made in the US.

3. Its a global market for parts as well. Although a tarrif on foreign parts might help out.

4. No problem with that one here.

OK, force unions out, but only if you make it law that no officer of any company recieves more than 20 times what the lowest paid employee, permanent or temporary, gets paid. This bullshit of blaming the working man for the errors of the CEOs is getting old and stinky. It was not the man on the floor that decided that Americans did not want a real hybrid. It was not the man on the factory floor that decided after some very successful test runs with the public, that they would not produce and electric car.

The decisions that have taken the American Auto industry down were made at the top by some very incompetant people. The very same people that get golden parachutes worth tens of millions, while that man on the factory floor gets a few months of unemployment insurance, a foreclosed home, and no health care.

The best thing we could do for the American Auto industry is fire everyone from midmanagement up. Out on the street, no parachutes, no severance pay. Incompetance is its own reward. Time for real change.
 
An electric car for the common man
One company is hoping to bring a $30,000, 80-mph battery-powered sedan to the market by 2009.
By Steve Hargreaves, CNNMoney.com staff writer
August 13 2007: 4:43 PM EDT


NEW YORK (CNNMoney.com) -- If all goes according to plan, by 2009 you could be sticking it to Big Oil by driving an all electric, Chinese-made sedan for little more than the cost of a Camry.

Electric cars are nothing new. But until now they've either been very expensive to produce or, if not that, then small and relatively slow - little more than glorified golf carts.

Special Reportfull coverage

Oil falls on concerns about demand
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Taxing our gas guzzling relapse
Pickens' wind plan hits a snag
IEA lowers oil demand forecast
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Miles Rubin, with his $30,000 Miles XS 500, is hoping to change all that.

Hybrid power served 5 ways
According to Rubin, Founder of Miles Automotive Group, the XS 500 has a top speed of 80 miles per hour and a range of 120 miles at 60 miles per hour. That's about as fast as GM's late-90s era electric car, the EV 1. And the XS 500 will be a lot cheaper to produce, the company says.

Both the low cost and the high range can be attributed to China, where low labor costs keep the price down and state-sponsored research into battery technology yielded what Rubin said was an advanced lithium ion power pack produced by Lishen Battery.

Plug the car into a normal wall socket and, according to company literature, six hours later you've got a full charge.

While this sounds like the perfect vehicle, serious challenges remain.

The first, of course, will be bringing the car to market. Rubin said he'll have 6 prototypes of the XS 500 by the fall, but they still need tinkering to get safety approval from U.S. regulators, plus do additional battery testing.

Then there's the competition. Phoenix Motors has a four-door utility truck with similar performance capabilities that it's planning on selling to the public around the same time. And Tesla Motors, makers of the $100,000 all-electric Tesla Roadster which is expected to enter limited production by the end of the year, has plans to enter the sedan market next. (An e-mail to the company seeking comment was not returned. For more on Tesla's sedan plans, as well the recent departure of that company's CEO read the Green Wombat blog.)

The big automakers are also getting in on the electric game with their plug-in hybrids - vehicles that use an electric motor all the time but can recharge with both a plug and a conventional gasoline engine, giving them far greater range.

General Motors, the only big automaker to announce anything like a target date, said Thursday mass production of its Volt plug-in should begin by 2010.

Selling the car is another obvious challenge. Ford, GM, Toyota and Honda all had electric vehicles back in the late 1990s. They were sold in California at a time when state regulations basically required car makers to do so. All of them halted production after those regulations were changed.

"But the world has changed," said Rubin. "We need to get off our reliance on oil and we need to alter our carbon footprint."

Rubin has previously worked as a corporate lawyer and, later, headed several companies, including a company that sold metal forms to Detroit automakers. He most recently headed Polo/Ralph Lauren Jeans.

Even if U.S. consumers flock to electric cars out of environmental concern, Rubin may still have to convince them to put their bodies inside a Chinese vehicle, especially in light of all the news lately of recalled Chinese goods.

To ensure quality, he says there are inspectors in both Chinese factories that will produce the car. He also touts the car's safety features including as reinforced doors and both front and side airbags.

"The cars will speak for themselves. You can PR it to death, but if it doesn't perform well, it's dead on arrival," he said.

Rubin will also have to answer skeptics who wonder how an electric vehicle is actually better for the environment, given that the electricity to run the car is produced largely from coal and the nation's electric grid is strained as is.

Rubin retorts that the electric grid is plenty capable of handling demand from electric vehicles, provided people recharge them at night.

On the environmental question, he says just because electricity now is mostly made from coal and natural gas, renewables like solar or wind or carbon-free nuclear power could play a larger part of meeting the nation's electricity demand.

Environmentalists also support the development of electric cars, noting that it's much more efficient to create electricity than it is to power a vehicle with a combustion engine.

Prius still king as hybrid auto sales rise

Mercedes ML320 CDI: So good, it's illegal
 
I think in the coming weeks and months, the definition of capitalism will need to be redefined. The government will not let the U.S. car industry fail.

They will not let the US industry fail. We do not, and never have lived in a purely capitalist state. The govt has been bailing companies out for a long time. When was it, the 80's, they bailed out Chrysler?
 
Not to defend Iran or anything, but if they are a massive supplier of oil, why shouldn't they cut oil production to save money? If we're a capitalist system and we support capitalism, why are we complaining about a company cutting production because demand has fallen?

We complained earlier this year when everyone said they weren't producing enough. Now they're producing too much. This is very two-faced.
 

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