What happen to the Auto Industry now?
 

I heard a lot of rumor that US auto industry will fall due to Global recession. And not only US, even the biggest car manufacturer(TOYOTA) announced that they loss $5billion last year.

What could be the other possible reason of the downfall of this industry?



----
"In less enlightened times, the best way to impress women was to own a hot car. But women wised up and realized it was better to buy their own hot cars so they wouldn't have to ride around with jerks." -Scott Adams

The US auto industry has had trouble for quite a while before this recession, but it certainly is making things much worse. Unfortunately, the big three consistently made labor concessions and other decisions that traded short term gain for long term costs. I don't think the US decision to go with mpg standards for vehicles (vs gas taxes) and then to create loopholes even for those helped either.

I know those two observations are part of a very complex situation and there's more going on, but I'm trying to capture the spirit of the situation in just a couple of lines.

I keep hearing vague predictions of the dire consequences to our economy if GM were allowed to fail, but never any serious attempt at specifics. Since the best case scenario is that GM would survive in a much reduced size, with much lower paying jobs, and that there would most likely be some expansion of foreign car maker activities in the U.S. were it to go bust, and that the resources put into saving GM could be used to grow the economy in some other manner, what is the bottom line? Once you throw in the suppliers to GM the picture gets pretty complicated, but someone, somewhere has got to be able to quantify the impact GM's failure would have, even if just to the minimal extent of putting it within a wide range of dollar values.

i believe if people are paying attention, auto sales may never return to what they once were. the days of buying new and trading every 2-3 years are likely over for many.

see...

https://www.gassavers.org/showthread.php?t=10067

irresponsible management, overbearing unions, over pay, over benefitted(pensions), and consumers keeping their cars longer all contributed to the auto maker downfall.

they need to evolve w/ the times. cut costs, remanage, lower prices, control or eliminate unions, etc to survive. NO MORE bailouts, let them go bankrupt and learn!

Good points. Is the gov't bailout enabing the auto industry and banks to become a welfare industry?

Why can't we let them fail and let them remake themselves in a way that is sustainable in the new economy?

Creative destruction is always a part of progress, but our social safety net that can ease the transition of workers from one industry to the next has really been let go. I think that's what's really contributing to so many being change averse.

If we hadn't systematically messed up our educational system, we should've largely moved on from the need for manufacturing by this point in our development.

one thing i agree w/ in this new executive administration is the need for new energy especially in regard to jobs. i don't agree w/ taxing both "old" energy and ultimately the consumer as well however.

we've created a monster in terms of dead end jobs. look at how many CVSs, 7elevens, gas stations etc that we have. that's not to mention how many similar individual products by companies and manufacturers. look how many models are being discontinues in the auto industry.

our economy, even healthy, can only support so much business and so many products. competition is a good thing, but like anything else moderation is key.

if i were looking for a job, i'd look not at the ones that have an "overinflated" need, but ones that would sustain thru difficult times and look to the future. that's not to say some just need whatever is available NOW, but they should continue to search.

If anybody's interested in some economics sorts of podcasts, I like Marketplace for more day to day things, and NPR's Planet Money for more in-depth stuff. They're both highly accessible. The Economist has some interesting things, but only a small amount is released free each week (basically an advertisement for their newspaper).

All three are available via iTunes. Podcasts are my preference as I can work/drive while listening to them.

Three words: Aging Baby Boomers.:)

But don't you think the stated costs of energy options should reflect their actual costs? Or do you mean taxing them above and beyond that point?

Hey! I know! I'll let you clarify and stop guessing.

max,

no question our fuel prices are deflated. but, taxing them to reflect actual cost would no doubt worsen an already struggling economy. my company prez gave a state of the company address recently deducting that fuel prices being relatively low has helped our business.

subsidizing is necessary evil unfortunately. look at healthcare...

what is the TRUE crisis and cost? greedy insurance companies? nope. lack of doctors? nope. the TRUE cost causing a crippling crisis is the majority subsidizing the minority--illegal aliens and those that smoke, eat terribly, do not exercise etc. and that's not even touching on WAY overprescribed presription drugs.

oh, and theclencher would add...breeders are to blame! ;)

and i almost forgot to answer your question directly...

if we were able to drill more at home now, NORMAL, present tax rates could be applied towards new tech and energy. and obviously THAT would bring down the true cost.

i stopped listening to the "big oil is evil" argument. they're in business for profit. and anyone that thinks they want no part of alternative fuels has no idea how capitalism works.

So you think the answer should be all carrot and no stick? I have to ask: do you believe in global warming?

good links. got one as well...

https://clarkhoward.com/

you can call or email this guy w/ questions--i like hands on advise.

he was quoted as saying that if this president thinks spending, borrowing, and taxing is going to get us out of economic tough times "he's nuts!"

Wait a sec, I think your positions seem at odds.

You say you think the problem with healthcare is subsidizing expensive behaviors of those acting inappropriately, but then say that subsidizing people who consume a lot of energy inappropriately is OK?

Unless I misunderstood one side or the other...

what people? when did i say(infer) that?

i believe tax credits should be given to those who drive efficient vehicles. but, businesses or handicap individulas for example, should not be penalized for NEEDING a large vehicle.

but it's ugly because you get into tax per mile proposals. major metro areas have the option of NOT driving.

let me say because you're new...i'm not very well educated, so my points are not always understood. BUT, but i am an independant conservative who believes in accountability AT ALL LEVELS(individual, govt, corp, etc). and i am VERY well informed.

and no i am not convinced of GW--too much evidence on either side. to wreck an economy for a theory? i think not!

if you search GS archives for global warming, you'll find individual opinions against that argument FAR greater than my intellect. it's quite entertaining as well! :D

I wanted to make sure I understood you. It's a real problem with these very short responses that try to address complicated issues. I don't agree entirely with your explanations for the causes of our healthcare problems. To debate it, however, is way outside the scope of these forums (and this thread).

The following may make me sound like a condescending jerk, but it is unfortunately my position not to debate global warming with people. This is because I'd have to be a fool to think that if you're willing to dismiss the overwhelming consensus of scientific opinion (of course there will always be dissenters) that now supports evidence of global warming that you're going to listen to anything I have to say on the subject. That's a factual argument which doesn't require my input. This seems to somewhat mirror your own position, so no one will need to put up with us arguing fruitlessly about it.

Let me instead make an observation about risk management in general. What matters is expected harm which is probability * consequences. It is not rational to argue for absolute proof before taking preventative measures, especially in the face of a trend of increasing probability estimates and increasing consequence estimates. There are a lot of options short of "wrecking" the economy.

I guess it depends on how you define "need". People with disabilities are pretty hard to argue against, but they're also not that numerous (thank goodness). Business is trickier. Let me give a simple hypothetical example. Let's say that in order to operate a business profitably you require the use of a gas guzzling vehicle of some kind (type is irrelevant). Now let's assume that without a use exemption that the business would fail. That sounds really bad, but what if there were another job option you could adopt that was viable and didn't require the huge gas guzzling vehicle? I'm not saying there aren't valid business reasons for exemption, just that it's not automatically bad for some enterprises to not be a reason for one. I'm interested in people's ideas on this.

The lack of carpooling in really busy urban areas is the thing that has me pulling my hair out.

let me finally say as we digress...

don't let things like that get you to that point. i used to be like that, but i realize now that some people will not change unless they are confronted w/ adversity. take gas consumption. $4/gal gas only hurt the poor and didn't do much to discourage driving UNTIL job losses started to mount(when gas was well below $4 BTW).

as an independant voter, it frustrates me that many politicians put party AHEAD of country. one side does this more than the other AND they have the help of the biased media to mislead uninformed voters.

take global warming, climate change, or whatever it will be called next week or year...if we could focus on pollution we could find some middle ground, but NO!, voters are given a distraction so the real issues do not surface and the knuckleheads get voted out!

anyone that does not see the US moving away from what the founding fathers made it to be, irrespective of GW, healthcare, or any other political agenda, i truly feel for them.

no one will EVER change my mind about core, fundamental avenues to success. they are...

accountability, integrity, love for humanity, and good stewardship. we are moving FAR away from these principles. w/out sounding religious, 'cause i'm not, these can be found in one book(the most popular in history).

BTW, for your "factual" argument...facts, stats, and studies can ALL be manipulated for $$$. "site your source" is another repulsive statement to me. my source is personal experience and/or studying both sides of an issue.

said it before...

you saw an inconvenient truth, then read an inconvenient book; you saw fahrenheit 9/11, then see fahrenhype 9/11; you read the new york times, then read the washington post; you watch NBC, ABC, and CBS, then watch FOX(CNN is getting a little better tho); you listen to Oberman, then also hear Hannity(i like Glenn Beck myself); if you're a democrat, listen to what republicans have to say.

I don't know if loosing one's job (and not having funds) makes people drive less because they don't have the $. I think you drive less because you're not driving to work every day.

-Jay

At least in medical circles, it's virtually impossible for a layman to use that approach to consistently evaluate claims. The trick is to find reputable experts to sift stuff for you. That's why a consensus of trained professionals should carry weight.

For the amount that our government have spent to bailout GM & Chrysler... they could have bought Toyota.