Do Sales Merit An Auto Bailout?
 

it is my view that the auto bailout is a no win situation given the lack of demand for new vehicles. a decisive plan by the manufacturers MIGHT warrant some type of assistance, but that remains uncertain to be sure.

i believe a bailout, in present circumstances, would only delay a collapse of 2 or more of the big 3 US auto makers. but then, the tax payers would be left holding the bag(of taxes).

i've created a poll to find out what GS members would do to stimulate, if at all, new car sales. afterall, i believe you all to be the most informed of consumers. sorry for our non-US members, but please feel free to vote. any way, please give your vote!

if you'd like to comment that you will buy new, just not any of the big 3, that's fine as well. that was part of my thought process--that the big 3 MUST compete better w/ imports!

If they don't change but do get help, they'll fail in a few years. Even if they DO change and get help, they could still fail -- a major portion of the problem is image. I don't think they deserve a bailout, and I don't believe that the taxpayers should have to cover it.

However...I believe that delaying their doom is a good plan, when it's all said and done. It's not out of concern for them; as much as I like GM vehicles, they (and the others) have to sink or swim on their own. However, this is a particularly vulnerable time for the economy to take a big hit. Up and down the supply chain, and following the impact out from there, there would be a huge effect...and a few years ago or a few years from now (probably) would be a more acceptable time for it to happen.

It's not like we're not going to pay anyway; even if we don't bail them out, we'll still be paying unemployment and bailing out the workers (not just GM's workers, but those all along the supply chain, and the ones hit by the ripple effect). Now's just a bad time for a big shock.

GM has been going downhill for over 10 years, how's more money going to help them out?

Fun read from 1994..it seems like history is repeating itself over and over.
https://query.nytimes.com/gst/fullpag...50C0A962958260

i understand there are a lot of jobs hanging in the balance, but we simply can't save them with tax dollars. the demand is not there. imagine lending a friend money to support his vcr repair business. yes, he may hang on for awhile, but eventually they will become obsolete yielding entirely to dvd.

auto manufacturers, especially the big 3, MUST reinvent themselves. restructure pay/benefits and lower prices is a start. how about cut out the UAW multi-million dollar golf resort?

I have actually been thinking heavily on a new vehicle. and when I say new, I mean new. I looked at the smart and the yaris mostly.

the domestic counterparts seem to be less comperable to what the foreign auto makers have to offer. the corrola gets better mileage than anything that the big 3 have and it has a better look and resale (with the exception of the cobalt XFE which I think is the same mileage) along with the fact that none of the domestic has a hybrid that is comperable to the prius or the civic hybrid. one of the most dissapointing thing was the malibu hybrid. I was hoping that it would see mid 40s like the civic hybrid but it has the same size 4 cylinder as the non-hybrid version so you can't expect but so much better.

because of the economy, my family has decided to stick with the two vehicles we have (I have recently sold my truck as well) and I am in the process of paying off my wife's element which would leave us with no car payments. it has been a while since I could say that. not sure if I would take a new car if it was under 10k. if they gave it away, I would take it just because but I can't see that happening any time soon.

*edit* and I didn't vote, none really applied to me. good thread though

Agreed, though cars are hardly approaching obsolescence as fast as the VCR. It's unlikely most people will simply switch to walking, biking, or riding the bus in this country anytime soon!

What does a golf course have to do with anything? It has ZERO impact on the contracts with the manufacturers. It's up to the membership to decide if it's worth their dues - and vote accordingly at meetings. Whether it stays or goes however will not change compensation. Jumping further off the rails, it's worth noting that the course is open to the public, and members who use the facility must still pay per use, albeit at a discount.

With respect to restructuring, GM and Chrysler executives have spent the last 10 years screwing the pooch by not innovating beyond gasoline aggressively enough. It's not really the fault of even most of the white collar guys, but rather the ones at the tippy top, opting instead to maximize short term gains by selling out the long term future. And that is the crux of the problem with our current publicly traded stock system: People are able milk the cow to near death, then move onto the next cow just before the previous one falls over. There is no long term accountability for the top executives, so it virtually always ends up a contest of them getting as much for themselves as possible before their time in the sun dithers.

WE cannot save the automakers directly. They must save themselves. All that we can do is extend the opportunity for them to do so via a loan. Unfortunately the conditions set for such a proposal have so far smacked of throwing good money after bad.

Forgot to add that we are apparently endless suckers for the latest and greatest models - much to our own financial peril. :P

Ok, so I've read a little more about this lavish facility, and the hoopla over it is outrageously laughable when you start to really apply the numbers.

The UAW over the last 5 years has lost $23M on the facility. That's quite a figure isn't it? Well, consider that the UAW has 465,000 members who have supported this loss with their union dues. $23M / 465k = $49.46 lost per member over the course of 5 years. Yup, those pretentious UAW members lavish lifestyle has cost them almost $10/year to maintain.

I guess they should have spent that money on 15 extra latte's during that time. :rolleyes:

The same process and logic can be applied to any example losses on either side -- golf courses, private jets, high salaries. It doesn't excuse the general short-sighted irresponsibility practiced by both the unions and the auto automakers (and everyone else involved).

Nobody is concerned with sustainability. The automakers failed to plan for when profitable SUVs wouldn't sell. The unions milk the hell out of the automakers. The stock-buying public, the government, the consumers...everyone.

It's human nature to want to blame a single scapegoat, but the reality is that it's just not that simple. Every group is at fault, and each group has individuals who tried to do the right thing but were overcome by the rest of the group.

I don't disagree with the rest of your post, but this specific issue is a comparison of something that benefits just a few executives vs. something that benefits nearly half a million people for a relative pittance from their wages. Seriously, they only have to use the facility once per year to get their $10 back through the discount. Being a non-golfer, I think it's a silly waste of money, but how many workers in this country have gym memberships costing more than that and never go? Singling this golf course out is a ridiculous red herring in this discussion, as many employers provide far greater perks to their employees for more cost than that - even if that is only in the form of corporate partner discounts (ala x-plan pricing on Fords).

Arguably, the union needs to decide whether they want to work or not. After all, not giving in to further concessions means diddly squat if the company goes into bankruptcy protection - in which case they will all end up having to endure major cuts anyway to keep their jobs - if the jobs still exist. It's a tough situation no matter how you look at it.

It won't stop us from purchasing a new car in the next year or two however or really even affect which manufacturer we select, because even in bankruptcy there will likely be service support available to owners. Most likely however, we will end up holding off on purchasing anything due to our own circumstances wherein I am considering a career move and relocation for a more secure income.

You've missed my point entirely. Someone else posted the golf course, then you defended it by talking about its small cost when you break it out per person. The same defense can be used for ANY waste on ANY side, and EVERYBODY has big chunks of waste.

Are you seriously suggesting that the golf course is the only sizable gratuitous waste on the union's side?

None of the groups involved are innocent.

i think my point was missed as well. no matter how great or small...

waste, mismanagement, seemingly insignificant golf courses and such, etc can define an individual and in this case ruin a corporation.

he who can't be trusted with little, certainly can't be trusted with much!

i really think this is going to have to happen to generate sales. budget cuts and profit will be sacrificed of course.

it is already starting to happen. i read an article a few weeks ago showing 2 models in the $10k range, stripped eco boxes obviously. but, with some belt tightening who knows what will happen.

i didn't intend to suggest that anything but an entry level car could drop to that level. but, certainly the concept could(should) bring down the MSRPs accross the board to ALL present production motor vehicles.

thanks for the good post comment.

I have actually seen the nissan versa for under 10k and I think it is kia that has a model under 10k.

I have purchased a few new vehicles. my wife's element was new with 13 miles on the odo at purchase and my truck (dodge dakota) was special ordered and had 7 miles on it when posession was taken of it. I don't plan to buy a new car for a while but I don't rule it out. more than likely, not a domestic which is sad because I do love those dodge trucks. If I buy another truck, it will probably be a toyota. the resale value and overall quality of the toyotas has really impressed me over the years.

I hope that prices will go down and stay down. I fear that the lower prices are just for the year end deals and to get number of cars down before tax time so they don't have to pay for left over inventory. maybe I am wrong.

I have my own opinions about the UAW (whick I wish not to mention) but in the end. now they are spending our money. tax money is our money, you and I. they being the domestic auto makers (GM and chrysler mostly). hopefully they will put it to good use. I want a GM that gets 40+ mpg. honda did it, toyota did it, and they got no incentives to do it eiter (not that I know of anyway) no bail out either.

I guess time will tell on this one but until the global economy gets better, I am not looking at adding to my fleet at all.

Your point to conflate multi-million dollar executive bonuses and options with a $10 per year union member perk - provided by their own union dues - was not missed. THAT is MY point.

I think the golf course was a stupid idea, but again, that's money that is not bargained for contractually with the automakers for that purpose, i.e. it's as completely irrelevant to the either side of the discussion as whether the employees use name brand dishwasher detergent at home or the generic store brand. The automakers have zero control and concern over whether the union runs a golf course or not, because it has zero impact on the contract and the corporation. It's insulting to not just the union members, but to anybody reading this to suggest that it is anything more than that, unlike those who zoom across the country on luxury jets and receive bonuses when their companies have actually lost money!

I'm sick of the bs, spin, and outright lies continually thrown out with respect to unions. This latest round of 'golf course waste by the UAW' is straight out the Republican spin machine, hoping that people will never actually bother to parse the truth out of their words. So either stow it, or expect to be challenged.

I think that there are many factors that have caused the financial situation of the domestic auto makers.

Is the union (UAW) at fault?... yes. Is upper management of the companies themselves at fault?... yes. Is the general public to blame for the condition of the companies?... yes (in some ways)

many facts have come out about the unions. things like excessive pay (which some dispute) but comperable jobs at foreign auto makers get paid significantly less. I mean the jobs within the borders of the US not in foreign countries. there is also the issue of laid off workers getting paid 95 percent of their salaries when there is nothing for them to do so they get paid to sit in the break room and watch TV waiting for their company to find a place for them to work.

the upper management of the companies have also contributed heavily to the situation. first of all not preparing for hard times. in any company, you have good years and bad, ups and downs. there should be a buffer to get you through hard times. also, they decide to take hefty bonuses and have private jets and other very lavish furnishings that are provided by the company.

and the general public. "joe public". this is the person that these cars are made for. for quite some time, bigger has been better. the bigger the SUV the more clout you have, the better off you must be (because you can afford it). the public has said that we want bigger cars and faster, more powerful cars. this idea does have a flaw though. in any risky business, you should diversify yourself and offer a variety of options so that if one part of the business does bad then you have something to pick up the slack.

I don't have references to back up my claims in this post but most of this is general knowledge. I also don't blame one part of the problem more than the other. I think that the biggest problem is that we (the american people) are paying for their decisions. If I owned a business, I would be expected to pay for my decisions. for the record, I do not own a business so I am speculating. who knows, maybe even small business owners can ask for a bail out.

I don't say this to chose sides or to discredit someone or to back someone else up, but more to voice my opinion.

was the bail out a good idea?????
time will tell on that one

just another view...

my father-in-law is furious w/ talk of bailouts. he lost his job and half his pension when eastern airlines went under. HE wants to know where his bailout is/was.

totally different circumstances, but wrong none the less. my thought is that HIS job, like many in gov't(and others), pay WAY too much in pensions. i believe the future will dictate eliminating pensions. afterall, some companies are limiting/eliminating 401ks.

concerning gov't(tax money), perhaps this should happen sooner than later. overpaid pensions might be worse than mismanagement or waste.

Just bought a Nissan Rogue for the wife, base model for $3200 off the factory window sticker. $18,094, $19,132 out the door.

We gave her daughter her 06 Murano with 35k miles, and took her 01 CRV to clean up and sell.

On Unions:

My father went to England in November of 1943 to fly B17s over Germany. His first mission was 12-24-43. At that time the Union at North American was on strike, so the arrival of the P51 Mustangs was delayed due to the strike.
He thought they should be lined up and shot for treason. Their actions were killing people fighting for their freedom.

In 1973 I worked at a Ford dealership. We got a truck that was brand new, never sold. When you started it up it dumped a quart of oil out the bellhousing in 30 seconds. Tore it down and found a hole drilled into the main oil gallery behind the flex plate. there was a note written above the hole.

"You found it you SOB".

When people sabotage their product and leave that kind of garbage for their customer to sort out, they don't deserve any sympathy from me. I have only owned one US made vehicle since then.

I have a letter from GM in response to my request to confer with them on my engine design. The letter basically stated that they would listen, but I would get no compensation for my ideas.

Now they are spending my money becasue they were to arrogant to listen.
To arrogant to innovate, to stupid to listen, to dumb to think ahead of something as simple as the consequences of a oil price hike.

Let them drown in their own debt.

Let the Unions buy the companies and see if they can run them better. I guarantee you the Morons would change their attitudes when they know their jobs and retirement are on the line.

Management recieving huge salaries and bonus packages for running companies into the ground. That makes about as much sense as helping a person who is trying to stab you.

So I act responsibly, think ahead and save, get out of debt, and still save.
All the time the government is spending like their is no tomorrow. It's time for a Constitutional Convention, and throwing all the bums out of Washington. We dont need no stinking representatives. I can dial a number, enter a code and vote directly for any legislation, without having a bunch a greedy criminals robbing me blind, calling it representation.

Can you tell I am a pessimist. Next year you will see 10% inflation, and 10% unemployment and it could get a lot worse. My dad (still alive) lived through the Great Depression. If we try to spend our way out of this one we may see inflation like the Weimar Republic in Germany after WW1.

regards
gary

R.I.D.E,

i think we're on the same page. i read today that Ford's 2010 hybrid Fusion will enable the electric motor to stay engaged up to 47mph. THAT is the type of innovation i believe is a beginning of a financial rebound. too little, too late; or perhaps to much @ $26k?

i'm sorry to here your idea is not welcomed by more. hopefully VT and your congressman(senator) will help forward your cause.

you stole my thunder about quality of work tho...

i eluded earlier to lack of integrity, and i was not solely referring to CEOs and management. frontline workers of the grind need to step it up. from the orlando sentinel today:

HOW TO KEEP YOURSELF EMPLOYED

"...Make yourself as valuable as you can to your employer. Make yourself a superstar, overachieving."

uh, this SHOULD be a no-brainer!!! sooooo many people get away with as little work as possible, use ALL their sick days, steal time or merchandise, etc.
THIS is what's killing our companies.

some things(talent) you just wake up with or you don't. others can be learned. we MUST work harder and help each other. socialism just encourages underachievers.

my employer pays incentive based wages, and it is used covertly as an accountability control device. that's not to suggest this type of stategy is a cure-all, but it would go a long way towards economic health.

That shouldn't be a problem. First off, the market for >$26k cars seems much larger than the market for <$26k. Second, the last time I investigated tax incentives, new hybrid models had a huge advantage over established models -- so much so that it would probably compete easily with the Prius, and has the advantage of being a familiar-looking regular family car instead of a funny-looking (to the general public) purpose-built hybrid.

Base MSRP for existing hybrid models (from https://autos.yahoo.com) -- search for hybrid vehicles returned 40 results:
Prius: 21,500
Civic: 22,600
Malibu: 23,895
Camry: 25,200
Altima: 25,480
Tribute: 25,485
VUE: 25,645
...the remaining results were variations of those vehicle platforms, followed by somewhat larger SUVs, followed by full size truck-based SUVs, followed by $56,000-$106,000 hybrid Lexuses (Lexi?).

As time passes, MSRP will drop as will tax incentive.

We just bought a new Prius. It was going to happen no matter what since the wife's old car was on its last legs.

There's no love lost between me and the unions, gov't, or the mfg's, so I'd just as soon they all be at the mercy of natural selection. Still, there's a lot of jobs sustained by the industry. Since none of them asked me what I think I have no sway over what happens.

In the end, I don't want my tax money wasted. Fat lot 'o good that does me...

Is there some other use for tax money? :D

Pick the cheapest car you can buy today in the US. Make it profitably in the Big 3 factories, with 25% fewer parts than any other car, while maintaining safety, crashworthiness, and reliability.

Thats my concept, and it really is doable. If gas stays cheap drive whatever you wish, but if OPEC decides to go back to the extortion routine, then we can shut them out of the supply system, at least for the US.

Think of the vehicle I am describing as a comfortable small sedan, that is also the best weapon we have to prevent Cartel extortion of our National Wealth.

We don't need to shoot them (Islamic Radicals or any other enemies), we just need to choke off the capital resources they will use to finance attacks on our Country and Citizens.

The money saved will go a long way towards financing much of the deficit spending we are presently contemplating.

regards
gary

i think if the members posting in this thread were here to vote, there'd be a landslide in favor of NOT buying new...

https://www.gassavers.org/showthread.php?t=285

It is my understanding that the union is taking paycuts in the next contract, which goes into effect either 2010 or 2011.

As another poster said, it would be a bad time to let one of them fail. Ford is in decent shape, having started their restructuring a couple years ago. They don't need the loan, but are worried about being able to survive the ripple if Chrysler or GM go under.

no question! however, it would be "badder" or "baddest case scenario" if they are thrown a bone and go belly up anyway.

That's where I disagree...throw them the bone, let them tread water for a year or two and then go belly up. At that point hopefully the economy will have recovered a little and can take the hit.

we'll agree to disagree then.

what is not deniable is that new car sales were overinflated BEFORE our current recession. many bought new cars that shouldn't have. sound familiar(housing)?

point being that work force, benefits, salaries, etc must be reduced. even when and if the economy recovers, new car sales might not, and really should not, return to previous #s.

so far, the majority, is a firm no. i listened to clark howard today. he is still preaching against debt of course. when will some people get it?

one guy I was listening to (can't remember his name) he wrote a book about getting out of debt, was talking about the "owe it to yourself" mentality.

that has gotten a lot of people. I have worked hard, so now I deserve a big honkin' SUV regardless of the cost. and it is much easier to get an auto loan than other loans. that may have changed recently because of the economic situation.

I will admit, I was right there with them. I had 3 vehicles and thinking of getting a 4th. though the 4th was going to be a smart car. this was before my daughter came along and before we knew about it. I have since sold my truck which puts me to 2 vehicles and gotten a refund on the smart reservation program. I have the payment to the element sitting on the kitchen table and plan to pay it off this month.

(*edit* that will put me at NO car payments)

I think the big thing is priority. I know my priorities have changed in the last 6 months or so. I would assume that many other peoples have as well (at least I hope they have)

yup, there are certain fundamental constants in regard to maintaining economic health. accountability must dictate our spending in personal, corporate, and gov't finance.

I think Larry Flint has answered that!

LOL! I don't know which is funnier, the fact that Larry Flint is actually asking for money for the porn industry, or that there are people who are taking him seriously!

If you don't understand who I'm talking about, one must first watch 'The People vs. Larry Flint' to truly understand. Larry is Michael Moore + Sarcasm x 100 with a poker face in action.

I know who he is, but I wasn't aware of his request. I had to google it.

https://www.msnbc.msn.com/id/28564654/
Quite obviously a publicity stunt, and perhaps with his heart in the right place -- his statement about how politicians spend money rings true. Who better to take financial advice from than a man who makes hundreds of times my yearly income every day and who has no special interest in the outcome (unless he's in the banking and/or auto industry too)...though I still support temporarily propping up the auto industry (despite iminent failure once the support runs out) for the reasons I described earlier in the thread.

Plus, he sells something my wife and I can afford, unlike banks and auto manufacturers.

Bank of America wants ANOTHER bail-out???!!!

COME ON!

this is the danger of "pandora's box."

a commentator on FOX News today gave the opinion that some corps should be allowed to fail, taking the "crutch" of gov't away.

there's one thing worse than a stale economy...a stale economy AND increased taxes, which promote MORE de-stimulation of consumer goods and MORE economic woes.

There, I fixed it for you. :rolleyes:

Bank of America's liabilities exceed their assets, and their profits won't get them out. They need to go away, but because the Saudis, with whom we have bestowed with so much of our cash now, own major shares of this and other banks, there is likely a bit of blackmailing going on over the bailout cash. After all, if the Saudis lose all of their value in US dollars and investments, they will lose incentives to play nice with the oil supply.

Make no mistake about this one thing: It is about far more than the mortgage and banking industry, and about the economics of trade and natural resources that we currently need and do not have an adequate supply of. They WILL get their bailout money while our domestic manufacturing industries will be allowed to flounder and whither away. Obama talks as if it will be different than the last round, but I don't see it happening, whether that is his true desire or not.

yup, what is TRULY in a name?

my company's biggest competitor is US Foods owned by a Dutch corp(i believe).

and what happened to the ALL American beer(anheiser busch)?

https://www.orlandosentinel.com/news/...,7216281.story

i believe this to be related.

"Only a few years ago, the National Bureau of Economic Research told us that personal savings in America hit a low equal to that of the Great Depression."

the demand for new cars will NEVER be what they had been in the recent years of economic growth if consumers are paying attention. this personal savings crisis began during a time of a healthy economy.

granted, a significant amount could be related to natural job losses and those spending savings after 9/11/01, but overconsuming plays a bigger role. cars and homes would be a large part, but not all of it.

wake up America, you must think about the future and spend less than you make. and, swallow your pride and buy what you need, not want.

Spot on.

Its quite possible that I will never again buy a new vehicle. And its not just my fear of robot overlords, (And most of this is probably me) but also with the lack luster choices available, the relatively poor gas milage (we've been building cars for how long, and unless it involves a hybrid system, doesn't get much better milage than a 1929 Plymouth?), and the overall overpriced sticker on all of them with the exception of few. Maybe its me, but 90% of the cars out there look like they plopped out of a cookie mold. And for the love of God, would someone take silver paint out of the color lineup! Perhaps its this area, but half the cars in the parking lot outside the building and in the street are silver, or gold, or some makeup of those two colors. I realize that what I want in a car, is probably not what most people want or need, hence why there are no cars out there that I like, or ones that I do, I am not willing to fork over cash for. So for me, finding older cars that do the job, or possible building my own car to commute in, that cost very little ( and will most likely be hideous) is where my options are.

Done.
2005:
https://www2.dupont.com/Automotive/en...e20051123.html
2008:
https://www2.dupont.com/EMEA_Media/en...e20081209.html
The survey results page itself:
https://vocuspr.vocus.com/VocusPR30/N...e&Cache=False_

North American color popularity:
White 20%
Black 17%
Silver 17%
Blue 13%
Gray 12%
Red 11%
Beige/brown 5%
Green 3%
Yellow/gold 2%
Other <1%

I guess that, like me, everyone got tired of beige/brown which was the reigning king for a long time.