The US car industry

Kay, folks, that's a topic I've been following quite a bit lately. I know the US car giants GM, Ford and Chrysler are overblown monsters, unprofitable, with cars not fitting into a world of dwindling oil reserves and climate change. Oddly enough in a country like the US there are unions that powerful making the life of these automobile makers pure hell. The cars also lack cutting edge technology by a fair shot, especially in engine development, though that appears to change atm. Too little, too late, though.

Nevertheless, on a personal level, I've always been quite fascinated by US cars. Big, powerful, raw. And as stupid the new muscle cars are from every POV common sense provides...darn, they are hot! I love these brutes with a passion. Were ressource conditions not what they are, I'd buy a new Challenger in a heartbeat! The chemics just fit.

GM declared without government help they won't survive this winter. But even with this help the problems probably are too big to save them. Pensions, a lacking model palette and lacking high techology these cars are simply 10 years behind their time.
When I was in the US last time two years ago, I got myself a Cadillac CTS to drive around. Great car on first glance, good acceleration ad lacking these übersoft suspensions typical of older cars I really grew to hate, but when I dropped a CD during unpacking, got down to get it from under the drivers seat...there were cables whereever you looked. It made the impression of beeing only half finsihed, with cables just hanging around freely. Like a childrens room where al the playtools are just shoved under the bed.

Selling by GM broke by 45 percent just this year. They lack any basis of beeing competetive in todays world. 100.000 to 200.000 would have to be fired by GM alone just to get back a healthy company size=profit relationship, something US unions are obviously unable to accept, not to talk about all the hard working ppl, some of them beeing in the company for the second or third generation.

What is to be done about this? I personally do not want to see the american car industry go down. They perfected the manufactoring of a german invention, produced countless classics and still have a reputation. Maybe I am just nostalgic, I already considered the downfall of the british car industry a great loss, but maybe dinosaurs are just bound to go extinct someday.

What is your opinion on that? What is a realistic way to solve this problem. And can it be helped at all? Are there any new upstart car companies giving some hope on the horizone?

[Zachstar]

There is only one chance for GM or Ford to survive.

Abandon Fossil fuel based cars RIGHT now.

Now of course that means disaster for the work force but it does 2 things.

#1 Even tho I am in a Union. The crap UAW have managed to get in the contract is beyond reason. Thus the workers often have to face 1 week on 1 week off situations now. So it gives the makers power to start rolling back the crazed perks. If the workers do not like it? Leave. They can move to right to work states if needed.

#2 It saves our ass in the long run.. let me explain this further.

No matter how many times they say "Drill Baby Drill" There simply isn't enough equipment to online enough fields in enough time to cope with demand. Thus gas will never go back to the glory days where filling your tank with 1 USD unleaded to go cruising on a V8.

Also the middle east will never seriously allow us to drive oil down with supply. They want it back to 100 USD.

The only way out of this mess is to use whatever energy WE make. And because cars cant burn coal. The only way forward is electric.

Battery: 10-20 advancements ready for infusions to be commercialized. Some almost quad performance of Li-ion

Solar: 75+ Advancements ready to churn out power.

Coal: Well tons of it and it can be burned a tad cleaner.

-------------------------

Yet, I do not see this happening. Ford and GM are dinos and no amount of backing will save their asses if they do not go electric.

[jpm1]

Originally Posted by Bewolf

Kay, folks, that's a topic I've been following quite a bit lately. I know the US car giants GM, Ford and Chrysler are overblown monsters, unprofitable, with cars not fitting into a world of dwindling oil reserves and climate change. Oddly enough in a country like the US there are unions that powerful making the life of these automobile makers pure hell. The cars also lack cutting edge technology by a fair shot, especially in engine development, though that appears to change atm. Too little, too late, though.

Nevertheless, on a personal level, I've always been quite fascinated by US cars. Big, powerful, raw. And as stupid the new muscle cars are from every POV common sense provides...darn, they are hot! I love these brutes with a passion. Were ressource conditions not what they are, I'd buy a new Challenger in a heartbeat! The chemics just fit.

GM declared without government help they won't survive this winter. But even with this help the problems probably are too big to save them. Pensions, a lacking model palette and lacking high techology these cars are simply 10 years behind their time.
When I was in the US last time two years ago, I got myself a Cadillac CTS to drive around. Great car on first glance, good acceleration ad lackign these übersoft suspension typical of older cars I really grew to hate, but when I dropped a CD during unpacking, got down to get it from under the drivers seat...there were cables whereever you looked. It made the impression of beeing only half finsihed, with cables just hanging around freely.

Selling by GM broke by 45 percent just this year. They lack any basis of beeing competetive in todays world. 100.000 to 200.000 would have to be fires by GM alone just to get back a healthy company size=profit relationship, something US unions are obviously unable to accept.

What is to be done about this? I personally do not want to see the american car industry go down. They perfected the manufactoring of a german invention, produced countless classics and still have a reputation. Maybe I am just nostalgic, I already considered the downfall of the british car industry a great loss, but maybe dinosaurs are just bound to go extinct someday.

What is your opinion on that? What is a realistic way to solve this problem. And can it be helped at all? Are there any new upstart car companies giving some hope on the horizone?

concurrence makes that your have low prices , concurrence makes that your have efficient stuff at low price and concurrence can even make your to have some gratis stuff . even if i'm european and that it makes me a little happy each time a european company takes a contract to an american company it's in the interest of nobody to live in a world where concurrence's absent . I have something you may like just let me the time to upload it

Note : i'm also happy when a european company takes a contract to a singaporian company or to a japanese company or to a russian company ..

Absolutely agreed, these failure of the GM, Ford and Chrylser managements began with the start of japanese imports into the country. Instead of fighting these with new models and technology these companies simply switched to big and heavy. I suppose they took their dominant role in the car business on the US continent as a natural given. American cars beeing majorly unsucessful anywhere else should have been a sign. That is the price they has to pay for their arrogance.

But despite these failure of it's management, as it is observable on so many levels, it's the core that matters. These are not just simply big companies..it's companies that provide hundrets of thousand ppl with a job and an identification. With a history and a legacy. With a lot of emotions. These compaies represent the US like maybe only Coca Cola does. Their downfall is more then the bankruptcy of a company, it's the downfall of a way of living. And it's not just the big companies themselves..there are even more jobs in jeapoardy, especially all the subcontractors.

Essentially, a whole and majorly important branch of the US industry is about to completly collaps, and with it ends an era.

[CaptainHaplo]

What SHOULD happen is that one of the "Big 3" dies. This would accomplish 2 things. First it would provide additional business for the remaining companies (and imports) as the buyers look to purchase. Second, it will shock the other 2 into a frenzy - modernizing their structure and processes, while shaking their design philosophy.

In a true capitalistic system, this is what would happen. You adapt or you die. Its a harsh reality.

Unfortunately - the government - now run heavily by the left - who counts on the support of almost all the unions, will subsidize the Big 3 and let them continue in the non-successful business model they have been using for decades. They politically cannot allow such a huge group of supporting voters to take it on the chin.

Until it is realized that its not the governments job to bail out banks, car makers, airlines and people who buy houses they can't afford, there is no true recovery from our economic woes. Do not get me wrong - the republicans are as guilty in this as the left - because they continued the subsidizing for many years as well.

Originally Posted by CaptainHaplo

What SHOULD happen is that one of the "Big 3" dies. This would accomplish 2 things. First it would provide additional business for the remaining companies (and imports) as the buyers look to purchase. Second, it will shock the other 2 into a frenzy - modernizing their structure and processes, while shaking their design philosophy.

In a true capitalistic system, this is what would happen. You adapt or you die. Its a harsh reality.

Unfortunately - the government - now run heavily by the left - who counts on the support of almost all the unions, will subsidize the Big 3 and let them continue in the non-successful business model they have been using for decades. They politically cannot allow such a huge group of supporting voters to take it on the chin.

Until it is realized that its not the governments job to bail out banks, car makers, airlines and people who buy houses they can't afford, there is no true recovery from our economic woes. Do not get me wrong - the republicans are as guilty in this as the left - because they continued the subsidizing for many years as well.

Though I aree to you in general re companny mistakes and their consequent bankrupcy, I think the problem is a bit more complicated in this case, simply to the sheer size of GM. Because the folks that have to face the consequences of mismanagement are not those responsible for the missed opportunities, the management, but the workers. And 200.000 thousand ppl losing their job just so will have a huge impact on the economy. It's not only that 200.000 ppl will lose their jobs, but with them the US economy will also lose tax payers and consumers, thus making life harder for other companies, the government and thus ultimately, all the ppl in a country. The question is what's coming more expensive in the long run...saving GM or having to deal with the results of a collapse. The same reasoning was behind the bank bailouts. The long term effects on the economy could be much much harsher then without government intervention.
Then again it has to be considered if a bailout would save GM..or just prolong the inevitable.

The problem also is that the other 2 are not in a much better shape, really.

[Catfish]

Hello,
i also like the older US cars, they have a style of its own, indeed they are the inventors of styling. I also like the British classic cars, and still own a small '69 Triumph Spit Mk3 which b.t.w. needs much less fuel than a "modern" car with its failing electronics. But then it has only covered 260.000 miles, and a new VW will certainly last longer (this is a JOKE, b.t.w.). Has anyone calculated the energy balance of a new produced car ? The german Porsche Cayenne needs some 40-70 liters per 100 km, but it is an ecological car with its new catalytic converter. Ask our government.

There is no doubt that human behaviour has something to do with the world's changing climate, but even without that it is quite idiotic to BURN coal, and especially oil. Oil is a good resource for plastic parts of all kinds, and the medical industry.

But what really strikes me is this idiotic peak oil theory probably made up by the large companies. I still think this was made up to raise oil prices beyond any "natural" barrier. As a geologist and having worked quite a bit about and with oil i can say there is no end of resources in sight - you will maybe not find mega fields in Houston, and Iraq anymore, but there's still some more to explore in the rest if the world (Siberiy, chinese continental shelf and a lot of otheres, certainly without direct US control). The prices are - apart from the taxes applied - much too high. Oil is traded as a rare substance, which it is not. The price is completely artificial. Seems capitalism is eating itself up here without a real competition. There was competition in earlier times, at least seven big companies trying to outdo themselves. Now there are four left, but they talk to another. A cartel, no competition, and nothing to do with free market economy.

We should certainly develop other fuels or energy concepts, for draining the world's batteries and producing CO2 is not really clever, but selling oil at high prices because it is artificially made "rare" ? Next they will sell you salt water, and limestone while you are sitting on an island of limestone.

Greetings,
Catfish

The principle behind peak oil is not just reserves in total, but also accesibility, refinary ressources and demand.

1. First of all, there is an absolute amount of oil still left. It's not "refilled". So no matter what, it "will" run out eventually, maybe sooner, maybe later. There is nothing going around this at all. How much left is another question.

2. What is more important though when does it become profitable to explore those oilfields that are harder to come by, when does it make sense to work with oil sands and comparable ressources. When it comes to these measure, yes, we will have oil for a couple more decades to come, but it will get more and more expensive for the simple reasons that ressources to get to that oil is becoming more expensive. The arctic and some other regions may still house some suprises to be discovered, but it just prolongs the ineviteable.

3. China, India and a lot more countries reach higher and higher industrial levels and such higher and higher demand. This means that even if we find more ressources, and are able to maintin and even raise oil production, it still means it will become more expensive as demand will for sure be higher. We'd have to discover, explore and invest in huge areas to keep the odds even. Given that since the 80ies no new and easily acessible major oilfield was discovered, I doubt that will happen.

4. The last couple years, also due to raising oil prices, the oil industry completly neglected refinery capacity and missed investments into the infrastructure. Hurricane katarina amplified that problem in the US. The lack of these capacities means, that even if more oil is found and it's possible to get it, there won't be enough ressources to make it into useable gas ann other products. Rebuilding and investing would take at least a decade before they could go into production. Given the fragile future of the whole oil market, making these investments is a high risk.

5. Interestingly enough the peak oil theory was always fought by the companies, never advertised. Cuz that would have ment, in it's logical conclusion, that alternative energy ressources would have to be found. oil companies are not stupid. They know that asking for higher prices has to stop somewhere, else they will lose their profit because folks will develop something else for the energy problem. I dare to say, had the industry come up with this theory themselves, earlier, we'd not have the problems right now. So it's not reasonable to assume it was this industry inventing peak oil. Thse guys certainly want to prevent any altrnatives as long they can milk the cow, which is understandable in my book.

[subchaser12]

These big companies love to chant "let the market work things out". Ok then, let's do exatly that. Let's let the market solve it shall we? Oh but when it's their butt in the fire all of a sudden they want a socialist fix. Imagine that.

The US auto market brought this on itself. Even before the gas crunch like 5 years ago there was a year and a half wait on a hybrid. Mind you this was before 4$ gallons on gas. What did the US auto industry give us? New hummers and crap like that. Sorry people, but I am sick of seeing soccer moms driving tanks to go to starbucks. Even the names are asinine. The excursion, expedition, the armada. I mean what next? The invasion, the task force, the inquisition. Pfft, let em burn, at least it will be easier to park my normal car.

I'm 6 feet tall and 245, I drive a little car, I don't need a big auto to feel macho.

[FIREWALL]

Originally Posted by CaptainHaplo

What SHOULD happen is that one of the "Big 3" dies. This would accomplish 2 things. First it would provide additional business for the remaining companies (and imports) as the buyers look to purchase. Second, it will shock the other 2 into a frenzy - modernizing their structure and processes, while shaking their design philosophy.

In a true capitalistic system, this is what would happen. You adapt or you die. Its a harsh reality.

Unfortunately - the government - now run heavily by the left - who counts on the support of almost all the unions, will subsidize the Big 3 and let them continue in the non-successful business model they have been using for decades. They politically cannot allow such a huge group of supporting voters to take it on the chin.

Until it is realized that its not the governments job to bail out banks, car makers, airlines and people who buy houses they can't afford, there is no true recovery from our economic woes. Do not get me wrong - the republicans are as guilty in this as the left - because they continued the subsidizing for many years as well.

That about sums it up. Good insight Capt. H

I beleive well thought out Change is not to be Feared.
Instead it welcomes in a new Era.

[AVGWarhawk]

Do the math, for every car GM produces, $1500.00 of that car sale is for health insurance and retirement. For every car Toyota produces, $100.00 of that car sale is for health insurance and retirement. So, what is GM doing wrong? UAW. The union has driven these big three into the ground. At one time, unions were needed. They are now a thing of the past but still drain the pockets of the very company that pays their way. Personally, they should be left to fail. History shows that something better comes along to fill the void. We would be throwing good money after bad in this instance.

Originally Posted by AVGWarhawk

Do the math, for every car GM produces, $1500.00 of that car sale is for health insurance and retirement. For every car Toyota produces, $100.00 of that car sale is for health insurance and retirement. So, what is GM doing wrong? UAW. The union has driven these big three into the ground. At one time, unions were needed. They are now a thing of the past but still drain the pockets of the very company that pays their way. Personally, they should be left to fail. History shows that something better comes along to fill the void. We would be throwing good money after bad in this instance.

That is the problem with american style unions which, interestingly enough, follow the principles of capitalism. Work is a product that has to be sold, as expensive as possible. As that it follows the same offer and demand principles as the rest of the US economy. Another part of the problem is that in the US, the companies are responsible for providing these services to their workforce, while in Europe it's mostly the countrys duty. And as with any product, the broader the mass, the cheaper it gets. The same applies to Japan, btw.
Unions over here also are not as rigid as american unions. The heck, once when I was in an american supermarket buying some meat to cook for the family I visited, the clerk did not want to cut it for me. He had to wait for his boss. Asking why he did not want to do such a simple task anyways I refered to union rules. I was dazzled, given that I thought that union power was much less of what it is in Europe...in fact, it is the opposite.

That aside, the union problems, though very real, are not the cause of the troubles, they just make them worse. The big 3 simply did not react to the growing asian and european competition and dug into their "bigger is better" credo, despite ompletly reversed world trends. That simple. Their own fault, as much they like it to blame others.

[subchaser12]

Originally Posted by AVGWarhawk

Do the math, for every car GM produces, $1500.00 of that car sale is for health insurance and retirement. For every car Toyota produces, $100.00 of that car sale is for health insurance and retirement. So, what is GM doing wrong? UAW. The union has driven these big three into the ground. At one time, unions were needed. They are now a thing of the past but still drain the pockets of the very company that pays their way. Personally, they should be left to fail. History shows that something better comes along to fill the void. We would be throwing good money after bad in this instance.

Good points, but something has to give here. You don't want companies to pay employees so much and provide healthcare, retirement etc. Ok, that is understandable. Then you don't want the government to pick up the tab because that would be communism or welfare. Ok, the companies want to bring in cheap Mexican labor; then the same people who are anti-union, anti-welfare then become anti-immigrant. You can't have it all is what I am trying to say.

What's it going to be? Have companies pay employees benefits? Let the government pay it? Bring in Mexican labor and just send the expensive white people home unemployed? You have to pick and choose, you can't have it all. American's won't be slaves. Mexicans will for a little while, then they will want more of the pie.

[FIREWALL]

Only good US car built in the last decade is the Saturn imo.

[August]

Originally Posted by Bewolf

... and dug into their "bigger is better" credo, despite ompletly reversed world trends. That simple. Their own fault, as much they like it to blame others.

Toyota Tundra
Mercedes D class
Nissan Titan

American car manufacturers aren't the only ones to do this.