SRR: The demise of the auto industry....

Discussion in 'Fly Fishing Forum' started by IveofIone, Nov 21, 2008.

  1. Feeling the fallout

    I can tell you that 250 miles north small, medium and good sized shops are dropping like flies. Not good..
     
  2. Thanks for the good insights, Jesse. As workers you and I have both worked awfully hard over the years to make a good life for ourselves and family. During that time we have both encountered bad management at some point but never 'deserved to fail' because of it. The 'Let them fail' contingent hasn't yet grasped the significance of said failure. If you are in a business that somehow involves steel, glass, plastics, fabric, electronics, fabrication, paint or rubber and somehow find yourself being downsized in a few months the 'Let them fail' solution will not be so appealing. Over the past 8 years we have endured an incompetent government that has greatly diminished us as a nation. We don't 'deserve to fail' because of poor leadership, we need to correct course and move on. Or if you are on an airliner and the pilot has had a few drinks you don't 'deserve to crash'. The co-pilot should take over and land you safely. I would like to see some co-piloting in this auto crisis and fewer decisions based on sound bites and gross exaggerations. The guys at the top-like the bankers-will get theirs no matter what. Like the bankers they have made millions making either bad decisions or no decisions at all. They are set for life.

    The people I am concerned about are the regular folks like us that work hard but are always the first to take it in the ass when something goes awry at the top. We can't sell a private jet or a yacht or a vacation home in Aspen to make ends meet. We have no choice but to trust these greedy bastards to provide us with a viable work environment and whatever bad decisions they make we simply have to endure.

    Right now the auto workers are in a bad place. They need stellar management-something they haven't had. They need to get a UAW boss that is more rational and less strident than Ron Gettlefinger. And they need a hug-not being blamed for the sins of their bosses.

    Had John Dingell not been a protectionist twit for Detroit all those years and had instead been a visionary that held feet to the fire on issues of mileage and emissions none of this would be an issue. He enabled Detroit to whine and threaten doom anytime someone suggested that they clean up their act and produce responsible cars. After 55 years of pimping for the automakers he was completely out of touch with reality. Another compelling reason for term limits.

    I hope the doomsters don't win this one. Throwing out the baby with the bathwater is a move we will live to regret.

    Ive
     
  3. Ive, while your post seemed to be addressing Jesse by name, since you also mentioned 'doomsters' I hope you don't mind if I chime in.

    While I understand and respect your thoughts about Detroit not deserving to fail, shouldn't the market play some role in determining which companies succeed and which fail? After all, this country is predicated on a capitalistic economic model.

    Seems to me the car-buying public has voted with their wallet and is either not buying at all or buying high-quality 'imports' instead. The fact that Detroit feels compelled to offer incentives a 'bribes' to people to buy their products should sound alarm bells.

    Companies that produced celluloid collars, buggy whips, wooden airplane propellers and fiberglass fly rods have all fallen by the wayside as demand for the products fell when newer, more competitive products replaced them.

    Why shouldn't we allow the market to send the same message to Detroit: it's time to update your offerings and the process by which you design and build them. If you're unwilling or unable to do so, why should you be propped up at taxpayer expense? We sure didn't do that when your infant auto industry replaced the horse and buggy.

    In reality, the Big 3 aren't going to disappear. But it's likely and even preferable that they re-invent themselves as the Big 2 with appropriate design and manufacturing facilities and a labor force that's appropriately compensated and motivated to produce vehicles that are both competitive and compelling.

    K
     
  4. nobody has claimed to be world class or experts on the subject. we're stating how we see it, and having a civil discussion about it.
     
  5. I don't get that. I'd put my "low quality" Ford small truck against any competing import in both price and quality. I think the quality issue is mostly a holdover from gm and ford products in the late 70s to very early 90s. The last 3 Fords I've owned were all pretty much bullet proof and priced less than the overseas competition.
     
  6. Actually, there probably are some on this board. :rolleyes:
     
  7. They need to figure it out for themselves.
     
  8. As a Michigan transplant (1974) I've had family thats been in the car business since there has been a car business. It's not been a lot of fun for those still in the business for a lot of years now. The US auto industry started to crumble in the mid 70's and has not been a growth industry since then. Yes there has been greed, arrogance, and stupidity from the boardroom down to the union hall. The US auto industry, like nearly all others, is a slave to investors, stock analysts, and the next quarters reports. Long range planning anymore is 1 to 3 years and planning is revised so often that short cuts and book cooking is the name of the game just to make the numbers look good for the analysts. "New" influences analysts so there is way too much capitol and energy put into creating new. When things get tight they cut corners on quality to make the quarterly numbers. Whenever bean counters get control of a company quality always suffers. My personal opinion is that all bean counters outside of the finance department and in the executive ranks and the boardroom should be burned at the stake.
    Detroit will survive but will be much smaller and the government will be the major stockholder. The industry and the jobs that it supports is far too important to let go away. Sure the Asian car makers have plants in the US but remember that the profits from these plants is going back to Korea and Japan, not being available for investment in the US. Our national standard of living has been declining for a couple of generations due to our loss of "smoke stack" industries. Not everyone in the US needs to be "white collar". We need a solid manufacturing base and its well paid "blue collar" jobs if we want to maintain our world position and standard of living.
     
  9. I really hate to say this......but I think I agree with Kent on this one and I don't think I have ever had that thought before!!!

    Here are the cars I have owned:

    65 Dodge Dart.......great car 26MPG. Did not steer worth a damn, but what the hell.
    68 Valiant.............great car 25MPG...did 80 mph average speed Seattle to Berkeley, 1973.
    73 Datsun Pickup...great truck 25MPG....Why did I sell it after only 15 years!!!
    82 Chevy S-10......last time I buy a car because I feel sorry for US auto workers. Half the car was metric, half English. Chevy mechanic asks me at 100,000 miles. "Is that the original engine?? Wow, you know it most did not make it past 70,000 miles".
    87 Honda Accord...I want it back. Great cruise car. Trips to Montana were just comfortable.
    92 Lumina.........Inherited. Don't ask. It ran and ran. The interior just melted away. Chevy wanted 2000 dollars for dash plastic. Everything but the engine and transmission just wore out in six years.
    96 Dodge Ram.....Dodge dealer thought it funny that windshield wipers quit working twice. Ever drive in pouring rain without windshield wipers? It is not funny.
    98 Saturn.....32 MPG...and a great little death trap. Still running....don't hit me because I will die!!
    2004 Honda Pilot....cannot turn down the dashboard lighting low enough so it doesn't affect night vision.
    Mice crawl into the ventilation system and die. Otherwise pretty good rig.

    Do you see a trend here?? I think there is room for ONE American auto company making big assed trucks and suv's for people that need them. I will own one. The other rig will probably be a HONDA.
     
  10. Almost forgot....more info on those rigs.

    65 Dodge Dart.......made in the USA
    68 Valiant.............made in the USA
    73 Datsun Pickup...made in Japan
    82 Chevy S-10......made in the USA
    87 Honda Accord...made in the USA (80% or so)
    92 Lumina.............made in the USA
    96 Dodge Ram.......made in Mexico
    98 Saturn.............made in Tennessee ( is that America??)
    2004 Honda Pilot....made in Canada
     
  11. So is this a good time to buy an American Pickup or not?
     
  12. Just to think that if one of them had the marketing sense to fly in in a public jet, he'd be raking in big bucks right now. but U guess that is why they are in the situation they are in now. Always going the wrong direction.
     
  13. That is a pretty good deal if you get the truck you want. I'll have to suggest that to the local Chevy and Ford Dealers.
     
  14. This got me thinking, what is congress thinking anyway. Everyone is feeling the pinch, it is time to embrace technology and conduct some video teleconferencing. No private jets, no commercial jets, hell no one even needs to put their pants on, just sit with a camera in your face, answer the questions and plead for assistance. Lots of companies and government agencies are embracing the technology, why not our "leadership". If they think they are so important to be able to direct everyone to fly to them they should think they are so important to influence better choice making.
     
  15. Jesse,

    I think your spinning your math on the carpenter pay as well. You say they make 25 bucks an hour. In fact they make 42 bucks an hour. In non union work hourly wage is quoted in pre tax, pre medical, pre pension....pre everything. My point is that when you see other pay in non union jobs for comparison its not take home pay.
    Also, my problem with the pay for the auto workers is that it is way to high from a relative standpoint. Working on a manufacturing line for the big 3 is no different that working on the line at Mcdonalds. It should be paid the same except the government has decided to subsidize this industry to make a fake middle class in the midwest. I don't think its fair. Why the auto workers in detroit. Why not allow workers at Mcdonalds instead to make 50 bucks an hour and we the tax payers subsidize Mcdonalds instead. At least that would benefit people in all states just not one region. Also, my point about auto workers making the same wage as Mcdonalds is not a slight on labor wages. I have no problem paying technical labor like carpenters and welders 50-100 bucks an hour. That is a technical job that I can't do that requires alot of skill and physical ability. Not so working a line at an auto plant...well no more or no less than at Mcdonalds anyway.
    Also my final point. The auto industry in the USA is not a closed system. If the big 3 fail, 1 or 2 or all 3 will start again but more healthy. Point being that we will not lose all of those jobs. Its foolish to think that if they fail we won't have any cars to buy.
     
  16. I saw George Stephano-whateverthehellhislastnameis-opoulis on the ABC national news tonight who anchored a story about the Detroit auto industry. This is a quote: "...where the average worker earns $73/hour including benefits."

    We can argue over exactly what 'including benefits' means or not, but the fact remains that those guys are making a hell of a lot of money making cars.

    Jobs aren't an entitlement just because you've always had one or you've always made that much.

    K
     
  17. I talked with a friend and client this morning who is looking to trade in his 5-YO F-150 on a new pickup. His head says to buy a Toyota but his wallet says to buy American. He's conflicted because the Toyota dealers don't offer as much wiggle room.

    Want it cheap? Buy domestic. Want resale value? Buy Toyota.

    K
     
  18. I haven't looked at Toyota trucks here but I do have experience with Toyota vehicles other places around the World. I have found them to be tough and reliable but poor on fuel economy and poor on hauling ability.

    Just rather buy American.
     
  19. Kent, Your comment about trade-ins and resale value opens up another whole line of discussion. When you buy a vehicle based entirely on it's resale value or buy a house using the same criteria you likely won't realize that value unless you trade up frequently. From what I have observed over the years most folks that do that are in the mode of making perpetual payments. That means perpetual credit-the same boogeyman that is causing so much grief around the world right now. It may sound simplistic but if you are operating on a cash and carry basis you are in much better position to deal with the current recession and it's after effects.

    Trading in an almost new vehicle every few years has almost become an American tradition and in almost every instance that trade works to the advantage of the dealer and to the detriment of the consumer. A look at any buying guide that shows the trade in value of your vehicle compared to the private party value will illustrate that point.

    In my case I bought my first car in 1954 and in the ensuing 54 years have never traded a car in. This has saved me thousands of dollars that were better used elsewhere. Like saving them for early retirement for instance. Two of my current vehicles total 31 years of age and have over 300,000 miles on them and still look good and drive well. Excluding tires I have spent less than $3,000 on combined maintenance on them over the years or an average of about $100 a year. Compare that to just the tax alone on a new pickup and it is clear that my combined expenses even with oil and filters, is just mouse nuts. Anybody can do the same, few want to.

    In your friends case were I to advise him I would suggest that he take advantage of the incredible price savings on a domestic truck and just do the math. Some are offering over $7,000 in price breaks for pickups that are still the finest in the world. No matter what the resale value is at the end of the vehicles life the differences in resale will never come close to the 7K that you saved up front. Put another way that 7K will buy 1750 gallons of gas at $4/gal or 2300 gallons at $3/gal. Assuming 15mpg that means the first 26,000 or 35,000 miles are essentially free. I would find it difficult to turn my back to a cash gift of that magnitude but then I am a frugal guy with no debt. Individual results may vary.

    Ive
     

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