Should the government save our auto industry?
08-07-2008, 01:12 PM
#21
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Originally Posted by Tadashi,Aug 7 2008, 01:00 AM
Ford needs to sell off some of the MANY other car companies it bought up over the last 10 years.
08-07-2008, 01:30 PM
#22
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I think it is a slippery slope. If the US government bails out the auto industry, then what about all the other industries that are not competitive? Where do we draw the line? And as tof asked, "what IS the US auto industry?" If the Toyota plant in Kentucky can no longer compete, should the US government bail out Toyota? 
08-07-2008, 01:43 PM
#23
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No bailout, they all need to make better decisions like all other companies must do, besides GM seems to be doing something correct in the markets outside the US.
GM becomes top-selling foreign automaker in China
CHRISTOPHER BODEEN / Associated Press
SHANGHAI, China -- General Motors Corp. became China's top-selling foreign automaker last year, surpassing Germany's Volkswagen AG, after seeing its sales grow 35.2 percent to 665,390 vehicles, according to company figures released Thursday.
South Korea's Hyundai and Japan's Honda also reported strong growth, while Volkswagen, the former market leader, saw its sales decline in 2005.
GM, which is looking to growth in China to make up for its shrinking market share in the U.S., said sales were driven by the continuing popularity of its Buick brand, led by the Excelle sedan and hatchback. It sold 105,000 of those two models through September, according to the China Auto Industry Association, although GM gave no figures for the entire year.
Sales of the Buick GL8 luxury passenger van also recorded steady growth, while newly introduced Chevrolet and Cadillac models also did well.
The sales growth gives GM, the world's largest automaker, about 11.2 percent of the Chinese market, up from 9.4 percent in 2003, the company said.
Nearly all GM cars sold in China are made domestically.
The company has opened a second plant in Shanghai last year and added three new Chevrolet models in 2005, the Sail compact car, Epica intermediate sedan and Aveo hatchback. That pushed China sales for the brand past the 100,000 mark for the first time, establishing China as Chevrolet's fourth-largest global market.
"We have no intention of letting up on the accelerator," Kevin Wale, president and managing director of the GM China Group, was quoted as saying in the release.
Volkswagen, which once had more than half of China's car market, said overall sales declined for the second straight year, falling about 15 percent to 564,306.
Annual sales at its flagship Shanghai joint venture fell 19 percent to 287,000 vehicles, said a company official speaking on condition of anonymity. Its other joint venture, China Volkswagen Automotive, saw sales edge up just 3.2 percent to 277,306 units from 268,000 in 2004.
VW has seen its market share drop sharply from over 50 percent in the 1990s. Hoping to regain lost ground, it has slashed prices and announced plans to introduce up to 12 new models in China by 2009 while cutting costs and improving service.
Hyundai Motor Co., meanwhile, reported annual sales of 233,668 cars produced by its Beijing Hyundai Motor joint venture, up 62 percent from 2004, spokesman Sun Zhenjie said.
Growth came mostly from its Elantra model, the mainstay of Beijing's taxi fleet and the mainland's second best selling sedan after China's own Xiali.
The Korean company aims to boost production and sales by about 30 percent in 2006 to 300,000 units, Sun said. Targets call for China production capacity of 600,000 units by 2008.
Japanese carmaker Honda Motor Co. reported a 19.1 percent rise in sales to 255,500 units in 2005, public relations manager Masaya Nagai said. Production in China last year rose 24.4 percent to 266,500 units, he said.
The company aims to raise sales 38 percent this year to 353,000 cars and boost production 41 percent to 375,000 units, Nagai said.
Meanwhile, GM's flagship joint venture in Shanghai, Shanghai General Motors Corp., sold 325,429 vehicles, up 28.7 percent from the previous year, the company said in a news release.
Minivans and small trucks sold under the Wuling brand -- made at the GM's joint venture in southwestern China, SAIC-GM-Wuling Automobile Co. -- benefited from strong sales in rural China and cities in the relatively poorer interior, it said. That joint venture sold 337,188 units, up 43.4 percent from 2004.
"GM benefited from an unprecedented number of new and upgraded product introductions as well as a growing portfolio of brands," said Wale.
New models under the Buick, Chevrolet and Cadillac brands will be introduced this year to keep up with what Wale predicted would be 10 and 15 percent growth in the Chinese vehicle market.
GM gave no figures for profits in its China operations.
But in July-September quarter, GM earned $176 million in Asia while losing $1.6 billion in North America. In 2004, GM sold 4.7 million cars and trucks in the U.S. and 4.3 million elsewhere.
GM becomes top-selling foreign automaker in China
CHRISTOPHER BODEEN / Associated Press
SHANGHAI, China -- General Motors Corp. became China's top-selling foreign automaker last year, surpassing Germany's Volkswagen AG, after seeing its sales grow 35.2 percent to 665,390 vehicles, according to company figures released Thursday.
South Korea's Hyundai and Japan's Honda also reported strong growth, while Volkswagen, the former market leader, saw its sales decline in 2005.
GM, which is looking to growth in China to make up for its shrinking market share in the U.S., said sales were driven by the continuing popularity of its Buick brand, led by the Excelle sedan and hatchback. It sold 105,000 of those two models through September, according to the China Auto Industry Association, although GM gave no figures for the entire year.
Sales of the Buick GL8 luxury passenger van also recorded steady growth, while newly introduced Chevrolet and Cadillac models also did well.
The sales growth gives GM, the world's largest automaker, about 11.2 percent of the Chinese market, up from 9.4 percent in 2003, the company said.
Nearly all GM cars sold in China are made domestically.
The company has opened a second plant in Shanghai last year and added three new Chevrolet models in 2005, the Sail compact car, Epica intermediate sedan and Aveo hatchback. That pushed China sales for the brand past the 100,000 mark for the first time, establishing China as Chevrolet's fourth-largest global market.
"We have no intention of letting up on the accelerator," Kevin Wale, president and managing director of the GM China Group, was quoted as saying in the release.
Volkswagen, which once had more than half of China's car market, said overall sales declined for the second straight year, falling about 15 percent to 564,306.
Annual sales at its flagship Shanghai joint venture fell 19 percent to 287,000 vehicles, said a company official speaking on condition of anonymity. Its other joint venture, China Volkswagen Automotive, saw sales edge up just 3.2 percent to 277,306 units from 268,000 in 2004.
VW has seen its market share drop sharply from over 50 percent in the 1990s. Hoping to regain lost ground, it has slashed prices and announced plans to introduce up to 12 new models in China by 2009 while cutting costs and improving service.
Hyundai Motor Co., meanwhile, reported annual sales of 233,668 cars produced by its Beijing Hyundai Motor joint venture, up 62 percent from 2004, spokesman Sun Zhenjie said.
Growth came mostly from its Elantra model, the mainstay of Beijing's taxi fleet and the mainland's second best selling sedan after China's own Xiali.
The Korean company aims to boost production and sales by about 30 percent in 2006 to 300,000 units, Sun said. Targets call for China production capacity of 600,000 units by 2008.
Japanese carmaker Honda Motor Co. reported a 19.1 percent rise in sales to 255,500 units in 2005, public relations manager Masaya Nagai said. Production in China last year rose 24.4 percent to 266,500 units, he said.
The company aims to raise sales 38 percent this year to 353,000 cars and boost production 41 percent to 375,000 units, Nagai said.
Meanwhile, GM's flagship joint venture in Shanghai, Shanghai General Motors Corp., sold 325,429 vehicles, up 28.7 percent from the previous year, the company said in a news release.
Minivans and small trucks sold under the Wuling brand -- made at the GM's joint venture in southwestern China, SAIC-GM-Wuling Automobile Co. -- benefited from strong sales in rural China and cities in the relatively poorer interior, it said. That joint venture sold 337,188 units, up 43.4 percent from 2004.
"GM benefited from an unprecedented number of new and upgraded product introductions as well as a growing portfolio of brands," said Wale.
New models under the Buick, Chevrolet and Cadillac brands will be introduced this year to keep up with what Wale predicted would be 10 and 15 percent growth in the Chinese vehicle market.
GM gave no figures for profits in its China operations.
But in July-September quarter, GM earned $176 million in Asia while losing $1.6 billion in North America. In 2004, GM sold 4.7 million cars and trucks in the U.S. and 4.3 million elsewhere.
08-07-2008, 01:45 PM
#24
Registered User
Woah woah woah! Where are people getting this idea that if the government doesn't bail them out, we'll lose the industrial base? Nothing could be further from the truth.
Suppose they go bankrupt. What happens? They declare chapter 11. But - lots of airlines have declared chapter 11, most recently United, and they are still flying.
What actually happens is this:
- Stockholders lose all the value of their stock. Hey, that happens sometimes when you invest in stocks. Win some, lose some.
- Debts get renegotiated. Lenders will get less than the full value of their loans. However, they'll get as much as they realistically could, since lenders get a veto on chapter 11 reorganization plans.
- Union contracts get abrogated. Michigan assembly line workers won't be making $60/hr any more. They'll probably get at least the $30/hr or so that nonunionized Toyota auto workers in the Southeast U.S. get, though.
- Retirees are mostly covered by the Pension Guarantee Trust Co., so they are okay.
- cars keep getting produced.
Now, some of the older, less efficient factories might get shut down. However, that needs to happen anyway, and in fact, the automakers are trying to do that right now. Bankruptcy will just make the job easier.
Even if they ended up getting liquidated instead of reorganized, the efficient factories would still be bought by a better run manufacturer. And if they got bought by someone other than the big 3 - say, Toyota - the jobs would still be here in the U.S.
Honestly, a bailout doesn't do anything about the infrastructure. All it does is give money to foolish stockholders who made a bad bet, give a free gift to bondholders who knew what they were getting into, and prop up overpaid $60/hr union workers at the cost of efficient $30/hr workers elsewhere in the U.S.
No bailout.
Suppose they go bankrupt. What happens? They declare chapter 11. But - lots of airlines have declared chapter 11, most recently United, and they are still flying.
What actually happens is this:
- Stockholders lose all the value of their stock. Hey, that happens sometimes when you invest in stocks. Win some, lose some.
- Debts get renegotiated. Lenders will get less than the full value of their loans. However, they'll get as much as they realistically could, since lenders get a veto on chapter 11 reorganization plans.
- Union contracts get abrogated. Michigan assembly line workers won't be making $60/hr any more. They'll probably get at least the $30/hr or so that nonunionized Toyota auto workers in the Southeast U.S. get, though.
- Retirees are mostly covered by the Pension Guarantee Trust Co., so they are okay.
- cars keep getting produced.
Now, some of the older, less efficient factories might get shut down. However, that needs to happen anyway, and in fact, the automakers are trying to do that right now. Bankruptcy will just make the job easier.
Even if they ended up getting liquidated instead of reorganized, the efficient factories would still be bought by a better run manufacturer. And if they got bought by someone other than the big 3 - say, Toyota - the jobs would still be here in the U.S.
Honestly, a bailout doesn't do anything about the infrastructure. All it does is give money to foolish stockholders who made a bad bet, give a free gift to bondholders who knew what they were getting into, and prop up overpaid $60/hr union workers at the cost of efficient $30/hr workers elsewhere in the U.S.
No bailout.
08-07-2008, 03:40 PM
#25
Originally Posted by OhioRacer,Aug 7 2008, 02:01 PM
Ken,
I hear what you are saying but this "propping up" of certain industries has been a house of cards and just perpetuates the problem IMHO. Government meddling has created alot of this mess. Perhaps Chrysler was destined to die long ago. Perhaps a new, better auto company would have risen from her ashes. Every time the government tries to change destiny, as determined by the free market economy, it screws things up. The same thing is happening with the mortgage crisis. More incompetent, greedy business people making stupid decisions. As a result, they have a crisis in their business. Our governement's solution? Let's let the taxpayer bail out these business for their stupid decisions. I don't get it.
I hear what you are saying but this "propping up" of certain industries has been a house of cards and just perpetuates the problem IMHO. Government meddling has created alot of this mess. Perhaps Chrysler was destined to die long ago. Perhaps a new, better auto company would have risen from her ashes. Every time the government tries to change destiny, as determined by the free market economy, it screws things up. The same thing is happening with the mortgage crisis. More incompetent, greedy business people making stupid decisions. As a result, they have a crisis in their business. Our governement's solution? Let's let the taxpayer bail out these business for their stupid decisions. I don't get it.
Is the cure worse than the disease?
08-07-2008, 06:12 PM
#26
Originally Posted by Zippy,Aug 7 2008, 06:40 PM
Very well put and being a free trade progressive, I really do get your point. It's evolution on an economic scale. I just fear the backlash if we lose one of the few real remaining manufacturing sectors that is still in this country.
Is the cure worse than the disease?
Is the cure worse than the disease?
Hey I'm a proud American just like the next guy and I hope these companies re-invent themselves and kick some arse. But they are SO big and the culture so entrenched I'm not sure it can be done without a collapse/rebirth as described above.
My only business experience is software. In the world I know, you damn well better be ready for the next wave of development tools/platforms or you will be a star company today, toast tomorrow.
08-07-2008, 11:15 PM
#27
Thread Starter
Originally Posted by Lainey8484,Aug 7 2008, 07:26 AM
This is a gloomy report. I hope it does not come to pass. Chrylser/Jeep pays our bills, along with many others employed by the company nationwide.
I hadn't heard this speculation...what are they saying about Jeep and Dodge?
I hadn't heard this speculation...what are they saying about Jeep and Dodge?
" In a Detroit Free Press article by Tim Higgins, insiders are secretly indicating Cerberus Capital does not have faith in its new Chrysler subsidiary to mount a profitable return in the near future. After collapsing sales, mounting discounts, and even having to resort to removing unsold 2006 models as "used" to clear dealerships, Cerberus may be giving up.
Publicly, the equity firm is standing strong with its purchase and intending to rebuild the (historically) unsteady company. But the 2009 production year has not inspired the auto press. For the sporting crowd, there will be lower-priced and less-equipped editions of the Challenger (as well as a traditional manual gearbox). The greenies out there will be offered gas-electric versions of the Dodge Durango and Chrysler Aspen. Finally, the revised Dodge Ram will receive the bulk of Chrysler's PR dollars. Yet, none of these appears to be an impending success for a company ailing most of this decade.
Is it finally time to see the Chrysler name go the way of Studebaker, Franklin, Packard, and DeLorean? Or will it have a miracle and come back strong? "
08-08-2008, 04:47 AM
#28
Registered User
Originally Posted by Zippy,Aug 7 2008, 03:40 PM
I just fear the backlash if we lose one of the few real remaining manufacturing sectors that is still in this country.
Is the cure worse than the disease?
Is the cure worse than the disease?
Tesla Motors made a big splash with its all electric sports car a couple years ago. Now they are getting serious. They have hired a VP from Chrysler and plan to hire a full team of people with car industry experience, and they have announced a new mid sized sedan at a much lower price than their roadster. California and New Mexico are fighting over where they will site their manufacturing plant, but both those locations are still in the U.S.
http://www.autobloggreen.com/2008/07/08/fo...neering-effort/
08-08-2008, 05:10 AM
#29
Thread Starter
Crunch time for Detroit - and the nation.
By Peter M. De Lorenzo
Detroit. After all of the hand-wringing about product, all of the second-guessing and Monday morning quarterbacking about what the Detroit automakers did or didn
By Peter M. De Lorenzo
Detroit. After all of the hand-wringing about product, all of the second-guessing and Monday morning quarterbacking about what the Detroit automakers did or didn
08-08-2008, 05:27 AM
#30
^
Interesting reading....for anyone whose employment is dependent on the auto industry, it certainly makes you
Lately we both seem to have the "I have to work for at least 10 more years blues." As far as all the speculation that is out there, for now, I need to stick with the the "head in the sand" approach and hope for the best.
Our new president WILL fix this for us, right?
Interesting reading....for anyone whose employment is dependent on the auto industry, it certainly makes you
Lately we both seem to have the "I have to work for at least 10 more years blues." As far as all the speculation that is out there, for now, I need to stick with the the "head in the sand" approach and hope for the best.
Our new president WILL fix this for us, right?