Changing Times and a Big 3 Bailout
A few days ago I came across a Motor Trend piece discussing the Dodge Challenger and the 2010 Chevy Camaro. In a nutshell, the news item revealed that Dodge will not create a convertible model of the Challenger because it simply doesn't have enough money for a redesign. And the Chevy Camaro convertible is on hold as well. Of course, as a Mustang guy, my first thought was, "Great, less competition." Then it hit me. We're in trouble, BIG trouble.
First things first, competition is good. It motivates companies to create better products and it generates enthusiasm for the industry as a whole. Unfortunately, the Big 3: Chrysler, Ford, and General Motors are now in the hole, and in a bad way. The recent credit crunch, and declining economic conditions, have really hurt automakers and the dealers that sell their vehicles. Of the three, I'm happy to report that Ford is weathering the storm the best, but that doesn't mean it's smooth sailing. A collapse of even one of the Big 3 auto makers would have a tremendous impact on the already declining U.S. economy. Some say if even one of the Big 3 goes out of business, 2.5 million jobs could be lost in a year. That, folks, is a lot of jobs.
Of course people have mixed feelings regarding a government bailout of the Detroit automakers. According to The Hart poll, conducted on November 11th and 12th, 55% of Americans believe that the government should provide loans to American automakers, while 30% oppose. Of all the opinions I've heard, many say American cars lack quality and deserve to go out of business. Others believe that, as Americans, it makes sense to support American companies.
As the happy owner of a Mustang (and many others over the years), I believe that America does make good cars, and I sure would hate to see the American automakers disappear. What are your thoughts? Do you think the American automakers deserve a government bailout or do you think they should face the economic storm without assistance? Just like the longstanding Celtics vs. Lakers rivalry, I sure was looking forward to a renewed Mustang vs. Camaro showdown. Of course, if GM goes out of business, we can kiss that dream goodbye.
Speaking of GM, it was announced this week they've pulled out of the upcoming LA Auto Show. Why? You guessed it, lack of money.
Related Articles
- For Used Cars’ Sake, Auto Manufacturers Need a Bailout
- Saving Detroit's Big Three: To Bail or Not to Bail
- Aaron's opinion: Should we bail out the Big Three?
- Should We Bail Out the Big 3?
- Top Ten Reasons to Save American Car Makers
Photo © Justin Sullivan/Getty Images
Comments
Our last stimulus package cost 168 BILLION. The money was borrowed from China! It didn’t do a thing to improve our economy. We have bailed out and bailed out. Still our economy is going down the tubes at a rapid pace. Not enough credit is being given to the role the record breaking cost of gas played in the downward spiral of our economy and the demise of businesses from the largest corporations on down the line. Families and business have struggled this past year to get buy while being slammed with high fuel costs. The average family broke the budget filling up the car alone. Then to add insult to injury, every consumer product cost us more due to increased production and shipping costs. Food, clothing, everything imaginable now cost more as well. Electric companies were quick to raise prices some as high as 22%. So, we cut back, drive only when we absolutely have to , quit going out to eat. Stop buying new clothes. Sadly the ripple effect is never ending, this results in even more jobs being lost. OPEC responds to our lowered consumption by cutting production and they continue to cut and will do so until they get the price per barrel back up. We need to end our dependence on foreign oil. We have so much available to us in the way of FREE energy sources such as wind and solar. We have modern technologies such as hybrid and electric plug in cars. Why don’t we invest in America becoming energy independent. 168 billion would go a LONG way towards getting some of these things set up. We are using oil at the rate of 2x faster than new oil is being discovered. World demand is rising as 3rd world countries become more modernized and populations explode. Jeff Wilson has a new book out called The Manhattan Project of 2009 Energy Independence NOW. President elect Obama needs to read this book and provide every elected official one. We can’t continue to bury our heads in the sand. We have the knowledge, we have the technology, what we seem to lack as a nation is a plan. www.themanhattanprojectof2009.com
There are a couple things that I think would help the industry and the economy. First, the US made a mistake giving foreign manufactures an advantage coming into this country without evening up the playing field. The US CANNOT match them do to embedded costs. See what happens when you try to manufacture in Japan. They protect their manufacturing. If the field was level, we can compete with anyone. The Fix, levy a tax on foreign builders (even if they built here) to at least match the Big 3’s production cost. Our government would like that,…..Mmmmm Taxes! Second, get people to work drilling anywhere there’s oil and go nukes, wind & solar. In that order. Next, all environmental regulations should be frozen into todays standards for 5-10 years. Our invironment is important but until we have stability and economic security in this country, further regulations just cripple us. Especially the next set of CAFE standards. See, it’s pretty easy. Will we do it? Hell NO!
Thanks for sharing your thoughts with us Sherry and Dave. Definitely valuable insights.
I too own a Mustang, and love it. I’m a ex-pat Brit, living in California. The fundamental issue the big 3 have is that for years, they have competed on price only. Product is decades behind, in every respect. I can’t emphasise how noticeable this is - I travel a lot, and drive a LOT of rental cars. The comparison between euro and US offerings is amazing - e.g the euro Focus is a great car, the US one…. At the rental counter, I avoid domestic US product - it comes to something when a gearhead car lover chooses a Hyundai over a Chrysler !!! Truly, the US domestic product is that bad. Growing up in England in the 70s, I am familiar with governments bailing out domestic car companies who thanks to Unions and years of uncompetitive product do not stand a chance of getting on terms with BMW or Toyota. I challenge anyone who thinks bailouts is a good idea to drive a Cobalt and a Corrolla back to back, or a 5-series and a Cadillac. You don’t need to be a car expert to see why the big 3 seem, at the moment, to be a lost cause. And my Mustang ? Prehistoric, sure, but I wanted a 60’s muscle car, so it measures up; I am just making sure I don’t drive my buddies Nissan 350…..
I Feel that ALL 3 have some persons being paid way more than is reasonable and can certainly afford to trade that cash out for future perks in the company. Secondly, I feel that ALL 3 could offer pay cuts in trade for perks across the board. I Feel that everyone involved can make sacrifices rather than become un-employed. If the Automakers are not willing to work together to make it happen, then NO Help! If the Gov is going to just hand it out, It will not help! Concessions reap rewards. Let the Gov Buy Stock if they think their $$$ will help. Gov needs to stop handing $$$ to those that are proveing with a track record, they don’t know how to handle it! These Yahoos that make a million a month and more need to get real. I make an OK living but with my mother in a nursing home and gas prices in the recent past, we have racked up over $100,000 in Credit Card Dept. Will the Gov Bail Me Out? I’m not looking for them to and would’nt know where to start looking. I don’t believe in hand outs by Gov. That is partially my money - Hand it back to me. I sure think the Gov could make better use of it than them perking themselves till death do we part and all those in office in the future and to go hand it to others that can’t handle it. Portion it back to them - Portion it back to me!
The car companies didn’t bail us out in July when we were paying 4.50 a gallon. Let the car companies tighten there belts like we have to.
China will be leading the car manufacturing businesss in a short period of time anyway.
Nooooo let them bail themselves out for a change.