What needs to happen
It’s time for Cerberus to start acting like patriots, instead of simply claiming patriotism. They need to give up on making a big profit from Chrysler – which is to say, they need to give up part of their stake in Chrysler Financial, and to dismiss any executive who will not limit their salary as demanded by the government as a condition for the $750 million loan. Chrysler Financial needs to come back for Chrysler itself to come back. Steve Feinberg has more money than any ten people can spend in a lifetime; he should be putting it where his mouth is, and bailing out his investors to compensate for the loss of equity. Or, perhaps, instead of giving away equity in Chrysler, they should be giving away some equity in Chrysler Financial to conform to government demands.
Had Cerberus’ leaders never played the patriot card when acquiring Chrysler, I would not hold them to a sacrificial standard. But real patriots don’t just play word games, they sacrifice. K.T. Keller voluntarily took a dollar per year, and at a time when profiteering would have been easy, he also held Chrysler’s profits to $1 per year.
Incidentally, while the executives at Chrysler Financial are being blamed for the loss of the $750 million loan, I wonder whether Cerberus chose not to demand that executives limit their pay, in order to sabotage the deal so that Cerberus would not look bad for refusing to give up their equity.
Chrysler executives – all of them – should be taking a serious pay cut, at least during the interim. Executives are paid multiple times what union workers are, and they can sacrifice more. I think everyone is tired of executives demanding pay cuts from everyone else, and then saying that “if we pay ourselves any less, we won’t be able to maintain morale.” The fact is, there has been absolutely no serious research done to show that pay is the key factor in getting the best people. Indeed, especially among CEOs, the opposite has been true — we’ve seen that the best-paid CEOs are often the worst performers. (When I say “pay,” by the way, I mean “total compensation package.” They like to play little games on us.) Sure, there are exceptions – Walter P. Chrysler himself, for example – but in general, you don’t get what you pay for in executives any more than you do in management consulting firms or computer programming outfits (hi, KPMG and Siemens.)
Fiat is getting a great deal, and it’s about time they put something onto the table other than technology that will not cost them much to give away. There’s been talk they might pay for the tooling to sell their cars here, which is a nice start, but what about the tooling for the Chrysler versions? There have been few details given out, and some of those have been contradictory. The latest news that Fiat might sell a division to pay for the deal is a good sign.
And then there are the unions. I disagree with the governments’ (including Canada) demands that the unions take the same overall pay, including benefits to past employees, as “non-union import plants.” Then people will end up getting paid more at the nonunion plants, at least until they drop their own wages. Really, there are two issues here – fairness and the domino effect. (I’m not including the question of government intervention in private industry, because in this case, private industry asked for it.) With regard to fairness, there are also two sides, the retirees – who contracted for one thing and are apparently to get another – and the current employees, who are being asked to get paid not only much less than they are under contract for, but also less, it seems, than workers at foreign factories in the United States.
As for the domino effect, consider what will happen to the guys at the import plants once the UAW and CAW are rendered useless and harmless. There will be absolutely no incentive for them to deal with safety and health issues or to provide better than the prevailing local wage. Salaries at import plants will simply plummet to compensate for the new UAW deal, and then the automakers and governments will demand that the UAW drop again until everyone reaches minimum wage. If you think that’s a good way to compete, think about what this will do to the middle class – hundreds of thousands of people once doing well will be on sustenance wages ($6.55 per hour), having to pay their own health insurance ($1,100 a month for a decent family plan). The people who sold things to those families will lose their incomes and so on. Anyone who thinks this does not affect them, will find out differently. Anyone who thinks that banks are unique in supporting our economy will also be corrected, the hard way.
That said, there will need to be more sacrifices from the guys who make the cars. I believe, though, that these should be clearly temporary in nature. There should be an understanding that once there are profits, wages will go back up, if not to their current levels than at least to levels somewhere in between.
Chrysler’s attitude towards Canada has been shameful. The Canadians have been more loyal to Chrysler than any other nation, and in return they are being threatened with the shutdown of all local plants and facilities. That’s just wrong. What’s more, Chrysler is using exchange-rate games to get lower wages from the CAW. That’s wrong, too. The public threats may well backfire, and Chrysler would deserve it — but who would lose? Not Cerberus executives, who use other people’s money, but the investors and the employees.
Finally, I have been surprised by the Obama administration’s actions throughout this crisis. Obama has been doing admirable things in a wide ranging of areas, outside of the economy, and it seems that every day there is a minor news item about some old scandal that’s being addressed, from getting nuclear weapons under control to constructive negotiations with other nations to stopping the giveaways of our resources to foreign mining companies. But his use of Wall Street insiders will backfire, and the double standard of money going to banks and industry is inexplicable even by his own Treasury Secretary. I never thought I would see a Canadian PM or a Democratic President demanding that unions give up negotiated contracts for nonunion wages, but then, it seems that Wall Street is calling the shots. (Perhaps with China’s assistance.)
The fact of the matter is that if you want retiree costs to go down, the best way to do it is to increase the sales of the automakers, not cut them. Chinese automakers are getting stronger and stronger, to the point where their #4 company easily beats our #3 company in sales, and China is soon expected to become the largest auto producer in the world. We’re slashing our capacity while they’re building up. Companies from India, Korea, and Germany are planning new factories in the United States, and that’s not to mention Italy; and we’re slashing our capacity, and the people are cheering.
When Chrysler started its 1990s renaissance, it had the highest per-car pension costs of the Big Three. By the mid-1990s, it had the lowest per-car pension costs. The fact of the matter is that the more cars you build, the more you spread out the fixed costs. As the automakers accede to public and government demands by shrinking, they increase their fixed costs. The only ways out are to expand, or to screw the pensioners. We’ve apparently chosen Door #2 and the American public is cheering.
Chrysler, incidentally, did not become successful in the 1990s – enormously successful – by slashing costs, which GM was doing at the time. GM’s cost cutting led to bigger losses. Chrysler’s investments led to huge profits. There’s a lesson there for anyone who cares to learn about it, but apparently that’s beyond journalists, Wall Street leaders, the White House, and both political parties, one of which wants the automakers to slash and burn, the other of which simply wants them to go away so that foreigners can build more plants in states that vote “the right way.”
There is still time to change, but it will require leadership. I have yet to see President Obama stand up for the automakers. Admittedly, it isn’t easy. They have had incredibly vain leaders like Wagoner and Mulally, who insisted that you can’t get a decent CEO for less than $20 million a year. They have had a culture of penny-pinching and low standards which gave the Japanese an edge and brought us technical inferiority. They have had a short-term view. And, in Chrysler’s case, they sold out to a horrific German company which they must have known would lead to awful results (over the objections of the only executive who spoke German and knew what was happening.) We have endured the Ford Escort and Tempo, the Chevette and J-cars, the Ultradrive and Neon head gaskets, the insanely over-recalled Ford Fairmont and Ford Focus, the oddly conceived Chevy SSR and Pontiac Aztek, and the squandered-opportunity Neon and PT Cruiser, not to mention overproliferation of models, complete ignorance of brand fidelity, and other moves which could only be described as “they just shot another hole in their own feet.” From the union workers, yes, there have been cases of malingering, laziness, violence, and drug use – the latter two mainly before the Japanese Car Invasion, and the former two apparently rare now. But the fact is that we still need them, and for all the foolishness of poorly tested contrivances (GM diesels, Chrysler Lean Burn, Ford vehicles), bad marketing, bad branding, executive excess, and the like, they have also had times of genius (Northstar, new and old Hemi, Neon) and sheer lovability.
More important, they are OURS. They are the North American automakers.
In some places, that’s the most important thing.
The President needs to use his bully pulpit to start promoting American vehicles instead of talking about how bad they are. This country needs to start investing in autos, not tearing down its own plants so Hyundai and Mahindra and Honda and Toyota and Volkswagen can have less competition.
China believes in the industry so much that the government appears to have started numerous automakers. France invested heavily in their industry and it’s competitive now. German protects its automakers, and so does Japan. Only here do we demand a slash and burn approach, and that’s got to change. Our futures are all riding on it.
Wow! Dave you sure hit this one on right on the head. I am with you 100%. At first I thought Obama was going to help the manufacturing companies in this country but now I realize he is just another politician trying to run the goverment by opion polls. I really feel this is Americas last chance to save its manufacturing jobs and I hate to say it but I think this administrations failure to understand whats at stake here is going to hurt this country for a very long time.
Daves right. I am a Canadian, and I just think American made vehicles are tops. I loved Chrysler/Dodge/Plymouth since I was a young boy and have never even considered buying anything else. I think they have great and exciting vehicles and their engineering is the best. People in North America need to stop beating up on one another. My motto is always to look out for our own first and secure a future for our children. People don’t seem to get that these days. They will do everything in their power to put down their own and give praise to an outside entity.
When I hear a stupid comment from a Canadian MP saying the CAW should take a $19/hour pay cut,
and obviously not having a clue as to what their talking about, I realize where some other people get their attitude. You have to realize here that when alot of people hear something stated on the news, they take it as gospel. You know how accurate the news is (NOT!) Half the time they can’t even get the story straight. Chrysler was threatening to close plants here and move all manufacturing out of Canada. NOT a good way to sell cars here. I was totally floored when I read this. That was pure bad judgement on their part. The worst part is their sales here are good. As a matter of fact, they pulled this stunt at a time when they were running ads on TV thanking Canada for giving them the highest sales in Canada for the month of February. Threatening people won’t drive sales up, it will “dry” them up. Its hard for people like me to defend this sort of action, and even harder to try and persuade someone to buy a North American car. (Sounds a bit like Nardelli’s work).
Obama I thought seemed to have his head on straight and alot of people seem to like him, but then who’s not to like after Bush. He gives me the impression now that he listens to or gets his information from alot of other people. Whether he’s right or wrong, there seems to be some pupetteering going on. One thing I didn’t agree with is how he spoke badly of his/our own auto sector. The last thing anybody wants to hear from their President are negativities and let down speeches. I don’t think he had a good word for Chrysler. It would have been better if he had said how bad of an economy it was all around, and how we must help, as taxpayers, to ensure a healthy recovery and future for those companies who got us as far as we are today. (people never remember the good times). He could have at least acknowledged the fact that a previous government put Chrysler in the hole its in today, by approving a merger with a foreign company, when there was absolutely no reason for it to happen. I think they should have then shunned the thought and told Daimler to take a hike and kept Chrysler U.S. I lost a bit for Obama when I heard his speech, he has a lot to learn. A Presidents` speech is to be hopefull and uplifting, it helps morale in times of hardship.
For all the autoworkers out there, I hope your future will be bright, and thanks for all your hard work.
When I speak of the auto crisis to friends and family, the first comment they make is about flying to Washington in their corporate jets. (Thanks Senators!) There is virtually no understanding of the overall financial crisis in the public mind, and less understanding of the cause of the meltdown in the auto industry, mostly thanks to the MSM, who are culpable themselves for their unwillingness to expose the fraud our financial system has perpetrated on the public. To my everlasting dismay and anger, Chrysler is going to become the sacrificial goat. Shame on all of you, President Obama, Prime Minister Harper, the U.S. Senate, Treasury and Federal Reserve, Cerberus, and every bank that screwed us all over, and ESPECIALLY to the self serving media who can’t even report the facts coherently, or truthfully anymore. They say what goes around – comes around. I can only hope and pray.
This issue is complicated and I go back and forth. At times I think of history: Packard, Peerless, Pierce-Arrow were once the top marques in the US. Two of them did not survive the depression. Cadillac came out on top. Just how it was. Perhaps GM and Chrysler are simply not going to survive this “Depression,” and Toyota, Hyundai, perhaps BYD or Geely, are going to come out on top. You can say that about countless brands, products, stores over the years. But, on the other hand the competition has not been equal. It’s as if we’ve asked our eight year old sons to take the football field against college men. And now we’re surprised at the results, mad at the CEO’s and UAW and CAW. Maybe we should support Ford and key suppliers, to preserve something that is healthy. Maybe propping up GM or Chrysler just hurts Ford in the long run. Maybe propping up GM hurts Chrysler, which in many ways is in better shape–with just three brands, no European branch to worry about (unlike GM and Opel).
The sad thing is the successes of Chrysler and GM are overlooked. Chrysler is still no. 5 or 6 in the world. GM–purely looking at Chevrolet and Cadillac’s sales–holds 12 percent of the US market. People still want the cars they make. These companies, and the men and women working for them, are not “failures.” AIG IS a FAILURE. People should be mad at them, not at a retired autoworker who simply wants the benefits he’s worked for all his life. Chrysler has segment leading products, more on the way if they aren’t shut down. RAM increased share even after the financial and gas crisis, and facing direct competition from Toyota. GM, with cars like the Enclave, CTS, Malibu, Silverado is making outstanding cars. Even jaded auto testers find the CTS and CTS-V the equal of a BMW. Americans once took pride in their accomplishments. Even the most self-serving politicians did. Where is national pride today?
This issue is complicated: it’s not one political party’s fault. Everyone has been shortsighted. This is a problem that need the clarity of thinking and policy that the Manhattan project had. Instead it’s treated like a problem at a local school board: essentially, ‘the lunch room concession company has thrity days to cut prices or we’re giving the money to someone else.’ At the end of the day this equates to losing our manufacturing base for good. This isn’t like a convenient store in banruptcy: who is going to buy cars from Chapter 11 companies? Sales are already suffering because of those fears. But every day potential buyers are hearing the government may force Chyrsler in Chapter 11. The government should have acted quickly to shore up the financial arms for GM and Chrysler. Freddie and Fannie should have been shut down–they should be the ones given 30 days to reorganize or go bankrupt. Perhaps something akin to FDIC should have been set up to back the warranties and financing and hold the debts and liabilities for the big three and so we get the issue off the table so confidence can be restored. It should have been done two months ago. Subsidize the big three to an EQUAL extent that Japan’s MIT does its automakers.
Guarantee the loans for five years and let the companies restructure as was done for Chyrsler in the 80s. Don’t say we’re recalling them if you don’t do what we want by April 30. Subsidize the big three building electrics, just as Prius was for Toyota, but get rid of CAFE and the penalties that hurt its most profitable mainstream cars. Don’t add new energy taxes at this point. Give incentives so more solar, more renewables are used, but don’t try to beat the US companies over the head. Give tax incentives to balance out what the transplants have obtained.
The pols want to do ’something’ because elections are coming. It won’t go well for Obama in states like Ohio, and Michigan if even more jobs are lost. But they need to see, where should we be ten years from now. Will we have a core of indigenous automkers that can stand on their own feet and build electric cars and hybrids that are somewhat profitable AND mainstream vehicles that people still want? will we have an auto industry on permanent government life-support, building unprofitable cars dictated by beaureaucrats? Or will this industry disappear altogether and we find ourselves buying everything from Chinese firms?
What we are seeing in Detroit has been building steam for years, and the kettle is boiling. In my 23 years with Chrysler i have seen it under three names. Chrysler Corporation(my favorite, it was fun then) DiamlerChrysler (what a joke) Chrysler LLC ( the reason I left). I have nothing but praise for the guys and gals working the line, they have a complete understanding of what needs to be done.
Management has left the building a long time ago. They do not get it. At all. They all want to be the next Lee Iacocca. Well Nardelli there was only one Lee Iacocca, and you don’t have what it takes to hold his shoes, much less try to wear them. 3 new models in the pipe over the next 5 years? Are you insane? I like the 300C, own one. But it is fast becoming a dated car, as is the Charger, The sales numbers would have dropped off on these models even if the banks hadn’t gone broke, and pulled the world as we knew it down with them. The 2009 Ram is a hit. But no, lets not do what we did there to the whole line, let’s stop there.
The problem with Chrysler is that it has not been allowed to shine in the areas it excels at. Nardelli has no idea how to run any manufacturing, or service related business. Chrysler, Ford and GM are all the same, they manufacture cars, and the service is making cars and trucks people want to by. Cars that will show up to dealer lots in “new” not like new condition. Nardelli has single handly sold Chrysler down to a operating shell. He should be fired.
Mr.Press has a long experience in this industry. He took Toyota from import to domestic status. He knows what people wants when it comes to car’s. It’s easy, More for Less. Well you can not do more with less, never happen. The investors and Banks need to wait on their profits. Not demand them now.
All the banks who lend Cerebus the capital to take over a controlling 80.1% stake in Chrysler from Diamler AG, are getting bailout money for their other failed stakes in risky subprime home loans. They were all looking for a fast, big money, high intrest payment. And it never showed up. Seems people with bad credit don’t want to repay their loans. Go Figure. Who would have thought this? Management missed it, that’s for sure. What chaps me is that my tax money is supporting them. The credit crunch killed, not only Detroit, but many other manufacturing based cities as well.
My biggest problem with President O’s administration is that it has miss “anti union anything” Clinton in it. This is a problem I keep my fingers crossed that he corrects. She has had not only her 15 minutes of fame but 30 minutes. The first 15 was when she and the others put “watergate” on the map and pulled down an American President. (For me I didn’t like Nixon he looked like a crook) The second 15 minutes was at Wal-Mart when she was there first female board of director. The most anti union company in the world, and one that to this day i buy nothing from.
Detroit as we knew it is gone. The glory days will never return. Maybe I will be proved wrong, and I hope so. But all the facts state i am right. Till Congress fixes many tax and foreign trade gaps, which will not happen in my life time. I expect things to get a lot worse. All the other countries in the world who make cars support them with tax breaks and even loans. In the United States that is a politicaly incorrect action to take.
So that brings me to the point, it’s the new teen and 20 somethings who do not support anything American. They, my daughter included, go out of the way to buy imported products because it is the “green” thing to do. The media has fooled them into believing other countries regulate their industries better on polution than the United States does. Yeah that was her words. That is what the media is filling them up with. And yes those words did hit hard. I have seen the plants protested against more than once. Sierra Club, was always my favorite. They would show up with there earth day stuff, driving around in the very vehicles made by the very people they were protesting against. Ironic. Who every coined the term “Green” and if they had a patent on it, is sitting back laughing there ass off counting the money piles. Cause that was the best advertising engine every thought of. Wish it had been me.
My personal view? Let them all slip into chapter 11. Whatever comes out will be leaner and meaner. If anything comes out. Let Toyota or Honda or whoever have the plants. Let’s become the first country in the whole wide world who has to import everything and be dependant on every other country. Sounds like a place i want to live my life out in.
Unfortunately, I believe a Chapter 11 filing for Chrysler will be shortly followed by a Chapter 7 filing. The assets will be sold off at 6 cents on the dollar. The dealer network will collapse almost instantaneously.
Let’s face it, the vast majority of politicians (and maybe Americans in general) don’t feel Chrysler is important enough to save. They may go to the mat for GM and Ford, but I fear Chrysler’s overall negative perception when it comes to product, quality, and viability will be its downfall. There is no Lee Iacocca this time around. Cerberus, whether it deserves it or not, looks like a bunch of villains that nobody wants to help. I predict Chrysler’s sales will drop dramatically from the already depressed levels once a Chapter 11 filing is made. That drop in sales will be one they can’t possibly recover from. GM has a better chance of restoring customer confidence in a post-Chapter 11 era.
The really sad part of it all is that the suppliers will also suffer with many of them collapsing thus forcing Ford and GM to start sourcing from overseas or from foreign transplants that followed Toyota and Honda here.
I hate to say it, but I don’t think guys like Patrick Leahy, Barney Frank, Chuck Schumer, Henry Waxman, Nancy Pelosi, Harry Reid, or Obama for that matter, have a clue what is at stake here.
You can add all the Republicans to that list, since I don’t recall ANY of them outside of the Auto Belt voting to help the automakers. Indeed, for all you like to drag Pelosi & Co. through the mud, the most vocal anti-automaker voices have been Republican Senators who just love their Toyota factories to death.
Obama, like Bush, ran counter to the Republican leadership and Congress as a whole by lending billions to Chrysler and GM. Both deserve credit.
The main problem as far as I see it, is the media. Very few commentators understand the situation; indeed, most are playing it for cheap ratings. I don’t expect NPR to find an “expert” who actually has something intelligent to say about autos, but Autoblog and the auto editors of the WSJ, NYT, and Heaven help us, Detroit News, should know better. How are common people supposed to know what’s going on when their information is tainted and limited?
As for Cerberus, well, Steve Feinberg could change the anger in a moment, but it’d cost him a billion of his own cash, and that ain’t gonna happen.
GM is in worse shape than Chrysler but you’re right, they’ll be propped up.
Meanwhile if Chrysler goes, the taxpayer will pick up a bill for $40 billion, between the pensions, bank aid, dealers, etc.
Agreed on Chapter 7.
PS> I still believe they’re using bankruptcy as a threat to move the bankers and maybe get some concessions out of the execs. And yes, I think even the current execs deserve as much blame as the Congress. Remember, in WWII, the Chrysler leadership took NOTHING for their work. Iacocca did a year for a buck. Yes, it’s symbolic. So what?
I agree with you. And I would say Symbols often lead reality. We have to get back to a healthier set of ethics. Really, Japan, and now China and India, have had the success they’ve had by emulating American business practices that existed prior to the 1990’s: CEO’s work their way up, spending decades in the company, pay was not exorbitant because it went back in the company, workers got decent pay and benefits because the health of the company long-term was more inmportant than trying to please investment firms that want the stock price to keep going up and up. True leaders have to step up to the plate or we are never going to compete with China or India in the next twenty-five years. The Chairmen of BYD or Tata are worth billions, on paper, but they live modestly and roll much of it into growing the company. True leaders are going to have to say we’re not going to take big paychecks if the company’s not in the black. But we have a system that makes it okay for leaders to leave failed companies with their pockets full. I would say consumers have to force that change: we should support firms that act responsibly. Consumers have alot of power: taht is why everyone tries to say they’re “green”–whether true or not, it either draws or repls customers.
Government ought to clean its own house as well. THe execs that pocketed millions from Fannie Mae, Freddie Mac ought to have to give it back. Those entities ought to be forever shut down, their programs ended. If the AG’s office wants something to do, it ought to investigate the Congressmen and Senators that benefitted from Countrywide and fraternized with execs of the finance companies that have their noses at the tax-payer trough. We have to end this culture that says what’s good for Goldman Sachs and AIG is good for America. We have to end this practice of vetting our leaders in Dept. of Tres. through Wall Street. It’s like having a wino guard the beer shipment. Ike warned of the military-industrial complex, but we are ignoring a financial-government complex. At the stroke of a pen trillions of dollars are allocated and moved about. Who is benefitting? Some are asking questions. But where are the Harry Truman’s of our generation? or the Eisenhowers?
I think the people can still affect this: ALOT of people didn’t even vote in 2008. Let’s forget Dem. and Rep. or Lib. or Con. because those terms are meaningless anymore–vote for candidates that will vote against the collusion and the insanity. The dems. got a majority in 06 because many of them campaigned as CONSERVATIVES on fiscal issues. Americans were tired of Bush’s spending like a drunken sailor. Let’s keep theses issues in mind in 2010 and not get as caught up in labels or who looks good or how much money the pol brings to our state.
People are mad at all of this, and most people don’t understand the Big Three is a separate issue, they just see another CEO trying to get money from them. In reality it’s different, GM and CHrysler are far more deserving of help than AIG, but the distinction is lost in 15 second soundbytes. In reality, we need to ask if we want to be a nation where 95 percent of the people make minimum wage, and the top 5% are billionaires, or do we want the prosperity and political stability a large middle class brings to a society.
I can’t believe the way in which the media reports news to people through TV, radio, and newspapers.
I’ve never seen such a compilation of incompentent reporting. If they said it was raining outside,
I’d still have to look out a window to double-check for myself. I am sick and tired of correcting news reports to people who think everything they hear from the media is totally correct. Everybody believes autoworkers are taking home $76 dollars an hour, Lack of fuel efficient cars is what caused the autosector to collapse, American cars are inferior in quality and thus nobody would buy them causing this autosector turmoil, auto workers make mega bucks and are lazy, etc, etc, etc…
You wouldn’t believe how many times I’ve had to have an argument with people to correct this.
People out there think that if the autosector collapses, it will not affect them or their way of life, when in fact, we wouldn’t be able to maintain our standard of living without a domestic auto manufacturing sector. I believe the governments should, without hesitation, help the autosector in this time of need. People seem to forget that those companies paid billions of dollars in taxes over the years, and now its time for the government to re-invest some of that money to help this industry. If anyone hurt this industry it would be the governments. They allowed foreign companies
to freely sell their products and do as they like here, without any regulations to protect these industries. They seem to give freely to the big banks without hesitation, and we all know these are the ones who caused all this. NOT taking a jet to a meeting.
GO CAW/UAW GO. These are the real heros of saving this industry. The average Joes who have to take concession, benefit cuts, and the brunt of the media “Gossip” to help us all continue with our standard of living. If this all pans out and the autosector revives, lets see how many people out there will remeber those autoworkers, who I hear have agreed to a precedented and pattern breaking contract to help as much as possible to save this industry.
I don’t know any autoworkers personally but, if there are any on this posting, you have my utmost Gratitude and Thanks from Me and my Family.
Dave, you’re right, I shouldn’t have excluded the Republicans! I was thinking of the ones currently in power. I’m so disappointed in the whole pack of them that I’d be in favor of voting all of the incumbents out of office. Even if that means getting rid of the few good ones that are there. If we want “change”, if we want real reform, if we want to eliminate cronyism and corruption, then we have to make a clean sweep, IMO. It’s the only way to stop the disease. It also means supporting the underdog candidates that aren’t endorsed by the current corporate and politcal power structures because that would mean more of the same, just different names and faces.
Personally, I’m aghast at the lack of knowledge and commitment to the auto industry (and others) demonstrated by our Congress as a whole. These people need to get out of the Washington bubble more often to figure out what America actually IS. The auto industry is such a huge part of our economy you would’ve thought they’d have been paying attention to it as they heaped regulation upon regulation upon it. Congress helped smother the Big 3 and has rarely supported them.
Watching another major manufacturing industry facing collapse and/or the choice of sending more manufacturing jobs overseas, is sickening and scary. Perhaps WWII is so far in the past that people forget that it was our manufacturing skills, knowledge, and capacity that enabled us to win that war. How many of the vehicle manufacturers that existed then are still around? Many have already died. But, like the remaining Big 3, they adapted their factories to build trucks, tanks, boats, aircraft, and weapons. I see hanging onto the Big 3 as much about national security as I do preserving jobs.
An interesting perspective on who is really benefitting from current policy:
http://www.forbes.com/2009/04/26/obama-bush-paulson-ayn-rand-opinions-columnists-tea-parties.html?partner=popstories
Unfortunately, fair play for the men and women that build things, as well as long-term economic security for the USA are not high on the agenda.
This article makes alot of good points but agrees with your second to last paragraph: we must realize there will be an auto industry operating in the US and throughout the world: the question is do we want to own a part of that? Or shall we cede all of it to Toyota, VW, Hyundai and whoever else can survive and attain to the very exclusive club of perhaps six surviving auto manufacturers.
http://www.businessweek.com/print/lifestyle/content/apr2009/bw20090423_526225.htm
It is so unfortunate to see the domestic automakers struggle. With the exception of Ford, the other two domestic automakers are on the brink. The problem is the way these companies are handled and managed. Instead of putting top quality products, the big 3 continually put out unreliable products and did not want fix them. Rather, they continually stonewalled customer complaints and blamed others for their inferior products. I am not taking shots at the Americans but America likes to play the blame game in every industry rather getting to the bottom of their issues. Almost everything in America, is about blaming the other guy rather than looking at itself. Therein lies the problem. American executives are greedy and care about themselves rather than the entire company.Hence, many American industries are falling apart because they only put in band aid solutions. Whereas the Japanese and other Asian industry leaders, don’t blame anybody but they hold themselves accountable when they make mistakes and in turn rectify it. Thus, Asian companies seldom
if ever have serious financial issues. As the saying goes, “Clean up your own backyard first before you clean others.” Likewise, it applies to everything in life. Look at yourself first and improve/correct yourself -then prosperity and all the good fortune is yours.
I can give you several examples of this. I have worked for all the Big 3 dealerships and a couple of Import dealerships. Let me tell you, the Big 3 will not acknowledge when there are issues with regards to their products and solutions come when it is too late. On the other hand, Import automakers acknowledge they have issues and address them as soon as possible. Furthermore, in the Big 3 dealerships, you have to lie to the customer when there is a common problem with a vehicle and you as a Service Advisor is aware of that. By the same token, Import dealerships are more forthcoming and the advisors will not be reprimanded when telling the truth. So what does this show? It shows that when telling truth, customers develop a sense of trust and thus they are more comfortable in buying that make and model over and over again. That is how the Asian automakers got a foothold in North America because they excelled in customer service and did not stonewall customers when they had legitimate complaints.This is where domestics have failed miserably and no matter how reliable their vehicles are now, it will take many years to reestablish the trust factor.
Until the big 3 can demonstrate that they can produce high quality vehicles and address issues promptly, on a consistent basis, they’ll continue to slide into oblivion. No amount of bailout money can fix anything if they continue to lie and stonewall legitimate customer complaints and not be accountable for it.The CEO’s of these companies have to invest strategically and carefully and eliminate excesses so that the very survival of the domestic auto industry, will be a long term thing, not just a few years.
I for one think, that Chrysler can turn itself around, like it has on so many other occasions, if the CEO’s don’t put their agendas ahead of the companies that they are leading. Instead of cost cutting, they use efficient methods of manufacturing and thus Chrysler can produce amazing vehicles like it did more than 35 years ago!!! Chrysler has got the best engineering out of the Big 3 but it is the leadership that has screwed them over repeatedly. Once all of that is taken care of, Chrysler will once again rise from the ashes with amazing products!! Hope and pray that this will be the case!
First, Ford is not in as bad shape because it already got massive loans – but otherwise, it is bleeding money like everyone else and can’t go on for much longer without serious problems. That’s why Mulally went in front of Congress to co-beg.
Second, I fully agree regarding service. That was only starting to be addressed before Daimler swallowed up the company, and I honestly thought that with the Mercedes people in charge, there might be some improvements. Instead, the status quo continued. The Five Star program “already in progress” was rolled out but enforced by zone reps and later countered by “money saving” processes that undermined good service.
I was pretty sure the Daimler deal would never work, and of course it didn’t. I fear the Fiat deal will be worse. I sure hope I’m wrong, but something tells me I’m not. I believe another great American company is in ICU and will never recover. I’m telling my Son to hold on to his SRT8 Challenger, there is no doubt it will be a collectors item when Chrysler is no more.