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Poll

What should congress do?

Bankruptcy
9 (90%)
Bailout
1 (10%)

Total Members Voted: 10

Voting closed: December 14, 2008, 01:16:53 PM

Author Topic: American Auto Industry  (Read 2375 times)

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Offline cowboy

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American Auto Industry
« on: November 14, 2008, 01:16:53 PM »

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Offline 48fan

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Re: American Auto Industry
« Reply #1 on: November 14, 2008, 01:53:57 PM »
Now now, you first asked "What should Congress do?"... then you have to throw in "Which is more beneficial to the economy?"... Obviously short run benefit will be to the economy if it was bailed out. Long run unless the industry can find a way to reduce overhead they are doomed. Labor is killing the US automakers. Pricing them out of the game.

Bailout is not a long term fix but would give them more time to figure it out.



Offline darrellmaurina

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Re: American Auto Industry
« Reply #2 on: November 14, 2008, 03:42:50 PM »
I'm from Michigan, my father's parents and oldest brother were autoworkers and UAW members, and I have real problems with much of what has gone on with top management of the auto industry for years. I'm not minimizing the problems there of poor decisions by executives and by the UAW.
 
However, there's a simple solution -- buy American.
 
Yes, some foreign cars are better made and some are cheaper. Buy the best American cars available, or the cheapest American cars available, depending on your preference. The result is that more such cars will be produced because there will be a good market for them. Otherwise, stop complaining about the exporting of American jobs to foreign countries.
 
It's already virtually impossible to buy many types of American-made electronics, but if we absolutely had to, we're capable of reconstituting the American electronics manufacturing industry because of our dominance of high-tech research. But we're running the risk of completely wrecking our industrial base with the loss of the auto industry. I'm not trying to say the auto industry is the most important thing Americans do -- it's not -- but the collapse of Detroit is a symptom of the transition of the American economy from a reliance on industry to a reliance on service occupations. That is not good for our long-term national security or for our civilian economy. McDonald's is fine as a service, but a nation primarily consisting of McDonald's workers and other types of service workers is not what we need.
 
Sooner or later, we're going to have to accept "Buy American" as a personal choice or we're going to just have to accept some very bad consequences.
 
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Offline cowboy

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Re: American Auto Industry
« Reply #3 on: November 14, 2008, 04:00:29 PM »
I'm from Michigan, my father's parents and oldest brother were autoworkers and UAW members, and I have real problems with much of what has gone on with top management of the auto industry for years. I'm not minimizing the problems there of poor decisions by executives and by the UAW.
 
However, there's a simple solution -- buy American.
 
Sooner or later, we're going to have to accept "Buy American" as a personal choice or we're going to just have to accept some very bad consequences.
 
Regards,
Darrell Todd Maurina

To understand better your thought process could you site a couple examples of poor decisions.

Offline 48fan

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Re: American Auto Industry
« Reply #4 on: November 14, 2008, 04:15:20 PM »
...
Sooner or later, we're going to have to accept "Buy American" as a personal choice or we're going to just have to accept some very bad consequences.
 

Agree with you. I own all Fords... Don't even look at anything else. But the bottom line is we are pricing ourselves out of the market. Labor is the vast magority of overhead in any business. Lots of workers have taken serious cuts in pay but how do you compeat with foriegn manufactures paying 1 third for their labor?
 
Yes, the answer is "Buy American", but good luck finding American. It's not getting easy to find.
 
What do you forsee as very bad consequences?

Offline darrellmaurina

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Re: American Auto Industry
« Reply #5 on: November 14, 2008, 08:32:04 PM »
To understand better your thought process could you site a couple examples of poor decisions.

Wow. Just a couple of examples of poor decisions in an industry that has been making bad decisions since at least the early 1970s, if not earlier?
 
Well, the 5-cent answer is that there's plenty of blame to spread around between management and labor. It's not a one-sided problem by any means. And debating which is more at fault is useless -- the problems weren't caused by just one side, they started about four decades ago, and there is absolutely no way to fix the mess without cooperation of both labor and management.
 
The 50-cent answer includes the following as main points, though much more could be said:
 
On the management side, American automakers decided to aim at the center of the market because that was the most profitable in the 1950s and early 1960s. The high-performance expensive cars were left primarily to the Germans and to some other European countries and the cheap economy fuel-efficient cars were left to the Japanese, who have always had trouble getting gasoline to their islands and have always had relatively expensive fuel prices compared to the United States. (Remember, as late as World War II America was a huge oil superpower, while Germany, Italy and Japan had increasingly major problems getting the petroleum needed to run their industrial operations as the war dragged on.)
 
On top of that, "planned obsolescence" was introduced as a market strategy to get Americans to buy cars more frequently since it was more profitable to make a car that would only last a decade or so rather than produce the old Model-T and Model-A vehicles that were designed to last for a very long time.
 
The end result is that when the OPEC oil embargo hit, the Japanese had a perfect market niche for cars that newly cost-conscious Americans didn't previously want to buy, and those Americans with more money who valued high-performance cars looked to non-American sources because many of the top auto engineers were working for foreign auutomakers.
 
American automobile manufacturers have never been able to get over the reputation that they produce an overpriced product that is built to wear out. And while the reputation isn't necessarily true across the board, and it used to be more true than it is today, the problem does persist across all American manufacturers and the majority of their models.
 
Pretty much the only niches American automakers still dominate are the mid-level Cadillac-type luxury cars (but not the Rolls Royce top-of-the-line models) and heavy duty work trucks like pickups and more recently SUVs. And even there, the Japanese are working hard to develop quality competitors in the luxury car lines as well as market fuel-efficient versions of the SUVs.
 
On the labor side, it's easy to pick on the unions for driving labor costs through the roof. But that's not really fair and not really relevant; there's a more important underlying problem. Unions can't be blamed for trying to provide good jobs at good pay for their workers -- that's what they exist to do. The main problem for the unions is that they didn't respond effectively to the internationalizing of the labor pool, and by focusing only on improving pay for American workers, they've priced American-made products out of reach of too many Americans.
 
A major part of that is caused by the severing of the American labor movement from its colleagues in other countries. Policies that were well-intentioned efforts by patriotic American labor leaders (especially in the old AFL, when the old CIO had some serious communist infiltration issues) to cut off the American labor movement from the socialist and sometimes even communist labor movement in foreign countries have backfired and created a major problem that probably couldn't have been anticipated in the 1920s, 1930s, and 1950s.
 
The pre-World War II labor movement was characterized by an emphasis on internationalization. That persists today in unions with names like "International Brotherhood of..." but today "International" usually means, at most, U.S. and Canada. Very few if any major American unions have very many locals in other countries besides those two, and there isn't anywhere near as much contact between American unions and the unions of the Third World (or developing world) as there was in the late 1800s and early 1900s between unions worldwide.
 
American unions should have been working with unions in Mexico and certain Asian countries to improve working conditions and raise pay rates worldwide rather than allowing American products to be undercut by virtual slave labor rates abroad. We now have a major problem that American weath and American spending is financing robber-baron economies throughout the Third World that are ripe for socialist takeovers because capitalism simply isn't floating all boats in some of the places making the products we're buying. President Chavez of Venezuela has a toxic message of anti-Americanism and socialism that could spread throughout Latin America if things don't change quickly.
 
Again, I understand why the anticommunist labor leaders of the early 1950s decided it was important to take a go-it-alone policy to keep communist influence out of American labor unions, and that may have been the only choice in the 1950s and 1960s. The "international labor movement" of that era was flat-out dangerous -- European unions were openly socialist and sometimes covertly communist in ways American labor simply could not accept without becoming a target of conservative anti-communist purges. And the fact is that the European labor movement has destroyed the economies of much of Europe and made things much worse over there than they are here.
 
But the fact remains that the world would be a very different place today if we had a strong anti-communist labor movement in certain countries to which American companies are exporting our jobs. I don't know how that could have been done in the 1950s, but when Polish labor leaders revolted a decade before the end of the Cold War, American labor leaders did the right thing by supporting the Solidarity union in Poland and that was a major factor in creating a successful pro-American democracy in the heart of Eastern Europe. It's too bad we don't have something similar right now in Latin America and Asia.
 
Regards,
Darrell Todd Maurina
Darrell Todd Maurina
Check out the Pulaski County Daily News online newspaper at
http://www.pulaskicountyweb.com
Cell: (573) 433.6733 * FAX: (573) 774-2349
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Offline fish

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Re: American Auto Industry
« Reply #6 on: November 15, 2008, 02:01:11 AM »
I was also born and raised in michigan. my dad and uncles were all in the uaw. I would like to see the union influence ended. they are the reason for much of the auto industry's problems. $1500 of the sticker of the vehicles sold goes to employees healthcare. GM had to have a 30,000 pool of employees to be available if they were needed if someone called in sick.what did they do while waiting? play cards,games and watch tv. this was the result of collective bargaining. The unions purpose is to support the union leaders and keep incompetent people employed. How is toyota doing? why did they build a plant in alabama? why did saturn build a plant in tennessee? not right to work states. there are enough laws on the books to take care of problems unions originally had to fight. But the unions are a key factor in the auto industry's problems.

Offline prE4chEr

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Re: American Auto Industry
« Reply #7 on: November 16, 2008, 11:05:58 AM »
$1500 of the sticker of the vehicles sold goes to employees healthcare.

So what you are saying is that health care is a major problem for some of our most important industries? Then it isn't a stretch to say that universal health care would be beneficial to these same companies which are the back bone of our economy? It's nice to see you falling in line with your soon to be president's plan.
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Offline fish

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Re: American Auto Industry
« Reply #8 on: November 16, 2008, 03:31:37 PM »
not at all. there is all thgis talk about "big oil", why is there no talk about "big health care"? costs need to be reined in so healthcare is more affordable. lower costs and insurance costs go down. the unions health care for the employees is a very generous program. who pays for it? Us, or did you miss the $1500 of the sticker price for each vehicle. Just like nobama's plan we would pay for it even if we had our own coverage and wasn't covered on nobama's plan. the problems with the auto industry have been the result of collective bargaining. airline pilots had their wages cut to save their jobs, the same needs to be done in the auto industry.

Offline cowboy

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Re: American Auto Industry
« Reply #9 on: November 16, 2008, 06:56:27 PM »
First I think you will find the number is more like $2000 and its cost not sticker price.  As I read the nobama plan it really won't do much to help.  The big problem is the fact that it is the health care cost for almost 800,000  UAW members that no longer work.   Its the "legacy" cost of the programs after they stop working.   If I recall at the last contract  the auto company's agreed to give the UAW $25 billion to take over this plan and get it off the books of the auto companies.  That how big the problem is and strange as it is it's about the same amount of money required for the bailout.

I agree with Fish someone needs to look at the full time windfall profits of the health care industry.

Offline 48fan

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Re: American Auto Industry
« Reply #10 on: November 16, 2008, 07:41:40 PM »
I hate to get off topic like this but it really amazes me how much the Hospitals charge for services. Then when you get your bill it amazes me just how little an insurance company actually pays. Then if you have no insurance they demand that a private citizen pay the full amount not the amount they will settle for with an insurance company. A doctors visit costs upwards of $100.00 and 90% of the time you spend waiting to hear then say here are some pills come see me in three weeks and I'll charge you another $100.00. Then we can talk about the pill manufactures charging outragous prices for drugs. Something needs to be done..