How Is That Auto Bailout Working Out?

Discussion in 'Politics, Religion, Social Issues' started by stevento, Mar 1, 2009.

  1. stevento macrumors 6502

    stevento

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    #1
    Taxpayers lent billions and billions to American automakers... so how are they doing with my money?

    Exactly Zero American vehicles made Consumer Report's 2009 Best Value List.
    link

    Meanwhile, GM makes announcements about underperforming brands. Pontiac goes to the guillotine in 2012. :( Hummer will follow if GM can't find a buyer. Saturn only to survive if dealer network comes up with a plan to buy it from GM.link

    Also car dealerships drop like flies in 2008. A record 881 dealerships in US close in 2008, more to follow suit in 2009.link

    Can GM shrink its way to prosperity?
     
  2. Counterfit macrumors G3

    Counterfit

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    #2
    You realize that the models tested for that were finalized long before they got the loans, right? Developing a car takes a long time.
    Hummer as a consumer brand needs to die, and Pontiac is mostly redundant. There's no point in keeping them around.
     
  3. blackfox macrumors 65816

    blackfox

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    #3
    Off-topic to the more serious underlying issue - but I would be sad to see Pontiac go - their recent models drawn from GM Australia are pretty decent, or leading towards more competitive offerings.

    Personally, I am interested in the fate of Saab. I love Saabs (I've owned 7) - and while I have had issues with the GM/Saab era - I still love their cars, the quirkiness and some of the underlying design/tech that Saab has built.

    As to the general issue of propping up Domestic Car manufacturers, I have always wondered why there isn't a consistent standard considering our take on Domestic Airlines.

    We have repeatedly bailed out airlines, which have proven themselves to be pretty bad at being competitive and profitable, but we don't allow foreign competition for Domestic routes.

    Meh.
     
  4. Thomas Veil macrumors 68020

    Thomas Veil

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    #4
    Consumer Reports has never been very domestic car-friendly. So this is nothing new.

    Can't we ask this question about any American company of any kind over the last forty years?
     
  5. takao macrumors 68040

    takao

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    #5
    well Saab filed for Insolvency separately
    GM europe wants to cut 26.000 jobs (out of 55.000 that is)
    Opel workers going onto streets protesting the cuts because thanks to german help plan they are swimming in orders

    for me it looks like GM is going down the drain and dragging all brands with them
     
  6. skunk macrumors G4

    skunk

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    #6
    Is this an argument for protectionism?
     
  7. blackfox macrumors 65816

    blackfox

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    #7
    No.

    Quite the opposite.
     
  8. SactoGuy18 macrumors 68030

    SactoGuy18

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    #8
    This is why I think the Obama Administration will craft for GM by the end of March 2009 a planned entrance into Chapter 11 bankruptcy so GM can massively reorganize itself to be a smaller, "lean and mean" company to better compete in the world markets in the future.

    Ford is far more likely to survive because its upcoming product mix--especially the new Fiesta now on sale in Europe and parts of Asia and coming to North America in January 2010 and the new Focus coming summer 2010--will be perfectly matched to the needs of the automotive market from now on.
     
  9. rdowns macrumors Penryn

    rdowns

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    #9
    As you said, the gov't. loaned the car makers money, this was not a bailout. And as the auto makers said, this money was needed to stay afloat so your question on how are they doing with my money is pointless.
     
  10. SLC Flyfishing Suspended

    SLC Flyfishing

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    #10
    I didn't want to see any money going to GM at all. Mainly because I've seen their products as a completely unsafe buy for a long time. Why would I want to see any of my tax money going to bailout a company who consistently churns out so many products that I would never in a million years even consider buying?

    I can't even think of a single GM product that I would ever consider spending money on. Some of the worst quality vehicles in existence IMO. Ford aren't far behind with their car and low end SUV lines. If I were in the market for a full sized truck to do real work with it'd be a Ford though.

    SLC
     
  11. SLC Flyfishing Suspended

    SLC Flyfishing

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    #11
    Is this really going to be seen as a loan when GM goes belly up and isn't around to pay any of that money back? I'm fairly confident that this will be the case, and I was confident when the money was loaned.

    The question on how they are doing with "my money" is completely valid when all signs are that they are doing absolutely nothing with "my money" except using it to accelerate their inevitable nose dive into oblivion.

    SLC
     
  12. quagmire macrumors 603

    quagmire

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    #12
    When was the last time you checked out a GM product?
     
  13. SLC Flyfishing Suspended

    SLC Flyfishing

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    #13
    I've never shopped for one personally. But that's because I've got friends and relatives who have bought them and I've never been anything but suspicious of their longevity and value when I've seen and driven them.

    It's kind of pointless for me to "check one out" in the shopping sense, when other's GM vehicles are just as good an indicator of where GM is at the current time.

    If I were looking for a compact car, the Chevy Cobalt for example would be near dead last on my list. It's not even in the same city much less the same ballpark as Honda or Toyota or Mazda. The Dodge Caliber is just as bad as the Cobalt, the Ford Focus is a little better (it's related to the Mazda 3 with it's suspension) but it's interior is lacking and it's engine is also.

    If it's midsized cars I'd sooner buy a Nissan Altima or Maxima or a Honda Accord, or a Toyota Camry etc than buy a Malibu or Impala or a Pontiac Grand Prix or what have you. For the same reasons cited above.

    SUV's is the one area where I may just be persuaded to buy a GMC, but even then there are very nice offerings from Honda, Toyota and Nissan (I'm currently driving a 2007 Pathfinder).

    I can't think of a GM model (outside of the GMC Acadia) that I'd even consider.

    SLC
     
  14. quagmire macrumors 603

    quagmire

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    #14
    What models did your friends have?

    I have had 4 GM products. All of them have been trouble free.

    1996 Suburban- no problems at 80,000 miles when my family traded it in for the 2002 taking advantage of the post-9/11 deals.

    2002 Suburban- no problems at 75,000 miles

    2006 Equinox- no problems at 54,000 miles

    2007 Aura- no problems at 12,000 miles( my personal car)
     
  15. SLC Flyfishing Suspended

    SLC Flyfishing

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    #15
    My friends have had many, of the ones that immediately spring to mind:

    Early 2000's Chevy 1500 Silverado (Blown engine at 6000 miles) I actually know two friends with the same issue and my wife knew another before we were married.

    My brother-in-law has a late model Suburban, it seems to run OK but the interior is very cheaply made. Not something I'd drop $40,000+ on.

    I've had friends with Chevy Cobalts and Cavaliers, cheap on the inside, cheap under the hood, and cheap on the outside. Most of the cavaliers aren't on the road anymore. The Toyota Corolla I used to drive was incredible, 70,000 miles and still drove like new. I had a Mazda 3 after that and it was a fantastic car also. I wouldn't buy anything but Toyota, Honda, Nissan, or Mazda if I was going for another compact.

    Family who have owned Malibu's and Impalas. They ran OK I guess, but again the interiors were crap (dash seams that didn't sit flush, crappy scratch prone plastic everywhere) and they didn't have that smooth feel in their engines that the Altima and Maxima etc have.

    I don't know, I've just never been impressed at all with anything from GM. But like I said, that GMC Acadia is a good looking exterior design.

    SLC
     
  16. rdowns macrumors Penryn

    rdowns

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    #16
    What else was the title meant to do? It's impossible for a manufacturer (especially of cars) to have made significant changes in less than 60 days.
     
  17. SLC Flyfishing Suspended

    SLC Flyfishing

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    #17
    The automakers got 25 billion in September, and now they announce that they are chopping some of their brands? And they want another $50 billion now?

    Now thanks, that money is much better spent elsewhere. Those companies have been doomed for years now!

    SLC
     
  18. zap2 macrumors 604

    zap2

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    #18

    Well they COULD keep all the brands, but then they'd need a bailout yearly, this way they remake themselves pack to profitability, and they won't need anymore bailouts(in the long run)
     
  19. quagmire macrumors 603

    quagmire

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    #19
    You do have to factor in what GM has to pay to the dealers in order to kill the brands. It cost GM $2 billion to shutdown Oldsmobile.

    The benefit of having independent dealers. Funny thing is, the dealers are lobbying for more protection when manufactures kill brands and yet it is the senators saying GM needs to kill brands. GM can't win......

    GM is doing a lot more then chopping brands. Pretty much all future product is on hold with the only non-delayed product being ones close to launch and the Volt. GM is making more use of their platforms by making their Cadillac flagship based off the Epsilon II platform( the new LaCrosse and Insignia are on) which is IMHO a huge mistake since Cadillac needs to be mainly RWD( the "DT7" on EPII is expected to be greenlighted any day now). The Small RWD Alpha based Cadillac which is supposed to go against the 3 series is on hold. GM is tight strapped for cash. Automakers can't just change within 6 months. Even Toyota is burning through cash. If things continue at Toyota, they will be asking the Japanese gov't for loans as they will be cash strapped by the end of this year.

    What really needs to happen is this.

    A gov't controlled Chap 11 bankruptcy. This needs to happen because consumers won't buy from an automaker in Chap 11 due to fears of them going into Chap. 7. This will kill sales and income to GM. The gov't will need to A) Give confidence to the consumer saying that the gov't is protecting your investment with a GM vehicle. B) Provide cash loans because the probability of a sales crash is still very likely.

    The gov't also needs to throw out the management at GM. They have gotten themselves into trouble two times in the past 2 decades. It is amazing with GM stock trading so low, the board hasn't ousted Wagoner.
     
  20. mactastic macrumors 68040

    mactastic

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    #20
    I think you've got it backwards. Domestic cars have never been very Consumer-Reports friendly.
     
  21. quagmire macrumors 603

    quagmire

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    #21
    CR has always given Toyota the benefit of the doubt. How can you be very scientific if you give new models a good rating based on reputation? CR has learned that three times with the 2005 Avalon with its first year problems( but, don't worry they gave them the benefit of the doubt they would fix it) and the 2007 Camry and Tundra that Toyota can have major first year issues. With the Camry having transmission issues on the V6 model and the Tundra having camshaft, transmission, and bending bed doors...... Hopefully, they will stop with the good by reputation ratings.....
     
  22. Thomas Veil macrumors 68020

    Thomas Veil

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    #22
    I stopped paying attention to CR's reports a few years ago because it seemed that no matter what the domestic industry did, even when they raised their reliability ratings to a par with foreign makers and made stylish cars, they could not get CR's approval. Maybe they've changed since then, but the memory of CR's snobbish attitude has stuck with me.
     
  23. Dmac77 macrumors 68020

    Dmac77

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    #23
    What GM should do is simple.

    They should declare bankruptcy, which will invalidate all of their union contract. They should then fire all of the unionized employees, and hire people in for under $15 an hour. They should also make the new employees pay for 75% of their insurance, and 100% of their family's insurance. They should also scrap the pension fund, and only match what these employees put into their 401(k), up to $15,000. GM has to start union-busting, if they want to stay in business.

    Don
     
  24. stevento thread starter macrumors 6502

    stevento

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    #24
    That won't be good for the economy, or middle class workers. Remember, the reason we care what happens to GM is because of the economic implications. I don't think it's fair that unions force GM to pay workers who aren't working.
    On the other hand, I think the UAW is too tough on GM. the reason GM keeps making lousy products is because they are forced to pay workers in an employee pool - even after they've been laid off- so if they are paying the guy $80/hr (with healthcare and pension included), they might as well have him work for it. and the result is lackluster vehicles.
     
  25. zap2 macrumors 604

    zap2

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    #25
    I agree....we need to find a balance between GM making money and paying good wages. A very important part of that is GM making great cars, another key part is the unions understanding "hey, we're working for a company that is losing money, we need to take some cuts...when GM is doing better, we can get some back"
     

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