We have been debating whether or not to loan them the money...but I would really like to her what you folks have to say as to when and how they began on their way to crashing and burning?

What decisions were made---and when were they made---that brought this chain of events about? What happened---who did what and to whom---that allowed this monumental clusterfu#% to begin.

It has to be multi-faceted---so---be precise, be factual---and begin the dissection of the possible demise of the US Automakers.

Tim C.

 

Oil futures
People in for a quick $$$$$$$$$$$$$$$$$
Even the Saudi's think so.

 

It started in 1971. There were lines at the gas stations because gas was in short supply. The Big 3 were busy making their eco- non- efficient pigs that got horrid fuel mileage. A friends Impala of the day got 10 mpg hiway and 8 town. That was about normal back then. The US public was still having an affair with HP only the Feds stepped in and told the auto makers that the published HP had to be rated in the car and with all accessories hooked up, not on an engine stand with zero accessory lose. So HP numbers fell with the fuel mileage. Folks started buying the small cars as gas was cutting a big hole in the budget. They finally came to market with poor excuses for cars like the Mustang II and others. While they got fair fuel mileage, a foreign car got much more. Then when gas got easier and the car companies started to make money, the unions went on strike and demands were ridiculous even for todays standards but the auto makers thought that the great business they had would go on forever. Then gas got short again and the Feds were demanding more MPGs so the HP numbers fell again. They have been slowly creeping back up and fuel mileage hasn't changed much in the last 15 years. The foreign makers still produce a quality car that gets better fuel mileage, better fit and finish, and hold value better than the Big 3. That is perceived value, not real, as US makers make just as good of vehicles today as any of the foreign makers. The auto makers should have gotten involved decades ago with finding alternative fuel sources and developed technology around that. The US oil companies are not going to be around much longer. M/E is not involved in any new fields, any new technologies, and the foreign oil companies are out performing them on a grand scale. The US auto maker will have to become much more involved in developing engines that use a fuel that is totally made here in the States. Otherwise, OPEC will be screwing us and the rest of the world to the wall just like have been for the last few years. Even with a bailout, this is far from being over. This is just the first hiccup in what will be a case of stomach flu if we don't get off of oil- period. The future is bleak for all of the auto makers, not just the Big 3. Too bad GM killed the EV-1. By now they could have improved the system dramatically to fit most driving situations. At the time most would go 100 miles between charges. We could have implemented wind generators and been far ahead of the curve. We could have cured the electrical shortages across the nation and used these new cars to reduce the demand for oil. I look for a company to come out with a diesel electric car. We already have technology available to turn bio-garbage into clean diesel, all we have to do is build it. But so far, nobody has expressed any interest just like they haven't expressed any interest in the headless engine that is 3 times more efficient than any engine in the world. And this is US technology going to waste.

 

Americans have purchased their way into the situation we see today.

Because part of the media says that foreign vehicles are "better", a percentage of the population will make their purchasing decisions based on that information - however wrong it might be.

Stats tell us American vehicles are as good as any - but they will never be able to shake the bad reputation they got from the 70's and early 80's and the never-ending bashing from the media here at home.

Add in the ridiculous loads put on the "Big 3" by the UAW and you have the mess we are in today.

The good news is, once they fold, the unions will be out and then the companies can reconstruct and start working again.

I look forward to the day that morons start to understand that they drove their own salaries and pensions into the ground.

 

x2 with Labnerd. It started a long time ago. They never thought that the foreign cars would make it and not be much competition....WRONG. While the grass was green they agreed to the demands of the UAW without thinking about the future....what if the grass isn't so green scenario and we are not making enough money to pay for all of this. More current they all jumped onto the truck and SUV bandwagon and neglected their cars. I saw an article in Car & Driver that was published around the late 70's to early 80's and the guy predicted this would happen unless the Big 3 changed their ways but I guess nobody payed attention. It has been a lot of poor decision making. Living in the current and not looking toward the future.

The bad thing is that they still have not learned their lesson yet. I have had the privilege of working on a battery program for Ford for the last several months. Everything was urgent and had to be done NOW when the gas prices keep increasing, but guess what has happened now. The gas prices have went down and now the project is on hold!!

We just cannot give them money. They need to restucture and change they way they do bussiness.

 

the unions took a stand against eastern airlines and lost. they have pretty much shut down the steel industry in the US. while maybe there was some good with unions at one time i think for the most part they have outlived their usefulness. thats just my opinion. we are all free to work where we want. i for one would not take a union job. i feel they extort money from the corporation, overly reward the senior people and protect the inefficient. just look at the teachers unions.

 

What I don't understand is the fact, people neglect to think of the Unions that
are in place that drive up the cost of goods the automakers receive.

Steel mills is the best example I can think of at the moment. We have read that
the UAW cost 10% of the cost of the car. Their cost of goods has to be brought
under control also, to compete with automakers that receive product from cheaper
sources.
It is not just the UAW. there are other unions involved also.

Unions are a nessesity. One problem is they have to show big results for the dues
they receive.

 

I would say that it started quite a few years ago for a variety of reasons:
People who are buying cars or trucks generally look for bang for the buck. Build quality, features,price & reliabilty to name but a few. Other motor manufacturers started to do this or were doing it better than the big 3 so what happens.........people buy them and not any of the three.
In retail you need to give the customer what they want and NOT what you think that you can sell. More recently there has been the issue of gas prices that have "fuelled" the slump in sales.
Also in the case of GM they have Nardelli who does not know his *** from his elbow!

 

Yes the government should help, with criteria to meet. Not like these stupid banks who got money and are buying up smaller banks. That to me is not the original intent. When did the big 3 lose ground? When all the foreign brands tidal waved in here with cars built for nothing and are able to be sold under the US cars bottom line. People are cheap so they buy them. Then the reasons are for superior quality blah blah. They are dancing around the truth: they're cheap!!! How can a domestic manufacturer of anything, cars bieng a larger more identifiable commodity, be able to compete with slave wages, no or little taxation and benefits etc? We should be taking care of no. 1 here, not worrying about other countries that are laughing at us all the way to the bank.

Heavy topic, but look at what would happen if the big 3 fail. I'll bet material cost increases account for waaaaayyyyy more of a vehicles price than does unions and benefits. It did not help that gas took off by over 200% in a few months. Also, the big 3 has cars, but again, people are cheap and would rather buy a Kia to save a few bucks somewhere.

 

In chronological order,

Poor solutions to government mandates for lower emissions and improved saftey equpment, starting in the mid '60s and really hitting home by the early '70s.

Ignoring the clearly emerging threat of the Japanese auto industry in the late '60's and early '70's

Failure to anticipate the first energy crisis of the early '70s and how it would shape consumer preferences.

Declining quality and value offered during the mid '70s to mid '80s, due to the reasons listed above as well as uncompetitve labor costs.

Then industry was unable to get our politicians to negotiate an equal playing field with our trading partners (i.e. our trading partners have higher tariffs on us than we do on them, so trade becomes a one way street).

Inability to overcome the problems above, leading to foreign competitors offering superior products for the money in most niches (full sized trucks being one of the few exceptions).

 

for me, alot of it had to do with lacking build quality, coupled with horrific customer service. having both of those at the same time is just bad business. went through it with GM in the late 80's early 90's (they actually bought my vehicle back after i filed papers with BBB) and to a lesser degree with my f150.

that, and not responding to the markets call for cars with higher fuel efficiency. as of a week or two ago, i kept seeing a gm escalade hybrid commercial on tv numerous times a day. funny thing was, if you read the fine print on screen its advertised mileage was 12 city, and either 18 or 19 highway. i'm thinking they still dont get it.

 

Deleted post.......

 

Uhhh Wait a minute. Ford was posting Multi BILLION Dollar PROFITS through the 90's. Something's doesn't jive here.

6 Billion in 94
7 Billion in 98

The Big Three made 16.4 BILLION in profits in 1998.

http://findarticles.com/p/articles/m...2/ai_n10073400
http://findarticles.com/p/articles/m...1/ai_n22348043

Meanwhile TOYOTA's Pofits have fallen 69% last year. Must be their Unions...



http://www.mysanantonio.com/news/Toy...9_percent.html

 

What doesn't jive? That Ford rode the Truck and SUV bandwagon without consideration for the future? Then when the bottom fell out they were left scratching their heads wonder where the money went. A lot can happen in ten years. You don't see Toyota begging for money. Their sales are down but still making a profit. Now who has the better business model?

Don't get me wrong I try my hardest to buy American made products and support the US but some other companies have played the game better. At the same time they are still giving their employees very good pay and benifits. People around here apply for Toyota and Honda jobs by the thousands when ever there is a position available.

 

A few thought's..
1973 - When OAPEC stated they would stop shipping oil to the United States. That situation got resolved and the oil shipments resumed.
The consumer wanted big, luxurious, comfortable, powerful cars in the 70's. High fuel economy was not a priority. Who at that time wanted to drive a Corolla or a Datsun pick up that was a rust bucket after 4 years but got good mileage?
Government did not mandate standards to significantly improve fuel economy.
Why would the oil companies want the auto industry to build a product that uses less gas, thus decreasing their sales?
Move forward a couple of decades. The U.S consumer wants full sized pick up's and SUV's. They try building small cars and find there is no profit for them. The big 3 cooperate and build what the public wants, big vehicles. 2008 rolls around, gas prices get extremely high, world demand for oil increases and everyone is thinking fuel economy and the big 3 have been left in the dust.
A little off subject Question: How much did BP pay Ford to print on my gas cap "Ford Recommends BP." How much did BP pay Ford to do this?