The Car Makers' Excuses

Does it matter that the vast majority of Americans does not want to see the Big Three bailed out? And, in fact, the Democrats don't give a hoot whether or not the Big Three survives ... except ... except that the UAW is a reliable pool of votes for them. The call by Obama and the Democrats for a bailout is meant for the ears of the UAW vote pool. Democrats do nothing that is not solicitous and political. There is no altruism here and there is no Adam Smith in it. Let the Big Three fail. Let them go bankrupt! Neither the UAW workers nor the management teams deserve any rescue. I have been in the automotive industry for over thirty years, as an insider and as a supplier. I know the outrageous waste that goes on in these plants. Thiry years ago, very few people actually labored inside a UAW plant. Today, it is even worse. It is almost impossible to find physical labor, or for that matter, company work of any kind, going on. It's easy to find employees playing cards while they're getting paid. It's easy to find employees doing all sorts of non-company things while getting paid. But, don't you dare ask them to do some value-adding work; you'll have a grievance in a heartbeat. The UAW worker income is an absloute travesty. Let them fail. And, let the managers fail. They acceded to all of the ridiculous demands that brought about the situation they now have; always believing that the cost of the demands and the cost of the waste could be passed on to the consumer. Let them all fail. Ford, Chrysler and General Motors don't deserve to be in business.

Absolutely no bonuses or golden parachutes for these executives. You always hear the saying "We need to pay the executives well to keep the top talent." Well, the American consumer doesn't need the type of "talent" these executive have today. Pay should be based on performance for all executives in the auto industry. By my calculations, these people owe the companies several hundred million dollars!

What will 25 billion between the three companies actually do? What is the monthly burn rate of cash? If they each get 8 billion and they are burning 2-4 billion a month they will be back for more cash before spring. Why don't these people provide specifics? As a business owner I would love to be able to get cash by begging for it and not providing any type of plan or numbers to back up my requests.

The debate over aid to the Detroit-based automakers is awash with half-truths and misrepresentations that are endlessly repeated by everyone from members of Congress to journalists. Here are six myths about the companies and their vehicles, and the reality in each case. Myth No. 1 Nobody buys their vehicles. Reality General Motors Corp., Ford Motor Co. and Chrysler LLC sold 8.5 million vehicles in the United States last year and millions more around the world. GM outsold Toyota by about 1.2 million vehicles in the United States last year and holds a U.S. lead over Toyota of about 560,000 so far this year. Globally, GM in 2007 remained the world's largest automaker, selling 9,369,524 vehicles worldwide -- about 3,000 more than Toyota. Ford outsold Honda by about 850,000 and Nissan by more than 1.3 million vehicles in the United States last year. Chrysler sold more vehicles here than Nissan and Hyundai combined in 2007 and so far this year. Myth No. 2 They build unreliable junk. Reality The creaky, leaky vehicles of the 1980s and '90s are long gone. Consumer Reports recently found that "Ford's reliability is now on par with good Japanese automakers." The independent J.D. Power Initial Quality Study scored Buick, Cadillac, Chevrolet, Ford, GMC, Mercury, Pontiac and Lincoln brands' overall quality as high or higher than that of Acura, Audi, BMW, Honda, Nissan, Scion, Volkswagen and Volvo. Power rated the Chevrolet Malibu the highest-quality midsize sedan. Both the Malibu and Ford Fusion scored better than the Honda Accord and Toyota Camry. Myth No. 3 They build gas-guzzlers. Reality All of the Detroit Three build midsize sedans the Environmental Protection Agency rates at 29-33 miles per gallon on the highway. The most fuel-efficient Chevrolet Malibu gets 33 m.p.g. on the highway, 2 m.p.g. better than the best Honda Accord. The most fuel-efficient Ford Focus has the same highway fuel economy ratings as the most efficient Toyota Corolla. The most fuel-efficient Chevrolet Cobalt has the same city fuel economy and better highway fuel economy than the most efficient non-hybrid Honda Civic. A recent study by Edmunds.com found that the Chevrolet Aveo subcompact is the least expensive car to buy and operate. Myth No. 4 They already got a $25-billion bailout. Reality None of that money has been lent out and may not be for more than a year. In addition, it can, by law, be used only to invest in future vehicles and technology, so it has no effect on the shortage of operating cash the companies face because of the economic slowdown that's killing them now. Myth No. 5 GM, Ford and Chrysler are idiots for investing in pickups and SUVs. Reality The domestic companies' lineup has been truck-heavy, but Toyota, Nissan, Mercedes-Benz and BMW have all spent billions of dollars on pickups and SUVs because trucks are a large and historically profitable part of the auto industry. The most fuel-efficient full-size pickups from GM, Ford and Chrysler all have higher EPA fuel economy ratings than Toyota and Nissan's full-size pickups. Myth No. 6 They don't build hybrids. Reality The Detroit Three got into the hybrid business late, but Ford and GM each now offers more hybrid models than Honda or Nissan, with several more due to hit the road in early 2009.

PLEASE SAY NO TO BAILING OUT FAILING AUTOMAKER COMPANIES AND THE UNIONS. THE UNIONS FORCE THESE COMPANIES TO PAY EXTREME OR GROSSLY NEGLIGENT SALARIES, BENEFITS AND OTHER FEES. SUPPORTERS OF THIS BAILOUT DO NOT SEEM TO REALIZE THAT WE WILL NOT BUY ANY NEW VEHICLES IN THE NEXT 2-3 YEARS. MOST AMERICANS WILL NOT HAVE THE MONEY TO SPEND ON LUXURY ITEMS. INSTEAD OF BAILOUT OF A FAILING BUSINESS, GIVE IT BACK TO THE STRUGGLING SENIORS AND TAXPAYERS WHO HAVE PAID TAXES. A LOT OF AMERICANS WILL HAVE LOST THEIR JOBS, HOMES AND 401K. THESE CEO'S FLY ON ONE OF THEIR FLEET JET'S TO ASK OUR LEADERS FOR OUR MONEY AND FUTURE. I KEEP HEARING THAT IT IS ALL ABOUT THEIR DEBT, WORKERS AND THE IMPACT THAT IT WILL HAVE ON THE ECONOMY. DO THEY NOT REALIZE THAT THE ECONOMY IS ALREADY IN TROUBLE AND THAT MOST AMERICANS HAVE ALREADY LOST JOBS. WHY SHOULD THEY RECEIVE ANY SPECIAL TREATMENT. THERE ARE JUST LIKE THE 100'S OF FAILING BUSINESSES ALL AROUND THIS COUNTRY. THE ECONOMIC IMPACT IS ALREADY HERE. MAYBE THEY DON'T HAVE A CLUE WHEN FLYING A COMPANY JET THOUSDANDS OF FEET IN THE AIR? I DON'T WANT ANYONE TO LOOSE THEIR JOBS, BUT IT IS HAPPENING EVERYDAY. I GUESS THESE CEO'S CAN GO TO CAPITAL HILL AND ASK FOR MONEY TO KEEP THEIR JOBS AND COMPANY UNTIL THERE IS NO TAXPAYER DOLLARS LEFT AND THEY CAN FLY OUT OF THE COUNTRY WITH OUR MONEY! LET'S ALL GO TO CAPITAL HILL AND ASK FOR MONEY! WE ALL HAVE DEBT, INSURANCE, GROCERIES AND CHILDREN TO TAKE CARE OF. WE DON'T HAVE PLANES, BUT WE COULD DRIVE OR TAKE A BUS.

Listening to the ongoing confusion babble that the politicos and big wigs are saying to get on TV makes me sick! Let them go to Chapter 11 for heaven's sake. The airlines did it after Sept. 11. If anyone thinks for a moment that $25bn is going to make it right needs to wake up! Oops, I'm sorry, I forgot about the comedy team of Obama, Pelosi and Reid with financial guidance from the Senate banking committee. The will lead us to the promised land! Give me strength.

Flying in on corporate jets is the ultimate insult to the American people. Fly commerical like the rest of us. Sell your jets. Take a cut in pay - down to $1 - because you aren't doing the job you were hired to do. Tell the Unions to BACK OFF, and give them all a cut in pay, but let them keep their jobs. No bonuses. And start making cars we WANT instead of telling us what we should buy. Ever wonder why people drive Priuses, Honda Hybrids, etc.? Because they can't afford the freaking gas in your houses on wheels. Big 3 - you are out of touch with the market, and usually when that happens, a business goes OUT OF BUSINESS, and someone who has a clue steps in to take up the slack. Get a clue.

I'm a concerned GM owner who is afraid of losing car value and future replacement parts. If one of the Big 3 is sacrificed in order to save the other two, what would I have to do as a customer and investor to make GM one of the 2 to survive?Theoretically, if all GM owners bought $1,000 of stock in the company, do you think GM could pull itself out of trouble? Or, at the very least, not be the first to close its doors?

To Burn or not to Burn that is the question? If we let them fail and file chapter 11 and they don't come out of it, then the Big 3 did not restructure correctly ( Trim NO! CUT the FAT: UAW, 10,000 margin on high end SUVs and Rick). Give America what America wants, a dependable, fuel efficient vehicle that doesn’t require a 2nd mortgage. Also if we bail them out then the suppliers are next because Rick will say he can't do it without them. SO WHERE DO WE STOP THE BUCK? I do not want to lose my job but maybe the big 3 need to get together and all at one time declare bankruptcy.

"Isn’t it true that the auto(US) industry pays 150 billion a year in taxes? 25 billion for 150 billion does not seem unreasonable to me. Might help pay off what they gave the banks that aren’t paying any taxes." Ok that's 1/6 of their taxes. I pay ~35K in taxes each year, I have some CC debt and a mortgage, so if I got 1/6th back (~5K), I could surely use that to pay back the banks. So WTF, with logic like, that WHY NOT ME? And why not use the 25 billion on a 1 million others like me? And Tony: "Imports are no better than domestic autos. If you think they are, just stop by any import dealer and peek into the service dept." You must be joking right? Look at the service dept? How about you look at the resale prices? I recently looked at a few models, and American makes had resale values after 1 year and 10K miles of ~60% of the new price. Toyotas after 1 year and 10K miles were around 75%. Combine that with the fact that import makes nearly ALWAYS having higher MPG, and except for the Luxury European makes they also have lower cost of ownership, it becomes painfully obvious American cars are outclassed. This of course also ignores their slow response to changing market demands. How long did it take for Ford/GM to roll out a crossover SUV that could compete with the Rav4/CR-V or Highlander/Pilot? Have they even done it yet? How long did it take for them to compete with the Camry/Accord?

I am convinced that the Big 3 have hired people to plague web stories like this one, as well as web forums where the Big 3 are a topic. Hence, the "we need to save the Big 3 in order to save ourselves" posts. We can lend $25 billion in order to give a blood transfusion to a corpse, and for a while maybe the corpse will retain its rosy cheeks. But, in the end, the corpse is dead. Better and cheaper for us all to just accept the facts and take note of the funeral.

I just want to know when those of us who are currently overrun by debt we put ourselves in can blame it all on the credit crisis and ask for the handouts that corporate America believes it is entitled to. We could have saved ourselves alot of money if they had doled out the bailout money to every American taxpayer because then we wouldn't have had to pay ourselves back!

I work at a Ford dealership and have for almost 18 years and I am not sure a bailout is the right thing to do either. All this mess the Big 3 are in along with the state of the economy has hit the local dealers hard. We have done layoffs, cut expenses and my even have to cut employee benefits and still are in the red at the end of the month. We can't continue to do this yet no one is offering to help us. I have thought for a long time that the Big 3 should slim down and not have so many lines, such as Ford droping Mercury and stop buying up other companies and just focus on one brand. I also think the UAW has always been a thorn in their sides and are now a detriment instead of helping anyone. We all want the best for our family but when you continue to ask for more and more you will lose in the end, just ask all the unemployed auto workers.

If the big 3 get bail out money, I will never buy another American made car. If the other foreign companies can make it by paying less and charging less for their cars, then so can GM, Ford, & Chrysler. Get rid of the unions and you'll save $2000.00 on every car sold. Also, let GM and others make less profit and sell the cars for less. Does a bail out mean that I'll get a discount on their cars because my tax dollars were used? I don't think so.

LET THEM FAIL!!!!!!!

The show being put on by the auto industry, unions and the government is like a three ring circus. Why should we, the taxpayers, pay to see the same old show? The players, the unions and industry executives, must change their act. So far, neither have made any concessions. They just want the money and they want it with no strings attached...NO! NO! NO!

I agree with you Elizabeth 100% I say let them fail and let them file for bankruptcy. And, Tony, you sound as if you are in their pockets! Do you realize that only Detroit is in this predicament? The UAW is partially at fault. The average worker at the big 3 makes $71 an hour!!!!! The average Toyota worker in Tennessee makes less than $50 an hour and Toyota doesn't have their hand out begging. I have owned either GM vehicles or Toyotas, Tony. Let me tell you something......Our GM's were in the shop within the first 7 months after purchase and our Toyotas (8 of them over the years for our family) saw only one of them ever have to go in to get something fixed on it and it cost less than %100 to fix it. You can't beat them for reliability and gas mileage. Too bad Detroit doesn't learn from them. Enough of these big pompous CEO's etc., making their big bucks and expecting the taxpayers to bail them out. Let them go down. NO MORE BAILOUTS!!!!!!

Enough is enough!! It is obvious that these companies are poorly run. Let them go bankrupt, re-structure, cut out the fat, and start making vehicles that are more fuel efficient. They wanted $25 billion to re-tool 2 weeks ago, but now they say that same money would be for "operating costs..." That translates into paying benefits, and the taxpayer is not in that business. 3 years ago the auto industry was making other excuses for their failures. If we give them money now, they WILL be back within 6 months. Do you see Honda and Toyota with their hands out? Did you know that the "Ford" Mustang is actually more of a foreign car than a Toyota Camry? We must not reward this mess with endless cash. Cut them off. Sell their private jets, take $1 per year like Lee Iococca, re-structure, then we will talk to them.

Enough is enough. I say no let them go into bankruptcy and start fresh. We deal with the aftermath. I'm tired of the panic and scare tactics. We'll end up giving them money and they'll use it short term and be crying 6 months from now. All the while living large and flying high!

I watched most of the hearings that were on tv. What I see is collusion fron the auto industry to inject fear. Basically what they are doing is extortion. They refuse to even think about a chapter 11 and threaten a chapter 7. If we need an auto maker in the US and they refuse to file chapter 11 then let them merge into one company and go it on their own. What they really want is for us to foot the high bills of their failures.

the big 3 don't even make good products. why bailout trash companies?

If GM goes the bankruptcy route today's stock market drop will be a holiday Let GM go and see how much it will cost the government (pensions, uninsured, and with all the dealers and suppliers going out) Within 2 months Dow will below 3000

GM says “intense” foreign competition, soaring gas prices in the aftermath of Hurricane Katrina, and high benefit costs for the automakers’ downfall. OK, fine then the bailout funds won't help. We need to do two things. First, we need them to go bankrupt so they can free themselves from what they feel is bothering them. Second, we must eleminate any existing taxes, fees, or laws that prohibit them from manufacturing and selling fuel efficient cars in the US. Note - No bailout money, just good business.

let the free-market forces decide their future; it's the natural law - i don't want to hear your buts...

Imports are better than domestics, I work with both foreign and domestic service depaertments at dealerships. The domestic cars in the servcie drive are for warranty work and vehicle brake downs. The imports in the service drive are for oil changes and other basic maintenance servcies. I can't run my finances like the big 3 runs their finances, if I did I would be declaring bankruptcy. Or at the very least I would be implementing drastic changes to get out of my insolvent situation. A government bail out by the big 3 guarantees 2 things: The big 3 will not make the necessary massive changes needed to survive, and they will be back in 6 months asking for more $. Let the big 3 figure it out on their own. The way I see it the big 3 brought this on themselves by applying little or no common sense to strategic forecasting and relying heavily on past business practices. Times change, the big 3 hasn't. I am a life long GM car guy and I hate to see this happen.....