The Car Makers' Excuses

What a mess. To think that the big3 have been seeing this coming and done nothing about it. New management is needed for sure. And what about the millions of employees who'll be at risk. Let's not forget the vendors that support the auto industry. If they can't get paid they will also go under. The reality is, do we put a bandage on a gusher?

Folks, these businesses have failed to run profitably. When you don't make good business decisions (i.e. UAW contracts from decades ago) and you don't produce a product that you can sell at a profit you go out of business. This is Business 101. The auto industry will be back with new owners who will run the businesses profitably with sound business practices. Fat and Happy usually leads to high cholesterol, high blood pressure, and clogged arteries. If you don't PAY (notice it doesn't say to have everyone around you pay) a doctor to fix the problem and get on a healthy diet, you have a heart attack. Well the big 3 are having their chest pains. They need to do something about it, not have us do it for them. If they die, another company will be born, and will hire the employees worth hiring and build a product the consumer will pay for. This is very simple. I feel sorry for all of us affected by this but we shouldn't be so naive to think the world will end. The auto industry will be reborn, as long as the government gets out of the way.

Stupid is, as stupid does. Washington has done a terrible job managing this crisis. But they will do worse. Far worse. It's coming, folks. Run now. Run fast. Don't look back! Chicken little was right. About the onliest people that won't get hurt are corporate executives and Congress. Billie Bob says: "If'n y'all believed Obama (rhymes with Alabama) and McCain and Bush and Reid and Pelosi, then I gots some swell bottomland fer sale. 'Course, it is a bit humid down they'ah. Being completely under water and all!"

Flying to the "bailout" meeting on pricey corporate jets sends exactly the wrong message about whether the big three CEO's can be trusted to do anything constructive with the taxpayer's money. They have done nothing in the past 40 years but lose market share to the better-managed and innovative competition. Funds would be better spent on infrastructure repair, public transit that is convenient, etc. Heck, hire laid-off Detroit workers to do this stuff. Since there is worldwide over-capacity of auto manufacturing capability, propping up the dinosaurs who can't build vehicles that people want to buy would only extend the date with extinction. Let 'em go.

Listen to what these execs are saying today and compare. There are ALWAYS excuses for them to be NON-competitive. How much to they spend in commercials? I don't know if it is true or not; but doesn't the government pay the domestic car companies millions of dollars for some form of reimbursement on commericals so the consumer "feels good" about their purchase? Is that not the job of the company who sold them the car? GM has made NUMEROUS (LOTS) of management errors. They don't want to listen to us but they sure as HELL want our MONEY to GIVE them so they can get their GENEROUS GOLDEN PARACHUTES! Both management and Union alike. When the UAW states point blank they are NOT willing to make any concessions AT ALL to keep the car companies in BUSINESS -- IT IS TIME TO LET THEM FAIL!! Enough. Personally I am in the market to purchase a NEW car in the realm of $30 to $35K. Right now I will NOT look to the "Big 3" companies in the US for that purchase. Let them figure it out for themselves WITHOUT MY money. Then lets see how much they appreciate my business. Currently, I drive an 89 GMC Jimmy with 306,000 miles on it. It runs just fine. My other car is a 92 Buick LaSabre with about 150,000 on it. Both run excellent. My next car will more than likely be a Toyota Tundra or Tacoma. Maybe even a Highlander; but I personally have no interest in these THUGS that run the American car companies. Management GREED and UAW GREED have sucessfully turned me OFF of their products. Also. GM puts "black boxes" on all cars since 2002 I believe. This registeres how you drive. If you are ever involved in an accident; the opposing attorney only wants to debate your driving habbits; not the issues regarding the accident if you are involved. They can keep them! Get us a car we want to drive and maybe I will reconsider my position. I WANT a Truck or SUV that is HYBRID!! Ford can do it; look at their South American production cars in Brazile. These guys KNOW how to do it; they just won't!! WHY should I as the CONSUMER PURCHASE anything they offer when they are sub-standard in comparison to the competition?

THEY FLEW PRIVATE JETS to the meeting in Washington DC. Give me a break! They deserve nothing. What's there next stint? fly around the country on private jets giving seminars on how to lose money? WRITE YOUR CONGRESSMEN..They deserve nothing. THERE FLYING IN PRIVATE JET'S and want the US Tax Payer to pay for it! Call your congressman

I think Elizabeth is on the wrong track. Yes GM has its share of problems but, the credit crisis has compounded the problems. Everyone forgets that the carmakers have been cutting costs for the last couple of years. But some of the UAW agreements don't go into effect until 2010 Why not let AIG and the banks go bankrupt? That makes just as much sense. Isn't it inevitable that AIG will fail? I think the automakers, suppliers, and dealerships employ more workers than the banks or AIG. We need to keep people working.

The problem with the car makers, is that they are not innovative enoungh. A major cost of a car is the engine, which they have not changed for years. The next logical step is to extrude the engine, its more efficient, stronger and much cheaper to make, making the vehcile much more competative. At powerbeat we have succfully extruded the aluminum engine, but they wont listin,that is a shame, to not look at it is a crime. Now they want to be bailed out for not being innovative, thats a crime and a waste of money, unless they change and become alot more innovative.

Elizabeth - I enjoy listening to you on Fox's saturday morning business shows (I don't have Fox Business on my cable yet). I think you have missed some of the history here. In 2007, the UAW made concessions to the companies which don't kick in until 2010. It takes the retiree healthcare costs off from the back of the companies (money went into a trust fund to cover retiree healthcare which will be managed by the union) and reduces wages on some jobs which previously were grossly overpaid. After this contract was settled last year, Rick Wagoner said they were now positioned to be competitive with the "transplant" automakers in the US, once these things kick in. Plant closings and reduction in workforce over the few years have incurred high charges, but have them in a much better position for the future. I think the Big 3 still have a lot of costs that could be reduced if they would further analyze their duplicate nameplates, etc. I do believe their current biggest problem is the downturn in the economy and the credit crisis. I just purchased a Chevy. With a credit score of 805, GMAC didn't have money to borrow to me. If the assumptions of the companies are correct, the money they are asking for keeps them afloat until the economy improves and their labor contract savings kick in. I believe in freemarkets, but I am nearly persuaded that the cost of borrowing them money will be less than the cost of one or all three having to file Chapter 11. The transplant companies use many of the same suppliers as the Big 3, and will also be hurt if the Big 3 and, therefore, many of the suppliers don't survive. John

Liz-The Big 3 have 47.1% domestic market share. There are 40+ automotive competitors in the USA. The Big 3 are Companies competing with Countries! If the good ole USA would fund the Big 3 Health Care.........like other countries do..............and reduce the corporate taxes to match other Countries Business tax, would there be a request for an automotive bridge loan? When the politicians and pundits quote an auto union hourly rate, it includes health care costs. Foreign transplansts have their health care paid for by their home country government. By 2010 the union wage rate will be the same as the Foreign Transplants. They are not making a true comparison. If the Big 3 were given the same economic consessions as the states of Kentucky, Alabama, Tennessee, Georgia, Texas etc gave the Foreign Transplants aka Foreign Auto Companies.....would the Big 3 need a BRIDGE LOAN!?!? If the USA did not have the greed of Wall Street, would Main Street be in this situation? If the USA Wall Street financial institutions would re-work the home mortgages that are in trouble........would the Big 3 need a bridge loan? Can't you have people who are experts on your show versus politicians? THE POLITICIANS WANT PEOPLE TO GIVE UP THEIR SALARY DUE TO NON-PERFORMANCE. I THINK THAT THE POLITICIANS SHOULD GIVE UP THEIR SALARY FOR NON-PERFORMANCE. Just look at the approval rating! Patricia

Ms. MacDonald, Quote: Wagoner does point out in his piece that foreign auto makers don’t carry the abalone around their necks of health costs, because foreign governments “fund a much greater portion of employee and retiree health-care costs.” Duly noted. I think this is a red herring. Foreign gov'ts aren't funding US auto workers working in Honda, Toyota, Nissan, Mitsubishi, etc, etc, plants here in the USA. Mexico isn't funding Mexican workers in some of the plants south of the border (US companies or other foreign companies). Furthermore, GM, et al, who have operations oversees and hire oversees workers would receive the same benefit. And the disparity of pay (including benefits) of US workers between GM, Ford, Chrysler and Honda, Toyota, Nissan is quite high, on average around $30/hour. No, the abalone around the US car companies' necks is of their own making. Which makes me think Richard Wagoner, CEO of General Motors statement is ahhh baloney.

Let the auto makers die - those displaced workers will end up at a firm and indusrty that can compete domesticlly and internationally - but not at exorbitant wage nee Health and wealth benefits they get now - Take the $25B and dump it in a retrianing program for autoworker And let private indusrty run the program

I'm surprised these clowns didn't appear before congress wearing ragged second hand clothing and sporting a tin cup. The only help the government should provide is loans through a bankruptcy proceeding.

Paul Revere made his ride a long time ago, instead this nation listened to weasels and thiefs and called Paul Revere(Ross Perot) an idiot. So now when the British, Chinese, Soviets, Saudi's, Mexicans and every other weasel nation that came to steal Americas wealth are here, we all run around astounded and say what happened? While you were basking in unrealistic credit the illegal body called the federal reserve(British weasel branch) made available to you, your government(Benedict Arnolds) threw the baby out with the bath water and a couple of generations birth rights whos' very ancestors paid for with blood. The idea of global markets is probably a must needed reality but living high on the hog for a short term and then finding out you were just living in a leaky helium ballon over a huge sea of quicksand isn't real smart is it? Pretty easy to see the big weasels plan when you step back and take a look and yet we still buy(sell) the fleecing of america daily. Is stealing an act of war? I don't know? You tell me? It seems it's just an act of diplomacy these days. If the next administration does nothing to balance this free trade crap with a big dose of reality, you will know who the Benedict Arnolds really are and where they have been hiding for the last 25 years and what is truely the real agenda.

They are all bums and do not really understand how to cut or make tuff discusions. They sit in their expansive offices with many assistants, ride in limos, and take G4's to meeting...like the one in Washington. They truly do not understand how to get thru tuff times. Cut them loose and bring back George Romney or Lee Iaccoa. They knew how to make the tuff choices and did so. With those jokers at the helm let the business file for reorginization.

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. All depends on who the friends of the purse string holder are? And didn't the same congress pass a law on the industry with more stringent requirements which left a lot of trucks and cars in their lots as if they didn't cost to make. Everyone knows they have had those jets for business for yrs. I'm not generally for bailouts but where is the fairness?

What is the problem with our auto industry? Union Corruption & Management Comfort= Chasing their tails and treating the American people like chumps! Quit protecting the status quo corporate fat cats and the unskilled labor that earns $100,000 for putting on safety glasses!

Amen. Now, perhaps this is only the beginning of Unions getting slapped by a rolled-up newspaper of their own making. Amazing how the people who ought to have the most foresight refuse to use it (Mgmt). Now they are trying to save their own behinds. Too bad. Enough!!!

I am no economist, or businessman, I am an Engineer. I don't have all the answers, but I do believe that the best thing that can happen to the auto industry is for the big 3 to get together and all at one time declare bankruptcy. This would void their union contracts which are sucking the life blood out of the American Auto Industry. At the time you declare bankruptcy you cut 100% of your personnel, and offer them new jobs at a REASONABLE salary, with REASONABLE benefits. An assembly line worker doesn't need to make $60 an hour. Fairly they should make $20-25 an hour and that is stretching it. Let's let the big the fail, declare bankruptcy, and restructure without the UAW. Delta doesn't have a union, and they are one of the most successful airlines in the world. Toyota, Nissan, and Honda don't have unions. The UAW is destroying the Big3, and the cancer needs to be cutout in order of the US auto industry to survive.

Also, who do you think jump-started our economy after 9-11 with the huge incentives they provided? I'm tired of all of the money given to everyone and think the automakers should restructure. Getting rid of a large portion of the money they pay to retirement would allow them to compete with anyone, anywhere. But watch all of the not so loyal former workers cry foul if they do.

U.S. Automakers need to determine, in reality terms, if there is a Market for their products; a reasonable price, acceptable to the marketplace and concentrate on meeting those terms. Otherwise, money, as a handout, is essentially going into the pockets of employees, vendors and advertisers. Sustained prominence within the Industry will only come back with the acceptence and trust of consumers. Foreign Automakers seem to understand this and accommodate the demand more rapidly then the American counterparts. I'm an owner of American products. I believe in American Auto products. Nonetheless, as a consumer I must weigh the risk/reward of purchasing an American Automobile over a Toyota or Hyundai just to be 'American'. Quality and Costs do matter. Albeit that the Big 3 say they're responding to the Market demands, it appears, through actions that they aren't convencing many potential buyers. The Credit Crisis may effect many in their purchasing decisions, but if the current trends of more stable Oil pricing combined with an easement of Cash, consumers will return to the Marketplace. Where they will return to is a matter to be determined. Confidence in the Big 3 needs to be re-earned through deeds; not 'just words, just speaches'. Action!

Lettum burn. Is someone going to bail me out if I can't afford to keep djing and throwing concerts? Hey! Congress! I need money for my entertainment projects! :-) BAIL ME OUT!

Good article. I agree that this is ludicrous. The business mantra today is "steal enough so that one's too big to fail." So much for the grasshopper and ant story.

Do you really think trust has anything to do with it? If so what about the banks. Suppliers supply us with what we want. The automakers have provided people with an above average retirement that has been overlooked for decades. Why not give them credit for not dumping them years ago? No credit is given them for the loyalty they have showed to their retirees who, in fact, have not been loyal to the auto makers. Imports are no better than domestic autos. If you think they are, just stop by any import dealer and peek into the service dept.

Based on showing up in corp jets wasting more company money, let them either go under or a new loan is made with tight stipulations including CEO resignations with no rewards. None of the "oh I screwed up so I will take the $20 million severance and go my way". Heck Nardelli did this once at Home Depot and he is probably hoping for the same at Chrysler.