GM CEO: Bankruptcy Likely; Firm May Leave Detroit

TheNewWorldMan

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As in most arguments, there's Side A, Side B, and the truth...

I don't believe anyone could seriously dispute (at least with any empirical evidence to support them) that American cars had serious quality issues back in the Seventies and Eighties.

Now as for the "whys" behind that, they're rather more complex than the stock "blame the UAW" mantra that comes from the Right. And as for the Left's notion that everything would have been fine if we'd just slapped huge tariffs on imports, well, that wouldn't have solved the problem either.

What happened, mostly, was that America got accustomed to being the top dog, and assumed that people would buy American in the future merely because they had done so in the past. Japan, meanwhile, imported quality control ideas from America, put them to rigorous use, and improved efficiency across the board. Japanese automobile corporations were, to put it plain and simple, more efficient and productive than their American counterparts.

Much is made of the "entitlement mentality" that American workers had, but those who criticize the UAW usually fail to address the other half of that coin: management's salaries and compensations in U.S. corporations, and how the same capitalist elite most of the anti-UAW crowd lauds required vastly higher compensation to do the same job in America that their counterparts did in Japan.

This is one reason I don't believe bailouts are a good idea: the model of American auto companies is fundamentally flawed and far less efficient than Japan's. In any event, if we're going to make workers eat, say, a 25% pay cut, then middle managers need to take 50%, high-level managers 70%, and CEOs 85%. As you'll see from the link above, that would mean the U.S. auto industry would still be more top-heavy than its Japanese counterparts, but it would be a good start.

If I were in the White House, those are the terms I'd offer for a bailout.

And no tariffs...not against Japan, anyway. Now China is a different story, but Japan is a fully developed peer, not some sweatshop of workers living in tin shacks, and there's no reason we shouldn't be able to compete on a level playing field.
 
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TheNewWorldMan

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I seem to have had the misfortune of moving to Detroit from Florida, oh well. The unemployent rate is 14% in the state and could be 16% next year ahhh!

Just vote Republican, live in a tin shack for the greater glory of the elite, and donate your every penny to the Forbes 500, and Detroit will magically regenerate.

Or so say certain people around here...
 
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blueapplepaste

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I hope everyone who ever bought an import is proud of themselves.

Its not my fault GM/Chrystler/Ford made such inferior products for so long. I'm proud of my import cars that I've bought. The only fault here is with the Big 3 for making such poor products.

And the ones they're putting out now don't seem to be much better. My car was in an accident a couple of weeks ago and while it was getting fixed the rental car I had was a 2008 Chevrolet Cobalt. Probably one of the worst cars I've driven. The car's styling looked bad to begin with, the seats were horribly uncomfortable, ergonomics terrible, and it rode and drove like a fat horse with numb legs i.e. terrible. I couldn't help but think "why on earth would anyone buy this car when for the same amount of money they could get a civic or corolla or similar?"
 
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sdmsanjose

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General Motors is open to considering moving its headquarters from Detroit, selling off U.S. plants and even renegotiating parts of its restructuring plan with its major union, the new chief executive said Monday . .

Any wonder?

Detroit is the most liberal city in America.

In 2008, Forbes ranked Detroit #1 in its index of America's Most Miserable Cities.

75% of students entering 9th grade in Detroit never graduate from High School. Only 67% who make it to their senior year graduate.

The FBI is investigating Detroit public schools for corruption.

Last July, the FBI announced it was investigating Detroit City council members for corruption.

Last fall, Detroit Mayor Kwame Malik Kilpatrick resigned after pleading guilty to two felonies.

In 2008, ACORN held its annual convention in Detroit.

The Obama/Pelosi/Reid so-called "stimulus" bill allocated over half a billion dollars (two thirds of it "discretionary) to the Detroit Public school system.







If you want to blame it on liberals and democrats then how do you explain why Detroit was king in the 1960s with Kennedy and LBJ as presidents?

While you are thinking up an answer I will remind you of a few other facts.


1950s and 1960s
In the 1950s and 1960s the Detroit vehicles were way ahead in sales.
The only foreign vehicles that were recognizing in the US were the VW-beetle and that was because of the American motion picture industry.
Detroit was king!
Anyone that owned a Japan vehicle was mostly considered driving an inferior vehicle
Anyone driving any vehicle in the U.S. that was not an American made vehicle was viewed as strange


1970s
The US auto industry put the brakes on the powerful engines in the 1970s
The 1970s oil embargo started Americans thinking about fuel economy.
In the 1970s Japan kept improving their small vehicles and their fuel economy kept getting better
U.S. auto makers never made a commitment to small efficient quality vehicles in the 1970s; they kept the big cars rolling off the line.
US auto makers did not foresee the trend to smaller vehicles to the extent that it became.



1980s
In the 1980s American and other buyers started buying vehicles from Japan
US automakers concentrated on the bigger vehicles and did not improve the quality like the Japan auto makers.
Toyota and other Japan vehicles were reported to have a very noticeable quality advantage
Vehicles from Japan were no longer viewed as inferior in quality


1990s
US automakers started to try and catch up to Japan’s small vehicle quality and gas mileage but were too far behind.
Americans and other countries no longer maintained a strong loyalty to US vehicles
US vehicles continued to loose market share to Japan.
Vehicles from Japan were viewed as superior in quality


2000s
Most of US automakers (Especially GM) concentrated on the trucks and SUV as they made the most profit.
Korea and other countries (especially Europeans) started selling vehicles in the U.S. and around the world
Purchase price, fuel efficiency, and quality became much more important
The Japan small vehicles were cheaper to purchase, had better quality, and were more fuel efficient that most US vehicles
Gas prices soared and the American truck and SUV sales plummeted.
Almost all U.S. vehicle loyalty evaporated
With economic down turn of 2001, 2002, and 2008 buyers wanted smaller vehicles with quality and good fuel efficiency and Japan was perceived to have the best vehicle for that criteria.
US automakers could not catch up to Japan in fuel efficency, quality, and because of contracts the U.S. could not sell comparable vehicles for the lower price of Japan and Korean vehicles
The American made vehicles lost enormous market share from the 50/60s to the 2000s

The above are some of the reasons that the Detroit automakers are in trouble and that Detroit is a city that has lost in many areas. The mistakes above were done under liberals and conservatives.
 
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DoubtingThomas29

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Well said Mr. Jose,

You hit the nail on the head. The thing I have come to think about is how the Japanese jumped right on the use of statistics to improve the quality of the cars and maintain quality control, their cars last longer because of that for decades an American car could only last 9 years about that, but now the Japanese car can last like 13 or 14 years. While the American car creeps up there on the life expectancy, I think they are up to eleven now.

You guys take care!

The redoubtable doubting Thomas
 
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