So now the "Big Three" American auto makers are blaming their pending collapse on the economy.It couldn't be that they are lobbying Congress for an additional 25bn (50 billion total) because they failed to learn from their past mistakes. It couldn't be that these auto makers failed to develop desirable products at the pace of their foreign competition.
Even those too young to remember the Edsel, Nash or AMC have probably seen a Plymouth (defunct - 2001) or Oldsmobile (defunct - 2004). Sometimes brands just outlive their usefulness. Wikipedia list 543 defunct American automotive brands from the past.
These companies' business models are predicated on people buying new cars at a rate that is unsustainable. Our disposable economy seems to have come back to have bitten us in the azz. American car companies build too many adequate cars instead of focusing on just a few excellent ones.
GM-
Buick
Cadillac
Chevrolet
GM Daewoo
GMC
Holden
Hummer
Opel
Pontiac
Saab
Saturn
Vauxhall
Wuling
Ford-
Ford
Lincoln
Mercury
Mazda
Volvo
Chrysler-
Dodge
Chrysler
Jeep
Honda-
Honda
Acura
Toyota-
Toyota
Lexus
Scion
(majority shareholder - Daihatsu, minority shareholder - Isuzu and Yamaha)
I'm not saying that Detroit doesn't produce any good products. But that they don't produce many good products. Maybe it's time for Detroit to shed some of their lesser performing brands or models.
Honestly, what's the difference between a Dodge and a Chrysler?
Why does Ford keep it's Mercury brand? Mercury could just be absorbed into Ford while eliminating a nondescript brand. Mercury could become the company's alternate-fuels label and in the end share it's progress with it's sister brands.
GMC's Buick, GMC and Pontiac lines could be folded into one mid-range brand to complement their upscale Cadillac and main stream Chevrolet lines. (Chevrolet is HUGE in China and Russia. Chevy is the fastest growing brand overseas, so it becomes one of the streamlined company's keepers.)
Maybe we should allow Chrysler and GM to merge and financially support the new company with incentives to build next-generation vehicles.
We could use the rest of the money to help a new and more lean Ford speed it's progress in alternate fuel vehicles.
Don't Blame Peak Oil.
Oil production and price have little to do with Detroit's woes.
When was "Peak Coal"? Did our country fold or adapt? Detroit's marriage to the "Seven Sisters" seems to be their choice as well as their burden.
The costliest blends of gasoline to produce are those that are not widely available. There are 11 special blends of gasoline nationally with 45 variations of these blends. Why can't the companies just produce the tougher California blends for the whole country? This seems to be Big Oil saving a penny in the short term to lose a dollar in the long term.
Back in the late sixties, members of Congress were taken for rides in cars that were steam fueled with clean burning engines. The Big 3 and Big Oil balked at this prospect.
John DeLorean states (In Jack Doyle's book - Taken For A Ride); "...As a matter of fact, because the California laws were tougher, we sold 'cleaner" cars there and dirtier cars throughout the rest of the nation..."
The Big Three won their battle with the states to overturn the Zero Emissions Mandate, ending any short term financial need to develop higher performing vehicles.
In 1983 - a four cylinder Honda Civic was rated at 46/59 mpg. Twenty five years later, the Hybrid four cylinder Honda Civic is rated at 40/45 mpg. Progress? What progress? Most other models rated at 66% of the current top performing Civic model's fuel economy are considered as doing well.
Killing Brands Is Costly
Not only in the lost jobs at the factories but in all of the down stream operations. Dealers would have to shut down. Parts suppliers would close. All of the workers at these and other aspects of the brand would lose their jobs. All of these workers would lose their health care and other benefits.
Retooling the factories in an environment of no credit couldn't be done. What would these factories build? More of the same cars produced elsewhere?
What is an American car?
Is it a brand that is owned by Americans but produced, in large parts, overseas?
Is it a Toyota or Honda that is manufactured mostly in America?
The average cost for a factory worker is about $28hr.
Detroit pays about $78hr (in wages, taxes, benefits, etc.) while Honda and Toyota spend about $48hr per employee.
Which companies are more beneficial to the American economy?
Speculation
The International Monetary Fund is seen largely as a branch of the US Treasury Department.
According to Russel K. Kick and G.A. Swanson - Daily, over 1.4 TRILLION dollars is moved electronically for the sole purpose of speculation, while 20 billion dollars (or 1.5%) is spent on the actual purpose of economic trade. (For every $1 that is spent on daily trade, $66 is spent on speculation. Before electronic transfers, the speculation to trade ratio was 4-1.)
These instruments create tremendous wealth for the few while bankrupting entire economies.
The IMF had known for years that Argentina's policy of Pesos for Dollars was one that was not sustainable. The IMF encouraged Argentina to borrow money to support it's Peso. When the worldwide recession hit in 2000, the IMF said; pay us...NOW. Argentina's economy collapsed. Argentina's populace overthrew the government.
Before 401k's, hardly any workers were directly effected by fluctuations in stock prices. Today, most of us have a direct interest in whether a company overseas (or in this country) fails. They've taken our money, promised some type of return, lost our money, and now tell us that they need more.
I used to gamble. I had the same problem.
Sometimes you have to just walk away to eliminate more losses.
Sometimes it's just better to start over from scratch with a more solid plan.
Again, we're at the point where we are being asked... no TOLD that we must provide loans to companies that never had our best interest at heart. We are told that the bribe (disguised as a stimulus package) to keep us from complaining is in our best interest.
We are being told that the creators of this mess are those best qualified to fix this mess.
Are we Neo (from the Matrix) searching for the source in order to find the inherent flaw in the system that was created by the creator(s)?
Didn't Neo die at the end of that movie?
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