The 7 Worst Ways to Rescue Detroit

GM, Ford, and Chrysler need long term ENGINEERING and QUALITY infusion

I was, and still am, a proponent of Buying American. But, in 2004, with gas prices regularly rising and up to $1.75, I purchased my first "foreign" car, a 2004 Honda Civic Hybrid. I understood that EPA mileage estimates were inflated for ALL vehicles, in part due to pressure for Detroit to meet the mandates. What I didn't fully expect was the quality and durability of the vehicle. With over 133,000 miles on it, I have spent less than $200 on REPAIRS. This does not include scheduled maintenance or collision, but does include brakes. On my 1997 Dodge van with 143,000 miles, I have spent well over $3000 on REPAIRS, again not including maintenance or collision. And my Honda Civic Hybrid, which was assembled in Japan, has 65% US and Canadian content. My father's 2004 Chevy Silverado has about the same US and Canadian content. It has 83,000 miles and has already had over $3000 in engine repairs alone. His previous truck, a Ford F150 had to be short-blocked under the warranty!

Gone are the days when manufacturers can live on "INITIAL QUALITY" reports. GM keeps bragging about Buick having the best INITIAL QUALITY of any manufacturer. People who buy Hondas and Toyatas are buying the long term value of the vehicle, not just the initial quality. They are often less expensive to buy, always less expensive to operate, and usually, more valuable at resale.

GM, Ford, and Chrysler can get back to me after five years and 100,000 miles.

Matt Good of @ Dec 04, 2008 15:03:46 PM

Auto Bailout

It is amazing to me that an industry, partucularly GM and Ford could be praised for their turn around plans earlier this year only to be demonized today. From all appearences it seems that the art of misdirection is in full play here. The finance and banking industry that has created this finacial sunami, which has overwhelmed our entire economy, is taking a back seat to the auto industy crisis, which it perpertrated.

I believe a more holistic approach is necessary to avert a more catastrophic finacial diaster in this country and the world.

Ernest Gayles of MD @ Dec 04, 2008 11:48:35 AM

The 7 Worst Ways to Rescue Detroit

"Chrysler is the only one of the three that could go out of business without having a huge domino effect," says analyst David Silver of the research firm Wall Street Strategies.

Uhhh, no! Any of the Detroit 3 that goes out of business has major implications regarding lost jobs, small businesses that depend on their support and an increased support of the retirees on the Government. An earlier post suggested going after the healthcare & insurance business and that's what needs to be attacked becasue their costs are waay over the line.

We as Americans do not support our own. Alibeit, true that Detroit built junk once upon a time but recently, the quality is there & they were catering to demand. No one but consumer demand forced them to build Tahoes, Navigators and plush up the F150's & Rams. We (Americans) did not want the Aveos and Festivas (Escorts and Focus) becasue we (Americans) wanted power and room. the average american family is 6 ft and approx 200lbs. Try fitting five of that in a Focus.

I agree that some things about the business needs to be remodeled: Unions, some wages, and duties, but we need American Manufacturing now more than ever. Unless we go back to 5 cent bread, 10 cent milk, and 25 cent gas.

T. Jackson of TX @ Dec 04, 2008 07:39:18 AM

Who's In Charge?

The Big Three apparently can't manage their businesses and Congress shouldn't even begin to think that they can. So -- who's going to manage the bailout and ensure that taxpayer money will actually do some good? Maybe a group of retired, reputable CFO's (not CEOs; they are essentially cheer leaders) should be hired/appointed to determine which of the three to save, how much that would cost and then manage the recovery. We're acting like $25 Billion is chump change and that only money will solve the problems (is that why the Big 3 are about to disappear?). Some of the concessions by labor and some of the corporate cuts will help, but where's the cost savings associated with these changes? Who is putting the pencil to the paper here? I don't see a revised balance sheets, timelines, or any thing that resembles a business approach to these problems. Maybe Detroit needs to "do things differently" from a BUSINESS perspective!

RonE of AZ @ Dec 03, 2008 22:12:54 PM

Automaker Reorganization

The only reason to put in federal dollars is to shape a new, more efficient and energy conscious industry. Putting in dollars before bankruptcy is a waste. Even in conventioal Chapter 11, creditors will decide how it is used and who gets what value out of it. Answer: a special reorganization statute that directs top-priority federal money to public benefit and not to paying pre-bankruptcy creditors (unless such payment is needed to save vital suppliers). And then let the bankruptcy court decide what portion of the value of the reorganized companies goes to pre-bankruptcy creditors, ongoing workers, retirees and equityholders. Don't let creditors and Wall Street sharpies dip their beaks in the value that taxpayers put into the business.

Bill of MA @ Dec 03, 2008 13:48:34 PM

Plants in the South

The statement about the plants in the south being more efficient are FALSE. The most productive plants in the US are the GM Lansing Grand River and Fords Wayne Assembly. The southern transplants are rittled with defects. Take the Nissan Mississippi plant the worst plant in the North Americas. Mercedies Benz once the gold seal of quality has suffered and now ranks near the bottom in the lastest JD Powers initial quality survey.

of MI @ Dec 03, 2008 12:43:36 PM

Automobile Bailout..._ + * # $ * *%

why do we feel like we have to bail out the auto industry, yes there are workers involved, and there are"BIG" salaries involved and "BIG Bonus's) involved, we bailed out he bankers and they are getting there Big bonuses, and fancy vactions and all he party whoopla, and the aveage joe blow doesn't know how he is going to make it day by day, well now after the Auto makers, then the Air lines, & then. you don't do that for the small business man, oh ya the kick backs to the polititans, and the special interest groups all make the big difference, you say change is coming..ha!! fat chance we'll ever see anything different.. I just wish we could wipe out the whole Gov't and start over....with some real statesman.

Donald Rajavuori of FL @ Dec 03, 2008 08:58:05 AM

Holier Than Thou = Hypocricy

The sniveling about the Big Three bowing to Big Oil is ludicrous. Let's admit things right now. As Americans we liked bigger vehicles and we bought them. As long as the pain at the pump was bearable, buying a mid-sized sedan over some fuel-sipping matchbox car was a no-brainer, we went mid-size, and larger if we could. Those cars had the room, power and comfort we wanted. Only the pain at the pump stopped us, and now we put on our fake halo and piously denounce the Big Three for not giving us what we now want, namely that matchbox car because the pain at the pump go too much. I'll make a safe bet. If gas dropped to $2/gal, we'd be howling for our comfort and power again. As for this article, and hinted in an earlier comment, one thing that needs done for any bailout was not mentioned. Kill the UAW! Make a condition for any loan that unionized workforce is not allowed. Put the wages and benefits the same as those foreign factories and level the playing field. Will that happen with a Democratic Congress and President Elect that publicly said he was pro-union? Not likely, but until the labor playing field is even, any giveaways from unions will be short-lived because the union leadership only holds their jobs if they keep bringing in goodies. That means any bailout will only be a bandaid on a sucking chest wound. Other items such as the franchise laws also need done, and the same with the CAFE laws. Bottom line, give the Big Three (or Two as comments about Chrysler are probably correct, let it die) a labor clean sheet, kill the laws tieing their hands, and then let them sink or swim. If Congress isn't willing to do the above, then do nothing and also except a large part of the blame, because while the Big Three have dug their graves over decades, Congress has helped with the shovel by passing laws over decades, often to support the unions, that have tied automakers hands that have unionized workforces. A seperate but related matter for Congress, the "Card Check" bill unions want? If you support that with this example of how organized labor can kill (Big Three) or help (All other car companies with factories in the US) businesses (we won't mention Steel or Textile industries, which are a debacle all their own), then Congress as a body has sunk to a new low in competence.

Tom V of VA @ Dec 03, 2008 05:42:14 AM