Saving the U.S. auto industry

[cameraman]

If GM or Chrysler went down hard and put even a single supplier like Magna into Chapter 7 the best case scenario is that shipments would be interrupted for 6 months minimum on the following: Mini Cooper, Mercedes C, Toyota Avensis, BMW X3, Suzuki XL, Honda Civic, Acura MDX, Porsche 911 Cabriolet and Nissan Altima.

That diversity is what will save them from going out of business.

[Insomniac]

IMO there was never a doubt the problem would be punted to the next administration. Let them try to strong-arm the UAW.

The administration could've used the same conditions that the failed bill had, but chose not to. The government has no concept of leverage. The only people who don't get favoritism are the people without lobbyists. They should only be allowed to schedule meetings at congressman's offices and campaign donations should be limited to $100 maximum per person. No PACs. Get rid of all the big $ fund raisers and anyone buying influence. All that will be left are bundlers, and at $100/person, they need to bundle a lot of people, and only once.

[SurfaceUnits]

The North American assembly lines at GM will be closed for the entire month of January.

Will the auto bailout work?
Now that GM and Chrysler are getting $13.4 billion, only two things are certain: more pain lies ahead for Detroit and the cost of the bailout will rise.
http://money.cnn.com/2008/12/19/news/companies/autos_future/index.htm?postversion=2008121917

[Insomniac]

They're expecting Toyota to issue a profit warning Monday which will result in an annual loss. First one in 71 years.

[SurfaceUnits]

VW has dropped ~15% in the last two sessions

[SurfaceUnits]

Ford scores marketing coup with thrifty Fusion hybrid

DETROIT — The Ford Fusion hybrid will be the most fuel-efficient midsize sedan on the market when it arrives this spring, clocking in at 41 miles per gallon, according to data given to Ford Motor by the Environmental Protection Agency.

http://www.usatoday.com/money/autos/2008-12-22-ford-fusion-fuel-efficient_N.htm

[Insomniac]

Lamborghini is doing fine!


Automobili Lamborghini S.p.A. will deliver another record year's results in 2008. Official sales figures will be communicated on the occasion of Lamborghini´s appearance at the Detroit Motor Show in January 2009.

...

Lamborghini will not divert from its long-term strategy. Investment into R&D will not be reduced, and there will be ongoing expansion of its brand presence on a world-wide scale, with more new products and further expansion of its dealer network. The company will continue its strategy of announcing at least one new product each year.

[SurfaceUnits]

Honda, Toyota looking to help troubled suppliers

Two of Japan's largest automakers are considering building parts inventories to prevent suppliers from sliding into bankruptcy, according to Bloomberg News. Toyota Motor Corp., which has operated under the lean, just-in-time system since 1938, as well as Honda Motor Co. fear that the struggles of Detroit automakers could result in many parts makers going out of business and bringing their assembly lines to a halt. One-third of domestic suppliers are considered to be at risk of bankruptcy, according to Grant Thornton LLP, a consulting firm.

[extramundane]

NYT says Rick Wagoner's done (http://www.nytimes.com/2009/03/30/business/30auto.html?_r=1&hp).

[oddlycalm]

NYT says Rick Wagoner's done (http://www.nytimes.com/2009/03/30/business/30auto.html?_r=1&hp).

Unconfirmed but not entirely surprising if true.

oc

[SteveH]

Now if they can only go back in time and force Roger Smith out, GM might have a chance.

[Insomniac]

Unconfirmed but not entirely surprising if true.

oc

It's confirmed. They forced him out. :shakehead Populism is a terrible way to govern.

[nrc]

NYT says Rick Wagoner's done (http://www.nytimes.com/2009/03/30/business/30auto.html?_r=1&hp).


The representatives blamed some of G.M’s problems on Mr. Wagoner’s leadership, saying the company was slow to react to greater demand for smaller, more fuel-efficient vehicles.
While Wagoner shares the blame with every other GM exec of the last 30 years, the notion that their current dire straits have much to do with fuel efficient vehicles is just fantasy. The company has a whole raft of problems and fuel efficient vehicles are somewhere way down the list. The Prius didn't save Toyota from a 40% sales slump that would have killed GM just as dead without a major bailout.

[KLang]

It's confirmed. They forced him out. :shakehead Populism is a terrible way to govern.

I guess if Washington can set their compensation they might as well be able to decide who can work there too. :yuck:

[datachicane]

Now if they can only go back in time and force Roger Smith out, GM might have a chance.

This bears repeating.

[Ankf00]

I guess if Washington can set their compensation they might as well be able to decide who can work there too. :yuck:

easy solution to avoiding this: don't socialize the losses of your broken business.

[TKGAngel]

Saw these photos (http://www.time.com/time/photogallery/0,29307,1882089,00.html) on Time earlier. They're heartbreaking and stunningly beautiful at the same time.

[oddlycalm]

Saw these photos (http://www.time.com/time/photogallery/0,29307,1882089,00.html) on Time earlier. They're heartbreaking and stunningly beautiful at the same time.
If you want to see more....
Ruins of Detroit (http://detroityes.com/home.htm)

What is striking to me just driving around are the large areas, I'm taking square mile large, that have returned to a natural state. There is a huge area along Grand River Ave. that is that way. Also striking is the feeble attempt at a modern monorail that weaves around abandoned buildings.

oc

[oddlycalm]

While Wagoner shares the blame with every other GM exec of the last 30 years, the notion that their current dire straits have much to do with fuel efficient vehicles is just fantasy.

Absolutely, GM's market share 40yrs ago was nearly 50%. Today it's under 20%. It wasn't some magical reverse Midas touch that made that happen. It took decades of hard work by many management teams to screw things up this badly.

Once again we see a double standard. Anyone holding their breath waiting for a a Wall Street CEO to get pushed out?

oc

Edit - guess I should add that Peugot's CEO got canned also because it's important to keep up with the French.

[Ankf00]

Once again we see a double standard. Anyone holding their breath waiting for a a Wall Street CEO to get pushed out?
oc

to borrow a quote from the atlantic article in the other thread:

Under duress, generosity toward old friends takes many innovative forms. Meanwhile, needing to squeeze someone, most emerging-market governments look first to ordinary working folk—at least until the riots grow too large.

gotta appease the plebes to buy yourself more time...

[dando]

If you want to see more....
Ruins of Detroit (http://detroityes.com/home.htm)


I think I see the UM foosball program among them ruins. :gomer: :shakehead

-Kevin

[Andrew Longman]

I think I see the UM foosball program among them ruins. :gomer: :shakehead

-Kevin

Just couldn''t let it be could ya?:gomer:

To be fair, the booting of Wagoner had more to do with the lame ass plan he showed up with than anything else.

Basically Chrysler without a Fiat "merger" is toast. Chrysler 5 years ago was said to have no competitive advantage and without Fiat has no future. Period.

GM has 30-40 years of ineptitude that isn't going to be fixed overnight but Wagoner needed to show he had some sort of plan to confront reality and he didn't.

If he wanted government money he needed to do better. He didn't.

[oddlycalm]

If he wanted government money he needed to do better. He didn't.

Kinda sums up the last 50yrs of GM management philosophy; if they wanted to keep their existing customers they needed to do better. They didn't.

Alfred Sloan managed to keep GM profitable throughout the depression of the 1930's and market share peaked at 54% in 1954. By contrast, in 2005 with US car sales at near record levels GM managed to lose more than $10 billion. :gomer: :shakehead After Sloan retired in 1956 it has been quite literally all downhill from there.

When innovative programs like the Corvair and the Buick aluminum block V8 didn't immediately pan out management quickly killed them. Ironically, the aluminum V8 was a huge success in other markets so they sold the rights. Apparently those companies trained the dealer mechanics to use a torque wrench. :rolleyes:

From the late 1960's on GM did little more than react to competition, and they didn't always bother to do that. Last with disk brakes, last with electronic fuel injection, last with lightweight high efficiency engines, last with any technology that actually mattered. And when they did manage to develop an innovative technology in the manufacturing divisions management had no idea how to exploit it. They sold their invaluable neodymium/iron/boron magnet technology to the Chinese just as it was about to become a key technology in hybrid and electric cars. :irked: :shakehead

oc

[Sean Malone]

Just couldn''t let it be could ya?:gomer:

To be fair, the booting of Wagoner had more to do with the lame ass plan he showed up with than anything else.

Basically Chrysler without a Fiat "merger" is toast. Chrysler 5 years ago was said to have no competitive advantage and without Fiat has no future. Period.

GM has 30-40 years of ineptitude that isn't going to be fixed overnight but Wagoner needed to show he had some sort of plan to confront reality and he didn't.

If he wanted government money he needed to do better. He didn't.

I haven't dug in past the headlines yet today but Chrysler has 30 days to finalize a deal with Fiat and GM has 60 days to come up with a phoenix plan or the alternative is bankruptcy. Did I read things right? Does bankruptcy necessarily mean complete shutdown?

[Methanolandbrats]

Kinda funny how the government is beating the crap out of the auto industry with a big club to shape them up and at the same time there is nothing but government lip prints on the asses of investment banks. Two different approaches to reform, I wish they would use that billy club on Wall Street.

[dando]

Ford, GM to make payments up to 12 months for those who lose their job:

http://money.cnn.com/2009/03/31/news/companies/ford/index.htm

-Kevin

[oddlycalm]

I wish they would use that billy club on Wall Street.
As long as most of the campaign funding for both political parties comes from Wall Street I don't look for that to happen. :irked:

oc

[nrc]

Honda is laying off now. Clearly they were slow to react to greater demand for smaller, more fuel-efficient vehicles. :shakehead

[Ankf00]

There's a world of difference between layoffs and insolvency.

[Gnam]

Any truth to the rumor that the gov'mint plans to rename GM the Department of Motor Vehicles? :p

[oddlycalm]

There's a world of difference between layoffs and insolvency.
Show me an auto company outside India that claims they aren't getting outside support and I'll show you a liar or a company that won't be in business in 2010. Everybody from the automakers down to suppliers in Japan have been getting government handouts since late last year.

Some of my contacts at the bearing companies told me in January that they weren't getting any government money yet because their large bearing divisions were still profitable (until January) and it was killing them. Wind turbines and aerospace kept the large bearing biz profitable long after everything else got slammed but once the order backlogs got worked off in January and that was it. Crickets.

Japan is talking about have the parts makers build inventory until things turn around according to Asahi Shinbun. Seems like that would create a problem once business improve and companies already have a lot of inventory, so I must be missing some magical feature...

oc

[Ankf00]

Show me an auto company outside India that claims they aren't getting outside support and I'll show you a liar or a company that won't be in business in 2010.

oc

isn't Ford merely using their long-ago mortgaged credit at this point?

[extramundane]

Any truth to the rumor that the gov'mint plans to rename GM the Department of Motor Vehicles? :p

American Leyland. :thumbup:

[EVL29]

Kinda funny how the government is beating the crap out of the auto industry with a big club to shape them up and at the same time there is nothing but government lip prints on the asses of investment banks. Two different approaches to reform, I wish they would use that billy club on Wall Street.



I wish they would use it on themselves.

[Insomniac]

I guess if Washington can set their compensation they might as well be able to decide who can work there too. :yuck:

To me, it's just a headline grabber move. It has no real impact. If Wagoner was refusing to try and right the ship and there was clearly someone better to steer it, it makes sense. I didn't see an announcement about who will replace him and why he or she will be better.

[extramundane]

To me, it's just a headline grabber move. It has no real impact. If Wagoner was refusing to try and right the ship and there was clearly someone better to steer it, it makes sense. I didn't see an announcement about who will replace him and why he or she will be better.

It pretty much is just a headline grabber. The immediate replacement is COO Fritz Henderson, who's generally considered to be a corporate clone of Wagoner. The arguments I've read for his promotion tend to center around the fact that GM needs a person familiar with the company to steer it through the next few months, but if that's the case, they'd have been as well off keeping Wagoner for the time being.

And I've yet to read a plausible theory as to why Wagoner had to go but Bob Nardelli should stay. Any takers?

[FTG]

There's a world of difference between layoffs and insolvency.

Yep. Don't do enough of the former, you get the later.

[Sean Malone]

It pretty much is just a headline grabber. The immediate replacement is COO Fritz Henderson, who's generally considered to be a corporate clone of Wagoner. The arguments I've read for his promotion tend to center around the fact that GM needs a person familiar with the company to steer it through the next few months, but if that's the case, they'd have been as well off keeping Wagoner for the time being.

And I've yet to read a plausible theory as to why Wagoner had to go but Bob Nardelli should stay. Any takers?

Two different situations and a 30 day (make that 28) countdown for a merge with Fiat.

[TKGAngel]

Two different situations and a 30 day (make that 28) countdown for a merge with Fiat.

Also, isn't Nardelli relatively new blood to the auto industry?

[Ankf00]

Also, isn't Nardelli relatively new blood to the auto industry?

he's old blood in the "driving a DJIA player into the ground so far the company found its way to China" industry

[nrc]

There's a world of difference between layoffs and insolvency.

Absolutely. If you have a badly managed, nearly bankrupt company and you hit a major downturn you're bankrupt. If you have a well managed company company and you hit a major downturn you may need to have unprecedented cuts. The point being that neither of those things has a damn thing to do with fuel economy as some nitwits in congress claim.

[Ankf00]

maybe this is to save banks after all

http://market-ticker.denninger.net/archives/921-GM-Bankrupt,-UNLESS.....html

:mad:

[oddlycalm]

maybe this is to save banks after all

http://market-ticker.denninger.net/archives/921-GM-Bankrupt,-UNLESS.....html

:mad:
Yup, heads they win, tails they win bigger. In a fixed game the house always wins, and usually in more than one way. Who do we think gets hired to sell off those unwanted divisions and to carry out the nuts and bolts of any restructuring....? :shakehead :yuck:

oc