# American made cars and the bailout



## dougp26364 (Nov 20, 2008)

Is there anyone else as ticked off as I am about the arogance of the American auto industry? Nothing like flying to Washington in private jets to ask for a cool $25,000,000,000.00 to keep them afloat because the foreign auto makers have been kicking their hind ends since the '70's. You'd have THOUGHT that when things started to go south some 30 years ago, they MIGHT have seen the writing on the wall and started to change their ways.

I've really tried to support the American auto manufactors but, I'm getting pretty near the end and, their plea to give them money or lose all those jobs (nothing like fear tactics) really has rubbed me the wrong way.

Besides, I can't say I've been all that impressed over the last decade in the quality of cars I've been purchasing. 

Examples:

We had a Ford Tarrus that required the brake rotors be turned every 15,000 miles. At 35,000 miles I had to replace the transmission. There were several other small issues including having to replace two electric window motors.

The Buick Century we had also had issues with the electric window motors. It also had one of those thermostat controlled heating/cooling systems that went out. We traded that car around 50,000 miles.

The latest is the Saturn Rely we own. It has 26,000 miles and has required several maintenance issues. The overhead rack system wasn't installed correctly and had a horrible rattle. One of the electric sliding doors has a mind of it's own. The dealership has never found anything wrong with it but, there's something wrong with it (intermitant issue they can't seem to find). There were two front bolts in the steering that had to be replaced. I just had to have the rotors turned on all four wheels and, because of that little bolt problem, I just replaced the tires at 26,000 miles.

There's more I could write about the other cars we've owned in the last two decades but why bother. They want bailout money. I want a car that will continue to run without me having to put a couple thousand extra into it before it hits 30,000 miles. When I'm finished with these cars......and I'm getting close to being finished.......I don't see that I have any choice but to go with a foriegn made vehicle. It's getting to expensive to support GM, Ford and Chrysler.


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## Icarus (Nov 20, 2008)

They want a loan. They aren't asking for a handout. (Though I'm sure that some people will argue that a loan is a handout.)

They, like many other companies and individuals, have been shut out of the financial markets.

Like American Express, GMAC is reorganizing as a bank holding company. GM is not the majority owner in GMAC, although they do own 49% of GMAC.

The corporate jet thing is ridiculous. They should have chartered a commercial jet like the president elect did.

-David


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## Jbart74 (Nov 20, 2008)

Icarus said:


> They want a loan. They aren't asking for a handout. (Though I'm sure that some people will argue that a loan is a handout.)
> 
> They, like many other companies and individuals, have been shut out of the financial markets.
> 
> -David



I'd like a 'loan' too.  Where do I sign up?


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## Icarus (Nov 20, 2008)

Jbart74 said:


> I'd like a 'loan' too.  Where do I sign up?



You don't know where to get a loan? I assume all your limbs are currently intact?

I'll send somebody over from Brooklyn and they can help you out.

Frank? Where are you? I have a customer for you.

-David


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## Jbart74 (Nov 20, 2008)

Icarus said:


> You don't know where to get a loan? I assume all your limbs are currently intact?
> 
> I'll send somebody over from Brooklyn and they can help you out.
> 
> ...




Talked to Frank...  He said the his credit lines are all dried up.  Apparently GM and Ford borrowed the rest of his money already.  He's a little bent out of shape over the whole deal.  Needless to say, he's pulling for the bailout.  I'd go on, but I feel it might be perceived as political.  Frank hates politics.


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## e.bram (Nov 20, 2008)

As long as the unskilled auto workers get $ 75.00 per hour, the companies can not survive.


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## Lawlar (Nov 20, 2008)

*A Mess*

I hate GM cars.  I've never bought one.  Their management has been so out of touch for decades.  [I'll bet Rick Wagner never test-drove a Prius.]  So I almost would be happy to see GM file bk (and I'm a bk lawyer - retired.)

But we have a big problem.  All of that GM debt is probably held by our insolvent banks, weak insurance companies, money market funds, thousands of pension plans, and, not the least, lots of retired Americans.

Then we have the problem of what are we going to do with the thousands of people that work for GM and the companies that supply GM?  Just tell them to get jobs at McDonalds and Walmart?  [And please don't tell me how overpaid they are.  Their salaries allow working people to pay their mortgages, send their children to school, and pay 30-40% for taxes that support our schools and troops.  Those who complain about labor wages are often the same folks who say it is fine for CEOs to earn millions in bonuses.]

And not that I want to scare anyone (frankly, I'm hiding under my bed because I'm so scared), how many of our financial institutions have issued credit default swaps (gurantees) on the GM debt?  

Then there is the issue of whether we really want all of our stuff built overseas and then shipped on boats to us and paid for with money we borrow from overseas.  [We can't go to war with China - because if we bomb China we will be bombing our own factories.]

So if GM goes down the drain, how much of our economy is going to go with it?


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## Jbart74 (Nov 20, 2008)

Lawler,

Where does it stop?  I am not intending to be confrontational, just asking the question.  If Exxon comes to Congress next year and says it can't afford to continue refining oil into gasoline unless it gets 25 billion dollars, should our government, aka, we, bail them out? (or offer them an interest free loan, whatever)  Yes, if Exxon goes under many thousands will lose their jobs.

If Home Depot comes to Congress next year and says it can't afford to continue selling lumber and other home improvement supplies at cut rates, should we bail them out?  Thousands of jobs will be lost if we don't.

If Marriott or Hyatt comes to Congress next year, and says that since everyone from GM, Ford, Home Depot and hundreds of other employers have lost their jobs, they can no longer afford to continue operating without help from the government, should we bail them out too? Thousands will lose their jobs!

 Do we really want to head down that road?  

Just thinking out loud, these are not points of view, simply viewing points.


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## Kal (Nov 21, 2008)

The stock market was down 400 points today on the HINT that a deal could not be worked out.

Now think ahead to the moment when any of the 3 automakers draw a line in the sand and say they are filing for bankruptcy and will lay off 1 million workers?  Aside from the fact that what they say may or may not have merit, WHAT WILL THE STOCK MARKET DO THEN??

The Dow is at 7500 today.  Is it possible that we would see a 2,000 point drop?  Investors (i.e. hedge funds and mutual fund managers) pull the trigger first and ask questions later, so fact has no bearing on the matter.

They have a gun to taxpayers head.

For me, I would show them the money but give them the Columbo approach where I just need one more bit of info to close the deal. That little bit of info just happens to be WHAT ARE YOU GOING TO DO WITH THE $$$$$ AND HOW WILL THIS GUARANTEE YOU WON'T BE BACK, EVER!


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## Clemson Fan (Nov 21, 2008)

Icarus said:


> The corporate jet thing is ridiculous. They should have chartered a commercial jet like the president elect did.
> 
> -David


 
That is just an awesome quote!   

I'm not sure how many people got it.


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## Icarus (Nov 21, 2008)

Clemson Fan said:


> I'm not sure how many people got it.



Usually I'm just here to amuse myself.

-David


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## Brett (Nov 21, 2008)

getting back to the original point, 
I also gave up on American cars after many problems at less than 50,000 miles. For the last 15 years I've had Honda's with no serious problems.  I wish it wasn't like that and maybe the new cars are better but I don't want to take the chance.


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## dougp26364 (Nov 21, 2008)

Icarus said:


> They want a loan. They aren't asking for a handout. (Though I'm sure that some people will argue that a loan is a handout.)
> 
> They, like many other companies and individuals, have been shut out of the financial markets.
> 
> ...




Loan or hand out, it still has had the same affect on the economy and, I would suspect their business, a result of unintended consequences. Who wants to buy a car from a company that might not be in business in a few months if someone (taxpayers) doesn't just hand over the money.

What's even funnier IMO is, when asked what their plans were if given this money, not one of them seemed prepared to answer. Yep, these guys deserve to be running these huge companies.


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## Kal (Nov 21, 2008)

Clemson Fan said:


> That is just an awesome quote!
> 
> I'm not sure how many people got it.


 
Or....just like us who travel for our timeshare visit!


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## dougp26364 (Nov 21, 2008)

Clemson Fan said:


> That is just an awesome quote!
> 
> I'm not sure how many people got it.



I caught it. For that matter, have they made such bad cars that they really have to worry about someone attempting to take down a comercial jet liner as revenge? 

IMO, if they really wanted to make their point, they should have flown coach class on a discount carrier, paid for their luggage, paid for their window seat, paid for their booze and then stand up and tell everyone how broke they are. For heavens sakes they are not as important as the president elect, they don't have secrete service agents and media types to accomadate and I'm relatively certain they might be pretty low on the terrorist list of potential targets.


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## dougp26364 (Nov 21, 2008)

Brett said:


> getting back to the original point,
> I also gave up on American cars after many problems at less than 50,000 miles. For the last 15 years I've had Honda's with no serious problems.  I wish it wasn't like that and maybe the new cars are better but I don't want to take the chance.



I've continued to say maybe the new cars are better for the last several years. In my case at least, that answer has been no. Now the Amercian car builders want me to buy another car from them but, they're telling us that without bailout money, they might go out of business. 

This seems like a rather poor business plan to me. Build inferior products, run out of money and then ask people to buy your cars while asking for a 25, billion dollar hand out to stay afloat. No wonder they're are broke. I can't WAIT to see what plan they propose to pay back this "loan."


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## Autoeng (Nov 21, 2008)

Something to chew on here is that IF American car manufacturers went belly up there would be virtually no "Made In America" products anymore. Why? Companies that manufacture parts for US auto makers also make a few other products. Without a large part of their business, the US auto make part, there usually isn't enough to survive on to continue making product for their other customers.

So that you understand this here is the situation that the company that I work for is in. Just about 1/3rd of our product is sold to US car manufactures. We manufacture manchines that move product. About 1/3 of our product supports companies who support US auto makers. If the first 
1/3rd dries up then the 2nd 3rd is just going to cascade into the hole created.

Who is our remaining customer. The US military. If we are not in business then there is no Made In The USA company to provide our product to the US military. Do you really want to rely on Japanese or Chinese made product to keep our military moving?

Then we have no auto maker to manufacture war goods should they become necessary. During WWII the US automakers converted to producing the war machines that enabled the US to win the war.

The prospects for the US in both manufacturing and Military put me extremely concerned for the future. I am hopeful that this is the time when the true leaders of Detriot (like Iacocca) will show themselves with good plans to revitalize the US industry. I personally think that the best leader is the one that steps forward and says "let us go bankrupt and then support us". Once they are free of the union contracts then perhaps they can become profitable.

Just my .02¢


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## Clemson Fan (Nov 21, 2008)

Kal said:


> Or....just like us who travel for our timeshare visit!


 
So, you travel to your timeshares in your own personally chartered jumbo jet with your name and logo painted on the side?


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## Carol C (Nov 21, 2008)

The mgmt saw all that market share going to Honda and Toyota for 20 years. Why didn't they take the cue and formulate a plan to re-tool plants and compete? The CEOs only care about their own bottom line and pleasing their biggest shareholders. As for unions, they're getting a bad rap. I don't think unskilled workers are making $75/hr...that sounds like the spin zone talkin. The senior-most skilled union workers might be getting $75/hr including vacation pay, health benefits, sick time, pension and stock options and such...all factored together.

I love Hondas and Toyotas and have owned them for years. My dad, who was a steelworker in Pittsburgh (before the steel industry got sold down the river), hated to see me driving "foreign" cars. Oh well...I guess I was on to something after all. Meanwhile, my hometown has been bankrupted and a blighted mess for years. When the mills were closed, there were lots of mom & pop businesses that went down. Lots of laid off workers were driven to substance abuse, and there were suicides, sad to say. So while I don't like the taxpayer bailout of the big three, I really feel for those communities that will be hard hit. I've seen that kind of heartbreak up close and personal.


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## Kal (Nov 21, 2008)

Clemson Fan said:


> So, you travel to your timeshares in your own personally chartered jumbo jet with your name and logo painted on the side?


 
No, the name and logo would be a tad bit over reaching.  However, the idea of a big Chrysler logo on the side has merit.  That way, no one would come anywhere near the aircraft.  Will omit all the chrome trim as that just doesn't make it.


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## normab (Nov 21, 2008)

Regardless of what cars I have owned, I don't think I should have to pay for other people's financial mistakes--no one pays for mine.  

The automakers have been fiscally irresponsible for decades.  There is an existing legal precedent to help them. Let them take the bankruptcy/ debtor protection route and and get financing/loans that way.  We don't need to loan them money right now. Once they restructure they may then learn to run business efficiently and in a manner that makes money.  

Also, the autoworkers union is not living in the real world. The currently are OVERPAID  compared to the average person, even making more than many degreed professionals. They want to maintain the same level of wages and benefits when everyone else is losing them as the economy changes. During restructuring these folks would have to review what they can do to help their own industry survive.

I already wrote my legislators.  I urge those with opinions to write their senators and congressman too!  It's the only way to really have our elected officials represent us.

I feel much better now, thanks for letting me vent.


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## DG001 (Nov 21, 2008)

So here's my question - is the American car industry just going to disappear if they file bankruptcy? 

I would have thought they would be like the airlines - filing Chapter 11 bankruptcies every few years, but still in business. They would also have the option of getting out of those union contracts (and bring smarter management on board?)

The other thing that bugs me about bailing out Detroit is that these companies have been horrible corporate citizens. They have spent money in fighting and lobbying against higher fuel efficiency, alternate fuel options, foreign competition and even public transportation instead of just building better cars.


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## Icarus (Nov 21, 2008)

GM to return two leased jets amid criticism

http://news.yahoo.com/s/nm/20081121/bs_nm/us_gm;_ylt=Aog.fcLPcsIkXW5msBlgGO7LLJ94


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## dougp26364 (Nov 21, 2008)

Icarus said:


> GM to return two leased jets amid criticism
> 
> http://news.yahoo.com/s/nm/20081121/bs_nm/us_gm;_ylt=Aog.fcLPcsIkXW5msBlgGO7LLJ94




Now if they can only learn to make an affordable car/truck that can compete in quality with the foriegn models AND convince the American public to buy them, they might be onto something.


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## T_R_Oglodyte (Nov 21, 2008)

DG001 said:


> So here's my question - is the American car industry just going to disappear if they file bankruptcy?
> 
> I would have thought they would be like the airlines - filing Chapter 11 bankruptcies every few years, but still in business. They would also have the option of getting out of those union contracts (and bring smarter management on board?)
> 
> The other thing that bugs me about bailing out Detroit is that these companies have been horrible corporate citizens. They have spent money in fighting and lobbying against higher fuel efficiency, alternate fuel options, foreign competition and even public transportation instead of just building better cars.



That gets toward the crux of the issue.

If the automakers file Chapter 11 bankruptcies they can shed the onerous labor contracts that make their labor rates twice the rates paid by Asian automakers in their US factories.  A typical mid-sze car built by a Detroit automaker has about $2000 to $3000 of embedded labor cost that would not be there if labor rates were equalized. If you shave $2000 to $3000 off the price of a Detroit car - or add that much back into the car in added features or improved engineering - the U.S. auto industry will get a lot healthier in not much time.

At it's heart, the bailout isn't a bailout of the auto companies.  It's a bailout of the United Auto Workers union and a reward for mismanagement in Detroit.  

********

This issue is being pushed hard by Democrats because the UAW has been a long and loyal supporter of the Democratic party, and the Party is returning that favor by proposing to use public money to prop up those ill-advised labor agreements. It's just typical political largesse.  Almost every politician of every political stripe does the same thing for his or her favored constituencies - one person's tax break is another person's bailout.

In the words of the inimitable Nikita Kruschev: _“Politicians are the same all over. They promise to build bridges even when there are no rivers.”_


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## Icarus (Nov 21, 2008)

dougp26364 said:


> Now if they can only learn to make an affordable car/truck that can compete in quality with the foriegn models AND convince the American public to buy them, they might be onto something.



I think Ford does that already. But nobody is going to sway your opinion on this, Doug.

-David


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## normab (Nov 21, 2008)

Steve, 

You explained the crux of the issue well. 

Norma


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## geekette (Nov 21, 2008)

Carol C said:


> The mgmt saw all that market share going to Honda and Toyota for 20 years. Why didn't they take the cue and formulate a plan to re-tool plants and compete? (



BINGO.

I ran my business into the ground.  Help me or the common American worker gets hosed.  Oh yeah, and all the retirees we promised to keep paying - do you want the elderly to sink into poverty?

Dang, too bad I wasn't first to market with a not-better mousetrap.


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## beanie (Nov 21, 2008)

Icarus said:


> I think Ford does that already. But nobody is going to sway your opinion on this, Doug.
> 
> -David



I agree .the ford f-150 has been the best selling truck for years . I have owned 2 saturns , a ford galaxy ,a ford Ltd ( my first ! ) , a ford ranger , an odlsmobile ferenza , and now a ford focus and have loved everyone of them . my wife loved her chevy cavalier , her ford falcon , ford taurus , and now her ford escape . we have never owned nor plan to own any other cars that aren't made by the big 3 unless of course they go out of business and we are forced . it will be a sad day and our fathers will be turning over in their graves as thats all they bought and rasied us the same way . no doubt they have to change there ways and the airplane thing was crazy . I just think they opened up a can of worms when they bailed out AIG and wall st and I am torn on this .


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## rickandcindy23 (Nov 21, 2008)

Almost every Honda and Toyota car and truck gets 25+ MPG.  Most of the American cars don't get that kind of MPG.  That is the problem.  Why build Hummers and giant SUV's that guzzle gas, if the American people don't want them.  What is wrong with making smaller cars and making them more affordable to drive.  A company needs to be forward-thinking!  For crying out loud, who needs a car that could carry a soccer team?  

We rent cars a lot on vacation, at least 8 weeks a year, and since most of the cars are American made Chevys and Dodges, I avoid the little cars, like the Dodge Neons.  We rent mid-sized American cars because the gas mileage is no better for a Neon than it is for a Stratus.  It's just true.  Why give up the luxury of a larger car for the same MPG?  We have rented two Neons and both were barely getting 25 MPG.  Our last rental was a large car, a Chevrolet Impala, and it got 24 MPG.  Which would you rather ride in?  

Our Toyota Avalon gets way over 30 on the highway.  Going 90 miles to and from our daughter's house, our car gets an average of 42 MPG.  We are driving 60 MPH for maximum economy.  No American car has done that for us, and we have owned many American cars.  From now on, it is Toyota for us.   Next time, which is a long way down the road, it will be a Prius or whatever hybrid they are making.  I will take a small car to save gas, even if it stays cheap.  As long as there is room for a suitcase when we travel.  

We have a Nissan truck that it 12 years old and has 180K miles, and it hasn't had a single mechanical problem.   

American automakers need to figure out what people want and act quickly!  I wonder what they do make per hour?  What a crazy notion, that they might make $75 per hour for working an assembly line.  GEESH!


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## T_R_Oglodyte (Nov 21, 2008)

rickandcindy23 said:


> A
> 
> American automakers need to figure out what people want and act quickly!  I wonder what they do make per hour?  What a crazy notion, that they might make $75 per hour for working an assembly line.  GEESH!



What difference does it make if they figure out what people want if they have to charge 10% more for the same product? I don't think the problem is that the US auto companies haven't been able to figure out what people want.  The problem has been that their cost structure is too high.

+++++++

Think this through a minute.  Let's say that you're selling refrigerators, and that every full-size refrigerator you build and ship costs you $300 more than your competitors.  The market for full-size refrigerators ranges from simple models selling for $700 to large deluxe energy consuming units selling for $5000.

If you've got that $300 disadvantage, and you try to sell $700 refrigerators that you have to price at $1000 to be profitable, you're not going to succeed.  You're either going to sell at a loss, or you're not going to sell refrigerators.

What then is your option???  You focus on selling larger units, for which a $300 price difference isn't as significant.  When the refrigerator costs $3000, a consumer will be much more likely to buy a refrigerator based on the differences in features than the difference in price.

I submit that is exactly the situation in which the US automakers have found themselves.  They haven't developed cheap fuel-efficient vehicles because they put themselves in a situation in which they couldn't compete in that market.

********

To add an additional note of reality, now let's assume the government adopts rules that require you, as a refrigerator manufacturer, to sell a certain number of refrigerators in all size ranges, including sizes in which you lose money on every sale.  

What do you do then if you're a refrigerator manufacturer?  Don't you start to pay even more attention to wringing profitability out of those high end refrigerators from which you do make money, so that you can maintain profits while you're forced to subsidize sales of the cheaper units?


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## ricoba (Nov 21, 2008)

T_R_Oglodyte said:


> What difference does it make if they figure out what people want if they have to charge 10% more for the same product? I don't think it's a matter that the US auto companies haven't been able to figure out what people want.  The problem has been that their cost structure is to high.



That is concisely the problem.


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## Kal (Nov 21, 2008)

The events that severely hurt Detroit were first the high price of gasoline then followed by the sub-prime collapse of the financial industry. Otherwise, Detroit would have merrily built and sold giant pick-up trucks and huge SUVs. Then suddenly the wheels came off the auto industry.

It's interesting to note that this is not limited to Detroit, but also to foreign brands. The west coast is a MAJOR trans-shipment way station and there are foreign brands parked at the docks as far as the eye can see. Port facilities are searching for more land just to park the cars. Nothing is moving because the number of dealers have severely decreased across the nation AND no body is buying anything.

The difference is cash flow. Detroit has a huge overhead even if they shut the doors while the foreign brands have control of their bottom line. With this economy it will be a long time before automobile sales pick up. Even then, buyers don't have discretionary funds to continue to buy Detroits favorite design - big pick-ups and huge SUVs. It's a Catch-22 that won't go away until Detroit has totally new design line in the dealer's show room. What will that take? 3-4 years??? The taxpayers are not going to give them a free ride for 6-months much less many years.

Then too, the foreign brands are very smart and will do whatever it takes to maintain their market share or more.  They're not going to let a "New" Detroit cut into their gravy train.


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## T_R_Oglodyte (Nov 21, 2008)

ricoba said:


> That is concisely the problem.



And the solution is to let them go through Chapter 11 to shed that cost structure, just as the airlines did.  

If the cost structure isn't solved and the government does a bailout, when the bailout is done (if you're an optimist and think that would ever happen) the industry will still not be competitive, it will fail because it's not competitive (or the car companies will come back for another bailout) and all of the bailout money will have been flushed.


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## Icarus (Nov 21, 2008)

rickandcindy23 said:


> Almost every Honda and Toyota car and truck gets 25+ MPG.  Most of the American cars don't get that kind of MPG.  That is the problem.



I bought my Ford Escape Hybrid in May 2007, when gas was relatively cheap. It even came with a rebate.

How come nobody was buying them when gas was cheap and they had to offer rebates?

-David


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## dfjkl (Nov 21, 2008)

Everyone seems to miss the fact that many of the foreign manufacturers have actually opened up production in the US.  ....and on the same token, many parts on "American" cars are actually imported.  It's no longer as simple as "this is American."  The big 3 have been run so stupidly for the last 10-20 years that this is really no surprise.  GM thinking they could just start charging Cadillac prices for it's SUV's out of the blue and thinking everyone was just going to keep buying them was dumb.  I like my classic GM's and our Ford truck and my Mercury Marauder...but our last 2 purchases were for daily drivers...and we wanted reliability.  We bought a Scion tC and a Mazda 3.  So far so good.  Scion has a little over 50k and we just put new tires on it, Mazda is @ 32k...original tires sucked and had to be replaced and air conditioning leaves much to be desired...but overall, no other issues.


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## Icarus (Nov 21, 2008)

T_R_Oglodyte said:


> And the solution is to let them go through Chapter 11 to shed that cost structure, just as the airlines did.



Steve,

What makes you think they will be able to get DIP financing in the current market?

Banks aren't lending money to other banks, even though the Fed guarantees those overnight loans now.

I'm not disagreeing with you about the use of chapter 11 to restructure their contracts, etc, but there's more to it than just saying that they should file chapter 11.


------------

ok, let's see how I can fit this into this thread:

If they were all using Macs instead of PCs, we wouldn't have this cash flow problem.

-David


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## ricoba (Nov 21, 2008)

T_R_Oglodyte said:


> And the solution is to let them go through Chapter 11 to shed that cost structure, just as the airlines did.



I have a tendency to agree with the Chapter 11 ideas.  I thought the Mitt Romney Op/Ed piece in the NYT was quite good arguing in favor of Chapter 11.

But I am concerned that it may not work, and I believe we need to support what manufacturing jobs we have left here in the US.  The problem as you have noted earlier is management and labor have both unfortunately screwed up big time and sadly the poor guy or gal on the line is the one who is going to suffer, not the big bosses on either side.


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## Lawlar (Nov 21, 2008)

*What Do We Make?*



Autoeng said:


> Something to chew on here is that IF American car manufacturers went belly up there would be virtually no "Made In America" products anymore. ...
> 
> So that you understand this here is the situation that the company that I work for is in. Just about 1/3rd of our product is sold to US car manufactures. We manufacture manchines that move product. About 1/3 of our product supports companies who support US auto makers. If the first
> 1/3rd dries up then the 2nd 3rd is just going to cascade into the hole created.
> ...



Both sides of this argument have good points.  But these are difficult times and I'm not sure everyone in this country appreciates the trouble we are in.

We really need to remanufacture our industries and stop relying on foreign manufacturers and foreign money.  We can't have a prosperous country if our future jobs consist of sales positions at stores selling foreign products (and timeshares).  

Bankruptcy is a problematic solution.  There is no gurantee of what you will get when, and if, you come out.  It is like going through a divorce - there is a judge who is going to make the final decisions.  And a bankruptcy can involve a lot of fighting (think lawyers gone wild) between the various groups of creditors/shareholders/labor, etc.  And you can't simply cancel the labor contracts and think that the employees will show up and take whatever the new management offers.  There is nothing to prevent labor from going on strike.

Remember that the Japanese auto industry was protected by their government for many years.  Toyota doesn't have to pay health care benefits to its employees. Our auto industry has not been competing on a level playing field. 

Yes, we can let competition determine who will prevail.  But I have a bad feeling that our kids and grandkids will be unemployed because their jobs will be shipped off to Asia where people will work for 50 cents an hour.

Jbart74- I welcome your opinions.  There is probably a middle ground where the ideas from both camps would be best served.


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## dougp26364 (Nov 21, 2008)

Icarus said:


> I think Ford does that already. But nobody is going to sway your opinion on this, Doug.
> 
> -David



The 1998 Mustang I had really was a decent car as far as quality. The Tarrus we had sucked. Rotors turned twice for warping in 30,000 miles, sound system that needed work, two window motors that had to be replaced and a transmission the had to be replaced at 35,000 miles sealed the fate of that car. 

I had a Mercury Lynx back in the '80's that was a fix and repair daily. I liked the 1997 Contour but, the wife complained so much about driving a stick that I traded it for the '98 Mustang that was an automatic. 

The 1986 Escort EXP had a few issues but, I was drivig 25,000 miles/year. 

When we were test driving cars 3 1/2 years ago, Ford just didn't have anything that appealed to us. The Escape drove and road like a truck. A friend of mine did by the Escape and ended up getting a new engine at 15,000 miles. That made me glad I went with the Saturn Vue. 

So no, you'll have trouble convincing me that Ford makes a solid product. Past history is a mixed bag as far as I'm concerned. Especially when I know so many people with Honda's and Toyota's that aren't having issues.


----------



## ricoba (Nov 21, 2008)

dougp26364 said:


> So no, you'll have trouble convincing me that Ford makes a solid product.



I know they are not the cars for everyone, but my current Lincoln Town Car and our previous Ford Crown Victoria, are cars that can take a lot of miles, with minimum problems and you end up arriving in comfort. 

But sadly, the days of the big V8  battleship boulevard cruisers are soon facing their demise.


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## Kal (Nov 22, 2008)

Lawlar said:


> ...you can't simply cancel the labor contracts and think that the employees will show up and take whatever the new management offers. There is nothing to prevent labor from going on strike....


 
A labor strike might be the best solution.  That would substantially reduce overhead costs.  After 30 days people on strike would have to purchase COBRA health insurance so that alone would encourage negotiations.

Detroit would not have to manufacture cars they can't sell.


----------



## Liz Wolf-Spada (Nov 22, 2008)

I just saw an interesting segment on CNN on Toyota's cars in development,  high fuel economy etc. Looked fascinating. Honda plans to move ahead with their fuel cell cars.
Liz


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## craftemp (Nov 22, 2008)

*Auto Bailout*



T_R_Oglodyte said:


> That gets toward the crux of the issue.
> 
> If the automakers file Chapter 11 bankruptcies they can shed the onerous labor contracts that make their labor rates twice the rates paid by Asian automakers in their US factories.  A typical mid-sze car built by a Detroit automaker has about $2000 to $3000 of embedded labor cost that would not be there if labor rates were equalized. If you shave $2000 to $3000 off the price of a Detroit car - or add that much back into the car in added features or improved engineering - the U.S. auto industry will get a lot healthier in not much time.
> 
> ...




That is my take on this too!  I am furious to think that the taxpayer is supposed to bail out the auto makers.. while the unions/workers give up nothing.  It is time for the union to give back FIRST and for the CEOs to stop taking 28,000,000 paychecks!  Then go to the taxpayer!
I read that the CEO of GM (I think) works in Detroit but lives in California so takes the private jet back and forth every weekend
Where does this end??  When the COUNTRY is bankrupt???  It is time for everyone to be responsible for their own bad judgement and mismanagement!


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## ricoba (Nov 22, 2008)

craftemp said:


> I read that the CEO of GM (I think) works in Detroit but lives in California so takes the private jet back and forth every weekend
> Where does this end??



I believe that is Alan Mulally the CEO of Ford, and I think he flies home to Seattle every weekend.  

Of course this isn't just an auto makers thing.

Jay Leno & Barry Manilow fly home every night via private jet to Beverly Hills and Palm Springs respectively, after their nightly performance, then fly back again for the next nights performance.

Then too did you see the big shin-dig in Dubai upon the opening of the new Atlantis Hotel? I think I read that $28m was spent just to fly a bunch of celebs in on private jets, just to party for the night.

While I realize there is a lot of hypocrisy in the auto makers coming with cup in hand to DC for a bailout on private jets.  I just think that excess is unfortunately a sign of the times, in all sectors.


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## rickandcindy23 (Nov 22, 2008)

Rick, Jay Leno isn't asking for the government (the people ARE the government) to bail him out of his car problems.


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## ricoba (Nov 22, 2008)

rickandcindy23 said:


> Rick, Jay Leno isn't asking for the government (the people ARE the government) to bail him out of his car problems.



Oh, I know that, in fact, I was wondering when someone would point out that I didn't say it.   

My point was that excess, has simply become a way of life today, whether that's in the auto industry or entertainment or even in the lives of everyday folks.  

What seems to be happening is we as a nation are now in a terrible mess because lots and lots and lots of us wanted (or thought we needed) things we couldn't afford.  I don't exclude myself from this.  I just think our over spending has finally caught up with us.  While not everyone was the cause of the fix we are now in, many of us unfortunately contributed in one way or another. 

Speaking of Jay, who I do like, I always find it ironic when he puts himself in the shoes of everyday American's in his humor.  Somehow he is able to paint himself as "one of the everyday Joe's" on a salary of $16M++, per year!


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## rickandcindy23 (Nov 22, 2008)

Hey, Jay is a good guy!  

He stops and helps people on the highway with car problems, and he really is thankful that his comedy got him so far.  I have seen him interviewed, and the guy is very humble.  

I remember Johnny Carson talking about his trips to Ralph's.  Now that was funny!


----------



## dfjkl (Nov 22, 2008)

craftemp said:


> That is my take on this too!  I am furious to think that the taxpayer is supposed to bail out the auto makers.. while the unions/workers give up nothing.  It is time for the union to give back FIRST and for the CEOs to stop taking 28,000,000 paychecks!  Then go to the taxpayer!
> I read that the CEO of GM (I think) works in Detroit but lives in California so takes the private jet back and forth every weekend
> Where does this end??  When the COUNTRY is bankrupt???  It is time for everyone to be responsible for their own bad judgement and mismanagement!



I don't think most workers should really have to give up much.  The realities are workers in general have had to give up a lot over the years.  Maybe not the UAW as much as a lot of others...but really, if the execs are taking paychecks that huge, a few percent of that can pretty much take care of most worker "benefits."  The waste in most of these organizations is solely at the top.  GM in particular would have done much better if it retooled for the current market and didn't think every SUV it was selling was a Cadillac.  Even Ford has priced most of it's trucks better than GM for the last 10 years.  I don't buy that these guys have "security concerns."  That is b.s.


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## MILOIOWA (Nov 22, 2008)

Ok, here it goes LOL! First, let me say I am by no means saying that the us auto makers should be bailed out.
   I have worked in the industry at the dealership level since 1996. First of all, from then to now I have seen a 30-50% decrease in warranty repairs across the board. meaning that cars in fact are built better now than they have ever been. Also, there are just as many piece of junk Honda Accords, toyota Camry's and Nissan Altimas on the road as there are Ford Taurus, Chevy Impalas, and Dodge Caravans(well maybe more Dodges  ) The argument that the us makers should have quit making gas guzzling suvs doesnt hold water because that is what the majority of people were buying-UNTIL the worthless liberal media preached all this mumbo-jumbo about how we need to drive 4 cylinder fuel efficient cars, and along with the high gas prices sent people into a panic mode so they quit buying them. The car makers cannot change their production stratagies overnight and when everyone panics, due mostly to them being sheep instead of thinking for themselves and listening to the media. 
     Something else I find interesting is that whenever Ford or Gm have a recall it is plastered all over the news. Toyota has just as many recalls if not more, but do you ever read about them? very seldom. This country is the greatest country in the world. However many of the freedoms we enjoy, have also caused most of the problems we face today. No matter how you look at it, no matter why the car makers are in financial trouble, if they go under, then it will trickle down to millions of jobs in industries that you can't even imagine. Did you know that many of the parts suppliers that make parts for the big 3 also make parts for Honda and Toyota? If the big 3 cannot pay their suppliers, the suppliers are out of business and that means you r almighty Toyots cannot get parts to repair them either. There is just soo much more to this that the media will never tell because then there wouldnt be all this drama and arguing over things to sell newspapers. 


Oh yeah, whoever said they liked their 97 ford Contour, the Contour/Mercury Mistake is one of the biggest piles of garbage FoMoCo has ever produced!


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## dougp26364 (Nov 22, 2008)

Icarus said:


> I bought my Ford Escape Hybrid in May 2007, when gas was relatively cheap. It even came with a rebate.
> 
> How come nobody was buying them when gas was cheap and they had to offer rebates?
> 
> -David



I didn't consider it because the cost difference didn't equate to a real savings unless gas hit $5.00/gallon compared to the non-hybrid versions I was considering.

I would love to have a hybrid but, I would also like to keep my money in my wallet. I won't buy something that doesn't make sense. In March, our leases are up on our existing vehicle's. Once again I'll be looking at my options and I'll look at the higher milage vehicles including hybrids.

We've already shopped the Smart Cars and, for the price I really like them. However they require premium gas. That hurts when the MPG is only 30 something in town and 41 highway. I'll have to weigh the decrease use of gas compared to the increase cost for premium to see if I'll at least break even on the deal.


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## ausman (Nov 22, 2008)

You can put me in the camp of let the big 3 go.

However, I find the political response difficult to understand. Supposedly they should have been pushing public transportation options. They should have had an overall energy policy.

To put the blame on the auto makers when every suburban Mum wanted an SUV is passing the buck.


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## dougp26364 (Nov 22, 2008)

MILOIOWA said:


> .........Oh yeah, whoever said they liked their 97 ford Contour, the Contour/Mercury Mistake is one of the biggest piles of garbage FoMoCo has ever produced!



I guess it's a good thing I only owned it for maybe 18 months and put a few thousand miles on it before trading it in on the Mustang. It was fine while we owned it but I have noticed there are darn few of those cars on the road today, which has always made me think they probably weren't built to last.


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## MILOIOWA (Nov 22, 2008)

basham said:


> You can put me in the camp of let the big 3 go.
> 
> However, I find the political response difficult to understand. Supposedly they should have been pushing public transportation options. They should have had an overall energy policy.
> 
> To put the blame on the auto makers when every suburban Mum wanted an SUV is passing the buck.



Exactly. It is no different than any other business catering to what the consumer wanted. Only on the scale they operate on it is almost impossible to adjust quickly enough to changes in  the market. I honestly feel, considering the contracts they have to honor, and with what the unions have gouged them for, they have done all that they could be expected to do considering. I don't care if the gov't bails them out, or they file for protection, one way or another they have to survive and rebound or our whole country is in very big trouble.


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## Icarus (Nov 22, 2008)

dougp26364 said:


> I didn't consider it because the cost difference didn't equate to a real savings unless gas hit $5.00/gallon compared to the non-hybrid versions I was considering.



You calculated that on the price of the Escape or the Prius? How did you come up with $5 a gallon?

Anyway, case closed.

People don't want to pay more for cars that get better gas mileage. They read boards like these where people tell them they will never recoup the price difference at $1.89 a gallon.

-David


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## dfjkl (Nov 22, 2008)

MILOIOWA said:


> Exactly. It is no different than any other business catering to what the consumer wanted. Only on the scale they operate on it is almost impossible to adjust quickly enough to changes in  the market. I honestly feel, considering the contracts they have to honor, and with what the unions have gouged them for, they have done all that they could be expected to do considering. I don't care if the gov't bails them out, or they file for protection, one way or another they have to survive and rebound or our whole country is in very big trouble.



Unions can't "gouge" any company any more than their own executive management can.  I'd be willing to bet you that the cost of supporting just that handful of people at the top far outweighs the cost of supporting most of the workers.  It's those workers that actually make the product.  That seems to get lost on those who run to the execs defense.

...and as far as the market, they still didn't adapt to it well.  Toyota and Honda both managed to capitalize on reliability AND introduce SUVs to take advantage of that market segment also.  They managed to be nimble where the US automakers did not.  I'm not saying that they should be forced to close...but unlike the last big bailout...there should be many strings attached...they shouldn't just get free money.  ....and it shouldn't have to be the workers that take the biggest hits.  They are already getting hit in every single other market segment (as are the average guys everywhere).  

I know the most die-hard US automaker fans that have seen those old little Toyota pick-ups beat into the ground that have come away with their minds changed.  The realities are the examples of US cars that have had the same kind of longevity are generally few and far between.  I do give my '96 T-Bird I had credit for making it to almost 200K (before it got t-boned) but it did have to have a 2nd transmission in it to make it (and it burned oil and leaked anti-freeze).  Even my Marauder brand-new was out of alignment and needed to have the shift cable adjusted to reliably grab park.  Our Scion...ZERO issues.  We've put a set of tires on it, had oil changed, and put gas in it.  That's it.  Not saying I don't like any vehicles from the big 3, but when it came down to daily drivers that were going to rack up the miles @ 60-80mi/day...well...the "econo-box" versions from the US automakers were low on the list.  Reliability and features for the $ did not make them all that appealing.  We still own 2 Ford products and a classic GM product though....and would hate to see them go.  But then again...I'm sure there are many people who still wish AMC was in business as it's old self too.


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## Kal (Nov 23, 2008)

MILOIOWA said:


> ....The argument that the us makers should have quit making gas guzzling suvs doesnt hold water because that is what the majority of people were buying-UNTIL the worthless liberal media preached all this mumbo-jumbo about how we need to drive 4 cylinder fuel efficient cars, and along with the high gas prices sent people into a panic mode so they quit buying them. The car makers cannot change their production stratagies overnight and when everyone panics, due mostly to them being sheep instead of thinking for themselves and listening to the media....


 
I think you're on to something here! Just tell the "worthless liberal media" to tell all the sheep to start buying cars, especially the gas guzzling SUVs. Then everything will be fine.

I'll bet that would work to solve the mortgage crisis too. Just have the liberal media tell the sheep to start buying houses.

But if SUVs aren't selling, doesn't that have the same effect on the foreign made brands too? There must be something unique with Detroit as the foreign brands aren't near bankruptcy. Hmmmmm.


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## Icarus (Nov 23, 2008)

Kal said:


> I think you're on to something here! Just tell the "worthless liberal media" to tell all the sheep to start buying cars, especially the gas guzzling SUVs. Then everything will be fine.



 

:rofl:

Do you know what the definition of "worthless liberal media" is? Anybody that questions or doesn't agree with the politics and/or beliefs of the person using the phrase "worthless liberal media".



-David


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## Kal (Nov 23, 2008)

The antonym is "valuable narrow-minded media".


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## Charlie D. (Nov 23, 2008)

Kal,

I think you’re on to something.  If the so-called worthless liberal media can get its sheep to buy American autos and Rush can get his sheep to buy American autos, the American automobile companies can get through this!!

Charlie D.


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## Icarus (Nov 23, 2008)

ok, so which media can convince the banks to start lending again?

-David


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## Kal (Nov 23, 2008)

Icarus said:


> ok, so which media can convince the banks to start lending again?
> 
> -David


 
That's easy - CNBC and the Murdoch Street Journal.


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## dougp26364 (Nov 23, 2008)

Icarus said:


> You calculated that on the price of the Escape or the Prius? How did you come up with $5 a gallon?
> 
> Anyway, case closed.
> 
> ...



I believe I calculated those numbers on the Prius. When I ran my numbers, to make it work out letting my Vue go back and buying the Prius, gas would have to be near $5.00/gallon to break even on the additional price/cost of the Prius. The problem is I just don't drive that many miles so the savings isn't there.

Now, if I was putting 15,000 miles per year on a car, which as I understand it is pretty much average, the cost per gallon would be a considerably lower break even point. 

I have time to mull things over and I'd really like to have a car that's easier on the environment, even if the cost doesn't really work out. Sometimes what I want is more important than what makes the most dollar sense for me. My wife REALLY likes those smart cars. They're inexpensive enough that I might just buy one to make her happy.


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## Icarus (Nov 23, 2008)

dougp26364 said:


> The problem is I just don't drive that many miles so the savings isn't there.



ok, I get it. Thanks for the explanation.

I was wondering because when I bought my FEH, the price difference after the rebate wasn't that much. I traded in a 2000 Ford Explorer which, at best, got around 18 or so for me. My FEH gets around 29.5 for me on average according to the display in the car. I don't drive that many miles per year either, but that really wasn't part of the equation for me.

I don't know if I'd get that Smart car or not, Doug. Take a look at the Honda Fit or something like that instead.

-David


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## dougp26364 (Nov 23, 2008)

Icarus said:


> ok, I get it. Thanks for the explanation.
> 
> I was wondering because when I bought my FEH, the price difference after the rebate wasn't that much. I traded in a 2000 Ford Explorer which, at best, got around 18 or so for me. My FEH gets around 29.5 for me on average according to the display in the car. I don't drive that many miles per year either, but that really wasn't part of the equation for me.
> 
> ...



The Smart Car probably isn't the smartest choice (no pun intended) when comparing to other economy model's. At 31 MPG in the city and requiring premium gas, I can see that it might not be the best choice for fuel economy out there. 

Still, they have been relativiely popular in Europe from what we saw when we were in Italy, and they were surprisingly comfortable when we shopped them in Palm Beach, FL earlier this month. I was really surprised by the comfort and leg room provided. I would say it's strictly a town car though as I don't believe this tiny thing would work well drivng long distances on the highway. They also have particular requirements for someone to work on them and they can't just be taken anywhere for even a simple oil change. 

I really equate them to the VW Beatle of the 60's. They may be popular for a time and end up with a fond place in people's memory but, the newer technology and comfort of cars like the Honda Fit may already have made them obsolete before they really get started. If the price of Gas remains low, I don't see them really ever taking off here.


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## DebBrown (Nov 23, 2008)

Speaking of the Honda Fit... (Somebody was, right?)  we bought one earlier this year for our son.  I looked hard at the Prius but it was $10k more and even with the price of gas, was beyond our budget.  The Fit was an ideal addition to our family.  I had given up my minivan a few years ago and really like the hatchback and fold down seats on the Fit for hauling stuff.

Many Smart cars have popped up in our neighborhood but, man, they are so tiny.  There is no room for passengers or much more than a few bags of groceries.

Deb


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## MILOIOWA (Nov 23, 2008)

Obviously I am dealing with far superior intellect here. I guess I should start listening to CNN and Fox News before making any decisions in the future. Thanks for the enlightenment.


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## Icarus (Nov 23, 2008)

MILOIOWA said:


> Obviously I am dealing with far superior intellect here. I guess I should start listening to CNN and Fox News before making any decisions in the future. Thanks for the enlightenment.



:rofl:

You are the one who said that people stopped buying big American made gas guzzlers because of a conspiracy of the so-called worthless liberal media.

Somehow, I seriously doubt that any post here is going to enlighten you to form your own opinions, do your own research, and stop blaming the media for our problems.

-David


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## Icarus (Nov 23, 2008)

Doug .. here's a picture of the European version of the smart car I took in Paris in 2006. It's good for city parking in tiny spots.

Sometimes we saw them parked perpendicular to the curb.

I know the US version is a little different.






-David


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## Liz Wolf-Spada (Nov 23, 2008)

My son, who lives in San Francisco, bought a real junk car and it needs more work than it's worth. I asked him about the Smart Car, because they're not expensive and they make parking easier. He said he drove one and the lack of instant acceleration scared him. He's someone who insists on a manual for that reason also.
Liz


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## dougp26364 (Nov 24, 2008)

Icarus said:


> Doug .. here's a picture of the European version of the smart car I took in Paris in 2006. It's good for city parking in tiny spots.
> 
> Sometimes we saw them parked perpendicular to the curb.
> 
> ...



We saw a ton of them in Italy. They'd park 3 or 4 of them perpendicular to the curb in one parking spot. The dealership we went to in FL had them parked two to a parking stall end to end. I believe they had issues with US safety and emission standards in getting them across the pond. I don't know if the MPG is the same or not.

The car is essentially all plastic except for the passenger frame/cage. The panels are plastic and, if you want a different color, you can have the panels changed out in about 2 hours.

They are interesting cars and my wife is in love with them. Personally, I'm not convinced but, they are neat little cars.


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## dougp26364 (Nov 24, 2008)

Liz Wolf-Spada said:


> My son, who lives in San Francisco, bought a real junk car and it needs more work than it's worth. I asked him about the Smart Car, because they're not expensive and they make parking easier. He said he drove one and the lack of instant acceleration scared him. He's someone who insists on a manual for that reason also.
> Liz



The transmission is the one thing I really don't like about this car. It's a manual/automatic. As it was explained to me, there is no clutch but, in order to get the transmission to shift, when you hit a certain point you have to let off the gas and let the transmission go to the next gear. This is a lot like a manual but, there's no clutch. 

I don't see this car as a great highway car but more of a town car. I haven't driven one but I could see this little car having issues with power getting out onto a freeway.


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## ricoba (Nov 24, 2008)

dougp26364 said:


> I could see this little car having issues with power getting out onto a freeway.



I have had more than one of them pass me on the freeway, while I was doing 65+ MPH! 

But I do agree that they would be a better car around town.  On a road trip, I would prefer my Lincoln Town Car!


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## Carol C (Nov 24, 2008)

I heard an auto industry expert interviewed on CNN a couple days ago, and she had an interesting idea. She thinks the giant oil companies that are making record profits should be the ones to bailout the auto companies. After all, the oil giants like Exxon Mobile made huge profits thanks to the Big 3 producing primarily gas-guzzling vehicles. Makes sense to me that big oil should help big auto stay afloat!


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## ricoba (Nov 24, 2008)

Carol C said:


> I heard an auto industry expert interviewed on CNN a couple days ago, and she had an interesting idea. She thinks the giant oil companies that are making record profits should be the ones to bailout the auto companies. After all, the oil giants like Exxon Mobile made huge profits thanks to the Big 3 producing primarily gas-guzzling vehicles. Makes sense to me that big oil should help big auto stay afloat!




Not sure if that could or would work in the real world, but the idea does have a certain appeal to it.


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## dougp26364 (Nov 24, 2008)

ricoba said:


> I have had more than one of them pass me on the freeway, while I was doing 65+ MPH!
> 
> But I do agree that they would be a better car around town.  On a road trip, I would prefer my Lincoln Town Car!



Going down hill or up? With or without a tail wind?


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## pedro47 (Nov 24, 2008)

basham said:


> You can put me in the camp of let the big 3 go.
> 
> However, I find the political response difficult to understand. Supposedly they should have been pushing public transportation options. They should have had an overall energy policy.
> 
> To put the blame on the auto makers when every suburban Mum wanted an SUV is passing the buck.



When you let the big three (3) go.  You will be looking at adding approx 300,000 to the unemployment lines.  Plus, you will be adding to many American losing their homes.   

How can you give American Tax dollars to Wall Street and not to the harding working blue collars middle class Americans.

DO YOU WANT THE UNEMPLOYMENT RATE TO HIT 25 % IN AMERICA LIKE IN THE GREAT DPRESSION?

This is my opinion only.


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## Dave M (Nov 24, 2008)

*With my moderator hat on....*

This thread is running into dangerous ground - because discussion of politics and/or contentious social issues is not permitted on these forums. 

It's okay to discuss the mechanics of an actual or possible bailout, but if your comments would be more contentious than that, please refrain from posting here. That includes responding to any of the recent posts that fall into that category. Let it be.


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## Lawlar (Nov 24, 2008)

*L A Car Show*

On a positive note, I just got back from the L.A. Car Show.  GM had a lot of good looking cars.  

The plug-in Volt (and they had a Saturn plug-in) looked good, but I'm not sure they will be able to bring it out at a price that will sell.

The Camero is a winner.  The new Mustang looked great (I want one of those).

Unfortunately, those pesky Japanese had some really hot cars as well.

No matter how this all turns out, there are some really great new cars coming - and lots of alternative energy cars (I really think the idea of using natural gas - that you can pump from your own garage is promising - and they had one at the show, but alas, it wasn't made by one of the big 3).


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## ricoba (Nov 24, 2008)

Lawlar said:


> (I really think the idea of using natural gas - that you can pump from your own garage is promising - and they had one at the show, but alas, it wasn't made by one of the big 3).



I remember clearly when BC Hydro( the Provincial gas company) was at the Vancouver Auto show, touting this idea.  That was in the mid 1980's!  

I thought it was a great idea then and I think it's a great idea now, so what the heck is taking so long for this to happen?

My gas meter sits right next to my parking space, talk about convenient.  So why can't I get this at home through SoCal Gas?  I guess only the pencil pushers know for sure.  

But if this option was available to me, I would definitely get it and I would either convert my current cars or buy cars with the technology built in. 

Natural Gas is a natural for North America, we have lots of it and it's still relatively cheap.  I am all for getting on the natural gas bandwagon....where do I sign up??


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## Liz Wolf-Spada (Nov 24, 2008)

I had heard that if the Big 3 went the combined job loss including suppliers and tangential workers would be more like 2.5 Mil.
Liz


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## dougp26364 (Nov 24, 2008)

pedro47 said:


> How can you give American Tax dollars to Wall Street and not to the harding working blue collars middle class Americans.




EDIT: Sorry Dave, not certrain if I'd have crossed a line with this post but, why take a chance. I self edited to try to stay in bounds.


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## JudyS (Nov 24, 2008)

The Big 3 know that there is a market for smaller, more reliable cars.  The problem is, their labor costs are so high that they can't compete with the Toyotas of the world.  So, they have focused on light trucks and on large SUVs, which the foreign automakers mostly don't make (because there's no market for them in their home countries.)  But when gas prices soared this summer, people stopped buying SUVs. Gas prices are down now, but no one can get credit, so buying hasn't picked up.  

A Big 3 bankruptcy would be a disaster, not only for the auto industry, but for the Great Lakes region, and for the US economy as a whole.  Michigan, Ohio, and several of the other Midwest states would probably go bankrupt if the Big 3 failed.  And, a bankruptcy of one of the Big 3 would cause huge numbers of other businesses to fail.  It's not just the Big 3 who would go down -- so would their dealers, suppliers, the stores and restaurants located near Big 3 plants, and many of the banks who loaned money to the Big 3 (and to their dealers and suppliers and to nearby stores and resturants.)  Plus, there could be a chain reaction in the auto industry -- if a supplier gets, say 50% of their business from GM but also supplies critical parts for other automakers, and GM defaults, the supplier might go under and the other automakers wouldn't be able to get parts -- not just Ford and Chrysler, but all the other automakers as well.

It should be pointed out that a bankruptcy of one of the Big 3 would likely be a Chapter 7 liquidation, not a Chapter 11 reorganization like we saw with the airlines.  In a recent survey 84% of Americans said they would not buy a car from a bankrupt automaker.  Plus, with the credit freeze, a bankrupt automaker might be unable to get the credit needed to reorganize, which would mean they'd have to close their doors.  And, even a successful Chapter 11 reorganization would mean suppliers would likely go unpaid for a long time,  and bankrupt suppliers means no parts to make new cars with. 

Also, the psychological impact of seeing large numbers of Americans lose their jobs would likely make many people fearful for their own jobs (even more than they already are), which would cause people to hoard money rather than invest or spend it (even more than they already are.)  Depressions are largely caused by psychological factors, and seeing a million or so more Americans unemployed could be the tipping point that causes World Depression II. In fact, I just had an online column published by the Detroit News on this issue, it's at http://www.detnews.com/apps/pbcs.dll/article?AID=2008811240308

So, what should be done?  I think Congress should offer a loan program for the Big 3, but with major concessions from both management and unions that would be similar to what they would have to give up under a Chapter 11 bankruptcy.  Depriving shareholders of their equity (which would also happen in Chapter 11), is harder to do with a loan program, but currently, GM stock is worth almost nothing, so to some extent that has already happened. Also, to avoid rewarding stockholders, a loan program could require the Big 3 to stop paying dividends for a number of years, and also require repayment terms that would allow US taxpayers to benefit if the Big 3 returned to profitability. Essentially, it would be similar to Chapter 11, but with the government as the "debtor-in-possession" that provides the restructuring capital.  Everyone could benefit from this -- the UAW workers would still have jobs (albeit at lower salary and benefit levels),  the economy would be spared a huge disruption, the shareholders would get some equity left (and these days, the shareholders of GM include many ordinary Americans with 401ks or IRAs).  Plus, taxpayers might actually make a profit -- the US Government made something like 30% profit on the Chrysler bailout loan in the 1980s. 

It really doesn't matter who's to blame for the Big 3's problems; the bottom line is, if they fail, the whole economy will suffer.


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## MILOIOWA (Nov 24, 2008)

JudyS said:


> The Big 3 know that there is a market for smaller, more reliable cars.  The problem is, their labor costs are so high that they can't compete with the Toyotas of the world.  So, they have focused on light trucks and on large SUVs, which the foreign automakers mostly don't make (because there's no market for them in their home countries.)  But when gas prices soared this summer, people stopped buying SUVs. Gas prices are down now, but no one can get credit, so buying hasn't picked up.
> 
> A Big 3 bankruptcy would be a disaster, not only for the auto industry, but for the Great Lakes region, and for the US economy as a whole.  Michigan, Ohio, and several of the other Midwest states would probably go bankrupt if the Big 3 failed.  And, a bankruptcy of one of the Big 3 would cause huge numbers of other businesses to fail.  It's not just the Big 3 who would go down -- so would their dealers, suppliers, the stores and restaurants located near Big 3 plants, and many of the banks who loaned money to the Big 3 (and to their dealers and suppliers and to nearby stores and resturants.)  Plus, there could be a chain reaction in the auto industry -- if a supplier gets, say 50% of their business from GM but also supplies critical parts for other automakers, and GM defaults, the supplier might go under and the other automakers wouldn't be able to get parts -- not just Ford and Chrysler, but all the other automakers as well.
> 
> ...



Thank You! That is probably the best post I have seen yet addressing this issue.


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## pedro47 (Nov 25, 2008)

MILOIOWA said:


> Thank You! That is probably the best post I have seen yet addressing this issue.




I agree with you 100 %.


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## dougp26364 (Nov 25, 2008)

Didn't Chrysler file bankruptcy several years ago without it being a liquidation fire sale? If so, that certainly didn't seem to ruin the economy. Anyone remember AMC? How about Jeep? Granted they're not as big but neigther of those losses tanked the economy.


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## beanie (Nov 25, 2008)

20 billion to citigroup but thats OK because theres no union to blame


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## Autoeng (Nov 25, 2008)

beanie said:


> 20 billion to citigroup but thats OK because theres no union to blame



They already got 25, they want another 20...


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## DG001 (Nov 25, 2008)

basham said:


> To put the blame on the auto makers when every suburban Mum wanted an SUV is passing the buck.



OK, I want to stand up for the suburban Mom with the huge SUV. *I admit it *- I want a big ol' sleek boat where everyone fits in comfortably! I WANT the great height and the super pick up and the big V6 (or even V8) engine purring as I speed along my recently paved and gleaming six-lane highway!

I have lived in Europe and Asia and I have been on and driven plenty of little cars with tires smaller than my bike's. Those cars are *not* fun to drive most of the time. I have a big old 4Runner and I love it!

The way I see it - America and the American way of life is based on innovation. It is up to American companies using their talent and intellect to come up with a way to let me do it economically even with high gas prices and without hurting the environment. 

All these companies should be spending millions on making sure I can drive my SUV with a big engine and all the luxuries and with no impact on the environment. That is what R&D is all about. 

Go Tesla! I am waiting for their $35K offering! - but my point is that the real reason to be disappointed with Detroit is that they have fundamentally ignored or worse - tried to stamp out companies like this. Toyota and Honda have at least gone and taken the first steps towards this!


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## Icarus (Nov 25, 2008)

beanie said:


> 20 billion to citigroup ...



I didn't read the articles yet, but what I heard was that the bigger thing is that the Fed will guarantee $308B of Citigroups troubled loan portfolio.

The $20B is peanuts, and I think they get preferred stock for it. But I haven't read the details yet.

IMO, Citigroup should be broken up eventually. They have always had problems, and it's just not managed well, like Wells Fargo or JPM Chase.

-David


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## craftemp (Nov 25, 2008)

*Bailout*



JudyS said:


> So, what should be done?  I think Congress should offer a loan program for the Big 3, but with major concessions from both management and unions that would be similar to what they would have to give up under a Chapter 11 bankruptcy.  Depriving shareholders of their equity (which would also happen in Chapter 11), is harder to do with a loan program, but currently, GM stock is worth almost nothing, so to some extent that has already happened. Also, to avoid rewarding stockholders, a loan program could require the Big 3 to stop paying dividends for a number of years, and also require repayment terms that would allow US taxpayers to benefit if the Big 3 returned to profitability. Essentially, it would be similar to Chapter 11, but with the government as the "debtor-in-possession" that provides the restructuring capital.  Everyone could benefit from this -- the UAW workers would still have jobs (albeit at lower salary and benefit levels),  the economy would be spared a huge disruption, the shareholders would get some equity left (and these days, the shareholders of GM include many ordinary Americans with 401ks or IRAs).  Plus, taxpayers might actually make a profit -- the US Government made something like 30% profit on the Chrysler bailout loan in the 1980s.
> 
> It really doesn't matter who's to blame for the Big 3's problems; the bottom line is, if they fail, the whole economy will suffer.



This is basically what I said ... only you said it sooooo much better.
I wish our congressmen and senators could read this.. maybe some common sense would enter their heads!
Thanks for the post


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## JudyS (Nov 25, 2008)

craftemp said:


> ....
> I wish our congressmen and senators could read this.. maybe some common sense would enter their heads!
> Thanks for the post


Thank you, and also thank you Pedro and Miloiowa for complimenting my post!  I did actually send my Senators & Representative my essay (the one I linked to in my last post) about the effects of a Big 3 failure on consumer confidence and unwillingness to spend.  But, the response was discouraging. All I got back was a form letter from my Senators. I got nothing at all back from my Representative, John Dingell, whose staff I guess was preoccupied by his losing his committee chairmanship.  I know they are already 100% in favor of a bailout (they're from *Michigan*), but I hoped I'd give them some arguments they hadn't thought of before -- I seem to be the only person around Detroit making the argument that massive layoffs in any industry would make millions of still-employed Americans hoard money (and money hoarding is one of the main things that trigger depressions.)

It's really great to have people here appreciate my writing!  Since I just had an essay published locally about the auto companies, I won't try submitting another one right away. But, I'll see about reworking my post here and submitting it as a newspaper commentary next month, when Congress will be discussing a possible bailout again.


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## JudyS (Nov 25, 2008)

dougp26364 said:


> Didn't Chrysler file bankruptcy several years ago without it being a liquidation fire sale? If so, that certainly didn't seem to ruin the economy. Anyone remember AMC? How about Jeep? Granted they're not as big but neigther of those losses tanked the economy.


No, Chrysler did not file bankruptcy. They were running out of money in 1979, but were rescued by a loan from the Federal government. As I mentioned in my last post, that loan was repaid with interest.  (In the interests of full disclosure, I don't know offhand if US taxpayers got a good return or not on the loan after inflation was taken into account.  They certainly got their principle returned, though.) 

AMC and Jeep didn't go bankrupt, either.  Both of them were acquired by Chrysler. Chrysler still produces vehicles under the Jeep nameplate. They stopped using the AMC brand name, but I believe they kept most (maybe all) of the AMC factories. So, AMC and Jeep were mergers, not bankruptcies. 

Having a merger of two of the Big 3 would be OK, I think. In the long run, it would probably make the auto industry more efficient. In the short run, there would be some layoffs, but nothing like with a liquidation would cause. The problem is, all of the Big 3 are close to bankruptcy, so a merger wouldn't help -- the new merged company would be just as bankrupt as the older two were. One proposal floated by GM was that the government lend them money to fund a merger with Chrysler, but the government turned them down.  

I understand that many people are angry with the auto companies, and feel their problems are their own fault.  But, letting one or more of the Big 3 liquidate would be so harmful to the economy that it would be a case of "cutting off your nose to spite your face." There are ways of making the Big 3 change, and even of punishing them for their past mistakes, without letting them go completely under.


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## Phill12 (Nov 25, 2008)

I am a retired union worker for 30 years and retired 2006 on disability and I don't have half the retirement plan these car workers have in their retirement.

 Auto companies when doing well gave away the store and now with Honda and Toyota here they can not compete. 

 Union is making cuts and that is good but bottom line is the unions don't decide what cars to build and the big three have been making to many cars each year and the wrong type of cars.

 There is a place for suv's and trucks and the F150 and I owned one for years . If they stop making these trucks we couldn't pull our boats to the lake. 

 Problem is these companies could have started 10 years ago to go the way of Honda and Toyota and wouldn't think of it.

 We need to try and keep Ford and Gmc but must have strong rules with the money.

 I love the fact at the meetings it came out that GMC is spending billions to build new car plants in Russia but need tax payers money here. 

 I would make all three of these guys leave their high paying jobs that they have failed at and also bring all cars to be built back here to the USA. I want to see old slogan (MADE IN AMERICA BY AMERICANS) again!

 You want our money then bring back America's jobs to America!


 PHIL


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## Liz Wolf-Spada (Nov 25, 2008)

Whoa! I hadn't heard that our "American made cars" were going to be completely made in other countries.  I agree with you, Phil, if you want loans, tax breaks etc., keep the jobs and your business here. Most Japanese cars are made here, employing American workers.
Liz


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## Jbart74 (Nov 27, 2008)

Just a side note.  I bought my first American car, a 1990 LeSabre from my neighbor about a year ago.  I travel by air to most of my work, so i use it to go the grocery store, gas station, and the occasional 30 mile trip to some local work when I am home.  Let's say 2500 miles/year.  It's a great car.  

I got rear ended today on the highway coming home from the train station after a trip to NYC for my best friend's 30th birthday party.  I was hit from behind by a tiny Mazda, and pushed into a Honda.  So, i was in the middle of the event.  The Mazda was basically totaled.  Luckily I reacted quickly and pressed hard on the brake so the Honda in from of me was minimally damaged.  But my damn Buick Tank was completely unscathed!  I mean, totally fine, front and back.  How awesome is that?  Okay, My liscense plate holder in the back fell apart and the plate fell off.  But that's it.  I've always hated American cars, but I am safe and sound, and so is my car.

Everyone else involved was uninjured as well...  Thanks be to the baby jesus, or mohamadad, or whatever.  I call it Karma.


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## ricoba (Nov 27, 2008)

Jbart74 said:


> Everyone else involved was uninjured as well...  Thanks be to the baby jesus, or mohamadad, or whatever.  I call it Karma.



Or you can thank the gods at GM for still making battleship boulevard cruisers, that can hold up like a tank!


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## IngridN (Nov 27, 2008)

ricoba said:


> Or you can thank the gods at GM for still making battleship boulevard cruisers, that can hold up like a tank!



Must be pre-1994!  My '94 Camaro is nothing but fiberglass.  DH had the trunk open when backing out of the garage and the hatchback just about fell apart!

Ingrid


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## Jbart74 (Nov 27, 2008)

IngridN said:


> Must be pre-1994!  My '94 Camaro is nothing but fiberglass.  DH had the trunk open when backing out of the garage and the hatchback just about fell apart!
> 
> Ingrid




Yup.  I'm kicking it old school style with a 1990 model.  Only 140,000 miles and going strong!


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## RDB (Nov 27, 2008)

Liz Wolf-Spada said:


> ... keep the jobs and your business here. Most Japanese cars are made here, employing American workers.
> Liz



Where does the profits wind up?


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## bogey21 (Nov 28, 2008)

Icarus said:


> They want a loan. They aren't asking for a handout. (Though I'm sure that some people will argue that a loan is a handout.)



*A loan becomes a handout when it isn't repaid!*




> The corporate jet thing is ridiculous. They should have chartered a commercial jet like the president elect did.



*No, they should have flown to Washingtion like the top Republican on the Committee does.  Senator Shelby commutes from Alabama using Southwest Airlines.*

GEORGE


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## bogey21 (Nov 28, 2008)

Icarus said:


> People don't want to pay more for cars that get better gas mileage. They read boards like these where people tell them they will never recoup the price difference at $1.89 a gallon.



I agree, but note that my second car, a 2000 Ford Escort that gets about 30 mpg, went up in value about $1,000 when gas hit $4 per gallon.

GEORGE


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## bogey21 (Nov 28, 2008)

I just reread my last post.  Isn't it interesting that Ford was selling a car in 2000 that got almost 30 mpg city and 33 mpg on the highway.  IMO they should have just brought back the Escort and saved the millions they put into developing hybreds, etc.

George


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## Deb from NC (Nov 28, 2008)

Any thoughts on what would happen to Volvo if Ford goes under?  (My understanding is that Ford owns Volvo, correct ?  )  I've been pondering buying a used Volvo and wonder if I should be worried....


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## Icarus (Nov 28, 2008)

Deb from NC said:


> Any thoughts on what would happen to Volvo if Ford goes under?  (My understanding is that Ford owns Volvo, correct ?  )  I've been pondering buying a used Volvo and wonder if I should be worried....



Volvo is an asset they can sell, if necessary.

I wouldn't worry about it. If that used car makes sense, buy it, if you want to. I'm sure you will be able to get parts for it no matter what happens, and there's plenty of mechanics that work on them.

-David


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## Icarus (Nov 28, 2008)

bogey21 said:


> I just reread my last post.  Isn't it interesting that Ford was selling a car in 2000 that got almost 30 mpg city and 33 mpg on the highway.  IMO they should have just brought back the Escort and saved the millions they put into developing hybreds, etc.
> 
> George



I don't know what the new EPA estimates would be on the Escort, but the Focus gets a combined 28MPG using the new form of EPA estimates, which is pretty good. The Focus is a nice car.

http://www.fueleconomy.gov/feg/noframes/24824.shtml

Interesting to note that the new EPA mileage estimate is about the same for the Toyota Corolla.

http://www.fueleconomy.org/feg/noframes/24320.shtml

Like I said earlier in this thread, Ford makes some pretty decent vehicles.

-David


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## kpitch (Nov 29, 2008)

I wish as much publicity was given to the pork barrel projects that are subsidized by the government every year.   We, as taxpayers, should be as concerned about the free money given to legislators' interests that impact a minimal number of people.  JMHO

Kathy


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## Liz Wolf-Spada (Nov 29, 2008)

I don't know about the profits for foreign car companies, but a lot of Americans own stock in foreign countries, so maybe it's pretty much a world wide market these days.
Liz


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## pwrshift (Nov 29, 2008)

I'll have to ask my driver what mpg my Maybach gets.  

http://www.maybachusa.com/maybach-video.php


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