Can the U.S. Auto Industry Be Saved?

Is this also be Toyota we're talking about?

Do you mean saved or transformed?

If you follow the logical path outlined by some politicians we will all driving Zaporozhets soon, comrad.

maybe if they started to make cars that people want?

maybe if they started to make cars that people want?

They do... The "Big 3" are doing quite well overseas (that is, everywhere but the US). There are many cars they build and sell abroad which are doing well and would do well in the US but they are not allowed to sell them in the US because of various pieces of legislation - most of which is environmental.

I have heard that GM has a small diesel passenger car that is selling very well abroad but they can't sell it in the US because of emissions standards (even though it gets around 50 or 60 mpg...).

I cringe when I hear talk of Washington "bailing out" the auto industry (or any other industry for that matter. As with the "mortgage and housing "crissis"", a large part of the auto industries problem IS Washington. It was Washington which pressured lenders into making loans to people who could not qualify (to end so called "red lining"... when a large number of applicants from a part of town can't qualify and are turned down housing activist's call it red lining regardless of the fact they don't have enough income and too much debt to qualify in the first place). In terms of the auto industry, the primary culprit has been the CAFE standards. It is very easy for a blow heart congressman or senator to pull a number out of their hat and demand the fleet averages meet or exceed the number. If a CAFE standard of 30 mpg is good, why not 40 or 50? And if 30 mpg is good, wouldn't an CAFE standard of 60 mpg be twice as good?

(The same logic applies to the minimum wage. If a minimum wage of $9 an hour is good, why wouldn't $18 an hour be twice as good? Why stop at $18? Let's go for broke and try $36 an hour?)

Travis, who is no fan of governmen with it's finger in every pie.

And yes, I believe soon we will wake up in the USSA - the United Socialist States of America. We seem to be going down this road at break neck speed as is.

This inuiry appears to be a spin off to a similar one a week or so ago when it was asked if Government should bail out the car companies.

My response to this question is same as I offered for the other one: a resounding No!

Car companies have been going out of business for over 70 years, some of them were the most highly respected name plates in the history of he automobile, Duesenberg amongst them. They all went away for the same reasons: bad management or inability to compete. How does a merger solve that?

What is needed to make the companies prosper is a lesson in survival. Only then will they take a close look at the underlying paradigm that caused the failure.

The American Car industry is myopic to say the least. They've been ignoring all the indicators that something was wrong, not the least being a steady loss of market share, for the last 40 years. How does a merger solve that?

How does combining the stagnant design and marketing of two failures into one big failure solve anything?!

L. J.

>How does combining the stagnant design and marketing of two failures into one big >failure solve anything?!

- and - = + perhaps?

Making something from nothing requires a level of meditation not widely appreciated in Western cultures, much less achieved.

Most over here are in too much of a rush to get somewhere.

Sadly, we've corrupted elements of your culture with it too.

L. J.

Ironically it's not the leaders whose designs are not stagnant. But they have always been good at catching up in style.

Then you wonder how much the bonuses these CEO's of the auto industry are getting. No matter what their performance is.

The other factor in the high cost of US cars, hence the low volume of sales and in turn the low profitability is the cost added to every unit (car) to cover the medical care of hundreds of thousands of people who no longer work there. Along with this the wages in the auto industry have killed any chance of being competitive.

Plants like SIA (Subaru Isuzu of America in Lafaette, IN) are non union. Their labor cost (and all other costs associated with labor) per unit are not nearly as high as they are for the unionized plants.

At one time in history there was a need for the unions. I think we are seeing how the unions have negotiated themselves out of a job. At every turn the unions demand higher wages and more benefits and rarely give back. Year after year, every new contract was one more nail in the coffin of the auto industry.

There are many "poor" line workers at KCAP (Ford's Kansas City Assembly Plant, Claycomo, MO) that are making in excess of $100,000 a year. Typically these are the high seniority people in the plant. Oddly enough, one of the highest seniority jobs in the plant is the guy who drives the floor sweeper around the plant. Another is Retirement Row where a hand full of them work in a knee pit and install specialty decals and trim to the trucks as they go by. As the name implies, the ones working on Retirement Row have one foot out the door already.

Perhaps the new generation of the American Auto Industry will have learned the lesson of union excess and largess.

Travis

Perhaps, but it's doubful the lesson will last long. BTW, we used to refer to that status as "retired in place". Lots of Civil Service people get that way, too.

a resounding No! ?

Now it is.

If the auto industry must be bailed out for whatever reason then it should be given a loan, at a reasonable interest rate, and not a gift. I say "if" because we may be far down the road to do anything meaningful in the short term to stop the industry from failing and failure can impact several million jobs. Joblessness also costs money which cannot be recouped like the loan can be.

The next simple step that comes to mind is for the industry to limit the number of models and hence the large tooling cost for each, at least for the next few years till they become solvent enough to have cash reserve for two years. We do not have to go back to the Edsel days of giving the consumer any color they want as long as it is black. But certianly can limit to say 5 models instead of 15 or more per manufacturer.

Joblessness also costs money

back in the 90's wherethe shipyard I was working at was closing down. there was a statistic that stated something like this, for each job a company provides it creates 3 more jobs indirectly to the local economy.

True. But I'd say it's more than three. Not every job can be directly related to several others, but rather to enough of several others to make them be no longer viable when any one job goes away. Think about how many other people you provide partial support for. Barbers and hairdressers, grocers, bowling alley attendants, gas station operators, insurance brokers, real estate agents, bartenders, short order cooks, hardware store clerks - how many people are partially employed by you? How many of them go away when you no longer support their chunk of the local economy? How many other people are needed to retain them in place once you are no longer paying for their goods and services?

yes it could be more, maybe it was 7, it was over 15 years ago since I heard it and 12 years since the yard shut down.

The local economy was devastated, this shipyard employed over 1,000 people.

The government step in gave the yard $$$ for retraining, and the chamber of commerce a pile of $$$$ for economic development. (grants)

example: if you started a business in the area, after (3) years you would receive it was either $10,000.00 or $15,000 for each employee you added since you started.

well some of the establish businesses that employed 20 -100 employees started new businesses, transfered their employees to the new business and jobbed them back and made a killing.

When the government grant money dried up, so did the new businesses.

So there is a lesson to be learned here, about government bail-out.

No matter what good intentions there are, the crooked politicians, businessmen and I'll throw in the attorney's too would cover the cash and make sure they get a piece of it, if not the whole pie.

I would say let it go, or put restriction on it, no matter if its legal at the time, if the money they recieved did not truly help,.......heck we know what'll happen then.

GA! I concur. The American auto industry has been killing itself off since WWII with bad designs, faulty engineering, and more greed than long-term committment. If it can be saved, it will have to overcome 60-70 years of bad decisionmaking to do so, and it should do it itself, not through government bailouts. We've already seen where that kind of money goes...

The only way I can see to overcome the many years of bad decision making is to replace the entire upper management with people thinking more about the company (it's survival and the employees) than the money! This is what happens when the Japanese management takes over a company! So, would the best thing be for a Japanese corporation to buy them out?? I would like to believe there are still enough Americans that think more like me out there ... but maybe I'm an optimist!

I dunno - but heads will have to roll one way or t'other, and they better not get any buy-out money either! BTW, there's no point in being a pessimist - it probably wouldn't do any good anyway...

That is one of the things I worried about when voting... Obama believes the government should be taking care of everything. I would not bet against the big three getting a bailout package. Hell, the government is giving it to everyone else!

The thing that really burns me up is that if you are a doctor you need malpractice insurance. If you are a professional engineer, you need malpractice insurance. If you are an executive and run a multi-billion dollar corporation into the ground ... you are not held responsible for possibly tens of thousands of people being out of jobs and anything they had invested in the corporation. Not to mention all the stockholders losses!

If someone was held responsible, an insurance company for example, you would at least have someone watching over the best interest of a company. The Board of Directors doesn't! They are on the CEO's side! I always thought that was a conflict of interest! Who is looking out for stockholders???

When GM bought his company, they got Ross Perot too.

The GM boardroom soon became a lively battleground while that little, funny sounding Texan started saying things about GM's management they thought less than funny.

They couldn't shut him up so they bought him out instead. It cost them a fortune.

Part of the fortune was the price they paid him to go away. The bulk of the fortune, however, was the flood of red ink that followed as a consequence of their failure to listen.

You can say what you want about Perot as a personality and as a Presidential candidate but the evidence is clear: he was right, GM was being damaged severely by screw ups with MBA's and the pack of wolves he warned them of, are now at the door!

Not surprisingly, Perot also warned us about government excesses. We didn't listen to him either and the same wolves are at our door!

L. J.

Your right,

it's too bad he wasn't 12" taller and had a deeper voice. people would have taken him more seriously, instead of writing him off as a paranoid screw ball.

The Japaneses have perfected feedback systems like 5S, lean manufacturing, pull versus push supply, quality engineering, and Value Engineering.

In my opinion, the Japanese do not have better engineers or even necessarily make a better car. But they have paid attention to their systems. From the outside looking in, it does not appear that the US manufacturers have done this.

It was just 7 years ago that GM stock was really high and they were humming. I think the US Auto industry will survive. But I agree with the previous statement, it will be transformed. And the cars they manufacture will be transformed. They will have to be.

Very depressing topic. I myself, as a mechanical engineer, find it disappointing to see so many great corporations going the way of the dinosaur. Poor management running companies into the ground with little/no consideration for those affected.

If the people at GM were smart they should have continued developing the EV-1. Today they would be leading the pack. Lack of vision? Lack of a plan for the future? Lack of putting profits back into the company for development (instead of in the pockets of upper management)? Lack of working with the government in helping reduce polution and eliminating dependance on oil? Too many things have gone wrong for too long. No easy fix. Maybe it is best to let them go bankrupt! Mismanagement should not go on and be rewarded. They should have let the financial institutions go under. If they can't be managed by competent people they should go under. Boards of Directors should be watching every major decision a CEO makes to assure its' in the best interest of the corporation. When was the last time you heard of a Board of Directors getting rid of a CEO?

It happens, but usually due to some type of innovation the Board doesn't like - rarely for malfeasance, more's the pity!

Ever since this sort of merger/bailout talk started up, I've always thought that there is one group perfect to bail them out--the oil companies! Who depends more on automobiles that Exxon-Mobil, Chevron-Texaco, BP-Arco and the rest? They are swimming in windfall profits just now, they can afford $40 or $50 billion, easy...

The oil companies should bail out the auto industry? That's absurd.

If that's the case then the oil companies should also bail out the airline industry too? Afterall, the airlines are dependent on Jet-A (kerosene).

You have to remember, a lot more comes out of a barrel of oil and out of the refineries than gas, diesel and jet fuel. Should the oil companies also bail out the plastics, pharmacutical and petro-chemical industries when they fall on hard times?

People (liberals in particular) are far too fast to suggest to Big Oil what Big Oil ought to do with their money and are far too fast to suggest confiscating their profits. How socialist can you get.

When the price of sweet light crude went up (and peaked on July 11) people and politicians alike were wanting to tax the oil companies for unfair profits. News flash - the oil companies do not set the price for a barrel of oil or a drop of gas. The price is set by the market - the futures market to be exact.

The price of crude (and hence what so many call a windfall) went up for a hand full of reasons, not all tied to supply and demand. When the USSA economy began to falter (because of the government induced mortgage mess - a'la Fanny, Freddy and don't forget Barney Frank, Chris Dodd, Maxine Waters and oh yes, Barry Oboma had his hand greased by Fanny and Freddy too) the Dollar lost value. Oil is priced in dollars so the price goes up. Also as other economies around the world began to faulter people (evil Wall Street capitalist pig trators and other capitalist pigs around the world) began to look for shelter. They found it in oil and gold.

At the same time CONgress began to squeel about the evil speculators. Never mind that for every one speculator there is another speculator taking the opposite position... that is, for every contract of oil (or any other commodoty) there is exactly one contract of oil (or any other commodoty) sold. For every evil speculator who wants to buy there has to be another evil speculator willing to sell.

When the price of oil retreated from it's high on July 11, 2008, why were not the same pin heads in CONgress crying out about the evil speculators getting rich? Remember, in futures trading it is possible to profit from an increase in price as well as a decrease in price - you just have to be on the right side of the trade.

Traders and speculators (one in the same really) do not drive prices up or down. If the current price of oil is $90 a barrel, who will buy it at $95 a barrel? If the current price of oil is $90 a barrel, who is going to sell it for $85 a barrel?

Price movement comes primarily from supply and demand and at times a desire to seek a safe haven. Just remember, those who sold oil at $80 a barrel prior to July 11 thought the price was going down. They lost some money but likely not much because they would (should) have had a stop loss order set to buy at some interval above the price which they sold (shorted) the market.

In short, the market and the market participants are not evil. If you want low cost oil the first and best thing to do is to ensure a strong US dollar and economy. The current mindset of bail out mania will not strengthen the dollar or help the economy. It will however reach into everyone's pocket and diminish our buying power and also increase our taxes. The government has two ways to pay for the "bail out". One is to tax us even more (which seems a forgone conclution at this point) or to sell treasuries (which many nations not so friendly to the USSA hold - read China). Neither is good.

Travis

Still looking for Galt's Gulch

The oil companies should bail out the auto industry? That's absurd.

I agree! The combined profits of the oil industry are just over 8%. Coke and Pepsi, by contrast, are more than twice that.

It is just like politicians and others with covert agendas to tell just enough of the truth to distort it!

That's why a court of law requires that you swear to tell the truth, the whole truth, just not the part you like.

If you insist on going public with a position like that, you owe it us to get your facts straight.

Ludwig Von Mises was Boss! So was Hank Rearden!

L.J.

The combined profits of the oil industry are just over 8%.

I've heard that, but thats their own damm fault for buying and merging to that size.

Say what?

Historically the return for the oil industry was low on a percentage bassis. These days a small percent of a huge number is still a rather large number.

Where was CONgress when oil was $10 a barell to help bail out the oil industry? Where was CONgress when domestic oil wells had to be capped because it cost more to pump it out of the ground and transport it than it could be sold for?

At the retail level (the Quickie Mart) the profit is on the order of 3-5 cents per gallon.

At the producer level, profit is on the order of (as I recall) 18 cents per gallon.

The taxes on a gallon of gas (as I recal) is some where North of 30 cents per gallon.

(The figures are what I recall from comparing several price break down's a few months ago.)

The government (state and federal) make more on a gallon of gas than do those who produce it. That is obscene in light of the fact that the government does nothing to produce that fuel but rather is obstructionist in it's creation.

Another factor that raises the price of gas is the countless number of different blends which are mandated to produce - seasonal and regional. Throw corn and alcohol into the mix and you get still higher production costs and lower profits.

Over the years many oil producers and refiners have merged - mainly out of necessity.

Travis

Remember, when people have the freedom to do as they choose, they most often just copy each other.

Where was CONgress when oil was $10 a barell to help bail out the oil industry?

They were still making a profit at $10.00 a barrel, one thing thats kind of like a parable is when they increase oil prices, they also increase their costs that cut into their profits, such as distribution

Over the years many oil producers and refiners have merged - mainly out of necessity.

They controlled the refineries so they can control the oil supply, 7 years ago Saudi Arabia offers to increase production for us as in U.S. But they didn't because it did not make sense, because why ship crude oil over here to refine when the refineries are already maxed out on capacity.

And the state of the refineries are poor at best. If they (the oil companies upgrade, then how will they defend their profits.

Lets see, as far as profits... 5% of 30 billion is..... 5% it doesn't sound like much, but when its not so much monopolized, but close, its profit are share amongst the few. which is huge.

Too bad it wouldn't work.

Exxon made $40 Billion in profits last year. TWELVE billion of that came from our tax dollars in the form of subsidies, etc. Who would really be paying?

Plus I agree to let them fail - they need to be held accountable and learn that they HAVE to manage better.

On the flip side, they are investing more in alternative energy now. In late October 5 manufacturers showcased their Fuel Cell cars (not all american - Honda has 300 FC cars on the road for a 2 yr pilot program in CA & DC). Others were Chevy, BMW, Toyota (I don't recal the 5th maker).

Fuel cells vehicles will be rolled out right behind Plug-in hybrids, hydrogen combustion engine, biofuel and other developed cars that will fill the gap for 15 to 20 years. I know that Daimler, along with some-one (GM?) bought a fuel cell companies auto division (Ballard). But these have to be tested for years to be able to warrenty them.

It will be a volotile time in the market with so much change approaching. The manufacturers will need good management as well as engineering. (yikes!) The gov't will have to help with the infrastructure so that people can "gas up" with fuel. Maybe the oil companies should pay for that?

Maybe Market Share would improve if they switched to building fuel efficient cars NOW.

An easy way to bump up gas mileage by aboute 25% without any new technology would be to use smaller engines. Most standard cars now offer engines in the 2.0 to 3.5 liter range. I think adequate power for most uses can be had from engines of 1.2 to 2.2 liter displacement. (I drive a 1.5 liter Honda Fit and get about 41 mpg on the highway …and it has enough power to pull a fully loaded pop-up camper with a 12 ft aluminum boat on top.)

Smaller (& lighter) engines also mean smaller (& lighter) drive train components.

High Gas Prices and a collapsing world economy will be changing people's notions on where to spend their money. Efficiency will become an increasingly important factor in shaping our lifestyles. Our Auto Industry should try to get ahead of this wave.

You are right. But it is also a matter of supply & demand. While the more efficient cars have great gas mileage, they are still burning a fuel that harms the environment.

One person mentioned the economy, forign oil & national security. These are all tied together. By producing fuel cells in THIS country, we supply jobs while also relieving us of our dependence on oil.

I can't help but point out that FC's byproduct is electricity, heat, and pure, pottable water - that's it. Zero harmfull emisions. Europe and Asia, once again, are way ahead of us.

These ARE developed and DO exist in autos in the US, in mail trucks in Germany, houses in Japan, buses in London, even whole power stations, and as back-up systems - such as cell phone towers. Why - because the US government requiress that each tower have at least 8 hours of back up power. The government can do more than throw money at the manufacturers.

By the way, the vehicless are much lighter, the fuel is way cheaper and the gas milage is superb, with a range of 400 miles before re-fueling in an electic car that spits out water!

I honestly don't know how to force a company to restructure it's managment and entire philosophy. Anybody?

Let them go out of business.

Do not invest any more taxpayers dollars into a company that is so ill-ran and has unreasonable labor costs.

Encourage other US companies to fill the sales void or help new US auto company start ups.

This country used to be based on competition, but as the government intervenes more and more it becoming more socialist,,.......

how ironic, survival of the fittest, made the companies get so big and blodded that it imploded. and there is so few competition left to offset it.

I agree with you about letting them go out of business because they can't be competitive but you still have to feel bad for the poor people (the workers on the line, in the shops, etc.) that have no control of the greedy, supposedly educated people who are running the company into the ground. They are the true loosers! They are also the ones the government is trying to help.

So how do you fix the problem? Government supporting the companies with the same bad management is the part I have a problem with. Let the government also fire and replace the upper management with a cap on salary and an independent Board of Directors, looking after the best interest of the company!

You have two choices, one is to let the company fail. The other is to at least try to make the bailout successfull. It won't be with the same management that run them into the ground! FIRE THEM! Without any golden parachute or benefits, naturally!

but you still have to feel bad for the poor people (the workers on the line, in the shops, etc.) that have no control of the greedy, supposedly educated people who are running the company into the ground. They are the true loosers!

Well lets look at it a different way, when a airplane crash its a tragedy with such loss of life lets say 223 people) in one swoop. just terrible. It makes news.

Now compare it to a personal automobile, and its accidents. Car crash 3 people died. Which makes the headlines.

Now instead having one large business conglomerate, where massive layoffs would happen, That makes news, Its hard to absorb that into the economy, but the service is still needed and it will get absorb......eventually, with hardship.

Other than if one small business lays off, its hardly noticed.

Now I don't want to compare air travel to auto safety record against large corporations economy impact to small corps impact unless you want to group the small corps together, whats more efficient. And whats more stable.

too many eggs in one basket may look good, but lose or drop that basket. where do you stand.

They are also the ones the government is trying to help.

Sure government is needed in certain situations, but people tend to depend on the government, and in a democracy, that would be the beginning of the end. People get complacent, and then totally dependant on the government.

The right question is: Can it not be saved?

But by what means?

Perhaps by purely competitive means: lowering vehicle prices across the board....to a point which the market will bear. True: this would result in a net lowering of wages (direct and indirect) in real dollar terms, but a (necessary...and ultimately beneficial) cyclical sectarian wage decrease has already been underway or in the offing for a while now. Some of course will speak of the unspeakable, deflation...but better a controllable deflation than a deflationary spiral as would be the case with failure of the auto manufacturing industry. Others will cry, "What about wage decreases in terms of unemployment?" Lowering wages will serve to mitigate that. And, to the degree that automobile manufacturing capacity is idled, it could be put to use, along with otherwise idled workers, to rebuild and re-equip the defense services. Government's and tax payers' role then would be to step forward, in the margins, to provide funding to mitigate unavoidable hardships to the degree to which market oriented solutions leave some people "unprotected." In all, it must be recognized, that just as with the 1930's economic corrections and and just as the (completion of) the War provided the economic stimulus to reverse that Deflation, this too will prove to be a period of economic warfare...as countries endeavor to come out on top as the world economy adjusts and recovers towards the next cycle of stability/prosperity. (For unbelievers, China has already tipped its cards that it intends to exploit its present advantages in order to come out a clear winner.) Sectarian wage growth reversal (for a time) in this country will prove useful to ensure that (this time) the US comes out in a competitive position in the normalcy to follow.

Your thoughts?

How many jobs do the so called US car manufacturers (Ford, GM, Chrysler) in the states as compared to so called foreign car manufacturers (Toyota, Honda, Mercedes) jobs that actually have plants in the US.?

It no longer matters even why all of these companies are going under. The way of the new millennium is for all institutions and corporations to bury themselves into the ground, largely due to incompetence or greed and much of it is purely intentional.

Then the process begins where there is either a huge bailout (to be paid by a country's constituents ???) or consumption of one corp to another, collapsing further until governments own everything.

From the money supply to the food supply, "they" will control everything, eventually leading to the collapse of everything, down to the monetary unit of measure itself.

The progress of mankind has been an afterthought for eons, and the pursuit of profit has tainted the soul of humanity.

There will be a day soon enough when all that has meant something means nothing, and basic necessities will be far out of reach for almost every man, woman and child.

Only thing is, at the same time, the people who ran these companies into the ground will have all the money and resources to survive.

NO financial assistance should be rendered, the car industry produces vehicles that few Americans want to buy because they are poor in quality, designs that are not wanted, more expensive than equivalent foreign bands, expensive to repair and maintain, and poor in gas consumption.

Professor W. Edwards Deming was correct in his assumptions about our automobile manufacturing companies, which was management was too arrogant, unwilling to listen and learn from past mistakes and make corrections, and indifferent to its customers needs and wants.

Yes, they deserve NO help from the American taxpayers', but of course, without that help many millions of employees will unfortunately lose their jobs causing more economic chaos in our country, lost pension and healthcare benefits, and screams and howls from the unions, who are one of the causes of this industries challenges.

That so true, but the demand for vehicles will still be there,.......Honda, Subraru will be happy to expand in the US to pick up the slack.

And Deming would have more effect on the US auto industry through the back door.

It seems the wide consensus here is to abandon the auto companies and let them be crushed by their own mistakes and the current economic crisis. There is a tendency for people to choose to "punish" others, even though it hurts themselves …but is that wise?

If we let these business giants collapse, they will take many, many "suppliers" down with them. The resulting economic disaster will be on the same order of magnitude as the Banking Fiasco …and we will suffer their combined effects.

I think we should take a pragmatic view and base our decisions on the economic principal of "Maximizing Utility". That means we want to pick the course of action with the largest ratio of [Benefit/Cost], where "Benefits" may be negative, but we still push for "less negative", and "Costs" are the totality of effort expended.

I do not have a specific plan in mind, but would like to see a comprehensive "package" which included expected return on our (Tax) investment, setting the design direction for high fuel efficiency NOW and incentives that coax the public to prefer these efficient vehicles.

I have to admit, that's the sanest answer I've read here so far. Worth a GA vote.

I can see the cost/benefit ratio, but it would be how it's structured. That as you pointed out is difficult and no easy answer. As post #43 shows what can happen. when CA$H is thrown at a problem.

Let it die, there will be hardship definitely.

Back in the 70's I believe the Government bailed out Chrysler, and I believe Chrysler paid it back with interest and ahead of schedule.

And the government awarded them along with some contracts that Chrysler turned around and sold. I think it was the Abrams Tank, but I can't remember.

phoenix911

I don't know that anyone wants to punish others but throwing money in the way of bailout to a company with incompetant management is not the answer. Fire the management that lacked the foresight to keep the company solvant and set up some type of management team to run the operations till they can support themselves. THIS IS NOT ROCKET SCIENCE ... FIX THE PROBLEM (MANAGEMENT). Make someone responsible.

Renegotiate with the unions, get costs and expenses under control. The days of a free ride are over! A carpenter/electrician/laborer in an automotive plant cannot be paid $150K per year with expectations that the company will survive! (I saw this in the East Chicago Steel Mills in the late 70's. I knew the company could not survive within six months of working there. I quit and went back to college. I would have been laid off within 2 years anyway! Within 5 years over 10,000 people were laid off and it went downhill from there!) Nobody will be happy with a pay cut ... who cares! How do you think they will like unemployment? People need to be reasonable. The scarry thing is that people will have to be responsible for what they do and live within their means! God forbid!

There must be a way to fix the problem. The steel industry in the midwest was sold to companies and union contracts were renegotiated or terminated and they started over. THis may be what has to happen to the automotive industry.

There are a lot of people out there looking for work and would be happy to make a fair days wages for a fair days work.

Easy street needs to be closed for repair until further notice!

You want to be fair, set up a profit shareing program. No profit, no bonus. Make the hourly people police themselves to get rid of the dead weight. There are so many things that can be done. Management needs to get off their dead asses and do something (besides give themselves another raise or bonus)! The unions need to work with them and help! This is everyone's problem and they better start working together intelligently to get it done!

I just can't think of how throwing money at poor management is a solution!

automotive plant cannot be paid $150K per year with expectations

A number of problems with this,

1.) the region is usually more expensive to live in.

2.) The union struggled in the 80's, that will be a tough nut to crack.

I like to add, something and I have to look into it.

I believe Mercedes opened a plant up in Arkansas, thats non union, the people were so grateful to have a job, and the company invested in education which became a real asset to both the community, employees and the companies bottom line.

I have to look into that because that would be difficult for their suppliers that are union.

The plant is in Birmingham, Alabama. It makes the SUVs.

Coming into work this morning I heard on the radio that AIG threw a party estimated at over $100,000.00.

That's their 2^nd one, after they received the approval of the bailout they also threw a party.

I'm looking on news webs sites to find out what actually happened.

This only goes to emphasize my point of "throwing money at bad management is not the answer"

The first party was "insult to injury"! Arrogance and irresponsible management running wild with nobody to answer to! Someone please explain the logic to this confused engineer!