Can the U.S. Auto Industry be Saved?

Both Honda and Toyota have plants in the US and they are doing fine.

http://corporate.honda.com/america/public-policy/factory-tour.aspx

http://factorytoursusa.com/TourDetails.asp?TourID=171&State=KY&Search=&CategoryID=

Perhaps if Chrysler and GM embraced Lean Manufacturing and learned a little from Deming (ironically an American) then they can make a comeback. They really need to take a longer view of things. And make cars that suck less.

To get a good feel for what to expect from the US auto industry, have a look at what happened to British Leyland when the government tried to bail them out...

I had a Spitfire car. The TR4 and TR6 were pretty. My Spitfire was the only car I totaled without running into another car. The English used to be great engineers. A Landrover is expensive and falls apart. Toyota makes a Lexus that is better than a Rolls Royce these days, for the money. I learned to drive in a Sunbeam Tiger that was powered by a Detroit V8. Good fast car. Typically governments bail out the idiots and sycophants that they have married off to their daughters. No. Not as long as anyone who has been running the US auto industry is allowed to continue to run the US auto industry for another day, or maybe another week.

Why bother going to the trouble of actually building something when it is much more lucrative just waiting for the next bailout check?

Perhaps a conditional loan to the auto industry could benefit the customer? Conditions could be: payback to the state with intrest, condition of limited gas-consumption for future cars, limited CO2-emissions, limited and fixed profits on sale-prices, etc.

Furthermore, and not only for the auto-industrie, there should be the obligation to look what the market will need for the next so many years, to avoid the possibility that thousands of workers are trapped in a job that can suddenly end because everybody already has your products.

Any comments on these thoughts?

Yes but they don't want the money instead

Yes, the US car industry can be saved. By Chapter 11 bankruptcy and a good reorganization. The first step would be to get rid of the CEOs and the board of directors. Then all the VPs.

If that doesn't happen (e.g. government bailout) then the British Leyland comparison is all too close.

My parents saw a bumper sticker on a Rolls in Palm Beach. It said, "All the parts falling off this car are of the finest British workmanship."

I could go into stories about parts incompatibility for spares for my Ford Contour but why waste the time. You can easily guess.

That's why I switched from Ford to Toyota last year. I wonder if they noticed.

Personally I don't think a bailout will work.

The American Auto Industry is a proud tradition and the only thing the has really caused its decline over the last several decades(in my humble opinion), is greedy Unions. What gives anyone the right to make an hourly wage of over $50.00 per hr, and adds incentives on top of that, with included bonuses there are line workers doing the most menial jobs making over $100 per hour including benefits and bonuses.

If any normal business were paying their employees on that kind of scale, they too would be bankrupt.

So I say File for bankruptcy, dump the unions, hire the workers back at a reasonable wage, and sell the cars cheaper. More people could afford to buy them and they would sell more of them.

But then I am just a Maintenance Manager for a small decal company.

I agree and would like to add that using taxpayers money to shore up this greedy system is incomprehensible.

"The same thing that gives the CEO the right to make $16M/yr with incentives and bonuses including a golden parachute...Face it They dug this hole as a group and they should find their own way out."

I agree with your statement, greed is the cause of the predicament they are in. I do believe, however, that Unions force the automakers into predicaments the put a strain on the overall budget of any company and it seems as though they have totally outlived their usefulness.

Here's a scenario:

I own a company that makes widgets, that everyone needs. these widgets cost the average consumer about 2 bucks apiece. The people making these widgets are making a fair wage based on the average salary nationwide for widget making.

Along comes a union and says to these fairly paid people "Hey we think your underpaid and want to get you more money, all it will cost you is a percentage of what you make." Now there a deal. So they negotiate over years and years and have these fairly paid people making 3-4 times what the average fairly paid person doing the same job is making. This triples the cost of the widget and now the average consumer would rather fix their old widget as opposed to buying a new one which is now way over priced.

Now I am not saying that when Unions first were established that they weren't needed. But now I think that if they weren't so darn greedy that the average cost of consumer necessities would be a lot cheaper.

If we paid all of our employees like the Unions think they should be paid, the average cost of a decal that you get for free with the purchase of some item, would be about $2.00 instead of the 3-4cents it actually costs. (pricing will vary depending on the difficulty of the project and the quantity ordered)

I am a firm believer in free enterprise, and if I could make a huge salary because I designed and made available a truly decent widget. I would feel justified in gaining a decent profit from it. I would also share that profit to some extent with the people that make it possible. But I'll be damned if someone is going to force me into running my company into the ground simply because they think they need to make me pay people more money.

So yes the problem is the CEO that agrees to the terms and the problem is compounded by greed on the part of Unions and the people that support them.

Sorry for the rant but didn't we learn this stuff in basic economics in high school?

I've worked with unions on both sides of the arguement. I've been a front line manager dealing with a local union steward. I've also been employed as a non-union employee in a competitive industry where our primary competetor was unionized (Sterilite vs Rubbermaid) Unions only have as much control as management allows them. It's easy to demonize the one and forget about the other. It's a working partnership. The interesting thing is that I made more money working as a non-union employee that my counterparts at the other company. Additionally, I used to think that unions had outlived their purpose, however after working for a company as a manager and witnessing the numerous flagrant violations of worker's basic rights I have changed my views. We all like to think that all companies are inherently good and that they will do what is in the best interest of everyone, unfortunately that is not always the case. I disagree with a bailout in any form. Let the market dictate who stays and who goes. If the union is truely the issue then they will cause their own downfall...by putting the unionized automakers out of business. I don't believe that this will happen. The big three are trying to get a handout, plain and simple. When the door gets slammed in their face, don't be suprised if they figure things out on their own.

All point very well put.

one note in response to:

"Additionally, I used to think that unions had outlived their purpose, however after working for a company as a manager and witnessing the numerous flagrant violations of worker's basic rights I have changed my views."

Isn't this what we pay the US government to regulate through the OSHA office?

If that is the case then why pay double indemnity on a service that should be doing its job that is already paid for.

I am not trying to argue for or against Unions but I have seen more companies fail because of them than succeed. Those that have succeeded are the one's now having troubles in our current economic downturn or recession (whatever you would like to call it) along with the greedy banking, insurance and investment groups.

I don't believe in the spread the wealth plan that our current President elect favored in the election, but I do believe in rewarding those within a company that help you get where you are now.

You are correct however that some Company owners could care less about the people that work for them. Fortunately I do not work for one of those companies.

The union got more accomplished than osha. I do wish the reverse were true. But, if you want a good example of a Union and Corporation working together and profiting from it look no further than the railroads.

When the door gets slammed in their face, don't be suprised if they figure things out on their own.

I would like to think that they won't get the bail out money (they've already received what, about $25M?... I would rather none of the bail outs were handed out to anyone) but now with a democrat controlled house and senate as well as the presidency hell bent on handing out money (in exchange for votes and power) it is going to happen. Now the only question is are there enough printing presses to print the money fast enough? They might have to reissue the $1000 note, or maybe even introduce a $10,000 note!

We (the tax payers) are being told to bend over forward and grab our ankles and are being told to like it. I for one don't like it at all.

The management of the car companies have had their hands tied for years when it comes to union contracts and negotiation. The union's stand is, "It's our way or the highway." The hourly average for a UAW worker is around $70 which includes wage, FICA, health care, pension, etc. For the non UAW workers at the foreign plants (here in the states) it's about half that.

In the UAW plants the position of union comitteeman and steward are very saught after positions. The only role the comitteeman has is to go around the plant and write grievences against the plant. Then when a UAW member gets in trouble (for being AWOL, misconduct, getting caught sleeping in their hidie hole) the comitteeman, worker and managemant get together, swap grievences and the guy gets off.

When the union is able to mandate that for every non UAW worker brought in during shut down (primarily July and Christmas when equipment is changed and conveyor work is done by outside conveyor companies) one UAW guy has to be on the clock (and does not work) is anyone surprised how expensive a car or truck costs?

Job Bank - when a position is eliminated the worker goes to Job Bank, does NOTHING and collects 80% full pay and full benefits until they choose to take another position in the plant. Pretty sweet deal. Is it any wonder cars and trucks are so expensive?

Over the years the union has forced ever increasing demands down the throats of the companies and have never taken cuts (even in lean times). It's easy to also blame the executives who gave in but what are they supposed to do? It's either give in to the demands or shut the plant. There is no way they'd be able to reopen because in most places the car plant is the biggest employer in town so everyone either works there or has a relative who does. Who could they hire?

With such an us against them mindset the UAW's only aim is to maximize dollars and benefits and protect their largess.

As far as the product goes, I have a 95 Windstar and a 98 Dodge 1500 conversion van. Both serve me well (and were bought used and are long since paid for). The Dodge has a lousy transmission which I just replaced. Even with the lousy Dodge transmission, I would never dream of unloading it (or the Windstar) to buy a new vehicle, especially a hybrid or electric. Cashflow is King! The domestic vehicles aren't all that bad and the import labels aren't all that great.... one can just build them a lot cheaper than the other.

Travis

First, the bailouts have so far come from a republican administration. That being said neither party is without blame here. It's all too easy to place the blame on a faceless group and demonize them as opposed to finding constructive solutions to problems. It's actually taught in the military to make it easier to kill an enemy soldier you must first treat the enemy as a less than human group. It's a psychological arguement. I also do not for one second believe the auto manufacturers are that pitiable. I agree that there are some concessions that are over the top. The choice for the auto manufacturers is whether or not they can live with the contract. If they cannot agree on a contract then they either hire non union workers during a strike, or close the plant and wait. Eventually the government will step in with an arbitrator. You also might consider that included in auto costs are all fines that the companies are given for producing vehicles that do not meet the fuel efficiency standards set by congress. The import companies tend to make more fuel efficient vehicles so they don't have as many fines. There is also an import company that, during plant shut-downs pays it's workers regular wages to work in the communities. My point is it is these manufacturers that got themselves into this mess let them get themselves out of it. As I recall there wasn't any discussion of a bailout for Studebaker. Perhaps we should allow the market to decide who does better business.

I don't blame the unions. They only get what management agrees to. Management had to justify their excessive salaries, bonuses and perks and the easy way was to lavish money on the unions who were rightly demanding their fair share.

The workers make what they are told to. The engineers design to a spec set by their management and marketing. The marketing people come up with specs based on what the public wants. Senior management is supposed to provide leadership and corporate direction. In the case of Toyota and Honda that leadership included investment in hybrid vehicle development. In the cae of the US companies that leadership concentrated only on the models that made the most money or were necessary to fill out the line. New tech just reduced profit and, therefore, bonuses.

So the "big three" are in trouble. At the same time all manufacturers are reporting declining sales. GM is down 42%, Honda, Toyota and Ford down 30%. But Toyota and Honda are much better positioned because of corporate leadership.

I agree that having an assembly worker making $50 and hour plus perks is crazy. So is having a CEO making millions, especially while the company is going bust. Thats why the US car makers have to go into chapter 11. They have to be able to restructure union contracts, factories and senior management. It's the only way that these companies will ever be viable again.

We can phrase this a different way. As my friend Quincy always says, a fish rots from the head. The CEOs have got to go.

I do in part blame the unions and I would like to add that I am not anti-union. Their efforts in safety and REASONABLE compensation are needed.

In the case of the the auto manufactures, unions can threaten and succeed at narrow-mindedly hurting the industries they should help to stay strong. The unions have succeeded at forcing exorbitant costs down the throat of the companies they have in a head lock.

I cant say I blame the union workers as a whole, they are usually directed by the Union organizers and those that profit from their hard labor. But they are the ones chosing to accept that leadership.

I also agree that the safety and REASONABLE compensation is needed. But should you really have to pay some big Union head a huge salary to get what you want to make?

Or did we at some point in our lives give up the freedom to chose to walk away from a company that paid poorly and go to a company that pays well or at least better?

Choice is an individual right, one that I promise will not be taken away from me.

As far all of these so called bailouts are concerned. Did AIG really deserve their bailout? They think they did and had a million dollar party to celebrate it. I say let em sink or swim on their own. when I was out of work and couldn't pay my bills, I didn't get a bit of help. I found a job and eventually paid everything I owed. Thats just the tough parts of life we all have to live with.

I agree with what you say about unions and CEO's being greedy. But the CEO's millions are just a drop in the bucket compared to the compensation given to overpaid workers and union dues. Unions were necessary at one time when employers were of a different mindset. Child labor, forced labor without compensation, no overtime, no health benefits, no retirement, etc has been abolished by government decrees. OSHA, fair labor laws have made unions redundant.

When unions were first introduced into our work environment, the goal was to protect worker's rights, hold employers accountable and give the worker a chance to get ahead in life. The unions carried it a bit too far. They got concessions for the workers, but greed raised it's ugly head. Unions after a while, came under the control of criminal elements like the Mafia. They were Can the U.S. Auto Industry be Saved? not about to call it quits on a lucrative cash cow. Milk it for all it's worth. As long as the worker gets a few crumbs, they won't complain. If someone wants to keep giving you money, are you going to refuse it? I don't think so. Most criminal elements have disappeared from unions. They are now legitimate businesses.

In response to your original question, " Can the U.S. Auto Industry be Saved?", Only if the cost of making automobiles can come down so they can compete with the foreign companies. In order to reduce costs, union activities need to be curtailed, workers compensation needs to be frozen or reduced, at least for the time being. Only cost-of-living increases should be allowed. Car companies need to change their philosophy re: what the consumer wants. The consumer has told the big three over and over for the past 40 years what it wants, but they won't listen. It's only during periods of high fuel costs that they come out with fuel efficient vehicles. As soon as fuel prices drop, they also drop fuel efficiency. Foreign cars have always been more fuel efficient because fuel costs are 3 to 4x higher than here. The big 3's attitude seems to be: "never mind what the consumer wants, we will give him what we want."

Why do we need cars that can go 120 mph? A top speed set at 80 or 90 plus reduction in gearing would go a long way in increasing fuel mileage. Electricity appears to be the best and most efficient power source for vehicles in the future. Much more development needs to go into battery development and that's where the full force of research should be headed. If not, a foreign company will find a way to do it and we lose out on the development.

In San Jose, Ca. they are installing charging stations on the street for electric vehicles. California has always been first in new technologies. Instead of talking this to death, isn't it time we got out and did something like in San Jose? I didn't vote for Obama, but I hope he has the vision to do what needs to be done to solve the energy situation, which if addressed, will help to remake the big 3.

In my experience OSHA won't successfully recover a worker's job once they have been terminated without cause...that is solely a function of the unions...

Actually the unions prevent someone from being fired when there IS cause.

Just go into any of the formerly big 3 plants on opening day of hunting season and see how many AWOLs (no shows) there are. Each worker is given a certain number of AWOLs per year.

Once I was in the GM Fairfax plant during deer season and there were so many AWOLs the line speed was cut in half for 2 days.

As I mentioned earlier, all they will do is swap grievences and everyone is happy.

Just like you can't evict a single mother from an appartment (for back rent, damage, etc) during the winter, you can hardly ever fire a UAW member.

Travis

Everyone likes a quip at the unions but union workers are well trained and accomplish their respective tasks well. Safety training and application is a fore gone conclusion at any union shop and acknowledge the job was done at the maximum time limit and repeated twice to make sure enough time was used to ensure the product is valuable.

Yes yes yes. All dependant a bailout of the currency.

The monetary system is the real issue.

I am anxious to see if all those CEOs make it to DC without breaking down on the PA Turnpike.

In a corporate bus maybe

Now that's a quality suggestion!

I know I am hard on unions at a point in time they were very necessary as many people have stated above. They helped my grandparents back in the early days have an opportunity to make a decent living for my parents. So I thank them for that. I also appreciate what they have done for the average worker. I appreciate all the health and safety benefits they help bring about or we all would not have the benefits we have now.

But enough is enough. The average educated line worker nation wide is about 15-20 dollars an hour. Most companies have training programs for new hires and a designated period of time for a person to learn that job. If the individual is unable to learn they are removed and another in trained in their place. Try that in a union shop. I could not tell you how many times i heard stories from my grandfather about how someone who was hired could not be fired because of the union.

How many of us would like to be able to buy a new car? All of us, or at least most of us. How many can afford it? I for one cannot, but if they were half the cost they are now, I might be able to. It would definitely be a hybrid, or the most fuel efficient vehicle I could find.

I for one don't want to see anyone out of a job, been there done that, read the book , got the t-shirt. I have however had to work more than one job, or take a pay cut when changing jobs due to necessity. It's all a part of life.

Here is a question I would like to pose in response to the original post.

If you knew your company was going under, and you had to take a 20-50% pay-cut to keep it alive, with the promise of a boost back to your original wages at a frozen rate over a period of 5 years, would you do it?

I would, I can always find a supplemental income even if it's McDonald's.

The US auto industry is doomed. The honorable Senator Chris Dodd, chairman of the Senate Banking Committee, has called for GM leader Rick Wagner to resign.

Senator Windbag was supervising Fannie and Freddie when they collapsed in dishonor and now he pretends to know what is best for the auto industry. I haven't had a belly laugh like this in ages. I guess the big 3 have truly sold their souls to the devil.

What a country!!

I got a laugh out of that as well.

<Pot> Hey Kettle your black!

Seems to me like the lot of em should be working for a business not running it.

I take some issue with you double j b concerning Union Workers as the pivot for the failure of the U.S. Auto Industry. Really it is not how much you pay people to do a job, but what it is you pay them to do. It is as legitimate for labor to demand more money to do stupid things, as it is for them to demand more money for doing smart things. Labor just shows up and does what it is told, even when they know better. May as well go kill deer... At least Union Labor across the board, Teamsters, UAW, IATSE, IBEW, know better than to expect OSHA to keep the work place safe. It is a fact that the US is losing out to labor that is not unionized and has no tradition of fair wages or state or national minimum wage standards. It is interesting that a nation like Germany which has such standards makes cars that are coveted in Africa. The Smart Car is gaining popularity in the US, though I'd hate to try and get up a Mountain in one. A car that goes 120 on level ground may do well to get 60 going through Asheville and Boone on its way to CA. What is the best car for Norway? Anyway as far as why the US Auto Companies are concerned, it is because the CEOs, Presidents, and those job was to design products to be made and sold, put all their eggs in government standards and law loopholes, instead of simply making machines worthy of love. At least in the US there have been times when the working guys were willing to kill, and were armed, and fought about it above the mine. I've worked in Aviation Services, Motion Pictures, and construction, either Union or Non Union, and I've been ripped off by most anybody. (Daggone that ex-wife, and the girlfriend.) My retirement plan is a shotgun in my mouth. Gephardt said rightly that a US minimum wage was a waste of time since in this globalized economy the only real solution is an International Minimum Wage. In fact what the situation is, is nations are companies, and intellectual property rights ripped off in Russia and China and sold through Wal Mart require disarming of the Working Class, if Class Warfare is not to threaten the Priests of the Economy. Another solution for the state of things is for the US printing presses making dollars is that every newborn get a Whole Life Insurance Policy from AIG till 18 free. This would unleash the invisible hand and confirm the inventiveness of the Dutch who founded New Amsterdam, but stay home now with a 50 percent tax rate skating on ice like the rest of us. But comfortable for the time being with hashish from Afghanistan... When an airline fails its assets are bought and sold and the planes keep flying. The US Auto Industry is not the US Auto Industry, but the Auto Industry, so the answer is still no, though I still need a car. Maybe a Smart Car will do used for me later, when the price comes down. For the time being I'll get by with the Honda and Kia. I don't go much of anywhere anymore now that I'm old and wise.

Transcendian,

I am going to respond to certain Key points that I feel need addressing in you monologue.

I did not say that Unions alone are the pivotal reason behind the automotive industry problems, I did however say that the greed supported by the union officials as well as the CEO's and exec's at the head of automotive industry as a combined force are.

I guess if you chose to take issue with that then that is your choice.

I also stated that at a time when people such as my Grandfather were working for pittance wages that Unions were actually a good thing. They help him to earn a wage that was commensurate with his experience.

"Really it is not how much you pay people to do a job, but what it is you pay them to do."

So your telling me that the guy on the line in an auto factory that puts the little nuts on the seat bolt all day long should make 50 - 70 bucks an hour? While I am well educated and experienced at maintaining about 100 pieces of equipment, but since I am not a union member deserve to not get paid as much?

"It is as legitimate for labor to demand more money to do stupid things, as it is for them to demand more money for doing smart things. Labor just shows up and does what it is told, even when they know better."

WHAT?!?

"Teamsters, UAW, IATSE, IBEW, know better than to expect OSHA to keep the work place safe."

OSHA is a regulatory body formed by the Government to establish safety guidelines for all aspects of industry and commercial business. Some members of the OSHA Committees are former Union Stewards and leaders. So if your Unions leaders are so good them why is it that the regulatory body that they are all members of and helped to establish cannot be expected to keep the workplace safe.

Workplace safety is the responsibility of each individual company and typically OSHA does not interfere unless there are unusually high numbers of injuries or infractions. All which under Union as well as OSHA guidelines, have to be reported.

"Anyway as far as why the US Auto Companies are concerned, it is because the CEOs, Presidents, and those job was to design products to be made and sold, put all their eggs in government standards and law loopholes, instead of simply making machines worthy of love."

I Agree.

"My retirement plan is a shotgun in my mouth."

I seriously hope you don't mean that.

"For the time being I'll get by with the Honda and Kia. I don't go much of anywhere anymore now that I'm old and wise."

Now that's the way to support the US auto industry.

Just to note, I am not trying to create an argument here with you but I am trying to respond with what I hope to be insightful information, as I have been made aware of it. I do not give intentional false information and everything I have stated above is true to the best of my knowledge. However in some cases it is merely a personal opinion and is hopefully obvious as being such.

I support the US Auto industry by voting with my dollars and whether they are new or used I always have bought American made vehicles. I do however, think that we could make a better vehicle cheaper, Much cheaper, if both the UAW And The CEO's could pull ther collective heads out of their collective backsides, and realise that they as well as the oil company ecex's, bank exec's, investment company exec's, and insurance exec's, that it is not their responsibility to control the worlds economy and hold the largest amount of income in their own accounts.

As I said before I do not believe in income redistribution, I just believe in common sense and morality. After all these people that are in charge of these companies are not the original inventors of the technologies, they are all just benefactors of an upper class society gone wrong.

Just a note: It's early and I have not had my third cup of coffee yet so I may sound a bit cranky.

I'd be the last one to defend the UAW, which seems to be suicidal. And I think the management who gave in to their ridiculous contracts over the years were complete idiots.

Having said that, I will say that until Americans have a change of mindset - that American companies can and do build good cars - they will continue to vote with their wallets for foreign cars. This mindset is, for the most part, just that. For example, I believe it was Mitsubishi that built two sports cars in the same factory. The only difference between the two cars was a different grill and some minor body work. One was sold through Mitsubishi dealers the other - I believe is was called Talon - was sold by Dodge dealers.

When surveyed, Americans said the Mitsubishi was far superior to the Talon. Much of what our younger car buyes have succumbed to is perception, not fact. Until Detriot can change that, they will continue seeing decreasing sales as their older, more loyal to the American worker generation dies off.

Dick

We are sitting here in NW Ohio watching the impact of the auto crisis ooze closer like something out of a B movie. We see more layoffs weekly and we know it is going to be a bitch even if they settled it all today.

My company supplies the domestics as well as the transplants and our workers are sometimes called to sort parts in the assembly plants. They come back with chilling stories of events that would never be tolerated in non union plants. To balance this the big 3, especially GM, treat their suppliers like dog crap on their heels. The transplants, while hard bargainers, treat their workers and suppliers with respect.

As long as the current pervasive attitude persists on both sides of the management/worker equation the domestics will continue to sink.......and take a lot of good people down with them.

I see the government's holding out their big purse as an intrusion into the free market that needs to function here if the domestics are ever going to clean up their act. Just listening to the congressional blowhards who haven't a clue what it takes to manage anything correctly gives me a clog.

The public knows what it wants and doesn't need to be told. The fact that they have rejected the domestics in favor of better quality, price, and style to the extent they have should be a clue. Nothing short of something cataclysmic will sort it out. A bailout will only delay it for another generation. Let's get it over with.

The fact that they are asking for a bailout is very sad,and how long well the money last?i get the feeling its like trying to bail water out of the titanic.chevy had an electric car years ago,people loved it,but in GM,s infinite wisdom vehicles like the hummer were made.i feel for all the people and jobs effected but mabe bloated poorly run companys need to go out of buisness or change,heck look at how many chapter 11 and mergers the airline industry has gone through.and i think the unions and their pensions and benefits are one of the problems.all this bailout stuff makes me ill,everyone acts like its someones elses money.whos next!line up for free money!so i think the us auto makers are a sinking ship.

Auto industry not likely to be saveable in this financial environment. The effects of finacial bubble pop is deep. The oil companies well even fell this one soon. Consumers likely to hold onto there cars much longer now.

The oil companies now have control of our leading Battery technologies (NiMH, Lithium-ion, and ultra capacitors) for propulsion purposes. Back-door industry shenanigans designed to prevent rapid deployment of this technology, which can help consumers, gain access to non-oil-industry fuel.

Companies as large as the Big Three Auto makers needs large-scale productions. It is difficult for them to use new technologies that can't fit the scale. There are monopoly forces behind the scenes. Auto Manufactures plan to build cars that support there built up empires. The combustion engine is what the empire is built on.
Here are some examples how General Motors corporation does not embrace fuel efficiency.
A. Invested in hummer.
B. Sued the California Air Resource Board to stop mandate of 0 emission vehicles.
C. Bought NiMH battery patent and sold controlling interest to Texaco.
D. Destroyed Saturn EV-1 Electric vehicle (See DVD ""Who killed the electric car?").
Note: GMAC money trouble. How many drank the same Ponzi scheme cool aid?

The United States auto market could thrive if the oil companies, the utility companies, and the auto companies could unite in one common cause. To set a new standard and a long term plan for a common wealth. Unfortunately they have there own financial interest. The only thing I see in common is corporations lobby control over government. The government's members benefit from that interest not being in common.

Unless the bail out (loan) includes a real plan the government should not Ponzi tax our future.
Should Auto and oil corporations who undermine our desire to have efficient clean transportation set our standards?

The monopoly game is over when the last person has no one left in the game. Is the game almost over?
Big Oil + big Auto + big Government = little Choice (wars?).
The next game.
Less exploitation + more innovation + representative Government = common wealth (prosperity)
What does the $$$$$$Billions$$$$$$$ stand for? What accountability?
Who decides? The consumers can only buy or not buy.
A new economy is emerging that rewards efficiency instead of exploitation of cheap carbon resources.

It's easy to identify the numerous crimes, mistakes and follies of governments, corporations and the United Auto Workers, and the participants in this discussion and others have done a very good job of doing so. The hard part is coming up with solutions for the future.

I. "Government is not the solution to the problem, government IS the problem." Ronald Reagan was right when he said this almost thirty years ago, and unfortunately the statement is as true as ever. The pigs lining up at the trough seem unaware that the socialists feeding them bailouts are plotting their slaughter. We the people have to force Congress back into its Constitutional limits and make them cut taxes, spending and regulations down to reasonable size.

Instead of handing out fancy strips of paper and calling it money, Congress should offer a capital gains tax exemption and a long-term or life-time dividends tax exemption for shares in the auto companies purchased by July 30 of this year and held through December 31, 2010. This will give the companies an advantage in raising capital to continue operations.

Congress needs to slash federal spending as quickly as possible. Keynesian economics does not work when the currency is in danger of collapse, as it is now. The federal deficit for the coming fiscal year could be as much as 20% of the GDP, and if Medicare and Social Security promises are counted as debt, the government is in the hole for four times the GDP. Barack Obama's "stimulus" spending proposals are exactly the wrong thing to do. The government will have to borrow heavily to carry them out, soaking up available credit, or else it will hyperinflate the currency, again discouraging lending (Who would lend $1, knowing that when it is repaid in a few weeks, it would only buy half what it could when it was lent?). Another quote from Reagan: "The nine most fearsome words in the English language are, 'I'm from the government and I'm here to help.'"

II. The auto manufacturers need to make some major changes to their business model. So do the people who work for them. The first thing that needs to go is the UAW monopoly. The UAW should be recognized for what it is: a company that provides workers to auto manufacturers. Theoretically, it is owned by the workers; in practice it belongs to a power clique of politicians within that group. It would make more sense to adopt the approach used by companies such as Kelly Services or Manpower. These firms are paid by their customers to take all the responsibility for payroll and benefits. They have an interest in making sure their employees provide high quality workmanship, otherwise they won't be able to renew the contract with the customer. The UAW ought to adopt this model and make its certified workers shareholders in the corporation in the usual sense of an employee-owned business. Unfortunately, that won't happen as long as Congress continues to accept contributions from the union bosses in exchange for unduly favorable regulations.

III. The automotive design teams need to take a fresh look at what the customers want. They should send out marketing engineers to ask people around the nation what would go into their product definition list, then distill the results into sets of design requirements. The Chevy Volt is a promising start, insofar as it addresses a common desire for a car that can travel locally without using expensive liquid fuel, although it is initially at too high a price point for most people.

A. The idea that low cost means shoddy designs with inadequate materials, poor workmanship and limited lifetimes must be discarded. More on this in part D. below.

B. Before releasing designs for production, the engineers should be required to disassemble and rebuild their prototypes in a weekend using only ordinary tools from Sears and Sawbucks, plus maybe an engine lifting device. Automobiles ought to be serviceable without a lot of swearing, knuckle busting or expensive custom tools.

C. As cheap as computer power is these days, there is no excuse for requiring an expensive external scan device to perform ordinary engine diagnosis. If a general purpose display is available in the vehicle, such as a GPS map unit, the data could be shown on that. Engine sensor and output data should at a minimum be available to a laptop computer via USB, running a free downloaded application with versions for Linux, Mac and Windows operating systems. The application should provide graphical displays of the data to make it easy to comprehend what's going on. If a possible problem part is identified, there should be links to instructions for finding the part, testing, removing and replacing it. Finally, and here is where the program pays for itself: the manufacturer's part number is provided, along with links to purchase on-line from local dealers.

D. Planned obsolescence should become obsolete. Cars should be designed as basic platforms with mounting spaces, wire and optical fiber cabling for field installable options as a low cost alternative to the full priced unit with all of the bells and whistles. A customer who could not initially afford a full option package could then go back to the dealer later and purchase an option or buy a newer version with a suitable adapter. In this way, by offering upgrade packages, the manufacturers can continue to make money off of old cars, even when times are too difficult for people to buy completely new vehicles. This could include the installation of new instrument panels, power units, suspension upgrades or the addition of new safety technology. Some pundits have even suggested quick-change auto body sections so the customer can readily change the styling of the car. There are many possibilities for a flexible design.

It may come as a surprise to Detroit, but this is not really a radical, untried concept. The aircraft industry, which has as much incentive as anyone to be cautious and conservative, has been operating in this manner for decades. It is even possible to buy FAA certified turboprop upgrades for the Douglas DC-3/C-47, which was designed about 70 years ago (available from a vendor other than the manufacturer).

To conclude, part of the solution is for the government to get out of the way. Another part is for the employees as represented by the UAW to stop acting like a ball and chain. From that point, it's up to the auto manufacturers to make their own way.

"B. Before releasing designs for production, the engineers should be required to disassemble and rebuild their prototypes in a weekend using only ordinary tools from Sears and Sawbucks, plus maybe an engine lifting device. Automobiles ought to be serviceable without a lot of swearing, knuckle busting or expensive custom tools.

C. As cheap as computer power is these days, there is no excuse for requiring an expensive external scan device to perform ordinary engine diagnosis. If a general purpose display is available in the vehicle, such as a GPS map unit, the data could be shown on that. Engine sensor and output data should at a minimum be available to a laptop computer via USB, running a free downloaded application with versions for Linux, Mac and Windows operating systems. The application should provide graphical displays of the data to make it easy to comprehend what's going on. If a possible problem part is identified, there should be links to instructions for finding the part, testing, removing and replacing it. Finally, and here is where the program pays for itself: the manufacturer's part number is provided, along with links to purchase on-line from local dealers.

D. Planned obsolescence should become obsolete. Cars should be designed as basic platforms with mounting spaces, wire and optical fiber cabling for field installable options as a low cost alternative to the full priced unit with all of the bells and whistles. A customer who could not initially afford a full option package could then go back to the dealer later and purchase an option or buy a newer version with a suitable adapter. In this way, by offering upgrade packages, the manufacturers can continue to make money off of old cars, even when times are too difficult for people to buy completely new vehicles. This could include the installation of new instrument panels, power units, suspension upgrades or the addition of new safety technology. Some pundits have even suggested quick-change auto body sections so the customer can readily change the styling of the car. There are many possibilities for a flexible design.

It may come as a surprise to Detroit, but this is not really a radical, untried concept. The aircraft industry, which has as much incentive as anyone to be cautious and conservative, has been operating in this manner for decades. It is even possible to buy FAA certified turboprop upgrades for the Douglas DC-3/C-47, which was designed about 70 years ago (available from a vendor other than the manufacturer)."

While I would love to see these changes I think you're living in a fantasy if you think any automaker would give up the monopoly created by specialized parts in their automobiles. Additionally custom diagnostics are a very profitable side business. If you want to open a repair shop you'll have to either buy the diagnostic equipment (high up front cost), or go without and cut your hourly rate to compete while taking longer to locate problems. The auto industry simply won't give up this added revenue. They don't have any reason to.

The problem with comparing the auto industry to the airline industry is that if your car fails during operation you generally call for a tow. If a plane fails...you get the idea. Additionally cars are built for the average consumer. Planes are built for companies. Companies tend to have better resources to research projected lifespans, up front costs, maintainance costs, etc. In other words this is not a "apples to apples comparison.

While I would love to see these changes I think you're living in a fantasy if you think any automaker would give up the monopoly created by specialized parts in their automobiles. Additionally custom diagnostics are a very profitable side business. ... The auto industry simply won't give up this added revenue. They don't have any reason to.

This assumes that the auto industry is a trust, where everyone agrees not to compete in certain ways. If the American companies won't look at these ideas, the Japanese manufacturers will. They are willing to forego some short-term profit in order to increase market share. We've seen it happen many times in this business. It's called competition. A vehicle with on-board diagnostic display capability and a design for easy service will be more attractive to the do-it-yourself customer and may save other customers money also.

Upgradeability does not imply giving up proprietary control of the design or supply of parts. Suppose I decide to buy a new car, but omit the remote key system to save money I don't want to spend at the time. Three years later, I get a raise and decide I can now afford the remote key. If the car is designed properly, I can go to the dealer, buy a module and just plug it in - no wiring to splice in or patch, no extreme contortions under the dashboard, etc. as is required for many third party products.

By designing in provisions for upgrades and updates, the auto manufacturer increases its probability of getting the aftermarket sales, rather than a third party vendor - provided that the OEM makes the investment in providing upgrade packages.

The problem with comparing the auto industry to the airline industry is that if your car fails during operation you generally call for a tow. If a plane fails...you get the idea. Additionally cars are built for the average consumer. Planes are built for companies. Companies tend to have better resources to research projected lifespans, up front costs, maintenance costs, etc. In other words this is not a "apples to apples comparison.

My point is not to compare the industries, but to show by example that a business plan offering upgradeable products can work, even in a business that is required to be conservative. I could have made a similar argument using personal computers, but they have far less critical requirements than vehicles and would be on the other side of the risk parameter. It's fairly common for people to buy their computers below the top end and upgrade later if they desire to.

It is not completely relevant that a corporate purchasing department has more resources to evaluate cost of ownership. Every day, smart consumers gather all the information they can obtain on this consideration before buying a car. Smart sellers make arguments that their products are competitive in this respect, making claims about fuel economy, reliability, quality, durability, etc. I'm suggesting that keeping the cost of service down provides an additional argument for selecting a product.

The big question is whether the American firms will get unstuck from the mud, clean their ears out and listen to what the customers want. If they won't provide a better value than the foreign-owned companies, they don't deserve to stay in business.

I've been working on my own cars and those of my friends for better than twenty years. The days of the backyard mechanic are long gone. While I can do most simple repairs on my own, often the complexity of the fix or ease of access cause me to use a professional facility. Even some parts such as bolts have become a manufacturer only item. I can't even get them at an after market store. Additionally, I've found that more and more people are unable or unwilling to spend the time to learn how to perform simple repairs on their own. The underlying assumption in your arguement is that a significant market segment can fix their own cars, and that this segment would buy a vehicle solely on the ability to easily repair it. It has been my experience that this is not the case. My father and his father's generation often spoke of people who were tied to a specific brand..."He's a ford guy" and other similar statements outlining thier company preference are quite prevalent. My generation seems to be a bit more willing to explore, but the jury's still out based on my small sampling. The point is that it seems people are more willing to buy a car based on good experience with a vehicle within their perspective. If they can get five good years out of a car they think it's given them good service.

"I'm suggesting that keeping the cost of service down provides an additional argument for selecting a product."

Perhaps but try to convince a salesperson of this. They don't want to discuss how much it'll cost you when it needs service they'll tell you endlessly how it's a very reliable vehicle and in their experience needs little more than the required maintainance.

I do agree that the american auto manufacturers have blown it again, but this is hardly a revelation. It's not so much their designs as it is their business model that needs work. They need to place long term goals and bring salaries in line with their competitors from the top down. They do, for the most part provide good competitive vehicles, they simply didn't invest in researching and producing fuel efficient vehicles. If they're not interested in that market, then I'd say the market you're pushing is out of luck.

"It is not completely relevant that a corporate purchasing department has more resources to evaluate cost of ownership. Every day, smart consumers gather all the information they can obtain on this consideration before buying a car."

I never said that it's always the case. I merely said that corporations tend to do their homework more often and have better resources.

correction: fascist not socialist

It's unusual for a constitutional conservative Republican like me to suggest a government plan to help private industry, but this one has a conservative principle behind it. Why not have the Government Services Administration review the Federal vehicle inventory to see what might be profitably replaced with new cars at this time? If Chrysler, GM and Ford are really hungry, they should be ready to offer the taxpayers a great deal on a large quantity purchase, especially if the GSA can make an advance payment on materials. We could go a step further and give state and local government agencies a chance to chip in and participate in the contract quantity discounts, provided they each have a plan to reimburse the federal government for their share of the advance payment(s). Congress could sweeten the deal by agreeing to make receipts for the 2009 special vehicle purchase tax-exempt, thus allowing the auto makers to apply the income directly to debt without having to set any aside for tax payments (this would be in exchange for an even better price, of course).

This would be a good time to specify high-efficiency, low cost-of-ownership vehicles. Bureaucrats don't need 12 MPG SUVs to travel across a city from one office to another unless they must routinely carry large amounts of equipment or passengers. The new vehicles must be properly matched to the purposes of the end-user agencies, otherwise the government will end up wasting money again.

If the government actually needs a significant number of new vehicles, this would be a true economic stimulus plan that could in the long run save money for the taxpayers. It won't provide a permanent solution for the auto makers, but the winning bidder(s) will get something to tide them over the present rough times and have a better chance of survival.