What do you see as the future for the American Car Industry? And what do you think of China's entering the market with the prediction of over a million cars sold its first year (Toyota sells about 1.5 million, and it is an established car company)?

GM's cutting 30000 jobs by 2008. What do you think?

So glad I got out of Michigan now.

I think this is an example of Lorpius' grand idea of laissez faire capitalism. Corporate ethics being what they are and loopholes being found, foreign auto-makers decided to build plants here in the U.S. to get away from import taxes. Meanwhile, whatever innovative car designs/improvements occured domestically was easily reverse-engineered by the Chinese and Japanese. The latter was actually responsible for bringing up the overal quality and durability of vehicles, not to mention the improved gas-mileage averages.

So either those laid-off attempt to seek work with the other players in town (Honda, Toyota, Kia, etc.), they go through the dilemma of retraining for a new career, or they take whatever jobs they can, being low or minimum wage jobs. The last may occur moreso since foreigners may legally come to this country if they have jobs waiting for them. That means if Toyota needs to do hiring, they might find it cheaper to bring in their own citizens.

L.P. is against minimum wage. These prior union-members will already feel a huge crunch dropping from the $12, $16 or $22 per hour jobs to try to survive with the $6 and $8 per hour, for those that can actually find work.

When it was learned that the Asian car market flooded our economy with a quarter of a million fuel efficient vehicles, it wasn't hard to see the writing on the wall that led to this. Wouldn't be surprising to see either foreign ownership of GM or Ford, if not total closure. No company can afford to lose $5 billion over a fiscal year, even giant auto-makers. Lorpius thinks the markets (job and car specifically) will all simply correct itself. Just a little thought, L.P... learn Japanese? One day, you might need it, eh?

I'm not quite sure I understand the point of your post. Are you saying that capitalism did not work well enough (the market isn't doing anything to help out GM), or that it is working too well (favoring companies that do not provide the same type of retirement benefits that GM/Ford provide their workers)?

There were a few points, some of which were hidden.

Lorpius is decidedly against the "minimum wage", which is exactly what laid-off workers might have to rely upon. Since that's barely above poverty income levels, if they have families to support, they won't be able to maintain their living standards (sell off the extra vehicles, sell the home, move into apartments, no insurance or health care, etc.).

Sure, the market will self-correct, but the feeling that it's the best course of action is erroneous. This is what is happening with GM. No government bail-out, no employee reassignment to other high-paying positions. It's all well and good, unless you are one of those people... and if you happen to be in management... and if you happen to hold stock.

Car companies combated imports by selling under their labels. Ford used to sell an Isuzu pickup for it's economy-sized vehicles. Import laws made that impractical. So unions here in the United States are what kept salaries so high, NOT minimum wage jobs. With the costs of fuel so high, those SUV's didn't roll of the dealership lots like they used to, because the public is afraid of getting stuck with really fancy drive-way ornament. Sure, a Hummer looks nice, but if you can't afford to drive it, that's what it essentially becomes.

Heck, one car company is trying to sell cars that come with a 2-year guarenteed supply of gasoline. Reckon that's a clue that they aren't trying to make them more economical? So the market demand was high, car manufacturers were focused on the high-end SUV's with the greater profit margin... and they got caught in a tight squeeze.

So why is it that all of these experts in economics in the United States that end up in management positions can't foresee beyond the immediate profit. Hence, no job security due to the profiteering in the short-term. If everyone has that kind of outlook in business, then gasoline will eventually go for $10.00 per gallon, while the supplies haven't really decreased. Markets may be self-correcting, but they can also be self-destructive. Sure, sometimes the system has to break down to learn what the problems really are.

The airline industry and now the car industry, two majour industries that the United States was the world-wide leader, is no longer first because they can't even turn profits. What other industries are next? Steel is already hurting. Even the oil companies are going to struggle when supplies do run short in a decade or two. Are we going to be a company dependant upon insurance providers, investment firms and lawyers? Are we going to all end up in the "Las Vegas" mode of trying to game a little on really long odds for a sizeable pay-off?

Capitalism does work better than some of the options that currently exist. It's certainly hard to put control of an economy in a bureucratic system like government and hope them to be more efficient. Yet if the United States can run progams like the Postal Service and Medicare effciently, how is it the public sector can't do better?

Again, it's the greed that comes into play for making as much money as possible in the NOW because there may not be a tomorrow. With such a mind-set, that's pretty well going to be a self-fulfilling prophecy. What's next, everyone suddenly honouring only payments in gold? And everyone will be okay with it, if it costs half a pound of gold for a month's worth of canned goods and a tankful of gasoline?

There may not be a great answer for a lot of the problems we are going to face in our near or immediate futures. But to state that a system like capitalism or government will "fix" everything is a kind of denial that we do not have to do anything ourselves to fix the problem. If everyone wants to rely upon F.E.M.A. for their housing needs after a disaster, they can wait to be one of the lucky 1 out of 450 people that day that will have shelter, though there isn't any telling how long that it will take to hook up the water, electric and sewer.

Italy is improving it's flood control on a large scale. Is it because of Hurricane Katrina and the tsunami off Indonesia? Or is it because they consider it a good chance that water levels are going to rise enough from global warming that floods will be more problematic? And folks like L.P. will step up and say things like, "They shouldn't have built in flood plains" or "They should have had insurance". Heck, his favourite saying about the unemployed is "They should all have jobs".

We are looking at majour shifts occuring in the world; in areas of economics and demographics. We are going to see continued needs of energy lead to "conflicts" about who can build what kind of nuclear power-plants and where, and who will control the fuel rod supply and the waste disposal. We are all going to wake up with bigger problems than just medical waste, dead animals from oil slicks or mercury-filled dead fish washing up on our shores. The money we are going to spend cleaning up the messes and all of the finger pointing isn't going to fix the problems. Trying to pass legislation to create two-parent households isn't the solution either.

Maybe I sound like a dooms-dayer. But humanitarians are going to realize that donating a dollar a day will barely pay the needs of one person's food rations and medical costs in some far away land. AID's isn't going to go away in a world that won't produce enough flu vaccinations because there isn't enough profit in it. And even if there were, they'd want to prevent where you could buy it from (as in the case of prescription medicines from Canada), while there is no problem of immigrants purchasing whatever they want and carrying it back home.

The problem is the number of people looking to protect their interests far outweighs their desire to look to the greater good. No, there really aren't many altruistic pursuits in this world, but if price-gouging is justified by people claiming it's the only way to make a living, then it's understood that crime exists because not everyone can afford to pay those prices for the essentials.

Soon, the wealth won't be measured so much in paper currencies or precious metals. It will change to clean drinking water, foodstuffs, a place to sleep and people you can trust to help when things get ugly, instead of those trying to maximize profits by supporting wars in foreign nations or trying to secure oil supplies/reserves. I'll settle for a cardboard box and a friend that I can truly trust versus the Beverly Hills mansion, 4-car garage and a safe full of diamonds or platinum and not have anyone left to rely upon because I'd screwed them over in some business deal in the name of "making a profit".

A few points to make. Auto workers are making far more than mimium wage when they are working. They make far more than I make working as an office assitant. However, when they go out into the market trying to find a job that pays 24-34 dollars an hour with a full pension when their only skill is the ablity to put the left rear tire on a car, of course they are going to have trouble. And I'm not sure how we can blame much of anyone except the actual person who did not diversify their ablities. I know it sounds tough, but a company cannot be expected to support the populace as it is, it isn't a charity, its work. It is business, and at times business needs to cut back, it is somthing that a person knows going into a job. And if they choose to limit themselves, I can't say it is the business's fault.

As for fuel economy. While yes, there certainly isn't that large of a push to make fuel effiecent cars, there is one that is starting. I believe Ford is coming out with a fuel effeicent car next year, a pickup at that. The thing is, it is hard to change the public perception of what that car is going to be. That is far harder than it is to actually desgin and make the car. And as long as the demand for cars and SUVs are there from the public, the company will continue to make those cars. Now, as we can see now, SUV sales are way down after the price increases in gas.
This has nothing to do with gas prices.
If you are willing to spend 45,000 dollars on a Chevy Suburban, you don't care about the increase of 12 cents in gas prices. No, but do you remember that employee discount that GM had (then all of the other compaines had)? That is when SUV sales spiked, and thats when everyone who wanted an SUV got one thus resulting in a lessened sale of them now. And now that that has happened, automakers will be forced into making the lower end cars, if only for a little while.

Well that sucks.

Yeah I just saw that on the Yahoo frontpage.

Another Michigan plant bites it...

Something's gonna snap soon.

http://news.yahoo.com/s/ap/20060126/ap_on_...HNlYwMlJVRPUCUl

It's a smart move. We can't really compete with the Chinese. Not right now anyways. A bailout is a waste of money right now...well a waste of money, period. What I'd like to see is the 60,000 people getting laid to maybe become automakers themselves.

Fuel efficiency is not the only reason why American car companies are losing money. Japanese manufacturers put together Cars of better quality. Although Japanese cars are more expensive, maintenance costs drive the overall price of American cars to be on par with Japanese cars.

And I have thought about taking Japanese lessons.

Bah, take chinese. They are entering the market this year. I agree though, there are mulitple reasons for all of this going down. I don't feel at all bad for the board of these companies loosing these jobs. I feel bad that the workers loose their jobs, but even that I have some issues with.

http://www.gm.com/company/onlygm/livegreen...r=1&carNumber=1

Ahhh E85 flex-fuel engines. That's a good start, but what will people go far? cheaper or flex-fuel?

I've looked into that already only to discover that India and China and probably Japan as well are not allowing foreigners to come to work in their country. Only minimally. We and few European nations are the only idiots doing so instead of investing our people. It's not a real option for Americans.

Would you prefer that the government regulate business in order to keep jobs here, Keys? Or do you believe in a free market. Because I still can't figure that one out.

I think we are continuing to follow policies based are theories that economically sound but being put into effect backwards. Before you enter into a global free market you should create a national free market where there is no favoritism by government to businesses in any form. What we currently have now in reality is a socialist market. The government supports businesses and industries in a variety of ways. It favors businesses in one aspect or another even with in industries. In a free market system where there is a level playing field for all businesses to compete, the best products survive at prices the community can afford & is willing to pay. They deregulated, lifting blocks to businesses but they never eliminated the favoritism among business taxes nor ended corporate welfare. Thus these businesses are not used to standing on their own and competing on level terms on a global scale. Create a real national free market first. Only the best products will be offered to the world. We have a global advantage in that we are a nation rich in many natural resources. Not every nation can claim that. We are a relatively unused part of the world haven't depleted all our resources to the extent that other older nations have. We have everything we need to compete right here (except maybe oil, but we should find other alternatives making that less important ASAP but that's another topic.). The policies being put into effect are not based on our real national situation & doesn't fit the models used for the theories they're following. Not according to the little bit of economics that actually bothered to pay attention to & understood. Thus our businesses are not ready to compete in a global free market economy. Thus they are dying off the stock markets.

The other problem is that you want an open free market system on a global scale with other economies that can do the same in return. You know, sell back & forth. But all the government has focused on is micro economies that can't return the favor. Sheer stupidity to me. A few businesses get short term lift in functioning costs through cheaper labor but this advantage quickly dissipates because only the US is the consumer funneling money out of the country. The US consumer is being tapped out in my opinion because we can't afford anything when we're not working because we're considered to be too expensive as labor. When all industry & manufacturing dies with in the nation, in a consumer driven economy, the money's only leaving the nation. That's what I see happening.

If we make a real national free market where everyone really competes on a level playing field then you open free trade to those nations who are willing to do the same & let the best producers win. Tax those that don't until they do, forcing the disadvantage on them until they do. We have a large enough and still rich enough population to market to, to make a difference. We may not for long judging by the yield curve inversion. We were being held afloat artificially by foreign investments and its gonna leave soon.

We are also rewarding those that cheat right now, mainly China. China is not allowing its population to become global consumers. Instead it is making its workers work for nearly slave wages & hours giving them the competitive edge labor wise. Thus businesses around the world are sending all their manufacturing and industry technology to China to use the cheap labor at their home nations costs of living wages to their own people. China is not recognizing intellectual rights or patents or whatever you call them and is absorbing all the technology. Its people in the long term will be the only ones experienced to use the most current technology. Our factories are being gutted and sent to China (or were because they've already improved on them.). All China has to do is keep its money down to prevent its population from becoming global consumers. They'll lift their money just enough so that its people buy Chinese products only, when China becomes the best producer of that product in the world. Money will only funnel to China. Not out. India is playing a similar game in the Information Technology. India has a large population but they too are not buying American goods. The majority of the population can't afford to. America is favoring them for political reasons not business in offshore outsourcing of lower IT and favoring them in granting guest worker visas to learn the higher IT to work here at lower wages. I take offense as more American workers are laid off in our IT industry to read in India times & other Indian newspapers in English that Hillary Clinton, Condaleeza Rice, and others of my government are guaranteeing them more American jobs as they go over there. Why do we bother having ambassadors if the entire federal government is going to travel the world then come back and pass free trade agreements, promised aid, and changes to our immigration & public laws even as they are detrimental to the American people? The presidency, both houses of congress and other federal officials are doing so. Don't even begin bothering to tell me this is proper because it absolutely is not. Did I say political reasons? I meant corruption. This not how American policy is supposed to made.

The problems Reagan faced are still here. That trickle down theory didn't work because the corporate CEO's took the profits and didn't trickle down to the workers much. The same problem is still here. Corporate CEO's work against American workers, raking up the profits in 5-6 years in bonuses of multimillions while the workers get screwed. Reagan had to force them to keep some of the businesses in America keeping America working. Our current & last administration did not and are not. Even as China is tightening it grasp on all property rights to any technology sent over there the CEO's are taking their bonuses and sending it anyways. Including the research & development.

Americans are being told to innovate new markets as we have traditionally. But Americans are being depleted of the resources to do so on levels we've never faced before. Colleges are favoring foreign students for placement. Outsourcing is normally not a bad thing. It allows a business to transfer to another business aspects of a product that it can specialize in & maybe do better than the original business could on site. So in business one, jobs are lost but new opportunities open up in another business specialty. But when you offshore outsource those jobs, no new openings occur here & this is not being taken into consideration when they measure the economy. There's the assumption that new job opportunities open. Also many outsourcing companies are even flagrantly advertising now that guest worker visas need only apply. This is displacement of the American worker. If your being kept out a field long enough, they can claim (and do now) that you don't have the skills they need & are looking for. I recently just saw an ad by the American Medical Association that basically was only for public relations. Since when has the AMA ever had to that? It's because guest worker visas are being passed to take their jobs. Every American professional association is trouble because these visas are being passed for every professional field, displacing American professionals. Do you really believe that our people who were the best in technology just 10-20 years ago, don't want any professional job & that there are shortages in all professional fields? Our government, even in time of war, has kept our borders open to illegal aliens. In fact have passed mandates that more or less reduced our border patrol & enforcement agencies to being advocates for those who enter illegally. This not in American citizenry interests. It displaces Americans from even lower wage jobs which traditionally American youth would enter the job market as well as the handicapped, the average joe who may be manually skilled but not college material (plumbers, laborers in general) all these people are being displaced. But we still have some money left and need to consume. Unfortunately all that's being left is foreign products.

Traditionally in America, its the small businesses that provide the living wages of the majority of the population. That bakery, that insurance office, that real estate estate office, the stores, all those places you drive by. Not the corporations nor even the global corporations. Also traditionally its the small businesses and entrepreneurs who innovate new designs, not corporations. Corporations tend to absorb the best of the latest designs that came from them. So why are economic indicators and the government being turned to focus solely on global businesses? Why allow Walmart which both only sells basically Chinese goods and breaks labor laws to eliminate businesses until almost all small businesses in an area can't compete and close? Global corporations are where you invest your savings for a retirement fund. they're not the starting starting source nor living wage of the majority of the population.

We are being told we have no right to a job. But as I said earlier if look at India or China they are closed labor markets. We can't go there & work unless you are starting a firm (or working for) that's sole purpose is to offshore outsource foreign jobs into their country. We apparently have no right to work at all anywhere until we agree to work at slave (nonliving) wages. Our government is enacting anti-American policies. Unless they change or we rebel we can't overcome all the attacks. In the meantime, we remain a consumer driven economy of foreign goods that cannot be sustained under these circumstances as the majority of the population is being impoverished while an elite class that will never have to work a day in their lives manipulates the world's populations through the WTO.

I believe a capitalistic society on a national scale works very well. There's room for some global corporations as long as they don't interfere with American government, American elections, and American policy. Capitalism on a global scale brings Ricardo's Iron Law of Wages into effect and destroys the American way of life by destroying the large middleclass. I believe in free trade with nations that can compete on level playing fields. I also want workers who are one aspect of trade/industry being represented. Where's labor's representation in the WTO?

Here's a good summary(in my opinion) of what's happening.

http://mathaba.net/0_index.shtml?x=523708

Well its late & I'm rambling but that's the gist of it in my weird way of thinking..

Ford mortgaged it's factories to finance it's losses and restructuring plan.



Wow. It's looking rather bleak now.


EDIT: Aug 21 2007

In other automotive news Chrysler was sold and is now a private company. That makes it the first privately owned american auto maker since...wow...50 some odd years ago when Ford went public.

This is probably reflective of the trend in where other nations are becoming industrialized and able to produce durable goods much cheaper than the United States because of low wages/salaries.

While Japan first broke into the car market here, they exploited the lack of quality by our own automotive makers. Instead of learning the lessons quickly, much of that wealth went overseas to subsidize other industries in which they became world leaders, like in electronics.

Now other countries are following their example... especially those in Southeast Asia. Automobiles are coming from China and Korean peninsula.

And it doesn't hurt when they can benefit from our educational systems as well.

GM stock fell to it's lowest ever recently dispite record sales in Europe.