How many of you heard the news yesterday about there being the creation of a “car czar” to help coordinate the bailout of the big 3? How many of you automatically went “TOM AND RAY!!!” Hubby and I did at the same second.
Just what we need…a “car czar”.
Yeah, I heard about it. Bad idea. Just umagine…GM run by a Washington politician. A true case of the blind leading the blind.
My first thought was Lee Iacocca! I don’t know whether he would be interested (and I think that he is pretty old by this time), but he would be an ideal overseer for the ailing US car industry. Just because someone is appointed by the Federal Government, it doesn’t necessary mean that a traditional politician would be the person appointed for the job.
Just read where they’ve decided not to have one Czar; it will be an oversight committee. Sometimes you need someone from the outside to reform things; Mullally, an outsider, did things long necessary at Ford, that had eluded them the previous 10 years.
Having said that; an oversight committee is needed to ensure that the compnies don’t fritter away money the way the financial recipients started buying other companies with the money instead of making the intended loans.
The ground rules will be agreed on this week, and the committee wil keep track of the progress against the plan.
The real bailout will start in late January when Obama will hit the ground running and will provide the strong push towards environmental-friendly product development and real restructuring that they should have been pursuing all along. This will likely mean the sale of Chrysler to GM or other entity, like Tata. Probably 14 plant closures with the government picking up a lot of the termination costs of the redundant employeees. Even the feds know that Japanese and Korean companies want nothing to do with hiring layed off Detroit 3 workers.
The other aspect concerns coordinating this re-sizing with the Canadian branches and the Canadian government which has already agreed to do its part in assisting the companies, provided only redundant jobs are shedded and necessary jobs are not shipped out of the country. The companies have asked the Canadian government for CAN$6.8 million, about $5.4 US, and they will likely get it all provided the unions and carmakers make the necessary concessions.
Bush basically is a laissez-faire capitalist, who believd that the industry would automatically do what was in their own LONG TERM interest! Dream along!
That should be $6.8 BILLION Canadian.
“Bush basically is a laissez-faire capitalist, who believd that the industry would automatically do what was in their own LONG TERM interest…”
Or face the consequences of their actions. You forgot that part. Laissez faire does not assume that anyone will do what is good for them. It does assume that the fittest will survive, and that the market will most efficiently determine who survives.
Sadly, the companies forgot about their long term interest and now don’t want to face the consequences.
I suggest the brothers for the job. It is time they got a real job. They sure will not do worse than what the corporate officers have done.
Good points. But I don’t think it is that easy. The big car and big truck markets were owned by the Beg 3. The international competitors, especially the Asian ones, had to find a segment of the market in which they could compete. They chose the low margin small car market because that is all they could do. Over time, their quality improved enough that they owned the small car market. They then started eating the Beg 3’s lunch. Still, there was plenty of room for the Beg 3 to make money on our insatiable appetites for large vehicles, especially trucks. Until everyone in North America decided to stop buying big cars and trucks over an extremely short time period, they were capable of making money.
The Beg 3’s cost structure has gotten out of whack so badly that in 2005 I priced an equivalently appointed Buick LaCrosse and Honda Accord EX V6. Even after the discounts, rebates, and GM bucks, the LaCrosse was $1000 more than the Accord. And the Accord had a moon roof and XM radio; both would have made the cost difference $1000 or more larger. I used to work in a steel mill. We had excellent products but couldn’t compete with the mini-mills in the US or imports on low tech products. The only way to survive was to shrink and provide higher technology stuff that many of the competitors couldn’t make.
Sure, labor costs are high in the auto industry and were also (still are) high in the steel industry. But the cost of absorbing a strike is enormous. Labor strikes could also have led to plant closings and possibly an earlier demise of some of the Beg 3’s marques.
It’s real easy for all of us to look back 5, 10, even 30 years and see clearly all the failings of the Beg 3. And while you may have guessed that it would come to this, it was just a guess. I imagine that management knew there was a risk of these events transpiring. They just couldn’t figure out how to balance the balls to get it right, and maybe it was impossible given the cards they were dealt.
If we have to do this (I think it is a horrible idea) - I’d recommend a small team. Say, Michael Andretti, Ray Evernham, and Jay Leno (since he’ll have little else to do soon).
They both are first and foremost car nuts. Both Michael and Ray of course raced, and also have run businesses. Leno’s life when not on the TS, seems to be at his garage - which I respect (and am rather jealous over).
I think just about any combination like this would be better than any Washington suits you could pick. At least the products would be interesting to look at, and fun to drive! Can you say 5-point seats standard? Who needs all those airbags then - saves weight!
Good comments jt! The key issue here seems to be the inability/unwillingness by Detroit to design and build good small cars. From the highly flawed Chevy Corvair in 1960 through Pintos, Vegas, etc, all these have been half-heated attempts with the resultant market share loss.
The way the market will shake out is unknown, but GM and Ford will survve in some form, if only because they are doing quite well overseas where they are not saddled with the wrong product lines and higher costs than the competition.
As for profitabilty on small cars, Toyota and GM sell about the same number of vehicles worldwide. In the last complete year, GM lost $38 billion, while Toyota ONLY made $17 billion profit. The vast majority of Toyota’s sales were in small vehicles, and small trucks.
My own predivtion is the disappearance of Chrysler, significant downsizing and restructuring of GM with Hummer, SAAB, Saturn, and Pontiace gone. As for Ford, they are very successful overseas and will sell Volvo, reduce their stake in Mazda further, but not lose the design sharing. Ford sells more trucvks tahn VChrysler sells cars, so that segment will remain strong but at a reduced rate. Ford’s new designs will come from Europe and Mazda in small and medium cars, while design of trucks and large cars will remain in the US.
Since Jay Leno will be just as busy as ever with his new 10:00 pm TV program, I think that you can rule him out. As for the other two, I would like to know something about their level of literacy, which is essentially an unknown quantity.
Will a “Car Czar” be another political fiefdom? How much haas been wasted on the "Homeland Security"RATHOLE? But if we must have one let Gov Blagojevich appoint him and we will know from the beginning what we are getting.
“Bush basically is a laissez-faire capitalist, who believd that the industry would automatically do what was in their own LONG TERM interest! Dream along!”
I agree, yet…
It’s not a Dem vs Rep issue. Since Bush left Texas with with Huston taking over as the most polluted city in the US and 1 of 3 rivers unusable for sport/recreational use…it sounds familiar on the national level.
Yet, Eisenhower was instrumental in Fed. land preservation purchases and Nixon supported forming the EPA.
We can all find common ground to make our autos more responsible environmentally.
as a goal…let’s have a zero pollution Indy 500.
If it takes a CAR CZAR or a Clutch King or Tom and Ray…I don’t care.
Govt. doesn’t do everything so bad. We are still here after nearly 2 1/2 centuries.
it will be an oversight committee.
Does anyone know if they’re doing this with AIG and those other banks that had their hands out a little while ago?
Of course not.
“…let Gov Blagojevich appoint him…”
Whats your bid for the Car Czar job?
Looks like we won’t need this position - at least for now (good). In the end, it was the UAW that foolishly sunk the deal.
Look at the bright side…wall street wants to party with the 700 billion and not release credit to the “public”…now the pres. may be forced to reallocate some of these funds to big three…what should have happened anyway.
As long as we don’t run out of ink, they can survive for a while with the Monopoly money we’re spreading around.
When did the UAW membership get to vote on the suggestions by Senate republicans on what would make the deal pass? It seems to me that everyone associated with the deal is to blame: UAW, management, and Members of Congress.