Why is Thomas Friedman saying "If we miss the chance to win the race for Car 2.0 because we keep mindlessly bailing out Car 1.0, there will be no one to blame more than Detroit’s new shareholders: we the taxpayers," when Detroit, and specifically GM, will release Car 2.0 in November 2010? Why is he willing to tout Japan's "government led electric car project" and yet spit on any effort of the American government to invest in a company developing an electric car that will destroy the fuel economy of a Toyota Prius?
Why, if the domestic auto industry problems are all self created, would a relative start up in Silicon Valley also be asking for government money to continue to develop the automotive technologies of tomorrow?
Why are we not talking about the Chevrolet Volt and what our nation needs to do to get it on the road today? Why are we willing to watch GM fail when the company holds our nation's best chance at lowering our oil consumption?
Why is no one reporting that our nation's highest paid autoworkers work at Toyota's Georgetown, KY and Fremont, CA plants?
In the follow-up memo, Toyota pointed out that workers at Georgetown and at New United Motor Manufacturing Inc. in Fremont, Calif., which Toyota owns with GM, are the highest-paid autoworkers in the United States.
Why didn't anyone remind Senators Bob Corker of Tennessee, Mitch McConnell of Kentucky, and Richard Shelby of Alabama that all of their states have always received more federal funding than they've paid in federal taxes? Before they killed the auto deal, why didn't anyone remind these senators that much of the excess federal money their states receive comes from the workers in the states they've turned their back on?
Why can the American government quickly pass a bill that shells out $700 billion to financial institutions, but can't, over the course of a month, come up with a bill that releases $14 billion to the auto industry?
Why?
you've asked all the right questions as always david.
ReplyDeletealso, have you heard about the new Ford Fusion hybrid coming out early in '09? bloggers fromautoblog and jalopnik have averaged between 40 and 43.1 mpg in mixed driving. not just on the highway. this easily beats the camry hybrid.
http://www.autobloggreen.com/2008/12/13/abg-first-drive-2010-ford-fusion-hybrid-43-1-mpg-on-the-street/
Last week's Fortune cover story explains how all levels of General Motors personnel "became insular, self-referential, and too wedded to the status quo - traits that persist even now, when GM is on the precipice."
ReplyDeleteThe Volt is years behind where it needs to be. Why don't any of the Big Three automakers have a product on the road that competes with the Prius today (or yesterday)? Why does Bob Lutz say things like this?
The Big Three sells tons of cars, and lots of those are in fleet sales to corporations, rental car companies, and government organizations. Large fleet sales reduce resale value. According to LeftLaneNews, "Fleet sales can bolster overall sales numbers, but the domestic automakers are reducing sales to daily rental companies in order to improve their vehicles’ resale values." Selling the most cars and being the biggest company (which GM goes back and forth with Toyota on now) doesn't mean you're the car company that's doing the best things now or in the future. What matters is customer perception, and changing that in anyone's favor is a difficult task.
I agree with you about the Malibu. The Chevy Malibu and the Ford Fusion are the only American cars that I could potentially buy that I find visually appealing (the Cadillacs look cool, too, and SUVs aren't my style).
Lots of people argue that the organized labor served an important role in history but today hamper American economic flexibility. Michigan, despite its dense population of skilled labor, has a difficult time competing against slack jawed Tennessee, Mississippi, and Alabama for automobile manufacturing (I tend to think of Michigan only being ceremonially included in the list of states Volkswagen considered for its new plant before selecting Tennessee). The UAW's bargaining power and labor laws in Rust Belt states did a fantastic job of creating a solid middle class, but we've all watched that erode. If the labor laws in Michigan, Pennsylvania, and Ohio were modified to be more similar to those of Tennessee, Alabama, and Mississippi, maybe Sun Belt growth would be controlled. I'm not sure of this, but it's something I've been thinking about all weekend.
The "other" paper in Nashville had an op-ed today that discussed these things out loud: "The national press has posited this as a battle of North versus South. It is really a battle between the past and the future. Perhaps the greatest irony is that the Democratic Party, which champions the environment, energy independence, and new technologies is clinging to an auto industry in Detroit that has refused to embrace any of these values until very recently. The connection, of course, is not between the party and the companies, but between national Democrats and the unions...There was certainly a time in this country’s history when organized labor was very much needed to protect the American worker. That model and its associated legacy costs are helping to drag down some of America’s biggest industrial institutions in the 21st Century, including the automakers."
I know we disagree on these issues but I hope we can still be friends and you'll let me visit.
Tom,
ReplyDeleteAs the article suggests, GM has done a lot over the last several years to reduce fleet sales. This is a good example of a problem that GM has been addressing and improving, but yet is being talked about as if they've been completely negligent and unaware. They haven't moved quickly enough in addressing their problems, but my frustration with the past few weeks stems from listening to these problems as if the big three have not taken any large steps restructuring their business. And though I understand that being the biggest doesn't mean being the best, no one should be talking about the big three as if they're no longer relevant. They still sold almost 50% of the cars and trucks last year!
The big three offer several hybrids. Bob Lutz has made a lot of dumb comments and he's said "I’ve made politically incorrect remarks about global warming, so it should be me,” who steps down if it means saving his company. He's also the man behind the GM's best cars and the Volt project.
Labor has become an easy scapegoat for the problems of the domestic auto industry. Because a lazy a reporter can google "UAW wages" and easily find old reports on domestic vs. foreign labor costs, everyone is quick to point out the discrepancy. Before we blame the union though, I want to see a report on all the other costs compared across the big three and the foreign companies. Supplier contracts, marketing contracts, transportation costs, manager pay, bonuses, etc. You don't lose $38 billion while your non-union competitor makes $14.9 billion simply because of how much you're paying your employees on the line.