Note from a ford dealer regarding the bailout.

Note from a Ford Dealer regarding the bailout request. It’s worth the
read!

Editor:
As I watch the coverage of the fate of the U.S. auto industry, one
alarming and frustrating fact hits me right between the eyes. The fate
of our nation’s economic survival is in the hands of some congressmen
who are completely out of touch and act without knowledge of an industry
that affects almost every person in our nation. The same lack of
knowledge is shared with many journalists whom are irresponsible when
influencing the opinion of millions of viewers.

Sen. Richard Shelby of Alabama has doomed the industry, calling it a
dinosaur. No Mr. Shelby, you are the dinosaur, with ideas stuck in the
’70s, ’80s and ’90s. You and the uninformed journalist and senators that
hold onto myths that are not relevant in today’s world.

When you say that the Big Three build vehicles nobody wants to buy, you
must have overlooked that GM outsold Toyota by about 1.2 million
vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2
million in the U.S. GM was the world’s No. 1 automaker beating Toyota by
3,000 units.

When you claim inferior quality comes from the Big Three, did you
realize that Chevy makes the Malibu and Ford makes the Fusion that were
both rated over the Camry and Accord by J.D. Power independent survey on
initial quality? Did you bother to read the Consumer Report that rated
Ford on par with good Japanese automakers.

Did you realize Big Three’s gas guzzlers include the 33 mpg Malibu that
beats the Accord. And for ’09 Ford introduces the Hybrid Fusion whose 39
mpg is the best midsize, beating the Camry Hybrid. Ford’s Focus beats
the Corolla and Chevy’s Cobalt beats the Civic.

When you ask how many times are we going to bail them out you must be
referring to 1980. The only Big Three bailout was Chrysler, who paid
back $1 billion, plus interest. GM and Ford have never received
government aid.

When you criticize the Big Three for building so many pickups, surely
you’ve noticed the attempts Toyota and Nissan have made spending
billions to try to get a piece of that pie. Perhaps it bothers you that
for 31 straight years Ford’s F-Series has been the best selling vehicle.
Ford and GM have dominated this market and when you see the new ’09
F-150 you’ll agree this won’t change soon.

Did you realize that both GM and Ford offer more hybrid models than
Nissan or Honda. Between 2005 and 2007, Ford alone has invested more
than $22 billion in research and development of technologies such as Eco
Boost, flex fuel, clean diesel, hybrids, plug in hybrids and hydrogen
cars.

It’s 2008 and the quality of the vehicles coming out of Detroit are once
again the best in the world.
Perhaps Sen. Shelby isn’t really that blind. Maybe he realizes the
quality shift to American. Maybe it’s the fact that his state of Alabama
has given so much to land factories from Honda, Hyundai and Mercedes
Benz (horrible quality) that he is more concerned about their continued growth than he is
about the people of our country. Sen. Shelby’s disdain for “government
subsidies” is very hypocritical. In the early ’90s he was the driving
force behind a $253 million incentive package to Mercedes. Plus, Alabama
agreed to purchase 2,500 vehicles from Mercedes. While the bridge loan
the Big Three is requesting will be paid back, Alabama’s $180,000-plus
per job was pure incentive. Sen. Shelby, not only are you out of touch,
you are a self-serving hypocrite, who is prepared to ruin our nation
because of lack of knowledge and lack of due diligence in making your
opinions and decisions.

After 9/11, the Detroit Three and Harley Davidson gave $40 million-plus
emergency vehicles to the recovery efforts. What was given to the 9/11
relief effort by the Asian and European Auto Manufactures? $0 Nada. Zip!

We live in a world of free trade, world economy and we have not been
able to produce products as cost efficiently. While the governments of
other auto producing nations subsidize their automakers, our government
may be ready to force its demise. While our automakers have paid union
wages, benefits and legacy debt, our Asian competitors employ cheap
labor. We are at an extreme disadvantage in production cost. Although
many UAW concessions begin in 2010, many lawmakers think it’s not
enough.

Some point the blame to corporate management. I would like to speak of
Ford Motor Co. The company has streamlined by reducing our workforce by
51,000 since 2005, closing 17 plants and cutting expenses. Product and
future product is excellent and the company is focused on OneFord. This
is a company poised for success. Ford product quality and corporate
management have improved light years since the nightmare of Jacques
Nasser. Thank you Alan Mulally and the best auto company management team
in the business.

The financial collapse caused by the secondary mortgage fiasco and the
greed of Wall Street has led to a $700 billion bailout of the industry
that created the problem. AIG spent nearly $1 million on three company
excursions to lavish resorts and hunting destinations. Paulson is saying
no to $250 billion foreclosure relief and the whole thing is a mess. So
when the Big Three ask for 4 percent of that of the $700 billion, $25
billion to save the country’s largest industry, there is obviously
oppositions. But does it make sense to reward the culprits of the
problem with $700 billion unconditionally, and ignore the victims?

As a Ford dealer, I feel our portion of the $25 billion will never be
touched and is not necessary. Ford currently has $29 billion of
liquidity. However, the effect of a bankruptcy by GM will hurt the
suppliers we all do business with. A Chapter 11 bankruptcy by any
manufacture would cost retirees their health care and retirements.
Chances are GM would recover from Chapter 11 with a better business plan
with much less expense. So who foots the bill if GM or all three go
Chapter 11? All that extra health care, unemployment, loss of tax base
and some forgiven debt goes back to the taxpayer, us. With no chance of
repayment, this would be much worse than a loan with the intent of
repayment.

So while it is debatable whether a loan or Chapter 11 is better for the
Big Three, a $25 billion loan is definitely better for the taxpayers and
the economy of our country.

So I’ll end where I began on the quality of the products of Detroit.
Before you, Mr. or Ms. Journalist continue to misinform the American
public and turn them against one of the great industries that helped
build this nation, I must ask you one question. Before you, Mr. or Madam
Congressman vote to end health care and retirement benefits for 1
million retirees, eliminate 2.5 million of our nation’s jobs, lose the
technology that will lead us in the future and create an economic
disaster including hundreds of billions of tax dollars lost, I ask this
question not in the rhetorical sense. I ask it in the sincere, literal
way. Can you tell me, have you driven a Ford lately?

I like the idea of no bailouts for any business. We are handing over more and more power to the incompetents who have had a hand in every financial crisis we are facing. If the market were allowed to work without government mandates and handouts and favoritism we would have healthy markets and healthy businesses. Maybe we would only have a Big 2 instead of a Big 3. But what we are gonna get for sure is more big government.

dd

If we can work in a new stadium for the Vikes…I’m in!

15 billion for auto industry and you want to cut it down to 2. 700 billion for the likes of AIG, Lehman bros, Citibank. Capital One, who should go under there?

Every single one that needs to go. Bankruptcy is for those who need it. Bailouts is our elected officials picking winners and losers. The market doesn’t play favorites.

dd

While I agree there is no fairness in how the automakers have been treated.. the comment that the perpetrators were rescued but the victims were not feels a little like the automakers consider themselves the only victims… obviously this is not true…. there are going to be a LOT of victims…. I guess I remember a line out of the Movie “the crow”… “victims…. arent we all?”…. the troubling thing is that a lot of money is being tossed around and it seems that businesses are falling over themselves to get in line.. and who can blame them? there are enough smart people around to come up with SOME kind of idea that doesnt end up being a TOTAL disaster… if the cure is worse than the disease we are goners….

I have real mixed feelings about the auto company loans. I do know that you cannot compare their situation to that of the financial companies.

US automakers (and also airlines) have flawed business models. They build good cars, but when your competitors have a much higher profit margin per vehicle, it leaves you extremely volnerable. If Honda and Toyota wanted, they could sell their cars at cost and put the big 3 out of business in just a few years.

Where the big 3 were profitable was as finance companies. After discounts and incentives, they were basically selling cars at cost and trying to make money on the financing. With all those fixed costs, they just dont have any room for error during any slowdown.

I would be more supportive of giving them a bridge loan, but I just dont see it helping them in the long run.

What I really hate is people complaining about executive pay and flying around in private jets. That isnt the problem and just distracts from the real issues w/ these companies. Also, having a “car czar” appointed and congressional oversight is ridiculous. What the heck to they know about running a car companies. They are part of the problem (mandating higher mileage, lower profit vehicles, pushing for electric cars w/out a total economic study to see the stress it would put on power grids if we have a massive transition to electric at a time when we have $1.50 gas).

We keep hearing about the failed business plan. Has anyone outlined what that is? I ask only because the Detroit 3 have been doing well, better than well in fact, when their products were selling. I guess I’m not sure what the failed model is they are referring to.

The unions? That is the only thing I can think of that the politicians are tip toeing around. Heaven forbid a certain political party say anything bad about the unions. I absolutely loath the unions and what that mindset has created. Some here are union members and I understand and will respect getting roasted but it won’t change a thing. If the failed business plan is hinging on the unions then people need to understand how they came to be and why they are here. If a company was in financial trouble and the solution was to tell the union to GFYS they’d have done it 25 years ago. And while some companies have actually invited unions into their doors non did hoping the outcome would be what it is. Most places were forced to become union.

What a long, ugly road this fiasco is turning into and with absolutely no credible leadership to steer us down a different path.

Unions, corporate planes and big bonuses?!?!?! I could give two shats about any of that. Bottom line here is if you cant make a go of it, chaneg it, if you cant make a go then, trim some more, if history keeps repeating itself than change your strategy or go belly up just like any other business owner. Because you are Ford, Chevy or Chrysler does not entitle you to anything more than the next business, IMO. However, take a good hard look at what Rat is saying, the truth might onlu be under the skin, look at the Star Trib, the union may have had its place and still might but there has to be some push and pull, everything is not always going to be about the employees, thats just the typical selfish thinking that society has condoned and in my eyes promoted.

Its good news too me that the big 3 are building a very good auto now unlike 15 years ago. As I’ve understood it the unions have made concessions in the latest contracts and also in past contracts. I have to say one thing about unions, if it wasen’t for unions everybody would be making lower wages, less then they need even with a tightened belt at thier home. If what I’ve heard wages and unsafe and unfair working conditions were like befor unions came into play were sweatshops, long hours, children laboring long and hard etc. Unions do have thier place because of greed in supporting the American workforce and now working conditions are what they should be. Unions also have the reputation of sometimes wanting too much and passing the cost down the line to the consumer which also isn’t right, theres nothing wrong with organised labor as long as it dosen’t demand too much, look at what the alternative would be. As long as a decent mutal contract can be agreed apon by both sides that will work its good for both sides. I used to work for a local union here in town and sometimes they do demand too much with keeping the costs down for the employer. Im a drywall contractor presently with just one other guy helping me. I have no problem at all with hireing a union drywall finisher or hanger at the present scale because I know skilled labor works for unions, if they don’t pan out then send them back to the hall and get another worker. I say give the big 3 the loans they need, not grants, that are to be paid back once thier better on thier feet, like the loan Chysler got and paid back with interist. Look at the alternative with millions loosing thier job and haveing to ask for help through the welfare system where we all pay for that, atleast a loan will be paid back with interist. To me theres nothing wrong with helping a company stay on its feet to keep thier workforce employed especially because one of the reasons is unfair subidized priceing competition coming from somewhere else. If the big three are headed in the right direction and it looks like they are and considering the conditions then I can’t see pulling the rug out from under thier feet, especially if its a loan and too be paid back.

That is the problem, IF the loan is paid back. Look at all the money that was given to airlines and lost. The airline industry, over its life, had LOST money. Yet, they continue to get support.

If the govt really wanted to help the auto industry, they would leave them alone. But too many hippies in congress wont allow that.

I hate hippies.

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That is the problem, IF the loan is paid back. Look at all the money that was given to airlines and lost. The airline industry, over its life, had LOST money. Yet, they continue to get support.

If the govt really wanted to help the auto industry, they would leave them alone. But too many hippies in congress wont allow that.

I hate hippies.

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That is the problem with any loan, what if it doesn’t get paid back. That’s why they need to secure ample collateral. The airlines are a great example of not securing useful collateral, I’d guess anyhow. We the airlines not government controlled in the early 80’s or so? I know the traffic controllers were and that was a terrible fiasco when they went on strike. On the other hand Chrysler took a government loan back in that same time and paid it all back (A billion dollars I think) with interest. So maybe it isn’t all doom and gloom?

I still say we either need to “give back” the 700 BILLION or have better plans in place to doll it out. I just can’t buy into leaving the auto makers fail. If the money is going to be loaned it seems it should go to the largest segment that can give the best bang for the buck.

I’m sorry but I can’t support any industry that pays an assembly line worker on average over $50/hour. Let them fail! If it truly is a viable business modern capitilists in this country will buy what’s left, re-incorporate, dismiss the unions back to the hole they came from, and begin making a competitive product paying a realistic wage.

The gravy train is over, no more drinking beers and smoking grass in the park during lunch… Bolting windshield wipers to a truck is $12/hour job, if you don’t like it, go back to school and get the qualifications/education to do something better.

The only thing anybody needs to know when it comes to Washington is: How can any crisis (real or imagined) be turned into a means to give us more power and control. You go to congress with your hat in your hand and you’ll get your money. You will also get told in which hand to hold your hat, the proper way to approach congess, what to do with that money, who has to go from your organization, what your business is going to build, who your business will and will not sell to, yada yada yada. Makes bankruptcy look like Paris in Spring.

BUSINESS ALERT!!! STAY AWAY FROM CONGRESS AS MUCH AS YOU CAN. DON’T BECOME A PART OF THEIR SOVIET-STYLE 5 YEAR PLANS!!!!!

dd

The point the Ford dealer and many other miss is if the country doesn’t have a stable financial backbone, it will collapse. If people do not have confidence in the banking system, the country will collapse. Read a little on the great depression. It wasn’t just because the stock market crashed. People lost confidence in the financial system and people made a run on the banks. Bad news. Imagine today if say you heard Wells Fargo was going to fail tomorrow. Well if you are a customer, you are going to go withdraw your money. If you are not a customer, you will figure your bank is next and go withdraw your money. The banks can handle that and collapse and right into a depression we go. If all three automakers go out of business (which wouldn’t happen anyway), what happens? People lose their jobs and people who invested in the company are out of their money. The entire country won’t collapse. It doesn’t mean anything to lose confidence in the auto industry. Not to pick on Chrysler, but let’s say they go completely out of business, how many jobs is that? Say 1 million based on Chrysler and the suppliers that can’t survive and whoever else you want to throw in there. So we now add a million unemployed. Guess what, that is going to happen in the months of November and December anyway and the country is not collapsing. Yes, I feel bad for anybody losing their job and benefits and less income is available to spend elsewhere meaning other companies will struggle too, but I don’t see why those jobs are any more special then say the people who are getting laid off at 3M or AT&T. I’m not saying the 700 was a good idea and it certainly isn’t being spent right, but the concept of saving your financial system makes sense. Not so much for a car maker.

Again, all three companies wouldn’t just go out of business so there wouldn’t be a 3 million job lose. They would go into bankruptcy, reorganize and dump the waste. They should just tear up the union papers and start over and hire at-will employees like the rest of us. Seems to work just fine at Toyota and other car makers. Paying $65 an hour to cut the grass, having a forklift driver at Delphi (who filed bankruptcy) making $106k, and paying 12,000 “employees” full benefits to do nothing is outrageous.

I was trying to find some info on salaries at Toyota and I came across this. I’m sure the numbers can be twisted certain ways to make things look the way the author wants, but I think it shows that even a few years ago when everything was so great, GM was in trouble. GM VS Toyota

From Time Magazine, “Is This Detroit’s Last Winter?” 12/04/2008…

“Next year, workers at Ford plants will earn an average $53 an hour with benefits, the result of a breakthrough industry agreement worked out with the UAW in 2007. That’s close to the $49 an hour that workers at the transplants average and far below the $71 an hour with benefits that was the old UAW wage”

My point is that no where else is assembly line work compensated so highly, the unions did this to the industry, their contracts have had the corporations over a barrell for decades. Shame on management for ever accepting the contracts in the first place.

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From Time Magazine, “Is This Detroit’s Last Winter?” 12/04/2008…

“Next year, workers at Ford plants will earn an average $53 an hour with benefits, the result of a breakthrough industry agreement worked out with the UAW in 2007. That’s close to the $49 an hour that workers at the transplants average and far below the $71 an hour with benefits that was the old UAW wage”

My point is that no where else is assembly line work compensated so highly, the unions did this to the industry, their contracts have had the corporations over a barrell for decades. Shame on management for ever accepting the contracts in the first place.

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This is exactly what I am referring to, shame on them is right! Now on the flip side of this (devils advocate) how is a guy that has provided for his family and lived off of $50.00 an hour to be expected to live off of half of that? That is a darn good wage to say the least for a good portion of society.

Here Here!

Understanding how the legal and financial system works there is little reason to blame the big 3 for having unions in place. As I said before if it was as easy as telling them to get lost that would have happened decades ago. It isn’t. Congress knows it but a certain party is heavily funded by unions and will do nothing to upset the apple cart. Detroit’s fault for the union contracts? Not hardly.

And the actual number is closer to 35 million unemployed if the big 3 fail. That is the projected number factoring in everyone from the top CEOs at the plants to the porters and wash up people in the car dealerships. If only one goes out of business the impact is far greater than one million people. Based on the news reports anyhow, I never actually did a head count.

How many more people could afford American cars if they werent paid $50/hour?

Well you’d think a lot. But think about it for a second. Are American cars thousands more than their import competition? No. Thinner profit margin. So who is gouging who? Seems the imports are gouging their customers.

Then there is the pro union thought process. “How many more Americans could afford to buy the cars if everyone was making $30-$50 per hour.” Well maybe if everyone earned what they were worth instead. On second thought scratch that. I kind of like having spending money!

With the exception of foreign cars built in the US, the addtional shipping costs should let US cars have a natural advantage over imports.

Interesting thought. I wonder what the actual shipping cost might be on an average sedan. I also wonder what the actual percentage of imported Camry’s, for example, is to those built here. If there are examples of each I wonder if the less expensive “home built” cars reflect the difference in the bottom line? Probably not. Most likely disguised as “average of both costs” or some BS like that.

I heard on some program the other day that the scale union auto workers make is 36? an hour, I don’t know forsure what they make. To pay taxes etc. the auto manufactures have to charge around $100 per hour or more per worker. When I heard this on tv my immediate thought was damn thats a high wage, Id hate to live in Detroit and see and pay those unrealistic prices that it takes to live there. I see that area going the same route that other areas have gone like certain areas in California and Florida plus others. There is a place for unions but like I said befor they can’t price themselves out of existance and expect everybody to support thier lifestyle. Im for fair labor but not wanting too much because it prices everybody else into hardship that has to live in that area. Inflations always been one of my pet peeves no matter whos causing those prices to rise.

Leting the auto companies fail dosen’t solve anything too me and if congess gives the loans it should come with concessions from both sides so they can sell autos at a realistic price and do all this with interist on thier loans. The last I heard about two weeks ago was that thier going to appoint a former executive from a big company (General Electric) or automaker as the one to oversee what goes on if the moneys doled out. Anyone heard about that appointment, it sounded like the guy might know his stuff, so I see its not just a big give away.

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And the actual number is closer to 35 million unemployed if the big 3 fail. That is the projected number factoring in everyone from the top CEOs at the plants to the porters and wash up people in the car dealerships. If only one goes out of business the impact is far greater than one million people. Based on the news reports anyhow, I never actually did a head count.

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Geez, where did you get 35 million from?? Must have come out of a union scare tactic or something?? Maybe I am too lazy to properly search the internet to find that?? Please post that info. I only seem to be able to find 3 million if all went out of business. If 35 million people were going to lose their job, then yes I would say bail them out.

But according to This that number is just a tad high. To summaries this from US News:

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The most recent report from the Center for Automotive Research studies the potential job losses if two or three of the Big Three carmakers failed. Researchers included jobs at the automakers, their suppliers, suppliers to suppliers, and jobs lost through a “spin off” effect when Big Three employees and suppliers reduce their spending.

if all three ceased operations in 2009, 3 million jobs would be lost in the first year, according to the report. If two failed–or if total employment and production was reduced by 50 percent–2.5 million jobs would be lost in the first year. In both scenarios, researchers estimate the employment picture would begin to recover in 2010, as international carmakers beefed up U.S. production and workers began to find work elsewhere. In the latter scenario, the remaining member of the Big Three would help by picking up production again as well.

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Well you’d think a lot. But think about it for a second. Are American cars thousands more than their import competition? No. Thinner profit margin. So who is gouging who? Seems the imports are gouging their customers.

Then there is the pro union thought process. “How many more Americans could afford to buy the cars if everyone was making $30-$50 per hour.” Well maybe if everyone earned what they were worth instead. On second thought scratch that. I kind of like having spending money!

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Actually I think I read that the Japanese imports average $4k or $8k more than American cars. From about 1996 to 2005 imports were about 10k more expensive. think they must be talking about the “higher end” cars or something because some of those little toy cars are pretty darn cheap?? Not sure. Back to that link comparing GM and Toyota, it shows that GM losses over $2k per vehicle sold while Toyota make almost $1,500 per.

It is not gouging. If someone feels the price is too high, they buy something else. No need to have a discussion on reasons why someone buys an import, but it shows that people are willing to pay more for them. If you notice the domestics always have some sort of special offer to get you into their vehicles whereas until this year (because demand is way down) you rarely see that from the imports. Once reason I have a Ram is they had close to 10k in rebates on it. I got the Ram because the Silverado was priced higher to begin with and it didn’t have the huge rebate. So the Ram was the better deal.

Wow, I obviously had my number F’ed up somewhere along the lines. My bad. They fear if all three go out of business they unemployment could go as high as 20%. That would make the 3 million number a little low yet as well. Either way you look at it America will pay. Either through the 700 BILLION bailout or through a completely ruined economy and likely both.

Just wathcing the head of the UAW, Ron Getyerfinger in them, and he’s talking about how with current employees, UAW wages are about $2.00 lower per hour than Toyota right now with all benefits and bonuses considered….. that’s fine and dandy, how many “retired” employees are there at Toyota pulling huge benefits ??? I can’t believe nobody (reporters) asked him that question…..

big G

http://news.yahoo.com/s/ap/20081219/ap_on_go_pr_wh/meltdown_autos