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SamReeves
01-06-09, 16:55
General Motors should have never taken the bailout money, and reorganized on their own. One of the great American auto manufacturers will never be the same again. And Obama claims he won't micromanage the new GM…yea…sure! :hea: I want my $20 billion back so we can fund the local police and fire department. The federal government will never see that money again.

After this mess with GM and Chrysler, it sounds like a good time to buy a Ford! :whi:

Read the bankruptcy story in the Wall Street Journal:

GM Files for Bankruptcy Protection (http://online.wsj.com/article/SB124385428627671889.html)

Dennis's Mom
01-06-09, 16:57
Yeah, this is just a shame. My great uncle in law has two GM dealerships too. This isn't good for a lot of reasons. :(

Fish.
01-06-09, 18:14
After this mess with GM and Chrysler, it sounds like a good time to buy a Ford! :whi:
I've always been an import fan anyway. GM got themselves into this mess, they should have dug themselves out before it was too late.

Cochrane
01-06-09, 18:34
About government intervention in general: Well, Conrail worked, didn't it?

I'm more a fan of italian cars anyway. Especially Alfa Romeo - which is why the Fiat/Chrysler deal strikes me with horror. Chrysler is a huge, annoying mess that Fiat now has to drag around, possibly sinking both - it didn't work out for Daimler Benz before, after all. I basically hope that this is just a deceptive ploy by Fiat to get funding from US tax payers, because that seems like much less risk than the alternative.

irjudd
01-06-09, 18:39
That's all a good read, but what's more important is "what does it mean for Joe McCarBuyer?"

Cochrane
01-06-09, 18:58
That's all a good read, but what's more important is "what does it mean for Joe McCarBuyer?"

Depends on whether he was planning to buy a GM car. Given that GM got in this mess, among other reasons, because car demand in general and GM demand in particular is very low, I'd say not much...

SamReeves
01-06-09, 19:27
About government intervention in general: Well, Conrail worked, didn't it?

Only to be broken up into CSX and NS later! :D

That's all a good read, but what's more important is "what does it mean for Joe McCarBuyer?"

Crappier service since GM will be a government entity?

Draco
01-06-09, 19:51
Well, my 89 Suburban should do ok. As for new cars...its all about VW.

:}hello friend
01-06-09, 20:11
Its a shame GM went bankrupt... I heard they'll be back after the recession is over.... then hopefully I can get a new Camaro :cln:

irjudd
01-06-09, 20:27
Doesn't really seem like anything to be ":hea:" about, to be honest.

Trigger_happy
01-06-09, 21:06
So what happens to all of the different bits of Gm? I mean like Holden and Opel and Vauxhall?

EmeraldFields
01-06-09, 21:37
Nissan ftw!:D

2kool4u
01-06-09, 21:38
Well its time to buy foriegn cars now! :vlol:

Cochrane
01-06-09, 21:53
Only to be broken up into CSX and NS later! :D

Yes... government intervention resulted in a network so attractive that two class I railroads went into a bidding war over it (before deciding on the split).

So what happens to all of the different bits of Gm? I mean like Holden and Opel and Vauxhall?

No idea about Holden at all. GM is looking for a buyer for GM Europe, that is Vauxhall and Opel (though not Saab, which was already bancrupt and might be sold off independently). The german government favors a deal with canadian supplier Magna, which also involves some russian fonds and GM retaining about one third of the new company. Since the german government has promised lots of government loans to the eventual buyer, this is quite important, and it seems that the other relevant entities (namely GM and the US government) have agreed on Magna as well. The other european countries where GM produces apparently didn't realize that they'd be affected as well and now cry for some say in the discussions as well...

Well its time to buy foriegn cars now! :vlol:

The cars of european branches of american companies are good (Ford, Opel is horribly boring, european Chevrolet, former Daewoo, sucks), but american cars? The only ones I find even remotely interesting are the Ford Mustang and the Corvette. Anything else seems very, very unappealing to me. :D

Mr.Burns
01-06-09, 22:20
I'm definitely not happy to see this happen but it was bound to. :( As for American made cars, Ford Mustang all the way :)

takamotosan
01-06-09, 23:23
if you ask the government for money to bail you out, you better expect their input to your business practices.

you can't have your cake and eat it too.

voltz
02-06-09, 00:39
you can't have your cake and eat it too.

The higher up folks had theirs already, so do they care about restructuring?

innocentvenus
02-06-09, 01:00
Well its time to buy foriegn cars now! :vlol:

I'd go for that! At least many of the foreign cars are made in American...by Americans. Not American companies having their cars made in Mexico.

Seriously though for american cars....corvette all the way!

Draco
02-06-09, 01:30
if you ask the government for money to bail you out, you better expect their input to your business practices.

you can't have your cake and eat it too.

You can't eat your cake and have it too.

[/knashingteeth]

takamotosan
02-06-09, 02:26
now, i am by no means a fan of obama,
but did he not ask the GM CEO to resign? isn't the management the big problem?
i don't recall where i heard that, but i did hear it somewhere...

MattTR
02-06-09, 03:28
Nissan ftw!:D

Agree, I own an Altima. ;)

Anyways, saw this coming, there's no way the government would let GM go out of business.. let's see what happens? :p

Draco
02-06-09, 04:17
Anyways, saw this coming, there's no way the government would let GM go out of business.. let's see what happens? :p

Why the hell not?

That is generally what happens when a business falls on its face.

Kittypower
02-06-09, 04:32
Why the hell not?

That is generally what happens when a business falls on its face.

Do you know how high unimployent would be if we let one of the last american companies that still manufactures in the United States to go under.

scoopy_loopy
02-06-09, 06:06
Thankfully, Holden - Australian's only car manufacturer - doesnt look like it's going to be dragged down by its parent company, GM.

Which is lucky. Cause Ive always had a soft spot for them :p I hope the other companies owned by them can stay afloat too (Is BMW still GM owned? I love those cars)

Cochrane
02-06-09, 07:07
Do you know how high unimployent would be if we let one of the last american companies that still manufactures in the United States to go under.

There were 123,000 employees working for General Motors North America in September 2008. The amount of jobs at suppliers that depend on them is very, very difficult to estimate, I've heard numbers of up to four times that. Is that worth all the money the government is pouring into that? I don't know, but since it's not my money going to GMNA, I don't actually care too much.

Thankfully, Holden - Australian's only car manufacturer - doesnt look like it's going to be dragged down by its parent company, GM.

Which is lucky. Cause Ive always had a soft spot for them :p I hope the other companies owned by them can stay afloat too (Is BMW still GM owned? I love those cars)
BMW? They never were. Could it be you are confusing them with someone else?

scoopy_loopy
02-06-09, 07:25
BMW? They never were. Could it be you are confusing them with someone else?

Really? Wow. I wonder why I thought they were...

Ward Dragon
02-06-09, 07:31
Is that worth all the money the government is pouring into that? I don't know, but since it's not my money going to GMNA, I don't actually care too much.

Ouch, rubbing salt in the wound there :p

I think that if this move really is to save jobs then it's a temporary measure at best and not worth the money. However, I don't think saving jobs is the government's purpose. I think the government saw a prime opportunity to take over a chunk of private business without too much opposition so they took it.

WSOwen02
02-06-09, 07:44
Ouch, rubbing salt in the wound there :p

I think that if this move really is to save jobs then it's a temporary measure at best and not worth the money. However, I don't think saving jobs is the government's purpose. I think the government saw a prime opportunity to take over a chunk of private business without too much opposition so they took it.

Bingo

Cochrane
02-06-09, 08:53
Ouch, rubbing salt in the wound there :p

I think that if this move really is to save jobs then it's a temporary measure at best and not worth the money. However, I don't think saving jobs is the government's purpose. I think the government saw a prime opportunity to take over a chunk of private business without too much opposition so they took it.

Hm, I always thought that saving jobs was part of the government's purpose (or, to be more precise, doing what it can against unemployment). Why do you think it's not?

Anyway, why would the US government have wanted to have a significant chunk of a bancrupt private business? I really don't see the appeal of that for any part of government, unless they want to use GM factories specifically to build cheap cars for government use. If the government had truly wanted to get involved, wouldn't it have been a far better idea to just outright buy a private company, either directly or through a fully government-owned one? There are lots of examples for this way of things (e.g. german's national railroad company has expanded a lot around the world).

SamReeves
02-06-09, 16:17
I think that if this move really is to save jobs then it's a temporary measure at best and not worth the money. However, I don't think saving jobs is the government's purpose. I think the government saw a prime opportunity to take over a chunk of private business without too much opposition so they took it.

That is the scary thing. Americans have become complacent. They believe the new Congress and President will take care of them. :hea: They already have in a way…the wrong way IMO.


Anyway, why would the US government have wanted to have a significant chunk of a bancrupt private business? I really don't see the appeal of that for any part of government, unless they want to use GM factories specifically to build cheap cars for government use. If the government had truly wanted to get involved, wouldn't it have been a far better idea to just outright buy a private company, either directly or through a fully government-owned one? There are lots of examples for this way of things (e.g. german's national railroad company has expanded a lot around the world).

The congressmen and senators need to keep their union buddies happy. To be honest none of them care about turning a profit. Most Democrats just want to keep GM on the federal dole, and turn the company into a welfare state. Hoping it will spread like a disease to other American corportations. God I hope not. :o

Draco
02-06-09, 18:45
Do you know how high unimployent would be if we let one of the last american companies that still manufactures in the United States to go under.

Less than a tenth of a percent.

If all of that money was given equally to the entirety of the working age and working condition legal citizens that are unemployed, Id be well off.

EmeraldFields
02-06-09, 19:48
The congressmen and senators need to keep their union buddies happy. To be honest none of them care about turning a profit. Most Democrats just want to keep GM on the federal dole, and turn the company into a welfare state. Hoping it will spread like a disease to other American corportations. God I hope not. :o

That sound like a conspiracy... Are they really out to get us?

Ward Dragon
03-06-09, 01:07
Hm, I always thought that saving jobs was part of the government's purpose (or, to be more precise, doing what it can against unemployment). Why do you think it's not?

Because whenever the government gets involved they make things worse. GM failed in the first place because of exorbitant demands by the union (GM workers were paid nearly twice as much as equivalent workers in other companies if you take benefits into account) and now that very same union was awarded control of the company by the government.

It's like the bank bailouts. The government offered a lot of money to the banks and now it is strong-arming the banks that accepted into doing what the government wants rather than what's best for the company. A lot of banks were forced to forgive debts that Chrysler owed them despite that they were legally entitled to get repaid out of Chrysler's assets.

The banks who didn't like that tried to give back the government's money and regain independence, but the government actually refused to take the money back. (source (http://money.cnn.com/2009/03/27/news/economy/tarp_takeback/index.htm))

First it was the banks and now it's the car companies. The government is playing politics and gaining power, not doing what is economically sound for the country.

Anyway, why would the US government have wanted to have a significant chunk of a bancrupt private business? I really don't see the appeal of that for any part of government, unless they want to use GM factories specifically to build cheap cars for government use. If the government had truly wanted to get involved, wouldn't it have been a far better idea to just outright buy a private company, either directly or through a fully government-owned one? There are lots of examples for this way of things (e.g. german's national railroad company has expanded a lot around the world).

Because the government's new policy isn't to make money. The government's new policy is to do what's "fair" even if that means everybody gets screwed over (as long as we all get screwed equally :rolleyes:).

That sound like a conspiracy... Are they really out to get us?

Yes, yes they are... :pi:

patriots88888
03-06-09, 03:23
All I'm going to say is that a lot of Americans did, and still do, ***** and complain that too many other Americans buy from the foreign automobile manufacturers.

GM was doomed from the moment they ignored what the foreign competitors were doing ages before all this. That would be, making smarter, more fuel efficient automobiles. GM should have realized over 10 years ago what the ramifications would be today for continuing on their merry way producing the cars and trucks they churned out.

They should have swallowed their pride some and took a lesson from the Japs instead of now swallowing up this $20 billion buyout. Personally, I feel they should have been allowed to rot and go down the tubes like any other failed business. They were more than obviously ignorant and/or oblivious to the potential consequences of their own stupidity. Or they just didn't care, which I don't anymore. Let the new era begin I say. We'll see in due time which road it leads us down.

WSOwen02
03-06-09, 06:45
I have never seen so many intelligent, rational people on an internet message board. Its so annoying seeing all of the morons out there who have no understanding of economics and the government and the internet only magnifies this.

I need to come here more often.

voltz
03-06-09, 07:50
I really have to agree with what patriots88888 said because GM really did all this to themselves. At any other point their business as usual practice would have left them to continue like it's nothing to worry about, but in recession, you can't pull this without streamlining your industry and coping with ways to survive so you can continue for the long haul. So now they're partially government owned, but I heard of either China or Japan now has a stake and we will see them cut down as a smaller car developer.

This will just be a lesson to everyone thinking they can get away with ignorance.

Ward Dragon
03-06-09, 07:53
So now they're partially government owned, but I heard of either China or Japan now has a stake and we will see them cut down as a smaller car developer.

Last I heard it was the Italian car company Fiat that got a piece of GM (although I have no clue why they would want it considering that the union and the US government get to dictate what happens with GM now).

Edit: Nevermind, Fiat got a piece of Chrysler, not GM.

Cochrane
03-06-09, 08:24
Fiat has a piece of Chrysler. They were interested in both GM Europe and GM Latin America, but they have been rejected as buyer for GME by european workers and the german government (which is providing a lot of money to the eventual buyer, so its opinion holds a lot of weight), and I think Fiat only wanted GMLA in combination with GME, not independently.

Fiat is generally interested in getting access to the north american market, where they currently only sell Ferraris and Maseratis. They've been considering re-introducing Alfa Romeo to that area for a few years already, but among other things, the lack of a dealer network as well as the lack of an american production facility have hindered this. Now, they have access to Chrysler's resources to sell Alfas, Fiats and so on in the US. Fiat has also long been looking for a new technology platform for Alfa Romeo (the current 159, Spider and Brera are based on a platform that was jointly developed by GM, although nobody but Alfa actually uses it), especially for larger cars. Co-developing this with Chrysler could certainly be an economic choice.

Interestingly, Fiat isn't paying anything for their 35% share in Chrysler - they are just granting Chrysler access to their small car platforms, because that is something Chrysler has a huge lack of. Union interference has actually been reduced a lot compared to what it was before the bancrupcy, and it's not as if Fiat has no experience with tough unions in Italy, so that's probably not a problem for them.

Ward Dragon
03-06-09, 08:30
^ Thanks for clarifying that :)

Edit: I found an interesting opinion piece here (http://www.americanthinker.com/2009/06/chrysler_gm_and_the_law_of_uni.html) which explains some of the things that could go wrong as a result of the government acquiring GM and Chrysler.

The Obama administration may assume that GM and Chrysler customers will remain loyal to the brands. But look, there weren't enough loyal customers last year to save them. So the government car wizards must assume that the new, leaner GM and Chrysler will lure customers away from Ford and the foreign brands. But wait, Ford's been gaining market share against the two new government automobile companies lately.

So down the track awaits Unintended Consequence (UC) #1: The old GM and Chrysler that once commanded a cadre of loyal customers now has new owners. Who's to say they'll remain loyal? When your favorite restaurant comes under new ownership, and that ownership has a reputation for serving bad food elsewhere, do you keep eating there? Only if you want food poisoning.

When sales of Chevy's and Hemi's continue to decline, the government will have to act to protect their -- meaning "our" -- investment (bailout). That'll require special tax breaks for Chevy-Hemi buyers, and higher taxes on those who buy other brands in order to make up the lost treasury revenues.

When that doesn't work, here comes UC #2: Additional tariffs on imported automobiles. But since many foreign brands are now manufactured in U.S. plants, that's won't work. So, foreign manufacturers operating U.S. plants will be subject to a Value Added Tax (VAT) to subsidize unsold government cars.

When people prefer the quality and superior fuel efficiency technologies of, say, Toyota and Honda, that'll trigger UC #3: Forced downsizing, and even closure, of foreign brand U.S. manufacturing plants in the face of government pressure to unionize their work force. That means lost jobs for non-union American auto workers. The UAW will cry crocodile tears.

UC #3 will trigger UC #4: Tariff retaliation from nations who have auto plants here but also import products from the U.S. In short, a trade war.

And then there's that major fault line in the Obama administration's plan for the American Green Fleet. The federal government has taken over much of an industry that it knows nothing about operating for a profit. In fact, it has no clue how to operate anything for a profit. It's only knows how to be a cost center, not a profit center.

So the government -- meaning "we" -- will subsidize the inevitable, sustained losses of Government Motors and the new Chrysler. Ten of billions more coming in bailouts.

And that will lead to UC#5: We won't have enough money to keep GM and Chrysler alive indefinitely, even with the Federal Reserve's printing presses running in overdrive. The only way for GM and Chrysler to succeed, for awhile longer, will be for the government to substantially reduce competition from foreign brands and tax gas to the point that Ford's profitable reliance on trucks and SUV sales drives it, too, into bankruptcy. Anyone want to bet against that eventually happening?

Then, finally, there's UC #6: Many us have bought our last GM or Chrysler product and will abstain from further purchases on the following consumer principle, that still lives in this as yet only partially socialized nation.

"The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality. Their attitudes result either in profit or in loss for the enterprises. They make poor men rich and rich men poor. They are no easy bosses. They are full of whims and fancies, changeable and unpredictable. They do not care a whit for past merit. As soon as something is offered to them that they like better or that is cheaper, they desert their old purveyors. With them nothing counts more than their own satisfaction. They bother neither about the vested interest of capitalists nor about the fate of the workers who lose their jobs if, as consumers, they no longer buy what they used to buy." Bureaucracy, Ludwig von Mises, 1944, pp. 20-21

To succeed, the Obama administration will ultimately have to monopolize most of the U.S. auto fleet. Half-way measures won't work. Just ask the USPS about their competitive disadvantages in operating against FedEx, UPS, et al.

voltz
03-06-09, 08:45
Here's a scary thought....

GM = "Government Monitored" vehicles. Big Brother IS watching you! :yik:

This is the kind of thing I really don't want to see because with the system controlling everything that goes into your car, a close eye could be kept on you for just about anything.

Ward Dragon
03-06-09, 08:50
Here's a scary thought....

GM = "Government Monitored" vehicles. Big Brother IS watching you! :yik:

This is the kind of thing I really don't want to see because with the system controlling everything that goes into your car, a close eye could be kept on you for just about anything.

I thought they could already do that with OnStar and other GPS monitoring if they really wanted to :whi:

voltz
03-06-09, 08:55
They can and I'm sure it's great for cops just looking for someone to bother in their spare time. With direct control, we could see this taking a few steps further then what some of us are willing to put up with.

Punaxe
03-06-09, 09:11
^ Thanks for clarifying that :)

Edit: I found an interesting opinion piece here (http://www.americanthinker.com/2009/06/chrysler_gm_and_the_law_of_uni.html) which explains some of the things that could go wrong as a result of the government acquiring GM and Chrysler.

This sounds extremely pessimistic if you ask me. It is assuming that GM will stay the way it is, and the government will take extreme measures to protect what they already realized was a bad strategy. This seems to be the sole, but unmentioned premise of the article. I highly doubt that this will happen. From what I heard GM should prepare for a major overhaul in strategy so they can better compete in the international market, which will compete along with them.

Also someone mentioned that the government is not in this to make a profit. I can't speak for the US, but the "nationalizations" that happened in the Netherlands were temporary. The government bought a substantial share in some companies, but only to get them back on track and sell them later on, and the aim is to do this with profit. The government is a government, not a conglomerate.

Cochrane
03-06-09, 09:53
^ Thanks for clarifying that :)

Edit: I found an interesting opinion piece here (http://www.americanthinker.com/2009/06/chrysler_gm_and_the_law_of_uni.html) which explains some of the things that could go wrong as a result of the government acquiring GM and Chrysler.

Sure, that is one possible scenario. However, that scenario has one basic flaw: It assumes that GM and Chrysler would continue to produce the same oversized products that too few people actually want that got them into this crisis. In the real world, however, GM is very strict about retaining a large share in GM Europe, to retain access to smaller, more fuel-efficient cars, and Chrysler after all is basically giving away one third of the company for the very same reason.

The Obama administration has made it very clear that they won't support either company's failed business models forever (including firing key executives), and both companies have apparently acknowledged that they will have to drastically change their strategies in the long run.

Could that fail horribly? Yes, of course. But that article's scepticism is, in my opinion, misguided.

Here's a scary thought....

GM = "Government Monitored" vehicles. Big Brother IS watching you! :yik:

This is the kind of thing I really don't want to see because with the system controlling everything that goes into your car, a close eye could be kept on you for just about anything.

It would be scary if it happened, yes. But do you have any other reason to suspect that other than that you don't like the government? Volkswagen, for example, is traditionally 20% government owned (by the State government of Lower Saxony, to be precise), and there is no such monitoring going on.

Ward Dragon
03-06-09, 09:54
@Punaxe: This government action is all about politics, not what's best for the country. The government's actions make little sense from an economic standpoint. They spent over $60 billion of taxpayer money to save 2/3 of GM's workforce which amounts to about 42,000 jobs if I read this article (http://news.yahoo.com/s/ap/20090601/ap_on_go_pr_wh/us_obama_gm) correctly. It would have been much cheaper to just give each worker a few hundred thousand dollars and tell them to find a new job XD

And the other article was pessimistic, but the government has given every us every reason to be cynical and suspicious of its actions. The government has already begun taking some of those extreme measures, including restricting the importation of foreign cars and car parts which are cheaper than the ones made here by more expensive workers who are members of the United Auto Workers union.

The Administration's concessions to the UAW also restrict the company's ability to import smaller, more fuel-efficient cars that it already makes overseas. UAW President Ron Gettelfinger boasted on PBS's "NewsHour" last week that "we, quite frankly, put pressure on the White House, the [auto] task force, the corporation" to bar small-car imports from overseas. GM is also selling its Opel operation in Europe as part of this restructuring, and the Washington Post reports that one of Treasury's sale conditions is that Opel's new owners must stay out of the U.S., and even out of China, where GM's business is strong.

This is raw trade protectionism. It is also textbook cartel behavior and would be an antitrust violation if practiced by a business. But the benefits for GM are illusory because the import limits mean the company will have to spend even more to retool its domestic plants to make the little green cars that President Obama and Congress are demanding. No one knows if Americans will buy such cars, even if GM can make them competitively in the U.S.

http://online.wsj.com/article/SB124381255295170405.html

Sure, that is one possible scenario. However, that scenario has one basic flaw: It assumes that GM and Chrysler would continue to produce the same oversized products that too few people actually want that got them into this crisis. In the real world, however, GM is very strict about retaining a large share in GM Europe, to retain access to smaller, more fuel-efficient cars, and Chrysler after all is basically giving away one third of the company for the very same reason.

The Obama administration has made it very clear that they won't support either company's failed business models forever (including firing key executives), and both companies have apparently acknowledged that they will have to drastically change their strategies in the long run.

Could that fail horribly? Yes, of course. But that article's scepticism is, in my opinion, misguided.

But GM is forbidden from importing those cheaper foreign cars into the US because it would result in less work for American union members, so that whole financial strategy is now unusable.

Cochrane
03-06-09, 10:09
^ This government action is all about politics, not what's best for the country. The government's actions make little sense from an economic standpoint. They spent over $60 billion of taxpayer money to save 2/3 of GM's workforce which amounts to about 42,000 jobs if I read this article (http://news.yahoo.com/s/ap/20090601/ap_on_go_pr_wh/us_obama_gm) correctly. It would have been much cheaper to just give each worker a few hundred thousand dollars and tell them to find a new job XD
I guess it would, though it's hard to judge the long-term effects. If suppliers fail because of that, then first it's even more jobs that are getting cut, and then other, more or less healthy companies (Ford) could get into trouble as well. Again, I don't know whether it's justified, but I'm pretty certain that any simple answer (no matter whether it's "Yes" or "No") is wrong.

And the other article was pessimistic, but the government has given every us every reason to be cynical and suspicious of its actions. The government has already begun taking some of those extreme measures, including restricting the importation of foreign cars and car parts which are cheaper than the ones made here by more expensive workers who are members of the United Auto Workers union.



http://online.wsj.com/article/SB124381255295170405.html
That article only quotes an UAW official who'd like that. Do you have any sources that say that the White House complies with these ideas?

But GM is forbidden from importing those cheaper European cars into the US because it would result in less work for American union members, so that whole financial strategy is now unusable.
Again, I've not heard about this restriction, but then, I've not followed the discussion on the other side of the atlantic very much anyway. The point, however, is not so much outright importing the cars. Depending on conversion rates, that might actually be a horribly bad idea. Again, using Chry/Fiat as comparison: Fiat is not interested in exporting any of it's (non-Ferrari and Maserati) italian models to the US. Rather, they want to build them in factories in North America, factories that Chrysler owns and where UAW workers happen to work. It's about technology transfers here and platform development, things which cost far more money than simple retooling.

Ward Dragon
03-06-09, 10:17
That article only quotes an UAW official who'd like that. Do you have any sources that say that the White House complies with these ideas?


Again, I've not heard about this restriction, but then, I've not followed the discussion on the other side of the atlantic very much anyway. The point, however, is not so much outright importing the cars. Depending on conversion rates, that might actually be a horribly bad idea. Again, using Chry/Fiat as comparison: Fiat is not interested in exporting any of it's (non-Ferrari and Maserati) italian models to the US. Rather, they want to build them in factories in North America, factories that Chrysler owns and where UAW workers happen to work. It's about technology transfers here and platform development, things which cost far more money than simple retooling.

I found more sources for that --

The German government announced late Saturday it had concluded a deal with Magna and its Russian backers to take over Opel from its parent GM, which filed for bankruptcy protection in the United States on Monday.

Stronach, in Ottawa to unveil new electric vehicle technologies, said Opel would not compete with GM on its home turf in the United States, as part of the terms of Magna's Opel purchase from GM.

http://uk.news.yahoo.com/18/20090602/tbs-opel-won-t-compete-with-gm-in-us-mag-8cc5291.html

General Motors' plan to import tens of thousands of Chinese-built cars to the U.S. over the next several years may be on hold.

The AP reports, "General Motors Corp. agreed not to import Chinese-made subcompact cars to the U.S. as part of its concession deal with the United Auto Workers, union President Ron Gettelfinger said Thursday. Instead, the company will build up to 160,000 of the cars per year at an existing U.S. factory and sell them in the U.S."

http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090529-Union-GM-Won-Import-Cars-from-China/

Cochrane
03-06-09, 10:28
I found more sources for that --



http://uk.news.yahoo.com/18/20090602/tbs-opel-won-t-compete-with-gm-in-us-mag-8cc5291.html
That is part of the GM-Magna deal, not government intervention.


http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090529-Union-GM-Won-Import-Cars-from-China/
OK, that one is new. I'd debate who would actually want chinese cars, but you're right, it is a troubling development.

Still, it only affects GM. GM's competitors can still freely import cars from wherever they want, so the free market is not impacted negatively.

Ward Dragon
03-06-09, 10:49
That is part of the GM-Magna deal, not government intervention.

I brought that up in response to the point about GM trying to retain ownership of GM Europe when instead it seems that they are selling their European company as long as it can't compete with them in the US. I was kind of distracted by trying to edit things in and I wasn't too clear about what I was responding to with each statement :o

OK, that one is new. I'd debate who would actually want chinese cars, but you're right, it is a troubling development.

Still, it only affects GM. GM's competitors can still freely import cars from wherever they want, so the free market is not impacted negatively.

It's only a matter of time before the effects on the free market will be more obvious. GM's competitors will be at a major advantage because they can make cars cheaper (whether they are foreign companies who are not subject to the unions or simply American companies that import cars). That means that the government will have to get involved and put pressure on Americans to buy GM cars as it has already begun doing by offering tax credits to people who buy hybrid cars (source (http://www.fueleconomy.gov/feg/tax_hybrid.shtml)). All the government has to do is increase the tax credits for purchasing GM cars to entice buyers into buying GM as opposed to the non-government owned competition.

Punaxe
03-06-09, 10:53
There is a big difference between supporting those who buy fuel-efficient cars while also having GM develop such cars, and singling out a company and supporting people who buy this brand. There may be some troubling/weird developments but I'm not seeing it clearly heading into the latter direction.

Ward Dragon
03-06-09, 11:07
There is a big difference between supporting those who buy fuel-efficient cars while also having GM develop such cars, and singling out a company and supporting people who buy this brand. There may be some troubling/weird developments but I'm not seeing it clearly heading into the latter direction.

Fuel efficient? Hybrid cars are more expensive overall than their gas-powered counterparts, and considering the cost of electricity people generally don't make up the difference in gas savings. There isn't that big of a market for hybrid cars in the US and people would rather buy bigger cheaper gas-powered cars. (source (http://money.cnn.com/2009/01/15/autos/bcg_electric_car_report/index.htm))

The government is actively working against the market by trying to push an unpopular product for political reasons. It would be far better if the government focused instead on researching alternative energies (mainly nuclear power) in order to make electricity much more freely available. Once electricity is cheap enough, then the market will naturally demand electricity-powered cars. Until then, the government is making things worse by pressuring companies to make hybrid cars and people to buy them.

Trigger_happy
03-06-09, 11:15
At least the American government took action. The UK Govt. just watch as BMW tore Rover apart and then left the remnants to survive by their selves. Once MG-rover snuffed it, the Govt. thought it should have taken action. As someone said, at least their jobs were saved.

Punaxe
03-06-09, 11:35
Fuel efficient? Hybrid cars are more expensive overall than their gas-powered counterparts, and considering the cost of electricity people generally don't make up the difference in gas savings. There isn't that big of a market for hybrid cars in the US and people would rather buy bigger cheaper gas-powered cars. (source (http://money.cnn.com/2009/01/15/autos/bcg_electric_car_report/index.htm))

The government is actively working against the market by trying to push an unpopular product for political reasons. It would be far better if the government focused instead on researching alternative energies (mainly nuclear power) in order to make electricity much more freely available. Once electricity is cheap enough, then the market will naturally demand electricity-powered cars. Until then, the government is making things worse by pressuring companies to make hybrid cars and people to buy them.

Well you have a point. I think people the government's main argument is the other way around however, and I don't see why it'd be less correct: once there are more electricity-powered cars, there will be more incentive to indeed find alternative ways of producing electricity. While everything still runs on gas and there is no market for great amounts of electricity, what are the companies going to do?

Also in the current situation, stimulating an entirely new carpark probably creates more jobs than putting a few highly specialized people in the lab.

Ward Dragon
03-06-09, 12:01
Well you have a point. I think people the government's main argument is the other way around however, and I don't see why it'd be less correct: once there are more electricity-powered cars, there will be more incentive to indeed find alternative ways of producing electricity. While everything still runs on gas and there is no market for great amounts of electricity, what are the companies going to do?

As it is right now, less than half of the states give people a choice of which electric company to use (it's decided based upon where they live) and in turn the electric companies have to have their rates approved by the state. The electricity companies aren't allowed much choice in what avenues to pursue either. For example, in California the state forbid production of nuclear power plants for environmental reasons. Meanwhile, demand for electricity was so high that the state had to institute a series of rolling blackouts in which people went for hours at a time without power. All new powerplants also had to be approved by the state and the power companies were not free to do what they wanted due to all of the regulations.

The electricity companies aren't really subject to supply and demand due to this oversight by the government. Even if a large increase in the number of hybrid cars suddenly increased demand for electricity, that's no guarantee that the power companies would be willing or able to meet that demand. On the other hand, since the government already has such a big role in the utilities anyway, they may as well actually develop better ways of getting electricity. That would make everything that relies on electricity much cheaper and more widely used. Plus of course if they managed to get the electricity from fusion as opposed to oil or coal, there would be much less pollution and no reliance upon foreign oil.

Also in the current situation, stimulating an entirely new carpark probably creates more jobs than putting a few highly specialized people in the lab.

But fewer jobs in the long run when that carpark goes out of business due to lack of consumers who want the product.

Punaxe
03-06-09, 12:19
Hmm I see. Overhere, the energy companies have recently been allowed free market competition and that's already beginning to show very clearly, and we are considering to push hybrid cars as well. It makes sense here, but maybe you're right, that it's a bit of a questionable practice in the US, unless of course the energy policy is changing along with it: are they not planning on getting more green electricity?

Ward Dragon
03-06-09, 12:41
Hmm I see. Overhere, the energy companies have recently been allowed free market competition and that's already beginning to show very clearly, and we are considering to push hybrid cars as well. It makes sense here, but maybe you're right, that it's a bit of a questionable practice in the US, unless of course the energy policy is changing along with it: are they not planning on getting more green electricity?

I'm not sure where they are with the electricity research. Lately the focus has been on adding ethanol additives to gasoline to make it more "green" but unfortunately that has adverse side effects on car engines, it results in cars attaining fewer miles per gallon, and it drives up the cost of food since a lot of the corn is going towards ethanol instead. I've heard members of both political parties actually agree that ethanol was a mistake and yet it's still being pushed by the government :confused:

http://www.reuters.com/article/environmentNews/idUSTRE4BG4EQ20081217?feedType=RSS

Additionally, the automotive industry is trying to fight the government mandates about ethanol because they feel that ethanol cars are not going to make a profit and they'd rather spend their money researching other ways to make cars more fuel efficient.

An industry trade group led by Detroit's Big Three urged lawmakers on the House Energy and Commerce Committee this week to oppose language in the Democrats' energy and climate bill that would force automakers to produce more flex-fuel vehicles.

"Thus far, Congress has refrained from picking technology winners; these [flex-fuel vehicles] mandate proposals do exactly the opposite," wrote Dave McCurdy, president of the Alliance of Automobile Manufacturers, a trade group representing the Detroit automakers, Toyota Motor Corp. and others. "[Flex-fuel] mandates will divert important limited resources away from the development of other advanced vehicle technologies."

The opposition is aimed at language in Chairman Henry Waxman's (D-Calif.) bill that would create an "open fuel standard," which would require automakers to produce more cars and trucks capable of running on high blends of alternative fuels, as well as a possible amendment from Rep. Eliot Engel (D-N.Y.) that would strengthen the requirements.

The existing provision, which found its way into the energy and climate effort as part of a substitute bill [pdf] introduced this week, would give the administration the ability to mandate the required percentages of flex-fuel vehicles in an automaker's fleet, assuming the needed alternative fuel and infrastructure are available.

http://www.scientificamerican.com/article.cfm?id=detroit-automakers-ethanol-mandate

voltz
03-06-09, 12:50
Additionally, the automotive industry is trying to fight the government mandates about ethanol because they feel that ethanol cars are not going to make a profit and they'd rather spend their money researching other ways to make cars more fuel efficient.

I also find this a bit perplexing because we have state officials pushing for higher taxation on ethanol based hybrid cars so they have funds to support roadwork repair and construction. This in tern will make all the monthly costs run up high even though they're not paying for gas, so I can't help but to wonder why we just continue to support it?