The Big 3 should become the Big 2!
BofA CEO: There are '1 too many' Detroit 3 members
Excerpt:
Two of the struggling Detroit Three automakers should combine and prove to the government they are worthy of a $25 billion rescue package being considered for them, Bank of America Chief Executive Kenneth Lewis said Tuesday.
"There are one too many" automakers, Lewis said, adding that he would require consolidation if he was deciding on a bailout.
"I think the American people are suspect of just giving more money and buying more time," Lewis told reporters after a speech to the Detroit Economic Club. "They want to see that the companies have in fact changed and the strategies have changed."
Comment: There are too many brands. Eg. Ford does not need a Mercury. GM does not need GMC, Pontiac, or Saab, or Saturn (or Hummer). There are too many dealers as well.
The UAW needs a little tough love. It derailed the Cerberus deal at Delphi. Today GM suffers a loss of about $2,000 per vehicle sold. On the other hand Toyota whose employees are not part of the UAW earns a profit of about $1,200 per vehicle sold. If GM was able to operate with labor prices near Toyota’s it would have pocketed an additional $29,715,200,000.
ReplyDeleteGM bailout nonsense
Even if the government does bail them out, the same government will turn around and destroy them. Or, best case scenario, automakers will have to radically change their current paradigm and retool, literally and figuratively, all parts of the industry.
ReplyDelete"Obama’s mission is to revive and expand the defeated 2007 Lieberman/Warner bill, “America’s Climate Security Act,” which proposed a cap and trade system to reduce carbon emissions 70 per cent by 2050.
The bill was rejected for a very good reason - its passage would have created economic conditions comparable to a new Great Depression and sunk America to near third world status."
to Anonymous: Good comment.
ReplyDeleteto Jason: I visited your blog - good stuff. Thanks for your comment
Good Post and Great comments:
ReplyDeleteSad to say, but in my 28 years as a professional I’ve been through various painful restructurings, in a couple of cases I was restructured right out onto the street with well wishes and brilliant letters of recommendation (meaning no Golden, Silver, Bronze, brass, steel, iron or otherwise parachute). The truth is, the people to blame were clearly “us” top management. We did not see the trends coming, or we were too entrenched in our philosophies and we failed the company and the employees.
These cold realities, once faced, affect how you lead future companies that you are lucky enough to have the opportunity to shape. Since the bad experiences, I must say that my business acumen has been sharpened and honed by all the beatings imparted by business realities. And, that is precisely why I don’t think the bailout is needed, but a “Work Out” is what the Automakers need.
The bailout needs to be evaluated as a business deal, and if the big three don’t have a plan, the money will be gone, and they’ll be coming to us [tax payers / investors] for further bail outs and that’s not acceptable.
We all need to start a campaign of e-mail to our congressman and senators to ensure they know how we feel about this.
The Lee’s Summit Conservative
http://leessummitconservative.blogspot.com/2008/11/no-for-automotive-industry-bailout.html
JP, do you know how to make web sites on your site light up, or whatever you call it, so you can just click on them and be brought there automatically? Maybe you have that turned off on purpose. Please disregard if that's so.
ReplyDeleteFor example: http://leessummitconservative.blogspot.com/2008/11/no-for-automotive-industry-bailout.html
Here's how you do that, anon.
ReplyDeleteI don't know about reducing divisions (there are profitable small car companies, why not divisions of GM?), but I am convinced that CAFE and union pensions/retirement has to be reformed or eliminated.
One thing I really don't buy; the idea that government somehow can guide carmakers to profitability. They are, after all, the same clowns who gave us "Amtrak."