US Auto Industry?

3 Billion lost this year?

How can it be saved?

Personally I think the only way it can happen is to de-unionize it. They simply cannot compete with the Japanese.

Nancy dearest wants to give them $25 Billion to bail them out.....but haven't we already bailed out Chrysler once?

Unfortunately, the US Auto Industry is one of the engines of our economy and I am not sure we can survive loosing them.

 

Unions need to go. Not only in the auto industry but in every industry.

Also ask the auto industry how many of the executives took a pay cut in their over-inflated salaries to shave cost last year.

 

That is not likely to happen with the current political landscape.

 

Aren't the Japanese plants in the US unionized? As well as BMW's US plants?

 

Most are not, hence the growing trend of new Auto plants in the South.

 

I did some quick fact checking and you sir are 100% correct.

 

Labor costs and pensions are kneecapping the american auto industry and have been for decades. My father in Law was paid over $50k/yr to drive a forklift at a GM plant in Lansing, and he retired at 56 with a full pension. How can any company possibly survive under those labor conditions?

 

Its tough to compete when health care for retirees equals $2000 car per vehicle and one could assume the pension adds a few thousand on top of that. So say $5000 per car for the domestics. Obviously the Jap/Euro automakers don't have that cost here since they don't have many retirees.

The gov't has to decide if they want to pay now or pay later. As an example lets say GM goes bankrupt, there are 350000 - 500000 retirees getting say $2500 a month in pension on avg. 350000 x 2500 = 875 million per month. So with healthcare thats well over a billion per month. Now imagine all the suppliers that go bankrupt. Lets assume 2 billion per month, now if the gov't only picks up half the tab its still going to be costing the gov't over 1 billion a month for many years. Now lets add unemployment costs for few months for the folks out of jobs. It would be very expensive, and further the recession that much more.

 

let their mismanagement and stupidity catch up with them and let them fail.

wont happen though. bailout nation has got you covered.

 

Agreed.....but this getting a little old having to bail these bozo's out every twenty years.

How can it be fixed long term?

 

The current workforce is going to have to agree to more realistic benefits packages

 

No you let the company providing the jobs draw a line in the sand for once and hand a pink slip to anyone that doesn't like the pay scale. Someone else will be along shortly to fill that position.

 

There is no way you are going to get the unions out without the companies dying first. What you have suggested IS what needs to happen, but the first time they try a strike is called and that will be all she wrote. I don't think any of those companies can weather a showdown.

 

We no longer have an auto industry... We have the "Big Three" defined retirement/medical benefits companies who also dabble in automobile and truck manufacturing... Says it all.

 

Different situation, it was one manufacturer and Lee had a plan ..... Ford, GM and Dodge currently do not.

 

Other than full size / Diesel trucks....does anybody here own an American car? Would you consider buying an American car in the near future?

Beyond thier labor concerns.....they suck at building cars too.

 

Toyota all the way. I gave up on merican stuff about 15 years ago.

 

So is it such a bad thing that the domestic automakers either sink or swim without the assistance of the federal lifeguard on duty? What would the outcome scenarios be without a Ford or GMC?

 

Agreed. It's going to be a slow turnaround though because you're basically waiting for current benefits recipients to die off. Promises have been made to those people like it or not. And letting the Big 3 off of thier promises to retiree's puts the burden back on Social Security. By comparison a bail out is a simple fix albeit a band-aid of sorts.

 

How would it be a burden on SS that doesn't already exist? Holding them to a "promise" that can't be met and keep them in business is an even bigger risk.....I would think.

From someone that is an outsider to the industry it seems like nothing more than stoopidity and greed. Management being stoopid with choices and direction, labor be stoopid with expectations that can't be met, and both sides wanting to keep all the benefits and "rewards" of being in business, even after doing such a piss poor job for the last 30 years, by saddling the tax payers with the bill.