GM/F/C bail out talk
11-20-08, 07:10 PM
#166
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Penske checks in. I doubt this one stands any chance at all.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
11-20-08, 07:12 PM
#167
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I am convinced that a few of us can run any of these three and save them millions if not billions of dollars. It is simple cut corporate greed and there foolish salaries. Nardelli does not even need to work with his GOLDEN PARACHUTE from Home Depot. I said the first day I heard he was with Chrysler that he will ruin them just like Home Depot. Now he cries poverty after he got rid of blue collar guys who mad the product. Home Depot round two coming. They get a bailout and Nardelli is history with a hugh GOLDEN PARACHUTE. Oh yeah in about 3 to 4 years all Chryslers will run on electric this is BS IMHO.
11-20-08, 07:37 PM
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You know, I don't doubt that people have a lot of heartburn over buying a car from a company in bankruptcy. Especially one where warranty repair is vital and the company would definitely hang customers out to dry. Instead of say, offering an independent warranty policy with every car. But I tried to find out about this survey. The only thing I could find is:
Tues., Dec. 27, 2005
CHICAGO - Nearly three-quarters of Americans wouldn't buy a car from a bankrupt company, according to a recent survey.
In a nationwide survey by the Cincinnati-based research firm Directions Research Inc. published Friday, only 26 percent of respondents said they would purchase or lease a new car from a manufacturer that had declared bankruptcy.
General Motors Corp. lost nearly $5 billion in its North American automotive business in the first nine months of 2005, and speculation has mounted among investors that the auto maker may eventually be forced to file for Chapter 11 protection.
GM recently announced it would close 12 North American manufacturing plants as part of a plan to cut $7 billion in costs per year.
Company executives have denied they consider bankruptcy an option. They have noted that buying a car is a long-term commitment, and buyers will be put off if the manufacturer is bankrupt or considering bankruptcy.
The survey data indicate that consumer attitudes toward a bankrupt auto maker would differ significantly from those toward airlines that have filed for Chapter 11.
Several large airline companies, such as UAL Corp. and Northwest Airlines Corp., are in bankruptcy and continue to have passenger numbers similar to carriers that aren't bankrupt.
The survey polled 1063 randomly selected adults during the three weeks ending on Dec. 14. The results had a margin of error of plus or minus three percentage points.
Directions Research said the survey wasn't done at the request of a client nor paid for by an interest group.
Among other findings, 28 percent of those surveyed said they would consider purchasing a car from a Chinese company if it started selling in the United States.
Only 15 percent of respondents said they would purchase a car from an Indian company.
http://www.msnbc.msn.com/id/10616931/
As for Directions Research, they are in Michigan and Ohio, and I found a reference to an office in San Diego but little else. As for their claim that the survey was not paid for by an auto company or public agency, nobody appears to have been interested enough to find out. But obviously, very, very little has changed since 2005 regarding the cast of merry men in Detroit.
Not sure 1,000 people is that big a sample size but I don't think I would really dispute the results. It was interesting that people in higher income brackets had less concerns over buying bankrupt.
And what about when ChryCo went into bankruptcy? Once again, back when GFC were the automotive powerhouses that they are today, from 2006:
By GINA CHON
Staff Reporter of THE WALL STREET JOURNAL
January 16, 2006
DETROIT -- On Mark LaNeve's desk inside General Motors Corp.'s world headquarters here sits a well-thumbed copy of Lee Iacocca's autobiography. Near the top of page 223, Mr. LaNeve has underlined a sentence from an ad that Mr. Iacocca ran while leading Chrysler back from the brink of bankruptcy: "Would America be better off without Chrysler?"
Mr. LaNeve, GMs vice president of North American marketing and sales, wonders if his company should ask the public a similar question about itself today.
Even as the world's largest auto maker insists it has no plans to file for bankruptcy protection, a loss of nearly $4 billion in the first nine months of 2005 has fueled rumors to the contrary. Cognizant that a recent study shows that almost 75% of Americans wouldn't buy a car from a bankrupt company, Mr. LaNeve envisions salespeople at Nissan and Ford dealerships telling customers they'd be crazy to consider a GM vehicle because the company might not be able to honor its warranty.
"As much as I hate to do this, we're probably going to have to do something proactively on the marketing side just to address that issue," he says. "How you do that, I don't know. It's a tough thing because you really don't want to go there."
In the midst of the seemingly never-ending bad news about his company, Mr. LaNeve says he doesn't want to trumpet a defensive message that is the equivalent of "GM isn't dead yet," but he is struggling to come up with something that will "get America rooting for us again."
One man intimately familiar with the problem is Mr. Iacocca. When he was Chrysler chairman, Mr. Iacocca was the front man for a blunt 1979 advertising campaign that asked a series of questions, such as "Doesn't Chrysler have more problems than anyone can solve?" "Is Chrysler management strong enough to turn the company around?" "Does Chrysler have a future?"
Mr. Iacocca, who now spends his time raising money for the Join Lee Now initiative to find a cure for diabetes, says that during that period, customers were wondering where they could get parts for vehicles if Chrysler went under.
"We had nowhere else to go, and when you are in doubt, you drop to your knees and pray," he says. "Our ad agency told me, you can't hide in a bunker. So we went out and asked the public to trust us."
Mr. Iacocca appeared in television spots, saying, "If you can find a better car, buy it." He signed his name at the end of newspaper ads answering those tough questions about Chrysler's future. And he mobilized dealers to make the company's case in 4,000 towns across the country. Touting cars "born in America," Chrysler also increased its warranty to seven years or 70,000 miles to increase consumer confidence and came out with a successful line of new products, like the K-car series, which became the platform for Chrysler's popular minivans.
After two years of what Mr. Iacocca describes as "slugging and praying," the strategy worked. He got mail from customers telling him to "hang in there." More importantly, Chrysler got a $1.2 billion loan from the federal government, which it was able to pay back seven years early in 1983.
Mr. Iacocca says GM needs to have a similar conversation with America and make sure that everyone, from the top executives to dealers to unionized workers, knows they will have to sacrifice.
"GM is a strong company, and I believe it will be stronger," Mr. Iacocca says. "But now, they all have to agree that they are in one hell of a crisis, and if you don't want to suffer the pain, then get out. And they have to level with the customer."
Mr. LaNeve says GM is considering a communications plan to "get the facts out and push back on some of the misperceptions." GM has yet to decide the details of the plan. Mr. LaNeve's frustration is particularly acute because he and other GM executives feel they have an improving story to tell, if they could get anyone to listen.
While GM has been portrayed as a company churning out gas guzzlers, they say, it has 20 vehicles that get at least 30 miles per gallon and its SUVs have the best fuel economy in their class. While critics say GM doesn't sell cars people want, it is the top-selling auto maker in the U.S. and has some hits, such as the retro Chevrolet HHR and the sporty Pontiac Solstice.
"I've always been pretty sanguine about press coverage because I believe you get what you deserve," Mr. LaNeve says. "But when analysts say our problem is we have cars nobody wants, it drives me out of my mind. Do they realize how bad that hurts us?"
GM is still fighting ghosts of products past. The company lost many customers in the 1980s because of quality problems, and they have not returned despite recent improvements. In the 2005 J.D. Power and Associates Vehicle Dependability Study, several GM vehicles were at the top of their segments, such as the Chevy Malibu outranking the Hyundai Sonata and the Buick Century beating the Toyota Avalon.
John Brown, a 31-year-old Los Angeles resident, is one of those consumers that GM is trying to win over. He grew up part of a "GM family," working on Chevys and Pontiacs with his dad. But when he bought a car, he decided to go with a Honda Civic because he didn't want to worry about reliability. He says GM isn't building cars he wants to buy and says the talk of a 50% chance GM could go bankrupt this year isn't helping change his mind. He's so passionate about the topic that he started his own Web log last year called "GM Can Do Better."
"It's a sad sign," says Mr. Brown, who remains skeptical about the company's quality claims. "GM has so much potential but they aren't fulfilling that potential, and now they could go under."
While GM grapples with the bankruptcy rumors, the company is pursuing several new efforts to get its message out. Last week, GM announced it was cutting sticker prices on nearly 80% of its models. "If we need to make further moves on pricing to get that message out," Mr. LaNeve says, "we're going to do that."
GM will also make sure its eight brands aren't advertising in the same place at the same time. For example, ads for GMC and Chevrolet used to run during the same National Football League broadcast, but this year GMC will buy ads during Monday night games while Chevrolet and Cadillac will target Sunday night.
GM will also try to better tailor its advertising to its target customers. Saturn ads have primarily appeared in prime time, even though many of its buyers are women. Now, it will focus more on daytime television, such as the "Oprah" and "Ellen" talk shows. But there will also be less focus on television and more efforts put into online advertising, which made up 12% of the advertising budget in 2005 and will be "somewhat higher" this year, Mr. LaNeve said.
The company is also focusing marketing efforts on trend-setting areas like Southern California. Although GM's SUVs and trucks sell well in California, it has a 10% market share for passenger cars there, slightly below its national share.
To meet the challenge, GM has been focusing on obtaining endorsements from tastemakers, such as a stylist, a record company executive or a celebrity. Every year GM hosts the Ten fashion show in Los Angeles, featuring 10 celebrities, 10 GM vehicles and 10 fashion designers. The company is also setting up more events that allow consumers to see and drive the cars, such as opportunities to try out GM vehicles and their competitors' and letting customers check out cars during sports events. The strategy has worked for Cadillac, but GM's other brands are struggling.
"We're not going to turn around California overnight," says Mike Jackson, GM's regional manager in charge of the western U.S. "But ultimately, we think we can get things turned around."
Ultimately, Mr. LaNeve says people need to realize that because of fierce global competition no car company will ever have the luxury of controlling more than half of the market, as GM did in the early 1960s. Even 30% seems out of reach. Still, Mr. LaNeve hopes GM can expand its retail share beyond the 26% it garnered last year.
"We've got to turn around the news on GM," Mr. LaNeve says. "We've got to regain our momentum."
To do that, John Barker, president of New York-based DZP Marketing Communications Inc., says GM must present an image of strength and confidence focusing on core brands, such as Chevrolet. "This is not just any global company," Mr. Barker says. "This is a piece of America, and that's why there is this backdrop of anxiety among consumers. GM needs to hit an intuitive chord and say the brands will endure."
http://online.wsj.com/public/article...981847375.html
It will be up to the old fart brigade to relate stories about when Chrysler was in bankruptcy to most of you. As for the rest of the story, it is amazing how little has changed in two or three years. Makes it even harder to swallow the stories about the turnaround for GFC being well under way until the credit crisis. With very few updates, none of the story has changed other than the losses getting bigger.
Tues., Dec. 27, 2005
CHICAGO - Nearly three-quarters of Americans wouldn't buy a car from a bankrupt company, according to a recent survey.
In a nationwide survey by the Cincinnati-based research firm Directions Research Inc. published Friday, only 26 percent of respondents said they would purchase or lease a new car from a manufacturer that had declared bankruptcy.
General Motors Corp. lost nearly $5 billion in its North American automotive business in the first nine months of 2005, and speculation has mounted among investors that the auto maker may eventually be forced to file for Chapter 11 protection.
GM recently announced it would close 12 North American manufacturing plants as part of a plan to cut $7 billion in costs per year.
Company executives have denied they consider bankruptcy an option. They have noted that buying a car is a long-term commitment, and buyers will be put off if the manufacturer is bankrupt or considering bankruptcy.
The survey data indicate that consumer attitudes toward a bankrupt auto maker would differ significantly from those toward airlines that have filed for Chapter 11.
Several large airline companies, such as UAL Corp. and Northwest Airlines Corp., are in bankruptcy and continue to have passenger numbers similar to carriers that aren't bankrupt.
The survey polled 1063 randomly selected adults during the three weeks ending on Dec. 14. The results had a margin of error of plus or minus three percentage points.
Directions Research said the survey wasn't done at the request of a client nor paid for by an interest group.
Among other findings, 28 percent of those surveyed said they would consider purchasing a car from a Chinese company if it started selling in the United States.
Only 15 percent of respondents said they would purchase a car from an Indian company.
http://www.msnbc.msn.com/id/10616931/
As for Directions Research, they are in Michigan and Ohio, and I found a reference to an office in San Diego but little else. As for their claim that the survey was not paid for by an auto company or public agency, nobody appears to have been interested enough to find out. But obviously, very, very little has changed since 2005 regarding the cast of merry men in Detroit.
Not sure 1,000 people is that big a sample size but I don't think I would really dispute the results. It was interesting that people in higher income brackets had less concerns over buying bankrupt.
And what about when ChryCo went into bankruptcy? Once again, back when GFC were the automotive powerhouses that they are today, from 2006:
By GINA CHON
Staff Reporter of THE WALL STREET JOURNAL
January 16, 2006
DETROIT -- On Mark LaNeve's desk inside General Motors Corp.'s world headquarters here sits a well-thumbed copy of Lee Iacocca's autobiography. Near the top of page 223, Mr. LaNeve has underlined a sentence from an ad that Mr. Iacocca ran while leading Chrysler back from the brink of bankruptcy: "Would America be better off without Chrysler?"
Mr. LaNeve, GMs vice president of North American marketing and sales, wonders if his company should ask the public a similar question about itself today.
Even as the world's largest auto maker insists it has no plans to file for bankruptcy protection, a loss of nearly $4 billion in the first nine months of 2005 has fueled rumors to the contrary. Cognizant that a recent study shows that almost 75% of Americans wouldn't buy a car from a bankrupt company, Mr. LaNeve envisions salespeople at Nissan and Ford dealerships telling customers they'd be crazy to consider a GM vehicle because the company might not be able to honor its warranty.
"As much as I hate to do this, we're probably going to have to do something proactively on the marketing side just to address that issue," he says. "How you do that, I don't know. It's a tough thing because you really don't want to go there."
In the midst of the seemingly never-ending bad news about his company, Mr. LaNeve says he doesn't want to trumpet a defensive message that is the equivalent of "GM isn't dead yet," but he is struggling to come up with something that will "get America rooting for us again."
One man intimately familiar with the problem is Mr. Iacocca. When he was Chrysler chairman, Mr. Iacocca was the front man for a blunt 1979 advertising campaign that asked a series of questions, such as "Doesn't Chrysler have more problems than anyone can solve?" "Is Chrysler management strong enough to turn the company around?" "Does Chrysler have a future?"
Mr. Iacocca, who now spends his time raising money for the Join Lee Now initiative to find a cure for diabetes, says that during that period, customers were wondering where they could get parts for vehicles if Chrysler went under.
"We had nowhere else to go, and when you are in doubt, you drop to your knees and pray," he says. "Our ad agency told me, you can't hide in a bunker. So we went out and asked the public to trust us."
Mr. Iacocca appeared in television spots, saying, "If you can find a better car, buy it." He signed his name at the end of newspaper ads answering those tough questions about Chrysler's future. And he mobilized dealers to make the company's case in 4,000 towns across the country. Touting cars "born in America," Chrysler also increased its warranty to seven years or 70,000 miles to increase consumer confidence and came out with a successful line of new products, like the K-car series, which became the platform for Chrysler's popular minivans.
After two years of what Mr. Iacocca describes as "slugging and praying," the strategy worked. He got mail from customers telling him to "hang in there." More importantly, Chrysler got a $1.2 billion loan from the federal government, which it was able to pay back seven years early in 1983.
Mr. Iacocca says GM needs to have a similar conversation with America and make sure that everyone, from the top executives to dealers to unionized workers, knows they will have to sacrifice.
"GM is a strong company, and I believe it will be stronger," Mr. Iacocca says. "But now, they all have to agree that they are in one hell of a crisis, and if you don't want to suffer the pain, then get out. And they have to level with the customer."
Mr. LaNeve says GM is considering a communications plan to "get the facts out and push back on some of the misperceptions." GM has yet to decide the details of the plan. Mr. LaNeve's frustration is particularly acute because he and other GM executives feel they have an improving story to tell, if they could get anyone to listen.
While GM has been portrayed as a company churning out gas guzzlers, they say, it has 20 vehicles that get at least 30 miles per gallon and its SUVs have the best fuel economy in their class. While critics say GM doesn't sell cars people want, it is the top-selling auto maker in the U.S. and has some hits, such as the retro Chevrolet HHR and the sporty Pontiac Solstice.
"I've always been pretty sanguine about press coverage because I believe you get what you deserve," Mr. LaNeve says. "But when analysts say our problem is we have cars nobody wants, it drives me out of my mind. Do they realize how bad that hurts us?"
GM is still fighting ghosts of products past. The company lost many customers in the 1980s because of quality problems, and they have not returned despite recent improvements. In the 2005 J.D. Power and Associates Vehicle Dependability Study, several GM vehicles were at the top of their segments, such as the Chevy Malibu outranking the Hyundai Sonata and the Buick Century beating the Toyota Avalon.
John Brown, a 31-year-old Los Angeles resident, is one of those consumers that GM is trying to win over. He grew up part of a "GM family," working on Chevys and Pontiacs with his dad. But when he bought a car, he decided to go with a Honda Civic because he didn't want to worry about reliability. He says GM isn't building cars he wants to buy and says the talk of a 50% chance GM could go bankrupt this year isn't helping change his mind. He's so passionate about the topic that he started his own Web log last year called "GM Can Do Better."
"It's a sad sign," says Mr. Brown, who remains skeptical about the company's quality claims. "GM has so much potential but they aren't fulfilling that potential, and now they could go under."
While GM grapples with the bankruptcy rumors, the company is pursuing several new efforts to get its message out. Last week, GM announced it was cutting sticker prices on nearly 80% of its models. "If we need to make further moves on pricing to get that message out," Mr. LaNeve says, "we're going to do that."
GM will also make sure its eight brands aren't advertising in the same place at the same time. For example, ads for GMC and Chevrolet used to run during the same National Football League broadcast, but this year GMC will buy ads during Monday night games while Chevrolet and Cadillac will target Sunday night.
GM will also try to better tailor its advertising to its target customers. Saturn ads have primarily appeared in prime time, even though many of its buyers are women. Now, it will focus more on daytime television, such as the "Oprah" and "Ellen" talk shows. But there will also be less focus on television and more efforts put into online advertising, which made up 12% of the advertising budget in 2005 and will be "somewhat higher" this year, Mr. LaNeve said.
The company is also focusing marketing efforts on trend-setting areas like Southern California. Although GM's SUVs and trucks sell well in California, it has a 10% market share for passenger cars there, slightly below its national share.
To meet the challenge, GM has been focusing on obtaining endorsements from tastemakers, such as a stylist, a record company executive or a celebrity. Every year GM hosts the Ten fashion show in Los Angeles, featuring 10 celebrities, 10 GM vehicles and 10 fashion designers. The company is also setting up more events that allow consumers to see and drive the cars, such as opportunities to try out GM vehicles and their competitors' and letting customers check out cars during sports events. The strategy has worked for Cadillac, but GM's other brands are struggling.
"We're not going to turn around California overnight," says Mike Jackson, GM's regional manager in charge of the western U.S. "But ultimately, we think we can get things turned around."
Ultimately, Mr. LaNeve says people need to realize that because of fierce global competition no car company will ever have the luxury of controlling more than half of the market, as GM did in the early 1960s. Even 30% seems out of reach. Still, Mr. LaNeve hopes GM can expand its retail share beyond the 26% it garnered last year.
"We've got to turn around the news on GM," Mr. LaNeve says. "We've got to regain our momentum."
To do that, John Barker, president of New York-based DZP Marketing Communications Inc., says GM must present an image of strength and confidence focusing on core brands, such as Chevrolet. "This is not just any global company," Mr. Barker says. "This is a piece of America, and that's why there is this backdrop of anxiety among consumers. GM needs to hit an intuitive chord and say the brands will endure."
http://online.wsj.com/public/article...981847375.html
It will be up to the old fart brigade to relate stories about when Chrysler was in bankruptcy to most of you. As for the rest of the story, it is amazing how little has changed in two or three years. Makes it even harder to swallow the stories about the turnaround for GFC being well under way until the credit crisis. With very few updates, none of the story has changed other than the losses getting bigger.
11-20-08, 08:06 PM
#169
Lexus Champion
Penske checks in. I doubt this one stands any chance at all.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
11-20-08, 08:15 PM
#171
Lexus Champion
Penske checks in. I doubt this one stands any chance at all.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
By Chris Woodyard, USA TODAY
LOS ANGELES — Automotive titan Roger Penske thinks he's found a simple answer to bailing out Detroit's automakers — a restructuring fee that would be added to the price of every new car.
Instead of government loans to try to bridge General Motors, Ford Motor and Chrysler through their financial crisis, Penske said Thursday that he likes the idea of a fee levied on every foreign or domestic vehicle sold that could raise billions a year for automakers.
Proceeds from the fee — he suggested $200 or $500 per car — would help relieve automakers of their health and retirement burdens. It could also go to buying out underperforming auto dealers. Laws in many states prevent automakers from closing dealers outright.
"It would level the playing field," said Penske, CEO of one of the nation's largest automotive dealer groups, importer of the Smart microcar and auto racing legend, in an interview at the Los Angeles Auto Show. "It helps pay for some of these legacy costs."
Penske says he thinks the time is right because Congress has yet to figure out how to structure a bailout plan that garners widespread support.
He says the proposal comes from Tom Dekar, regional managing principal for the accounting firm Deloitte & Touche. Dekar said he only wants to float the idea as his personal view to enhance discussion to solve the crisis.
It was one of several that he says he devised after talking to Michigan Gov. Jennifer Granholm. The governor's spokeswoman, Liz Boyd, said she could not immediately reach her for comment.
The proposal would recognize automaking "as a strategic industry," Dekar said. "Everyone is beating up the Big Three." But he says the criticism is unfair because Detroit's trouble can be traced largely to taking care of their workers in the industry's heyday. Now the unionized workforces burden the Big Three with costs not shared by non-union plants of foreign rivals in the USA.
Penske says he thinks even foreign makers would line up behind a fee because they have already said the Big Three's survival is critical to their ability to maintain their base of key suppliers.
Initial reaction to the idea appears skeptical, however. Stephen Collins, president of the Automotive Trade Policy Council in Washington, says a new fee or tax won't be popular — a loan would "lower costs rather than raise taxes" on car buyers.
http://www.usatoday.com/money/autos/...s_N.htm?csp=34
$200 to $500 added to the price of every car sold to pay for the US auto industry's compassion to "take care of their workers." Like I said, I doubt this one stands a chance.
How is it Congress' fault that they couldn't figure out a bailout plan? It's clear that GM dragged Ford there in the first place with no plan, only outstretched hands. So now Congress not only has to supply the funding, they also have to figure out a plan to save GM, and make it read so it's widely supported?
Penske is clearly delusional if he thinks foreign auto companies are going to rally behind this asinine idea. They are profitable and know how to run their companies. I watched a great piece on the state of Alabama today on how successful they have been in attracting vehicle manufacturers. Hyundai, Toyota, VW, Kia, Benz, BMW all successful and growing.
It appeared in watching the news conferences today that Congress wants to provide some money. But the unwillingness of the Big 3 and specifically, GM, to provide a clear plan of how the bailout money would be spent, and how this would "save" the Big 3 kept their hands in their pockets.
I also find it absurd that Wagoner has not and is not willing to discuss or consider bankruptcy. If he cannot recognize that bankruptcy may potentially be the best decision for the overall health and long-term viability of GM, he shouldn't be in a position to make the decision. Oh, right....we already knew that
11-20-08, 10:34 PM
#172
Lead Lap
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Random thoughts here...
1. Let's not blame the UAW for the Big 3 mess. There is a lot more to it (the current crop of Chrysler cars are not the fault of the UAW).
2. Let's see what we can do to correct the long term cost of the UAW - time for unions to start ponying up some serious contributions to health care - like the rest of us
3. Let's let the market decide what to do here.... GM makes some nice stuff, Ford not so bad, and oh Chrysler is just terrible. Maybe one of them needs to go.
4. Let's not forget that management of the big 3 is more responsible for their mess then anyone (IMHO).
1. Let's not blame the UAW for the Big 3 mess. There is a lot more to it (the current crop of Chrysler cars are not the fault of the UAW).
2. Let's see what we can do to correct the long term cost of the UAW - time for unions to start ponying up some serious contributions to health care - like the rest of us
3. Let's let the market decide what to do here.... GM makes some nice stuff, Ford not so bad, and oh Chrysler is just terrible. Maybe one of them needs to go.
4. Let's not forget that management of the big 3 is more responsible for their mess then anyone (IMHO).
Please read this article (from 2006), it is much more articulate than I ...
http://mises.org/story/2124
11-20-08, 10:45 PM
#173
Lexus Champion
Management is very responsible for this mess, I dont think anyone would argue otherwise. But the fact remains, the UAW is a simply a socialist relic from the 1930s and serves no purpose today besides blackmail these companies into taking contracts they cant afford. This talk of current bailout isnt a result of the current problems, GM has been nearly broke for years.
Please read this article (from 2006), it is much more articulate than I ...
http://mises.org/story/2124
Please read this article (from 2006), it is much more articulate than I ...
http://mises.org/story/2124
11-21-08, 03:10 AM
#174
Racer
Join Date: Jan 2007
Location: CA
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If I roll up to your house in a maybach with a driver waiting outside wearing all kinds of gold rolex and ASK you for some $$ (come'on you know they are not paying back the "loan" they are asking for, in fact they still haven't pay back the millions they borrowed 10 years ago.) how pissed would you be?
11-21-08, 04:00 AM
#175
Pole Position
Best post in the entire thread!!
11-21-08, 04:06 AM
#176
Pole Position
Huh? GM is a publicly traded company. They don't have to open their books. Their entire financial being is public record for ANYONE to see.
11-21-08, 04:26 AM
#177
Lexus Champion
11-21-08, 05:39 AM
#178
Pole Position
Correct. The financial statement/balance sheets won't mention the actual financial "condition" of a company, however, a quick glance at these documents can give away the the financial health of a company and where it's headed.
11-21-08, 05:56 AM
#179
Pole Position
Ha ha, could you imagine Waggoner, the pitiful soul that drove GM into the ground, trying to revamp GM under reorganization? Sorry, part of the reorg. should be for him to go bye bye. He obviously refuses bankruptcy because he doesn't have the talent to make his company profitable again.
11-21-08, 06:21 AM
#180
There is no telling how much money they are wasting on certain things - and public as they may be, detailed records like this are not available...