Bailout Nation 2: General Motors

[jm1fd]

But domestic resale values are low, so they aren't priced the way you describe. People buy new domestic cars because they don't trust used domestic cars, even though the resale values are so low.

How do you know they aren't buying new domestics because the incentives are so good and not because they don't trust them?

The truth of the matter is that resale values are driven by a number of factors: perceived quality and reliability, incentives available on similar new vehicles, and of course just plain 'ol supply and demand.

You're going to sell it for as much as the market will bear, which isn't as much as a similar used foreign car.

One of the factors in how much the market will bear is how much an equivalent new vehicle is selling for.

All I see on "trudelta.com" is something about Delta Airlines and some college fraternities.

Ooops...typo That should be truEdelta.com

[BryanS]

Bryan, if I cracked open two of today's engines side by side, I'll bet you dollars to doughnuts that you couldn't tell the difference of which one is which. Back in the 60's and 70's it would have been far more easier, as all the companies even color coded their blocks to ell which one was which. Even though Chrysler had an orange on some of their hemis, it was a different orange color from chevy's.

The problem with American consumers is that we want to have the biggest car on the road and still get 50mpg with it. The styling of American cars and the downward spiral of the perception of poor quality of American built cars has also killed Detroit.

TJ, if you took the heads off of those engines, I bet my father, my uncle could tell the difference. GM has been making 327, 350 V-8 engines since the 1960's and still makes them today. It's why people buy Chevy and GMC trucks. Many will throw stones: "No wonder GM is going under, they haven't advanced their technology since the 1960's." That's horse crap. Today, those same V-8 engines use active displacement which cuts the fuel to 4 cylinders for better gas mileage on the freeway - all controlled by computers. Personally... I would not want that kind of feature, because if it ever broke... god knows how you're gonna fix that. But they have innovated.

In terms of styling... Chrysler builds some of the most stylish vehicles on the market. Only the Dodge Ram pickup, starting with their 1996 model to present, beats out Ford and Chevy in terms of a sharp truck, style. You have to admit it. Maybe you want "the best" quality... buy a Chevy Silverado then - see editor's 2007 JD powers survey. #1. Not Toyota. Want the best selling truck? F-150 then. And Chevy's "new El Camino" - truck-car-looking thing... pretty bold. I was impressed with Pontiac Solstice. Now all the retro styling is coming back...

If you want to drive a box... congratulations, you can be cheap and do so. If you want something more stylish, with more features, power, etc... you have to pay more. GM, Ford, Chrysler - can fill the bill no matter what you want.

The problem is not the cars.

It's the economy and the absence of communist Chinese work labor force compensation/benefits/wages at GM that the rest of the world is sadly being forced to move toward.

[RedScare]

Personally... I would not want that kind of feature, because if it ever broke... god knows how you're gonna fix that. But they have innovated.

Same way you fix all the other computer controlled problems. Change the chip. Not that the chips go out very often.

As for the rest of your post, you are entitled to your opinion. My crappy Toyoata truck will be 5 years old in 18 days...never seen the shop...and it was built in the US. And I think Ford and Chevy trucks are butt ugly.

[jm1fd]

Same way you fix all the other computer controlled problems. Change the chip. Not that the chips go out very often.

Cylinder deactivation isn't just software. There's hardware involved that shuts down oil flow to the lifters for certain cylinders....this prevents half the engine from wasting energy pretending to be an air pump.

[editor]

One of the local political talk shows this morning is talking about how Obama will handle the GM situation (the Obama policy transition office is here in Chicago while the personnel office is in DC, which explains why the neighborhood is crawling with cops these days)

The consensus among the panelists was that Obama won't touch a bailout until spring at the earliest because he has other priorities, and because his people don't have the faintest idea how to restructure an industry, so they're going to have to do a lot of learning first.

They also agreed that Bush won't do anything about the bailout simply because there isn't time.

[TheNiche]

The same thing happened with the mass media. Before the 80's they were owned and run by media people and journalists. Then they all started going public. Next thing you know all the TV companies are owned by bigger companies with no experience in television (GE, Westinghouse, Capital Cities) who used their in-house and imported consultants to tell the journalists how to do their job. Now we're reaping the rewards of that mistake -- the public doesn't trust the media, and the media is answerable to Wall Street and not to the viewers.

You don't think that that wasn't unprecedented? I mean, the concept of yellow journalism has been around for quite a while. William Randolph Hearst became a publisher in 1887.

[RedScare]

Funny that we were just debating which brands do best. Forbes has an article out on best and worst performing vehicles. Gues which two manufacturers hogged the Best Performing list? Guess who made the Worst?

http://autos.yahoo.com/articles/autos_cont...E2NGdhMnFiBF9TA

[houstonmacbro]

Funny that we were just debating which brands do best. Forbes has an article out on best and worst performing vehicles. Gues which two manufacturers hogged the Best Performing list? Guess who made the Worst?

http://autos.yahoo.com/articles/autos_cont...E2NGdhMnFiBF9TA

The brand I drive (Honda) ranks consistently in the top. I love my Honda!

[houstonmacbro]

More bad news ... GM is skimming the barrel trying to raise cash ... things are REALLY bad with GM right now:

GM TO SELL BACK SUZUKI STAKE TO RAISE CASH

General Motors will sell back its 3 percent stake in Suzuki Motor for $232 million as part of the struggling U.S. automaker's efforts to raise cash.

The move comes as the U.S. Congress debates a bailout for money-losing car makers that some say will give the firms a chance to restructure and save jobs while others say it only throws good money after bad.

[Subdude]

From what I'm reading the GM bailout is dead in the water. Wouldn't it be a violation of WTO rules to bail them out anyway, despite GM's hysteria campaign? Did the "Big 3" already burn through the $25 million in subsidized loans they just got?

In terms of styling... Chrysler builds some of the most stylish vehicles on the market.

I'm sorry man, but Chrysler totally lost it on styling. The Dodge Caliber? Chrysler Sebring? They are beyond ugly. What were they thinking?

[memebag]

I'm sorry man, but Chrysler totally lost it on styling. The Dodge Caliber? Chrysler Sebring? They are beyond ugly. What were they thinking?

This is a Dodge Caliber. It is the ugliest car I've ever seen. It makes me shriek with disgust every time I see one on the road. I even get a special premonition feeling before I see one; the hairs literally stand up on the back of my neck.

Who is buying this car? Who thinks this looks good and why?

[jm1fd]

Did the "Big 3" already burn through the $25 million in subsidized loans they just got?

They haven't even gotten that money yet.

[crunchtastic]

This is a Dodge Caliber. It is the ugliest car I've ever seen. It makes me shriek with disgust every time I see one on the road. I even get a special premonition feeling before I see one; the hairs literally stand up on the back of my neck.

Who is buying this car? Who thinks this looks good and why?

The Caliber sucks. The only car that suck more is the PT Cruiser. I've had the misfortune of getting stuck with both as rentals before. Awful, awful, awful cars.

Horrible handling, horrible acceleration, horrible visisbility, miles of dash that obscures one's sight line, horrible interior ergonomics. Did I mention that the Caliber sucks?

[memebag]

Did I mention that the Caliber sucks?

Even if it handled like a Zonda, it would still be too ugly to live. Yet I see them on the road all the time. I really want someone to explain the motivation for buying one.

[TheNiche]

Even if it handled like a Zonda, it would still be too ugly to live. Yet I see them on the road all the time. I really want someone to explain the motivation for buying one.

Given the choice between the Dodge Caliber and the Buick Rendezvous, which fugly would you rather drive?

[memebag]

Given the choice between the Dodge Caliber and the Buick Rendezvous, which fugly would you rather drive?

I'd rather drive a rusty railroad spike into my eye socket than either of them. What's the deal with the vinyl stripe over the doors?

[BryanS]

I'm sorry man, but Chrysler totally lost it on styling. The Dodge Caliber? Chrysler Sebring? They are beyond ugly. What were they thinking?

And how much does those cars cost? ... As if the Honda Civic is any better? They're all inexpensive, boxes. You want more, then pay more.

This is a Dodge Caliber. It is the ugliest car I've ever seen. It makes me shriek with disgust every time I see one on the road. I even get a special premonition feeling before I see one; the hairs literally stand up on the back of my neck.

Who is buying this car? Who thinks this looks good and why?

I kinda like it. It looks agressive. As in kinda boar-hog agressive.

[RedScare]

I kinda like it. It looks agressive. As in kinda boar-hog agressive.

It does have sort of an Arkansas Razorback slope to it.

Not as much as this one, though...

[memebag]

I kinda like it. It looks agressive. As in kinda boar-hog agressive.

Really? A station wagon with a lot of superfluous folds and a big black vinyl stripe over each side looks ... aggressive? I'm not seeing it.

[barracuda]

Wow, how do you go from making cars like this...

1955

to that fugly thing?

2008

[Subdude]

Really? A station wagon with a lot of superfluous folds and a big black vinyl stripe over each side looks ... aggressive? I'm not seeing it.

The idea of the black stripe is to de-emphasize the high roofline to give more of the visual aspect of a coupe. That's the idea, only here it doesn't work. And the gigundi wheel wells? I know that's in fashion, but here it looks cartoonish.

Here is their latest flop, the Sebring

[Subdude]

Hey it is just paper, (well, cotton and fibers) the Govt. will print more. The big 3 need the bailout, and as long as they put in the provisions for halting CEO and upper-level payouts. I see no problem. They have also promised to build MORE eco-friendly cars, so, what is the beef here ?

I was just reading an article that was saying a bailout should be in exchange for making them build more fuel-efficient cars. I'm not posting the link because it was absolute bilge. First of all, GM builds a lot of big trucks because they are very profitable and (until recently) have been in high demand. It seems a bit off the mark to bail them out by requiring them to build more less profitable vehicles. Second, if the government wants more fuel efficient cars the way to do it is to raise gasoline taxes to create a better incentive for people to use less oil. People are kidding themselves if they think just putting more efficient cars out there will change buyer preferences.

[RedScare]

I was just reading an article that was saying a bailout should be in exchange for making them build more fuel-efficient cars. I'm not posting the link because it was absolute bilge. First of all, GM builds a lot of big trucks because they are very profitable and (until recently) have been in high demand. It seems a bit off the mark to bail them out by requiring them to build more less profitable vehicles. Second, if the government wants more fuel efficient cars the way to do it is to raise gasoline taxes to create a better incentive for people to use less oil. People are kidding themselves if they think just putting more efficient cars out there will change buyer preferences.

True. When government gives tax breaks to consumers for buying 6000 pound vehicles, the consumer will buy 6000 pound vehicles. Granted, it was GM lobbyists who got that tax break approved, but a bailout that requires fuel efficiency while tax laws and gas taxes encourage big vehicles is schizophrenic. The government needs a consistent message that encourages consumers to buy what it forces GM to build. Otherwise, both the consumer AND GM loses.

[TJones]

I was just reading an article that was saying a bailout should be in exchange for making them build more fuel-efficient cars. I'm not posting the link because it was absolute bilge. First of all, GM builds a lot of big trucks because they are very profitable and (until recently) have been in high demand. It seems a bit off the mark to bail them out by requiring them to build more less profitable vehicles. Second, if the government wants more fuel efficient cars the way to do it is to raise gasoline taxes to create a better incentive for people to use less oil. People are kidding themselves if they think just putting more efficient cars out there will change buyer preferences.

Oh, the big 3 have already made that promise to the powers that be Subdude. They are talking about 30mpg trucks within 10 years. Which is actually not that far away, you just have to be ready for your 310hp monsters to be detuned again. So, 210hp engines will be the new thing again, but they will figure out how to keep the torque there.

[RedScare]

Oh, the big 3 have already made that promise to the powers that be Subdude. They are talking about 30mpg trucks within 10 years. Which is actually not that far away, you just have to be ready for your 310hp monsters to be detuned again. So, 210hp engines will be the new thing again, but they will figure out how to keep the torque there.

Oh NO! How will suburban office workers EVER be able to sit in rush hour traffic with only 210 hp under the hood!

[Subdude]

Oh, the big 3 have already made that promise to the powers that be Subdude. They are talking about 30mpg trucks within 10 years. Which is actually not that far away, you just have to be ready for your 310hp monsters to be detuned again. So, 210hp engines will be the new thing again, but they will figure out how to keep the torque there.

That should be feasible. Can't electric motors provide the torque? A guy I work with got to drive a Tesla the other day and he said the acceleration was amazing. The torque curve is actually a straight line.

[Fringe]

After the $4 a gallon scare last summer, people are already demanding more fuel efficient vehicles. So it's a moot point to require better mpg vehicles now.

Does anyone else see the irony of a CEO making tens of millions of dollars asking for a bailout?

[TheNiche]

Does anyone else see the irony of a CEO making tens of millions of dollars asking for a bailout?

No, not at all. Please explain.

[Fringe]

Obviously you don't if I have to explain it to you but here goes:

1. This person is making millions despite his company loosing revenue. How much of this bailout will go to paying his salary?

2. Has this CEO made any sacrifices for his company? I'm guessing not.

3. Can we really trust a person that is obviously incompetent with our money?

4. Obviously, despite their stock dropping to all time lows, there is still plenty of money for the executives.

I think Mitt Romney says it best:

November 19, 2008

Op-Ed Contributor

Let Detroit Go Bankrupt

By MITT ROMNEY

Boston

IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won

[Subdude]

After the $4 a gallon scare last summer, people are already demanding more fuel efficient vehicles. So it's a moot point to require better mpg vehicles now.

Does anyone else see the irony of a CEO making tens of millions of dollars asking for a bailout?

It gets better. When they went to Washington to beg for still more public funds all three CEOs took private jets. After all, it just wouldn't do to go commercial.