Massachusetts Cop Forum banner
1 - 20 of 30 Posts

·
MassCops Angel
Joined
·
121,497 Posts
Discussion Starter · #1 ·
By MITT ROMNEY

Published: November 18, 2008
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't go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course - the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support - banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around - and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit's automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota's Avalon. Of course the Avalon feels like a better product - it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries - from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, "Getting more and more pay for less and less work is a dead-end street."
You don't have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms - all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies - especially fuel-saving designs - that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don't want to lose the only people who can get them to grow. So don't fire the best dealers, and don't crush them with new financial or performance demands they can't meet.
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research - on new energy sources, fuel-economy technology, materials science and the like - that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don't ask Washington to give shareholders and bondholders a free pass - they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Mitt Romney, the former governor of Massachusetts, was a candidate for this year's Republican presidential nomination.

http://www.nytimes.com/2008/11/19/opinion/19romney.html?_r=2
 

·
Registered
Joined
·
4,172 Posts
No, they're not going to fail anyway. The problem with the bankruptcy scenario is the availability of capitol at this time. The only thing the companies need is the government to provide "loan guarantees", aka cosigning the loan. This is not without precedent; the feds did this for MoPar back in the eighties. No taxpayer money was spent helping Chrysler, nor should it be this time. One more time for those of you in the cheap seats: NO TAXPAYER MONEY WAS SPENT HELPING CHRYSLER. NONE SHOULD BE SPENT THIS TIME EITHER. Anything to the contrary that Miss Rottoncrotch told you in school was a marxist lie (see "useful idiots").

Romney is right. But if you all want to believe that Nancy, Harry, Barney, Chris and Waxman know more about the automobile industry (or any industry for that matter) than Romney, then suit yourself. Regardless of what is done, the gubmint is going to be involved...I'll take the loan guarantees over the outright loans/grants any day.

You know that no matter what, the idiot marxists are going to try to force Detroit to produce "green cars" (they have already made such statements; the Big 3 aren't in trouble because they don't manufacture enough "green" products). This would truly be a death sentence for the Big 3. Trying to force stuff onto the market that isn't wanted will just mean that a lot of product will be decaying on the lots. If "green" was so profitable, the other manufacturers would be manufacturing that product to the exclusion of others: instead, they are making a big "green" noise and continuing to provide the standard product (Detroit offers more hybrids than their competitors). Too, there is the issue of a looming shortage of unicorn farts that would supposedly power these miraculous green vehicles.

In any event, who says that the Democrats want the Big 3 to survive?
 

·
Subscribing Member
Joined
·
6,688 Posts
going back into ancient history ( 1970's ) Detroit would have made small cars , but the american public wanted BIG cars. enter the oil embargo and companies like toyota were in the right place at the right time.

fast forward to the 80's and 90's SUV's became popular and Detroit was quick to appease the american buying public.

the economy tanks and now people want cars that run on thin air !

and for this the big 3 find a convenient way to screw the workers out of their pensions.
 

·
Needs more complaints
Joined
·
4,309 Posts
No, they're not going to fail anyway. The problem with the bankruptcy scenario is the availability of capitol at this time. The only thing the companies need is the government to provide "loan guarantees", aka cosigning the loan. This is not without precedent; the feds did this for MoPar back in the eighties. No taxpayer money was spent helping Chrysler, nor should it be this time. One more time for those of you in the cheap seats: NO TAXPAYER MONEY WAS SPENT HELPING CHRYSLER. NONE SHOULD BE SPENT THIS TIME EITHER. Anything to the contrary that Miss Rottoncrotch told you in school was a marxist lie (see "useful idiots").

Romney is right. But if you all want to believe that Nancy, Harry, Barney, Chris and Waxman know more about the automobile industry (or any industry for that matter) than Romney, then suit yourself. Regardless of what is done, the gubmint is going to be involved...I'll take the loan guarantees over the outright loans/grants any day.

You know that no matter what, the idiot marxists are going to try to force Detroit to produce "green cars" (they have already made such statements; the Big 3 aren't in trouble because they don't manufacture enough "green" products). This would truly be a death sentence for the Big 3. Trying to force stuff onto the market that isn't wanted will just mean that a lot of product will be decaying on the lots. If "green" was so profitable, the other manufacturers would be manufacturing that product to the exclusion of others: instead, they are making a big "green" noise and continuing to provide the standard product (Detroit offers more hybrids than their competitors). Too, there is the issue of a looming shortage of unicorn farts that would supposedly power these miraculous green vehicles.

In any event, who says that the Democrats want the Big 3 to survive?
They've already failed. GM lost almost $40 BILLION last year. If that's not a failing business, tell me what is; and I still bought a big ass gas-guzzling GM product last year and love it. 4 of my last 5 cars were GM and Chrysler products.

The thing I don't like is that all of the talking heads spin this story into an anti-labor tirade. When big media talks about how the UAW is soaking GM for more than what they can afford, they don't spend one minute talking about how the management and CEOs ultimately approve of the contracts. These CEOs/CFOs are supposed to be the best and brightest and firing on all cylinders when they make big money/long term financial decisions.

Even when these media people sign on to a contract with whatever radio or news station, they have certain guarantees that both parties agree to. It's not the fault of the employee's contract that the parent business is failing.

When Michael Graham signed on to WTKK, or Hannity signed with FoxNews, or the same for some of these clueless anchors, I bet there was no clause in their contract that said if the station posts a loss, his/her contract would be null and void. His manager, agent or head hunter wouldn't allow it, nor should any union association when negotiating with the parent company.
 

·
MassCops Angel
Joined
·
121,497 Posts
Discussion Starter · #6 ·
If you took the salaries of the top 20 people at each of the company's
and used it to help the company's survive no bail-out would be needed.
It's not the unions that is the downfall,it's the fat cat salaries at the top.
 

·
Registered
Joined
·
3,110 Posts
Unions could be partially to blame (very small part of the problem). However even if the issues with the unions were perfect. The big 3 would still be in major trouble. Pass special legislation to help them out, etc. tax waivers. Clean house totally of management,I mean totally. Unless they are specialized engineers or something, clean house. Bailing them out would be like throwing money at the MBTA or some other agency that messes things up.

I didn't live through the Jimmy Carter years, I am getting an idea what it is like to live in the Jimmy Carter era now. There are so many dead gas stations and dead car dealers now more then ever!
 

·
Zombie Hunter
Joined
·
4,815 Posts
Let them fail; such is the way of the free-market economy. Someone else will buy them out, and re-tool them better. If a small business went belly-up the owner doesn't get to beg the feds for money to bail him out. The big three have managed themselves out of competitiveness, and deserve to go out.
 

·
Registered
Joined
·
4,172 Posts
Not only did GM lose money last year, but so did Ford and Chrysler. Losing money is not the same as insolvency. A company can lose money for a finite period only. The Big 3 are approaching that limit, hence the panic. The sentiment here, and elsewhere, is "let them fail". Given some of the comments here, I take it some identify "fail" to mean, "go out of business." The trouble with this is that when they "fail", they take a myriad of support industries with them: Dana, Arvin-Meritor, Johnson Controls, Hayes-Lemerz (Lemerz-Hayes?…eff it, Kelsey-Hayes :D) ). The potential is approximately three million jobs…many of them from "union" shops.

As to the unions, while they are not responsible for the troubled American auto industry, they are willfully complicit. Any attempt to "spin" the shared responsibility of unions and depict them as "victims" is disingenuous. They were able to negotiate from a position of strength because they could strike; no work, no production, and in a highly competitive field that means loss of market share. This goes back to when the UAW was playing the Big 3 and Rambler against one another. The arrival of the Japanese and Germans should have been a wake-up call…but they were all but ignored. Business, both manufacturing and union, continued "as usual." We see the fruits of this now: an industry on the ropes and a union who has priced their members out of the market. Change is coming. If you want to call it union busting, so be it. The market will adjust, regardless. I think it would be better for everyone involved, if they hammered out a more reasonable, equitable arrangement. If they don't adapt, say good-bye to the union jobs and the domestic auto industry.

The airplanes and dining rooms of the "executives" not only look bad, but also are just a waste of money. The bonuses/stock options are necessary to entice and keep top talent. You may suggest that they obviously aren't "top talent", but try looking at this from a sports perspective. How much money is spent for "top talent", coaches and players, who then don't perform as well as they did previously? They may have the talent but they must have the support system for that talent to manifest itself. It is the same in industry. You can have the most talented execs on the planet, but if their engineers, designers and assemblers suck, that talent will not matter for much. Sure, some people just suck at their jobs: in the executive world they are paid to "just go away" (just as sports figures are released from their contracts). In any event, no one thing stands alone: no one thing is solely to blame.

The Big 3 are producing good products: for instance, their trucks are non-pareil. The quality of Mercury and Cadillac is equal to that of Lexus (JD Power). In contrast, Toyota is the leader in product recall, a situation they have, to their credit, recognized and are desperately trying to correct (Automotive News). Please don't think that the Big 3 are the only ones not moving product: everybody is experiencing double digit reductions (excepting one month for Datsun). Heck, Toyota can't give their trucks away and are offering rebates (!) and financing deals. As far as hybrids are concerned, Detroit is offering more varieties of hybrids than everybody else.

Editorial and Disclosure: Please understand that I am not now and have never been a union member (police unions don't count: can't strike = not a union). Secondly, I have never owned, and hopefully will never own, a "furrin" car. This is not because I think they are an inferior product. In the case of "rice burners", there are still 1000 sailors and marines at their posts on the USS Arizona: I have had too many friends and coworkers who fought in that theater. This is not a slap at the Japanese; I am a great fan of anime and their culture. Rather, this is a matter of respect for those friends, coworkers and what that generation endured. Those events are too close in time for me; perhaps the next generation can work past that. In the case of "Jew burners", 'nuff said (ditto, though, friends and coworkers…respect for culture, et al). Further, this is not to suggest disrespect on the part of those who do not think as I do: my views, hang-ups and experiences are uniquely mine and I do not seek to project them onto anyone else.

Wolfie, my rhetorical "gifts" are no match for your keen editorial insight...:cool:
 

·
Registered
Joined
·
34 Posts
Look at car companies like Tesla Motors. Not everyone is failing right now. Instead of supporting a failing business we should be supporting the many small businesses in hopes that they grow and mature into the role that GM used to hold- without the corruption or generally idiotic corporate structure.
 
G

·
The only thing that will save these three companies is a managed Bankruptcy. Sell off the old parts of the company. get rid of some labor, cut management salaries to 5 times what the workers under them make. Not the 20 times or more now. Most of all make better shit. If you gonna try to sell me an edsel, then yeah! I am going to go buy overseas.

......
I can't believe I'm going to say this, but...
I agree with Mitt.
 
G

·
Even the myopic Dr. Phil has something good to say once in a while. Everyone is bound to get lucky once or twice. Even if he really isn't a doctor anymore.
This just does not make sense though. Why reward these execs with money that you know will just be used to pad wallets. First they cry they need money from their jets, and then they scream they need money from their hybrids. Its all just a show. The UAW and management should agree to cut salaries where needed, move the extra money around the company, redesign and modernize. Get rid of models that are not selling well, and make a car that'll last more than 5 years.

I'm not saying make every model a fully fuel efficent gas sipper or hybrid. We still need models like the corvette, mustang, viper, etc. I'd just like to see those useless SUVs get put in their place.

File bankruptcy, get out of the old agreements and contracts that are killing their companies, renegotiate with the unions and their suppliers to figure out just how to FIX this problem, instead of putting a bandage on it with a few billion dollars.

If I fail at my job, can I get a multi million dollar severance "golden parachute"?
 

·
Registered
Joined
·
34 Posts
Even the myopic Dr. Phil has something good to say once in a while. Everyone is bound to get lucky once or twice. Even if he really isn't a doctor anymore.
This just does not make sense though. Why reward these execs with money that you know will just be used to pad wallets. First they cry they need money from their jets, and then they scream they need money from their hybrids. Its all just a show. The UAW and management should agree to cut salaries where needed, move the extra money around the company, redesign and modernize. Get rid of models that are not selling well, and make a car that'll last more than 5 years.

I'm not saying make every model a fully fuel efficent gas sipper or hybrid. We still need models like the corvette, mustang, viper, etc. I'd just like to see those useless SUVs get put in their place.

File bankruptcy, get out of the old agreements and contracts that are killing their companies, renegotiate with the unions and their suppliers to figure out just how to FIX this problem, instead of putting a bandage on it with a few billion dollars.

If I fail at my job, can I get a multi million dollar severance "golden parachute"?
We need to get rid of our dependence on gas-burning vehicles. New advances in lithium batteries have made it environmentally safe, and for the first time- both practical and green. That doesn't mean you need to lose your horsepower though. Imagine the rush of zero to sixty in four seconds with no engine sound or vibration, and no shifting of gears. Sure, there are faster movers... but that's a damn good start.

The only thing is that it's gonna take a good 8 hours to recharge without a big unit installed in your garage- so for trips EV's are no good. However, if you go and throw a gas engine on there, then you lose the power to that extra weight. Hybrids are more of the same- over-complex destined to break down and hard to service. This isn't to say cars aren't great, and it's isn't to say that EV's are a solution either... But it's time we started advancing as a society and developing past it. The technology is there now. And after the 90's the people developing these things realize they can't look completely retarded, too.

Think of all the fluid and mechanical systems an electric-only engine removes from the breakdown picture for a minute. An electric engine is a damn simple thing, and doesn't have a hell of a lot of moving parts that can break- as opposed to an internal combustion engine.
 
G

·
Even the myopic Dr. Phil has something good to say once in a while. Everyone is bound to get lucky once or twice. Even if he really isn't a doctor anymore.
Anyone with an earned (not honorary) doctoral degree from a legitimately accredited school is entitled to call themself "doctor", regardless of what their field of study happens to be. The myth that only physicians are "real doctors" is pretty laughable when you read the history of the word "doctor", which in ancient times referred to a learned person.

Dr. Phil McGraw, while being a pompous blowhard, has an earned doctoral degree in clinical psychology from the University of North Texas.
 
1 - 20 of 30 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top