Will the Big Three Survive the Decade?

Recently the stock of Ford has fallen to just two bucks, while GM hovers around six dollars.

Amazingly, Toyota and Honda are together worth TWENTY-TWO times the value of GM and Ford, according to the latest figures from Fortune magazine.

Do you still want a made in America vehicle...does anybody?

Lets hear some answers as to HOW this happened???

 

Log in or Sign up to hide all adverts.

The biggest problem is the way the USA organizes pension and health care. Both of which can be directly tied to the company and in the case of GM and Ford is. Therefor, the only way to unload all the retired people (of whom include my Aunt, 4 Uncles, grandfather and father) they need to go bankrupt then restructure during which time those "liabilities" will be discarded. Such is the American way.

Right now Toyota and Honda aren't burdened with 4 generations of retired employees.

 

Log in or Sign up to hide all adverts.

I'm sure Ford and GM will survive - after the bankruptcy and restructuring.

What I find shocking is how government is forking over TRILLIONS to save financial institutions but seems to care less that the few remaining big US companies that actually make something are going to survive. What's wrong with these people?

 

Log in or Sign up to hide all adverts.

I see a merger happening somewhere with at least 2 of them.

 

I wouldn't put any money in GM and Ford. They are dinosaurs of another age. With science education in the pits in the US, you're not going to see much innovation there. Especially since the US has also become less attractive for immigrants.

 

I've worked for GM. They make cars as well as Toyota. Actually, sometimes GM makes Toyota and sometimes Toyota makes GM parts (including whole engines). Hell, GM sometimes makes things for Porsche - transmissions for example.

the problem has nothing to do with technology, actually, when I was in management meeting almost all divisions of GM could turn a profit IF they didn't have to pay out to retired employees and people on medical leave. THAT was pretty much the big drain. But, what can they do? Those people worked their arses off for the company and they had a deal that said when they retire they get X dollars until they die, and even then their spouse keeps getting money until they die.

So, that's the problem. There's no way it's ever going to go away UNLESS shit hits the fan so hard that the companies can make a case they MUST go bankrupt, in such an event all the pensioners and people on medical leave and people laid off will be put on the governments tab (get a hell of a lot less) and the companies will restructure (move even more manufacturing to Mexico and S. America) and start making billions again.

The question is - what happens to people's stock pre-bankruptcy? Do they loss everything? If so then NO I would not buy it either.

 

I bought a Mercury, it was made in Canada. I bought a Honda, it was made in America.

 

Excellent post...gleaned from first hand experience!

 

Obama's plan is not national health care, and it is too little too late for the car companies.

Actual socialized medicine was blocked by the Companies, back when.

Yes, it would have headed off most of the current problems. Not only national health care, but at one time the unions wanted to control the health care and were blocked. The employers wanted the control, and they thought health care was a profit source.

The way employer-based health care was sold to the American people was that if America had socialized medicine black people would be able to go to white hospitals, and other communist innovations would be forced on everyone.

The only way the Big Three survived the eighties was by getting the Feds to impose tariffs on Japanese imports. That and rigging the pollution standards so that GM's catalytic converters had to be installed, instead of getting the benefit of the superior Japanese engines. These tariffs and pollution meddlings have cost me at least 5000 dollars directly out of pocket, all of which subsidized the Big Three.

 

LOL...

Please Register or Log in to view the hidden image!

 

http://online.wsj.com/article/SB122487032121567191.html?mod=article-outset-box

"Detroit's Big Three look like they will soon be a Smaller Two. Industry leaders and investors are still absorbing the idea that Chrysler LLC could disappear. A lot of consumers have already moved on.

Chrysler's woes arise from many mistakes, compounded by bad turns of luck. But the company's failure to keep up with rivals on quality is a significant, and underrated, factor in its current crisis.

Chrysler's quality deficit was a stark highlight of Consumer Reports magazine's annual survey of vehicle quality, released last Thursday. Chrysler "trails the pack" in quality, the magazine says. Almost two-thirds of Chryslers models rated below average in the magazine's testing and in its subscriber survey, which collected responses on 1.4 million vehicles this year and is one of the largest surveys running on vehicle quality.

Chrysler's Town & Country and Caravan minivans both did poorly in the magazine's testing and in its subscriber survey. The Chrysler Sebring "is one of the worst vehicles" for reliability that the magazine rated, David Champion, the senior director for the magazine's auto testing operation, told members of the Automotive Press Association in Detroit.

Mr. Champion had kinder words, sort of, for Detroit's other beleaguered giants.

Ford Motor Co.'s quality "has been getting better and better," Mr. Champion said in a presentation Thursday to Detroit's Automotive Press Association. Ford "is extremely close to Honda and Toyota in reliability." The company's problem is it needs to make its models "a little more exciting," he said.

General Motors Corp., he said, "has a very good model portfolio. Its trucks are good. The (Cadillac) CTS is good, in test results." But GM still is hit or miss on reliability. GMC Acadia crossover wagons are no longer recommended buys because reliability has dropped to below average.
[Chrysler quality woes Eyes on the Road] Chrysler

So, Mr. Champion said, Ford has figured out how to make reliable boring cars. GM's cars have better styling, but GM still can't deliver consistent reliability.

These layoffs are inevitable as American consumers abandon Chrysler in droves. The company's sales are down 25% for the year through Sept. 30 – a decline twice as steep as the overall market, and substantially worse than the roughly 17% declines at GM and Ford. Honda Motor Co., which is a leader in both Consumer Reports quality rankings and in the appeal of its fuel efficient cars, is down just 1% through Sept. 30.

Chrysler's quality failure is all the more striking when contrasted to the performance of Korean auto makers Hyundai Motor Co. and Kia Motors Corp. The two Korean companies, which are two arms of the same conglomerate, "rank right up there with the better Japanese nameplates" in Consumer Reports' latest surveys, the magazine says. Only the Hyundai Entourage and Kia Sedona minivans ranked below average, Mr. Champion said."

 

GM will never be the same.

 

Exactly. What were these companies thinking. I see patients 70 year old. Haven't worked for GM for over 20 years, yet GM is still paying for the health care for them and their wives. How did they ever think they could afford that?

 

I remember being a meeting on spark plugs. the PPM (part per million that are faulty) for Toyota was something like 12-21 whereas Delphi GM had the "goal" to get to below 1200!

 

many physicians migrated to MI just to cash in on that Generous Motors health care plan. They milked that cow dry.

 

Universities are not like that. The moment you retire, you lose all health coverage. So basically, when you need it the most, its not available. Its a fantastic system [as in based on the fantasy that this is a better system].

 

Would you like to back that up with figures ? Toyota has a much better track record.