"Detroit must DIE" - PeachParts Mercedes-Benz Forum

Jim B. · #1 11-15-2008, 04:21 AM

Well written commentary by Mark Morford, sfgate.

full article:

This is what I think whenever I see someone plodding along the freeway or struggling through the city streets in some older and terminally bland or even brand new and yet still terminally bland Malibu or Cobalt or Taurus, Sebring or Nitro or Mustang or Corvette or Neon or hell, almost any car from any American manufacturer whatsoever...

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Mark Morford
Detroit must die American cars are still uniformly god-awful. Why save them? 11.14.08

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I think: Oh, you poor thing. I think: Do you not have any friends? Did no one tell you? Have you not yet heard of this crazy thing called the Interweb? Did you not even bother to do ten minutes of research and comparison shopping before you purchased that squeaky, ill-built lump of misfit steel and crude design, homework which would've instantly revealed to you what even the most amateur automotive buff knows the instant she becomes a fan of quality engineering and design refinement and, you know, basic drivability?

This is what you would've learned: that American cars are, to this very day, still uniformly awful. Or if they're not awful, they're just passably mediocre. And your money would be oh so much better spent on German or Japanese or even Korean. I'm so sorry about your urine-yellow Chevy Aveo. Here, have my parking space.

You might disagree. You might say, hey wait a minute, not all American cars are as dreadful and ill-equipped as Sarah Palin at a science fair. There are a few exceptions, a few gems among the dirt clods.

Like the new... um, the Ford, uh, what was it again? Right. The Flex (that's not a car, but whatever). And hey, the new Fiesta is supposed to be hot, because they brought it over from Europe -- aka "land of wonderful, efficient, well-designed little cars we almost never see." And wasn't that big pseudo-gangster slab, the Chrysler 300, sort of cool about five years ago? Sure it was.

And you're right. Those cars are exactly that, exceptions. Rarities. Flukes. The truth is, American cars haven't been interesting or exceptional in decades. When it comes to small and efficient, there isn't a single truly desirable American car on the road today. And innovation? Dear God. The last new idea a U.S. manufacturer had was sticking a mini fridge under the seat of the Caravan. Neato.

And now here's the other thing I think when I hear that the bloated American auto industry is on the verge of complete collapse, failure, bankruptcy, that the Big Three -- Ford, GM, Chrysler -- are losing billions hand over tailpipe, and that Obama and Nancy Pelosi are right now considering shoveling many billions into their voracious maws to try and keep them afloat for a while longer, just so they can keep producing crap no one really wants.

I think: Are you kidding me? We have a chance to let this fat, lazy, top-heavy, SUV-glutted industry implode like it so very much deserves, and we might not take it? I think: What an opportunity. We could begin to reinvent the American automobile starting next week, and we might instead keep the old ways alive simply because the Big Three were too stupid and greedy to see past their gross SUV sales figures for the past 25 years? Come on.

Look. You are free to reminisce all you like about some hazy, throbbing, "American Graffiti"-tinted golden era of American cars, all about Steve McQueen and 'Cudas and '67 Mustangs and peeling out in the high school parking lot. Knock yourself out. But the truth is, this economic crisis might be our best chance yet to wipe the flabby, useless U.S. transportation slate clean and begin anew, armed with a whole new set of tools American auto manufacturing has never used before: efficiency, ingenuity, agility. Can you imagine?

I realize I am no economist. I fully understand there might be reasons far larger and more fiscally complicated to justify keeping the Big Three alive for awhile longer, simply because, like AIG, so many billions are wrapped up in their operations and in the various supply chains that support them, to let them all fail nearly simultaneously could rip a hole in our sinking ship of state far larger and more dangerous than the one that results from letting them suffer and die slowly, bleeding billions all the way.

What's more, I'm also not so heartless to ignore the brutal job losses, the tens of thousands of collapsed pension plans and failed retirement accounts that would result from the end of American auto industry. It would be horrible indeed. But maybe that's where the government's billions would be far more useful, to ease the meltdown and provide retraining.

(I am also urged to note that the enormous, overstuffed UAW isn't exactly a saint, either, and that a large part of the responsibility for Big Auto's lack of innovation and change lo these past decades rests squarely on its petulant shoulders, too. You can't blame all the ills of American auto on the greedy CEOs and their shortsighted accountants. Just most of them.)

Here's the upshot: The American auto market is the biggest in the world. Our near-religious adoration of cars isn't vanishing anytime soon. There are hundreds of billions of dollars still to be made. Let prehistoric Big Auto die now, put the old, tired, sickly circus elephant out of its misery, and watch what happens.

Innovation would skyrocket. Entrepreneurs would flood in. New and pioneering car companies -- or better yet, radical new ideas for urban human transport -- would flourish. New jobs would be created almost instantly. Those supply chains wouldn't vanish, they'd adapt. The American auto industry would convulse, struggle, acclimate, reinvent itself anew.

Hell, even most Republicans agree on this: You don't bail out lousy, overweight companies who've been dumping bad ideas on us since the Carter administration. Let the free market pull the trigger, and move on.

Yes, it might take awhile -- ten or twenty years, even -- before we'd see anything resembling a tolerable American vehicle that could compete with Toyota's manufacturing genius, Honda's simple quality, or any of the Germans' astonishing refinement or cool sex appeal. So what? Meantime, we'd all have to suffer driving Minis and Audis and Honda Fits while America figures out how to be ingenious and competitive again? Gosh, how horrible.

LaRondo · #2 11-15-2008, 04:35 AM

That's so wrong, ethically speaking.

Here they go and bail out those lousy, filthy and fraudulent banking establishments, but cannot find a way to renovate American originals.

Yeah, I understand that everybody would rather drive a Benz, a beamer, Toyta car or any other foreign make, for the purpose of appearing more distinguished. Good for Europeans and Asians!

Boy, again, those double standards are truly despicable. I don't expect anybody to grasp it, so let's not have an argument over it.

Mistel · #3 11-15-2008, 05:45 AM

I am not sure whether it is best to let them die or not, but I am a pretty average guy and I would never consider any of the crop of current American cars. I consider them too unreliable, ****ty MPG and just boring plastic junk. I would likely buy a used car anyway, in which case I would definately not consider an American car as I have this belief that over the years the cars have been made to poorer standards so that they only last 100k miles. I don't know if this is true, but I have heard that when they build a part, they consider how many miles they expect it to last. They have been lowering the miles to where it is now only 100K, I guess just enough to get it out of warranty.

The last new GM truck I had was a 2003. I was smart enough to sell it in 2004 before it became worthless because of the incredibly ****ty MPG. The buyer wanted an inspection by a GM dealer. I was reluctant, but it only had 10K miles on it, was still under warranty, so what could go wrong? They would fix any problem for free, right? I take it in, they look at it, they say it needs a complete brake job, $1,700, not covered under warranty. Yea, sure buddy, give me my ****** keys back. I didn't come in on a turnip truck. I take it to my mechanic, he looks at it, says it is fine and certifies it. Sadly there are a lot of retired people in our town and they are the only GM dealer. I can imagine how many un-needed brake jobs they have done. The service guy, who is the owners son, tried to give me the "it's not safe to drive, I shouldn't let you drive it away" story. Blow me. I was so pissed I wanted to make a stink about it but it is a small town and everyone knows everyone, my brother lives on the same street as the guy, so I forgot about it.

I'll stick with my 85 300TDT. I figure it will last as long as I want it too, as long as I stay on top of the rust and can still get parts. I look at it more like a house that you fix when it is broken rather than tear it down and build a new one. North American cars are disposible like a BIC lighter.

dynalow · #4 11-15-2008, 07:54 AM

Congress is destined to bail them out. And they WANT to!. If I were Bush, I'd exact as a quid pro quo whatever whateve he wants, like the Columbian Trade deal. Even if he does, this bailout will come on his watch and he'll get "blamed" for it. Better perhaps for Bush to punt on this and let the Democratic Congress and president take all the credit for this?

Standing in the wings with hands out are several states and now even a few cities. I think he ought to repeat Gerry Ford's 1975 stand. All these entities need to be cut apart and rebuilt. Handouts ain't gonna do anything but put a coat of paint over rotten wood. California, New York, New Jersey, New York City, Detroit, get your own houses in order.

Can you imagine this headline "BUSH TO GM: DROP DEAD!"

GM Blitzes Washington in Attempt to Win Aid
By JEFFREY MCCRACKEN and JOHN D. STOLL
General Motors Corp., hoping to sway the battle in Washington over an auto-industry bailout, has begun telling federal officials that a bankruptcy filing by the car maker would set off a chain reaction hammering hundreds of suppliers and dealers -- and in turn the company's Detroit rivals.

GM is attempting to set the terms for what looks to be a showdown among the lame-duck U.S. Congress, President Bush and the incoming Obama administration. On Friday, Senate Majority Leader Harry Reid signaled he will move forward on Monday with a bill giving the industry access to the $700 billion Troubled Asset Relief Program. That entity, known as TARP, was set up by the government in October to help ailing banks and other financial firms.

The Bush administration and many Senate Republicans oppose giving auto makers access to TARP. Instead, President Bush on Friday urged Congress to speed up the release of $25 billion in already-approved loans to the auto industry. He asked Congress to drop requirements that those loans be used to help the industry retool to meet higher fuel-economy standards, a step many Democrats oppose. The Republicans have enough votes to block a deal in the Senate.

Amid the political horse trading, GM is holding meetings this weekend with U.S. Congressional leaders, the Bush White House and members of the Obama transition team, according to people familiar with the situation. The efforts are an attempt to show policy makers how a GM bankruptcy filing would unleash unintended consequences that could cripple the country's industrial base.

GM's board is composed of several people considered influential in Washington circles, and some of them are pitching in on the lobbying effort, say people familiar with the process. Among these directors are Erskine Bowles, Bill Clinton's former chief of staff; Phil Laskawy, recently named as the non-executive chairman of Fannie May; John Bryant, a key Obama fundraiser; and Armando Codina, who is a close personal friend of President Bush. Through a spokesman, Mr. Codina declined comment. The other directors could not be reached.

The Possible Impact of a GM Bankruptcy

Warning of systemic risk may seem like a self-serving step for a company seeking a government bailout. But GM's new lobbying nonetheless raises the political stakes for Congress and president-elect Barack Obama.

A bailout would be a boon both to the companies and, by saving jobs, to organized labor, a major supporter of Mr. Obama in the election. Auto-related industries employ 3.1 million people around the country, encompassing everything from car-seat makers to auto dealers to auto-parts stores. GM itself employs 123,000 in North America and does business with thousands of North America suppliers.

Part of GM's premise is that a bankruptcy would threaten both jobs and the health of the government's pension-benefit insurance arm, which covers millions of workers not in the auto industry. A GM bankruptcy would swamp the fund, the argument goes, placing another burden on the strained federal budget.

"There is no Plan B being discussed beyond a government bailout,

" said one top GM adviser said Friday. Another person close to GM said executives recently told GM's board they are "increasingly optimistic" that GM will receive a liquidity injection before the end of the month.

To whip up support for a bailout, GM has been sending letters to tens of thousands of dealers, supplier executives, employees and union members. The letters have encouraged them to call and write Congress, and to contact local media with various "talking points" about the effects of a GM bankruptcy.

Detroit's three auto makers -- GM, Chrysler LLC and Ford Motor Co. -- share many of the same suppliers for such parts as instrument panels, wheels and electronics. A recent analysis by Chrysler LLC found that 96% of its largest suppliers also do business with GM, Ford or both.

Advocates of a bailout point to the complexity and impact of a GM bankruptcy. But New York University business professor Edward Altman, a long-time analyst of corporate bankruptcies, says the federal government should only put money into GM through a pre-planned bankruptcy process that knocks out GM shareholders, rolls bondholders into equity and renegotiates union labor contracts.

Mr. Altman recommends the government provide financing to help GM only after it files for protection from creditors.

"I do not think putting more money into the failed business strategy there makes sense," said Mr. Altman. "The government should help, but it should use bankruptcy as part of the more-efficient process that also limits exposure to taxpayers." Such an approach, says Mr. Altman, would also avoid risk to the broader industry, because GM could use the process to keep paying its most critical vendors.

A GM bankruptcy could create a cascading set of bankruptcies among these part suppliers, other auto makers and suppliers. That's because a bankrupt company could take months, if ever, to pay its pre-bankruptcy bills. Such delays would put stress on suppliers that already run on thin working capital and that feed just a few end auto makers, they argue.

This spillover would most directly hit Chrysler and Ford, who have greater GM overlaps. GM officials are telling lawmakers that the failures at the parts makers would bring them down, too.

The failures could also hit Asian car makers like Toyota and Honda, say automotive experts, who estimate 20% to 25% of suppliers are shared by those two auto makers and Detroit's Big Three.

In all, as many as 5,000 parts suppliers dot North America, with combined annual sales around $150 billion to $200 billion, according to Craig Fitzgerald, a partner at accounting firm Plante & Moran, which advises parts makers.

In addition, the parts business has three times as many workers as the auto makers. There were approximately 489,500 auto-parts production workers at the end of last year, a figure which fell to 415,700 at the end of September, according to the Department of Labor. There were approximately 151,000 auto-assembly workers in the U.S. at the start of 2008, a number that slid to 127,300 at the end of September.

Beyond suppliers, a collapse at GM also carries a risk to thousands of auto dealerships and to the government's pension-benefit insurance arm.

On average, auto dealerships employ 7.3% of a typical state's payroll, and 740,000 dealership jobs nationwide come from the Big Three makers. GM's 6,000-plus dealers employ about 325,000 of those people, according to estimates from the National Automotive Dealer Association.

One of the biggest fears in Washington is how a bankruptcy filing by one or all of the auto makers would affect the federal agency that insures the retirement savings of almost 44 million Americans. The Pension Benefit Guaranty Corp. ended 2007 with a $14 billion deficit, though that shortfall was expected to shrink to about $11 billion. Were GM to place its pension burden on PBGC, it would more than double the agency's current shortfall.

"GM has not been able to give us a straight answer about the funded status of their pension plan," said PBGC Director Charles Millard. "We can't successfully monitor the situation if they are not responsive."

Detroit's pension funds have also been hit hard as stocks -- in which they are heavily invested -- have declined. GM's own pension fund has enough money to meet obligations now, but a Deutsche Bank report estimates that given the market's recent performance, it could be under-funded by $18 billion at the end of 2008.

Gurkha · #5 11-15-2008, 10:26 AM

I will repeat at the cost of being redundant, we don't' need huge stinking behemoth corporations. We need Tuckers ( don't laugh ) and similar persons building revolutionary cars with quality first being the motto, sort of like the over engineered MB of 70s and 80s. Believe me, few cars out like that and the world will be lining up for cars made in the US.

LUVMBDiesels · #6 11-15-2008, 10:54 AM

Quote:

Originally Posted by Gurkha

I will repeat at the cost of being redundant, we don't' need huge stinking behemoth corporations. We need Tuckers ( don't laugh ) and similar persons building revolutionary cars with quality first being the motto, sort of like the over engineered MB of 70s and 80s. Believe me, few cars out like that and the world will be lining up for cars made in the US.

I agree with you. We need innovators like Preston Tucker and designers like Raymond Lowey. We also need to have the UAW go away. Once an American car company can design and engineer a truly great car and have it built by workers who are not run by the union, but have the company's best interest at heart things will change.

As I said before the best thing for GM would be to go Chapter 11 and shed most of their dead weight.

aklim · #7 11-15-2008, 11:22 AM

Quote:

Originally Posted by LaRondo

but cannot find a way to renovate American originals.

What's so great about those American originals that we must save them from themselves?

aklim · #8 11-15-2008, 11:25 AM

Quote:

Originally Posted by Gurkha

Believe me, few cars out like that and the world will be lining up for cars made in the US.

At what price though. We cannot compete with the Asian countries for labor. They can manufacture whatever we can and do it for less.

AustinsCE · #9 11-15-2008, 11:35 AM

Entrepreneurs can't "step in". That's why there were 20? 30? auto companies at one time, and now basically 3. Bureaucracy and regulation forces out small business, that's common sense. It costs at least $300 million to produce a car these days. Yep, someone will fill in, just like they did in the UK. Like always, how about fixing the problem first. People have proven they'd rather have a decent car than absolute garbage at the lowest cost. Audi sales are going up!

MS Fowler · #10 11-15-2008, 12:51 PM

American car companies have negotiated with their unions to the point that right now $2000 off the top of each car that Ford, Chrysler, or GM sells goes to union retirement benefits.

Think of what that $2000 represents in loss of competitive ability, in terms of Engineering costs.

Its not that America car Engineers are stupid, and the Koreans, Germans Japanese are smarter. Engineering is pretty much the same around the world--materials have a given strength, and so much is required to do the job.

Its the cost accounting aspect of the business that hurts. I have mentioned before, I knew a guy who went to work for the Delco division that made their ABS. They gave him an orientation tour, and at the end the Engineer asked if he had any questions, He replied, Only one--Who is the idiot who designed the ABS so that it makes so much noise? His guide bowed his head, and admitted, " That would be me, but the system we are producing is not what I originally designed--the accountants kept asking me to take out more and more cost. What we ended up with was an ABS that no one really liked, but it satisfied the accountants."

It is the fault of upper management that negotiated these contracts.

iwrock · #11 11-15-2008, 01:14 PM

I think the Big 3 has had the end near for quite some time. Way back when, it was cool to have an american car...

The recipe was quite simple in fact: big engine, chrome, enough space up front to get laid. I like old american iron. Big, chrome everywhere, engine with cylinders the size of paint cans, chassis flex that will scare the hell out of you, etc.

IMHO, todays problem is two folded. On one side of the problem is that they are building cars with attributes people want. Size and fuel economy are among the top of those attributes, however, they are not building cars to the standard people want. While I may be biased that I own a german car, to me, I get into a Dodge Neon, and I feel death. I get into a new charger, and I feel death. Get into a Civic, and I feel toaster. People want applainces, not death...

(part ii coming up)

iwrock · #12 11-15-2008, 01:36 PM

(part ii)

The recipe has changed. What was once a big old flappy piece of steel and iron is now aluminum, a feeling a safety, being able to get nearly 40mpgs. While they are good at making the goal of 40 mpgs, their cars are not very safe. Pickups are now a thing of the past, an extinct dinosaur.

The second problem is Pride. No one takes pride in their american cars anymore. Gone are the says of a deep muscle car grumble, and instead we want silent cars, in which we an take pride in the fact its super green. Theres no pride in production, its just a job. Theres no pride in selling them, its a job. Hell, its a chore to drive them, wondering if an when their going to break down, and if you are going to have a dealer that will fix it.

Japanese cars are full of pride, german cars (well theres the reason I drive one) are as well. Theres no pride left in the dodge neon. Toyotas that are built in a nice clean factory in Texas are full of pride.

Maybe its me..... I dont know. I would buy a new Pontiac G8... Why, its Australian, has flair, and whats that, Pride.

Hatterasguy · #13 11-15-2008, 02:47 PM

I remember when we were looking for a little SUV for my mom. Took at look at some Chevy...that lasted about 5 minutes. Bought a Toyota.

GM should go into chapter 11, you would think they would see this as a chance to shed a lot of dead weight.

Hatterasguy · #14 11-15-2008, 02:49 PM

Quote:

Originally Posted by AustinsCE

Entrepreneurs can't "step in". That's why there were 20? 30? auto companies at one time, and now basically 3. Bureaucracy and regulation forces out small business, that's common sense. It costs at least $300 million to produce a car these days. Yep, someone will fill in, just like they did in the UK. Like always, how about fixing the problem first. People have proven they'd rather have a decent car than absolute garbage at the lowest cost. Audi sales are going up!

This guy is doing it, now we build the fastest car in the world. Next he is going to build a 4 door sedan.

American made with American sourced parts. Fantastic car, closer to a F1 McLaren than anything else on the road today.

Ara T. · #15 11-15-2008, 03:45 PM

I would take a new Malibu over a Camry without a second thought. Just a much nicer car to drive. Surprisingly nice interior. Makes the Toyota look like a POS on the inside.

I think GM is screwed no matter how good they get, because of all the crappy cars they have made in the past 20 years. They've made good ones too but they are easily overshadowed.