IMHO the Big three auto giants should collapse and then they should be broken into smaller companies which then Toyota, Nissan and Mitsubishi should buy.
Then these companies will be be run efficiently by the Japanese .
What is your idea ?
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Posted on: 12-12-08 10:42:55
I agree.
They should be made into smaller companies producing slightly less than the required no. of Automobiles needed on the road.
For example, the North American market produces 16 million vehicles a year , out of which 10 million only are needed on the road a year. So production should be scaled back to 9-9.5 million units a year.
Also the wage per hour for GM employees is around $65 an hour (incl. pension and healthcare benefits) while for the Japanese car makers in NA is $44-48. So wage reduction is a must. It is just not feasible for them to work at $65 an hour.
The brunt of all this will be Ontario in Canada. It has been recently found that Mexico offers a better alternative (in wages) than in Ontario and now Mexico has unseated Ontario for the coveted spot. I think it is fair to state that people working in Automobile industry should start looking for other jobs / have a back up plan etc...
Also the worst hit will be the GM dealers who are already facing the brunt of slow sales.
I welcome the structured collapse of the big 3.
Peace by TK
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I am a Gents and not a Ladies.
I was listening to the radio on the way into work this morning and the debate rages on. The general consensus however is that they should be bailed out. Simply because of the unfathomable ramifications that it will have on the economy. Maybe you don't realize it now but it will affect every person directly or indirectly. It is not just the companies that will fold but every supplier will be hit and will be hit very hard. This isn't something that is as simple as it sounds.
"Let them fail" is not a statement one can casually make. Like it or not but they need to stay alive. If you are going to pull them down just to be vindictive, you are just shooting yourself in the foot.
But a 10 year transition plan to gradually phase them out would be a viable option. A sudden collapse would be disastrous...sad but true 
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Quote:
Originally posted by blorean
I was listening to the radio on the way into work this morning and the debate rages on. The general consensus however is that they should be bailed out. Simply because of the unfathomable ramifications that it will have on the economy. Maybe you don't realize it now but it will affect every person directly or indirectly. It is not just the companies that will fold but every supplier will be hit and will be hit very hard. This isn't something that is as simple as it sounds.
"Let them fail" is not a statement one can casually make. Like it or not but they need to stay alive. If you are going to pull them down just to be vindictive, you are just shooting yourself in the foot.
But a 10 year transition plan to gradually phase them out would be a viable option. A sudden collapse would be disastrous...sad but true
I second this. Remember most them are families just like us. However, before they use our tax $$, I strongly feel that benefits of the worker union and the executive cadre should be limited and scaled back till the amount is paid back. It is for the union to decide whether to settle for 30% less returns or let go of the employment (in case of bankruptcy). The same applied to the higher management - everyone earning over $75,000 should opt for a voluntary 25%-30% reduction in thier earnings. Ofcourse there will be no more bonuses, since the company is in RED.
The numbers I mentioned here are arbitrary, but I am just offering the lines of negotiations.
Hiren
Both the viewpoints are correct in their own regard.
If you guys noted, I have previously discussed on the board that my personal preference is to let these auto companies crash and burn and be responsible for their past actions.
They made bad business decisions in terms of the number and type of vehicles they produce, the deals that they signed with the unions to go on paying pension and health care benefits, etc.
Neither the companies themselves nor their pooled pensions should receive any tax payer funding.
I find no justification for funding the pension plans of already overpaid workers by using tax money taken from people whose jobs are not secure or who themselves might be laid off.
At the same time, I agree with blorean that the repurcussions of such a collapse will be widespread in North America esp. in Ontario.
The other factor to consider is that if the auto companies are bailed out, every two-penny company will be lining up Capitol Hill and Parliament Hill for bailouts.
I heard yesterday on the news that the tech companies are calling for a $60B of govt investment.
The car dealers association wants a bailout, too.
The Obama administration is very pro union jobs and public spending via bailouts.
He has already stated clearly that he is in favour of bailouts.
So regardless of what we think, the bailouts will go ahead.
I'm convinced that the bailouts will simply be postponing the problem.
A year or so from now, the companies will be back asking for more money.
There are fundamental problems with these companies that cannot be solved by $20B in bailout money or loan guarantees.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
I agree pratick .Instead of dealaying the pain let it crash now and we will learn to bear the consequenses. There are buyers waiting in the shadows to buy these firms so i do not think the workers will be unemployed for long. Only thing is they will be paid reasonable wages .
I read somewhere that a high school pass worker in GM makes as much as a PHd professor.
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You know you are a desi when ........ You spew forth the virtues of India, but don't want to live there...............You've never had a tanning salon membership
Quote:Can you believe this -
Originally posted by Loser
I agree pratick .Instead of dealaying the pain let it crash now and we will learn to bear the consequenses. There are buyers waiting in the shadows to buy these firms so i do not think the workers will be unemployed for long. Only thing is they will be paid reasonable wages .
I read somewhere that a high school pass worker in GM makes as much as a PHd professor.
http://www.680news.com/news/more.jsp?content=20081212_083259_9608
Republican senators turned it down after the United Auto Workers refused to accept demands that they cut their wages to match the wages paid to Toyota and Honda workers in the U.S.
However, UAW president, Ron Gettelfinger, said he is encouraged that the White House and Treasury are prepared to prevent the companies from collapsing.
The union needs to gets down from its high horse and put their feet on the ground and face realities.
At a time of unprecedented economic turmoil when workers in all sectors of the economy are facing layoffs, pension and retirement funds are dwindling what gives them the right to make such demands?
It's time to stop the protectionism of the auto companies and let Schumpeter's "creative destruction" do its thing with all the auto companies, investment firm/banks, pooled pension funds, etc. who have gambled away their money on greed and now want to raid the tax-payer's money to keep living like robber barons.
In addition to the auto companies, the US and Canadian govt should not bail out the investment firms and the pension funds either.
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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."
-- Rhett Butler in "Gone with the Wind"
