Government bailouts and the Auto Industry?
mod
http://www.theglobeandmail.com/servlet/story/LAC.20081106.IBOBAMAAUTOS06/TPStory/Business
So now the American Auto Industry is hunting around for a government bailout. We already bailed out Wall Street, Airlines, Railway companies that seem to just eat it. So why not the Auto Industry, again? After all it seemed to paid off nicely once thanks to Lee Iacocca, even if Chrysler is back on the skids.
They don't seem to have a clear profitable path forward and are just looking for funds they'll burn through? Maybe we should put our money in companies like Tesla Motors? That not only have the right idea but took it to an extreme Detroit wasn't even aware was possible, but isn't affordable for everyone, yet.
My question is, should we keep throwing life rings to companies that eat them rather then use it as a flotation device?
So now the American Auto Industry is hunting around for a government bailout. We already bailed out Wall Street, Airlines, Railway companies that seem to just eat it. So why not the Auto Industry, again? After all it seemed to paid off nicely once thanks to Lee Iacocca, even if Chrysler is back on the skids.
They don't seem to have a clear profitable path forward and are just looking for funds they'll burn through? Maybe we should put our money in companies like Tesla Motors? That not only have the right idea but took it to an extreme Detroit wasn't even aware was possible, but isn't affordable for everyone, yet.
My question is, should we keep throwing life rings to companies that eat them rather then use it as a flotation device?
Replies
If and when the government bails out the car manufacturers there should be mandates for gas millage and or electric car technology being more pervasive in the designs of new models.
Fuck em. Let Toyota build more plants over here - the working class Americans can still have their factory jobs.
"Award for best initial quality"?
WTF.
I too can pinch a loaf and wrap it up in fancy sparkly paper real nice and pro like and make it look like every other fancy wrapped chocolate bar out there... you won't know what you get until you bring it home and open up the wrapper... will you get crunchy corn or crispy rice? The suprise is half the fun!
BUY AMERICAN... OR ELSE.
Yea, the dumbshits are now scrambling to try and catch up to Japan's hybrid technology. In all fairness though, how could anyone have seen that the consumer would want a car that gets the best gas mileage possible?
Even if i could dish out the 109K, would that actually work out to be saving you money? Someone thats good at math should crunch the numbers on life span of the car and how much you spent vs price of another 2 seater car and buying gas.
As for bailout, fuckem. Plent of other car manu's out there putting wheels on the streets. I could careless if gm, chevy, or ford bite it. Where they fall, another will arise. This is why i bought a subaru. Quality, and proper engineering built to last. As for the people loosing there job. There is no surprise in the mix. Everyone has seen this coming for years. If those workers get caught off guard and wind up jobless, thats there own dumb fault for not staying current and involved in what there employeer is doing.
If Tesla Motors delivers on its high performance promises which should trickle down to some kind of everyday car (crosses fingers). They'll have blown the doors off the Japanese hybrid technology. Considering Detroit hasn't even caught up to that yet...
No politician, republican or democrat, wants the failure of the big 3 companies to happen on their watch.
B
You do realize Tesla is at just as much risk of going under right now?
No. Just, no. If *anything* is a bad idea, it's government mandates for things like that. You let the economy drive that kind of business decision, not the government. If people want to buy cars that don't get as good a gas mileage as their competition, that is the *consumer's* choice. Besides, government involvement in that kind of thing has rarely had a good result... care to explain why we've got MTBE in California's gasoline?
I think those cars would more likely save money in the long run for people here
If goverment bails them out it means they didnt really do well with the market situation and if they keep doing what they do they go under or have to be bailed out again and again and again untill your goverment cant afford it anymore. So enforcing rules to a company that is being saved from certain death sounds fair to me atleast.
I just checked, the Chrysler Sebring (first car I found which was about the same size/utility as my Civic) has a highway economy of 30mpg, and a combined economy of about 25mpg or less. The base model Civic here in the UK does nearly 60mpg on the highway, and a combined value of 48mpg (that's the petrol engine too, not the diesel).
I'm pretty sure that in general US-built cars could have much more efficient engines with less cost to the consumer (and probably not much difference to the manufacturer, although I don't know).
If they want a government bailout, the government has every right to force them to use that money wisely by putting conditions on the loan.
They've been drunk on SUV sales for far too long and it allowed them to turn a deaf ear to people wanting more fuel efficient vehicles. I'm all for helping them adapt if they have a plan to be leaders again. But I'm against it if they want the money no strings attached and plan to use it to keep doing failed business as usual.
Honestly they're dead already, they just don't know it and no one wants to admit it.
I think two big reasons as to why cars have worse economy here is because of stricter pollution and safety regulations.
On the other side of Detroit we have Ford working with Hydrogen... It emits water! I'd like to see them drink. People said "it only emits Co2" when gas power came around. How about zero emissions, and no gas, can we work on that guys?
We need to stop using oil as fuel (remember it gets used for tons of other things, things we can't live without, like medicine, plastics, chemicals, feralizer ect). Also China and India have caught up if not passed the US in pollution emissions. Even if the US goes green every developing nation out there isn't. It's not enough for the US to cut back and consume less...
60mpg? that's better than the civic hybrid!
"The official fuel-economy ratings advertised on the sticker of every new car are calculated by the U.S. Environmental Protection Agency, which has long used unrealistic driving patterns to test auto mileage. Starting with the 2008 model year, the EPA has modified its test patterns to reflect real-world driving by today’s drivers – reducing the listed fuel economy of every car, but especially hybrids. (The Civic hybrid drops to 40 city/45 highway under the new system.)"
and I recall a while back that experts said the Prius would only be cost effective to own when gas goes above $5.00 a gallon.
edit: wowzers, 1 imperial gallon = 1.2 US gallons
Well the tesla 100k car is the lotus of the electric car world. So if you want to compare that then its easy.
lotus costs 80k. The average amount spent per year on gas is $1000-1500. maintenance costs for cars range from 200 a year to 5000. So say you keep your car for ten years then your total cost for ownership is $92-145k. Where as the telsa car would have you paying more on your energy bill say $500 for the ten years and basically no maintenance costs. Also there used to be a nice big tax credit for buying a hybrid/electric car.
tesla is also working on a 4 door car with the same specs only slower acceleration (closer to a gas car) for 30k. So at 30k it would be more than worth in the ten year life span.
If the big car manufactures can't provide what the consumers want then they need to die. I don't believe that they should be bought out, if you fail to spend your company's money wisely on R&D and find yourself outdated then you should go under. We make games, guess what happens when we dont keep up with the demands of our consumers we dont get enough sales and we go under. the people who worked at that company move on and learn from the mistakes and make new company's creating more opportunitys.
First, this ISN'T a bailout they are asking for. They have stated very clearly that they want a LOAN. They intend to pay it back. There is also discussions of getting the government to do some kind of tax incentive to consumers to buy American cars. A reference: http://www.hybridcars.com/incentives-laws/25b-loan-not-bailout-detroit-25075.html
Second, Toyota is also having difficulties, so it isn't just the American manufacturers.
Third, GM tried a long time ago to make a full electric vehicle. They succeeded, but then no one bought them. They only marketed them in a few areas (mainly California), but people were too in love with their SUVs and insisting that they needed more than the 80 mile daily range. GM still has a lot of these EV1s rolling around this area (and their tech center). I've driven one, and they are pretty damn cool.
They have been working on hybrid vehicles for a while now. Unfortunately, they initially tried shoving them into SUVs since that's what the market was driving. You can go buy a hybrid Escalade or Tahoe. Ford has the hybrid Escape.
The volt is only going to be their first car hybrid... and my company is doing the brake system for it, so I should be able to drive one in the next few months
Anyway, as a final note, you don't realize how badly the economy, across the nation, is tied to the big 3. There are literally millions of jobs tied to the production of American cars and their suppliers. If you saw Michigan's current economic state and imagine that across the country, the outlook is VERY bleak. I think the big 3 were late at adjusting their sales focus, but they are trying to change and they need help doing so.
You should watch the documentary on the EV1. Gm didnt shut it down due to lack of interest. Far from it.
Heres a small clip from it...
[ame]
I watched that video, and to be honest, the instant I hear Martin Sheen, I get suspicious
My boss was on the program that developed the EV1, and he pointed out the one failure by GM. They did surveys to see if people would buy the EV1 and had any interest. They all said yeah, and thus GM went ahead and developed it. The failure (according to my boss), was that they never asked, would you be willing to pay $25,000 for one. At that price, they were more interested in their SUVs and they convenience of gas. I think if there were to rerelease it, things may be different. Then again, I'm assuming they are reworking it (as my boss said they would do if they had the budget to do so).
Remember this, the day you see a car at the auto shows, it's already been 2 years in the works. They have a 4 year develoment cycle. Two in design, then two more in development.
If i were a bank then the US car manufacturers would be at the very bottom of my loan trust list.
Goverment on the other hand lends peoples money, they dont care, so they might buy the optimistic childish explanations how the money will pull the companies out of the ditch. And if they fail, so what? It was goverments money, nothing will happen.
No EV1 electric was ever sold...? they were all lease only.? GM refused to renew leases or sell any EV electric and crushed them. The battery technology was bought up by Chevron oil.
re: chevy volt..
I didn't know the Volt was a Hybrid with a gas engine? I thought the gas tank was for generator back-up power ( not internal combustion auto engine )?
either way I've been waiting since 1976... I want one.
05 Ford Focus with about 60k miles. Gets 32-34mpg highway. Has around 60k miles. Has a 6CD/MP3 player stock, good airbags, leather wheel, nice dash, etc. It is very fast (especially compared to most economical vehicles).
Not a damn thing has gone wrong with it and I only paid barely over $11k for it. The cheapest Mazda I could find was around $18k and the cheapest Toyota was around $17k.
Either way, from what I've seen on the net, people in the West coast seem to have the greatest dislike of American cars compared to the East coast. Nation wide though, there was an opinion that American cars != quality. The big 3 have been working hard to get rid of this impression, but haven't been too successful. Quality has improved, but I still think there's work to do.
I think if they did some designs that rivaled the BMW, Audi, and other european cars they could get some other people interested. I can't wait for the Volt though, it's a bit weird looking but I'm excited to see them moving in a new direction.
B
According to Wikipedia, it started in 1979, when Ford started buying up Mazda stock. They now own 2/3rds of Mazda
For me, I've bought GM's products most of my life. Their powertrains are durable and strong (not to mention fast). My only complaint with them is they can't make a gas mileage vehicle for the life of them and many of their designs have gotten stale. The problem with their economy vehicles is, they go cheap every time they try to make one. That's partially because of the large overhead they have to produce cars in union shops. The other is their high profit expectations.
ps. this is the whole idea behind open market. If i chose not to buy, thats my decision. If there comp dies b/c they cant produce something worth buying (to me) then they go down like the maw and paw coffe shops trying to compete with starbucks. I fail to see why just b/c of size they get special treatment?
Yeah the gas engine is just a generator, its not a hybrid in the conventional sense. The first 40 miles are essentially "gas free", and after that it gets something like 50mpg. If you drive 80 miles a day you're essentially getting 100 miles to the gallon.
The EV1 died because there was no commercial market, they had a small lease market, and a very small(hundreds to thousands) number of people who were actually willing to buy them. It was disconinuted because it would not have been cost effect to keep manufacturing parts and providing support for such a small user base, you've got to understand this sort of thing works on mass-production, you cant set up a factory to service some 1000 vehichles. It just doesn't make sense. There was no silly conspiracy to kill the project, it was all logistics.
Heres more info on the volt: http://gm-volt.com/chevy-volt-faqs/
and the ev1: http://en.wikipedia.org/wiki/General_Motors_EV1
Next down I'll buy "built in America" but foreign owned. Then foreign owned, foreign built.
I'd like to bail them out or loan them the money if I knew they where going to use it wisely and had a clear plan forward. I don't see Hydrogen dangerous and emits, or pretending that hybrids are fully electric is a clear plan to lead again. I'd like to see the money go to companies with a clean plate, a clear plan and an amazing chance for success. If Detroit can pull their heads out of their asses and make that happen I don't see why it shouldn't work.
As for the Volt, it still needs to be plugged in making the gas engine even more redundant and a weight burden. Not to mention you can already get the same MPG from a prius, without having to plug it in. It also switches back and forth between battery and electric depending on driving habits and power requirements, instead of burning out the electric first THEN switching to ass. They claim its a step forward but its set up for failure and its not even out yet... Like I said they appear to be playing catch up to Toyota and I'm not sure its going to cut it?
I generally agree with Martenson about the future of this economy. If you've not seen this already then I recommend it. It's kindof like watching a powerpoint presentation sometimes, but it's really well done and thorough. Anyway, it sort of puts all the bailouts into perspective.
You can get a 100mpg driving 80 miles a day with a prius? Are you high? Take a little time to actually read up on the volt, it dosen't have a gas engine, it has a gas generator. The only purpose gas serves in the volt is to generate electricity for the electric motor. There is no gas engine.
Q: What is the cost of operation of the car
A: With current average U.S. electric rates of ~10 cents/kwh it should cost 80 cents to drive for the first 40 miles, and then get 50 mpg thereafter using gasoline (market rate).
You're telling me $0.80 per 40 miles is comparable to what you pay in gas? Even with gas prices lower than they have been in a long time, this would just be an extremely stupid point to try and argue.
In a world full of electric cars, tho, Exxon and Mobile would be ruined. Most of the negative crap about electric cars comes from the people who have a vested interest in making sure the electric car never happens, and the same companies are hyping up hydrogen and biofuels because they represent an opportunity to continue raking in cash with a different product.
And people discredit those working on electro-magnetic motors as crackpots, but the possibility exists that an electromagnetically driven electric vehicle would need no fuel and no recharging. Ever. It is in their best interests prevent technology like that from coming to the surface.
Another thing about these car manufacturers is the fact that even with the bailouts, the country is entering into a huge recession - maybe something on the scale of the great depression or larger - and there is simply not enough money flowing in the lower 80% of the population to continue buying vehicles, and not enough credit anymore for them to do so on loans. They would not succeed in staying afloat in this economy anyway. The country is on a tightrope and with their current policies with regard to spending and borrowing these bailouts are just the tip of a much larger iceburg that the country is about to slam into.
Honestly, the EV1 is massively restricted for traction control. GM had video of an EV1 against a 'vette, but the EV1 got a performance profile so the traction control was limited. The EV1 blew away the 'vette until they got to their upper speeds. My boss also told me about what happens when they turn off the traction control. The car just sits there, unable to move because the tires are spinning too fast. It will literally sit there and smoke 'em off.
The electric motors have massive torque at the start, and it's a common misperception that they are slow. There still something about the SOUND of a V8, but the speed isn't missing on an electric
Also GM has a Saturn Hybrid that already gets 34-38MPG. I've considered getting the VUE, since I really like my fully gas powered version. But sadly the not so distant future does not include gas, so why bother with trying to incorporate it into the design, when you don't have to? Work on extending the range of pure electrcity and you've got a plan for success.
As for the extra savings, that gets blown in the extra cost you pay for the Volt. Starting price is $30k (same starting price as the 100% electric Tesla sedan). Prius is $22k. Also the volt won't hit showroom floors until 2010 even with the 4-5 year dev cycle Toyota is still ahead of the game and will be over most of its growing pains just as the volt is hitting its.
The basic point I'm making is that Detroit miss read the public even with heavily government sponsored programs. Now we're stuck having to help them out so they can just catch up. We need to know what the plans look like for Volt 2.0 or are they going to just fulfill their government obligations and then cut funds once no one is looking?
Volt v1.0 VS Japanese Hybrid 2.0 that look and acts just like your car now, only difference is that it gets better MPG. Who knows what Japan has in the works the Prius has been out for almost an entire dev cycle maybe something is on the verge of being annouced? All of which is great, but still not cutting the ties of oil. Just making room for cheaper consumption by more people.
So are people really going to hassle with plugging their car in and waiting for a charge on something they still have to fill full of gas or are they just going to take the easy road and pick something that gets similar gas millage? Also who
An electric vehicle that gets 250 miles per charge that charges in less than 2 hrs is all i'm asking for.
also depends on which motor will require less service/maintenance?
they will also use ethanol if delivered as promised?
Toyota , chevy, Dodge, Tesla... whoever.
I'm gonna jes blindly buy electric no matter how bad they run and no matter how expensive they are. I'll go kit if I have to. Hopefully our grandkids will reap the rewards of murphy's law.
also.. I hear the filling station nozzles for hydro r inserted up yer ass for the full effect.
consumer meat unit idiots
and then the new Abu Dhabi AMD could go to war with as much.
Wouldn't it be great if being green left the Burning Man festivals
and became a technology advancement war instead?
I'm sure the oil companies would not conspire to interfere?
In the light of such positive advances I am sure they would glady roll
over and die for our future.
Electric cars that get at least 250 miles per charge and can be charged in a few hours and hot swappable battery's for long trips.
Under ground vacuum tunnel maglev trains for personal transport and cars. You drive up to the station the car is then put into the train and charged while your on the train then off loaded when you disembark.
Its a pipe dream but its my dream.