Toyota Pulls a Detroit of Yesteryear

Once upon a time not so long ago there was a scary monster that ruled the land by seeding the world with its demonic like fire breathing spawn (cars). They used to call it the Detroit Big Three. Its children would roam the world devouring liquids (GM SUV) at every gas station, rusting (Chrysler) out right before our very eyes, and exploding in flames like a Phoenix (Ford Pinto) when offended by a fender bender. Till one bright and shinny day, a bunch of knights (engineers) from Japan decided that they could rid the world of these monsters by offering a tamed down domesticated version of the DBT from across the big blue sea. All was well with the world. The End… or was it?

Toyota has lost its way when it comes to quality and the only one they have to blame is themselves. It’s easy to be the number one car manufacturer in the world if you ignore your customers and just keep pushing out units as fast as your factories can make them. Toyota basically refused to look in its own rear view mirror. So when did Toyota stop following the “Don’t do what the DBT did” business formula? The answer to that question is simple. When profit was more important than the quality of their product. AKA, if you build it then they will buy it or being number one is systemic with built in arrogance.

"Consideration for customers was lacking in Toyota," Seiji Maehara, Japan's minister in charge of transport, said this week after the government learned that the carmaker had known for months about a problem of squishy brakes on its Prius hybrid.

Yet until the Japanese government pressured them to recall more than 400,000 Priuses and other hybrid models on Tuesday, Toyota executives had insisted that the braking issue was a matter of driver "perception."

In the United States, where years-old problems with a sticking gas pedal led to a suspension in January of the production and sale of eight vehicle models, Toyota had also neglected customer complaints, blamed drivers and was not forthcoming with federal investigators. - Washington Post

Recalling 400,000 cars is a huge admission of a serious quality control problem and that is not the way to keep repeat customers. Numbers of that size recall are nothing new to Toyota but seem to be the status quo. Going back to just August of 2006 it was evident then that Toyota had a quality problem and yet they still pulled a DBT. Has Toyota taken up the old DBT quality standard of built in product obsolescence? Could this quality problem be a precursor as to what will happen to Toyota jobs here in America?

At Toyota's annual executive meeting in June, its outgoing chairman, Hiroshi Okuda, its new chairman, Fujio Cho, and its chief executive, Katsuaki Watanabe, all vowed to the gathered managers that the quality issue would be addressed, according to a senior Toyota executive who attended the meeting.

"The quality issue is a big concern. They're embarrassed about it," said the executive, who insisted on anonymity because the meeting was private. He added, "You think about Toyota, and quality is in our DNA. We are concerned about looking like the rest of the pack. The market is forgiving because of our long reputation, but how long will they be forgiving?" - New York Times

There is a reoccurring pattern when it comes to the blame game at Toyota and that is and has been to blame its engineers. Yes, they do have some ownership but the boys in the executive branch are the ones making the decisions that the customers end up buying and owning. Companies like the “New” Toyota are their own worst enemies when they “choose” to ignore the reason they became successful to begin with. QUALITY!

Click on the link for the full list of the latest Toyota recall. And you can be sure that the insurance industry isn't going to miss a heartbeat raising your rates when it comes to your Toyota car insurance. Poor safety performance on any vehicle is too good of an opportunity for them to miss.

UPDATE 2/15/10: Toyota considers incentives to maintain customer confidence post recall according to CNN Money

Papamoka

***Washington Post has linked to this post... Thank you!

Electric and Hybrid Car Buzzzz

What noise does an electric car make anyway? Is it a buzzing noise or is it a humming noise? Anyway, the last maker of the stage coach probably made the best built carriage there ever was. They most likely had the best suspension, ultimate comfort, and ease of access for passengers and drivers. It would be fair to say that General Motors is not going to follow in the footsteps of the last Stage Coach manufacturer with the launching of its new Electric Motor plant in Maryland. But the competition already has a leg up in the market...

GM to build electric motors in Maryland
By Peter Whoriskey
Washington Post Staff Writer
Tuesday, January 26, 2010

Betting that hybrid and electric vehicles will play a growing role on American highways, General Motors is expected to announce Tuesday a $246 million investment to add production of electric motors at its White Marsh, Md., manufacturing plant.

The decision reflects confidence at GM and other automakers that the "electrification" of the U.S. fleet is not far away, with GM officials likening the importance of electric-motor technology to that of engines in gasoline cars.

The electric-motor project is expected to create about 200 jobs and will be funded in part by a $105 million grant from the Department of Energy, the automaker said. - Washington Post

Electric car technology is taking off in the auto industry and rightfully so given the price of gas and oil over the last few years. Speculations on where the prices for oil and gas will go is anyone’s guess but one thing is certain, fleets of electric cars, hybrid cars and hybrid trucks will not be pulling up to any gas pump anytime in the future. Good news for consumers and the environment but bad news for OPEC.

Just doing a quick Google search I came across some interesting news on new Hybrid and EV cars. According to All Cars Electric, Mitsubishi is dropping prices and moving up its production of I-MiEV based on demand to 30,000 cars per year in 2013 which is 10,000 more than previous projections. Toyota is boosting production in 2011 of its new hybrid cars to one million units based on the growing demand that they are seeing from customers for their product line of cars. Acura is entering the hybrid market with its TSX model with great expectations for success.

Ford is gearing up to bring to market its Focus EV model with the conversion of one of its SUV plants in Michigan. Ford is also promising three additional EV’s by 2012. Last but not least is Volvo pulling up the rear with its C30 EV which has been delayed in part by Volvo as they look to beef up the car and make it one of the safest electric cars on the road.

Take that and blow it out your oil well OPEC!

Papamoka

Kids Allowance Pulled at GM and Chrysler

There comes a time when every parent has to pull the weekly allowance to their child. When your child outspends or refuses to change spending habits you just can’t give them advances on their allowance month after month. Junior (aka your child) needs to learn the value of a dollar and seek out work to earn their own money to pay for those hundred and fifty dollar sneakers. Junior needs to know how hard it is to earn the dollars needed to pay for an expensive prom dress or tux. Junior needs to know that mom and dad can’t give them everything simply because they want it.

Even as liberal as I am, I have had thoughts of doubt about the recent bailout of the auto industries in America. The auto industry alone is so intertwined with many other industries in our nation that at times I honestly believe that we should be doing everything we can to save them. Then again, we can’t afford as a nation to continually poor dollars down a bottomless well. GM and Chrysler should have cut expenses and costs to the bone by now since the first Bush Presidential era bailout but they really have not. The United Auto Workers should be more than willing to work with them given the number of union members employed at both corporations but they are waiting for the next bailout as well to drop. Suppliers, distributors, show rooms and the list goes on should be contributing to the savings of these two companies but they are not. This all spells bankruptcy for both GM and Chrysler and maybe that is not a bad thing for them at this point in time.

President Obama spoke today on this very subject and Yahoo News has it covered with the full speech…

In recent months, my Auto Task Force has been reviewing requests by General Motors and Chrysler for additional government assistance as well as plans developed by each of these companies to restructure, modernize, and make themselves more competitive.
Year after year, decade after decade, we have seen problems papered-over and tough choices kicked down the road, even as foreign competitors outpaced us. Well, we have reached the end of that road.

We cannot, we must not, and we will not let our auto industry simply vanish. But we also cannot continue to excuse poor decisions. And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars. These companies -- and this industry -- must ultimately stand on their own, not as wards of the state.

That is why the federal government provided General Motors and Chrysler with emergency loans to prevent their sudden collapse at the end of last year -- only on the condition that they would develop plans to restructure. In keeping with that agreement, each company has submitted a plan to restructure.

But after careful analysis, we have determined that neither goes far enough to warrant the substantial new investments that these companies are requesting. And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success.

What we are asking is difficult. It will require hard choices by companies. It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognise that they cannot hold out for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry. - Yahoo News UK/Ireland

Before you call me a UAW or Detroit automaker hate filled monster hear me out. GM and Chrysler need to grow out of the bankruptcy as better companies just like your child would do so on learning that they have to stand on their own and pay for what they can realistically afford. Something has to give and the truth is that everyone involved with making a profit from GM and Chrysler products has to own up to it and decide if they want to work for and profit from the same company in the next couple of months or twenty years down the road. Everyone involved in these two companies survival needs to knuckle down and offer savings to save paychecks and jobs at all levels of the corporations survival structure. That works from the guy or gal cleaning the toilets to the people supplying steel, Union Workers, health benefit suppliers, guys and gals on the production floor in management, and retired workers. Everyone getting a piece of the GM and Chrysler pie needs to push a slice back. President Obama more or less fired the CEO of GM today because he came to the taxpayer trough. It was Rick Wagoner’s job to save GM. He didn’t act fast enough and he got his just reward. The details don’t matter, he didn’t do his job and his stock holders should have tarred and feathered him over a year ago!

Nobody wins if either company fails.

A very good point was made today by the Governor of Michigan, Jennifer M. Granholm, we can’t support them but they do play a part in our national security as far as having an industrial complex that can convert quickly for full scale military production. I’m thinking she was talking about WWII and the complete military industrial transformation. That isn’t a good selling point to the discussion but it is a point to really think about.

I’ll toss my cost savings into the ring, I bet that I could save GM and Chrysler millions per year each if they changed their supplier standards and let a guy like me quote their wire and cable needs. They won’t, but I could save them a bundle and the product I would supply would all be made in the USA and the same regulatory safe product they use today. The standards and requirements built into wire and cable design for all of the automotive industry adds hundreds of millions to the cost per year when a simple guy like me could supply the same damn product for mega savings without all the extended BS specifications that limit competition. Email me if you are a buyer at GM or Chrysler!

I’d put the email address in this post but I have enough offers from African nation people willing to split millions with me if I just give my banking and personal contact info.

I’m just one guy willing to bid competitively on their business. Who else is out there willing to jump in to save GM and Chrysler some serious cash in the supply chain? Step up boys and girls and be heard here! My company is willing to save GM and Chrysler some money, who else is willing to step up to save American jobs?

Papamoka

Interesting article over at the Gun Toting Liberal on this same topic...

Media Frenzy on the Economy

There is a media frenzy over the financial crisis that America is facing and it's almost tantamount to Chicken Little screaming that the sky is falling but people are actually listening to the main stream media. You can not turn on a news magazine talk show and not here opinions from the host that are just that… OPINION! These people that sit in the chairs that stare into a camera or talk into a microphone and just babble on based on what they think are by no means financial experts. And yet, America is listening and the belts of the folks still with good jobs at great wages are listening as if these news reporters or “entertainment news anchors” are their Sunday morning preacher declaring the Rapture just after this paid advertisement. And those belts all across America are tightening by people tuning in day after day on the financial crisis news. It becomes a self induced prophecy of our economy. All of the networks are bashing people over the current economic crisis and not a one is innocent…

Video Link



For the record I don’t believe political polls but I believe in people that will speak honestly when it comes to their feeling about the current economic situation here in the states. People talk money and vote money when you come right down to it. In elections, they look at the money proposed on campaign promises as somebody else that is spending the money that really is not their money, but in the general economy polls, it is their money and their jobs. Wallets and personal checking accounts come into play.

Over at Breitbart.Com they have this to say about the media frenzy and its influence on the overall economy…

Poll: 77% of Americans Blame Media for Making Economic Crisis Worse

Jan 1 11:09 AM US/Eastern

- New Poll Conducted by Opinion Research Corporation -
NEW YORK, Jan. 1 /PRNewswire/ -- Seventy-seven percent of Americans believe that the U.S. media is making the economic situation worse by projecting fear into people's minds.

The majority of those surveyed feel that the financial press, by focusing on and embellishing negative news, is damaging consumer confidence and damping investment, making a difficult situation much worse. The poll was conducted via telephone, December 4 - 7.

The US survey of 1000 adults was conducted by Opinion Research Corporation and is statistically representative of the total U.S. population. The survey question: "Do you think the financial press is making the economic crisis worse by projecting fear into people's minds?" While the overall response indicated that 77% of Americans answered YES, here are highlights of note: Household Incomes: $25k - $35k -- 79% answered YES $35k - $50k -- 88% answered YES $50k - $75k -- 76% answered YES $75k - more -- 78% answered YES Demographics: 85% of young adults (18-24 yrs old) answered YES 77% of males and females alike answered YES 65% of blacks answered YES. - Breitbart.com

I stopped watching Fox News after they defended and justified the price of gasoline at the pump hitting almost five bucks a gallon so I can’t say what Fox News and their talking heads are doing on this subject but I can say that I do watch MSNBC in the morning and at night. Morning Joe is a joke with non expert experts that claim to know the ins and outs of the economy and declare their words to be gospel before the real experts come on and give their opinions. I’ve literally watched as Mike Barnicle, a frequent contributor espoused on what is wrong with Detroit and the automakers and he has no clue what it takes to actually build a U.S. made car! He probably drives a friging Toyota! The same man was there spouting off on the problems of Wall Street but he wasn’t demanding as much from those criminals as he was of the working man or woman on the production lines at GM, Ford, or Chrysler?

My point is, just because you are a reporter does not make you an expert on every financial issue. But they sure as hell can scare the hell out of many people with their self righteous pompous attitude that is fed into our living rooms. Mind you, I’m not just talking about MSNBC either and their talking heads. All of the networks have the same hype built news magazines and I don’t mean to single out Mike Barnicle or MSNBC.

If I were contacted for this poll I would have more than positively stated that the media is starting a stampede against the economy simply because fear sells better than hope on television or the radio. Fluffy kitten stories are not news people want to hear. Drama, anger, fear, and corruption is what draws viewers and listeners.

There is a real danger in the media today, that danger is when reporters and hosts of a television or radio program for entertainment purposes are taken as fact based voices for the majority of the populous in America. These people are selling just air time and the facts may be further from the actual truth.

Whom would you trust more? Zbigniew Brzezinski a former Secretary of State and real life expert on foreign affairs or Joe Scarborough TV News show host? How about Rep. Barney Frank who has worked on real Banking Legislation change for decades or Bill O’Reilly, an extremely volatile and contraversial entertainment news personality? In each case the news entertainer maligned or tried their best to discredit the expert because they are the shows host. That is Yellow Journalism on television at its best. That sells better airtime than the actual truth that is kind of boring and ho hum news.

Thank you Memeorandum for the news tip...

Papamoka

Shutdown and Breakdown in Detroit

Video Link Courtesy of MSNBC

Visit msnbc.com for Breaking News, World News, and News about the Economy

Uttt OHHHH! The Big Three automakers are shutting down plants and that is not a good thing. Detroit is closing up shop because cars are not moving off the lots in the dealerships all across America. Trust me, this is not going to be an American made auto manufacturer phenomenon. Chrysler is shutting down all of its plants for thirty days and Ford is looking at similar options. GM is planning major shutdowns at plants as well and the ripple effect is not going to be good for the world economy. Over at Market Watch they have this to say and I have my own opinion on it afterward…

Chrysler to shut assembly lines for at least a month

Rival Ford takes similar steps, extending shutdown times at most plants

By Shawn Langlois, MarketWatch
Last update: 6:57 p.m. EST Dec. 17, 2008

SAN FRANCISCO (MarketWatch) -- Chrysler LLC, struggling to keep afloat as it awaits word on a federal lifeline, said Wednesday it will idle all of its 30 plants for at least a month in an effort to bring output closer in line with plunging demand for new cars and trucks.

The privately held carmaker said it will shut its assembly lines at the end of Friday's shift and keep them closed through at least Jan. 19, extending a holiday shutdown that was already put in place. Under the current union contract, idled workers still receive most of their benefits and wages during the production stoppage.

Separately, Ford Motor Co. announced that it will shut down most of its North American assembly plants for an extra week in January, according to the Associated Press.
Automakers typically close their factories for a couple of weeks over the two weeks during holidays and often, as in Ford's case, target specific plants for even longer idle periods to keep a lid on inventory during times of slack demand. Yet Chrysler's move to idle its entire operation for at least a month reflects just how dire the situation is in Detroit.

"This is definitely out of the ordinary," Edmunds.com analyst Jesse Toprak said. "I've never seen this kind of shutdown for this long, and if you read the language Chrysler used in the release, they're leaving the door open for another extension."

Toprak added that the company will probably take a hard look at its December sales results, which he expects to be down 45% from a year ago, and decide whether to keep blue-collar workers from assembly lines even longer. - Market Watch (Link not working?)

It doesn’t matter anymore what side of the issue you stand on when it comes to the bailout for Detroit and its automakers. The Congress has spoken and the auto industry in America was told to go screw itself. That is a double edged sword so to speak.

Granted the UAW contracts will still pay many of the idled workers almost the same pay for a short shutdown but they can’t get paid forever if the companies end up folding. All of the investment capital that the Big Three used as leverage for long term loans was based on the price per share and all of them are in the toilet as far as share price goes. Wall Street can not and will not offer capital to these companies because the collateral in shares is just not there anymore. The Congress and the Republican members made that a reality by not backing the industry simply because they could. Rather than looking at the bigger picture, Republicans in the Congress looked to see who was in their own back yard and all they could see was Toyota, Honda and the list goes on of foreign owned plants here in the United States. Good for them, they covered their own political ass. Or did they?

While those same Republican leaders were looking out the back step they didn’t see their neighbor Joe that drives twenty minutes to a little mom and pop owned machine shop that just makes screws that go to Detroit. Those screws are installed by the thousands every day by Detroit workers in American made cars. All the little screws do is hold one little piece in a pick up or mid size car down so that another piece of the truck or car can be installed over it with those same little screws holding that part down. Those little tiny machined screws have paid all the wages and healthcare benefits for the five or six people running the actual machines that made them for decades. Not to mention mom and pop put a couple of kids through good schools, then good colleges, and then had those kids buy homes in the local area. Those five or six machine operators buy groceries locally, buy homes or renovate existing homes at the local hardware or home improvement center. They pay local and state taxes that pay for schools, roads, police and fire. They spend their hard earned paychecks where they live and other people benefit from their hard earned wages making little tiny screws that ship to Detroit.

Mom and pop have to close up shop for a while because Detroit is shutting down for a spell. Pick an industry and expand the scenario however you like. There is that old saying about a butterfly beating its wings in China and it gives birth to a hurricane thousands of miles away. Bingo!

There was a reason why the government of long ago would never let Chrysler go bankrupt. It reached to far and wide into the capillaries of the American economy. Lee Iacocca rebuilt Chrysler from the ground up because he had the means to do so courtesy of an American government backed loan. He didn’t do it alone and yet they all made it work out in the end. But now it is okay to let ALL THREE automakers fail? This lack of interest by or government is totally on the Republican Party and they are more than welcome to own it. I can literally see the history books thirty years from now on the new generation of Hoover that started the second economic collapse of America and the world.

This is the never ending ripple effect and when the small business manufacturing owners start closing the doors because Detroit is no longer in business then it is in fact a DEPRESSION! Somebody please call your Congressional representative and give them an earful!

Papamoka

Republican Walmart Deal For Detroit

I’m sorry but I am totally not in agreement with Republican’s when it comes to the Big Three Bailout that failed in the Senate today. Apparently, the only concession that Republican’s wanted was that Detroit Auto Workers agree to the same pay as Walmart workers! What concessions did Wall Street and the billions of greed laden bonuses were part of the discussion for $700 Billion by the banking industry? Do you read anything anywhere about pay cuts in the banking or brokerage houses? Yes, there are job cuts but nobody is cutting their pay down to subsistence levels. I’ll tell you what… NOT ONE big bank that will take the bailout money is going to trim pay scales! But if you are a Detroit Auto Worker you are supposed to put on a blue vest and be thankful while Republican’s break your legal union up simply because they can. This would not be the same outcome if Democrat’s fully controlled the Congress. Um, Democrats do control the Senate but apparently the leadership has no backbone to actually lead. If Jim Web of Virginia were Senate President it would have passed with no concessions.

Over at the New York Times they have this one last chance to slap the working class in the face by Republican’s with a screw you attitude towards the middle and lower classes of America. And in doing so they dump all of the problems they have refused to work on to fix on a new Democrat President…

U.A.W. at Center of Dispute Over Bailout
By MICHELINE MAYNARD
Published: December 12, 2008

DETROIT — Opponents of a Congressional bailout for Detroit auto companies and the United Automobile Workers union traded charges Friday over who was responsible for the defeat of legislation that would have provided temporary financing until the automakers restructured.

Senator Bob Corker, a Republican of Tennessee, suggested the fault lay with the U.A.W.’s president, Ron Gettelfinger, whose union declined to agree to allow wage concessions in 2009 as part of a deal.

But at a news conference Friday morning, Mr. Gettelfinger said the union feared that it was “being set up” by Mr. Corker, who he said was asking the union for concessions that were not sought from other participants in the talks.

Snip… Grab A Wrench to throw…

In a statement Thursday night, the union said it was “prepared to agree that any restructuring plan should ensure that the wages and benefits of workers at the domestic automakers should be competitive with those paid by the foreign transplants. But we also recognized that this would take time to work out and implement” using programs like buyouts and early retirement offers to bring in new workers at lower rates.

“Unfortunately, Senate Republicans insisted that this had to be accomplished by an arbitrary deadline,” the statement said. “This arbitrary requirement was not imposed on any other stakeholder groups. Thus, the U.A.W. believed this was a blatant attempt to make workers shoulder the lion’s share of the costs of any restructuring plan.”

In an interview Friday morning on CNBC, Mr. Corker suggested the union, not Republicans, bore the burden for the measure’s failure.

“I offered them a solution,” he said of discussions with union representatives. “Our caucus was 100 percent behind it. Do we own it, or does the U.A.W. own it?” – New York Times

There is more to this story than we are all reading and I think it comes down to the foreign automakers spread out over more states that are using that Congressional power of numbers to protect and defend their own interests. If the Big Three fail, then Toyota, Honda and every other foreign owned auto maker with plants in the United States wins. You will never be able to buy another American made car ever again! But the campaign war chest check cleared for the Congress members that shot this bill down. All of them Republican!

What is the real destructiveness of this loss is to the American worker across many industries. Republican’s have found a way to cripple a union and make them look like the guilty party. Good wages for good jobs are wrong in America for people punching the clock and working forty or sixty hours a week. The wet dream of the people that killed this bill is to have a nation of Walmart workers where your pay sucks, your benefits suck, and your opportunity to move up in life is less than the chance of winning the lottery. A nation of part time workers where the top of the food chain of the company hands out crumbs to the masses and feels good about the people eating cake.

This bills failure to pass just created several million new Democrat voters all over America that used to be Republican. With the possible bankruptcy of the Big Three Automakers comes millions of middle management and business owners that will see their own business forced into bankruptcy. Good paying jobs all across America will be lost because Senator Bob Corker of Tenn deemed it so. Democrat’s in Congress wanted to pass a bill to bailout the Big Three, Bob Corker and his Republican friends in the Congress killed it.

I do have this to say, Harry Reed should resign as Senate President. If he didn’t have the guts to politically deal with the Republican’s in the Senate then he has no clue as to how to do the job. How the hell is this going to pass once Obama is President or for that matter any tough legislation he needs passed for America? Nice knowing you Harry but you need to step down and let a real leader with backbone take over.

Hopefully, Walmart can keep opening up stores all across America to keep up with the number of JOBS Senator Bob Corker just put into the unemployment lines. Here is your smiley sticker, you can’t eat it or pay your mortgage with it but doesn’t it make you feel better? NOT!

Papamoka

UPDATE: MSNBC HAS REPUBLICAN MEMO ON KILLING GM AND THE UAW!

Video Link




*****YaHoo News has linked to this post in Blog News... Thank you!

Washington to Detroit Loan Deal Done

It’s finally going to be a done deal for the Big Three in Detroit to get some bailout money to save millions of Automaker jobs. Believe it or not it was a loan deal worked out by the White House and Speaker of the House Nancy Pelosi! I’m still in shock that President Bush cleared his house shopping schedule to find a compromise deal with the Speaker of the House. Over at CBS News they have this to say on it…

CBS News correspondent Kimberly Dozier reports that significant progress came Friday night, when Democrats from both the House and Senate agreed to bail out the struggling General Motors, Chrysler and Ford with federal funds.

Several officials say the White House and congressional Democrats have agreed on $15 billion in loans, which is less than half of what the car chiefs were seeking.

They say the breakthrough came after House Speaker Nancy Pelosi bowed to a demand by President Bush that any aid come from a fund that had been intended to help Detroit produce more fuel-efficient cars.

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry. - CBS News

I have to say that I knew that this deal was going to come sooner or later. Matter of fact anyone that follows the automotive industry knew it too. GM, Ford, and Chrysler were going to get a bailout loan, it was just a question as to how much each would actually get that was an unknown fact. The federal government could not let the big three fail or go into bankruptcy because of the ripple effect it would eventually expose. You know that $700 billion they have in bailout cash for the banking industry, that bailout cash would have been just a drop in the bucket if Ford, GM, and Chrysler filed for bankruptcy.

I propose the following hypothetical scenario. All three automakers file bankruptcy protection. If you are a supplier to any of them then you do not get paid for any outstanding invoices and thus you can not keep paying your suppliers for continuing orders so your company is forced to file bankruptcy. Suppliers feel the pinch hard and can not pay their suppliers for raw materials so they are forced to file bankruptcy. And the cycle continues down the food chain. The layoffs from all of the suppliers to the Big Three would dwarf all of the layoffs from the Big Three. Lastly, not all of the suppliers are in Detroit.

I think it is fair to say that this bailout will save more jobs than the $700 billion in bailout cash that the banks received a free pass on. I believe it was the Steel Workers President that summed this controversy up best; “If you shower before work you get a bailout, if you shower after working all day, you don’t.”

In the long haul objective, steps are being taken in the right direction to put the brakes on the economies collapse. Baby steps, but they are still steps.

Papamoka

White Collar Job’s Only Bailout

Yesterday the U.S. Government bailed out another white collar giant in the banking industry. Citi Bank, the largest of banks in the nation received a blank check from Washington without any questions asked. This most recent of bailouts is all okay with the higher than thou Congress simply because the people cashing the blank check all wear white collars. White collar jobs are good, blue collar jobs bad.

The Steel Workers President put it best, it’s okay to bailout someone that takes a shower before work but if you take one after working all day you get thrown out.

Rachel Maddow has this interesting view on this very same subject…

Video Link



I think I might have just found the answer to the automotive industry bailout problem. Don’t tell anyone in Washington but GM, Ford, and Chrysler should change their mailing address to Wall Street in New York city. Better yet, they should all start offering brokerage accounts and free toasters with every car purchase. Even better and this would be a slam dunk, change the corporate names to GM Bank, Ford Bank and Chrysler Bank. Then they could get the same blank check as Citi Bank!

Blue collar union jobs bad, white collar big bank jobs good? Makes sense so far in the scheme of things that Washington and our pontificating Congress uses for an excuse not to bailout the big three automakers. While they claim that the big three have put themselves in the position they are all in, how did Wall Street and all the banks robbing the treasury blind get where they are?

Papamoka

Detroit Bailout Terms from Reid and Pelosi

It makes sense that Detroit and the big three need to change their business plan if Washington is going to bail them out. Today Senate President Harry Reid and Speaker of the House served up the terms for any bailout loan. It would not make sense to just hand out a blank check to the big three without preconditions.

It also makes perfect sense that the Congress can not let these three key corporations fail when they are so heavily interwoven in the American manufacturing economy. Given the fact that many companies all across America rely on the big three as their main customers, the Congress can not kick the stool out from under them and let them hang in the bankruptcy courts. If they did collapse in bankruptcy it would be a rush on the courts to file bankruptcy by thousands of companies all across America when they are forced to eat the big three’s simple business mistakes.

Over at the Washington Post they have this at The Ticker on the terms of the Reid and Pelosi terms…

Congressional leaders gave automakers a list of promises that must be made in writing by Dec. 2 so Congress can come back for a second lame-duck session on Dec. 8 to consider the loans.

Here is what Congress needs from Detroit before it will release any loans:

-- A "forthright, documented assessment" of the Big Three's cash position, short-term liquidity needs and plans to meet their financing needs.

-- Estimates of how much money Detroit needs based on auto sales at current, better and worse levels.

-- "Transparency and accountability," including balance-sheet reporting to the government.

-- A promise to pay the government loans back before loans the Big Three has secured from private lenders.

-- The provision of sweeteners to taxpayers in the form of warrants or other mechanisms.

-- A promise to bar the payment of dividends to shareholders and "excessive compensation, including bonuses and golden parachutes." (Note the lack of a concrete figures on bonus and salary limits; this will provide automakers with some wiggle room to retain key executives.)

-- Proposals to continue paying health care and pension obligations.

-- A demonstration that the Big Three will be able to hit fuel-efficiency standards set for by Congress last year and "and become a long-term global leader in the production of energy-efficient advanced technology vehicles." (Again, wiggle room.)

-- An agreement that the government loans will be immediately callable if Congress's requirements are not met.

Washington Post and The Ticker

Congress is going to give this loan to the big three and the terms will be met. Congress does not have a choice when the tentacles of the business the auto industry is in reaches so far and deep into our economy. If you think it will not pass then you don’t have a clue as to how far and wide these three businesses reach.

Keep the pressure on and save good paying American jobs! Call your Senator and Congressional member. Email them, write letters, and just be a pain in the butt to save your neighbors jobs.

Papamoka

*****Buzz Tracker has linked in... Thank you!

Move your Ass Detroit!

In India they unveiled the cheapest car in the world. It’s God awful ugly but goes from point A to point B at 50 MPG. Don’t even think about looking for it on the streets in North America any time soon. It won’t pass the bicycle hitting the newspaper stand test. But it is innovative in an entrepreneurial kind of way of making brand new car ownership possible to millions of people in India.

This raises the question, why the hell can’t Detroit do this for the folks in the United States? Could it be that all the outsourcing of jobs to India has created the end of Detroit’s ownership on the world transportation needs? Either way you look at it, India has a compact super little car that fit’s the needs of their people and cuts emissions that can be bought for $2500 US dollars.

Tata unveils Nano, its $2,500 car

The long-awaited Indian 'People's Car' aims to replace the scooter in first-time buyers' hearts. Though you won't see it in the West anytime soon, it could signal a wave of lower-priced cars to come.

By MSN Money staff and wire reports

India's Tata Motors today unveiled the Nano, its much-anticipated $2,500 car, an ultracheap price tag that brings car ownership into the reach of tens of millions of people.
Company Chairman Ratan Tata, introducing the Nano during India's main auto show in New Delhi, drove onto a stage in a white version of the tiny four-door subcompact, his head nearly touching the roof.

With a snub nose and a sloping roof, the world's cheapest car can hold five people -- if they squeeze. And the basic version is spare: There's no radio, no air bags, no passenger-side mirror and only one windshield wiper. If you want air conditioning to cope with India's brutal summers, you need to get the deluxe version. - MSN MONEY

All is fair in love and war and American’s love cars. The current administration has proven that we will go to war over the go go juice that gets our people from point A to point B. With this little car we just might not have to go to war to protect our need for more go go juice.

Cheap cars are never pretty, remember the Yugo? That was a joke of a car but many people bought them and drove them till their Bic Lighter life ran out. Same thing goes for the Geo Metro, put me in the ownership column of Geo Metro lovers. I loved my little four door grasshopper. Filling the tank once every two weeks with a work commute of 19 miles each way fit my larger than life family.

Watch your back Detroit, India is knocking on the door and they are bringing savings to the driving consumers. It may not be pretty now but these cars will be on the streets of North America in less than ten years with some beefing up crash test passing results. The clock is ticking… tick, tock, tick, tock…

Papamoka

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