How many people will actually run out to buy/lease a car in the next month if W decides to pull the trigger on this "loan?" I would suspect not many since most are worried about their jobs and their mortgage.
The plants are idle due to the Holidays, and GM has suggested a shutdown through January. I suppose this is a step in the right direction, but what do they and the other two do after the shutdowns? Spend more money and build more cars that no one is buying? They have unfortunately more product on hand then they can move, they should have seen this when they have had to place so many incentives on their vehicles just to move them off their dealership lots to make more room for the vehicles rolling off the lines or to move them off their off-site storage facilities. Stop the madness, what happened to matching your supply a little closer to your demand?
Guess what, if you have a product that someone truly wants, they will wait. Ask MicroSoft with their XBOX, or Sony with their PS3 or Nintendo with their Wii. Not happy with that analogy because it is not a car, try Honda or Toyota, people wait for their product? Don't like that because they are Japanese brands, which oh by the way employee Americans here on American soil, then what about BMW and their Mini Cooper, they had waits of over 4 months this summer.
The bailout needs to force a change in operations, but sadly it means to loss of jobs of many. A bailout and status quo only delays the inevitable.
~the pulse beats on
Tuesday, December 16, 2008
Thursday, December 11, 2008
A Different Approach
Are you frustrated with the bailouts and the path our politicians are leading us down? Do you really believe the bailout strategies are going to stop the mortgage crisis or have people run out and buy or lease a car?
Take a look at the blog found at www.remortageamerica.blogspot.com for a different approach.
~the pulse beats on.
Take a look at the blog found at www.remortageamerica.blogspot.com for a different approach.
~the pulse beats on.
Sunday, December 7, 2008
Stop Production
Vehicle sales have steadily declined for the Big Three and the "transplant" automakers. The state of our economy has most people worried if they are going to have a job in the coming weeks, add to that the pressures of having a "happy" Christmas (another topic) and there are not too many folks thinking about buying or leasing a car from any auto maker. The bailout will not cure this.
The Big Three are pleading their case for funds to sustain operations. I wonder what shutting down all production in all of their manufacturing facilities would save? This on the surface sounds like a naive question, but let's think about this one for a bit.
Have you ever looked at the size of a Big Three dealerships lot? It is typically two, if not three to four times the size the lot of any other automakers lot. Not to mention the number of vehicles each of the Big Three have sitting somewhere on one of their plant yards or some other remote location in the surrounding town that they have a facility. How many days inventory due they have on hand would be an interesting question. The days inventory should be adjusted for the downturn in sales before anyone should answer that question.
The manufacturing plants shutting down soon for the holidays will bring some over capacity relief, but they really need to think about squeezing back on production all together.
Why produce more of what no one is buying? Save the money, invest in new technologies that will help this nation move away from its dependence on oil.
Now, I probably have millions of people up in arms about stopping production. I realize that this will wreak havoc across the supply chain. Vendors across the nation would suffer, but I ask you this, "Vendors, do you really want the Big Three to continue building product that no one is buying just so you can continue selling them parts?" Or to the carriers, "Just so you can move parts and vehicles around?"
It is not pretty, but it is reality. We are in a situation where there is too much supply for the demand, and unfortunately it is only going to get worse before it improves.
Please read my previous post - Automotive Bailout.
~the pulse beats on
The Big Three are pleading their case for funds to sustain operations. I wonder what shutting down all production in all of their manufacturing facilities would save? This on the surface sounds like a naive question, but let's think about this one for a bit.
Have you ever looked at the size of a Big Three dealerships lot? It is typically two, if not three to four times the size the lot of any other automakers lot. Not to mention the number of vehicles each of the Big Three have sitting somewhere on one of their plant yards or some other remote location in the surrounding town that they have a facility. How many days inventory due they have on hand would be an interesting question. The days inventory should be adjusted for the downturn in sales before anyone should answer that question.
The manufacturing plants shutting down soon for the holidays will bring some over capacity relief, but they really need to think about squeezing back on production all together.
Why produce more of what no one is buying? Save the money, invest in new technologies that will help this nation move away from its dependence on oil.
Now, I probably have millions of people up in arms about stopping production. I realize that this will wreak havoc across the supply chain. Vendors across the nation would suffer, but I ask you this, "Vendors, do you really want the Big Three to continue building product that no one is buying just so you can continue selling them parts?" Or to the carriers, "Just so you can move parts and vehicles around?"
It is not pretty, but it is reality. We are in a situation where there is too much supply for the demand, and unfortunately it is only going to get worse before it improves.
Please read my previous post - Automotive Bailout.
~the pulse beats on
Saturday, December 6, 2008
Automotive Bailout
Now, I am not a fan of seeing any one of the Big Three go out of business; however, I am not a big fan of a bailout either. If a bailout is approved, there should be an equally significant change in the management structure and each of the organizations as well. We are about to award the executive management of each of these organizations for leading their respective companies into this situation.
They will argue, it is the economy, or it is the foreign automakers, a combination of the two, or a number of other situations out of their control. What happened to taking ownership of the problems you create?
I have not been hiding under a rock, I am well aware of what is going on with the economy. Yes, our economy is suffering, and it will only get worse before it turns for the better. So, I ask, will this bail out all of a sudden have consumers rushing to buy or lease a car? I think not. This "bridge" loan is not the answer.
The big three has too much inventory on their hands, and not enough buyers. If it were not for the pending holiday shutdowns, I wonder, would they be cutting back on production. Let's give them the benefit of the doubt and say they would. The laid off line workers would no longer show up at the plant, but guess what, they still get paid a crazy percentage of their pay. What a deal, a deal that has led to financial ruin. And you want me, the averaged Joe, to pick up the tab? And, I get no stake in the company. What happened to a company doing well, winning investor confidence such that we bought their stock? I am basically being forced to watch my tax dollars invested into their failing business model.
Oil, you say the rise in the price of oil caused this? Well, several years ago, let's say 5, I can recall some interesting conversations regarding what we heard in the news, trends at the pump, and commercials we all were exposed to on a daily basis.
At the time, gas prices did not fluctuate or rise as rapidly as they did this past year, but they were trending up. Yet the lineup from Chrysler, DiamlerChrysler, at the time, was so gas guzzling focused with their products sporting the HEMI power - Dodge Ram, 300M, Durango, Jeep Grand Cherokee, to name a few, and don't forget, the SRT-8 versions. Can you hear the question, "Does it have a HEMI?"
Ford and GM are not without fault either, with their large SUVs. However, GM stands out rather infamously. Today, they will tout that they are charting a new path to alternative fuel, they have a lineup of Flex Fuel vehicles, and they are excited, rightfully so, to tell us about the pending launch of the Chevy Volt. So proud they are of this product that Wagoner pulled up to the Congressional Hearings in one to show the Nation what they call The Extended-Range Electric Vehicle that is redefining the automotive world. I ask you GM, Mr. Wagoner, why did you kill the EV1 program in 2003? I hope the answers are not the answers one can find in the documentary - Who Killed the Electric Car? For the curious, this film can be found at most libraries.
Foreign competition is a fact of life in our Global Economy. It is capitalism working the way it is intended. When you are the only game in town, you can afford and choose to charge what you want. You can afford to compensate your employees well, but when your product and/or work becomes a commodity, prices drop, wages drop, it sucks, but it is reality. If the transplant auto manufacturers can build plants in Ohio, Tennessee, Kentucky, South Carolina, Alabama, and run them with out a union, and be successful, well, it is time for a change.
The argument of buy American does not float either. If the transplants are building on American soil, are they not putting Americans to work in America with wages that will be spent here in America? Their dealerships employee sales and support staff, who earn a wage here in America and spend here in America. Yet, the Big Three build vehicles and engines in Mexico, Brazil, Canada, etc. Not to mention, the equipment used to build and convey the vehicles in the plants are often manufactured by a non-American company. We don't need to talk about part suppliers too, do we? The American consumer should not be forced to buy a specific brand, how un-American is that?
The bailout is not going to solve the problem, it is a band aid, it will help to stop the bleeding, but the wound will remain. There are serious issues to resolve, and it unfortunately is not a pretty picture, it will have to get worse before it gets better. I realize there have been significant cuts, but if they are still asking for money to keep operations running, then maybe the operations are too large for the demand for their product.
~the pulse beats on
They will argue, it is the economy, or it is the foreign automakers, a combination of the two, or a number of other situations out of their control. What happened to taking ownership of the problems you create?
I have not been hiding under a rock, I am well aware of what is going on with the economy. Yes, our economy is suffering, and it will only get worse before it turns for the better. So, I ask, will this bail out all of a sudden have consumers rushing to buy or lease a car? I think not. This "bridge" loan is not the answer.
The big three has too much inventory on their hands, and not enough buyers. If it were not for the pending holiday shutdowns, I wonder, would they be cutting back on production. Let's give them the benefit of the doubt and say they would. The laid off line workers would no longer show up at the plant, but guess what, they still get paid a crazy percentage of their pay. What a deal, a deal that has led to financial ruin. And you want me, the averaged Joe, to pick up the tab? And, I get no stake in the company. What happened to a company doing well, winning investor confidence such that we bought their stock? I am basically being forced to watch my tax dollars invested into their failing business model.
Oil, you say the rise in the price of oil caused this? Well, several years ago, let's say 5, I can recall some interesting conversations regarding what we heard in the news, trends at the pump, and commercials we all were exposed to on a daily basis.
At the time, gas prices did not fluctuate or rise as rapidly as they did this past year, but they were trending up. Yet the lineup from Chrysler, DiamlerChrysler, at the time, was so gas guzzling focused with their products sporting the HEMI power - Dodge Ram, 300M, Durango, Jeep Grand Cherokee, to name a few, and don't forget, the SRT-8 versions. Can you hear the question, "Does it have a HEMI?"
Ford and GM are not without fault either, with their large SUVs. However, GM stands out rather infamously. Today, they will tout that they are charting a new path to alternative fuel, they have a lineup of Flex Fuel vehicles, and they are excited, rightfully so, to tell us about the pending launch of the Chevy Volt. So proud they are of this product that Wagoner pulled up to the Congressional Hearings in one to show the Nation what they call The Extended-Range Electric Vehicle that is redefining the automotive world. I ask you GM, Mr. Wagoner, why did you kill the EV1 program in 2003? I hope the answers are not the answers one can find in the documentary - Who Killed the Electric Car? For the curious, this film can be found at most libraries.
Foreign competition is a fact of life in our Global Economy. It is capitalism working the way it is intended. When you are the only game in town, you can afford and choose to charge what you want. You can afford to compensate your employees well, but when your product and/or work becomes a commodity, prices drop, wages drop, it sucks, but it is reality. If the transplant auto manufacturers can build plants in Ohio, Tennessee, Kentucky, South Carolina, Alabama, and run them with out a union, and be successful, well, it is time for a change.
The argument of buy American does not float either. If the transplants are building on American soil, are they not putting Americans to work in America with wages that will be spent here in America? Their dealerships employee sales and support staff, who earn a wage here in America and spend here in America. Yet, the Big Three build vehicles and engines in Mexico, Brazil, Canada, etc. Not to mention, the equipment used to build and convey the vehicles in the plants are often manufactured by a non-American company. We don't need to talk about part suppliers too, do we? The American consumer should not be forced to buy a specific brand, how un-American is that?
The bailout is not going to solve the problem, it is a band aid, it will help to stop the bleeding, but the wound will remain. There are serious issues to resolve, and it unfortunately is not a pretty picture, it will have to get worse before it gets better. I realize there have been significant cuts, but if they are still asking for money to keep operations running, then maybe the operations are too large for the demand for their product.
~the pulse beats on
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