Comments on: The Big Three Stick-Up http://www.getreallist.com/the-big-three-stick-up.html Deal With Reality or It Will Deal With You Mon, 02 Jan 2012 04:09:51 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Finite Resource http://www.getreallist.com/the-big-three-stick-up.html/comment-page-1#comment-331 Finite Resource Thu, 20 Nov 2008 13:59:12 +0000 http://www.getreallist.com/?p=851#comment-331 The UK fed its own auto manufacturing dinosaur massive amounts of cash, courtesy of taxpayers, for decades during repeated attempts to turn it into something modern and competitive. All these attempts failed because the management and unions knew it was easier to go back to the public trough every few years than to make the tough choices needed to become profitable. Finally, the Government called the car makers' bluff (and by this time it had such a big stake in British Leyland that it was effectively calling its own bluff). Jobs were lost, factories closed and communities suffered. In the meantime, Nissan, Toyota and Honda set up factories in other parts of the country. The UK now makes more cars and employs almost as many people in car making as it did before the Gov't kicked away the old industry's crutches. Ford and GM in the UK had to smarten up their act when the Japanese arrived, because they had to become fully competitive; not merely be a bit more competitive than the inefficient British Leyland. BL, renamed Rover Group, still took 20 years to finally die after being taken off life support. That fact should put into perspective the US carmakers' threats of instant Armageddon if they don't get a bailout. Rover looked like it might make it once or twice but in reality the world of auto making moved on too far during BL's zombie phase for Rover to ever catch up. Another reason why zombiefying GM and Ford is doomed to fail. As zombie corporations, they will suck the life blood out of US manufacturing just when your country needs to stop making cars and start building a post-Peak society. People talk about a Manhattan Project but my preferred analogy is the Battle of Britain in 1940, which was largely fought, on the British side, with aircraft built in former car plants. Give Detroit a licence to build one ICE car for every two PHEVs or renewable grid components. That might spark something in a dinosaur brain somewhere. The UK fed its own auto manufacturing dinosaur massive amounts of cash, courtesy of taxpayers, for decades during repeated attempts to turn it into something modern and competitive. All these attempts failed because the management and unions knew it was easier to go back to the public trough every few years than to make the tough choices needed to become profitable.

Finally, the Government called the car makers’ bluff (and by this time it had such a big stake in British Leyland that it was effectively calling its own bluff). Jobs were lost, factories closed and communities suffered. In the meantime, Nissan, Toyota and Honda set up factories in other parts of the country. The UK now makes more cars and employs almost as many people in car making as it did before the Gov’t kicked away the old industry’s crutches.

Ford and GM in the UK had to smarten up their act when the Japanese arrived, because they had to become fully competitive; not merely be a bit more competitive than the inefficient British Leyland.

BL, renamed Rover Group, still took 20 years to finally die after being taken off life support. That fact should put into perspective the US carmakers’ threats of instant Armageddon if they don’t get a bailout. Rover looked like it might make it once or twice but in reality the world of auto making moved on too far during BL’s zombie phase for Rover to ever catch up. Another reason why zombiefying GM and Ford is doomed to fail.

As zombie corporations, they will suck the life blood out of US manufacturing just when your country needs to stop making cars and start building a post-Peak society. People talk about a Manhattan Project but my preferred analogy is the Battle of Britain in 1940, which was largely fought, on the British side, with aircraft built in former car plants. Give Detroit a licence to build one ICE car for every two PHEVs or renewable grid components. That might spark something in a dinosaur brain somewhere.

]]> By: Chris http://www.getreallist.com/the-big-three-stick-up.html/comment-page-1#comment-329 Chris Thu, 20 Nov 2008 04:18:38 +0000 http://www.getreallist.com/?p=851#comment-329 Unless the entire company leadership in each company is replaced, such that the culture of the companies can be fundamentally changed, I would expect more of the same. I they go bankrupt, they'll probably maintain operations at a lower level, and be gradually sold off to younger, nimbler competitors, though not necessarily foreign competitors! There is a whole crop of domestic automaker startups that could potentially take over their factories and re-employ the labor force, but it will take years, and a lot of private capital. Pure speculation though at this point... Unless the entire company leadership in each company is replaced, such that the culture of the companies can be fundamentally changed, I would expect more of the same. I they go bankrupt, they’ll probably maintain operations at a lower level, and be gradually sold off to younger, nimbler competitors, though not necessarily foreign competitors! There is a whole crop of domestic automaker startups that could potentially take over their factories and re-employ the labor force, but it will take years, and a lot of private capital. Pure speculation though at this point…

]]> By: markytom http://www.getreallist.com/the-big-three-stick-up.html/comment-page-1#comment-328 markytom Thu, 20 Nov 2008 03:45:54 +0000 http://www.getreallist.com/?p=851#comment-328 "I even have a little sympathy for the Big Three CEOs . . ." Not me - not when all three flew to DC in their multi-million dollar private luxury jets to beg for money. And the UAW helped destroy the Big 3 as well. Bailing out the Big 3 is essentially turning the UAW members into government employees. And quite a slippery slope - what company would be next to be bailed out? And next? And next? Where does it end? The US can only print so much money. Questions: You provided several arguments for not bailing out the Big 3 - what would you anticipate happenning if they do get bailed out? Do you think they would truly change or only come up with excuses why they can't make more efficient and cleaner burning cars (they do have a very powerful lobby)? And if they go bankrupt do you see multiple smaller car companies taking their place or do you think the Japanese/Koreans would end up with a monopoly? “I even have a little sympathy for the Big Three CEOs . . .”

Not me – not when all three flew to DC in their multi-million dollar private luxury jets to beg for money.

And the UAW helped destroy the Big 3 as well. Bailing out the Big 3 is essentially turning the UAW members into government employees. And quite a slippery slope – what company would be next to be bailed out? And next? And next? Where does it end? The US can only print so much money.

Questions: You provided several arguments for not bailing out the Big 3 – what would you anticipate happenning if they do get bailed out? Do you think they would truly change or only come up with excuses why they can’t make more efficient and cleaner burning cars (they do have a very powerful lobby)? And if they go bankrupt do you see multiple smaller car companies taking their place or do you think the Japanese/Koreans would end up with a monopoly?

]]>