Interesting idea.

I see two problems.

1. buying the stock doesn’t solve the problem. The U.S. will still need to spend billions to support the big three, and

2. I’m not sure I trust the government to run the auto industry. I work for the federal government and politics impact too many decisions. Look at California. First they supported gasoline vehicles, then all electric, then fuel cell, and now they appear to be switching to who knows? And with the Dems in control, the government will cater to the unions. And if the repubilicans gain control, the gas companies will get a boost……

I’m glad that Congress is running the big three through the wringer. But in the end, I believe we should allow the auto companies to run themselves, rather than nationalize the industry.

The government will need to support the auto industry with loans and tax breaks, or the u.S. will have millions more on the unemployment roles.

Naw. We don’t need to buy GM. Even after two centuries, the post office is terrible. All the cars would look like handsome Henry Waxman. However, we could buy some of GM’s stock, though, and some stock of every company out there worth a dang, foreign companies too if they have plants or close partners here. Throw the stock into the Social Security Trust Fund and forget it until we can sell if we need to tackle inflation instead of the fed raising rates. The money sloshing around would get people buying cars again.

As usual, these things have some good ideas, but are a bit simplistic. Our national goal is to get more fuel efficient cars out there, and to provide jobs for the American public. Only providing funds to Detroit for cars that get 40+ mpg is not a good business model at this point… the general public simply is not on average purchasing cars that get even 30+ mpg cars, and there will be a time delay to get those cars to market.

I do agree with a board shakeup. It’s fair for congress to ask what got Detroit into the current problems, and that’s a lack of vision. But, it was savvy business for Detroit to sell SUVs and trucks, WE wanted them. Toyota moved into that area, Nissan moved into that area.

What can we (congress, the american public, etc) do? We can attach any string to funding we give. One string is an oversight board that has the power to review board members, and replace those that cling too hard on an obsolete vision. That oversight board should also have the savvy to produce a viable business. In the past years, we regularly rejected subcompacts. A business plan that produces only subcompacts simply isn’t practical at this point in time. A business plan that does tilt the mix to smaller cars, even beyond Japan, while keeping crossovers and luxury cars, has merit. There can be regular reviews that say “How are the hybrids doing?, How are the 40+ mpg cars coming along? Have you shed enough excess capacity, and excess dealerships?” If not, then why not, and if a board member or upper management is the problem, then question that person, or replace that person.

How great. These two think they know everything but have demonstrably proven the opposite, now telling us how to run G.M. “They can’t even run their own lives, I’ll be ___ if they’ll run mine.” If either of these clowns were running GM or even Chrysler, those companies would have closed down long ago. Yes, there are nightmares even worse than capitalism gone bad.

Buying the Big 3 would make each and every one of us responsible for every further misstep they make. Would you want Congress making the decisions for the cars you want?? Would you want Nader and Moore doing it????

What is all this talk about the end of the American auto industry? Maybe the end of Detroit HQ auto companies, but there is as much US content in a Toyota, Honda, or VW. There will be suppliers that consumer demand and I’m happy to be a Honda built in the USA. Jobs will be lost at GM and gained at Toyota (in the US) under work rules that allow for efficiency of operations. Are my tax dollars supposed to support union work rules so we can have 3 guys watching one person do the work?

Chapter 11 is the best solution. It’s protection at it’s finest. It’s accountability at it best. It costs America about the same in the short term in lost tax revenue, but pretty much assures us that the automakers will be smarter, leeaner, meaner and ready to compete with a solid business plan in hand after they emerge from the mess. America has always loved the underdog…now only if they could move Detoit to Florida, Texas or California where real workers want to live…all will be well.

Turksterker

Yes and the profits go to japan.

So the money in profits are spent outside the usa.

Makeing us poor

Consummate Skeptic, thanks for the comments. The unintended consequences of CAFE I mentioned before were that trucks were allowed to get lesser MPG than cars. This was an obvious point in the 1970′s, when trucks were trucks and cars were cars. If people wanted a highway cruiser,they bought an LTD, Impala, or Fury.

“No one” until the mid 1980′s drove trucks unless they had to. They weren’t “cool.” Then the price of fuel dropped like a rock.

But CAFE required that every large car you made had to be offset by at least 2 small cars, which were less profitable. By making a pichup with an extended cab, or an SUV, a customer could get a large vehicle with a V8 and all the power equipment he wanted. It had a good range with a huge fuel tank that was now cheap to fill. Tightening CAFE on trucks doesn’t make sense, though: America needs trucks that are workhorses – we just don’t need people commuting in them.

CAFE is and always will be legislation that will have unnatural consequences. No one in the 1970′s expected that fuel would drop again and people would commute (alone) in full-size trucks. Now, what a car is vs. a truck is hard to figure. You can try to plug the loop-holes, but you’ll never anticipate them all. You then reward the cleverest user of the rules, instead of reducing fuel consumption.

Which brings up CAFE’s other major failure. A more efficient car doesn’t reduce consumption if it’s driven more. An American driver plus a 35 MPG car and $2 gas = “road trip! How much do you even think about car-pooling and combining (or even planning) trips? People have bought houses further from home, contributing to urban sprawl and destruction of more farmland and woods.

To top it all off, the larger vehicles on the road have made other people think they need one, too, to 1) be safe, and 2) to be able to see around the truck in front of you.

Actually there are more side-effects, but I think the point is made: CAFE has been a failed policy. The automakers themselves have fought it and said that a fuel tax would be a better way to reduce consumption, if we are really interested in solving the problem.

CAFE may make it look like politicians are doing something, but it’s “feel-good” politics that will continue to produce collateral damage.

And, oh, government-run car companies don’t work. Ask England, Russia, and (if it existed any more)East Germany. Especially with morons like Moore or Nader running them.

steved28, I understand your opinion. Every individual purchase has little effect on our economy, and the American way is to do what’s best for you.

The unsustainable UAW wages you mentioned were already scheduled to drop to $15/hour in 2010, even before the economic collapse. The press doesn’t make much of this, since it would reduce sensationalism.

But when you talk about sustainability, note that we can’t keep sending all our dollars overseas. Japan and China have ended up owning much of our government’s debt, and have gained political leverage on us as a result. Buying from them facilitates our government’s deficit spending on wars in Iraq.

Sending money overseas should also make the dollar weak against the yen, but the Japanese government purposely buys dollars to keep the yen cheap, taxing their citizens more to fund this. This artificially keeps Japanese cars cheap (including ones “made” here, which are still engineered, developed, and tooled in Japan).

Other governments HELP their automakers.

The American automakers are the only ones that
1) Have an antagonistic government to work with,
2) Have a market open to products made with cheap labor (either in real terms or in a manipulated currency), government-paid health care, government subsidies, etc.
3) Have low home-market fuel prices that provide no dependable demand for fuel efficiency, which has recently required huge reinvestments as Americans again “get religion.”
4) Operate with an openly hostile, and largely ignorant, press, who seem to go out of their way to criticize their home team and neglect to criticize problems with imports (such as the hypocrisy of producing gas-guzzling trucks and using the profits to subsidize hybrids, becoming “green”).
5) Are subject to many frivolous law suits brought by a litigious home society.
6) Compete with foreign plants (usually just final assembly) that have been subsidized by our own states!
7) Compete with foreign plants that have no older workers (i.e., lower wages, lower health care costs).

Don’t get me wrong – some of Detroit’s problems are self-inflicted. Many people still think we make junk, which is an outdated, prejudiced notion. But Americans somehow think that if something is done somewhere else, it must be better (a certain panache?). Compare recent Cadillacs to BMW’s or recent Chevy Malibus to Toyota Camry’s, and you’ll see that we are as good or better, for less money.

One thing that I hope comes out of these hearing is that the US government needs to cooperate with the domestic automakers to have

1) a consistent, effective energy policy, and
2) an industrial policy.

If we can’t do that, America doesn’t deserve the economic power, technology, know-how, national pride, and expertise that comes with a strong domestic auto industry.

Two simple comments …

First the electrical argument is flawed. To charge and electric car uses trickle charge. Its not all at once. It uses way less power than your Air Conditioner for your home at over 2000W. There was a carefull analysis done that if the entire USA bought a Chevy volt Ev1 or Toyota Rav4 electric etc for example it would not impact the grid what so ever.

Second,

Look at Apple in silicone valley. There computer are manufactured in China now used to be in USA. All the programming jobs and engineering jobs are still in cupertuno. Now if everyone bought Chinese I phones all the jobs in cupertuno go away. Cupertuno housing prices falls. If the Chinese came in then and put in a plant making their I phone here in the usa do you think the factory workers would be able to afford a 1 million dollar house. NO it lowers your quality of life.

Buying any foreign product where every its made is bad for the USA. We purchase way too many products made overseas foreign the quality of our products lower. People buy a cheap TV sets therefor RCA had to lower the quality to sell.

Same with CARS in some ways. Toyota and Honda spend the profits overseas where paying the American worker small amount of money.

Research engineering and engine manufacturing says in japan.

The real issue is the future you will lose the ability to manufacture because you design base is exported.

The American public had been eroded for years from PR from Toyota making people think that 8% of a cars parts are USA. Labor to make a car is little and does nothing to make our future more competitive.

But the huge 4000 profit goes to Japan.

If you want to see the USA get worse just keep on buying foreign products.

Almost 1,700 have signed on in support of Mike’s proposal. You can do the same by going to his web page. His suggestions are worth weighing as we look for the best solutions and giving these failures more money is certainly not the answer.

Yup. In a heartbeat. Nader and Moore actually care about this country and have an innate sense of the common good. Some things CEOs are not endowed with. It’s all about greed and fear for Wagoner, et al.

Face it, half the country could run these companies better than they have. For decades, auto CEOs have thwarted stockholder initiatives, looked for corporate welfare from the Dingellberries in Congress, and REFUSED to offer me a decent car, let alone one with NEW technology under the hood.

The newest thing in US cars in the last five years is…the GPS. Not even an auto product!

Sheesh! Yeh, give Ford to Nader and GM to the homeboy. They would do worse? Where do I vote?

Why do anything? The market has spoken, Detroit failed to respond to consumer demands over 30 years ago. I’ll thank GM, Ford and Chrysler to keep their hands off my tax dollars. Some of the newer big 3 vehicles really are nice (as mentioned above), but they still don’t justify the price. I’ll stick with my Kia, Nissan and Honda. I’ll buy an American built motorcycle, though….a Victory. I’m sure the gov’t will give Detroit their ‘bailout’……about as effective as giving a fiver to a wino.

Just FYI

Every car Toyota Makes GM has a equal car that gets better millage.

The only car Toyota makes that is better than GM is the Prius.

Soon the Volt will change that.

IF you look it up Toyota is actually overall less green than GM

Ed Magowan, you sound like Bush did when he so helpfully said that “Detroit needs to make a relevant product.”

Guess what? When gas was less than $1/gallon 10 years ago, SUV’s were what was relevant. Personally, I don’t like them, but when it only cost $25 to fill a 30 dollar tank, when consumers complained about mileage, what they really meant was range (they wanted > 300 miles).

Politicians on both costs also parrot the mantra that they will make Detroit “build cars people want,” while Detroit still owns 50% market share. What they really mean is that Detroit doesn’t build the cars that the politicians want the consumer to want. It’s sort of like when a wife wants a husband to do something, but won’t tell them what it is:

1) The government says it wants to reduce consumption, but keeps fuel taxes low, telling the consumer that fuel is expendable.
2) The average consumer then says “I might as well buy something big and drive it A LOT. Maybe I’ll even move further from work, where houses are cheaper.”
3) An auto manufacturer has the audacity to sell them the large vehicle they want, to make more money.
4) The government tells the manufacturer it was wrong to sell the customer such a wasteful vehicle, and that it needs to be “taught” how to do it right.
5) The consumers who bought such vehicles say they were coerced, that it’s the auto manufacturer’s fault, and they won’t ever “fall for that again.”
6) The public and the government all agree that the domestic manufacturers are dunces, and feel very self-righteous.
7) They all agree that the imports, who merely sold products they developed for a home market that always values fuel economy, are geniuses, and that that is the types of vehicles we will, as a people, always buy. The fact that what enables their “genius” is a government that manipulates currency, writes weaker union laws, and provides health care, is ignored. Anyone who points this out is called a whiner, or anti-consumer.
8) Laws are written to require the manufacturers to make fuel-efficient cars, while fuel taxes are left untouched (the politicians would rather appear to be anti-evil corporation that employs many Americans).
8) 25 years (or maybe less) go by, some of the players change, and the country forgets the whole thing.
9) Soon, the whole process repeats. Each time, the domestic industry gets weaker. Imports increase, Americans lose jobs, etc.

This cycle WILL repeat until we address the root cause: cheap but voltaile fuel prices. The hypocrisy of this situation would be funny if it weren’t so sad.

If we don’t do something about this soon, so many people will lose jobs that even imports can’t sell, since no one has any cash (that they used to earn from domestic auto emplyees, although they didn’t know it).

How about we change this?

A Modern Parable.

A Japanese company ( Toyota ) and an American company (Ford Motors) decided to have a canoe race on the Missouri River Both teams practiced long and hard to reach their peak performance before the race.

On the big day, the Japanese won by a mile.

The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 7 people steering and 2 people rowing.

Feeling a deeper study was in order; American management hired a consulting company and paid them a large amount of money for a second opinion.

They advised, of course, that too many people were steering the boat, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to the Japanese, the rowing team’s management structure was totally reorganized to 4 steering supervisors, 2 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 2 people rowing the boat greater incentive to work harder. It was called the ‘Rowing Team Quality First Program,’ with meetings, dinners and free pens for the rowers. There was discussion of getting new paddles, canoes and other equipment, extra vacation days for practices and bonuses. The pension program was trimmed to ‘equal the competition’ and some of the resultant savings were channeled into morale boosting programs and teamwork posters.

The next year the Japanese won by two miles.

Humiliated, the American management laid-off one rower, halted development of a new canoe, sold all the paddles, and canceled all capital investments for new equipment. The money saved was distributed to the Senior Executives as bonuses.

The next year, try as he might, the lone designated rower was unable to even finish the race (having no paddles,) so he was laid off for unacceptable performance, all canoe equipment was sold and the next year’s racing team was out-sourced to India.

Sadly, the End.

Here’s something else to think about: Ford has spent the last thirty years moving all its factories out of the US , claiming they can’t make money paying American wages.

TOYOTA has spent the last thirty years building more than a dozen plants inside the US . The last quarter’s results:

TOYOTA makes 4 billion in profits while Ford racked up 9 billion in losses.

Ford folks are still scratching their heads, and collecting bonuses…

IF THIS WEREN’T SO TRUE IT MIGHT BE FUNNY

It’s funny you chose Ford Cal. Of the big 3 Ford is in the best position to survive – is asking for the smallest govt loan and has the highest reliability of the big 3.
I would have thought you would have picked Chrysler which is already half sold to Daimler, has the least reliability of the big 3 and has only 2 hybrid vehicles of which both are being discontinued this month…

I think Ford or GM should buy the Jeep brand and improve their quality and add some hybrids to the lineup…

I wasn’t necessarily picking on one or the other, just making a point. No Bailout! Ford just happened to be the one. They’re all wrong. I’ve been a business owner for 20 years and could never get away with running my business the way of the auto makers or our government. If I had a failed business plan, I would either have to restructure and try again, or close my doors.

I’m not sure what planet these two come from, but since when has any government, anywhere in the world, ever done well running a buisiness? Have they completely ignored history in the past 200 years?!

I think the only people less compitent to run the big 3 automakers are members of the US government.

Secondly, all of the outstanding shares of GM represent 5% of the company, therefore even if the government bought every outstanding share they would own 5%, not 50%, (not enough to control the company.) (Do these guys have any idea how stocks work?, and should we really be taking advice from two who so obviously have no idea how the stock market works?)

I would rather have GM, Ford, and Chrystler go out of buisiness forever than have them run by the government.

Dick Kaiser: “Ralph Nader has done more for this country than any blogger here.”
Well….he did manage to get W elected in 2000, and I guess that was, uh, a lot for this country, uh, right?
Uh, good observation you made, eh?

I quit buying American two years ago, because

A) I got tired of the $1000+ repair bills even on new vehicles with < 30K miles. This was a 2003 Chevy Venture and it was costing me big bucks. I complained to GM and they said "suck it" there's nothing we can do. So I voted with my wallet.

B) I didn’t want an SUV and they had nothing to compare to a Civic Hybrid or a Prius.

Now with low gas prices and my Civic Hybrid I spend about $15 a month on gas!

Harold,

When I bought the Venture the warranty was 30K miles or 36 months. The first repair was on GM’s dime. They had to replace several components in the A/C. I don’t know what that bill cost since it was theirs. The second was after about 2 years the brakes went out. Fine brakes go out, but also the rotors needed to be replaced, the brake cylinders on front and rear needed new seals because they were leaking fluids. Total cost was over $1000 on a vehicle < 2 years old. This was at the dealer where I bought the vehicle. I complained hoping that some of the labor would be refunded since seals on brakes should not be going out so soon. The next repair occurred just after the 30K mile warranty expired. The check engine light came on and I thought no problem something simple, probably cost me a couple hundred bucks. Boy was I wrong. Engine seals were now going bad and needed to replace. Ka-ching another 1K down the drain.

All new cars I’ve purchased until a couple of years ago were GM. All my chevy’s have had problems. Oldsmobile was great. Had to replace a few things after 100K miles, but otherwise good. But GM no longer makes Oldsmobiles!

>You must be really stupid to pay that.

You must be really an ahole to say that.

Thanks for the friendly attitude.

Bottom line — The Big Three are in trouble because of the greed of management and the greed of the unions. Big Three Corporates should all slowly be replaced with people of vision. Start at the top, the three auto excutives should be fired and replaced by managers who can managed. Bankruptcy is really the best way to go, they would be able to restructure from the top on down. They don’t want bankruptcy because it interfers with their greed, restricts their ongoing mis-management and makes them leave their comfort zones. But most important WE AMERICANS need to stop all that talk about what can’t be done, the high MPG cars are not possible and all that nonsense! YOU WANT PROOF that I am right? Then LOOK UP! thats right there is a space station in orbit above your heads, that was and still is being constructed with American Know How! you same people did’nt belive in it and think it was possible, good thing no one had to ask for your help or opinions, Your cell phones and micro wave life styles you now take for granted. We are Americans and We Can Do, our problem is that we lack the will to do so and you nay sayers are the lazy ones because if you can’t see it, then you don’t belive it after all you people think know one can figure out anything if you can’t figure it out right?

The electrical grid not handling plug-in requirements is a myth by those trying to deceive. Please do not buy it for a minute.

This not just deceptive … it is flat out wrong. Please don’t just spew nonsense as seeming to be factual. GM themselves met with electircal companies to ask about the ability of future grids to handle the plug-in model in very large scale before they commited to the Volt. it was publicly stated that they agreed they not only could handle it going forward and welcomed it. They also stated that with minor upgrades they could in very short order handle anything they could put out in the next 10 years easy. This is not an issue and never was. It is a diversion from using electricity instead of oil.