The Big 3: What To Do…
Listening to Carlos Ghosn speak the other morning as the key note speaker for the LA Auto Show, I could sense a little condescending tone in his voice when speaking of the American economy and the automotive troubles in America. Nothing bad, really. But, you could just hear in his voice that he felt as though he was smarter than the CEO’s of the big 3. And, it’s possible that he’s right. But, it’s possible that he’s wrong.
Listening to BMW give their big address for the new 2009 7-Series and its Hybrid counterpart, along with the reveal of the new Mini E was very interesting. The CEO of BMW, Norbert Reithofer, spoke very highly of the new fuel efficient diesels, and all of the other Efficient Dynamics from BMW. I spoke with a few other BMW elite and spokespeople, and they all seemed so passionate about the product. Passionate to the point that they spoke with an enthusiast love tone in their voices. Impressive. That’s the difference.
Americans don’t get as passionate about their product. Sometimes when I talk to people from GM or Chrysler, they seem like it’s just a job. Ford seems to be different, though. Every time I speak to the PR people, project managers, test drivers, salesman, and the likes, it’s not about bashing the competition, it’s about proving to you that they have no one to beat but themselves. There almost is no American competition from America to Fords new vehicle lineup.
The Germans, the Italians, while sometimes they can be pompous and annoying when they speak of how much better their product is than others, can still be quite entertaining with their love and affection that never seems to wear. It seems that BMW is on a very strong track, and a fast track, to even more success. The same goes for Carlos Ghosn. While I’m not the biggest fan of Nissan and Renault, he is owed respect for helping to turn Nissan around, along with Renault.
Of course, everyone is hurting these days, but more so are the Americans of GM, Ford and Chrysler. In fact, they are in so much trouble that the heads of each automaker went and met before Congress to, basically, beg for money. They flew their private jets to the meeting, sparking a huge outcry from the public and Congress for that. I don’t really care how they got there. Most people don’t realize that they’ve already paid for the planes and the fuel… So if they’re not using them… They are…wasting them. So, this way, they’re using the hundreds of millions they’ve already spent. They buy jet fuel in bulk, so they’ve already got enough to last them a few years. I don’t really see the issue here, do you? Here is the other issue. Congress is one to talk when it comes to wasting. They waste more tax payers’ money just having lunch than any of the big 3 waste of their own money. They way I see it, Congress, sit down, shut up, and get on with your next meaningless meeting that holds no true regard to the things that we are trying to better in this country.
I watched bits and pieces of the hearing, mostly because I’m at odds with the whole situation.
I will tell you right now that I’m not in favor of giving the American automakers money. I don’t think we should have to pay for their stupidities and mistakes for the past 100 years, or so. But, while I don’t think we should be giving them money, I feel as though we must, in some ways. The power of buying a car has on all of us is major economic situation. Most people have to have a car. I need to have a car. I drive a Ford. A Bullitt Mustang.
While Ford is in a much better position, especially having Mazda as a financial crutch at times, they are still in need of some sort of aid. If they are left alone to battle the foreign automakers, they’ll never make it, simply because of how much GM and Ford work together on things. The big 3 need one another. GM claims they will run out of money by the end of next summer. And while Chrysler is owned by the investment firm, Cerberus. I don’t think they want to dump much more money into them. So, now it becomes the case of, do we give them money to help them survive, while helping the American economy at the same time. Or, do we let them burn, just like they have done to us as car buyers at some point in our lives?
This presents quite the conundrum. On one hand you have the American automakers, who have produced so much crap in their time to fill 6 nuclear waste facilities 30 times over. Example, the Pontiac Aztek… Yeah, I don’t even feel like talking crap about it, simply because it would be a waste of my time. The current small and midsize SUV line from GM, with the exception of the Cadillac SRX. Chevrolet still can’t make a Corvette that is worth what you’ve just spent on it once you get behind the wheel. I love Corvettes. I’ve grown up around them, but while they are GREAT looking… They suck once you start to sit in the seats. The driving is a pleasure, but the seats are meant for a 55 year old 230lb obese person, and the rest of the refinement stops with the interesting electronic door handles. Ford is getting better, except they still haven’t brought us a worthy Focus. I’d still pay the extra $2-4,000 and get a Mazda 3. Chrysler… Need I say more? Even their current Challenger is nothing special. Cool car, great looks, tons of manly power. But, heavy, heavy…and…heavy. Oh, and it rolls through turns, has vague steering, and it was first only offered in automatic form. That should tell you something about who their target audience is.
Then you have the unionized workforce. While you will hear tons of complaints about what they make, what they don’t make, and blah, blah, blah. Personally, I still can’t quite figure out what they make from all of the conflicting reports. And, with that said, I don’t care what they make. They have been put to shame by their automakers. They have been forced to leave, take pay cuts, take early retirement, and what have you. The big 3 have fired so many people in the past five years, that it makes the genocidal acts in Africa from years past look like a better way to live. And it’s not, so that should show you something. Not that the Japanese automakers have been any better. Toyota and Nissan are both under extreme scrutiny and also federal review in Japan and America for workforce being overworked, resulting in many suicides over the past two years.
So, do we give them money? Let them file for bankruptcy? Or do we just sit back and see what happens? This presents not only the government with a tough situation, but also the average American. While we mustn’t feel bad for the automakers, we should feel bad for the people that work for them. We should feel bad because if they lose their jobs, they may be left with nothing. This also leaves the state of the U.S. economy in even more shambles than it already is. Not good… This means that with the automakers out of business, pennyless, or what have you, there go all of the suppliers that get payed to supply the big 3 with radios, speakers, wheels, tires, exhaust, plastics, leather, you name it. Then, if they go, you go next. That means you can’t buy your son the G.I. Joe with the Kung Fu grip. And who wants to hear a crying 7 year old at Christmas? No one.
Everything has gotten so bad that the big 3 have sent letters to their local communities, their entire workforce, and many others, to beg them to contact their local official and plead for the government to give them money. Maybe they should have thought of all of this crap when they were producing cars in the 80’s with the motto of, “Let’s make it fall apart after two years so they have to buy new cars.”
This doesn’t stop at just the American auto firms. If they go under, it may seem like the Germans, British, Italians and the Japanese will take over. Not the case. Each and every one of the auto companies in those countries work hand in hand at times with the American firms. It’s a giant circle of everyone having a hand in someone else’s pocket.
GM is saying that if they are able to get aid, they may sell Saab, Pontiac and Saturn. Mercedes-Benz is trying to free up their small percentage ownership in Chrysler. They’re willing to give it away for free… Ford, while not the richest automaker in the world, is in a much better position than the other two. They have recently sold 20% of their 33.9% controlling stake in Mazda for $540,000,000. Yes, that’s 540 million dollars. That is roughly half of what they sold Jaguar and Land Rover to Tata for. Now Ford is looking to sell Volvo.
So, Detroit wants $25,000,000,000. Do they deserve it? Should they get it? Congress wants to see a good plan in action before they go handing out money to them. Funny, they didn’t say that a few months ago when they did the 750 billion dollar bailout plan.