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90CelicaST
11-27-2006, 02:39 PM
In my business psycology class, we are discussing the issue of the mass losses of both General Motors and Ford Motor Co.

The debate: Do we let the government save either Ford, GM, both, or neither?

As bad as it is, our group decided to save GM due to "better reliability." I basically kept my mouth closed on this debate.

Please discuss.

Murgatroy
11-27-2006, 03:16 PM
Ford, they are more of a National Treasure, after all, Henry Fod didn't invent the car, he just invented a way to make sure everyone could afford it.

Cavanagh
11-27-2006, 03:31 PM
Let them both go out of business, i dislike them both greatly.

Dan3312
11-27-2006, 04:25 PM
In reality the government would have to either pick both or not help them out at all. Only a couple of years ago GM was the only one of the big three that was looking good and making money. Not that, that matters I just mean that it flip flops back and forth a fair amount.
That's just my $.02

T-spoon
11-27-2006, 06:51 PM
Neither. It's not the governments place to back or nix a company. That is completely against how our economy and government were set up. You know, in the USSR the government decided which companys made it and which didn't.

Futant3
11-27-2006, 07:02 PM
Agreed. I understand that the economic effects of having such large companies fail can be problematic, but the government steping in would be a temporary fix at best. It fails to address the issue that the automotive industry is extremely over crowded. For any of them to be successful we need less makers in the industry that are more narrowly focused. Not every company needs to own several different brands that all make several different types of vehicles. Let them both crash like AA profits.

90CelicaST
11-28-2006, 03:11 AM
I was told by our teacher that in the 1980s, our govmt helped pull Chrysler out of the hole.

tankd0g
11-28-2006, 03:30 AM
They've already flushed more than enough money down but Ford and GMs toilets. Time to let them fall victim to their own poor management. If they are lucky, someone like DC will aquire them and let them call it a "merger" to save face.

2kSnakEater
11-28-2006, 03:53 AM
90CelicaST you are right, in the 70s or 80s the goverment helped Chrysler from going under. I vote both since you cant help one without the other, and Il be damm if I am made to buy a leaky toyota or an unreliable Mitsubishi because GM and ford are no longer in bussines

hobbie2k
11-28-2006, 04:09 PM
Yes, the gov did save Chrysler, and look, they're in trouble again (though not as bad as GM and Ford).

If the gov is gonna save one, they have to save both. But I'd rather see them both go under than see my tax dollars going to prop up a pair of inefficient companies that are too inflexible to change with the times and can't put together a decent plan for profitability. If the companies do make great strides towards improving their situation, then I'm all for governement assistance to keep them afloat. If they just sit on their asses and complain about overcrowding, unions, and gas prices killing their SUVs, then let them die.

Also, the market isn't overcrowded. True we don't need as many brands and companies as we have, but there's still more than enough room for them to make a profit. Look at Nissan and Toyota. Toyota has been consistantly profitable for years selling Camrys and Corollas even though GM and Ford don't consider cars to profitable enough for development. Nissan was on the verge of dying, and in only 3 years they became one of the most profitable car companies in the world.

Anyhow, 90CelicaST, you should tell your class that a decision like that shouldn't be made on percieved issues of reliablity, or which company's history or "mystique" is more valuable to America (I'm guessing there were a lot of Chevy Truck guys in your class?). Rather it should be taken as a purely economic discussion, because ultimately that is what it all comes down to.

MCcelica
11-28-2006, 07:39 PM
I heard on the news a couple weeks ago that ford and gm MAY be planning a merger? Anyone else hear this? So if they did go to save one, they would wind up saving the other too either way perhapse?

Futant3
11-29-2006, 05:19 AM
Also, the market isn't overcrowded. True we don't need as many brands and companies as we have, but there's still more than enough room for them to make a profit. Look at Nissan and Toyota. Toyota has been consistantly profitable for years selling Camrys and Corollas even though GM and Ford don't consider cars to profitable enough for development. Nissan was on the verge of dying, and in only 3 years they became one of the most profitable car companies in the world.

Doesn't your first sentence completely conflict with the second sentence? Toyota has been profitable for a number of reasons but the one that directly supports my arguement is that they drop models that are lack luster in terms of economic performance. Such as the Celica and MR-2, don't get me wrong I think it was a mistake to drop those but it was done to help profitability.

I wouldn't bank on Nissan being a good example of a car company comeback just yet. They have a charismatic CEO that made some reasonable changes that boosted short term numbers. Nothing he did was revolutionary and it can be argued that some of the changes are bad for the long term position. He is now working at Renault as well and has not had the same success, and is doing many of the same things he did at Nissan. Nissan numbers are slipping quite a bit we will just have to see how it works out.

elektrateq
11-29-2006, 06:55 AM
Government should not just give money away, its not the way the system works. I thikn there is plenty of hope for GM and ford. Mostly GM though. Their diversity may help them out. Saturn is doing pretty good and Pontiac is coming up with some good designs. The hole retro-hotrod thing will be short lived and should not be depended on by any means. GM's versatility, while may lead to bloating, is helping spawn some innovation. the 90's marked failed concepts and not so great reliability. US car companies are learning to be more efficient and not so power hungry with their engines. the ford fusion is a good concept. If American companies can come up with more good concepts in their design department and continue to be technologically innovative and efficiency oriented, then our comapnies stand a good chance of making a solid comeback. Their recent reduction willl be what saves them from killing themselves. I would love to think that an American car will win my heart over in the future.

aballz
11-29-2006, 08:06 AM
I think if the American auto industry dies, it would be a big loss to our economy. Both Ford and GM needs to create a unique identity to all the brands they own such as Lincoln and Mercury. It seems like GMC and Chevrolet competes with each other with their vehicles rather than competing with imports. This is my 2 cents. Reduce the amount of cars you make but create higher quality cars with the remaining lineup.

hobbie2k
11-29-2006, 01:08 PM
Doesn't your first sentence completely conflict with the second sentence? Toyota has been profitable for a number of reasons but the one that directly supports my arguement is that they drop models that are lack luster in terms of economic performance. Such as the Celica and MR-2, don't get me wrong I think it was a mistake to drop those but it was done to help profitability.

I wouldn't bank on Nissan being a good example of a car company comeback just yet. They have a charismatic CEO that made some reasonable changes that boosted short term numbers. Nothing he did was revolutionary and it can be argued that some of the changes are bad for the long term position. He is now working at Renault as well and has not had the same success, and is doing many of the same things he did at Nissan. Nissan numbers are slipping quite a bit we will just have to see how it works out.

I don't see how they conflict. The point was that there is plenty of room in the market for all the brands. If there wasn't room in the market, then all the companies (including Toyota and Nissan) would be feeling the effects.

Cavanagh
11-30-2006, 01:20 AM
I think if the American auto industry dies, it would be a big loss to our economy. Both Ford and GM needs to create a unique identity to all the brands they own such as Lincoln and Mercury. It seems like GMC and Chevrolet competes with each other with their vehicles rather than competing with imports. This is my 2 cents. Reduce the amount of cars you make but create higher quality cars with the remaining lineup.
I Agree for sure.

gt lifthback
11-30-2006, 02:12 AM
Absolutely....... i dont agree that the market is overcrowded .....however i dont think is the government duty to help these two well known car companies...if the government helps them that will mean that other companies will expect the same treatment. not only in the automobile industry but in the retail industry over all

20incher
11-30-2006, 03:15 AM
I havent read everyones post but i think the companies should recieve help but likewise should return not only the money they borrowed but also have a contract that states the government will get so many vehicles..or so. Awhile back Amtrak got out of the hole but now has to carry US mail in one car on the back of the train...Think how many jobs would be gone if those 2 companies went under.

Cavanagh
11-30-2006, 03:52 AM
They shouldnt have made shitty cars. :p jk.

hobbie2k
11-30-2006, 02:59 PM
Here's the thing, both companies have resources and brand loyalty that many other companies would love to have access to. It's far more likely that they will be bought out by another company, than they will die.

Both GM and Ford are looking to sell parts of their companies. GM is looking to drop GMAC and a portion of their underutilized manufacturing divisions, and Ford is trying to sell the PAG (Aston, Jaguar, and Land Rover).

I do feel they need to thuroughly rethink their brand divisions and try and make them more individualized. I mean, Mercury and Lincoln are a joke, they're just tarted up Fords, and Chevy, Pontiac, Buick, and Saturn share so much that there's no real point in keeping them all up, they could easily put all their models into one brand.

As I understand it, the only real reason Buick is still alive is because of all the dealers that are pissed off for having already lost Olds.

90celicaGTX
12-06-2006, 09:04 PM
Toyota All The Way..... :cool:

JBfromoz
12-07-2006, 11:23 AM
I remember reading an article on the costs involved with vehicle production, the case was laid out between ford being like 100 years old and some of the korean car makers.
One point that was raised about ford was that due to the history of its workforce, there is a huge overhead in pension plans and benefits paid to workers, as an ongoing cost still born today with each new car sold.
I recall the figure being something like $1,000 of each car ford sold was purely to cover the cost of these historical pension plans and committments. Thats before they buy a single bolt, nut screw, or develop anything. when you compare this to the newer companies that have developed with a brand new workforce and no legacy issues, they can afford to chase the small cheap car market and do it in bulk with low overheads because they are not dealing with this kind of thing.
It would be enough to make me want to close the doors and go home if my business was at a $1k loss point before even making a single new car.

hobbie2k
12-07-2006, 05:23 PM
I remember reading an article on the costs involved with vehicle production, the case was laid out between ford being like 100 years old and some of the korean car makers.
One point that was raised about ford was that due to the history of its workforce, there is a huge overhead in pension plans and benefits paid to workers, as an ongoing cost still born today with each new car sold.
I recall the figure being something like $1,000 of each car ford sold was purely to cover the cost of these historical pension plans and committments. Thats before they buy a single bolt, nut screw, or develop anything. when you compare this to the newer companies that have developed with a brand new workforce and no legacy issues, they can afford to chase the small cheap car market and do it in bulk with low overheads because they are not dealing with this kind of thing.
It would be enough to make me want to close the doors and go home if my business was at a $1k loss point before even making a single new car.

As I recall, a couple years ago GM was at about $5000 per car just for pension and health benefits.

JBfromoz
12-07-2006, 11:10 PM
thats just craxy coconuts.
issues like this are hyooge regardless of quality of product or efficiency of production. How do you engineer out a $5k innefficiency in a $15k car?

lingham
12-09-2006, 10:06 PM
If they can't learn to compete in a free market, let them both go under. They need to try the Demming way of management (like the Japanese did), if they want to succeed. If they would only learn to "do it right the first time", they might still have a chance to save themselves. Consumers might have more faith in their products if the failure rate was lower.

hobbie2k
12-10-2006, 12:07 AM
I don't think the problem is a failure rate or reliability, the problem is corporate structuring, waste, and cars that can only be sold with massive incentives (which turn a $15k car into a $13k car before dealer costs).

The Toyota Camry is on track to be the first vehicle in more the 30 years to reach 450,000 annual sales in the US, all sold at MSRP or higher. How many Ford or GM vehicles are being sold without incentives right now?

First thing they have to do is clean up all their inefficiencies, their wasted resources. Once things are running smoothly again, they can start building cars that people want. Ford should look at Mazda and GM at Holden and Opel. American manufacturers have the talent and the vision (the brilliant Camry is designed and built here), it's the business end that's ruining them.

supershannon77
12-10-2006, 09:02 PM
I don't no everyone I am taking a american issues and problems history class in my college and we talk about this kind of stuff all the time. If either of those to companys go down let alone both our economy is doing to go down hard and we will be paying for it. Just think how many people will be out of jobs...since they are out of jobs they won't be buying anything..and if they are not buying anything all the stores are losing all that buiness which in return is just going to ruin our economy. I feel the whole walmart thing is going to be bad as well..again just my .02

VikingJZ
12-10-2006, 11:58 PM
I vote neither because both produce horrible cars. I wrote the Con side of a pro/con debate in our school newspaper last year. Every time I read something from GM or Ford on Edmunds.com, the review (for the most part) had more negative things than positive. They put the two companies at an "average" rating at best. Both corporations and all of their divisions got nailed fo stuff like "cheap interior build quality and layout", "reliability", and "overall design" Nothing coming out of GM, in particular, is that visually appealing to me. The new "GTO", while fast, isn't that good of a car and was an obvious flop from the get-go (hence why it is no longer in production). I find two cars from GM that I like(visually)-the G6 Coupe and the Solstice/Sky. I know I mentioned three but the Solstice and the Sky are the same car with a few different panels and badges. Even those are unreliable...

It's a shame that the American brand segment has come to this, but that's what they get for producing shotty cars for so long. Chrysler is enjoying this newfound success solely thanks to the bail out from the 1980's and the merger with Daimler-Benz.

I don't get why people would say they wouldn't buy from Toyota, Honda, and Nissan. I'd say the verdict is out there still on Mazda and Mitsubishi. Suzuki is garbage along with the Korean brands (although they are on the upswing.


GM and Ford also produce the majority of their vehicles in foreign countries.

I'd rather see Ford stick around than GM, but I still am not a fan of the American brand segment.

Garbage.