indeed. there was, and is, a healthy, vibrant automobile industry in the US. it's just no longer based in detroit. the bailout was a union payoff. pure and simple.
The auto companies failed because they put all their eggs in the SUV basket. If they had competative products to accomodate shifts in the market place then they would have been fine. Instead, SUV's were their highest profit segment so they placed their whole strategy behind growth of the SUV market. When that dried up, they dried up. Other automakers who had a more deversified product offering faired better such as VW or Toyota. Poor cost structures didn't help but that is constant and management should have factor that in. Simply put, they assumed the SUV market was not going to have the rug pulled out from them.
http://en.wikipedia.org/wiki/Who_Killed_the_Electric_Car? Good documentry that highlights the various political & special interest pressures of the late 90's & early 2000's and worthy of viewing given the topic of your debate.
American automakers were on the downfall way before anyone knew what an SUV was. The SUV market just kept them alive a little longer.
exactly, i like how evironmentalists try to link the downfall to making big vehicles. two separate issues
During the recession, did their labor costs go up? No. Did they have to shut down production lines because nobody was buying their products? Yes. The company calculated their labor costs. They didn't calculate no revenue.
they weren't making any revenue because it was a freakin recession. also, they were struggling before 2008.
Other automakers faired just fine. VW and Toyota were a-okay. Stuggling and going backrupt are two different things. With your logic, should every company go backrupt during a recession? They were particularly poised to crash during the recession becuase their whole product line was based on the availability of cheap gas. If you recall, dealers had surpluses of trucks and SUV's during this time. Why? Cause nobody wanted them. Regardless of a recesion, in any business, if you cut your revenue that dramatically ...you got problems. Management didn't anticipate such a massive cut is demand. Any investment manager will tell you; diversify, diversify, diversify.
Countries with top five land mass and population have to be able to make their own cars, ship their own mail, grow their own food and prioritize economic stability over profitability and growth.
I don't disagree that the product line was a problem. actually i remember specifically gm getting out of the hummer line in 08. but the bigger problem was their cost structure relating to benefits that no longer fit into today's business model, and they were struggling before the recession because of it.
Well, like anything big problems are multifaceted. You can't just pin it on one thing. Their cost structure surely was a problem but I beleive if the price of oil didn't rocket (see what I did there?) to $130/barrel then they would have "survived". In any strategy (whether personal or business), you need to be prepared for the unexpected. Bottom line is they didn't prepare for such a big drop in revenue. We can agree that they weren't healthy enough to overcome the recession. The bail-out was the right answer, btw. The tax revenue that would have been lost (and unemployment/welfare/etc increases) was too great a burden considering all the Tier I, II, III companies that would have assuredly been lost. No brainer.
GM crashed because they were too busy building gas guzzling SUVs that had higher profit margins and then when gas went to $4 suddenly a Prius was looking pretty tempting to American consumers.
if i had a nickel for every time conservatives mentioned unions, of all things, were destroying one of the least unionized developed countries in the world, well, I'd have quite a stack of money.
Yes and no. I find who killed the electric car to be wildly overblown. All that documentary showed was California overreaching with its zero emission vehicle mandate at a time when gas was still below a dollar a gallon. Car companies had no incentive to invest in electric technology. Gas was absurdly cheap and no consumer could justify the markup on electric vehicles (even with tax credits). The car companies did sabotage the whole thing by essentially refusing to market the vehicles after they were introduced and forced California to repeal its law but in reality most people on the California air and resources board admitted that the mandate was wrong at the time. They have since reintroduced the ZEV mandate last year but this time it actually makes sense since electric cars are actually price competitive with gasoline cars with today's gas prices. (plus they have a nice federal tax credit to boot this time around) The movie actually points most of this out but tries too hard to make it look like it was a grand corporate conspiracy. In reality California just mandated a set of vehicles that simply were not going to be sold and the car companies did their best to sabotage the whole thing in order to force California to repeal the law.
http://dailycaller.com/2012/02/13/obama-hikes-subsidy-to-wealthy-electric-car-buyers/#ixzz1mKVNMxFO that's right, we the taxpayer give GM a cool $10k for every Volt they sell, but it's all good since the taxpayer owns GM anyway lol of course, another change in policy without a congressional vote
Read your own article. Also, as your own article indicates it applies to all electric vehicles, not just GM.
So would I. If a Republican can't think of anything else to say, slam the unions! Doesn't matter that they are a shadow of what they once were in this country.
