An American "Car", Sir?

[Ancient Mariner]

You an American considering bying an American "car"? Don't bother, your government is bying them, eh the car manufacturers that is, for you. You will now own a tiny, little piece of every cra.., sorry "car" wished together in the good old USoA. Free market capitalism at its finest.
http://www.washingtonpost.com/wp-dyn/co ... 01774.htmlPer

[flyboy2548m]

Wished together?

[Pipe]

You an American considering bying an American "car"? Don't bother, your government is bying them, eh the car manufacturers that is, for you. You will now own a tiny, little piece of every cra.., sorry "car" wished together in the good old USoA. Free market capitalism at its finest.
http://www.washingtonpost.com/wp-dyn/co ... 01774.htmlPer

Wait until they buy out Boeing. THAT´s gonna be an interesting discussion.

[Ancient Mariner]

Wished together?

As in: " I know I have some leftover nuts/bolts/washers and that I probably didn't use the right torque on those I did fasten, I do however WISH that the thing stays together until my shift is over and/or the "car" reaches the showroom/customer."
Wished together.
Per

[David Hilditch]

The recent very sharp fall in gasoline prices will be a long-term disaster for the US car companies if they do manage to get additional federal bailouts. No money means they will be more likely to innovate. With federal money they'll just do what they have done in the past, which is fail to innovate and, if they don't disappear this time round, they will be sure to disappear during the next round of fuel price increases in a few years.

It also sets a poor precedent. Who next ? The airlines, Boeing....?

[flyboy2548m]

As in: " I know I have some leftover nuts/bolts/washers and that I probably didn't use the right torque on those I did fasten, I do however WISH that the thing stays together until my shift is over and/or the "car" reaches the showroom/customer."
Wished together.

Brilliant!

[Ancient Mariner]

As in: " I know I have some leftover nuts/bolts/washers and that I probably didn't use the right torque on those I did fasten, I do however WISH that the thing stays together until my shift is over and/or the "car" reaches the showroom/customer."
Wished together.

Brilliant!

Thanks. Coming from you it brought a tear to my eye.
Per

[Verbal]

Bite your tongues, all you people who are comparing Boeing to the U.S. automakers.

[Verbal]

The recent very sharp fall in gasoline prices will be a long-term disaster for the US car companies if they do manage to get additional federal bailouts. No money means they will be more likely to innovate. With federal money they'll just do what they have done in the past, which is fail to innovate and, if they don't disappear this time round, they will be sure to disappear during the next round of fuel price increases in a few years.

David, the lack of innovation is only partially to blame for the collapse of the U.S. automakers. Like an air disaster, there are many layers of Swiss cheese....

1) The "next big thing" mentality. GM especially is notorious for this. They approach every new vehicle program as though it will be the company's savior, then abandon it to focus on the Next Big Thing. Consequently, they allow their legacy programs to wither and die on the vine with no further development for years. Contrast the Japanese automakers, who pursue continuous evolutionary improvement.

2) The "eggs in one basket" strategy. Beginning in the mid-90's, Ford effectively stopped developing new passenger car designs, electing instead to devote the bulk of its resources to pick up trucks and SUVs. The few car lines they kept were mainly to supply the rental fleets. They reasoned that the passenger car market was too competitive, and that they could only make money in the high profit truck market. Unfortunately for them, market needs shifted.

3) Sweetheart contracts with the unions. The UAW has successfully negotiated contracts that bleed the automakers dry, from pension obligations to work rules. Management is partly to blame for this because they agreed to these ludicrous contracts in the first place.

4) Cut costs at any cost. A successful manufacturer makes a profit building a competitive product. If you let the engineers run the show, you will have an exquisite product that no one can afford to buy. If you let accountants run the show, you make money in the short term, until people realize you're building cheap, worthless crap. Success comes from balancing these influences, but the automakers have tipped the scale too far in the cost saving direction. They don't seem to understand that you cut costs by streamlining your processes, not by cheapening your end product.

5) The dealership experience is a joke, from the initial purchase to getting warranty work done.

6) Disconnect from the customers. Located in fly-over country as they are, the automakers are out of touch with what Americans really want to drive. They think that everyone wants a jumbo SUV to tow their boat to the upper peninsula every summer.

[flyboy2548m]

2) The "eggs in one basket" strategy. Beginning in the mid-90's, Ford effectively stopped developing new passenger car designs, electing instead to devote the bulk of its resources to pick up trucks and SUVs. The few car lines they kept were mainly to supply the rental fleets. They reasoned that the passenger car market was too competitive, and that they could only make money in the high profit truck market. Unfortunately for them, market needs shifted.

Well, at least in Ford's case, they're hard to blame for that. Only Hertz and Alamo were buying Tauri and Escorts in the 90s, the retail customer couldn't get enough Explorers and Expeditions. Or is your point that Ford somehow created that situation?

[Verbal]

Well, at least in Ford's case, they're hard to blame for that. Only Hertz and Alamo were buying Tauri and Escorts in the 90s, the retail customer couldn't get enough Explorers and Expeditions. Or is your point that Ford somehow created that situation?

I think the truth lies somewhere in between. Ford certainly fueled the SUV demand, but by turning their passenger cars into fleet queens, they left themselves high and dry when private buyers started abandoning their Explorers.

[ZilogMan]

6) Disconnect from the customers. Located in fly-over country as they are, the automakers are out of touch with what Americans really want to drive. They think that everyone wants a jumbo SUV to tow their boat to the upper peninsula every summer.

OT: Which reminds me of this episode...

[David Hilditch]

David, the lack of innovation is only partially to blame for the collapse of the U.S. automakers. Like an air disaster, there are many layers of Swiss cheese....

1) The "next big thing" mentality. GM especially is notorious for this. They approach every new vehicle program as though it will be the company's savior, then abandon it to focus on the Next Big Thing. Consequently, they allow their legacy programs to wither and die on the vine with no further development for years. Contrast the Japanese automakers, who pursue continuous evolutionary improvement.

2) The "eggs in one basket" strategy. Beginning in the mid-90's, Ford effectively stopped developing new passenger car designs, electing instead to devote the bulk of its resources to pick up trucks and SUVs. The few car lines they kept were mainly to supply the rental fleets. They reasoned that the passenger car market was too competitive, and that they could only make money in the high profit truck market. Unfortunately for them, market needs shifted.

3) Sweetheart contracts with the unions. The UAW has successfully negotiated contracts that bleed the automakers dry, from pension obligations to work rules. Management is partly to blame for this because they agreed to these ludicrous contracts in the first place.

4) Cut costs at any cost. A successful manufacturer makes a profit building a competitive product. If you let the engineers run the show, you will have an exquisite product that no one can afford to buy. If you let accountants run the show, you make money in the short term, until people realize you're building cheap, worthless crap. Success comes from balancing these influences, but the automakers have tipped the scale too far in the cost saving direction. They don't seem to understand that you cut costs by streamlining your processes, not by cheapening your end product.

5) The dealership experience is a joke, from the initial purchase to getting warranty work done.

6) Disconnect from the customers. Located in fly-over country as they are, the automakers are out of touch with what Americans really want to drive. They think that everyone wants a jumbo SUV to tow their boat to the upper peninsula every summer.

Sure, there are many layers contributing to the current plight of the car makers. That's a good list, thanks. I like your Point 6, by the way : they're not actually making cars Americans want to drive.

My point about oil prices was meant to highlight the risk of prolonged low prices, which may well let the car companies breathe a sigh of relief and that SUV sales may even rise. More generally, sustained low prices will kill initiatives to develop alternative technologies and also may undermine recent trends for Americans to downsize, to drive less, to use public transportation and so on. Demands for smaller more fuel-efficient vehicles may reduce, and while oil consumption in the US is today lower than it has been since 1999, the supply/demand balance worldwide will swing again. I'd hate to see us re-run in 10 years or so the position we were in this decade.

By all rights they ought to be out of business already. At the least, I think GM and Chrysler will merge. I think this may happen because the alternatives are worse. It may be done with federal help, ie. taxpayers as stockholders, as happened 25 years ago with Chrysler. The price for this may have to be major cuts in salaries, benefits, jobs, factories, dealerships etc. There will be blood, any which way. One of the problems today, of course, is that car buyers can't get credit. One solution being talked about is to convert the finance companies (GMAC, Ford Motor Credit.....) to commercial banks, so that they could benefit under the federal rescue plan for banks. In any case, I think the finance companies will feature large in the eventual "solution".

[flyboy2548m]

One of the problems today, of course, is that car buyers can't get credit. One solution being talked about is to convert the finance companies (GMAC, Ford Motor Credit.....) to commercial banks, so that they could benefit under the federal rescue plan for banks. In any case, I think the finance companies will feature large in the eventual "solution".

Worse yet, finance companies are now refusing some dealers with floor-plan funding and that's a real problem.

[David Hilditch]

While US car company stock prices are falling off a cliff, spare a thought for Volkswagen. In the last week alone they have more than quadrupled. Some murky dealings going on, not clear exactly - something to do with Porsche and short squeeze on their stock.

[supersean]

Bite your tongues, all you people who are comparing Boeing to the U.S. automakers.

In due time my friend... in due time!

[Verbal]

What does "GM" stand for? Government Money.

[Cam]

This is f--king retarded...let them fail.

It's the mentality of today. Remember when you were kids and your parents let you get hurt or make something that was a piece of shit and it broke, but you learned from it?

This bullshit has been going on for years with parents, and now the government, with their velvet glove approach to everything.

Don't let little Tommy get hurt...protect him from everything.

SCREW that, let the kid fall down or touch the stupid stove so he learns his lesson! Let's these shitheads fall flat on their face, no golden parachutes, nothing. Sorry employees, your bosses are stupid dick weeds that can't think past tomorrow.

Governments spend this money like water because by law we have to pay. It's like a never ending bank account. F--k this shit, no more.

[Verbal]

I am sensing anger.

[DeskFlyer]

The twin powers of perservant & obceptive are with you!

You should cash in & make a buck. It's what the Justice League would do.

[Sickbag]

While US car company stock prices are falling off a cliff, spare a thought for Volkswagen. In the last week alone they have more than quadrupled. Some murky dealings going on, not clear exactly - something to do with Porsche and short squeeze on their stock.

I think Porsche has just blitzed the markets.

[FrankM]

While US car company stock prices are falling off a cliff, spare a thought for Volkswagen. In the last week alone they have more than quadrupled. Some murky dealings going on, not clear exactly - something to do with Porsche and short squeeze on their stock.

I think Porsche has just blitzed the markets.

Yes, although they are declining it. Today they relieved the market a bit by selling off a few shares and VW stocks plunged back by about 45%. This thing really didn't have any thing to do with reality, but it bit the gamblers very, very hard. There are estimates that the hedge funds lost in an area of 15-20 billion(!) USD within a couple of days on the dirty game they invented themselves.

For those who care to know: Porsche is in the process of taking over VW, they control around 75% of the VW shares (about half of them indirectly through buying options) and the state of Niedersachsen (where VW's headquarter is located) owns around 20%, so there are currently only around 5-6% of VW shares freely tradeable. Of course VW isn't doing great those days, at least the expectations for the coming 1-2 years look rather bad. This lead all the hedge funds to go massively short on VW shares (as probably on other car shares as well) in the expectation of falling share prices. Right then Porsche announced that they are planning to actually pull those options and eventually really own those 75%. Which was rather a bit unexpected to say the least. Anyway, this announcement lead the VW share price to rise which was bad for the gamblers as they actually had to buy those VW shares that they had being going short on. That effect would have lead normally to a minor loss, but in this case there were just not enough shares available on the market which sent the price through the roof, from €150 to little more than €1.000 within a few days. A classical "short squeeze". BTW, Porsche should made a (virtual) profit on this one in the area of billions of Euros, at least temporarily. They have some quite smart bastards in their financial department. Earlier this year they legally robbed some banks. Earlier this year they had secured a credit line of 10 billion Euros at a very low interest rate. When the interest rates started to raise they actually pulled this credit and invested it at the same banks for higher interest rates than those they actually have to pay ...

Other than that, great analysis, Verbal !!!

[rattler]

This is f--king retarded...let them fail.

It's the mentality of today. Remember when you were kids and your parents let you get hurt or make something that was a piece of shit and it broke, but you learned from it?

This bullshit has been going on for years with parents, and now the government, with their velvet glove approach to everything.

Don't let little Tommy get hurt...protect him from everything.

SCREW that, let the kid fall down or touch the stupid stove so he learns his lesson! Let's these shitheads fall flat on their face, no golden parachutes, nothing. -snip-

with you on that, *if* you provide a thread for your kids to learn from.

My mother always was afraid I would climb trees and eventually fall off one and get hurt, so she wanted to prohibit me to climb trees.

My father chimed in and told her that "boys *will* climb trees, like it or not, prohibited or not" and rather preferred to teach me how to do it with less risk ("three point fix", only move one extremity at a time, toung in mouth, teeth pressed shut). Climbed a few, never hurt myself falling off one.

IMHO thats the way to go, children, economy and life IG.

Rattler

[rattler]

While US car company stock prices are falling off a cliff, spare a thought for Volkswagen. In the last week alone they have more than quadrupled. Some murky dealings going on, not clear exactly - something to do with Porsche and short squeeze on their stock.

Actually, VW was the most expensive company on the planet for some time yesterday (when shares topped the 1000 Euros). Its a short sellers game. German stock trade watch reduced VW impact on the DAX to 10%... Great time for the gamblers that went with options on rise (and fall, today)... Wished I had had the money...

Rattler

[David Hilditch]

Actually, VW was the most expensive company on the planet for some time yesterday (when shares topped the 1000 Euros). Its a short sellers game. German stock trade watch reduced VW impact on the DAX to 10%... Great time for the gamblers that went with options on rise (and fall, today)... Wished I had had the money...

Rattler

Good luck to you there. It seems to me, from what I can understand of this, that Porsche were attempting an old fashioned corner, combined with the new way of using derivatives to remove the risk on the part of those creating the corner. Those trying to cash in on the short squeeze on the way have been screwed.