What really happened when President Bush and President-elect Obama met at the White House? Here's the real dope.
President-elect Barack Obama made his first visit to the White House at the invitation of George Bush. Although reporters were kept away from the meeting, and the two offered no remarks after the visit, your intrepid reporter has sources deep inside the presidential mansion and has learned much of what transpired between the two former adversaries.…
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26 - Clavos
the Ford Focus, Ford Escape Hybrid, the Chevy Malibu
Good concepts, sure. but they're still american-made, and american-made cars in general are crap.
And they produced the gas guzzlers because they were popular and profitable...
Absolutely right; they were meeting demand, and building those vehicles was actually one of the few smart things american auto execs have done in the last several decades.
Some of the financial problems are about huge pension and healthcare obligations that carry over from the dear old days of corporate paternalism, right?
Corporate paternalism, no; they're a carryover from the days the auto execs were too afraid of the unions, caving at almost every negotiation; they didn't grant those benefits out of the goodness of their hearts, they were outfought (or maybe bought off) by the union execs.
So it's a little more complicated than that Honda and Toyota are smarter and nimbler [although they are]. Their sales are tanking too, but the companies aren't in danger of going under.
True. They're tanking far less, and that gets back to the fact that for decades they have built better cars, and now, they're even doing it in america, with american workers.
If the government gives bailout funds to the american car manufacturers without first getting rid of all senior management in all three manufacturers, the money will be pissed away, and they'll go broke anyway; it'll just take a little longer.
27 - Clavos
Oh, and BTW: since the jap companies woke up and began to build full size pickups, they've been steadily eroding american-built pickup market share.
28 - Dave Nalle
Handy hits at the nubbing of the problem. It's the unions and the huge obligations they bullied the car companies into. We need to bust the autoworkers unions, bring wages in that industry down to within the range of similar jobs in other parts of the country. That's the help the big three need.
Average salary and benefits for an autoworker in Detroit totals over $70 an hour. In right to work states similar jobs like sheet metal fabrication are paid the equivalent of $35 an hour including benefits. That tells the whole story.
Dave
29 - Mark Schannon
Oversimplification alert! Oversimplification alert
Come on, Dave, it's o.k. for the execs to make millions, live in huge houses, get all the perks, and the workers to get the leftovers?
Unions gained strength because of corporate greed, stupidity, and arrogance...and a complete disregard for safety or health. I was a corporate tool for 30+ years, and I don't like how unions got bloated & stupid...but they were only following the lead of their corporate masters.
It's a lot more complicated than that. And the lack of innovation and market savvy among the big three is a large part of the problem.
And that's the truth.
In Jameson Veritas
30 - Lisa Solod Warren
Right on, Mark.
31 - Lisa Solod Warren
And this meeting demand stuff is also an oversimplification.....
They KNEW they had to make better, more efficient cars. Are you saying we couldn't do it better than the Japanese? I don't believe that. We could have and should have. We just didn't because management was lazy and arrogant and out for a profit. If we had retooled and been creative we could have beaten them. I think it's management's fault for being shortsighted (like our government) and looking for the quick profit and the next big thing instead of strategizing and seeing the big picture and the long road. American business needs to get with the program.
32 - Lisa Solod Warren
This is the right idea.
33 - Clavos
And this meeting demand stuff is also an oversimplification.....
They KNEW they had to make better, more efficient cars. Are you saying we couldn't do it better than the Japanese?
No, Lisa, I'm saying that, until very recently (and briefly, back in the seventies) the market demanded the guzzlers. Hell just look at how many are on the road, even today. And also notice how many of them are japanese these days. My brother drives an infiniti qx56 -- the thing's a tank, with mileage to match. The american companies didn't lose their market share for that reason, they lost it on the quality issue; as far back as the sixties, american cars were crap.
The japs broke into the us market first on price, until the early buyers of toyotas and hondas realized (and so did everyone else) that these cars were way superior in quality to the american tin. Then, once they had a good solid market share, they began raising the prices (but keeping the quality) until now, the americans are actually starting to be cheaper (but still not as good quality).
The americans lost it on quality, not fuel efficiency. The public didn't care about fuel efficiency until very recently.
34 - bliffle
For at least twenty years GM has been managed to produce large unwarranted dividnds for shareholders. Why? Because that way the officers own options and shares increased in value.
It's the direct effect of the boardroom takeover by operating officers.
35 - Clavos
Good point, bliffle. And a bigger point than just GM. I have personally benefited from that kind of management at a number of companies for years.
36 - Lisa Solod Warren
Beside the point, Clav. American companies could have competed had they wanted to, had they been less lazy, less greedy and more competitive.
37 - Clavos
Beside the point, Clav. American companies could have competed had they wanted to, had they been less lazy, less greedy and more competitive.
Um, Lisa. That IS my point. The american car companies have been poorly managed for 40 years (or longer). Bailing them out at this point without getting rid of all the deadwood in their various executive suites will simply be throwing good money after bad.
It wasn't laziness, or greed; they wanted to compete, but forgot how. It was sheer incompetence.
Ironically, it was an american, W. Edwards Deming, who taught the japanese how to eat our lunch.
38 - Lisa Solod Warren
So we don't disagree, then.
39 - Clavos
Lisa,
Another example of the ongoing stupidity of american auto companies.
40 - Clavos
And here's another (from your favorite, the NYT, no less!), which says, in part:
Which is exactly what I said above.
41 - Lisa Solod Warren
You silly Clav. I ALREADY linked to that NYT piece. (#32) Proves you don't read me before you argue with me:)
42 - bliffle
The reason the big 3 have huge pension libilities now is because when unions/workers demanded better wages during boom times, the management offered DEFERRED benefits in the form of pensions. But they didn't put the cash away for the future.
Basically, they just kicked the problem down the road
43 - Mark Schannon
Lisa, we both agree with Clavos. The underlying issue was quality...both on the guzzler and cheapo cars. Quality in terms of safety, maintenance, driving, style...etc. Detroit failed on all counts, relying on a few big sellers that generated outrageous profit & the brand loyalty that many Americans had.
It's all come home to roost.
44 - Lisa Solod Warren
I know, Bliffle and it's awful....
And yes Mark, it has indeed.
45 - Dave Nalle
Woah, here folks. I agree that the GM board should probably be disciplined in some way, but shareholders shouldn't lose their equity. That's harsh on real people and the economy.
GM ought to be given a chance to turn around the way that Chrysler was back in the '80s. Kick out the board, bring in someone truly competent and see if the assets and resources they have, plus some government loans can put the company back on track.
Obviously that would mean concentrating on hybrids, electric and alternative fuel vehicles, an area where their past R&D is very strong, but which their idiot managers have failed to capitalize on profitably.
Dave
46 - bliffle
You guys don't get it: GM is failing because the BoD , under Operating Officer control, rigged the economics for their own personal benefits, and then they pursued a plan to liquidate the company to realize those personal benefits.
Basically, they stole company assets and put them in their own pockets.
But it's all legal according to current corporate rules.
And it will happen more with other corps unless we change the rules and laws.
47 - Clavos
Basically, they just kicked the problem down the road
True. And they left the road unpaved.
48 - bliffle
The underlying problem is the lax rules of incorporation that we indulge in the USA.
Basically, everything is permitted. There are few boundaries to corporate behaviour. they are accorded the Freedoms of individuals (they can 'say' anything under free speech, even if that means suborning officials), but don't have the limits and consequences of people. For example, if the corp floods a river with poisons and people die, the corp will not be confined to a cell until it is executed. In fact, it will not be executed at all.
Thus, people are set free to commit crimes with a corp proxy that they cannot commit on their own.
Plus, the Board Of Directors represents a narrow band of interests: the officers of the company. All the other stakeholders in the company are neglected. Even shareholders, in the modern corp.
Abuse is inevitable. And so we have it.
49 - Lisa Solod Warren
Right Bliffle. And now those abusers want more money... and we are supposed to give it to them without any strings? I don't think so.
50 - bliffle
The abuse is abetted by enablers, especially those with fixed ideological notions.
One of those is the "Free Markets" or Chicago group who will go to any lengths to prop up failing pieces of their sham economics. Of course their ideas are based on a basic deceit: they have no intention of leaving markets free, but rather in the hands of the monopolies that sponsor them.