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Old 09-10-2008, 09:33 PM   #1
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Great WSJ article on the failures of detroit

Yep you guessed it...over regulation....

http://online.wsj.com/article/SB1221...ays_columnists

i found this excerpt really interesting....

"It must infuriate the auto makers how readily their critics attribute their problems to their own incompetence. Then how to explain that GM is thriving in Europe, selling small cars that get lots of miles per gallon? Buick is among the biggest selling brands in China. GM is running away with Latin America.

The Big Three's problem, to be blunt, is North America. They should have pulled out long ago.

Not only did history saddle them with a UAW labor monopoly that their foreign competitors have managed to avoid. Even that might not have been fatal had Congress not enacted its "corporate average fuel economy" rules in the 1970s.

Look at gallons consumed, miles driven, barrels imported or emissions emitted: CAFE has had no significant impact on energy consumption. Its sole practical effect has been to inflict on Detroit the need to produce, with high-cost U.S. labor, millions of small cars designed to lose money.

CAFE has to be the most perverse exercise in product regulation in industrial history. It confronted the Big Three with the choice only of whether to lose a lot of money, by matching Toyota and Honda on quality and features; or somewhat less money, by scrimping on quality and features and discounting, discounting, discounting. Rationally, they scrimped...."

I believe we should be thankful that the camaro came out so amazing....thank you f-bod and gm for not scrimping on the camaro in the least bit
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Old 09-10-2008, 09:46 PM   #2
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Freaking ridiculous.
If there was any sense left they would repeal CAFE.
It's like they're trying to kill American cars...IN AMERICA!
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Old 09-10-2008, 09:50 PM   #3
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Freaking ridiculous.
If there was any sense left they would repeal CAFE.
It's like they're trying to kill American cars...IN AMERICA!
I kid you not...its like we are being run by commies...

carmakers will react to the market if the market is demanding higher mpg cars...government shouldn't force certain guidelines since they have never built a car not know how to build one...

and i won't get into the unions but detroit is paying more for their retired workers than their current labor force...thats just backwards thinking and the contract with the union was probably done by ceo's who knew they were going to retire and wouldn't have to deal with that problem in the future
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Old 09-10-2008, 10:41 PM   #4
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Its not so much that the politicians want to destroy Detroit per se. They simply want votes. They can get votes by promising more and more fuel economy regulations, because the average consumer roughly believes that fuel economy is just a number that is programmed into an engine. Regulations call for 100 mpg? Why all the engineers have to do is type in 100 into the engine control computer and it will do that. So to win the votes from those people, all the politicians have to do is outbid each other on CAFE regs. If Detroit has to go down, well thats the price to be paid to keep our swell politicians in office.
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Old 09-11-2008, 02:56 AM   #5
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Just remember this country is SUPPOSED to be run by the people. Make your voice heard and the Govt. will have to fall in line.
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Old 09-11-2008, 03:11 AM   #6
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Yup

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Freaking ridiculous.
If there was any sense left they would repeal CAFE.
It's like they're trying to kill American cars...IN AMERICA!
+10
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Old 09-11-2008, 05:19 AM   #7
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We are headed for socialism, the government is taking our power little by little. bail outs and take overs, whats next..airlines...the big 3? CAFE is BS, they might as well take hot dogs and baseball while their at it. When election time comes we get to vote for a Dbag or a turd sandwich... true story
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Old 09-11-2008, 05:36 AM   #8
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People will buy what they want... the Government is forcing people to buy what the enviromentalist wackos want them to buy. I thought this was a free country at one time... It has gotten so ridiculous that people now cannot fend for themselves and ask the government to help them out no matter what the problem....

My house blew down in the hurricane....Please washington build me a new one...
I can't make my 300,000 house house payment... Please washington make them let me pay less...
My SUV only gets 10MPG... Please Washingtom make the automakers make my SUV get 50MPG....

Gee, Washington didn't make you buy those things YOU DECIDED TO BUY THEM.. Don't ask Washington to help you out of your own mistake...

IF my house gets struck by lightening and burns to the ground should I ask Washington to rebuild it or give me a place to live??? Why should the people that choose to live where hurricanes are known to come in expect it??

If you bought a $300,000 dollar house and then can't make the payments, why expect Washington to come along and help you?

YOU bought that 10MPG SUV nobody forced you to buy it, so now why should the government force automakers to make only cars that get 30+ MPG...

I am sick of Washington telling me what I can and cannot have and also that I have to pay for someone elses mistakes...
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Old 09-11-2008, 07:13 AM   #9
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In the SF bay area I know the homes thing is different.

houses here start at around 700k. People get the amazing interest rate loans, then have the loans sold to another company and all of a sudden have to pay up to and exceeding twice as much as their loan payments started at. Not all cases but at least a few of the people I know are in this position
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Old 09-11-2008, 09:15 AM   #10
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The downfall of Detroit auto makers is a combination of things; only one small part is regulation. Most of Detroit’s problems are of their own making. Years of poor quality, putting all your eggs in one basket (high margin SUV’s) agreeing to bad contracts with the UAW, and making too many brands that compete directly with each other.

Why is it that everyone else can succeed in North America except GM, Ford and Chrysler? They all have to follow the same regulations. This is why the $50 billion buyout that the once big 3 are asking for pisses me off to no end. If you can’t run your business properly you file for bankruptcy and try again. Now I do think legislators could make some changes allowing GM to close dealerships they don’t need anymore or close brands without as much cost. Other than Chevrolet and Cadillac what else does GM really need? Buick is worthless as is Pontiac. They have maybe two cars between the brands that are worth anything. GMC is just rebadged Chevy’s. Saab? Worthless. Saturn? Competes directly with Chevy. Hummer? Its already dead.
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Old 09-11-2008, 10:32 AM   #11
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This is why the $50 billion buyout that the once big 3 are asking for pisses me off to no end. If you canít run your business properly you file for bankruptcy and try again. Now I do think legislators could make some changes allowing GM to close dealerships they donít need anymore or close brands without as much cost. Other than Chevrolet and Cadillac what else does GM really need? Buick is worthless as is Pontiac. They have maybe two cars between the brands that are worth anything. GMC is just rebadged Chevyís. Saab? Worthless. Saturn? Competes directly with Chevy. Hummer? Its already dead.

It is NOT a bailout. it is a loan to "jumpstart" future energy efficient (read: CAFE standards) products.
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Old 09-11-2008, 10:42 AM   #12
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As I've said several times before, contact your elected officials and tell them how you feel. Usually, they will respond. Make sure to let them know your address so that you can prove that you are a constituent.
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Old 09-11-2008, 11:36 AM   #13
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Beesides, no one held a gun to anyones head when making a decision to purchase any particular vehicle.

I by no stretch am a fan of SUV's and behemoth pickups. But, I respect people's right to choose what vehicle they drive.

Either way, it ends up being a sign that the auto industry is in for some pretty radical change, whether we as enthusiasts like it or not.
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Old 09-11-2008, 11:42 AM   #14
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Beesides, no one held a gun to anyones head when making a decision to purchase any particular vehicle.

I by no stretch am a fan of SUV's and behemoth pickups. But, I respect people's right to choose what vehicle they drive.

Either way, it ends up being a sign that the auto industry is in for some pretty radical change, whether we as enthusiasts like it or not.
I'm definitely not saying that buyers should have to change, but the market has turned against Detroit. Buyers should be able to get anything they want, but Detroit needs to follow the market with its products. When more compacts are selling, it is important to lay off of larger platforms to keep demand high enough to make a profit.
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Old 09-11-2008, 11:48 AM   #15
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I kid you not...its like we are being run by commies...

carmakers will react to the market if the market is demanding higher mpg cars...government shouldn't force certain guidelines since they have never built a car not know how to build one...

and i won't get into the unions but detroit is paying more for their retired workers than their current labor force...thats just backwards thinking and the contract with the union was probably done by ceo's who knew they were going to retire and wouldn't have to deal with that problem in the future
maybe they should stop handing out pensions if they dont plan on paying them
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Old 09-11-2008, 04:27 PM   #16
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The downfall of Detroit auto makers is a combination of things; only one small part is regulation. Most of Detroitís problems are of their own making. Years of poor quality, putting all your eggs in one basket (high margin SUVís) agreeing to bad contracts with the UAW, and making too many brands that compete directly with each other.

Why is it that everyone else can succeed in North America except GM, Ford and Chrysler? They all have to follow the same regulations. This is why the $50 billion buyout that the once big 3 are asking for pisses me off to no end. If you canít run your business properly you file for bankruptcy and try again. Now I do think legislators could make some changes allowing GM to close dealerships they donít need anymore or close brands without as much cost. Other than Chevrolet and Cadillac what else does GM really need? Buick is worthless as is Pontiac. They have maybe two cars between the brands that are worth anything. GMC is just rebadged Chevyís. Saab? Worthless. Saturn? Competes directly with Chevy. Hummer? Its already dead.
the uaw situation plays a huge part...and that is something that toyota and lexus don't have
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Old 09-12-2008, 05:47 AM   #17
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There has to be some personal responsibility...I bought my tahoe and it was my decision alone(great vehicle) If I want a BAD BOY v\8 from the factory it should be my right to have it. I'm tired of paying insane taxes on each check only to see my government go deeper into the red and take away my choices.I wish we had a true candidate for CHANGE instead of a run of the mill politician that has the media in his pocket.
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Old 09-12-2008, 11:14 AM   #18
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It is NOT a bailout. it is a loan to "jumpstart" future energy efficient (read: CAFE standards) products.
A rose by another name...

If we want to help the big 3 re-evaluate franchise laws. Allow them to close dealers and brands if need be. Provide incentives to tax payers who buy fuel efficient cars like the volt (for any automaker).

Things like the UAW contracts and pensions/healthcare we agreed upon by the then management, they need to be held accountable. Why should our money be given to them for their mistakes? GM has also absolved themselves of the healthcare benefits of retirees with the UAW VEBA put in place. They are now competitive with the transplants give or take.

If your company is losing billions after billions then why is your CEO and they rest of the brass still in charge?

At least Bill Ford had the foresight to see he wasn't the man to get the job done and the desire to better the company. Ford is now in a race, will they be able to make the change to a profitable company before they run out of money. They are mortgaged to the hilt and itís an all of nothing gamble I wish them the best.

I firmly believe that there will not be a Chrysler as we know it in the next two years. GM has a chance but its close. If we have a big uptick in the economy in a year or two and if the Volt and similar do everything itís supposed to and more they might just make it.
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Old 09-12-2008, 11:30 AM   #19
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A lot of people seem to be concerned that there won't be V8s from the factory, or that such V8s will be impotent.

If you want a powerful V8, you can get one. CAFE is just guiding the majority of cars produced by a company. The market already shows that most people don't care about having that much power. If anything, CAFE somewhat follows the market. Future regulations guided by CAFE are certainly more extreme than they should be, but the current ones aren't that tough at all.

As the default devil's advocate, I tend to find myself arguing for CAFE laws. I don't think they're the worst thing that's happened to the auto industry, but they certainly aren't the best. If you want lots of power, you can still buy a Camaro or a Corvette, but most buyers really don't want that. Of the cars that GM produces, there are a lot of great small cars with small engines and a few great cars with great engines. In between, you've got some fat that can be cut, like the weak Monte Carlo or excessive truck production. CAFE will force GM to be a leaner company that builds what people buy. That means that enthusiasts like us will still get our share in the performance market while soccer moms can still buy slow sedans and crossovers. The only real changes that CAFE is forcing automakers like GM to make are going to be visible on car lots. There won't be as many Colorados as Cobalts. I don't think that's such a horrible thing.

I don't care for the threat of CAFE eliminating great American V8s, but I strongly doubt that the V8 will be going away any time soon. Keep the faith.
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Old 09-12-2008, 06:11 PM   #20
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Originally Posted by The_Blur View Post
A lot of people seem to be concerned that there won't be V8s from the factory, or that such V8s will be impotent.

If you want a powerful V8, you can get one. CAFE is just guiding the majority of cars produced by a company. The market already shows that most people don't care about having that much power. If anything, CAFE somewhat follows the market. Future regulations guided by CAFE are certainly more extreme than they should be, but the current ones aren't that tough at all.

As the default devil's advocate, I tend to find myself arguing for CAFE laws. I don't think they're the worst thing that's happened to the auto industry, but they certainly aren't the best. If you want lots of power, you can still buy a Camaro or a Corvette, but most buyers really don't want that. Of the cars that GM produces, there are a lot of great small cars with small engines and a few great cars with great engines. In between, you've got some fat that can be cut, like the weak Monte Carlo or excessive truck production. CAFE will force GM to be a leaner company that builds what people buy. That means that enthusiasts like us will still get our share in the performance market while soccer moms can still buy slow sedans and crossovers. The only real changes that CAFE is forcing automakers like GM to make are going to be visible on car lots. There won't be as many Colorados as Cobalts. I don't think that's such a horrible thing.

I don't care for the threat of CAFE eliminating great American V8s, but I strongly doubt that the V8 will be going away any time soon. Keep the faith.
sorry my friend but the government has no business trying to guess the market...leave that to the free market...

if you don't think that government controlling the output of a company is a bad thing perhaps you might like a place called cuba ...or 1980's soviet union...

government doesn't know how to build cars...you just don't force a company to be leaner the market itself will do that if trucks aren't selling...
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Old 09-12-2008, 07:12 PM   #21
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At the risk of getting flamed here, I think it was GM's own fault for miserable quality in the 70s and 80s, and I don't blame CAFE one bit - even though I completely disagree with it and I do think CAFE is a joke.

It's not CAFE that made Honda and Toyota make a profit on small cars, they made small cars all their life long before anyone even heard of CAFE..... and GM had done nothing but make land barges.

It's all either company knew how to do well. It was in the DNA of the companies long before it was in the wrong hands of Washington.

But I have a problem letting GM off the hook that easily. Even Bob Lutz today readily admits that the creation of the 1983 Cimaron was the lowest of the lowest points for GM, and that kind of thinking back then (or lack thereof) by the powers that be contribute in no small part to a great deal of people's perception of the company today.

If GM was so handcuffed by the UAW contracts 30 years ago, it's their own fault for caving in to them and letting the floor sweepers make thirty bucks an hour.

The NFL is the most profitable and lucrative of all the major sports today, and they play 1/10th the number of games played in a MLB season. Because it has salary caps and equal profit sharing among the teams. You don't end up with the Angels, Yankees, or Red Sox ability to sign anyone they want for $30 million/year and the KC Royals, Pittsburgh Pirates, and Cleveland Indians forced to find other ways once their stars become too good to keep. Hence, the quality of their teams suffer.

Fair or unfair, that's the truth of the matter.
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Old 09-13-2008, 11:00 AM   #22
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straight up, our government is attempting to destroy our economy, cause another great depression, and probably make us susceptible to take over by another country. I really see no other goal for cafe except to murder detroit, like the article says, and in turn remove american jobs and increase japanese jobs. it might help it in the long run, but right now it is further implying the already prevalent stigma that american cars don't get good mpg (chevy has more 30+ mpg cars than honda or toyota). on top of that, the govt. is driving up gas prices w/ taxes and letting the oil companies run rampart w/ their profits which further puts out domestic auto makers.

this reminds me of a physics teacher i once had who tried to convince the class that american cars were crap and we shouldn't buy them. i constantly countered her and assured her that she was destroying our economy and killing our future. people like that infuriate me. forgive me, i digress.

anyway, i just want to see the expressions on the traitors of congressmen's faces 10 years from now when our country has gone under due to the stupid decisions that were probably made for under the table profits. please forgive my ranting, i'm done now
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Old 09-13-2008, 02:33 PM   #23
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Think of it this way, if the automakers were allowed to sell anything they want for the last 25 years, they would have been offering more powerful and less efficient vehicles. While that would have secured more money for them, this past year would have been even worse for them.

As for the unions, they have outlived their usefulness. But when GM made the agreements with them, things were going pretty good for them. They could allow for generous concessions. At the time the Big 3 dominated the market and imports were all actually imported. Plus, nobody was really expecting retirees to live into their 80's.
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