Eric Reguly of Canadian paper Globe and Mail has a piece on why the Detroit Three should be allowed to go bust. Click here to read the story.
Essentially the gist of the article is that the Detroit Three have gone lazy and have relied on lobbying auto-related laws such as CAFE (Corporate Average Fuel Economy) standards to be able to sell low-tech large guzzling and polluting SUVs at over-inflated prices, while other automakers who actually have to sell their cars in other markets which are not protected continued technically innovating and developing their cars following the global market trends.
The CAFE was a protectionist bailout in disguise, and now when the shit hits the fan, they want to be bailed out all over again, this time with cold hard cash.
Frankly I tend to agree. The only globally marketable car that seems to be coming out of GM’s factories now are all Daewoo-based. It’s ironic – from what was once a cheap car designed to sell in “emerging markets” like the special “ASEAN cars” we get here in our market, the new Daewoo Lacetti (pictured above, to be badged the Chevrolet Cruze) is touted as the car that could save GM, even in the US.
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losing fans, lol~
let them learn, the hard way!
Filing for bankruptcy and then restarting again will solve a lot of problem. Filing for chapter will allow the company to restructure, revise all the deals made in the past and the most important of all, to have a new management. Of course, the short term impact will be quite disastrous, but for the long run, this seems like the best course. Just my two cents.
Americans need to change their mentality/mindset.
And so does everyone else in this world.
We can’t burn fossil fuel forever.
baaah paul…
if its an oustside comopany u want to bail them out…
if its malaysian u say just let them die!!!!!!
Paul Tan says: Where have I said any of those things you accused me of?
better bail out proton and perodua hahahahha
If only Proton have a lot of cash reserve,well Mazda seems to be value for money.heeheheh
GM owns Opel too right
Insigna nice!
should.
our Proton should go bust also.
our govt bailout proton more than 10 years oredi.
They should never bailout the Detroit Three (formerly known as the Big Three but not anymore). One of the biggest liabilities they have are the UAW contracts which cost 1400USD per vehicle not on worker’s wages but retired workers’ pensions and health benefits. Going bust nullifies the contract and therefore able to get rid of the parasite UAW. If you look at the present situation in the US and Malaysia, there is no differences except that in Malaysia we have no choice but being forced to subsidize Proton.
Let them all go bust.
Paul, you should watch Larry King’s interview just within this week and repeated twice on the weekend his interview with Micheal Moore (that Fahrenheit 911 guy). He made a movie 20 years ago title Roger & Me predicting the collapse of the US auto industry.
they should fall.
their pension scheme and welfare benefits have drained alot of their funds i heard.
and with the unions choking on their operation, its obvious they were falling.
by filing for chapter 11, they get to restart operations.
sometimes pressure has to be exerted to find the diamonds.
worse come to worse, i am sure some other companies will buy them over.
the one i pity most is the workers. recession without a job, life’s gonna be hard on them.
haha..Paul even if you been trying to play safe also still kena bash..
whatever it is i just pity the 3 million people who is going to be out of job!!!
tax payer money has every right to help the needy..so 25 billion for US is nothing…just give for the sake of the 3 million people..
aliBaPa said,
November 24, 2008 @ 7:40 pm
should.
our Proton should go bust also.
our govt bailout proton more than 10 years oredi.
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fact? where’s the proof? pls do not say thing if u just heard or feel… and if proton got money from govt, whats the issue? it’s under khazanah and khazanah owned by the gov? so, what the problem?
and this is topic on GM, Ford and Chrysler… for the sake of 3mil ppl… pls bail them out…
The co? forget them. The worker? Help them.
Many fail to see the chain-effect from the Big 3 going bust.
It’s not ONLY about the car maker, it’s the entire MidWestern America’s economy, and its the commitment that the Dems and Obama made to get them to the White House.
UAW are a staunch supporters of Dems, and to leave them out to dry will draw political backlash.
The auto-industry in the Midwest represents ‘everyday’ American…JoePlumber.
They would be wondering, why did the goverment gave a USD700 bn tax payers money to save the ‘suits’ at Wall Street…representing only…a fraction of the everyday American, while USD25 bn to save millions and almost majority of everyday American Joe’s is hard-to-come by?
I do agree, the benefits and perks of the CEO shut be trimmed, heck the cost of maintaining their lifestyle with Lear Jets, Colarado Winter House and stock options costing millions despite the company going under.
Just last week, the CEO of Alan Mulally was interviewed on Bloomberg and specifically on the exorbitant ‘benefits and perks’ of these Big 3 Senior Management. He was not ashamed not remorseless when he indirectly declined for these bourgeois perks to be trimmed.
On the same week, a US Rep from the House ask these 3 CEO’s wheter they would consider to sell their corporate jets and go back to the Midwest (HQ of the automaker) by public flight. None of them said Yes.
So, if or when the US gov gives the USD25 bn, first thing, remove these big wig suits, kick them out WITHOUT the ‘golden handshake’. Don’t reward incompetency.
No, don’t kill the big 3 or the spilling effect of its closure will impact not only Midwest, but will go on even to Malaysia.
People understand the spillover effect on the overall economy when they go under. But, still, I’m in the favor of them going burst. They represent 45 % (if I’m not mistaken) of total vehicle sales in the US, but auto industry as a whole is a lot more resilient. The Japs, the Germans, the Koreans, French etc will be able to fill in the gaps. After all, this is not the first time this happened. An analogous situation happened in the UK back in 1950. Back then Jaguar, Morris, Bentley, Rolls Royce, BSA were the leading car exporters in the world. Due to inept management, poor quality, wrong policies and shifting consumer preferences, they faltered. British auto industry and economy did not vanish. It suffered but eventually recovered. Notice that the causes for the downfall is similar. History is repeating itself. Go here for more details http://www.autoobserver.com/2007/07/guest-commentary-detroits-big-three-on-the-road-to-oblivion.html
GM is bleeding USD 1billion a month now. Bailout will only defer their eventual demise. Giving good money after bad just won’t do it. Their mgmt is flawed, wrong product lines, leeching trade unions etc. Did you guys know that the top mgmt came by private jets to Washington DC to ask for bailout? That costs at least USD25K just for the trip! They should at least use public air transport to save costs.
These 3 automakers never learn. This is not the first time they are in trouble. Back in 1970 during Opec oil crisis, they were hit hard . Somehow, they managed to survived. Mainly by lobbying in the US gov. to impose quotas on foreign imports. In the early 2000’s they produced fuel guzzling SUVs. Little effort was done on the fuel efficient small cars. When petrol prices skyrocketed, it’s too late to retool to smaller cars. It is their own doing.
They should not be helped. If they managed to recover all by themselves, then it’s good. Otherwise, just let them die. The economy will suffer. Spill effect will be there. But it is a temporary thing.
MisterBenjo said,
November 24, 2008 @ 7:07 pm
If only Proton have a lot of cash reserve,well Mazda seems to be value for money.heeheheh
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Volvo too!!! :-)
alihms said,
November 25, 2008 @ 10:43 am
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Well said! I second that! If the Brit had lost majority of their great automakers in the past and still standing, why can’t the Americans? I know the effect will hit the rest of the world but why want to protect a company that mostly concern making a fuel guzzler cars especially GM and Chrysler (Ford does make few fuel efficent cars)? Let them go bust, let them learn! Over paid and arrogant is major issue in the top management of this big three! All I can say is that, help the workers, use the 25 bil to compensate them get through this recession time. They are the one who really needs the 25 bil!!
i think proton should own them…
imagine proton with V8 engine…
szw said,
November 25, 2008 @ 7:54 pm
i think proton should own them…
imagine proton with V8 engine…
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r u ready to see ur engine exploding !!!!!!!!!!!!!
Xx- Ferrari -xX said,
November 26, 2008 @ 1:18 pm
szw said,
November 25, 2008 @ 7:54 pm
i think proton should own them…
imagine proton with V8 engine…
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r u ready to see ur engine exploding !!!!!!!!!!!!!
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too heavy the car fall apart
i think they need to let them go bust. unions are suffocating every industry they are in. the bail out money should be used to compensate the workers until they re-adjust thier lives and get other jobs. and also the money should be used as incentives for foreign makes to use the factories to make cars as well as a guarantee by the government that unions or workers do not cause any trouble for the foreign company. if these people cause trouble to the foreign company, government steps in and pays the foreign company for thier losses. whether or not GM can make fuel efficient cars is irrelevant because they are still going to bleed regardless how successful they sell thier cars which at this point its impoosible. (sort of like proton’s case). if they bail them out its gonna let them live a few months longer only and the money will mostly go to the executives for the severence packages. and eventually like proton, they will fly thier executives over to DC in private jets again to ask for money in a few months time. ailing companies need to go.
close proton first
The Detroit Three should not be allowed to go bust. They’re the backbone of the American economy. When those three gone, we’ll be heading for a global meltdown far worse than the Depression of 1929. It’s not just America that will suffer. It’ll also be China, India even us.