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GM CEO Rick Wagoner Resigns -- US Govt Presses On
Here is a copy of a blog post I saw commenting on today's Auto industry bailout situation:
"I think we learned that one president’s deadline is not the same as another president’s deadline. There are two big holes in Chrysler’s plan. One is that if Fiat takes control of 35 percent of Chrysler, Daimler still owns 19 percent. Technically, Fiat becomes a foreign-owned company propped up with $6 billion U.S. dollars. The second big gaping hole in a Chrysler-Fiat plan is that historically, American car dealers have never been able to successfully sell foreign cars. The scrapyard of failed attempts to sell foreign cars at U.S. dealers includes the Nash Metropolitan, Dodge Cricket, Plymouth Sapporo, Plymouth Arrow, Ford Cortina, Ford Capri, Mercury Capri (from Australia), Ford Pantera, Opel, Buick/Opel by Isuzu, and more. Chrysler even attempted to sell Alfa-Romeo’s on their lots in the early 1990s. Of course, some folks will say, “This time it’s different,” which is what they said when Renaults made in Kenosha were supposed to save AMC. Anyone who believes that Fiats made in North America can compete against Hondas and Toyotas made in the US on the sales floor is mistaken. Chrysler-badged Fiats will also have to traverse an enormous speedbump of negative equity branding. There are enough of us who remember Fiats from 20 years ago as cars that never completely passed their reliability tests because they rusted out.
Then, there’s GM, and that situation isn’t much better."
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GM CEO Rick Wagoner Resigns -- US Govt Presses On
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I'm not convinced of the "American car dealers have never been able to successfully sell foreign cars."
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I think what is being referred to is when a car manufacturer tries to supplement the shortcomings of its line by implanting another line in. Bad example but take the Izuzu Passport as an SUV in Honda's line, or the Mitsubishi line in Chrysler.
Nonetheless exactly what is a US car manufacturer anyway, the Detroit auto companies have operations all over the world are they really US, or just had their roots in North America.
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GM CEO Rick Wagoner Resigns -- US Govt Presses On
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....The kicker for me was when the same government who buys $900 toilet seats, destroyed Social Security and mis-managed Medicare into a Black Hole promised to honor and IMPROVE on GM's vehicle warranties. ......
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Mark, my wife and I were talking aout this at breakfast this morning, and she is not into mechanics and cars at all. So she says how is Obama going warranty GM and Chrysler new cars if they are going under?
So I explained to her Obama is not going to attempt to keep the Dealer Service Network in place. What he probably means is that he will do what GM did in the 1970's when GM quality was at an all time low (now is the low point for GM as a comapany). To get consumers to buy they offered extended warranties. The gotcha then as it is now is that these were third party Auto Maintenance insurance contracts that would provide for reimbursement under the condtions of the contract. This might mean that you had go to a certain mechanic etc..
Would it not be funny if the insurer for the GM and Chrysler new car warranties was AIG. Heck why don't we all just pay for it directly out our taxes for the repairs of anyone foolish enough to buy a GM under these circumstances.
How and what are we really saving when we bail out GM and Chrysler. So lets say we let them go, won't the jobs just shift to Honda, Toyota and others. Sure expensive parts are built in Japan. If we were concerned about the engine import why not put a tarriff on Engines so that components were manufactured here.
As I see it the Detroit bail out is really about the Unions and the jobs in the states where GM and Chrysler operate. Cars wear out they don't last forever, someone has to build them, and they need to be cars that people want to own. Trying to coerce the consumer to buy a certain brand is ludicrous.
Dennis
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