The auto industry bailout

[nancylebov]

As I see it, there's no substitute for competent management, and a car czar isn't going to supply it.

Ford has managed to not be in desperate straits (how?). I'd like to see Ford, Toyota, and other competent car companies buy GM and Chrysler.

As for the unions, I'm not in love with them-- it seems like a lot of people don't believe it's possible for a union to overreach, and the UAW may have. Still it is not reasonable or decent (as someone on my flist pointed out) to only break union contracts while treating contracts to higher status people as sacred. Did the unions have a responsibility to pressure management to make better business decisions? This is a real question.

Addendum: There was just something on NPR about Ford making the right choice to borrow a lot of money on all its assets when interest rates were low, and that has a lot to do with why the company is in decent shape now. On the other hand, making good cars presumably has something to do with it, too.

I have no idea whether borrowing at that time (one of the other companies sold assets instead) was luck or good sense.

Comments

[xiphias.livejournal.com]

The Ford F-150. It's an actual decent truck that does an actual useful job at an actual reasonable price. It's not an SUV, it's not a concept car, it's not a fancy-schmancy clever thing. It's just a pickup truck that does pickup-trucky things like carry loads in its pickup bed.

[brewsternorth.livejournal.com]

Ford has managed to not be in desperate straits (how?).

I'm not expert, but it may be as simple a thing as observing demand and trying to anticipate it rather than create it: with oil prices (and the output of Toyota et al) being what they are, the smart choice was to retool to make middling-to-small cars rather than keep on churning out the SUVs in large numbers. Time magazine was even observing that Ford has plans to roll out their popular-in-Europe model the Fiesta in America in order to compete with the other small cars by the Japanese makers. GM theoretically has the Corsa, but they've managed themselves into an SUV-sized corner, I greatly fear.

Also, I don't think Ford has quite as many "sub-brands" as GM, so there are fewer plates for the management to spin.

[sethg]

I hear that Ford actually makes comparable-to-Japan-quality cars these days, although as the owner of an old Ford minivan, I'm not willing to lay down any more of my own money to find out if that's true.

And from what I understand, GM's contracts with its dealers tie it to maintaining a large number of brands that effectively compete with each other.

I don't know about Chrysler. Maybe Ford and GM hired all the competent American designers and management.

[chickenfeet2003.livejournal.com]

I don't really understand the value in bailing out GM. If GM goes under because of decades of crap management then other manufacturers will step in to fill the gap. If it makes sense to build the vehicles in North America they will. It's not as if [insert long list of manufacturers] don't already have NA operations.

[madfilkentist]

From what I've heard in discussions (which may or may not be accurate), the car companies elected not to fund deferred benefits (retirement and medical insurance). This might have seemed clever at the time, but it means that employees who are no longer there are costing them now.

[danceswithfat.livejournal.com]

I own a business and it's my job to make it profitable. Everyone in my company gets paid before me. If the company isn't working then I failed and either I am replaced, the company goes under, or another (smarter) business person buys the company at a discount and gives it a go. I think it's a shame that these CEO's aren't subject to the same basic business principals.