Dire Times for the Auto Industry
- Thread starter AtomicGT
- Start date
tpraceman
THEE GT OWNER
SEOUL, South Korea - Unionized workers at Hyundai Motor Co. have approved a revised wage package following a series of partial strikes that cost the automaker hundreds of millions of dollars.
Strikes have long bedeviled Hyundai. The company's union has gone on strike over pay or other issues every year but one since it was formed in 1987.
http://www.ibtimes.com/articles/20080926/hyundai-motor-union-approves-revised-wage-deal.htm
The grass is not always......
Strikes have long bedeviled Hyundai. The company's union has gone on strike over pay or other issues every year but one since it was formed in 1987.
http://www.ibtimes.com/articles/20080926/hyundai-motor-union-approves-revised-wage-deal.htm
The grass is not always......
tpraceman
THEE GT OWNER
History repeats
Check this out.
1997 Asian Financial Crisis
South Korea
Further information: Economy of South Korea
Macroeconomic fundamentals in South Korea were good but the banking sector was burdened with non-performing loans as its large corporations were funding aggressive expansions. During that time, there was a haste to build great conglomerates to compete on the world stage. Many businesses ultimately failed to ensure returns and profitability. The Korean conglomerates, more or less completely controlled by the government, simply absorbed more and more capital investment. Eventually, excess debt led to major failures and takeovers. For example, in July 1997, South Korea's third-largest car maker, Kia Motors, asked for emergency loans. In the wake of the Asian market downturn, Moody's lowered the credit rating of South Korea from A1 to A3, on November 28, 1997, and downgraded again to B2 on December 11. That contributed to a further decline in Korean shares since stock markets were already bearish in November. The Seoul stock exchange fell by 4% on 7 November 1997. On November 8, it plunged by 7%, its biggest one-day drop to that date. And on November 24, stocks fell a further 7.2% on fears that the IMF would demand tough reforms. In 1998, Hyundai Motor took over Kia Motors. Samsung Motors' $5 billion dollar venture was dissolved due to the crisis, and eventually Daewoo Motors was sold to the American company General Motors (GM).
The Korean won, meanwhile, weakened to more than 1,700 per dollar from around 800. Despite an initial sharp economic slowdown and numerous corporate bankruptcies, Korea has managed to triple its per capita GDP in dollar terms since 1997. Indeed, it resumed its role as the world's fastest-growing economy -- since 1960, per capita GDP has grown from $80 in nominal terms to more than $21,000 as of 2007. However, like the chaebol, South Korea's government did not escape unscathed. Its national debt-to-GDP ratio more than doubled (app. 13% to 30%) as a result of the crisis.
For the full and interesting reading.
http://en.wikipedia.org/wiki/1997_Asian_Financial_Crisis
Check this out.
1997 Asian Financial Crisis
South Korea
Further information: Economy of South Korea
Macroeconomic fundamentals in South Korea were good but the banking sector was burdened with non-performing loans as its large corporations were funding aggressive expansions. During that time, there was a haste to build great conglomerates to compete on the world stage. Many businesses ultimately failed to ensure returns and profitability. The Korean conglomerates, more or less completely controlled by the government, simply absorbed more and more capital investment. Eventually, excess debt led to major failures and takeovers. For example, in July 1997, South Korea's third-largest car maker, Kia Motors, asked for emergency loans. In the wake of the Asian market downturn, Moody's lowered the credit rating of South Korea from A1 to A3, on November 28, 1997, and downgraded again to B2 on December 11. That contributed to a further decline in Korean shares since stock markets were already bearish in November. The Seoul stock exchange fell by 4% on 7 November 1997. On November 8, it plunged by 7%, its biggest one-day drop to that date. And on November 24, stocks fell a further 7.2% on fears that the IMF would demand tough reforms. In 1998, Hyundai Motor took over Kia Motors. Samsung Motors' $5 billion dollar venture was dissolved due to the crisis, and eventually Daewoo Motors was sold to the American company General Motors (GM).
The Korean won, meanwhile, weakened to more than 1,700 per dollar from around 800. Despite an initial sharp economic slowdown and numerous corporate bankruptcies, Korea has managed to triple its per capita GDP in dollar terms since 1997. Indeed, it resumed its role as the world's fastest-growing economy -- since 1960, per capita GDP has grown from $80 in nominal terms to more than $21,000 as of 2007. However, like the chaebol, South Korea's government did not escape unscathed. Its national debt-to-GDP ratio more than doubled (app. 13% to 30%) as a result of the crisis.
For the full and interesting reading.
http://en.wikipedia.org/wiki/1997_Asian_Financial_Crisis
tpraceman
THEE GT OWNER
goverment forced buyout of KIA
Kia's troubles in 1997 helped to push South Korea into the Asian financial crisis, and it was acquired in 1998 by the Hyundai Motor Company. Hyundai resisted this move but were forced by the Korean government to take over Kia as part of the strategy to fix Korea's financial crisis.
http://wikicars.org/en/Kia
Kia's troubles in 1997 helped to push South Korea into the Asian financial crisis, and it was acquired in 1998 by the Hyundai Motor Company. Hyundai resisted this move but were forced by the Korean government to take over Kia as part of the strategy to fix Korea's financial crisis.
http://wikicars.org/en/Kia
BlackICE
GT Owner
WSJ article on the new Ford Mustang. Read the asinine comments. The Mustang is a money maker! If Ford built only the cars these idiots recommend they will be BK for sure! Build what people want to buy, not want eco-nuts or the government want you to build! I wouldn't want to run a business where my majority partner was the Feds! What have the Feds ran that has ever turned a profit?
http://blogs.wsj.com/autoshow/2008/11/18/ford-unveils-redesigned-mustang/?mod=yahoo_hs
http://blogs.wsj.com/autoshow/2008/11/18/ford-unveils-redesigned-mustang/?mod=yahoo_hs
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BlackICE
GT Owner
A Sea of Unwanted Imports
Import auto companies are have problems as well. Car are piling up at lots at Long Beach! The news said that some German and Chinese auto companies are looking for gov. bailouts as well.
http://www.nytimes.com/2008/11/19/business/economy/19ports.html
Import auto companies are have problems as well. Car are piling up at lots at Long Beach! The news said that some German and Chinese auto companies are looking for gov. bailouts as well.
http://www.nytimes.com/2008/11/19/business/economy/19ports.html
Neilda
GT Owner
UK makers (we don't own any serious automotive companies now) are also suffering - particularly the high end Bentley and Aston chaps.
Kingman
GT Owner
Here’s the view of Mitt Romney...
November 19, 2008
Op-Ed Contributor, NY Times
Let Detroit Go Bankrupt
By MITT ROMNEY
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Mitt Romney, the former governor of Massachusetts, was a candidate for this year’s Republican presidential nomination.
November 19, 2008
Op-Ed Contributor, NY Times
Let Detroit Go Bankrupt
By MITT ROMNEY
IF General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
I love cars, American cars. I was born in Detroit, the son of an auto chief executive. In 1954, my dad, George Romney, was tapped to run American Motors when its president suddenly died. The company itself was on life support — banks were threatening to deal it a death blow. The stock collapsed. I watched Dad work to turn the company around — and years later at business school, they were still talking about it. From the lessons of that turnaround, and from my own experiences, I have several prescriptions for Detroit’s automakers.
First, their huge disadvantage in costs relative to foreign brands must be eliminated. That means new labor agreements to align pay and benefits to match those of workers at competitors like BMW, Honda, Nissan and Toyota. Furthermore, retiree benefits must be reduced so that the total burden per auto for domestic makers is not higher than that of foreign producers.
That extra burden is estimated to be more than $2,000 per car. Think what that means: Ford, for example, needs to cut $2,000 worth of features and quality out of its Taurus to compete with Toyota’s Avalon. Of course the Avalon feels like a better product — it has $2,000 more put into it. Considering this disadvantage, Detroit has done a remarkable job of designing and engineering its cars. But if this cost penalty persists, any bailout will only delay the inevitable.
Second, management as is must go. New faces should be recruited from unrelated industries — from companies widely respected for excellence in marketing, innovation, creativity and labor relations.
The new management must work with labor leaders to see that the enmity between labor and management comes to an end. This division is a holdover from the early years of the last century, when unions brought workers job security and better wages and benefits. But as Walter Reuther, the former head of the United Automobile Workers, said to my father, “Getting more and more pay for less and less work is a dead-end street.”
You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th. This will mean a new direction for the U.A.W., profit sharing or stock grants to all employees and a change in Big Three management culture.
The need for collaboration will mean accepting sanity in salaries and perks. At American Motors, my dad cut his pay and that of his executive team, he bought stock in the company, and he went out to factories to talk to workers directly. Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat.
Investments must be made for the future. No more focus on quarterly earnings or the kind of short-term stock appreciation that means quick riches for executives with options. Manage with an eye on cash flow, balance sheets and long-term appreciation. Invest in truly competitive products and innovative technologies — especially fuel-saving designs — that may not arrive for years. Starving research and development is like eating the seed corn.
Just as important to the future of American carmakers is the sales force. When sales are down, you don’t want to lose the only people who can get them to grow. So don’t fire the best dealers, and don’t crush them with new financial or performance demands they can’t meet.
It is not wrong to ask for government help, but the automakers should come up with a win-win proposition. I believe the federal government should invest substantially more in basic research — on new energy sources, fuel-economy technology, materials science and the like — that will ultimately benefit the automotive industry, along with many others. I believe Washington should raise energy research spending to $20 billion a year, from the $4 billion that is spent today. The research could be done at universities, at research labs and even through public-private collaboration. The federal government should also rectify the imbedded tax penalties that favor foreign carmakers.
But don’t ask Washington to give shareholders and bondholders a free pass — they bet on management and they lost.
The American auto industry is vital to our national interest as an employer and as a hub for manufacturing. A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.
In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.
Mitt Romney, the former governor of Massachusetts, was a candidate for this year’s Republican presidential nomination.
Kayvan
GT Owner
- Jul 13, 2006
- 4,782
"Get rid of the planes, the executive dining rooms — all the symbols that breed resentment among the hundreds of thousands who will also be sacrificing to keep the companies afloat." Mitt Romney, NYT
http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1
http://jalopnik.com/5093642/congres...heading-to-dc-begging-for-money?autoplay=true
Thats a tone deaf Marie Antoinette moment....."Let them fly Private..."
http://abcnews.go.com/Blotter/WallStreet/story?id=6285739&page=1
http://jalopnik.com/5093642/congres...heading-to-dc-begging-for-money?autoplay=true
Thats a tone deaf Marie Antoinette moment....."Let them fly Private..."
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Mullet
FORD GT OWNER
Kingman
great article. I could not agree more with what he said (and I have said the labor costs are a MAIN factor in the problems the big 3 are having).
great article. I could not agree more with what he said (and I have said the labor costs are a MAIN factor in the problems the big 3 are having).
Cobrar
GT Owner
Sadly, the dialogue isn't about how to solve the problems, they are about partisan politics. There is no relevance between 1954 and today, Mitt knows better than that ~ and don't you wish times were that simple. BTW, I am sure your dad would be ashamed of you for the attempt at revisionist history. Seems we're still smarting about a bail-out of Wall Street and the auto industry is taking the full front for it.
Mitt, you can buy your new car from China, you'll never work this out in bankuptcy court, or apparently in Washington. And, I am still waiting for a full Congressional review of the past (and future) bail-out for AIG. Can I get a vote on that Mitt?
Mitt said some things that I agree with but his comments about capturing market share is stupid. Real stupid in fact. Trying to get more share of an unprofitable/marginal market is a suckers move.
I know some of the people on this forum have stated as much but it friggin amazes me that too many talking heads, either involved with our Government or the Auto companies, don't get it.
I know some of the people on this forum have stated as much but it friggin amazes me that too many talking heads, either involved with our Government or the Auto companies, don't get it.
tpraceman
THEE GT OWNER
A republican politition can't vote for it if they want to run next election.
The dem's thrive on this stuff, and maybe we can use them to get this help.
It would be nice to use a Dem at their own game:thumbsup
I beleive they are stalling to get the credit to Obama as the savior of the middle class to seal the next election.
If the public swings to support the big 3 the Congress & Senate will jump all over it.
The dem's thrive on this stuff, and maybe we can use them to get this help.
It would be nice to use a Dem at their own game:thumbsup
I beleive they are stalling to get the credit to Obama as the savior of the middle class to seal the next election.
If the public swings to support the big 3 the Congress & Senate will jump all over it.
Cobrar
GT Owner
I agree, what bothers me is the cost for 'decisions' that get made (or not) until this get sorted out. There is a tremendous irony that the 'fairness' in our political process (read: time) is also being exploited as a competitive advantage by other countries.
RV King
GT Owner
Absolutely, were all corporate giants similarly run as Chris' labor force, there might be no need for collective bargaining. Were country X be allowed to set up shop next door to Chris' with an identically performing labor force at 1/3 the cost, and 1/3 the pay to the employee's, Chris is belly up. The minority of Unions in the US perpetuate almost nothing compared to the effects of corporate greed, globalization, and the takeover of our land and business by foreign interests.
What is being asked for in most of these opinions is the creation of a lowering in the standards of living for the average employee. For any who might disagree, form in your own mind how you think the average auto industry employee should be compensated and try living on that for your life time.
Nothing but the highest marks for Chris and his well compensated labor force, and there are many outfits that do indeed take care of their own. I have worked for some! Until there can be another firm method of regulating or oversight on industry, the unions must and will prevail, or indeed the middle class has ended.
Pete S.
Empty Pockets
ex-GT Owner
I just clicked on this thread to post the same thing. 'Can't really argue convincingly against a darn thing he stated for the most part.
So you're telling me you can't argue convincingly that Cerberus Capital Management, an outsider to the auto industry, hasn't effectively run it into the ground even worse?
You're telling me that Ford, with quality admittedly on par with Toyota and Honda, is not investing in quality products? Or GM and Ford both having more hybrid vehicles than any Asian counterpart is not investing in "innovative technologies — especially fuel-saving designs"? Or Ford having 3 hybrid cars that getter fuel efficiency than the comparable Toyota, but even the versions that are gasoline powered still being better by at least 5 mpg?
This is all soundbite bullshit so Mitt can run for President in 2012. It is what it is. He came to Michigan and won the primary singing the praises of the Big 3, and then as soon as he thought he needed to change his political tune to run successfully in four years, he did. Give me a break. Reality does not meet perception here, and people completely ignore it.
Even if you hate domestic cars, just be prepared. We are already in deep economic turmoil. If people completely fail to act, be prepared for a lot more of this:
"Well, I was part of a 33% staffing reduction on top of a 30% reduction they had earlier this year. So if anybody knows of anything in auto safety testing or military testing let me know, it would be greatly appreciated.
I have an Associates in Electronics and a Bachelors in Engineering Technology with 6+ years experience with an OEM and a Tier 1."
"Well, I was part of a 33% staffing reduction on top of a 30% reduction they had earlier this year. So if anybody knows of anything in auto safety testing or military testing let me know, it would be greatly appreciated.
I have an Associates in Electronics and a Bachelors in Engineering Technology with 6+ years experience with an OEM and a Tier 1."