US auto bailout goes ahead!

[prydey]

http://www.news.com.au/business/stor...-31037,00.html

doesn't give them a whole lot of time to sort themselves out.

i was sort of hoping that GM would slide even further but i know its for the best that they keep going. its just the public perception here in australia thinks that ford aren't far away from folding and i just hoped that something would happen to show how much of a desparate situation GM were in. Ford aren't a lot better but sometimes the way the media spins it you'd think it was the other way around.

[BIGJB]

It says they set the deadline to become viable by March 31.....
So if they don't become viable by then the US govt is down by 13 billion dollars.
Do you think the US govt will force them into bankruptcy if they aren't viable by
that time?

[MAD]

Gee, heaps of info and referencing in that "report".

What gets accepted as journalisim these days is beyond a joke. No-body even checks facts, just lay down what they "know" (generally very little), then spin up some assumptions and report it as fact until more facts are discovered, then the process begins again.

I thought this loan was to give them until march to redesign their business model or they wont be given any more money to weather the storm.

[XRtowcar]

Bush said in his speech: The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now -- or the only option will be bankruptcy.

Wonder if the auto unions will keep pushing there luck?

[XRtowcar]

Bush's speech:
http://www.whitehouse.gov/news/relea.../20081219.html

[Romulus]

I heard Rick Wagoner say this bail-out will put GM back as the market leader in the automotive industry. Really Rick? Pardon me, but isn't the reason why you need this bail-out due to the garbage you've churned out over the last 10 years, causing GM to lose sales hand over first and cause GM to bleed from it's rear end?

Interested to note Ford says it does not need assistance from the bail-out.

[FPV8U]

Interisting times ahead, atleast that helps secure Fords situation, if they didn't "Need" the money it should be easiest for them to reach the needed Targets, GM & Chrysler on the other hand are going to be flogging all their money just to reach the goals.

[Scott]

Ford must be spewing.

[XRQTR]

Originally Posted by XRtowcar

Bush said in his speech: The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now -- or the only option will be bankruptcy.

Wonder if the auto unions will keep pushing there luck?

And yet financial institutions get nearly a trillion dollars to prop up the executives holiday spending, here we have potentially hundreds of thousands of jobs in the U.S. alone, possibly even over a million with the trickle down effect.

I really don't understand the way many politicians think, I mean sure these institutions might give them a few mill towards there campaigns but it's still the working shlubs that put them where they are.

[djst]

Basicly GM have gone from 65 Billion in debt to 78 Billion in debt.
Unless they change and start to change fast,the future is still frosty.

[baboon]

Oh no. More debt paying for debt. This wont continue. They are delaying the inevitable. I dont think anyone will want to lend money to america anymore, seeing that they cannot pay it back.

Americas printing presses are going to get more of a caining. Might as well use their dollars for keeping the fire alight or subsitute toilet paper.

I hate to say it but they need to go bankrupt and let someone else run their busineses.

[Dave_au]

Dead cat bounce.

[JerseyVics]

I heard they're hiring in Western Australia... time to come for an extended visit... lol

[Eaturbo]

They had an interview with a guy on SBS yesterday, he has said that GM has lost $70 Billion since 2004. The money is only a short term loan as they have supplier bills to pay and they dont build cars for a month. If the suppliers dont get paid they will go broke too, leaving the other manufacturers to suffer as well. No one even mentioned Ford only GM and Chrysler. They have talked about a Government managed bank ruptcy to guarantee all bills get paid but to weed out some debts but Bush doesn't want to do this as once it's done there's no going back and all the pensions and medical plans go out the door which puts more pressure on the government. Also he doesnt want to hand it to Obama like this as it leaves his hands tied. The loan will buy time for Obama to be sworn in and take over the decision making

[vztrt]

Originally Posted by XRQTR

And yet financial institutions get nearly a trillion dollars to prop up the executives holiday spending, here we have potentially hundreds of thousands of jobs in the U.S. alone, possibly even over a million with the trickle down effect.

I really don't understand the way many politicians think, I mean sure these institutions might give them a few mill towards there campaigns but it's still the working shlubs that put them where they are.

Where do you think the politicians have their money invested?

[Ohio XB]

Originally Posted by 99GHIA

It says they set the deadline to become viable by March 31.....
So if they don't become viable by then the US govt is down by 13 billion dollars.
Do you think the US govt will force them into bankruptcy if they aren't viable by
that time?

The media is already skewing the reports. They have until March 31 to turn in a plan that shows how they will become viable. That is quite a difference. This report is wrong.


Steve

[Ohio XB]

Originally Posted by XRtowcar

Bush said in his speech: The automakers and unions must understand what is at stake, and make hard decisions necessary to reform, These conditions send a clear message to everyone involved in the future of American automakers: The time to make the hard decisions to become viable is now -- or the only option will be bankruptcy.

Wonder if the auto unions will keep pushing there luck?

Here again is an example of the government being out of touch with what is going on in the auto industry.


One of the things Bush said the UAW was going to have to do is get rid of the jobs bank. If he was keeping up he would know that the jobs bank program was suspended by the UAW 2 frigging weeks ago.

Part of the problem is that the media hardly gave it ANY coverage. Funny thing is that this was singled out as a HUGE issue and then when the UAW kills it nobody covers it in the news.


There are other demands that Bush, Congress, and the Senate are making that had been met either months or years ago as a regular negotiation between the UAW and the companies in the name of being competitive. They have no clue what's going on.


Steve

[Ohio XB]

Originally Posted by TVS Super Pursuit

I heard Rick Wagoner say this bail-out will put GM back as the market leader in the automotive industry. Really Rick? Pardon me, but isn't the reason why you need this bail-out due to the garbage you've churned out over the last 10 years, causing GM to lose sales hand over first and cause GM to bleed from it's rear end?

Interested to note Ford says it does not need assistance from the bail-out.

Imagine you have a business that you realize has got behind the competition. You are losing sales big time and you need to get better than the competition to first catch up and then overtake them to get in the lead again. The only way to do this is to make your products, that you have been lax on, the best in the business.

So you invest, change the way you do things, innovate new ideas, perform massive R & D, create a new business model, change your operating cost structure, get new improved products ready to release to market.......

....then the economy goes into the toilet. Not only are you unable to start driving customers to your outlets to show them your new products or to consider your products, but even the successful companies that had surpassed you are having a hard time and can hardly sell any products.


This is where GM is and in a larger scale so is Ford. Ford has done more to improve the company and products but the timing of this market crash could not be worse. No one is buying cars (comparably). Hybrids are not moving, econoboxes are not moving, nothing is.


I am not saying that I know GM is ready to fly out of the gates and become the huge icon it once was, but I do know it is NOT the same company people believe it to be. Neither is Ford. Ford is very transformed. It is entirely a different company and there is still more to go.


By the way, GM had sold 2.76 million vehicles in the US to date in 2008 as of the end of November. It's not like the company has shrivelled into oblivion. The Chevy Malibu, in November, one of the worst months for sales to date, had an increase in sales over last year by 31% with over 160,000 Malibus sold to date. This is a great car.

GM also had the number 2 selling vehicle in the country this year, the Chevy Silverado full sized pick-up. The number 1 selling vehicle in the country is the same as it has been for the past 26 years, the Ford F-150.



Steve

[Ohio XB]

Originally Posted by GTP006

Ford must be spewing.

Ford is taking a sigh of relief knowing that their suppliers are not in an immediate threat of shutting down.


.....then they are getting back to business now that this threshold has been crossed.



Steve

[Romulus]

Originally Posted by Ohio XB

Imagine you have a business that you realize has got behind the competition. You are losing sales big time and you need to get better than the competition to first catch up and then overtake them to get in the lead again. The only way to do this is to make your products, that you have been lax on, the best in the business.

So you invest, change the way you do things, innovate new ideas, perform massive R & D, create a new business model, change your operating cost structure, get new improved products ready to release to market.......

....then the economy goes into the toilet. Not only are you unable to start driving customers to your outlets to show them your new products or to consider your products, but even the successful companies that had surpassed you are having a hard time and can hardly sell any products.


This is where GM is and in a larger scale so is Ford. Ford has done more to improve the company and products but the timing of this market crash could not be worse. No one is buying cars (comparably). Hybrids are not moving, econoboxes are not moving, nothing is.


I am not saying that I know GM is ready to fly out of the gates and become the huge icon it once was, but I do know it is NOT the same company people believe it to be. Neither is Ford. Ford is very transformed. It is entirely a different company and there is still more to go.

By the way, GM had sold 2.76 million vehicles in the US to date in 2008 as of the end of November. It's not like the company has shrivelled into oblivion. The Chevy Malibu, in November, one of the worst months for sales to date, had an increase in sales over last year by 31% with over 160,000 Malibus sold to date. This is a great car.

GM also had the number 2 selling vehicle in the country this year, the Chevy Silverado full sized pick-up. The number 1 selling vehicle in the country is the same as it has been for the past 26 years, the Ford F-150.



Steve

Fair points. Do you believe the changes Ford undertook were around the time Alan Mullaly took over? He certainly did a lot for Boeing.

[Luke Plaizier]

Originally Posted by Ohio XB

Ford is taking a sigh of relief knowing that their suppliers are not in an immediate threat of shutting down.

.....then they are getting back to business now that this threshold has been crossed.

Steve

Mate, your posts are awesome. You provide an insight into this situation that we don't get to see from this side of the pond.

Thanks for sticking around.


Lukeyson

[XRQTR]

Originally Posted by vztrt

Where do you think the politicians have their money invested?

Election fund - Retirement fund

Kind of the same thing bud, if you actually think that all the money for an election fund actually goes into an election then, well, ok, but just for you

[XRQTR]

Originally Posted by Ohio XB

. The number 1 selling vehicle in the country is the same as it has been for the past 26 years, the Ford F-150.



Steve

And if the manufacturers and the government didn't always try to bend us over on any car that they bring in for the new car market it would possibly be pretty high up in the scale here as well. Most Ford and Holden ute (pick up) buyers here would jump at a brand new effy for under $40K, shiyit most would still be running to grab anything under $50K.

That's a big part of the problem is the price differences, forget the exchange, we now know it's the bigest load of garbage since they invented bigger bins, the recent $Au parity with the $US just showed how much it doesn't make a difference to the manufacturers. Well going our way anyway, where the VE going to the US sold for much less than it does here in an upspecced version, anything coming this way only kept going up.

Sure it costs money to transport things but anyone that has ever imported a vehicle can tell you that it's nowhere even close to what they make out it costs. If they had a system whereby they were bringing cars like the F-150 for example at a price marginally higher than the U.S. pricing we would buy bucket loads.

But then it all goes back to protecting the domestic markets, didn't someone say, not long ago I think, that we need a free market economy on a global scale in order to survive any future downturns in economies, maybe I was just having a wet dream :

[Ohio XB]

Originally Posted by TVS Super Pursuit

Fair points. Do you believe the changes Ford undertook were around the time Alan Mullaly took over? He certainly did a lot for Boeing.

I work for Ford and let me say....God bless Alan Mulally.


But even Alan will tell you (and has in interviews) that Ford already had a plan in place and was progressing through it. Mark Fields was a big architect of the Way Forward plan. Alan coming to Ford enabled this plan to get executed as it shouldAlan accelerated the plan as well as secured financing to get it done just a few months after he got here. He also made the hard decisions and started closing plants and reducing the work force to size the company to the market. He even changed the company culture. This is probably the most remarkable thing he has done.


Here is a peek back in time to September 2006 outlining the acceleration of the Way Forward plan that was already in place.....

http://media.ford.com/article_displa...ticle_id=24261

One of the cornerstones of the plan was to reduce operating costs by $5 billion by the end of 2008 and we received a message this week that it has happened. This was only possible through concessions and operating changes from the UAW. This is why Ford and the UAW get along well. Like I've said in other posts, it's not the same old Ford, it's not the same old UAW. Times have changed, the media just hasn't covered it. It's not what people want to hear. They want to loathe the UAW and complain about the Big3 based on years or decades old memories.




Here's some of the things outlined in the plan. Remember, this is from 2006...


Ford continues to work with the UAW to improve the competitiveness of its U.S. manufacturing facilities. As a result, new competitive operating agreements have been ratified by UAW locals in 30 different U.S. Ford and ACH facilities – and nearly $600 million in annual savings is projected to be realized.

Today - DONE

Compared with 2005, annual operating costs will be reduced by about $5 billion by the end of 2008.

Today - DONE

Salaried-related costs will be reduced through the elimination of the equivalent of about 14,000 salaried-related positions, which represents approximately a third of Ford’s North American salaried work force. The reduction includes the equivalent of 4,000 positions eliminated in the first quarter of 2006. The additional reductions will be achieved through early retirements, voluntary separations and, if necessary, involuntary separations – with most employees expected to depart by the end of the first quarter in 2007.

Today - DONE, plus additional salaried personell being reduced this and next month, an additional 10%.

An agreement with the UAW will expand early retirement offers and separation packages to all Ford U.S. hourly employees, including Ford employees at the company’s ACH plants. Employees will begin receiving details by mid-October, and those accepting offers will leave the company by September 2007.

Today - DONE

Ford will accelerate by four years its previously announced goal of reducing 25,000 to 30,000 North American manufacturing employees by the end of 2012. The reductions now will be completed by the end of 2008.

Today - DONE, only total hourly employees reduced is more than 40,000.

Product development work is intensifying through 2008 on creating new small cars and even more crossovers that will go on sale in the future. These vehicles will be based on the company’s global vehicle architectures, including “B” and “C” platforms not presently used in North America.

Today - New global Fiesta being tooled for in China for Asia/Pacific market and Mexico for North America market. Already in production in Europe, receiving rave reviews and awards. American plants in the process of retooling for other European Fords including the Focus, 6 vehicles total.



Well, that's enough for here and that's just s few of the extensive list of changes outlined in the Plan. You can read everything, including projected risk factors, at the link. With very few exceptions due to the economy Ford is right on Plan.


Steve

[Ohio XB]

Originally Posted by Luke Plaizier

Mate, your posts are awesome. You provide an insight into this situation that we don't get to see from this side of the pond.

Thanks for sticking around.


Lukeyson

Thank you. Knowing that people like you and others appreciate this info makes me feel my time spent here typing out these "novels" is worth it.


This isn't information that just doesn't get across the pond, it doesn't get across the land here in the US. Why that is, I could give a number of reasons without any proof, but one is that the public has a habit of bashing the Big3 since their quality was lax while the Japanese surpassed them. They like to be on the band wagon with that. I don't understand why they don't take American pride in learning that GM, Ford, Toyota, and Honda have basically the same quality level now, and I know at least for Ford, sometimes surpassing them.


Here's something that you don't hear much of. The Group Vice Pres. of Global Quality, Benny Fowler, has publically stated that Ford is heading towards a quality rating of .8 TGWs (Things Gone Wrong) per vehicle. Right now Ford and Toyota are at 1.2 TGWs across their entire line ups. If you want to know what the separation is between the two you have to go smaller in decimals. Not exact number but a real good representation, Toyota is at something like 1.212 TGWs per vehicle and Ford is at 1.224 TGWs.

Ford worked real hard to get their quality even with Toyota, and Toyota has been their benchmark for a long time. Now Ford intends to BE the benchmark by not just having better quality than Toyota but by having far better quality. With the "new Ford" that exists now I fully expect this to happen.

.....I just hope it gets covered in the news..


Steve

[Ohio XB]

Originally Posted by XRQTR

And if the manufacturers and the government didn't always try to bend us over on any car that they bring in for the new car market it would possibly be pretty high up in the scale here as well. Most Ford and Holden ute (pick up) buyers here would jump at a brand new effy for under $40K, shiyit most would still be running to grab anything under $50K.

That's a big part of the problem is the price differences, forget the exchange, we now know it's the bigest load of garbage since they invented bigger bins, the recent $Au parity with the $US just showed how much it doesn't make a difference to the manufacturers. Well going our way anyway, where the VE going to the US sold for much less than it does here in an upspecced version, anything coming this way only kept going up.

Sure it costs money to transport things but anyone that has ever imported a vehicle can tell you that it's nowhere even close to what they make out it costs. If they had a system whereby they were bringing cars like the F-150 for example at a price marginally higher than the U.S. pricing we would buy bucket loads.

But then it all goes back to protecting the domestic markets, didn't someone say, not long ago I think, that we need a free market economy on a global scale in order to survive any future downturns in economies, maybe I was just having a wet dream :

There's one of the things I love about Aussie slang, if I were to say "effy" here nobody would know what I was talking about.


When I look at the price of the more fun, new Falcons there, and the money people spend on building their Clevelands, I see a definate difference in what the norm is compared to here in the US. You guys pay a lot for cars and a lot to build an engine, certainly much more than average here in the US. I can't imagine what they are asking for for the F-150 there, after RHD conversion as well.


I remember in Japan when Ford would export Taurus' to them there was an additional $6,000 slapped on them as an excise tax. This was back in the early 1990's. Their cars get an excise tax slapped on them when they bring them here but it isn't that much. I think we should charge whatever they charge.

Likewise, how many Japanese manufacturing plants (just autos) are there in the US? 5? 10? How many US auto manufacturing plants are there in Japan?

Zero.

Yeah, free trade.

Here we don't want free trade on a global basis, we want fair trade. What's good for one is good for the other. That way each country trades under the same rules.

On top of that how is a worker that earns $20 an hour supposed to compete with another that earns $1 per hour and/or lives in a depressed society as a nation?


Steve

[StAndArdAU]

really good info to hear, an excellent insight.

cheers.

[RIPGMH]

Originally Posted by Ohio XB

When I look at the price of the more fun, new Falcons there, and the money people spend on building their Clevelands, I see a definate difference in what the norm is compared to here in the US. You guys pay a lot for cars and a lot to build an engine, certainly much more than average here in the US.

I dare say we build a better car bang for buck than the US or for that matter anywhere in the world.

Originally Posted by Ohio XB

On top of that how is a worker that earns $20 an hour supposed to compete with another that earns $1 per hour and/or lives in a depressed society as a nation?

The same way we have always done it - through innovation and quality. Free trade, the global financial crisis they all represent an opportunity to re-evaluate the way we do business.

[Ohio XB]

Originally Posted by RIPGMH

1. I dare say we build a better car bang for buck than the US or for that matter anywhere in the world.




2. The same way we have always done it - through innovation and quality. Free trade, the global financial crisis they all represent an opportunity to re-evaluate the way we do business.

1. I would have to agree. You've got such a small market compared to the US and have to have an "island" mentality. I wish Ford would bring some of your people here and explain how that is done.


2. The latest in CNC machining technology has brought a lot of machining business back from China, even where the work in China was pretty good. The reduced scheduling and logistics makes more sense to machine some stuff here rather than sending it there, when you've got great machines.

But even this type of innovation can only go so far. For example, one can buy a set of 1-2-3 blocks for set-ups in the machine trades....




....from China cheaper than it costs to buy the tool steel to make them here. You can get a pair of these for less than $15 US and they are precision ground to within .0002". In the US you cannot buy and heat treat the steel for that price (even in non-union shops).

How do you compete with that?


Steve

[George1861]

Ford reportedly lined up enough financing a year or so back to make it through '09. They had at least one plant in Japan, but it got bombed in WWII. It was reported during the Olympics that some Chinese businessmen were closing factories in China & moving them to Vietnam to get cheaper labor!