Bob Moore Closing Dealerships

[soonerguru]

Kerry fails to mention that both Toyota and Honda are subsidized by the Japanese government, which goes a long way toward ensuring their profitability. GOP always wants to blame labor, always and forever more.

[Kerry]

How does Japan subsidize Honda and Toyota (and why would they)? Those companies are very profitable so there would be no reason for the Japanese government to give them money. However, it doesn't matter anymore as the "evil" Bush just gave them $17 billion today.

My favorite quote from your post is that the subsidy goes along way ensuring profitability. Do you even know why someone would receive a subsidy? I can tell you that it isn't because the company is profitable. In fact, subsidies cause companies to become unprofitable, just look at Amtrak. I suggest you find a copy of "Trade Wars: Japan vs. The West" and learn a little bit about international trade and which government has the most protectionist laws on the planet. It is the good old USA and look what it has given us - a country that can't compete with foreign manufacturing even though those foreign companies use the same US labor.

[Jon27]

Ok, so the government is handing out money to GM and Chrysler. While I'm still awaiting the answer on the Japanese subsidy, will this make GM and Chrysler profitable?....NO.......It's funny how now all of the sudden, Ford doesn't need the bailout. They are going to be fine, but the other 2...probably not.

Here's what I think needs to happen, and it's just my opinion:

1. GM and Chrysler need to merge.
2. File bankruptcy
3. Get rid of everything but Chevy, Cadillac, and Dodge.

This may give them a chance. I've been reading this forum, and finally decided to comment. It's a good discussion! While I disagree with a lot of Curt's posts, I applaud his work in the alternative energy realm. Also, Curt, you have made some really good points, and I hope my disagreement doesn't offend you.

Regardless of the company, we need to get off of oil, and get to batteries, fuel cells, or whatever. I think if my opinion would go forward, and this new company was the first to mass produce a line of alternative energy vehicles, we would not need to worry about the auto industry in America.

I don't want to see GM/Chrysler fail, or anyone to lose their job. What I want to see is innovation rather than complacency.

[windowphobe]

Well, it's not that Ford is in such wonderful shape, but they arranged for some serious financing before we wound up with Carpocalypse Now, and they're not going to run out of cash in a month or two. (On the other hand, they've got liens on everything up to and including the Sacred Blue Oval.)

And since Ford is still largely a family business, it seems reasonable to conclude that the family doesn't want to turn over a whole lot of control to a bunch of ill-informed Washington yahoos.

[Kerry]

I love how everyone complained about auto execs flying private aircraft but why wasn't the UAW forced to get rid of their golf course?

Black Lake Golf Club, Golf Northern Michigan, Onaway Michigan

Here is a little quote from their fee schedule that I love.

UAW members receive a 20 percent discount.
UAW retirees receive a 30 percent discount.

That pretty much sums up auto industry problem.

[Kerry]

And where does some of the other Union money go...

Here: UAW - Where We Are - Onaway, Michigan

and some people still can't figure out why Toyota and Honda can make a car for $2,000 less than GM. I would love to see some the classroom material provided at this "education camp". I also wonder if they have a large supply of cool-aide. I do love the fact that money to run the facility comes from the interest collected from the Strike Fund (and now the US taxpayers). Perfect!

[bombermwc]

And hey folks, think of this as a little brain teaser. The Prius only makes Toyota about $100 in profit. The cost of the batteries is still so high that they can't get any more than that out of it with current technology. So if Toyota has a car with such an incredibly small profit margin, yet they can still absorb that and be the #1 worldwide company, what possible excuse can the U.S. makers use that warrants their current plans and contracts? Do you think Toyota workers have their own golf course? Um, no.

[BradR]

i'd say because for every prius they sell, they probably sell 100+ camrys or corollas

[bluedogok]

The Big 3 workers don't have their own golf course, their union management does, that's a big difference since the UAW is a separate third party. Toyota does own the Fuji Speedway complex with the adjacent Gotemba Golf Club.
Google Maps - Fuji Speedway

[Kerry]

Just where do you think the UAW gets its money from? The get it from Union employees. It is called union dues and if you pay them you are a union member. In short - the Unon is the rank and file union due payer. The golf course is open to all union members, both active and retired. The public can also play there if there is an opening.

Now to your Toyota comment. Toyota owning a racetrack is not the same thing. Now if the employees of Toyota owned the track, and Toyota was going out of business due to the inflated union wages and benefits, then you might have a point. Just go to the UAW web site and see how they sale Unionism; high wages and even higher benefits. It might seem great for the employee but not so great for the consumer of union made products. Of course, it is only great for the employee if the company can afford to stay in business.

Does anyone even remotely think GM and Chrysler can solve all of their problems in the next 90 days? I don't. $17 billion wasted.

[bluedogok]

Do you really think if those union "member" tried to extract their "ownership" out of the country club they would be able to? That is what I mean by the statement that "they" don't own it, management does. The unionists might try to act like "they" have a hand in running the union but they really have no more hand in running a large union like the UAW than an individual taxpayer does with running the gov't. The union members actually serve two masters, the company management and the union management. Toyota owns a racetrack because of the fruits of their laborers, I doubt their employees get as much use of it as the UAW members do with the golf course, they are both nothing more than corporate investments.

Unions exist now for two purposes, to justify their existence and make the people running the union rich, so they are really no different than any other corporate entity. In effect, they have become what they despise (a corporation) but yet have enough people believing their rhetoric.....sounds familiar, doesn't it?

[Kerry]

Sorry Bluedog - I misread your post. You are correct that if one of rank and file union guys showed up and ask for his share of the profits it wouldn't get very far. On the Toyota thing though, I am sure the track in some way ties into the marketing efforts of Toyota, and marketing generaly results in more people buying your product. I would argue that a racetrack owned by Toyota does more to promot the purchase of Toyota vehicles than a golf course does to promote the purchase of union made cars.

[bluedogok]

I agree that a racetrack more "directly" helps Toyota in marketing and R&D, they did have an F1 race this year instead of Suzuka. Honda owns the Twin Ring Motegi track which has held IRL races and I think they had some kind of Nascar race (not sure whcih class or if it was just and exhibition) there in the past few years.

I was just trying to say that I am sure the UAW viewed it as an investment just like any other fund manager, just like CALPERS (California Public Employees Retirement System) own many office/warehouse buildings in OKC as investments among their many other properties. I am sure the UAW uses it for "marketing" purposes as well, well probably more in the line of lobbying. So it is too much for them to own it, especially if it would be in a desirable area and could generate a profit from a sale.

[Curt]

Ok, so the government is handing out money to GM and Chrysler. While I'm still awaiting the answer on the Japanese subsidy, will this make GM and Chrysler profitable?....NO.......It's funny how now all of the sudden, Ford doesn't need the bailout. They are going to be fine, but the other 2...probably not.

Here's what I think needs to happen, and it's just my opinion:

1. GM and Chrysler need to merge.
2. File bankruptcy
3. Get rid of everything but Chevy, Cadillac, and Dodge.

This may give them a chance. I've been reading this forum, and finally decided to comment. It's a good discussion! While I disagree with a lot of Curt's posts, I applaud his work in the alternative energy realm. Also, Curt, you have made some really good points, and I hope my disagreement doesn't offend you.

Regardless of the company, we need to get off of oil, and get to batteries, fuel cells, or whatever. I think if my opinion would go forward, and this new company was the first to mass produce a line of alternative energy vehicles, we would not need to worry about the auto industry in America.

I don't want to see GM/Chrysler fail, or anyone to lose their job. What I want to see is innovation rather than complacency.

I agree with your post here and I am not offended by your disagreement...

Thanks for your input

[Curt]

Amen on that. Running to the government should be the last line of defense, not the first or second. When I see the Renaissance Center in Detroit up for sale then we can talk about a bailout. Oklahoma County should have held off on buying the former GM plant. They could have got it for half price now.

Agreed...When your financially in trouble you sell off everything you dont need before running for help...

When I was at my lowest point in life I had to return pop bottles to get five bucks for dinner...That was 25 years ago and I am doing better than most people now..

But I never asked for help I knew I had to pull myself out and I did..

[Curt]

Ford's current state? Ford is the only domestic manufacturer not asking for a bailout. The Ford CEO said their restructuring plan is on track and they have enough funds to go into 2010. It is GM with there multiple brands and privately held Chrysler that are in trouble.

Right again...

You must be sitting in on the same meetings I do at work..Ford will be fine...not GREAT...but fine by the end of 2009 and expected to return to profitablilty heading into 2011..

Although it's a ways off I have the opportunity most people dont...working on the prototypes and seeing them everyday Ford has good intentions and all they need is public support..

Thats going to be hard for any of the Detroit 3 as they did put out junk for so many years and now they have to ask...beg..for forgiveness..

[southernskye]

.. the long history of government subsidies doled out for
foreign-owned auto plants...

1980: Honda, Marysville OH, $27 million*
1980: Nissan, Smyrna, TN, $233 million**
1985: Toyota, Georgetown, KY, $147 million
1985: Honda, Anna, OH, $27 million*
1986: Subaru, Lafayette, IN, $94 million
1987: Honda, East Liberty, OH, $27 million*
1992: BMW, Spartanburg, SC, $150 million
1993: Mercedes-Benz, Vance, AL, $258 million
1995: Toyota, Princeton, IN, $30 million
1995: Nissan, Decherd, TN, $200 million**
1996: Toyota, Buffalo, WV, more than $15 million
1999: Honda, Lincoln, AL, $248 million
2000: Nissan, Canton, MS, $295 million
2001: Toyota, Huntsville, AL, $30 million
2002: Hyundai, Montgomery, AL, $252 million
2003: Toyota, San Antonio, TX, $133 million
2006: Kia, West Point, GA, $400 million
2006: Honda, Greensburg, IN, $141 million
2007: Toyota, Blue Springs, MS, $300 million
2008: Volkswagen, Chattanooga, TN, $577 million
* total of direct subsidies to all Honda facilities in Ohio** includes about $200 million for expansions of Smyrna and Decherd plants. List does not include joint ventures with U.S. companies... KansasCityStar

data from GoodJobsFirst

[Jon27]

.. the long history of government subsidies doled out for
foreign-owned auto plants...

1980: Honda, Marysville OH, $27 million*
1980: Nissan, Smyrna, TN, $233 million**
1985: Toyota, Georgetown, KY, $147 million
1985: Honda, Anna, OH, $27 million*
1986: Subaru, Lafayette, IN, $94 million
1987: Honda, East Liberty, OH, $27 million*
1992: BMW, Spartanburg, SC, $150 million
1993: Mercedes-Benz, Vance, AL, $258 million
1995: Toyota, Princeton, IN, $30 million
1995: Nissan, Decherd, TN, $200 million**
1996: Toyota, Buffalo, WV, more than $15 million
1999: Honda, Lincoln, AL, $248 million
2000: Nissan, Canton, MS, $295 million
2001: Toyota, Huntsville, AL, $30 million
2002: Hyundai, Montgomery, AL, $252 million
2003: Toyota, San Antonio, TX, $133 million
2006: Kia, West Point, GA, $400 million
2006: Honda, Greensburg, IN, $141 million
2007: Toyota, Blue Springs, MS, $300 million
2008: Volkswagen, Chattanooga, TN, $577 million
* total of direct subsidies to all Honda facilities in Ohio** includes about $200 million for expansions of Smyrna and Decherd plants. List does not include joint ventures with U.S. companies... KansasCityStar

data from GoodJobsFirst

.

Right, these are probably tax incentives to build a facility in the towns for job creation. These are a product of local and state governments. NOT a bailout for being a bad business from the federal government!! 2 different things. Where are the listings of incentives for GM, Ford, and Chrysler to build factories? I'm sure they have just as many if not more. How much bailout money have the foreign auto makers received because of being unprofitable?

[Curt]

Funny how nobody has a problem with the government subsidized offshore based auto companies but when it comes to the home based companies everyone has a problem..

Good Jobs First: Corporate Subsidy Watch, Case Studies, Industries

[Curt]

.. the long history of government subsidies doled out for
foreign-owned auto plants...

1980: Honda, Marysville OH, $27 million*
1980: Nissan, Smyrna, TN, $233 million**
1985: Toyota, Georgetown, KY, $147 million
1985: Honda, Anna, OH, $27 million*
1986: Subaru, Lafayette, IN, $94 million
1987: Honda, East Liberty, OH, $27 million*
1992: BMW, Spartanburg, SC, $150 million
1993: Mercedes-Benz, Vance, AL, $258 million
1995: Toyota, Princeton, IN, $30 million
1995: Nissan, Decherd, TN, $200 million**
1996: Toyota, Buffalo, WV, more than $15 million
1999: Honda, Lincoln, AL, $248 million
2000: Nissan, Canton, MS, $295 million
2001: Toyota, Huntsville, AL, $30 million
2002: Hyundai, Montgomery, AL, $252 million
2003: Toyota, San Antonio, TX, $133 million
2006: Kia, West Point, GA, $400 million
2006: Honda, Greensburg, IN, $141 million
2007: Toyota, Blue Springs, MS, $300 million
2008: Volkswagen, Chattanooga, TN, $577 million
* total of direct subsidies to all Honda facilities in Ohio** includes about $200 million for expansions of Smyrna and Decherd plants. List does not include joint ventures with U.S. companies... KansasCityStar

data from GoodJobsFirst

Good catch...Thanks

[Kerry]

Usually the kind of incentives mentioned above are tax rebates or credits. Surely all of you can see the difference between this type of assistance and what GM and Chrysler are asked for. The states these companies went to are not out any actual dollars, they are only allowing the company to keep the money the company generated for a period of time. At some point the tax credits or rebates will expire and the companies will start paying into the general fund.

If GM wanted to relocate from Detroit to OKC then they would be eligible for Quality Jobs program and be able to save a few dollars. If Chrysler wanted to move to Chattanooga I am sure Tennessee would come up with huge chunk of change to make that happen. What we have now is the US government paying to keep bad companies afloat.

Maybe the $17 billion would have been better spent paying Nissan, Honda, Toyota, and Hyundai to build new plants in the US. Just look at all the jobs the foreign companies were able to create on just a fraction of that $17 billion. Yet another thing foreign companies can do better than GM and Chrysler.

[Curt]

Usually the kind of incentives mentioned above are tax rebates or credits. Surely all of you can see the difference between this type of assistance and what GM and Chrysler are asked for. The states these companies went to are not out any actual dollars, they are only allowing the company to keep the money the company generated for a period of time. At some point the tax credits or rebates will expire and the companies will start paying into the general fund.

If GM wanted to relocate from Detroit to OKC then they would be eligible for Quality Jobs program and be able to save a few dollars. If Chrysler wanted to move to Chattanooga I am sure Tennessee would come up with huge chunk of change to make that happen. What we have now is the US government paying to keep bad companies afloat.

Maybe the $17 billion would have been better spent paying Nissan, Honda, Toyota, and Hyundai to build new plants in the US. Just look at all the jobs the foreign companies were able to create on just a fraction of that $17 billion. Yet another thing foreign companies can do better than GM and Chrysler.

Just out of curiosity if GM or any of the Detroit 3 were to want to relocate to OKC would they be welcome?

It's just a question kind of polling people and your opinions...

[kevinpate]

I'd say they would be, but since GM shuttered its long term plant, I'd also say a few billion in aid isn't likely to land them here. More's the pity.

[Kerry]

I think GM would be warmly recieved if they moved to OKC. Probably the best thing any of the Big 3 could do is move out of Michigan. Well 2nd best maybe. GM needs to do 2 things; declare bankruptcy so they can get rid of the huge union obligations and close Pontiac, Hummer, Saturn, GMC, and Buick. As for Chrysler, they are privately held by a hedge fund - let them figure out their own problems or better yet - let the UAW buy them.

[Rover]

The confusion on Japanese govt. subsidies is based on subsidies after WWII, the "Sunrise" subsidies. Japanese industry was basically destroyed and this was their way of getting on their feet. In the process, many became very efficient with processes designed to eliminate much waste. And yes, labor, mgmt. et al did it for generally less than many others. But most of all, they just built what the public wanted and sold it to them for less.

For the most part, subsidies weaken, not strengthen companies. The bailouts are rewarding for decades of bad behavior on the part of both mgt. and union and the inablity to be smart designers and marketers of products.