Want to see the future of the automobile industry worldwide? Check out the multitude of news from the LA Auto Show on the West Coast, comprehensively reported here on Straightline.
Want to see the future of the Detroit Big Three? You gotta go to Washington, D.C. where the politicians, lobbyists and other snake oil salesmen are desperately trying to figure out a way to "bailout" Detroit's Big Three.
I posted a big Special Edition yesterday. There were so many updates to that post yesterday, however, that it seems wise to post a second Special Edition to cover the updates likely to flood in today.
So, let's start with the Auto Prophet who surveys the political landscape that provides the context for the bailout debate. You might want to skip this one if ... you ....are a Republican. Related posts from AP here, here, here, here and here. Whew, this guy is good!
Over at The Weekly Standard Blog, you will find a dclaration that it's over for Detroit. In fact, it was over the minute Wagoner, Mulally and Nardelli stepped onboard their corporate jets to fly to DC.
The CarGurus Blog is thinking band-aid.
Meanwhile, brevity remains the soul of wit for Cars! Cars! Cars! when it comes to the bailout, but check out the reader comments.
And GM Fastlane is happy with some reporting yesterday by the hometown newspaper.
Some very revealing data here.
More,much more probably, to come today as the debate progresses here in your nation's capital.
UPDATE: Legal Blog Suggests 50% Paycut
Jim Lindgren at the Volokh Conspiracy offers a critique of bailout proposals, including this observation: "If a business is failing, union auto wages should be priced well BELOW what nonunion auto workers make, not well ABOVE what nonunion workers make. So until the unions have given back everything above the market value of their labor, they haven't given back nearly enough. I don't know enough about what goes into the $72 compensation rate, but perhaps the parties should consider having all current employees, both management and union workers, take a 50% pay cut."
UPDATE II: Mrs. Pelosi Gives An Essay Test
Rick Wagoner, Alan Mulally and Bob Nardelli have until Dec. 2 to turn in their paper explaining what they would do with $25 billion if Congress agrees to give it to them. Edward Neidermeyer at The Truth About Cars explains.
Not sure why I missed this one but Rick Moran at The American Thinker posted a fine analysis over the weekend. A H/T to Joe Sherlock at The View Through the Windshield for putting me onto it.
Not directly linked to the bailout but definitely related news: Rep. Henry Waxman, D-CA, is replacing Rep. John Dingell, D-MI, at chairman of the House Energy and Commerce Committee that writes most legislation of interest to the auto industry. Todd Lassa at Motor City Blogman calls it "piling on the automakers."
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People need to stop making the corporate jet thing the headline. Yea, it was stupid. Go ahead and make provisions about CEO profits and luxuries then move on.
If you're for or against the bailout, we need to stop talking about the CEO's jets and start talking about the millions of people it will affect.
P.S. This isn't directed at Edmunds specifically, but the media and commenters in general.
I think the jet thing, while heavily exposed, is precisely the problem. These guys have the "I'm just one man" mentality. They think their singular impacts are not worth noting.
But the reality is that $20K is more than most GM dealers will make today, this week, or possibly even this month. What this comes down to is a resentable standard of living that CEOs have. It's incredibly frustrating for a line worker to see his boss living well without a care in the world when you're not sure if you'll be employeed tomorrow.
It seems odd to me that the automakers were hit for failing to build more fuel-efficient cars. The current offerings seem competitive in that area.
My experience has been that the American companies have been fighting a perception battle since they started launching good cars (Malibu, CTS, Lambdas, etc). Most folks don't seem to know that the new versions of these cars are comparable to others on the market. Honestly, I hope they get the bailout money because losing that many jobs would be a catastrophic loss to our economy.
"It seems odd to me that the automakers were hit for failing to build more fuel-efficient cars. The current offerings seem competitive in that area. "
The media isnt concerned with facts. Now every analyst in DC and NY is touring the talk show circuit spewing lies and pushing myths. Congressman are simply stupid. The hearings we have just witnessed only prove that they are less intelligent than the supposedly inept Big 3 CEOs they are attacking.
The Cobalt and Focus are about as efficient as the civic and corolla.
Malibu and Aura are more efficient than Camry or Accord. Soon the Fusion will be too.
Detroit's pickups are more efficient than Japan's models
The most efficient compact SUVs are the Vue and Escape hybrids.
The private jet criticism would be OK if it wasnt coming from politicans in DC who get wined and dined by lobbyist on a regular basis. They may not have private jets but they know all about enjoying the luxuries of life on other people's dime. Wagoner should have said "I would be willing to work for your salary" when asked about working for $1. The people that allowed this mess to happen feel that they are doing a great job and are trying to outdo one another in their grandstanding attacks on Detroit. HAs anyone in congress taken a pay cut as a result of the financial crisis? Has anyone stepped down? How is Dodd critiquing the competence of Detroit after his failures with regards to the mortgage mess and lack of regulation of the financial industry?
Crisis averted.
http://finance.yahoo.com/news/Bipartisan-group-works-to-apf-13633769.html
Not much in the way of details, yet.
The corporate jet is symbolic, just as the UAW officials hanging out in a Miami resort to get their members a fifteen cent an hour wage. All sides in this sorry episode are to blame.
The question is, now what? I think we try something that hasn't been tried in over twenty years, free market economics. Clearly all three of these dinosaurs are not going to survive. They have been told by the government what kind of cars to sell and now make shitty products at high prices and guess what? They don't sell.
I would allow them to consolidate under chapter eleven into one company. US Auto or Crap Inc. Whatever name you choose. Then scrap the whole management, get rid of the UAW contracts and put the company up for sale. Then an American free market person can come in and run the company the way they want, it can turn a profit, create a new union that reflects 2008 economics and not 1938. Then we may have something worth worrying about.
Otherwise they should go the way of horse and buggy industry and let some new blood start some new companies.
sabastian, I think it's even worse than you state. They're facing the perception that they used to make low mpg junk.
In the 80's and 90's the Taurus was deemed more reliable than the Camry or Accord. No one will believe it.
In the 90's you could buy a Ford (designed by Ford, assembled by Kia, sold as a Ford) that was rated at 42mpg on the highway.
Toyota has more SUV models than Ford. Ford only has more pickups than Toyota and Nissan if you count their HD trucks.
VW has an ugly history of reliability problems, but they're taking over the world! Nissan is the worst of the major Japanese brands, but their numbers are way above average. Both these companies rebadge (or soon will rebadge) Chrysler, yet Chrysler is doing the worst of any US automaker.
The examples go on. Was there junk? Yup. Did the Japanese have junk too? Yup, different junk. The problem has always been a media perpetuated perception issue.
It's all crazy.
The jet is a symptom of the real problem - that business want to continue "business as usual".
Those days are gone, history. None of the Big 3 will ever be profitable if they continue enjoying these luxuries.
Same for AIG, for that matter. Multi-million dollar retreats with free massages can no longer be a regular part of their MO.
Wake up. Seriously.