Is GM finished?

[balrog666]

You seriously think losing $700 Billion from the economy just made it worse? lol, that's an understatement.

What really made it worse was endless rebates, promotions, and "employee pricing" marketing campaigns instead of dealing with their problems. When you lose money on each vehicle, you can't make it up in volume.

Again, rhetoric:http://query.nytimes.com/gst/fullpage.html?res=9406E5DD1F31F934A25752C0A9659C8B63

Back in 2003 a dollar was worth a dollar sunny. We had 2 GB iPods and we liked it. I had to use a 128 MB flash stick, I could barely fit my resume on it and we liked it. You kids and your wifi, we had ethernet cables all over the house and we liked it. We loved it I tell yah

You guys are a bunch of grumpy old men around here. 2003 was not a long, long time ago. Quit spouting non-sense

Are you just being silly or deliberately spewing disinformation?

GM made a 1% cash-flow "profit" 5 years ago and you think it's something to crow about? Was there a financial crisis then? If not, what was their problem? How did they do 4 years ago? Was there a financial crisis then?

And how much of that so-called profit from 5-years-ago was made by GMAC financing of houses and boats and planes instead of actually producing and selling cars? Do you think that was a successful business plan for GM as an exemplar of the automobile industry?

Get back to me when you have a clue.
.

 

[Furcifer]

What really made it worse was endless rebates, promotions, and "employee pricing" marketing campaigns instead of dealing with their problems. When you lose money on each vehicle, you can't make it up in volume.




Are you just being silly or deliberately spewing disinformation?

GM made a 1% cash-flow "profit" 5 years ago and you think it's something to crow about? Was there a financial crisis then? If not, what was their problem? How did they do 4 years ago? Was there a financial crisis then?

And how much of that so-called profit from 5-years-ago was made by GMAC financing of houses and boats and planes instead of actually producing and selling cars? Do you think that was a successful business plan for GM as an exemplar of the automobile industry?

Get back to me when you have a clue.
.

Tsk. Tsk. You have no idea how big this industry is or what it means to the economy, this we have established.

As far as having a clue, I'm sorry you may think you do but there is no substitution for having a father who worked in the plants for 30 years, and working more than a decade on both sides of the fence. I live and breathe this crap, you have no idea what impact Greenspan's words had on the economy during his reign. It's cute that you think you know what's going on but you don't. And you can't fail me for trying. As they say, ignorance is bliss. Enjoy your bliss.

 

[a_unique_person]

Claims it could be finished by the end of the year.

http://www.lubbockonline.com/stories/110808/bus_353522310.shtml

Just about the end of the year now, but a few more months could be it.

 

[Furcifer]

I don't disagree with anything here, but I made have said what I meant more clearly.

1. Are they really working for a dollar a year or do they plan to sit on nifty stock options that will net them millions of tax payer dollars if a bailout happens?
2. Why aren't they working for a dollar a year now? Their companies are losing money hand over fist and their big sacrifice is to drive to Washington instead of fly?
c. From my perspective bonuses are ethically derived from profits. Bonuses that are derived by burning through capital are morally reprehensible on the part of the company leadership.
d. The boards have continued to support these guys. Why? Do people on the board care about the shareholders or were they just part of this grand scam where the companies were run in a way that was unsustainable while they could scam some bucks out of the company's capital?
e. Since these guys will likely be making zero, and their miscellaneous perks will be eliminated in the event of a bankruptcy, offering to take a dollar a year if it helps them retain a big chunk of their corruptly granted perks doesn't look like a sacrifice at all to me.
f. Where is the evidence that these are the guys to run these companies? In a bankruptcy run by the creditors the qualifications of these guys would be examined carefully and if the creditors thought they can do better with somebody else they'd be gone regardless of what their sweetheart boards had to say. No wonder they'd like to avoid that.

Whatever money these guys manage to scam from their various companies may be insignificant when it comes to looking at the total picture, but guys that have been taking their companies for whatever they could while their companies crash and burn may not be the kind of guys that you want running these companies. What is required here is are tough driven, youngish guys that are going to make hard choices and hard decisions. The time for the guys running the companies now may have passed them by. But maybe some of them are doing OK. Ford seems to be close to a turn around. Maybe he's done well enough to keep his job. But if Waggoner is part of the problem how is that problem going to get fixed if Congress bails out GM?

I kinda agree Dave. The $1 a year is joke. Let's drain their banks accounts, then give em' a buck a year to produce a profit, that's what I'm saying. But I'm less inclined to believe they have as much control over the company as you do.

 

[The Man]

I didn't see the breakdown for Saturn sales in November, but last I heard Saturn was the least affected division in GM.

While waiting for the service we were watching the questioning of the big three by the House Financial Services Committee. As one of the relevant bits of data they periodically flash on the screen it said that part of GM plan was to sell or close the Saturn division. The owner of the dealership was surprised as he said Saturn was the best performing GM division. He also remarked, as one the representative of Connecticut dealerships had remarked, that financing was a big issues and some people with good credit ratings and who wanted to buy a car could not get decent financing (mostly due to high interest rates). He also remarked that there was some talk about perhaps some Chinese investors buying Saturn but that was highly speculative.

By the way, they are covering the new stereo under the warranty that has already technically expired.

I never owned one, but people seem to like their Saturn dealer better than their car?

Not that I am aware of. Never had a problem with my cars or my dealer, not that I’ve ever really known my dealer, Friday was the most time I ever spent with them.

 

[OneShotKi11]

3BodyProblem:

So can we all agree now that in September "The House" cleared GM a Loan for 25 Billion that on Oct 3rd of 08' was signed into LAW by G.W. BUSH?

I just want to make sure that i was semi in the loop and understood what was happening. They did get cleared for a 25 billion loan to help fund the making of hybrid/more efficient cars correct?

 

[Furcifer]

3BodyProblem:

So can we all agree now that in September "The House" cleared GM a Loan for 25 Billion that on Oct 3rd of 08' was signed into LAW by G.W. BUSH?

I just want to make sure that i was semi in the loop and understood what was happening. They did get cleared for a 25 billion loan to help fund the making of hybrid/more efficient cars correct?

Read this, it explains what is current :http://www.bloomberg.com/apps/news?pid=20601087&sid=an8DxW4Ey.oA&refer=home

The $25 Billion is coming from the Energy Department and was to go to the Big Three, not just GM. Pelosi had asked, and rightly so in my opinion, that the Big 3 get part of the $700 Billion bailout money in order to continue to operate. That isn't going to fly. They're going to make the funds they need to operate now available from what has already been allotted.

Here's the thing, people are saying the Government shouldn't interfere and let them fail. The problem is they already have, CAFE was imposed on them by the Government. How is that Free Market? They dictated what they could build. Things were good and we hoped that everything would work out fine, and things were on track despite this. Then it went bad. Why? I don't care what anyone says here about quality or the UAW, the Government screwed up. Had they passively dictated by increasing the gas tax they would have curbed demand (of gas guzzlers), generated income, helped the environment and stopped urban sprawl. But they didn't. They realized the error and tried to correct it by way of the Energy Plan but oops, the economy fell out from under us. Why? Because they let a bunch of bankers get rich making bad loans. And what's to show for that? A bunch of empty homes? That doesn't account for the $700 Billion. It just disappeared. At least when Detroit makes a crappy car you get a crappy car. And a crappy car is better than nothing.

 

[davefoc]

What really made it worse was endless rebates, promotions, and "employee pricing" marketing campaigns instead of dealing with their problems. When you lose money on each vehicle, you can't make it up in volume.


.

Your comments here reminded me a bit of an experience from my life. About twenty years ago, near the peak of the previous real estate boom we bought an apartment building.

We struggled quite a bit initially. As the country moved into recession we tried to maintain our rents which were already high because of last minute raises by the previous owner. We tried rebates and other schemes. What worked in the end was to just admit that our prices were too high in that environment and to lower them. It's a hard thing to lower prices when your goal is to make money but sometimes accepting reality and making decisions about what the situation is rather than what you'd like it to be is necessary.

But I don't think the Detroit automakers have really ever had to confront that reality like every small business person in the country has to. They were insulated with their massive salaries and a sense that the auto industry was immune to the pressures that every body else that does business in the US needs to deal with. Would a typical small business owner have stood by while his capital was devastated by a wage structure that made competitiveness impossible. I think the answer is no for the vast majority of them. But it wasn't the capital of Detroits CEO's that was getting destroyed. That was somebody else's and while the getting was good they were going to get what they could get.

Or they were the stupidest people on the planet, that couldn't figure out that they were just not going to be able to compete with people whose labor costs were a fraction of theirs.

 

[brumsen]

Here's the thing, people are saying the Government shouldn't interfere and let them fail. The problem is they already have, CAFE was imposed on them by the Government. How is that Free Market? They dictated what they could build. Things were good and we hoped that everything would work out fine, and things were on track despite this. Then it went bad. Why? I don't care what anyone says here about quality or the UAW, the Government screwed up. Had they passively dictated by increasing the gas tax they would have curbed demand (of gas guzzlers), generated income, helped the environment and stopped urban sprawl. But they didn't. They realized the error and tried to correct it by way of the Energy Plan but oops, the economy fell out from under us. Why? Because they let a bunch of bankers get rich making bad loans. And what's to show for that? A bunch of empty homes? That doesn't account for the $700 Billion. It just disappeared. At least when Detroit makes a crappy car you get a crappy car. And a crappy car is better than nothing.

I don't really see how:
- having interfered before justifies interfering again (except that it wouldn't be such an exception as some people make it out to be)
- having earlier made the error of actively interfering rather than 'passively dictating' justifies more such interference now
- having bailed out the banking sector (erroneously or not) justifies interference with the automobile industry.

I don't mean to be GM bashing at all, but if we say "learn from past errors" and "don't throw good money after bad" then it seems to me that there's a good case for letting the Big Three die if they must. The job losses will of course cost money, and it will be a difficult time for the auto industry, but the end result is nonetheless likely to be better cars, and healthier economic activity.

 

[OneShotKi11]

Read this, it explains what is current :http://www.bloomberg.com/apps/news?pid=20601087&sid=an8DxW4Ey.oA&refer=home

The $25 Billion is coming from the Energy Department and was to go to the Big Three, not just GM. Pelosi had asked, and rightly so in my opinion, that the Big 3 get part of the $700 Billion bailout money in order to continue to operate. That isn't going to fly. They're going to make the funds they need to operate now available from what has already been allotted.

Here's the thing, people are saying the Government shouldn't interfere and let them fail. The problem is they already have, CAFE was imposed on them by the Government. How is that Free Market? They dictated what they could build. Things were good and we hoped that everything would work out fine, and things were on track despite this. Then it went bad. Why? I don't care what anyone says here about quality or the UAW, the Government screwed up. Had they passively dictated by increasing the gas tax they would have curbed demand (of gas guzzlers), generated income, helped the environment and stopped urban sprawl. But they didn't. They realized the error and tried to correct it by way of the Energy Plan but oops, the economy fell out from under us. Why? Because they let a bunch of bankers get rich making bad loans. And what's to show for that? A bunch of empty homes? That doesn't account for the $700 Billion. It just disappeared. At least when Detroit makes a crappy car you get a crappy car. And a crappy car is better than nothing.

Im still a little confused, after reading that article im still under the impression that they were cleared for the money but instead it would come from Energy Department funds, and not part of the extra large bailout.
Whats the difference might i ask?

To me it doesnt really matter, either way they are getting large sums of money to aid in their propping up. Am i wrong in this assumption? Is there a major difference that i am missing?
Im a youngin so its possible that my ignorance is bliss....

 

[bobrayner]

I apologise in advance for the loser-length response.

Sure India and China may represent huge markets that could save the Big 3, but will they remain open to NA manufacturers? My guess is they will retain their own "oligopoly" and keep the NA manufacturers out. No use making the same mistakes we already made in this industry...

Presumably you haven't seen the streets in China or looked at Chinese market stats. They're full of foreign-designed cars, generally built by local JVs. The Chinese market has been flooded with investment from all the world's major producers during recent years. http://www.platinum.matthey.com/media_room/1063873803.html

Did the Big 3 thrive in that big, juicy, open market? No.
Is it because the rest of the world is conspiring against America? No.

The USA is the world's biggest car market. Why are the Big 3 failing to compete even on home territory, even when there are many American carbuyers (including some in this thread) who would strongly prefer to buy something with an American badge? It must be pretty difficult to fail in a market like that. Are foreigners to blame for this too?

I'm not a proponent of protectionism... I look for local produce and pay a little extra if I have to. The same goes for many of my purchases. I avoid Wal Mart when I can, but I also know they carry more Canadian made products than Canadian Tire. I don't see anythhing wrong with being an informed shopper. That's all I'm getting at.

So you are a protectionist then. But you claim not to be.

But they still have some 8 Billion in the bank from the deal if I'm not mistaken. When I saw the Daimler I lost my noodle. I'll Google this and get back to you, but Chrysler isn't hemorrhaging money like GM, but worse than Ford if I remember.

Really? The Economist disagrees.
"If GM’s prospects are likely to remain clouded even if it gets the money it is asking for, Chrysler’s are even worse. It says it needs $7 billion to be able to continue trading after the end of this year."
http://www.economist.com/business/displaystory.cfm?story_id=12725106

According to "free marked teori" anyone will be better off buying its cars from the best and cheapest producer.
And there is no penalty to national economics from loosing your industrial base.

Have you heard of comparative advantage? The USA (and any other country) would be best off if it concentrated on making the goods & services that it was good at, rather than arbitrarily subsidising industries just because a foreign competitor is doing a better job.

How about your congress/goverment set up an administration to prepare to take over any viable parts after the enivable bankrupcy?

Downside is that bush might be able to pick someone even more incompetent that the current leaders of the big 3.

There are lots of past examples of state-controlled carmakers. They do not set a very good precedent. However, there are still a few of them around the world making copies of 1970s European hand-me-downs.

Any viable part would be capable of standing on their own two feet anyway, without government handouts; the government would presumably take control of a few unprofitable factories, then find itself unable to cut costs or improve productivity, then bailouts would become routine (although less visible). A giant American version of British Leyland? No thanks.

We failed as a society when we allowed others into a vital market, got caught up in the hype, failed to recongnize the importance of keeping it "local" and doomed our economy.

Protectionism, pure and simple.

The Unions biggest playing card was obscene profits made by the shareholders, now that they are losing money there's no more "Robin Hood" effect.

Ugh, i hate to say this but it's "Time for change"

You acknowledge that the industry deserves investment, but it's obscene when people get a return on their investment? You acknowledge that the industry generates huge amounts of value, but it's obscene when the owners earn a lot of money?

If there is a need for cars, someone will fill it.

Downside is that not making any in the us will make the us defecit even worse.
That could hurt the rest of the world economicaly.

Why? The cars would be made in a different factory, that's all. Why would the world suffer?

Not to mention they are aware that its the governments responsibility, not theirs, to invest in the industry.

Why on earth would it be the government's responsibility?

Even if you don't believe Jim Press, the Japanese and the Europeans have heavily subsidized their automakers in the past and continue to do so. Heck, even the US government granted Foreign automakers special status in several states. You don't think this amounts to a subsidy? I can't believe the number of people in this thread that remain ignorant to this fact then chirp "Free Market".

For the last few years the EU/EC has fought very hard to stop unfair subsidies & support by local protectionists - and it's mostly succeeded. I wish other governments could learn a lesson from this.

Why is it the Government's responsibility to do anything? Please, I can't believe members of this forum falling prey to this "Free Market" woo. All of the World's Governments have a vested interest in protecting their industries. Why else would there be a WTO? From grants, subsidies, tax breaks to inflating or deflating their currencies, all of them have and continue to protect their economies by protecting their industries.

As has already been explained to you, the WTO is there to fight protectionism (amongst other things). Protectionism is bad and mercantilism was discredited centuries ago. Unfortunately, many decision-makers (and some in this forum) still believe in it, or cynically use it to win votes, which is why continuing efforts are needed to oppose it - for the benefit of all of us.

Why would you allow one of your biggest industries to fail while blindly following this "Free Market" religion that doesn't exist? Can't you see the problem this ideal is causing, a monopoly on the World's currency?

Perhaps you should learn some basic economics before spewing stuff like this.

I've got a better idea, why not find out where the $700 Billion went and give that back to the average working joe so he can reinvest it in the industries that are failing.

Yes, why don't you find out? It's going to support a failing industry. $700 Billion is not disappearing into a black hole.

You seriously think losing $700 Billion from the economy just made it worse? lol, that's an understatement.

Seriously, you really ought to learn more about it. Try this: http://treas.gov/press/releases/hp1207.htm
The money isn't lost.

Tsk. Tsk. You have no idea how big this industry is or what it means to the economy, this we have established.

As far as having a clue, I'm sorry you may think you do but there is no substitution for having a father who worked in the plants for 30 years, and working more than a decade on both sides of the fence. I live and breathe this crap, you have no idea what impact Greenspan's words had on the economy during his reign. It's cute that you think you know what's going on but you don't. And you can't fail me for trying. As they say, ignorance is bliss. Enjoy your bliss.

Wow. An impressive feat of reasoning.

 

[Furcifer]

I apologise in advance for the loser-length response. [/quote]

No apologies necessary, however a simple "I don't know what I'm talking about" would have sufficed. Now I gotta address this whole page a hooey

Presumably you haven't seen the streets in China or looked at Chinese market stats. They're full of foreign-designed cars, generally built by local JVs. The Chinese market has been flooded with investment from all the world's major producers during recent years. http://www.platinum.matthey.com/media_room/1063873803.html

Did the Big 3 thrive in that big, juicy, open market? No.
Is it because the rest of the world is conspiring against America? No.

Assuming I am fully aware that Buick is the number one selling brand in China, which I am, your presumption is unfounded and wrong. Even though GM has apparently dominated the market there they don't seem to turn the same profit. I wonder why?

The USA is the world's biggest car market. Why are the Big 3 failing to compete even on home territory, even when there are many American car buyers (including some in this thread) who would strongly prefer to buy something with an American badge? It must be pretty difficult to fail in a market like that. Are foreigners to blame for this too?

Is it? Do you have anything to verify this? Between the US, China and Japan I'm not sure where they rank these days. Anyways, it's about economics and positioning and being in the right place at the right time (ask Bill Gates).

Let me give you something to consider. I propose a sea race around the world, the fastest one wins. That's all the info you're given. You and I begin to build our boats, as do others. You build an offshore, I build a triple hull sailboat and buddy builds a 250 foot freighter. You and I get our boats built in roughly the same time, me 1 month ahead of you while buddy is still in dry dock. I start the race and lead for 6 weeks until you start the race and 2 weeks into yours, you're 1000 miles in the lead mind you, when the race committee announces you can't consume more than 15000 gallons of fuel for the entire race. You realize all of a sudden you've gone through 10000 and he only way you can make it is to catch a current and drift far enough to hope you can turn em' back on. I'm on sails so I make ground quickly. I just get in the lead when the committee announces that in addition to the 15000 gallon fuel restriction you have to carry 200 ton of cargo. Buddy, just got his 250 footer in the water and is loaded with 200 ton of Idaho's finest corn, but he realizes the fuel restriction means he can only travel 25 nautical miles a day at 1/16 throttle to meet the restrictions. They further announce that in order to meet the load requirements, a second or third vessel can be enter, as long as the restrictions for fuel and load are met. I can build 15 more vessels but I'm limited by time in doing so. You realize you need 6 more laden off shores, running at idle, to make it happen. You start building you boats and your tech team tells you new high efficiency diesel is coming, better mileage. You can continue with the boat you have in production, or scrap it and wait. They're not sure when exactly the new technology is coming but they know it's soon. Another bright tech says that they may be able to adapt the old design to the new technology even if you go with the original, but no guarantees. The race committee then announces that anyone can take advantage of the new technology, but they have to build it and ship it to the boats already in the race. Further, they have to consider the fuel used in the production and transport be factored in to the trip usage. But, the new technology means being able to burn corn based bio diesel. So if you're loaded with corn, you can convert some of the load on to fuel.

Are you confused yet? I am. I have no idea what build or who has a chance of winning. Me, you, the guy in the freighter? who knows. Maybe it was the guy who didn't even what was going on and entered late and on a whim that ends up having the best chance. This market is big and changes faster than most can react. Does this kinda explain how complicated it can be?

So you are a protectionist then. But you claim not to be.

My free will to protect a local business is different than the Government mandating I buy 10.54% local produce. I make the choice of what I am willing to sacrifice to keep a neighbour employed or what I'm not.

Really? The Economist disagrees.
"If GM’s prospects are likely to remain clouded even if it gets the money it is asking for, Chrysler’s are even worse. It says it needs $7 billion to be able to continue trading after the end of this year."
http://www.economist.com/business/displaystory.cfm?story_id=12725106

Fair enough. This goes to show you how fast things can change in this business.

Have you heard of comparative advantage? The USA (and any other country) would be best off if it concentrated on making the goods & services that it was good at, rather than arbitrarily subsidizing industries just because a foreign competitor is doing a better job.

And that would be? This kinda of naive thinking will thrust the US into depression.

There are lots of past examples of state-controlled car makers. They do not set a very good precedent. However, there are still a few of them around the world making copies of 1970s European hand-me-downs.

Examples please? I'm thinking VW and Ferrari...

Protectionism, pure and simple.

No, not if we consider what other governments have done to promote their own industries in this economy.

You acknowledge that the industry deserves investment, but it's obscene when people get a return on their investment? You acknowledge that the industry generates huge amounts of value, but it's obscene when the owners earn a lot of money?

When it becomes disproportionate, as it has, yes.

Why? The cars would be made in a different factory, that's all. Why would the world suffer?

Why are they now? I'm not and expert, but as the US economy goes so does the World.

Why on earth would it be the government's responsibility?

They took and now they need to give. Reparations.

For the last few years the EU/EC has fought very hard to stop unfair subsidies & support by local protectionists - and it's mostly succeeded. I wish other governments could learn a lesson from this.

It's about time, but the damage has been done. As a lesson of what not to do and how not to handle it I think the lesson has been learned.

As has already been explained to you, the WTO is there to fight protectionism (amongst other things). Protectionism is bad and mercantilism was discredited centuries ago. Unfortunately, many decision-makers (and some in this forum) still believe in it, or cynically use it to win votes, which is why continuing efforts are needed to oppose it - for the benefit of all of us.

You're confused, re-read what I posted.

Perhaps you should learn some basic economics before spewing stuff like this.

Perhaps you need to realize the implications of a very few having all the money and what a monopoly is. If the "Free Market" results in 1 guy owning my fuel, 1 guy owning my food, 1 guy owning my shelter and 1 guy owning my fre time, that's bad. The stratification has gotten worse, when will it end?

Yes, why don't you find out? It's going to support a failing industry. $700 Billion is not disappearing into a black hole.

A failing industry based on speculation in regards to debt. I want something tangible, call me crazy.

Seriously, you really ought to learn more about it. Try this: http://treas.gov/press/releases/hp1207.htm
The money isn't lost.

It isn't lost? OK, well then the Reserve should have just collected it then...

Wow. An impressive feat of reasoning.

Yah, my lifelong experience and your.... well nothing really, you've got no clue. You have no involvement, never worked directly in the industry and don't know the difference between Final Car and Trim. I owe some of my well being to the UAW and some to management and you couldn't find your "B" pillar with both your hands. Hey listen, I'm not an ass, you tell me the differences between ISO 9001 and TS 16949 and I'll admit you know your manufacturing and i should shut up. In fact, I'll put you down for some PPA and send you to UAT. If you identify 4 of the 5 S's and send me a copy of your Black Belt, well heck, I'll freely elect to be all of your RTR. I mean that, I will represent all of your RTR, for 1 year.

 

[AWPrime]

Perhaps you need to realize the implications of a very few having all the money and what a monopoly is. If the "Free Market" results in 1 guy owning my fuel, 1 guy owning my food, 1 guy owning my shelter and 1 guy owning my fre time, that's bad. The stratification has gotten worse, when will it end?

A good argument for GM to go chapter11 and split off in several companies.

 

[Drewbot]

Artificially raising the price of gas in order to make people buy fuel efficient cars is not the way to go.

I know first hand, that when gas went up, my costs went up, and I am in a non-automotive field. Everything, the price of metal, freight, price of food, lumber goes up when gas goes up. So not only were we paying more for our own personal gas, but everything that gets shipped somewhere gets hit by a price increase.

 

[Furcifer]

Artificially raising the price of gas in order to make people buy fuel efficient cars is not the way to go.

I know first hand, that when gas went up, my costs went up, and I am in a non-automotive field. Everything, the price of metal, freight, price of food, lumber goes up when gas goes up. So not only were we paying more for our own personal gas, but everything that gets shipped somewhere gets hit by a price increase.

There's a difference between raising gas prices and raising fuel prices by way of a tax increase.

Diesel technolgy is now cleaner, more efficient, quiet and less labour intensive to produce. Had the tax taken effect, on gasoline only, there may have been an interim shift in production to diesel cars and trucks. We would have had the technology faster and we would be in a better position to implement bio-diesel. I'm not saying your point is entirely moot, but any increase in cost of goods and services due to a tax increase in gasoline would be artificial. Tankers, freighters and transport all run on diesel, not gasoline (for a reason, $$$) I could further argue, now that I think of it, that the price of diesel would have remained lower had this happened, due to the number of cars using it as well as transport, and the price of lumber, food and steel may have gone down (relative to what it is now).

 

[Furcifer]

Consider this one, 3body: We have no evidence that anyone in middle and upper middle management was willing to tell the GM board that what they were doing was dead wrong, and could force the companies to close their doors. I'm not saying it didn't happen, I'm saying we have no evidence. If you have it, let's see it.

I'm still looking. Last week there was a segment on WDET 101.9 FM my local NPR station, with a guest on speaking to this issue. I can't remember if it was from NPR or local. I've tried to find it in the archives but failed. Here's a few things I've found:

http://www.taxhistory.org/thp/readings.nsf/ArtWeb/5DDB79194769C2BF852574D5003C28D5?OpenDocument

This from the New York Times is good read on the subject:
http://query.nytimes.com/gst/fullpage.html?res=9F0CE7D81331F931A35752C0A965958260
As you can see, in Japan 42% of the cost of gas was tax. I wonder why they built smaller more efficient cars?

Again, TIME magazine, 1993:
http://www.time.com/time/magazine/article/0,9171,977765,00.html
Quote:" Most Detroit auto executives have long been ardent supporters."
I wish I had the source for that quote, but I know it's true.

The gas tax in 1993, at about 14 cents per gallon, was creating something like $600 Million in revenues. Imagine what it could have done if it was increased. In the coming months I think you will see a revival of this "new idea" by the Big 3 and the Obama government.

Here's one that may win me Randi's money: In the very near future Bill Clinton will admit he missed the opportunity to initiate a tax increase on gasoline (this big) and consider it one of his biggest mistakes.

 

[FarmallMTA]

GM's biggest problem is that the word most closely associated with "GM" and their dealers is "liar." It's like an adulterous spouse. Once the trust is gone, it's just gone and it's never coming back.

In 1950 (yes, 1950) my Dad ordered a new 1950 Chevrolet 4dr Sedan, black. The dealership called my dad and said his car had arrived. It was a pea green 2dr sedan. My dad said he ordered a black 4dr and wouldn't accept the green car. The dealer's sales manager pointed out the "fine print" of the contract that said "reasonable substitution due to availability" was permitted the dealer. My dad said, it's not a 4dr. They said, it's a Chevrolet. Take it or lose your 10% deposit. He lost his 10% deposit and bought a used 1947 Ford. The next week, he saw the sales manager sitting beside him at a traffic light in his brand new 1950 Chevrolet 4 dr Sedan, black.

My dad never, ever, EVER has stepped foot in a GM dealership since. Neither have I, neither has my sister. Neither do my children. The same thing has happened all over the US. They killed their own business with their monumental arrogance. Good riddance.

 

[Just thinking]

Farma,

Although I sympathize 200% with your father's experience (I'll tell you about my personal one in a bit), the fault is the dealer's. My mother (just last year) took her 1999 Accord into the dealer from where she purchased it for routine service. They gave her a laundry list of items that needed immediate attention, including a drive shaft that needed replacement --- on a Honda with under 35,000 miles, driven by a 70+ year old woman who I know has never abused it, and doesn't put many miles on it. Also, the transmission screen was pulled and checked and showed that some major work was needed there as well. OK ... she needs the car and we were pretty much at their mercy. After much $$$$ later she drove the car for another 6 months. Then the alternator died at a location near that dealer ... what luck! It was towed there and we had the alternator replaced. After a courteous and free inspection, they told us that from looking at the transmission screen, some major work was needed. (I was present at the service desk when that was told to us.) I asked them to check their records 6 months or so ago --- "We just had that serviced, I told them. It's still under warranty." "Oh," was his surprised reply when he looked it up. "It's OK, then ... we don't have to do anything. It's fine." Moral of story ... dealers suck!

Now, as for my own experience ... let me just say that when I bought a new car back in 1985, I later found out that the transmission on the car was swapped with a used one which had been abused, poorly repaired and then slapped back togehter. . I found out when the trans one day started giving me trouble and I took it in to a very reputable repair garage (not a dealer). He asked me when was the last time I had work done on the tranny. "Never", I said. "I bought the car new and had never had transmission work done on it." Well, he proved otherwise as it had been put back together with improper sealant and had a large amount of it in a big glop still in the housing ... and it wasn't factory OEM material. New car ... never titled. He said this sort of stuff is more common that you would believe.

 

[WildCat]

The gas tax in 1993, at about 14 cents per gallon, was creating something like $600 Million in revenues. Imagine what it could have done if it was increased. In the coming months I think you will see a revival of this "new idea" by the Big 3 and the Obama government.

Which won't do a damn thing to help Detroit. They will still be making crap cars nobody wants to buy, only difference is they'll get better mileage maybe.

 

[balrog666]

Unfortunately, the incoming Energy Secretary, Steven Chu, seems to know nothing of economics. He seems to think that the gas tax should be raised until the price is $9.00/gallon.