Baseball, Hot Dogs, Apple Pie and Chevrolet
George Bush has joined the malodorous southern Republicans in their heinous attempt to drive US automakers into bankruptcy. From the Washington Post:
An "orderly" bankruptcy may be the best way of handling the struggling U.S. auto industry, President Bush indicated today as he spoke before the American Enterprise Institute, a conservative Washington think tank. However, he said he hasn’t decided what action he will take, the Associated Press reports.
…
Perino said: "The president is not going to allow a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system."
Bush and the American auto killers are flat out determined to drive the country to ruin and kill the last remaining hard industry the nation has, it appears. And they are able to do so because so much of the country is ill informed to completely uninformed about the real nature of American auto.
In the previous post, Marcy described how Bill Ford schooled Larry King on the truth about Ford Motor Company and the backup credit line they wish to have available should it be necessary. Well, now I am here do a little edifying about General Motors.
Remember all that bashing administered by Richard Shelby, Bob Corker, Jim DeMint and so many other union busting types about "the failed business model", the "backwards out of date products", and the failure to transform to a company for the future? It is hard to tell whether this is a knowing lie or just rank ignorance. Time to school the foreign coddling, un-American, Dixie union and industry busters; a southern man doesn’t need them around anyhow.
First off, that plan for a profitable and sustainable future with progressive products that the Congress keeps demanding? It is already in progress; and, hey Republican nimrods, it has been for almost four years, since 2005. The following information bits are excerpted from various GM information releases forwarded to me by a senior executive at General Motors headquarters.
As to the need to shift from huge SUVs and large trucks and towards efficient cars and smaller crossover vehicles, GM is already doing that:
Eleven of our last 13 new or major launches in the U.S. were cars or crossovers.
Take the Chevy Malibu, for example, which has won 29 industry awards so far, including the 2008 North American Car of the Year. And consumers are reacting with enthusiasm… as the Malibu is turning on dealer lots faster than any other midsize car, with retail sales up 125 percent this year.
The Malibu is a great example of our commitment to product excellence, and our ability to achieve it, in consumer’s eyes. You’ll see more of this in our future new car launches.
…
Going forward, GM’s focus on cars and crossovers will accelerate. In fact, 18 of our next 19 new product launches in the U.S. will be cars or crossovers.
As to the efficiency of integrating globally:
The GM Board of Directors approved an all-new next-generation Chevrolet compact-car program.
This car will represent the first U.S. application of our global architecture strategy… an initiative we undertook several years ago, and which will pay major dividends as we fully leverage our expansive car development capability in Europe, Korea, and other locations, to accelerate the shift in our U.S. product portfolio.
This next-generation compact car will be pure Chevrolet in design and performance… it’ll be better equipped than today’s compact car… achieve benchmark safety and quality levels… and most importantly, have a 1.4 liter turbo engine that, when mated with a manual transmission, offers a 9 mile-per-gallon fuel economy improvement over Chevy’s entry in this segment today.
Production will begin in mid-2010, in our Lordstown, Ohio, plant, subject to final negotiations with state and local authorities.
As to integrated production of new engines and power plants for the future:
The GM Board also approved an investment to produce a highly efficient, small-displacement engine module in the U.S. This 1.0- to 1.4-liter engine achieves a superb balance between fuel efficiency and power, and will be the mainstream engine for the next-generation Chevy compact car I just talked about.
This engine is tentatively planned to be produced in Flint, Michigan – again, subject to satisfactory negotiations with local and state authorities.
This new engine module in the U.S. is another good example of the benefits we’re seeing from our global approach to running the business.
When you combine these recent Board actions with what we’ve recently announced, or are already doing… such as:
10 variants of our new six-speed transmission by 2010, which will allow us to produce more than 2 million units annually in the U.S….
expansion of our hybrid offerings to eight vehicles by year-end 2008, more than any other manufacturer… and then to over 20 hybrid vehicles by 2012…
our strategic alliances with two leading cellulosic ethanol startups to help jumpstart much needed growth in biofuels…
delivery of 81 of the 100 Chevy Equinox Fuel Cell SUVs we’re placing with customers to create the world’s largest fuel-cell test fleet…
The Chevy Volt is a game changing vehicle that stands to serve as a benchmark in the transformation of American automobile manufacturing, not to mention the way that American think about their cars. Jane Hamsher has described beautifully what the Volt is, and can mean, as well as what the bull headed ignorant talk of bankruptcy will mean to the project, namely likely death and capture by foreign interests of the technology and market lead. The Volt is not some pie in the sky concept, it is a reality and is at the forefront of GM’s vision for the future:
In other words, the Chevy Volt is a go… and we believe it is the biggest step yet in our industry’s move away from its historic, virtually complete reliance on petroleum to power vehicles.
What we’re saying with this approval is that the GM management and Board believe the technical goals of the Volt are not only achievable, but achievable generally within the time frame we previously outlined.
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We intend to show the production version of the Chevy Volt publicly in the near future, and we remain focused on our target of getting the Volt into Chevrolet showrooms by the end of 2010. We are preliminarily planning to produce the Volt at our Detroit/Hamtramck plant, subject to successful discussions with state and local governments.
And, last, but certainly not least, actions to consolidate production, cut costs, streamline factories, become more modern and environmentally sound and otherwise plan for a progressive future:
On the other side of the mix equation, we need to address the rapid industry shift away from trucks and SUVs. Today, we are announcing our plan to, over time, cease production at four GM truck assembly plants:
Our Oshawa, Canada, Truck Assembly facility, where we build the Chevy Silverado and GMC Sierra pickups – with the timing likely to be 2009.
Moraine, Ohio, where we build the Chevy TrailBlazer, GMC Envoy, and Saab 9-7 – at the end of the current model run in 2010, or sooner if market demand dictates.
Janesville, Wisconsin, where we build the Chevy Tahoe and Suburban, GMC Yukon, and Chevy, GMC, and Isuzu medium duty trucks. The medium duty truck line will cease operation by the end of 2009, and the SUV lines will discontinue production in 2010, or sooner if market demand remains weak.
And Toluca, Mexico, where we build Chevrolet Kodiak medium duty trucks -by the end of this year.
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In addition to these assembly plant moves, we will consolidate the related stamping and powertrain capacity, consistent with the lower market demand for trucks and SUVs. We will communicate the affected plants as these plans are finalized.With today’s announcements, we will be reducing our truck annual assembly capacity by over 700,000 units, and our total GM North America capacity to 3.7 million units by 2010.
We expect that these actions, along with the recently announced shift reductions at two other U.S. truck plants, Pontiac and Flint, will result in an additional GM North America structural cost savings of over $1 billion, on a running-rate basis, by 2010.
This is on top of the approximately $5 billion in savings by 2011 that we announced earlier this year… and also, of course, in addition to the $9 billion cost reduction accomplished over the 2006-2007 period in North America.
In short, all of the things that Washington has been screaming is wrong with Detroit, and specifically General Motors, have either been dealt with, or are in that process as we speak. The constant refrain from Washington is a load of bull to mask their desired to bust unions and, apparently, drive the United States into the severest depression possible. Oh, and relinquish our manufacturing base to foreign interests and make us completely dependent on the the funny money financial services fraud sector that we see collapsing in front of our eyes currently.
It is looking like forty two Senators and George Bush may kill General Motors, and the American automotive industry (including the suppliers, distributors and dealers down the line). This will be an unmitigated disaster for America and its economy. And the entire stated basis for it is a blatant lie.
So if it isn’t the product lines, or the shifts in production, I guess the problem is the labor costs? Don’t blame the auto companies, blame the UAW.
Read more. Post less.
FORD: Well, the UAW obviously has been our partner through all of this. Have they made mistakes and have we made mistakes? Of course. The UAW has come a long way. I think their leader, Ron Gettelfinger, is an excellent leader and he really understands our business. In this last contract, he gave up a lot. He’s also indicated they’re willing to come to the table to do more. And so for anybody to blame the UAW as the sole reason for this is frankly wrong.
Of course Ford is going to say that. They want the money from washington. If they blamed it on the UAW then washington would just go bust the union, and they wouldn’t get their immediate band-aid financing. When contracts are renegotiated with the UAW then they’re going to use this situation as leverage.
There is a reason why toyota, honda, nissan, etc. perform much better. No unions, and lower labor costs! There is also a reason nobody else will loan money to gm, ford, or chrysler other than the government. They can’t be competitive with their high labor costs.
Bust the unions and force the big 2.5 to cut the fat (multiple product lines for the exact same cars, too many plants and not enough demand, etc)
I guess that’s just your way of saying that the UAW already has substantial parity with the wages of foreign owned automakers in the US.
Just because you say the earth is flat, doesn’t necessarily make it so.
If you’ve got a link that says foreign owned vehicles made in the US are better quality than GM and Ford, I am very interested.
Health care, and retirement benefits are the core of the U.S. auto problem, not the wages paid to UAW workers.
As far as unions are concerned, they’re a fact of life. Physicians, lawyers, and accountants are all defacto unions or guilds due to the high barriers to entry to those professions. The point is, in a larger economic sense, they behave/function just like unions.
Detroit actually makes stuff. The reason our economy is so fragile is because of credit default swaps and the housing bubble. That stuff doesn’t produce anything of economic value.
FWIW, I agree the UAW has made some mistakes, along with the marketing people at the big 2.5. It’s our industrial base. If we lose it to the Chinese, which could happen in bankruptcy, we’ll be buying GM cars made in China and they will flatten us.
What history teaches us is that without unions, all the money gets concentrated at the very top. Are unions perfect, absolutely not. They make plenty of mistakes, but democracy doesn’t work without them.
I’m not saying that those foreign cars are higher quality (many of which actually do have lower repair costs over total ownership, can’t link consumer reports), I’m saying that the companies perform better overall.
Those health care and retirement benefits were negotiated by the UAW. Also, yes, wages are roughly 30% higher at a UAW plant vs. a non-union plant.
Nothing wrong with barriers to entry into a profession. Those “guilds” don’t require the hospital, law firm, or accounting firm to pay a minimum amount of benefits or wages. Apples to oranges.
Never said that making stuff in the US was bad. Making stuff that’s too expensive to make than people are willing to pay is bad.
We already buy GM cars made in Mexico and Canada, no flattening going on.
Not all unions are bad. It’s actually the faults of the auto companies for giving in to the demands years ago that put them where they are today. It’s the fault of the UAW for not protecting their members as a whole a renegotiating when the industry became more competitive and the high wages could no longer be afforded. If I worked at a Ford plant I’d be mad at the union for not protecting my job. Better to make $15 an hour instead of $0.
You appear to be blogging in good faith which I appreciate.
When I first read your comments, I thought you were a troll.
Yes, I agree, there’s a lot of blame to go around.
Both the big 2.5 and UAW let themselves get pushed into pressuring Congress to raise CAFE standards, because it helped their profitability.
Your comment on the cost of the Volt above was astute.
Is your biodiesel made from corn?
I’m interested how you found emptywheel’s place.
I “troll” on FDL sometimes, more like playing devil’s advocate over there, but get called a troll.
I’m a car guy so these articles interest me.
I’m a recovering
plantation caucusRepublican.If my Dad knew I was defending the UAW he’d roll over in his grave and kill me.
My spouse has a diesel VW. Claims he can smell the french fries still when he’s caught in a traffic jam.
Only if you’re running on veggie oil. Regular diesel just reminds you of truck stops.
Totally agree
And also agree that when things get too cold, those diesels are slow to start up.
They don’t bargain like the UAW does, directly with the big 2.5, but it is the lawyers and the physicians who effectively limit the number of people who can compete with them. That’s what unions do and when you’ve accomplished that you’ve driven up the prices for your services. Physicians are better at it than lawyers. AMA controls the number of physicians who graduate each year through a sub-committee on medical school education. It used to be called the Liaison Committee on Medical Education. In most states attorneys keep making the bar exam tougher and tougher. It’s a barrier to competition and it works.
I should have mentioned tenured faculty as another example. As corporations integrate vertically and horizontally, workers have to do the same.
That’s just a barrier to entry though, not a barrier to being profitable and efficient AFTER you’ve entered the industry. Still apples to oranges.
icymi, here’s a fine piece by Ian Welsh When China Will Be Able to PWN the US
You are missing a whole level of what’s happening, and a level that is based on ‘bogus wealth’ that was basically invented by optimism, goodwill, desire, greed, and computer programming.
The computer programs were called ‘derivatives.’
Where did ‘derivatives’ come from…?
Remember ninth grade algebra? Where you ‘derived’ a value from a mathematical formula? Well, some of those former students grew up, went to Wall Street, and basically started ‘mathematically calculating risk’. They called those calculations — or math formulas — ‘derivatives‘.
If you gut through the bullshit, “derivative” is just a fancy name for ‘math formula’.
But these were evidently complex math formulas, created and invented by The Very Brightest Minds, and sold by people in verrrry expen$ive suits, who thought they ruled the universe.
Basically, it appears that those Wall Street Masters of the Universe were making million$$$$ by hawking glorified math formulas.
But selling them only once didn’t generate the profits they were after.
They “swapped” them multiple times, in multiple ways, and each time they got paid fees, often a percentage of the ’swap’.
And then they started ’swapping’ formulas that were ‘derived’ from the RISK that companies like GM could go bankrupt. The odds seemed small, so they didn’t pay too much at first. But then, someone ’swapped’ that derivative, and the odds became… enticingly appealing — if you can push GM into bankruptcy, you stand to make gagillions of dollars, and to hell with the US because you’re a Private Equity firm, or a global investor who doesn’t give a rat’s ass about national boundaries, or banking regulations.
So the shit’s hit the fan.
And it now appears that because enough people made millions buying and selling ‘risk’ — in the form of Credit DEFAULT Swaps (yeah, note that ‘default’ is a key feature, and not a bug) stand to make a whole lot more money out of pushing GM into bankruptcy than out of saving it.
The financial predators stand to make a killing beyond what you or I can really get our heads around.
They can ONLY collect on those Credit DEFAULT Swap profits if GM goes into bankruptcy.
I’m only one humble American, but if I ran the world a whole lot of people would be getting subpeonas in their Christmas stockings, along with truckloads of coal.
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And BooRadley@12, thank you for this!!!!!!!!!
Picture complex reinsurance agreements. Without regulation. Sold like securities, again without regulation or oversight. With no transparency. And, most importantly, with little to no reserves/collateral in case of loss.
Yup.
And like randiego@37, I keep wondering why — since on the surface, it appears to completely self-defeating. One possible explanation: that there is a Mayflower Madam (or Mayflower Roger, or whoever…) out there with a whole lot of compromising photos, video, and other… ‘I’ve got your balls in a vice” stuff that’s got some of these idiots twisting in the winds.
Some — like Cheney – appear to be neofeudalists who don’t care about punking the US b/c they’re off to Dubai or wherever. The rest? They’re either dumber than pond slime, or maybe they’re just too hung over to think clearly.
By this logic, Cerberus and its Private Equity pals were no doubt funding hookers and booze for a lot of Congressional ‘players’. Strictly because it was good in case they needed to ‘call in some cards’, so to speak.
Other than those hunches, I’m damned if I can figure out how things became so insanely destructive. But if I were a genuinely heartless jackal, I’d no doubt want to get my hands on any and all ‘green patents’ before Mr. Obama arrives in office; and I’d be running out of time to do that unless I had a lot of leverage on Bush and the Plantation Caucus.
I never imagined that I would have even half this much sympathy for the UAW, or even for the Big 2.5. As you point out, they’re just the roadkill in someone’s Bigger Scheme.
Whatever that turns out to be.
Thanks.
Oh, and if you think a 40k electric car is going to save GM you’re dreaming.
The malibu? Great car.
Where you getting your bio diesel from?
There’s a nice place in Maycomb that gives it to me.
What’s it made from?
Maycomb was a joke (referring to your sn). Since you’re curious, put a kit in an 02 Golf TDI, runs on vegetable oil. Don’t drive it very often, just a hobby. Get the used oil from various restaurants in my hometown.
I’m glad it’s from vegetable oil. I think ethanol is better than importing oil, but I’m hopeful the algae technologies prove to be as good as advertised.
I live in one of the frigid northern states though, and biodiesel congeals at low temps, making unusable in the winter. TDI with biodiesel in the summer, and a 4×4 jeep in the winter.
I don’t mind ethanol (there are some logistical things that need to be worked out with storage, but that’s not too difficult), it’s the subsidies and their impact on food prices that bother me.
They might. One could burn algae in a diesel engine, no processing required. An alcohol/algae emulsion would be interesting.
Yea, lets burn something that produces more oxygen for our atmosphere than trees. That’d be great for climate change, get rid of all of the “carbon filters”.
Perhaps I missed your point, but, afaik, trees are much better carbon sinks than algae, unless you burn them. The wood holds the carbon. You’re correct, algae produces more Oxygen, but when it dies, the carbon goes right back into the atmosphere.
I’m not a chemist, but from the little I’ve read, algae is a far better fuel option than ethanol. There are a lot of high tech start-ups trying to grow certain kinds of algae indoors. IIRC, the initial results have been quiet encouraging. As you probably know, growing corn is not carbon neutral.
It’s all about natural gas or electric (neither of which will be cost efficient for 10-20 years), every other option is a pipe dream.
That’s a whole lot of algae to make fuel for Americans. Any of the bio-products for a primary fuel source are going to do more damage than good.
FYI, these people want to go indoors (year-round growing season) and vertical
Valcent’s HDVB bioreactor system can be deployed on non-arable land, requires very little water due to its closed circuit process, does not incur significant labor costs and does not employ fossil fuel burning equipment, unlike traditional food/biofuel crops, like soy and palm oil. They require large agricultural acreage, huge volumes of water and chemicals, and traditional farm equipment and labor. They are also much less productive than the HDVB process: soybean, palm oil and conventional pond-grown algae typically yield 48 gallons, 635 gallons and 10,000 gallons per acre per year respectively.
I’m not sure about the waste problems, but afaik, there are a lot of start ups focusing on this kind of technology.
How is that?
“..a disorderly collapse of the companies. A disorderly collapse would be something very chaotic that is a shock to the system..” Yes, Dana, because a nice, slow collapse, like a Hallowe’en pumpkin is just so much less of a shock to the system. Sweetheart – a collapse is a collapse. Period. End of story. It doesn’t matter if you slit the US auto industry’s throat like a Kosher butcher and let it go down fast – or if you guys make it run the race with an anvil strapped around it’s knees. In the end, it will still be dead; the suppliers will be dead; the workers will be out of work; the communities will be eviscerated, and the country will be sunk even farther into The Next Great Depression(tm). Either we save the industry and give it the ‘give me the paddles/’clear’/shock the heart’ thing, or we just kill it off. Anything else is cruel and a sham. Grow up.
Thanks bmaz.
digg
bmaz, any idea whether Bush will run this Chapter 11 out of the WH to avoid triggering credit default swaps?
No clue. I don’t even think anybody really knows how much and where that exposure resides; certainly I have no idea.
icymi, here’s what masaccio had to say
Paying off on Credit Default Swaps is So Important
That’s sure what it looks like from where I sit.
National-scale sharecropping at last!
(jane up now on CNN)
I was too late to comment at FDL, but didn’t Jane do well with that impervious guy, and didn’t she look fantastic in electric blue?
agreed. she did a great job at the close, when she was able to finally finish her thought without the host cutting her off.
Agree.
Why did you mention baseball and Bush in the same sentence?
Heresy.
His administration is a failed business plan.
It’s like that nightmare you have, when you scream, and nothing comes out… nobody can hear you…
I still don’t get the Republican’s play here. Play to your base? Don’t care about your electoral future? Hoping that everyone forgets?
How’s that been working for you lately?
Bush lied us into a massively expensive war, in terms of blood, money and political capital, for reasons of political calculation. Why would he hesitate to lie us into the severest depression in nearly a hundred years for the same reason?
Bush’s GOP is a rump of what Nixon assembled, but its foundations and superstructure remain in the South. The South chose anti-labor legislation as its meal ticket for many reasons, including culture, racism, and as a middle-fingered salute to the Northern states, who lost their most lucrative jobs because of it. (The War of Northern Aggression never ended; it just changed battlefields.)
The South drew hundreds of manufacturers there from Massachusetts, New York, Pennsylvania, Ohio, Michigan, Indiana and around the world. They stopped there en route to China and India, many to stay, and were joined by Korean, Japanese and, latterly, German manufacturers looking for a toehold in their then most lucrative market. I suspect the cost of those states’ collective subsidies, immunities and entitlements dwarfs GM’s legacy health care and pension costs.
There is no such thing as “post-partisan” politics, only politics. This is a strenuous competition for resources. Both sides do not want the same end, nor do they play by the same rules. The only dirty trick Karl Rove and his heirs disdain is the one they haven’t thought up or tried. Obama, as one of Chicago’s most successful politicians, knows that. So what game is he playing; it doesn’t appear to be the one he says he’s playing.
This is Hateful Bush and His Hateful Plantation Caucus making a non-sensical, but Ideological point, specifically intended to hurt US, as part of their never-ending Culture War for Social Control.
Our Auto Industry, as EW and bmaz have shown, have real, viable products and technologies that are well-suited to the intelligent adaptation that We need to make in the face of today’s global petroleum realities.
We can come together and guarantee a loan to bridge them through to a transformative, win-win, better tomorrow for All of US.
And, at the same time, preserve Jobs in a declining Economy – something the short-sighted, blood-thirsty, chain-saw weilding Goopers don’t yet realize they’re standing on the wrong side of the limb on.
So, here’s hoping Our Rubber Backed Dems can Save the Auto Industry and 3 Million American Jobs, before the Goopers part-it-out to the Chinese to make a point about the Unions.
Bush should stop talking while he is ahead.
http://www.queersunited.blogspot.com
So the marriage between the oil companies and the new revised efficient car companies is over. They are getting a divorce. And that makes Cheney angry.
I feel like a light bulb just turned on. I can get my brain wrapped around that one.
It ain’t San Diego, It’s RanDiego!
Surfer dude has saved the Trestles and San Onofre Beach!
Great news, for sure – we really need some!
That road was supposedly for relief of traffic congestion, but all it really was for was to open up areas for more houses and condos. I don’t think we’ll be needing all those condos anytime soon, but we’ll be fighting that road for years – it’s a zombie.
Does Congress have to get permission from the WH for the 25 billion auto loan money from the fuel efficient bill Bush signed in Oct? Sorry, having a brain fart & didn’t recall the name of it. http://www.detnews.com/apps/pb…../810010350
House passed it, the Senate didn’t. There’s still $15 billion left in the first $350 billion in the TARP. Paulson could use that, but Bush hasn’t let him yet. Stocks took a huge hit today when junior talked about bankruptcy.
I was talking about the bill Bush signed this past Oct not the bill that went to the Senate last week. See link above. I think I heard it would take a yr or so to be released. Wondering if that could be speeded up by a yr?
Some of the land that Gm has sold (or tried to sell) to raise cash.
http://www.detnews.com/apps/pb…../810010383
Not OT:
Today, I needed to look up something related to physics and astronomy.
The keyword = ‘magnetar’.
So I googled ‘magnetar’. And what came up? Magnetar, LLC.
Hmmmm…. interesting.
So I thought, “Hmmm… I wonder what happens if I google “Magnetar + Cerberus”…?”
Anyone who has even remote doubts about how money-centered and ruthless the PE firms are might find my little exercise quite enlightening. Not pleasant. But enlightening.
So on that cheerless note, I’m off to toddle after obscure topics related to ‘magnetars‘ and ‘magnetic fields‘… sigh.
I have read that car emissions are changing ocean chemistry. Also, when CA in the past week passed a dieselfuel regulation law, there was news that biodiesel produces the same kind of biotoxic effects subtended under those new regs. Maybe Detroit is ready to migrate to right to work states, or perhaps the South will awaken unilaterally. I think congress needs to work as the equalizer, much as it did with civil rights and equal opportunity, as the scope of the impacts needs balancing broadly over the entire economy. Bush and friends will broadcast hype about the pathos they experience from the car industry crash in Detroit, but it is a hollow plaintive the exiting administration’s spokespersons are enunciating.
FWIW, seems as if 2008 is the centennial year for GM –
“www.kingoftheroad.net/pontiac_html/58pontiac_5.html”
Whodathought they’d be ‘celebrating’ by potentially going under? (You’ll have to cut & paste as the !@#$%^ link embedding still no workee)