Why GM Matters: Inside the Race to Transform an American Icon

[As I indicated yesterday in the post "Why American Industry (And Its Future) Matters", we have the privilege of having author William J. Holstein today at Emptywheel and Firedoglake. Mr. Holstein has a long and rich history as a journalist and author. Most importantly for today, he has plunged into the history and ethos of General Motors and produced an incredible work detailing just how critical General Motors, the American auto industry, and American industry itself is to the United States economy and way of life.

As Michael Fitzgerald observed at bnet.com, "Holstein is using GM as a symbol for whether it makes sense for the U.S. to bother with manufacturing. That might sound odd for a country that for now probably remains the world’s largest manufacturing economy. But Holstein argues that our political and financial leaders don’t get manufacturing, and don’t think it’s important. This is the crux of the Main Street vs. Wall Street debate, and it is shaping up as the core fight of economic policy over the next few years: do we get a justifiable return if we invest in making things, or should we focus on information-driven innovation?"

I think that is right. Since we cannot layout the entire book in the intro here, Bill and I decided to focus on the emerging technology, and specifically battery/electric technology, and the new product lines, that GM is producing. With that said, what follows are prepared remarks in that regard by Bill Holstein. Take a look, and then join us in discussion. I am looking forward to the best and brightest that inhabit our little corner of the world participating in and driving this. Oh, and visit Bill anytime at his blog WilliamJHolstein.com Also, I heartily recommend purchasing his book, it is a fascinating look into a critical issue of our time, not to mention a great read. – bmaz]

*****
By: William J. Holstein:

It’s time to cut through all the nonsense about General Motors “not making cars that Amrericans want to buy.” The truth is that GM has seized design and performance leadership over its longtime nemesis, Toyota. Toyota’s cars these days resemble appliances, i.e. refrigerators on wheels. They don’t break, but they hardly inspire.

In terms of their physical appearance, GM vehicles have real attitude. The new CTS has a very bold and aggressive front end that designer John Manoogian came up with at the last moment. He and his team decided to take the V-shape that used to stop at the bumpers and let it plunge below the bumpers toward the ground. They also inserted grilles on the right front panels merely for decorative purposes. That nearly drove the engineers crazy because of the challenge of stamping a piece of sheet metal with an odd hole in the middle of it. But they did it. At first, the competition could not believe that GM had figured out how to achieve that.

GM’s design revival started in the late 1990s with the new creased look of the Cadillac. But it accelerated with the arrival of Bob Lutz in 2001. Lutz is the quintessential “car guy” and he took responsibility for product development. He acknowledges, and Chief Executive Officer Rick Wagoner acknowledges, that design got lost at GM for at least two decades. The flamboyant designers of the 1940s and 1950s faded away and were replaced by engineers and bean-counters who relied on “clinics,” or panel sessions with consumers, to decide what the market wanted. This was a disastrous way to design cars—consumers can only respond to what they see on the road. They can’t anticipate the new and exciting.

Lutz helped allow the designers, led by Ed Welburn, to once again take risks and insist that the engineers and metal stampers and accountants let designers pursue their dreams. Designers have to play. They have to tinker. They have to reach into history to identify the themes and motifs that turn Americans on. That’s exactly what GM’s designers are doing these days. For my book, I walked through GM design studios in the United States, Germany and China. They are filled with young people from all over the world who are excited about working for GM. That could never have been said 10 years ago.

Not enough Americans understand why General Motors’ effort to develop the Chevrolet Volt with a lithium ion battery is so important. Here’s why:

Alliance Bernstein estimates that lithium ion batteries could be a $150 billion a year industry by 2030. It is a new industry waiting to be born. It’s a perfect example of the so-called “green industries” that President Obama says he wants to see in America.

But right now, the Americans are lagging behind Japan, China, South Korea and the French in developing these batteries that are considered more efficient and longer-lasting than previous generations of batteries, such as the nickel metal hydride battery that is in the Toyota Prius.

GM has invested $1 billion so far in this battery project and has tapped LG Chem, a unit of the LG group of South Korea, to develop a particular variety of the lithium ion batter. LG will make the battery cells in Korea and bring them to Michigan where they will be packagd into systems that can actually be built into the Volt.

It’s true that the Volt will be relatively expensive when it comes out by the end of 2010—somewhere in the $35,000 to $40,000 range. But what GM hopes to do is introduce the lithium ion battery into other models and into other geographic markets like China so that it can drive down the costs. It’s much like gearing up the semiconductor or flat panel display industries. Once you can achieve scale, you can drive costs way down.

If GM can get momentum with the lithium ion battery, it’s likely that more and more of the “value added” elements of making the batteries will end up on American soil. This is great from many different perspectives—it creates jobs, it eases our dependence on foreign energy sources and it will diminish emissions. In fact, if you operate the Volt for only 40 miles, there will be zero emissions. That’s because the Volt will go 40 miles between charges. If you go further, a gasoline turbine kicks in to recharge the battery. At that point, the driver would be consuming gasoline and emitting carbon dioxide. But 78 percent of Americans drive 40 or fewer miles each day. So most people who own a Volt will not be emitting anything during the course of their daily lives.

That’s different from the way the Prius works. It has a gasoline engine and a battery-powered engine. When you accelerate the vehicle, the gas engine is doing the work. But when you are idle, or when you are coasting or braking, the battery takes over. But it is not possible to operate the Prius in the battery-only mode for any extended period of time. This difference in how the Volt is equipped is another part of the breakthrough that GM is on the verge of achieving.

This is another element of why GM is important to America’s future. If the government forces GM into bankruptcy or other downward spirals, the Volt program almost certainly would be delayed—and with them, America’s hopes for being a player in the lithium ion future.

So let’s dispense with this myth that “GM only makes gas-guzzling SUVs.” GM is back in the car design business, and back in style.

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221 replies
  1. klynn says:

    It’s true that the Volt will be relatively expensive when it comes out by the end of 2010—somewhere in the $35,000 to $40,000 range. But what GM hopes to do is introduce the lithium ion battery into other models and into other geographic markets like China so that it can drive down the costs. It’s much like gearing up the semiconductor or flat panel display industries. Once you can achieve scale, you can drive costs way down.

    Here is the point that Washington has to hear and grasp. If not, then a hand full of Senators are going to have their way with the demise of the US auto industry.

    If GM can get momentum with the lithium ion battery, it’s likely that more and more of the “value added” elements of making the batteries will end up on American soil. This is great from many different perspectives—it creates jobs, it eases our dependence on foreign energy sources and it will diminish emissions. In fact, if you operate the Volt for only 40 miles, there will be zero emissions. That’s because the Volt will go 40 miles between charges. If you go further, a gasoline turbine kicks in to recharge the battery. At that point, the driver would be consuming gasoline and emitting carbon dioxide. But 78 percent of Americans drive 40 or fewer miles each day. So most people who own a Volt will not be emitting anything during the course of their daily lives.

    Eventually, I hope the design could lead to a “leapfrog” battery concept where one battery is in charge mode while the car is being propelled by the other battery and that the engine could “leapfrog” power between the two batteries for greater distances without the need of gas power.

  2. solai says:

    My question has nothing to do with GM’s designs, so forgive me for being a bit OT. I read yesterday (and I don’t even know if it’s true) that GM is in the process of investing $3 Billion in China. Can you comment on this? If it’s true, then I don’t see any advantage to giving them bailout money.

    • billholstein says:

      Yes, GM has invested about that much in China. I went to see what they are doing. They’ve also invested recently in Thailand, India and Poland/Russia. The question is: are they still an American company?

      My answer is that yes, they are still an American company and deserve these loans from the federal government. GM had no choice but to become global because it had to compete against Toyota and Volkswagen and everyone else. If they had remained domestically focused, they could never have reached a point that they could defend themselves in this market. It’s the nature of global competition today.

      One little known fact: GM has made so much money in China that it has used some of those profits to support their very tough restructuring in the U.S.

      • solai says:

        Well, I’m discouraged by this. I am not so much interested in saving American Companies as I am American JOBS.

        • bmaz says:

          Well, there are some things to consider then: 1) The geometrically larger amount of jobs to be lost if we don’t keep GM alive; it will crush the economy, 2) Preserving a company that can grow in the future and maybe reclaim some of those laid off now, and 3) That foreign business is helping keep people employed here.

          • billholstein says:

            This is a good point. In my travels, I hear a lot of people speaking against helping GM through this financial crisis. They seem to think that GM, and CEO Rick Wagoner, are part of the same pattern of behavior we saw from the Countrywide Financials, Merrill Lynch’s, Fannie and Freddie, etc. There seems to be a thirst for “teaching GM a lesson” as if pushing them into bankruptcy would represent an act of economic justice.

            But that’s a very wrong-headed set of attitudes. If we force GM into bankruptcy, it’s a slippery slope downward. I think we would almost certainly shut down major parts of the automotive supply chain, and that would affect thousands of suppliers all over the country. GM, for example, is the largest private sector buyer of Information Technology. People in California don’t think they have much of a stake in GM’s survival, but they do.

            Overall, GM and its suppliers represent 1 percent of our GNP. Do we really want to hundreds of thousands of more people thrown out of jobs?

            • Hugh says:

              I think most of us here support a bailout for GM, less so for Chrysler because of the Cerberus connection, not because we have all that high an opinion of GM but because we wish to mitigate as much as possible the effects of the depression we are entering into. It would be nice if GM built greener more fuel efficient more reliable cars but the primary impetus for support now is purely Keynesian.

              • billholstein says:

                Good point. GM and Chrysler are in entirely different conditions. The government should not treat them identically. GM is a viable company with a robust product development process. It has completely changed the way it manufactures, by incorporating the Toyota method. It has innovated with the lithium ion battery, the OnStar system, XM Radio and other things. It can survive if it gets help to get through the credit freeze.

                Chrysler, however, clearly cannot survive on its own. Daimler took the best engineers and designers with them back to Germany. Chrysler has closed its advance design studios in California, and it has no product programs underway, which is very serious. And they don’t have a global footprint, so there is no way they can compete. The government needs to have a very candid conversation with the boys at Cerebrus and find out whether they want to invest more money to try to rebuild Chrysler or whether they just want to make a quick exit.

                • bmaz says:

                  Yes. and i fear that Cerberus is probably the wrong entity and kind of entity to be owning Chrysler in light of those facts. I am heartbroken by Chrysler’s posture, but I honestly think that the Chrysler that we all have known historically cannot survive. I hope I am wrong on that though….

        • billholstein says:

          American companies and American jobs are the same thing. If we have a GM that is not competitive, no one’s job there is safe. But if GM can go toe-to-toe against the biggest, baddest competitors in the world, they can defend lots of high-paying jobs, not to mention jobs on the line.

          • DWBartoo says:

            Whoa, there Bill.

            “…they can defend lots of high-paying jobs, not to mention jobs on the line.”

            Why are jobs “on the line” by which I assume you mean ‘production line’ not up for the “high-paying” category?

            If not, just what will be the nature of these “high paying” jobs?

            I think we need a new ‘culture’ of greater ‘wealth-sharing’ for everyone, not a further divergence of the ‘top ( so-called) from those who actually have the skill to actually build things (thereby actually producing the ‘wealth’.

            • billholstein says:

              For every job on the line, there are nine or ten other jobs in the company. This includes designers, many of whom are well paid, as well as all sorts of engineers with advanced degrees. Even young engineers can make more than $100,000 a year. There are also a number of high-paying jobs in finance, marketing, etc.

              I share your opinion that we ought to be paying people on the line, who have experience, a full living wage. The veterans now can make $90,000 to $100,000 a year, particularly if they get overtime.

              But what we as a nation seem to be saying right now is that we don’t want working people to be that well-compensated. We want them to make as much as younger, rural folks in Alabama or Mississippi. It’s way too late to change this debate now, but I feel like we, as a society, should not be tearing down GM workers. We should be saying to Hyundai and Honda and Toyota–bring your guys up to the national level. That’s how we would truly build national wealth, rather than engaging in a race to the bottom.

              • DWBartoo says:

                “…we as a nation seem to be saying …”

                I am perplexed as to who the ‘we’ you refer to might be.

                ‘We’ here, those with whom you are speaking at the moment, are NOT part of that ‘we’ to whom you allude.

                The pundits, the Political Cla$$ and America’s Own Ari$toracy are the major component of the ‘we’ or the ‘them’ who are largely responsible for a number of unfortunate ‘realities’ which ALL of ‘us’ are grappling with, including economic crisis, decades of lousy industrial design, the outsourcing of jobs and the deliberate destruction of Amerrica’s manufacturing base.

                These things did NOT happen by accident but, rather, by ‘design’.

                Most of us, here, do not wish to reward the foolish or greedy, we want our people, our nation and our society to value something beyond short-term profit. The race to the bottom will not change until this nation is rebuilt, from the ground up.

                Without a firm ‘foundation’ which involves the well-being and livelihood of the people, we are only going to witness another house of cards being erected over the ruins of the last.

                Such a ‘foundation’ requires more than a mere ‘living wage’ and the insistence that everyone buy health insurance …

                If an appeal to ‘Buy American’ is simply a slick PR ‘trick’ then little genuine increase in viable HUMAN mileage will result.

  3. tanbark says:

    Great! We’re supposed to be impressed with automobiles with “attitude”.

    I thought buying gas-guzzling panzers that couldn’t hold a candle to the best of the Japanese autos, for reliability and just plain usability, was what helped get us into trouble to start with.

    I have two Toyota trucks. An ‘85 4X and and ‘86 2X. They’re durable (obviously) reliable, and I, who am no Mr. Goodwrench, can work on them myself. Let me know when we start seeing as many old GM’s on the road, as the Toys.

    Pssst! They also helped drag the american auto industry kicking and screaming, into the twentieth century. I bow down in the direction of Tokyo once a day.

    • billholstein says:

      It is undeniably true that GM is making better vehicles today than it did 25 years ago and the rise of Japanese, Korean and German competition here on our soil has forced them to do that. What we all want, as consumers, is for a wide variety of choices of high-quality vehicles and we certainly have those choices today. But, from a national policy perspective, we don’t want our own American-owned manufacturers to be completely knocked out. That certainly would not enhance competition or consumer choice.

    • billholstein says:

      Oh, and by the way, Toyota has not been able to successfully penetrate the market for full-sized pickup trucks. They just don’t have the right stuff there.

    • MadDog says:

      I’m late to the thread, but better late than never. *g*

      I have two Toyota trucks. An ‘85 4X and and ‘86 2X. They’re durable (obviously) reliable, and I, who am no Mr. Goodwrench, can work on them myself. Let me know when we start seeing as many old GM’s on the road, as the Toys.

      That old canard again?

      I’ve owned nothing but Toyotas for the last 25 years. I like them too.

      But…don’t be blowing that “superiority” smoke up our butts. Please!!!

      A little story…a little “Toyota” story.

      When the engine light on the dashboard of my Toyota Camry came on and stayed on, I got out the manual and it told me to immediately take my Toyota Camry into the dealer because my car’s engine was at serious risk.

      I slavishly obeyed.

      At the Toyota dealer, they told me that I’d have to pay $180 upfront for them to hook my car up to their computer diagnostic service in order for them to determine the cause of this “serious” problem.

      I said: “$180 upfront? Fook that!!!”

      Then one of the Toyota service people came over and clued me into the problem.

      It seems that Toyota has a sensor on the gas cap that tells you when it is not screwed on tightly enough. This causes that “engine” light to stay lit on the dashboard.

      His solution? Just tighten the gas cap. He said there is no way to turn the engine light on the dashboard off except for the passage of a couple of days or X amount of miles driven.

      He was right!

      That “engine light” on the dashboard still comes on during the hot summer months. It seems that it is a Toyota design defect.

      The heat of a hot summer day will heat up the gasoline in the car causing a pressure buildup in the gas tank which in turn makes the gas cap sensor “think” it is not screwed on tightly enough even though it actually is.

      And I still say: “$180 upfront? To tell me my fookin’ gas cap sensor is fooked up again? Fook that!!!”

      Lastly, yes I still like my Toyota AND I fully support the bailout of the American carmakers.

      Whether in the future I continue to buy Toyotas or an American vehicle or a fookin’ Ferrari from Italy, I continue to believe that American manufacturing, and in particular, American car manufacturers are important to America.

      End of rant. *g*

  4. DWBartoo says:

    Thank you for joining us, Bil.

    How long might it be before the price of this technology will be within reach of a broad segment of the American public?

    (Bearing in mind that best estimates are that we face a very painful five to seven year ’stretch’ of economic ’shortfall’ for many here in America.)

    And, is executive ‘compensation’ to be realistically tied to actual ‘performance’ on the part of the executives.

    And, how much ‘off-shoring’ of labor, in the manufacture of this technology, is anticipated, now in in future?

    DW

    • billholstein says:

      The trick in making the lithium ion batteries available to a large audience is going to be to get the batteries into more vehicles than just the Volt and to get them into more geographies than just the United States. If GM is able to gear up the scale of manufacturing of the batteries, they’ll be able to rapidly drive down the cost. Rick Wagoner told me his goal is to sell 500,000 Chevy Volts at $20,000, not 10,000 of them at $35,000 or $40,000.

      On executive compensation, Wagoner made $4 million in 2007 and I think that is a rational level for a company with $180 billion in sales. All his stock options are under water. If he can save the company and reap big gains from those options, he’s entitled to them. He will have saved America’s largest industrial company.

      On offshoring, it’s obviously in GM’s interests to get as much of the battery business onshore because that is close to actual manufacturing for the U.S. market. Hope that answers your questions.

      • joelmael says:

        On executive compensation, Wagoner made $4 million in 2007 and I think that is a rational level for a company with $180 billion in sales.”

        If you had put your “rational” comment first I could have saved reading anymore.

        The Europeans have been saving fuel for many years without huge vehicles that depend on expensive to build hybrids of various kinds.

        Set up incentives for automakers to build and create market for and consumbers to buy 1.0 liter nice(and fun) cars. Eliminate the 0 to 60 mph in 8 seconds horsepower freaks.

      • Justinajustice says:

        President Obama makes $400,000 a year, plus free rent, wheels, planes and copters. Let say his salary and perks add up to one million a year. Is there any reason in the world why the CEO of any major company needs to make more than a million a year?

        The push for the outrageous bonuses are part of the psychology of greed which has pushed the economy into our current disastrous condition. The CEO’s don’t need that much money, but they are all in competition with each other to see who can pull out the highest bonus, just like baseball players.

        When are shareholders going to realize that their CEO’s and Board members have sold them down the pike. The absurd bonuses come from profits that would otherwise go back to investors. The stock options for CEO’s and Board members fuel the push to fabricate phony financial statements to get the stock prices up so the executives can make their own personal fortunates at the expense of the company’s and share-holder’s well being.

        Why pay bonuses (or retention awards) to these guys whose decision-making has been appalling. The average high school graduate would make better decisions, and be more than willing to have the job for twice the minimum wage.

        Everyone at the top of our economy has been running a Ponzi scheme, the only difference is that Madeoff and Sanford got caught, while the heads of the big banks and brokerage firms got bail-outs.

        Use the bail-out funds to create jobs here in the U.S., that is the only thing that will get us back to a sane, sound economy.

  5. Hugh says:

    I like cars that don’t break.

    And from my scandals list (snippet of 298):

    Under Bush, the economy also lost 4,401,000 manufacturing jobs. These are jobs that traditionally had good wages and benefits and at the end of the Bush Administration accounted for only 12.71 million of the nation’s 134.6 million nonfarm jobs (or 9.4% of them). Bush lost twice as many of these good paying manufacturing jobs during his time in office as he has created jobs of all other kinds. In all, the US lost 25.7% of its manufacturing jobs under Bush.

  6. bmaz says:

    Mr Hostein, what can you tell us about other energy efficient vehicles GM has coming online in the immediate future, such as the Cruze? I know there are others as well and I would sure like to get an idea of what they are, and I think that is an important thing. Many people seem to think that it is still the GM of the 80s and 90s.

    • billholstein says:

      Well, the Chevy Malibu is getting 30 mpg in some driving conditions, on par or better than the Camry. Overall, GM has eight hybrid models on the market right now and they include the big vehicles such as the Tahoe and Escalade. The dual battery-gasoline engine system helps improve their mileage.

      There also is a hydrogen-powered Chevy Equinox. But we as Americans aren’t ready for hydrogen vehicles yet. How do you refuel them?

      The Cruze is coming. The Aveo is already here. It’s a small vehicle designed and manufactured in South Korea.

      And of course, the really big model will be the Chevy Volt next year with the lithium ion battery, the subject of my initial blog.

  7. klynn says:

    Welcome Mr. Holstein. Thank you for joining us.

    …It’s much like gearing up the semiconductor or flat panel display industries. Once you can achieve scale, you can drive costs way down.

    (my bold)

    My inferred question at #2 is:

    How does GM ”pitch” receiving Fed support to reach this production goal of acheiving scale?”

    Note: I get the import, living in Ohio and being such a large auto parts producing state. Unfortunately, members of Congress (such as Boehner, whose district has been deeply hit by the auto slow down,) do not ”get” the import of supporting auto manufacturing to the point of reaching this stage in production.

    • billholstein says:

      Step One for GM, in pursuing lithium ion batteries, is of course to survive. But then beyond that, there are at least three things the feds could be doing:

      –Enacting tax breaks for people who buy lithium ion-powered cars.
      –Ramping up the Department of Energy funding for lithium ion. This would require putting smart people on a panel there who could make smart bets about which versions of lithium ion batteries are best.
      –Gearing up the Advanced Battery Consortium. This is a private-public partnership that has been lingering in the shadows. Efforts like this should be revved up.

  8. bmaz says:

    You have clearly put a lot of travel, both domestically and internationally in for both this book and your career, and clearly have some thoughts on American industry as a whole. What can we do to both save and reinvigorate the American manufacturing base and the wealth of decent jobs it has to provide?

    • billholstein says:

      This is the debate about “competitiveness” and I’ve been involved in it for a quarter of a century. For a long time, no one seems to have been listening. The mainsteam opinion has been: all we need is consumer spending. All we need is casinos in the desert. All we need is investment bankers who can create more ways to leverage their capital. We as a society don’t need manufacturing.

      What I and others have been arguing for a long time is that we need to encourage R&D, improve education, improve retraining for workers who get displaced (it’s a national disgrace how ineffective we are at that), encourage exports and other successful international strategies, reduce the litigious nature of our society, etc. It’s all been spelled out and debated for years. My hope now is that Americans will start to ask: where does real wealth come from? How do we create jobs and industries that are sustainable? The knowledge about how to do that exists. We just have not believed in doing it.

  9. solai says:

    Overall, GM and its suppliers represent 1 percent of our GNP. Do we really want to hundreds of thousands of more people thrown out of jobs?

    Of course not. But what I really want is for the US to gain manufacturing jobs. Let me ask you this. If we had Universal Healthcare in this country, would that be enough to keep manufacturing jobs here or would we still not be competitive with China etc.?

  10. Synoia says:

    “Toyota’s cars these days resemble appliances, i.e. refrigerators on wheels. They don’t break, but they hardly inspire.”

    Who care about being inspired? I care about reliability. Don’t write complete busslhit, and not understand the need and value of reliability. It’s those attributes, reliability, that got Toyota to where it is today, by meeting the ustomers’ need.

    I don’t want no stinking “planned obsolescence”, or gaudy styling. You might want to take a stab at GM’s stunning ability to produce ugly cars. That take real talent.

    • bmaz says:

      I care about being inspired, and most drivers do whether they admit it or not. It is not just exterior styling, it is ergonomics, handling, the way the machine feels in your hands on the wheel, the vision you have outward from the driver’s seat. If two cars are similar as far as durability and utility, you will always buy the one that is more pleasing in exterior styling and the factors I listed. That is what inspires. It most certainly counts.

        • bmaz says:

          I have driven the Malibu, the Aveo and the newest Corvette; all recently. Personally I currently drive a BMW 528; it is my hope to drive that until a Volt is available, and then purchase one of those.

      • Synoia says:

        I’m inspired by reliability. Having had 2 GM cars, I’m not inspired by repairs. I was never a fan of Toyota until my wife persuadedme to get one. I’m just blow away by the reliability, 200,000 miles, with 2 repairs.

        • bmaz says:

          Most people that have compared the two have uniformly said that the Chevy Malibu is better built and will be more reliable than the similar Camry from Toyota. I should also note that Toyota has had a significant decrease in quality over the last three years. Most people have not realized that yet. They are still very well made however, but there is no effective gap like there used to be.

  11. afguy says:

    “The truth is that GM has seized design and performance leadership over its longtime nemesis, Toyota. Toyota’s cars these days resemble appliances, i.e. refrigerators on wheels. They don’t break, but they hardly inspire.”
    .
    Here’s a suggestion for GM – banish that phrase (and the concept of) “planned obsolescence” from your vocabulary. Toyota may not inspire, but it doesn’t rattle like a child’s toy after 4 years, before you’ve even paid off the loan for it.
    .
    It took a long time for GM to alienate me as a customer. First car was a ‘65 Chevelle. Loved it. But the succeeding cars that I could afford and bought were crap! All the while, I was promised that they were building quality cars.
    .
    Want to overcome Toyota? Start building cars with the bulletproof nature of their product. That’s how they overtook you. Stop treating auto manufacturing as a marketing exercise. I don’t like being told about the high quality when the switches fall out of the dash. After a while, I will stop listening and start buying from someone who does build quality.
    .
    Treat the customer right. Don’t kick them out the door the day after the warranty expires. Toyota and Honda are beating you at customer relations. And no amount of marketing programs are going to overcome this perception that you have forgotten how to buld them good.

    • bmaz says:

      Take a look at the newest products; they are not what you remember even from as little as a few years ago. That is the transition they have been undergoing, and the difference in the new lines is really startling in a good way.

  12. eCAHNomics says:

    Mr. Holstein,

    What you are running into here is the fact that no corp in modern times has giving a ff for workers. Not mfg (which has increasingly eroded wages and benefits, esp the car cos), not finance, not retail, not any corp. Why give tax dollars to a company that has done nothing but cut workers, their pay and their benefits, and is highly likely to do more of the same in the future. Your counterargument seems to be that workers would be even worse off unless they cave in. And you seem to want to continue having the heavy hand of govt come down on the corp side, not the workers side, just as has been the case since at least Reagan. What good is all this technology if U.S. workers are too poor or jobless to buy it?

  13. ohbytheway says:

    Why do automobile companies still advertise the SUV and gas guzzliers? They claim that the American Public demands these behemoths but I say that the car companies create that demand. The view of some four wheeler charging up a mountainside is so inaproprate in today’s economy. Also the best MPG I see advertised is 24mpg and that’s embarrasing.

  14. Synoia says:

    “effort to develop the Chevrolet Volt with a lithium ion battery is so important.”

    Good luck with the lithium supply. You may want to research its’ long term availability.

      • Synoia says:

        As I recall the supply of lithium is limited, with the largest supply from Chile, and not so much from there. We do not want to exchange a shortage of oil for a shortage of lithium.

        Lithium is spontaneously combustible when it comes in contact with water at room temperatures, as are many light metals. As people found out the incendiary laptop batteries.

        One of the best articles I’ve read on the hydrogen economy was by a Chemist who addressed the storage and transportation problems of hydrogen, and his recommendation was to bind the hydrogen with carbon & oxygen into methanol (liquid at room temperatures).

        • bmaz says:

          As with so many things, lithium will probably be a transition to a better battery design. There are already alternatives being worked on. It is safe enough for cars, but I do worry about recyclability and disposal. Nothing is perfect, but all things considered seems appropriate now.

        • Rayne says:

          I think you wanted to say Bolivia and not Chile; that Bolivia holds nearly 50% of the world’s lithium supply merely changes the current equation from Saudi control of oil to Bolivian control of lithium.

          It could be worse. Most people who do not follow the auto industry closely don’t realize that Toyota recently ate the expenses of a very large flop in battery development. They’d been working on a cobalt-based system, which had an annoying habit of blowing up — their version of the EV-1, but with more chemically sensitive repercussions.

          I’d much rather see GM and other carmakers agree on a standard platform that allows consumers a wider choice of fuels — not just batteries. For more than 15 years there has been on-going research into fuel cells (which at one point were farther ahead than batteries for alternative energy). There’s a wide variety of fuel cells, from PEM to direct methanol; it’d be nice to simply pop down to the corner market, buy whatever is on special this week and pop it into the fuel cell slot in my car, versus lock-in to one technology only that could become obsolete or untenable for other reasons like geo-political upheaval.

  15. rockfish says:

    I think another side to this that the political class doesn’t get is how much specialized capability would be lost if the domestic industry goes under. An automotive plant (or parts plant) is incredibly capital intensive. There is also the lost knowledge base in design and manufacturing, plant management, logistics, etc that will be lost and can not be easily created. You can order a bunch of computers and specialized software and with a few million investment dollars very quickly have a small investment bank up and running that can easily grow and expand into a Wall Street firm. You can’t duplicate that for a GM.

    • readerOfTeaLeaves says:

      Superb comment. I don’t think nearly enough people understand it and I hope the UAW picks it up and really runs with it.

      See whether the Plantation Caucus can figure out why this is such an important insight…. they need to understand this, and I suspect that governors understand it better.

  16. Synoia says:

    “So let’s dispense with this myth that “GM only makes gas-guzzling SUVs.” GM is back in the car design business, and back in style.”

    Then please explain the change between the Volt concept design, stunning, and the Volt production design, boring.

  17. Knut says:

    I confess to not liking American cars. The last one our family (going back to my parents) bought one was a Nash Rambler 1953 (used). Once I drove a Taurus in the 1930s, and the steering was so soft I thought I’d never make it around a curve. So we have stayed with the Japanese for the past 30 years (different makes).

    Anyway, two weeks ago we were in Seattle and we rented a Chevy Aero (I think that’s what it is called). A sub sub compact, which is the kind we like to drive. A fine little car. Drove well, pretty quiet all things considered, and unless it has rust or some other problem, I can’t see it being any worse than the comparable Korean and Japanese products. I’d buy one, especially for the price. I assume it’s manufactured in the US. So much for the US not being able to make serviceable vehicles.

  18. klynn says:

    Have you had direct contact with policy makers in DC and are they listening to you irt saving US auto manufacturing?

    • billholstein says:

      I have sent the book to key members of Congress and different people on the Obama team. And I was in Washington earlier this week on C-Span, Fox, NPR, etc. But overall, I find that Washington has no idea what has been happening in the auto industry. They’re completely clueless. It’s like the guys from Detroit are coming in from another planet. I hope that Obama’s task force can rapidly gear up and learn how to judge the different business strategies of the automakers. Right now, they seem fixated on “financial viability” and that is not the best indicator of long-term health.

  19. earlofhuntingdon says:

    Diesel, electric, and electric-gasoline hybrids are all good things. I’m equally swayed by enduring product quality of the kind that would earn high ratings from e.g., Consumer Reports.

    A car is the most expensive product most families buy after their home and possibly their educations. It’s purchase is a prepayment for years of service. How do GM and Ford rate compared to their rivals?

  20. solai says:

    we, as a society, should not be tearing down GM workers. We should be saying to Hyundai and Honda and Toyota–bring your guys up to the national level. That’s how we would truly build national wealth, rather than engaging in a race to the bottom.

    So, is GM doing this? Seems to me they’re in that race to the bottom. But, I’d love it if I were wrong. What are GM’s plans for their American factories?

    • billholstein says:

      No one in Washington is willing to listen to this argument. GM has surprisingly little clout there, so it can’t take a leadership position on that. It has little choice but to continue closing factories and pushing out its best-paid workers. In fact, they already have cut the ranks of unionized workers IN HALF in recent years and now are preparing to buy out the rest of its workers making the full $28 an hour, plus benefits. Many of them will be replaced by so-called Tier 2 workers who start off at $14 or $15 an hour. GM and the UAW are being forced to meet the cost structure that the transplants have in the southern states.

  21. earlofhuntingdon says:

    I agree that it is essential for America to retain a manufacturing base, an attitude GM would compare with King Canute holding back the tide. How when even a revived Big Auto and its suppliers will continue to ship such jobs and the associated networks and skills offshore?

    • billholstein says:

      If GM is allowed to complete its tranformation and if it is able to re-emerge as a profitable company, it is going to be a very different GM than the one that traditionally supported the economies of Michigan and Ohio. It will be a more global GM with design, engineering, purchasing and many other functions quite globalized. To be healthy in this globalized environment, GM and every other manufacturing company has to find the ideas and the people and the parts that are the best and cheapest.

      • earlofhuntingdon says:

        Sounds a bit RenCenterish to me.

        GM is already globalized. It has intellectual, engineering, manufacturing, financial and labor resources spread from Stockholm to Shanghai to Zaragoza. Globalization is not its problem, nor a paucity of talent. It is a mindset, perceived rigidities of scale, and now a “private equity” business model that equates running a company longer than a calendar quarter with depriving “shareholders” of their pound of flesh.

        The question for me is what elements of the current GM will survive. If they include most of the current top executives and creditors, it will have better tailored clothes covering the same paunch. It will need a diet of different managers to be a “new” improved GM. As an aside, one major help in remaking GM would be for Obama to get serious about health care reform.

  22. judybrowni says:

    I have a baby boomer friend loyal to GM for years — until her last buy several years ago.

    That sucker started to fall apart fast, with frequent returns to the dealership for the same repairs, over and over and over.

    A friend advised her to take her GM to an independent mechanic, who repaired stuff that stays repaired.

    The car runs now without frequent re-repairs, but I doubt my friend will buy from them again, since she feels that GM’s point was to make more from the repair of her car, and the parts, than the car itself.

    (Which was also a point made in the documentary “Who Killed the Electric Car?” so my friend’s problem, and conclusion, was hardly individual.)

    Why should the American consumer trust GM now, when they’ve been repeatedly betrayed in the past?

    • bmaz says:

      A consumer should want to but the best product for the money. The products of GM, at least the newest lines, have changed radically for the better. Take a look at them. My most recent rental cars have been a Nissan Altima, Toyota Camry and a Chevy Malibu. The Malibu was by far the best of the three. I fully understand the skepticism, I have it too; but they are making a believer out of me with their new stuff.

    • billholstein says:

      Because they have completely absorbed the Toyota lean manufacturing system. They’re making cars in an entirely different way than they did in the 70s and 80s. They’ve adopted the team concept, rather than using the old assembly line technique that Henry Ford created. All the independent third-party sources (Harbor, JD Power, Consumer Reports) show that the GM’s quality has dramatically improved and is just a whisker behind Toyota. In fact, Toyota has developed quality problems as it expanded so rapidly in this market. Toyota now has recalls and excess manufacturing capacity. Sound familiar?

  23. klynn says:

    …They’re completely clueless. It’s like the guys from Detroit are coming in from another planet… Right now, they seem fixated on “financial viability” and that is not the best indicator of long-term health.

    Then how do you suggest the netroots mobilize to make the point that “financial viability” is not the best indicator of long-term health? How should the netroots mobilize as a voice on preserving US auto manufacturing?

    BTW, thank you for your efforts.

    • billholstein says:

      I think Obama is still listening to the netroots. He’s still plugged in to what many caring, thoughtful Americans are saying. Having been in Washington recently, I sensed that he’s up against an entrenched political class that wants to pick over the remains of the American carcas. They’re not really interesting in taking the perspective of what’s right for America as a whole. We are now paying the price for having allowed Washington to descend into corruption and incompetence.

      • SanderO says:

        To which have been saying forever – TERM LIMITS

        throw them all out.

        We need a new start, a new culture.

  24. hackworth1 says:

    Some seem to believe that all automobiles should be built in China as cheaply as possible and sold to jobless Americans at the highest possible price.

  25. judybrowni says:

    And how are autoworkers supposed to support families on $600 (or less) a week?

    4 million reasonable compensation for CEO, but the autoworkers (who didn’t kill the electric car the first time, didn’t make the bloated decisions for puffed up SUVs) — they’re supposed to pay the price.

    Another reason why we don’t (and shouldn’t) trust GM.

      • judybrowni says:

        That first electric car, the EV-1 was horrid;”

        Then why did those leasing fight so hard to keep their EVs?

        Why didn’t GM continue to work on it, to improve it? Think how much battery development could have happened in the years in between.

        I remember when cell phones weighed a ton — should have junked the whole concept back then, according to your logic.

        • billholstein says:

          My understanding is that GM concluded electric cars could never be profitable, so they turned away from them. It wasn’t until Bob Lutz threw a fit and demanded that they start exploring extended range electric vehicles and hybrids that the organization sprung back to action. For better or for worse, that’s how it happened.

          • judybrowni says:

            “My understanding is that GM concluded electric cars could never be profitable”

            More like, electric cars threatened the oil industry, and GM’s profitable selling of parts for their rinkytink internal combustion engines. How’s that working out for you now, GM?

            “My information is that Toyota loses money on each Prius it sells. It still is not profitable for them.”

            Versus the American car companies which lose money on their entire output, else why are we bailing them out?

            I also doubt that Toyota lost money on the Prius, until the worldwide collapse of economies.

    • ohbytheway says:

      ’bout time someone pointed this out. On planet earth there is very little difference in the intelligence of people especially autoworkers and their overcompensated CEO’s

    • sad4america says:

      Unions are not all that great in my mind. I am in one and would really rather not be. I pay $50 a month for what??? If it wasn’t their the slugs working around me could be fired easier and justifiably. The company would be able to reward people for exceptional work which it can’t really do now. I would be able to move up based on my hard work and skills instead of waiting in the seniority line. Obama did the “Make work pay” tax credit, getting us an extra $8-$13 dollars a week and as of right now it is temporary. I say drop the unions, then the workers will get their $10-$12 a week back and put it into the economy for the long run, not temporary. Hard workers will be rewarded and not-so-hard-workers will be pushed to better themselves or let go. I understand Unions have a place in providing fairness in the workplace, so I also propose that a internet site be developed to easily explain and help employees understand their rights in the workplace and the steps to take. This might also mean a bigger Department of workforce Development and/or BBB.

      • Hugh says:

        Hysterical. Another rugged American. And when your company cuts your wages and benefits or cans you then at least you won’t have it to blame for your woes.

        • sad4america says:

          Most people would rather take a cut in pay then be fired or lay off (x) number of people from the plant and with a union that is harder to do. I wouldn’t blame anyone if my job was lost, it is business. I am here to take care of myself and my family until I have achieved enough to help others. Putting money away for a rainy day seems to get no consideration at all these days. People sure do have lots of blame to throw around but I found that blame doesn’t put food on the table so when times allow I put extra away for the not-so-good-times. Maybe if Unions sponsered money-management classes for its workers I’d like them more but I believe then Unions would become less popular when the workers themselves are empowered and see that they indeed can take care of themselves

          • Hugh says:

            I think you need to read a little history on what labor conditions and rights were in this country from about the 1870s to the 1930s and just how hard unions had to fight for the rights and privileges you so cavalierly take for granted. And curiously right along with the decline in unions in the 1970s we have seen a decline in workers’ wages, pension funds done in, benefits cut, jobs lost, no doubt just a coincidence.

            And your idea of empowerment is a fantasy. What part of our recent political history would lead you to think anything other than that the powers that be want to empower anyone but themselves?

            • sad4america says:

              Sorry I didn’t go back that far, I agree the pipeline union in Alaska was one of the best achievements and they deserved what they got because they were a strong workforce that deserved to be paid that way. Times have gotten better and a level of expectation has been set. A strong minded worker was more on a level playing field will business owners back then. Now companies hire lawyers, use scare tactics very effectively and many time the unions hurt their people because its is a methodical game for the company and it lawyers in some senses.

              • klynn says:

                ditto that.

                Besides, someone’s plantation staffers are working overtime here. Seems to happen every time there is constructive conversation on the auto industry.

                bmaz, thanks for arranging this book salon and thank you for handling the comments.

  26. DWBartoo says:

    ” …the best and the cheapest.”

    I have never seen the two be the ’same’, at least not for long.

    This idea fails to recognize ‘value’, at either end.

    Why should the ‘best’ of human talent be paid the least?

    And how may something remain the cheapest if it is exploited extensively?

  27. joelmael says:

    Raise the gasoline tax by 3 cents per month for the next few years. Provide an equivalent income tax reduction.

    We will soon be driving efficient human sized vehicles like the europeans

    • billholstein says:

      This is economically logical and makes sense from an energy independence perspective. But politically, it is just death. Our entire pattern of life is so dependent on cars that an increase in the gasoline tax would provoke riots. It just can’t happen, certainly not in this economic environment.

      • bobschacht says:

        “…an increase in the gasoline tax would provoke riots. “

        Why is it that an increase in the price of gasoline did not provoke riots, but instead changed driving behavior?

        I don’t think that modest increases in the gasoline tax would provoke riots at all. In fact, they’re a good idea.

        Bob in HI

        • bmaz says:

          Yeah, I am with you on that. Gas prices were high just a few months ago and the economy already sucked. It does hurt poor people especially, but I think it is necessary at this point for a lot of reasons. How much extra is debatable, but I would argue for a healthy increase.

        • billholstein says:

          When gas prices approached $4 a gallon, Americans assumed it was people outside the country who were doing it to us, or that it was simply the result of supply and demand.

          But if the federal government, or any government here, raised taxes and that drove up gasoline prices, Americans would have a target. It would be a different story.

  28. AKASamurai says:

    I find it strange that GM needed to spend so much to develop the Volt, a mixed gasoline/electric car, when they had already developed the EV1, a fully electric vehicle years ago. Do you have any insight as to why this vehicle line was shut down, and why the technology in that car is not applicable in today’s environment?

    • billholstein says:

      The knowhow from the EV-1 actually has carried over into the Volt. Read my chapter on this. GM concluded that the EV-1 didn’t have adequate range and cost too much to make. They had leased the cars to about 1,000 people in California, but reclaimed them at the end of the leases because they concluded they couldn’t make the car on scale and make it profitable. But some of the same people who were involved in the EV-1 have been driving the Volt project.

  29. judybrowni says:

    they are making a believer out of me with their new stuff.”

    Rental cars, driven for days, or at most, weeks.

    How long will those little tin boxes last?

    I live on a very busy street in Los Angeles, I hailed the electric car first time around, because it would mean less gunk in my lungs, less noise, you name it.

    California spent millions on setting up charging stations based on GM’s promise to develop said car. GM dragged their their feet, did their damndest to kill it — I wonder how many years have been cut out of my life from automobile emissions since then.

    So suuuuuuuuuuuuuuuure they’re working hard on that lithium battery, which I believe is just an excuse to break the union.

    Once broken, GM will be back to their old tricks.

    • billholstein says:

      It’s easy to be cynical about GM. That certainly has been the right attitude for a long time. But they sense that their very survival is at stake. They actually have made many of the right moves. Maybe it’s too little, too late, but they’re trying. Read my book and tell me if you’re still completely cynical about them.

      • SanderO says:

        I don’t think they should survive. They don’t deserve to.

        They should be bought out by car manufacturers that know about cars.

        • bmaz says:

          Well, since we basically taught the world how to produce autos on a large scale to start with, this is one ignorant opinion. How about we use American drive and ingenuity and do it better than the others instead of crying in our milk and handing the biggest manufacturing base we have left over to other countries? What you suggest is ridiculous.

        • sad4america says:

          It is not the cars that are bringing them down most. It is the way they run their business and government regulation which also drives up the costs. Unions cause lots of financial trouble and are not necessarily the best workforce available. The big 3’s dealerships ran out of control and it got to big to be efficient.

      • DWBartoo says:

        Well, Bill, you’re doing a pretty good job of dealing with a lot of questions, here, and I thank you for joining us.

        It is not so much that people are cynical (let’s reserve that term for those who deliberately ‘game’ the system and the public), but that they’ve been, consistently, disappointed.

        When bmaz, who is an enthusiast, when it comes to automobiles,says he’s impressed, those of us who share his enthusiasm are inclined to listen.

        GM is going to have to impress with excellence AND affordability, and they’ve not much time to do so.

        Beyond convincing the public, though, they have to convince their work-force, and that must be accomplished by treating the lowliest worker with respect and appreciation (translation fair and reasonable wages and benefits) because in terms of quality, that is precisely where ‘the buck stops’.

        We shall see.

    • Rayne says:

      Seriously, you need to do some reading on the topic before you make assumptions. You don’t live here in Michigan in car country, where we talk about it over the dinner table every night. Battery plants are locating here in what is UAW’s home turf.

      The much bigger problem isn’t some bullshit nebulous threat that batteries will somehow cost union workers jobs; it’s that the American people have failed to invest in technology including research and development of batteries for the last 20-plus years.

      We went to the moon and then we sat on our laurels, in other words. We are now a net importer of technology, and we suddenly forced to compete with other countries who’ve been investing heavily in technology all along as part of their national strategy.

      And you also need to do a little more boning up on risk management. The batteries in the EV-1 had a nasty habit of blowing up; what would have happened to the development of the electric car in the U.S. had there been spectuclar, fiery deaths of families in one of those things? It’s no wonder they killed it; imagine how damned bad it had to be for an American car company to hunt them all down and remove them from the marketplace.

      • bmaz says:

        Sadly, that is exactly right and what i was saying earlier about the EV-1. It was a prototype that never should have been released, it just wasn’t ready. Fucking drove like a turd too I might add.

  30. SanderO says:

    My impression has been that GM missed the boat on innovation for years and produced a line of cars which were not well built, not fuel efficient, not safe, not best in ANYTHING. Foreign companies excelled in every single niche.

    We need to US companies to be absorbed by German and Japanese car makers who make THEIR designs in American factories.

    Screw American corporations who have screwed american workers and american consumers for decades

  31. randiego says:

    Bmaz, thanks for the heads up on this… what an impressive session.

    I’m slammed today and will need to come back and read through tonight.

    Cheers, carry on.

  32. SanderO says:

    We need to get out of the car culture. Worst thing that happened to America.

    Sure we needed a means of transport, but detroit killed our rail system and paved paradise with interstates. YUCK

    This let to suburbia and big box stores and malls. I blame it on the car.

    • bmaz says:

      Yes, there is always something to demonize and rail at. But reality proves a different picture to be dealt with, few Americans want to alter their lives as radically as you seem to contemplate.

      • SanderO says:

        They may not want to alter their lives that much but they are going to have to ultimately and the sooner we move in that direction the better we will all be.

        We need a sensible sustainable economy with productive needed jobs producing goods and services. We don’t need to preserve dinosaur corporations which extract profits.

    • billholstein says:

      Millions of Americans would tell you that the car allowed them to pursue their freedom, by living where they want, working where they want, etc. We have based our entire society and culture on the car, beginning in earnest after World War II. Other societies, notably Japan’s, haven’t. But for the United States to suddenly turn away from the car is impossible. It would take decades to make a significant shift. And by now, our population is widely distributed, making mass transportation largely unrealistic for most. These are the realities.

  33. judybrowni says:

    I haven’t driven a car in 25 years — wouldn’t start now, if I could.

    Public transportation has been strangled deliberately by the car manufacturers and oil industry working in tandem.

    Both were happy with our poisoned air, fought like tigers to keep it poisoned — why I should fight for 4 million dollar CEOs who now fight to kill the middle class for their workers, is beyond me.

  34. rwcole says:

    The Volt will be important for PR purposes- but I doubt that GM will make any money on it for many years.

    The Pruis type hybrid and the Ford Fusion make sense today- they are near zero emissions and get 51 and 41 MPG respectively. They are well worth the few thousand extra dollars they cost over the non hybrid models. Going from a Prius to a plug in Prius would save about $600 per year in fuel for most people at an incremental cost of $10K or so- in addition, the cost to replace that battery is going to be enormous for many years.

    Plug ins are the next step- but probably become viable at about $10 per gallon- and we’ll see that within the next ten years.

    • bmaz says:

      Keep in mind that the vaunted Prius had to be sold at a loss at first until the volume built up; no reason the Volt cannot be handled similarly. And it IS important for PR and momentum purposes. It will be symbol for the future.

      • rwcole says:

        True- but there was more built in upside to the Prius…

        At $5 per gallon- assuming you drive a 1,000 miles per month- going from a 20 mpg vehicle to a Prius saves $1,800 per year

        Going from a Prius to a plug in Prius saves only $600 per year.

        The incremental cost of the volt over the Prius would have to be limited to $3,000 or so in order to recover incremental costs in five years.

        • bmaz says:

          Ah, but it is not just the nature of the tech that comes into play; styling quality, amenites, handling, etc. do as well. The Volt is not designed to be as pedestrian as the Prius, so that will be some of the difference in price. But your point is well taken overall. If GM can get it price competitive relatively within 2-3 years, then that seems acceptable, and they are shooting, I think, for 2 years out. It doesn’t happen overnight. And the mechanics of Volt are said to be far more advanced than Prius. We shall see I hope…..

      • billholstein says:

        My information is that Toyota loses money on each Prius it sells. It still is not profitable for them.

    • billholstein says:

      The Volt is about much more than PR. The company has staked its reputation on it, and so has Rick Wagoner.

  35. judybrowni says:

    EV batteries may or may not have been a problem, but instead of working on development, GM dropped out of working toward batteries that were safe and practical for what? A decade? Or is it more?

    I’ve seen too many automobile industry betrayals in my lifetime to trust their newest turnaround.

    As soon as the union is decapitated, now that the price of gasoline is down, watcha wanna bet all that battery development is dropped, as well as their new interest in quality?

    • Rayne says:

      Jeebus. You really know jack about the car industry and yet you continue to spout about it.

      GM had spent quite a few years and nearly 2 billion dollars on research and development of hydrogen and fuel cell powered cars by 1999 (you can find an article on this in Business 2.0 magazine circa 2002, I’m not going to find it for you).

      After the EV-1 GM continued to work on alternative energy; the problem is that the public continued to demand gas pigs like Hummers, making it more difficult to rationalize to shareholders the massive expenditures necessary to make up for the public’s thin-to-non-existent investment in alternative energy technology.

      (Somebody argued upthread that the car makers manufactured demand of gas hogs — the Hummer is proof this was not the case, since GM bought Hummer AFTER the public had already been snapping them up. And those weren’t particularly well-marketed before GM bought the company.)

      So along comes the Bush administration, giving lip service to fuel cell and hydrogen; he enters office in 2001 having promised tax credits to the tune of $400 million for the entire industry. Pretty useless to GM at that point after spending beaucoup out of pocket.

  36. SanderO says:

    I am all for lots of jobs. I am all against the hideous car culture that GM perpetuates and that includes NASCAR.

  37. oldtree says:

    GM, and industry, supporting a lot of Americans. Yes.
    Moving forward to sustain the company, no. GM has a terrible issue with what it builds. It started the Volt as it knew it was going under. Some green toward the end of a wasteful existence, spending the last of the seed money as bankruptcy looms. It is seems a perverse way to gain the sympathy of a few Americans as it begs for a bailout. No, the people at GM do not inspire any form of confidence. Why would anyone consider giving them another chance? They could have made the decision to fix things years ago, but decided profit was better than sustenance.

    Ford has an electric pickup/delivery van coming next year, made in Turkey. How curious that it has to be made in Turkey or outside the US? How odd that it has no “fashion” related to it. I am looped at the distinction of how Toyota’s design makes it unappealing? Who in the hell would care if it runs for 20 years without an oil change, and your ford or chevy run a few thousand miles before they develop an oil leak. Let’s not compare the fuel economy or repair records, that would be unfair.

    If people will still buy their transportation based on fashion, they get the crap they deserve, If you want to buy a vehicle that does what you need it to, they don’t exist. Based on what I have read in this article, it seems GM is doomed to repeat a failed policy. Does no one at GM get what we need in this country? Do they still believe that they if they create it, people will buy it? That really shows a leadership with shit for brains.

    • billholstein says:

      GM started with the development of the Volt long before the current crisis hit it. Read my chapter on this.

  38. Teddy Partridge says:

    Do you think GM is erring in eliminating its Halo cars like the CTS-V? Seems to me a company has to stand for something, and eliminating the Pontiac G-8, the CTS-V and (maybe even?) the Corvette make it tough to appeal to buyers for whom image matters. Not many of whom are here today on this thread, but still…. *g*

    • bmaz says:

      Well, they will not eliminate the Corvette, nor will they the new Camaro, which I understand will be quite good. I think the V models will probably be axed. The rest scaled back, but still remaining. And, no, they should not dump performance models, they are very important image wise and PR wise.

    • billholstein says:

      A piece in the NY Times today by Jim Cobb explains this. They’re not really completely walking away from their performance vehicles. It’s in the car section. I can’t find it online.

  39. SanderO says:

    GM was a bloated company with no innovation and resisted every safety change along with the other detroit slugs, fought CAFE standards like pit bulls.

    I feel for the workers but not the for the company.

  40. judybrowni says:

    Strong unions are what created the middle class in America, if your particular union isn’t strong, blame the Republicans and their enablers.

    Strong unions also forced other industries to be competitive in salary and safety for their workers.

    Why do you suppose the Republicans have fought for 30 years to kill off the unions? To create the reverse pyramid we have now — bloated CEO payments, workers on starvation salaries. Which starves the country.

    When we had strong unions, we had a strong middle class — note that the unionized workers at GM made $28 an hour had pensions and healthcare, and helped create a strong economy by infusing that money into their community.

    It’s difficult to raise a family on $15 an hour, the non-unionized wage, and that means half the money going into the local community.

    Think that $4 million CEO dollars is going into Detroit? Nope, Swiss or Bahamanian bank accounts.

    • sad4america says:

      It’s the Union itself. I started working they told me, “lay low for 90 days til you get in then they won’t be able to fire you for hardly anything. People that got caught sleeping on the job, having sex on the job have gotten fired and then gotten their jobs back because the union fought and got it back. I work hard and don’t get into trouble and am paying for the one’s that do. Our dues just got raised around $5 a month and one of the reasons was to increase our strike benefits $100 a week. We will never go on strike, the employees can’t afford it, most make decent money and live paycheck to paycheck and that working 7 days a week some even husband and wife both working that much at the same place.

  41. SanderO says:

    Bloated management overcompensated and clueless.

    It’s the unions fault, they ruined detroit.

    Detroit ruined the rail roads and we need them more than cars.

  42. judybrowni says:

    And the luxury goods bought by the 4 million dollars don’t employ as many workers, either.

    For an imaginary instance, selling 100 pairs of $40 shoes employs more workers than one pair of $400 dollar shoes.

    You want a strong economy? Then you want strong unions. You want a shit economy with only the top 1% safe and secure, kill unions.

    I notice that our enlightened author still hasn’t answered my question: how can a GM worker support a family on $600 a week?

    • sad4america says:

      I live in Wisconsin and support just my girlfriend but I was making $600 a week and was able to pay off my school loans ($20,000), buy 2 duplexes with 10% down ($90,000 house cost average), start a 401k and put $15,000 into repairs of my first TLC needing duplex in the last 3 years. I took a $150 a week pay cut to get into the maintenance program as a millwright and am still surviving just fine. yes it is Wisconsin but understanding money shows you how to accomplish and strive towards goals that are the best for you and what you need to have a better life down the road.

    • bmaz says:

      You understand do you not that Rick Wagoner and the GM board has agreed to $1 a year salary to get the loan package right? Or is even a buck too much??

    • billholstein says:

      Obviously $600 isn’t a lot of money per week. What the UAW says is that the workers starting off in Tier 2 will eventually be able to move up to Tier 1 and make a better wage. But all this presupposes that when workers are young, they will work hard, including perhaps overtime, and their spouses also may need to work. But over time, they’ll make more money. Will they ever live as well as the folks making $28 an hour? Of course not.

  43. SanderO says:

    Let’s save McDonnel Douglass and Raytheon and Northrop too. Heck we need their… Oh I forgot they employ workers… can’t stop making killing machines either.

    • DWBartoo says:

      Why Sander, that is the only truly ‘healthy’ segment of our ‘manufacturing base’, and isn’t making a ‘killing’ precisely what American ‘enterprise’ has been about for years?

      You are correct about the rail system. It will be needed, as part of a coherent national transportation system, for both passengers and freight.

      But we are probably some years from that ‘realization’.

    • 4jkb4ia says:

      McDonnell Douglas has been owned by Boeing for the last 15 years. That really is a national security issue. My husband complains all the time about having only two contractors for any contract that Boeing might get.

  44. SJD53 says:

    Toyota’s don’t break?

    In 2007,Toyota made 2.26 million vehicles–and RECALLED 2.38 million.

    “Common knowledge” is often wrong.

  45. judybrowni says:

    I’ve worked in jobs without unions and there were lazy bastards there, too.

    And corruption.

    But whenever I’ve been lucky enough to have a union job, I had better healthcare, a better salary, and better working conditions.

    Only wish I could pay union dues now.

    Statistically, workers in unions make better salaries, have better healthcare — and are more likely to have pensions.

    Remember pensions? My father is 85 and isn’t starving through a combination of a modest pension and Social Security.

    Killing unions also meant killing pensions: if you don’t have one, thank the union busting bloated CEOs and Republican politicians.

    • sad4america says:

      The union sold my chances of getting a pension because they traded my pension to the older workers so they could have an extra 1/2% raise and not challenge double time on sundays. The union reps are mill workers going against lawyers how in the hell is that fair.

    • bobschacht says:

      “Remember pensions? “

      What I remember is that when I entered the workforce, pensions were “defined benefit” pensions. Then we all got seduced by “You clever people can make more money than those stuffy old retirement fund managers if only you get to choose where to invest your money!” So we went from defined benefit pensions to defined contribution benefits and guess what! They socialized the risk and privatized the benefits. So we got all the risk, and the pension managers got to say, “tsk, tsk, sorry your retirement funds tanked; I guess you made the wrong investment decisions! Too bad!”

      Freeing pension funds from that old-fashioned defined-benefit strait-jacket took an enormous load off their backs. Never mind careful management! Caveat emptor! Wheeeeeeeee!”

      Did anyone actually ever stop to read what those pension contracts amount to?

      “You give us your money, and we’ll invest it for you in Funds A, B, C or D. Your choice! If you lose money, well, we’re not responsible! You had free choice! Isn’t that what you wanted?”

      We’ve been snookered.

      Bob in HI

  46. rwcole says:

    Most cars are sold on the basis of sex appeal than practicality. If people just did what was practical they would all buy a Prius and keep it for 10 or twelve years before trading it in on another…If we all behaved like that, the car industry would be pushing up daisies somewhere.

    The car market depends on people reading about the new SuperMobile and deciding that they just can’t live without it.

  47. judybrowni says:

    I still haven’t gotten an answer from either our enlightened author, or any of the anti-union types here: how does a GM worker raise a family on $600 a week?

    Maybe they didn’t hear me: how does a GM worker raise a family on $600 a week?

    Again: HOW DOES A GM WORKER RAISE A FAMILY ON $600 A WEEK?

    Maybe it will help to shout, ’cause they can’t hear over that $4 million CEO compensation.

  48. hackworth1 says:

    The theory of environmentally benign, economical cars is a myth. If cars were made thusly, then billions more people would own and drive cars. There would be more polution, gridlocked traffic and other problems.

    The truth is that our solutions lie in mass transit, which many Americans hate to consider.

  49. judybrowni says:

    How nice that your housing market is so depressed that $600 a week goes a long way.

    But you don’t have children yet, major health problems, or a retirement to fund.

    Good luck with all that, if the industry in your area decides they can find workers to replace you on half your salary.

    • sad4america says:

      no our housing market doesn’t go to extremes like some places but I did buy at the peak (nov 2006) (June 2007). I saved and didn’t go out much and yes I did start my 401k which if unions really worked for their people they should make workers opt out of 401k programs instead of opt in. I’m already making less than what you said was hard to believe to live on so how could they lower my pay?? Wisconsin is a huge mill state, we have been shedding jobs consistently for 7-8 years.

      Guess what our brilliant governor Jim Doyle proposed his budget ( we have a projects deficit of 5.4 billion over the next 2 years. So he institutes a $.75 tax increase on cigs, (i don’t have a problem with that, I smoke but who cares) he then went on to explain that he doesn’t want to make money off this tax but only to discourage new smokers from starting and current smokers to stop, because that what a tax does. That all well and good then he says he is going to raise state corporate taxes…. so what does that do by his logic understood by most anyone? well it discourages new businesses from starting or coming here and encourages current businesses to stop doing business here.

  50. judybrowni says:

    You understand do you not that Rick Wagoner and the GM board has agreed to $1 a year salary to get the loan package right? Or is even a buck too much??”

    It’s our illustrious author who felt $4 million compensation for the GM CEO was “reasonable” — his figure, not mine.

    Think about it, how can Rick Wagoner and the GM board AFFORD to live on $1 a year? Could you? How many millions do they have stashed away? What other compensation are they receiving?

    • smedl says:

      Stay mean, judybrown.

      This conversation is not about cars, its about the social and economic benefits of investing billions of american bucks for some yet to be determined societal good. A CEO making 4 mil is ok, a bunch of top-dollar engeneers and IT folk making 100k+ is also cool. Doing all this on the backs of a few thousand folks trying to raise families on 15.00 bucks an hour is ludicrous corporate bullshit.

      And BMAZ, try to imagine how those dinner conversations might go if you and the wife were instead trying to what to cut out, maybe what you couldn’t eat this week so you could buy those shoes, school supplies or, god forbid, that cheerleader’s outfit. The automobile industry? In and of itself its no big deal. There will always be someone to build the next car.

      s

      • bmaz says:

        Who builds that car matters to me, and I do worry and make those calculations. I think my, and everyone else’s lives would be infinitely more miserable financially if GM is forced into bankruptcy and liquidation. Plus, I flat out like their new products and what they are doing to restructure the company. Are they behind the curve from where they should be, yes they are. Are they on the right track now, and if they can make it past the next year or two will they be a solid company that will be good for the US? I am absolutely convinced that they will.

  51. foothillsmike says:

    I can’t for the life of me understand why as a consumer based society we are scrambling over ourselves to eliminate potential consumers. This concept of beating down workers is absolutely insane. Can a $600 a week worker afford a new car whether it is $20K or $30K

  52. judybrowni says:

    Job growth may be “faster” in right to work states, but what kind of jobs?

    Not the kind that fuel and fund a vibrant middle-class.

    Unions have been crippled by the kind of deals forced on them by supply-side Republicans for 30 years: just like the one GM is forcing on their workers, 1/2 the salary for the same work.

    Whatever you’re making now, halve it: that’s what GM is doing, killing what’s left of the middle class in their communities.

    But I’ve read the statistics (on this blog) if I don’t have them at my finger tips: Union workers make better salaries, have safer workplaces, better healthcare and more pensions, than non-unionized jobs.

    I remember when America had a middle class, and it was after unions had fought for decades for that middle class.

    What we have now is in large part from the death of unions — if you like this economy, then fine, hate unions, too.

    • sad4america says:

      Thanks for agreeing on that job grow faster. Now another economic rule, supply and demand. When there is a great supply of jobs than their is demand for them, then the wages naturally rise. I’m not saying minimum wage is bad but you are buying minimum work with minimum wage. any smart business person knows this, higher wage attracts better worker.

      If I didn’t have union dues I would have more money to spend in the community instead of the union funneling it off to places not in our community. If our benefits and pay got cut I could apply to other mills in the area with similar pay (not union). This would most likely keep our company having competitive wages.

      This blog isn’t always the best source of information, I also read on here that the CEO’s of the Big 3 are making millions in Salary when they all took pay cuts to a $1 in salary.

      • bmaz says:

        There is a difference between what their assigned presumptive salaries are and what they agreed to take as part of the loan/restructuring process with the government. They also undoubtedly retain options and warrants such that, if they really get their companies turned to the promised land, allow them to benefit thereby. They have put their compensation where their mouthes and beliefs are though, and that is a good thing.

        • sad4america says:

          Of course, which is also another reason why I don’t like hearing the demonizing of the rich. Executive and business owners don’t take big salaries. A great deal is stock so when they have successful companies and do good their benefits are multiplied but also are the other shareholders through 401ks, IRAs, Roths, pensions, ect.

  53. Hugh says:

    a level of expectation has been set

    But as a lot of clawbacks in union contracts have shown that level of expectation doesn’t exist in fact. It has been deeply eroded by the actions of companies.

  54. judybrowni says:

    Good luck with that 401K, many of the Americans now in their retirement years who were forced out of pensions into 401Ks are people in their 70s, 80s no matter their health problems, being now forced to go back to work, looking for jobs that no longer exist.

    I end up talking to some of them every week: they’re rightly frightened.

    It wasn’t the unions dropping pensions, it was the corporations emboldened by 30 years of Republican government officials being paid off by the stockmarket that killed pensions. Pensions only existed in the first place because unions fought for them.

    It was the corporations given tax breaks to take American manufacturing jobs overseas (yes, even corporations already making a fat profit in the U.S., despite paying their workers a decent living wage.)

    Unions have been weakened by the corportate-run Republican government over the last 30 years; you know, those nice people who also brought you the financial collapse we’re now in.

    When unions were the strongest, and Democrats in power in the 1950s, ’60s, we had a strong middle-class: even lower middle-class people had hope for the future, one parent working could support a family, their own homes they could afford, and freedom from fear in their retirement years. Health care was affordable, too (Blue Cross insurance was non-profit then, and yes, actually paid the medical bills, without telling the doctors what they could and couldn’t treat.)

    But I guess it takes an economic clusterfuck like we’re in now to kill some of the zombie lies about unions, and right to work, I’m just motherfucking surprised that people on this blog have fallen for them.

  55. judybrowni says:

    Actually, the states with the highest minimum wage are actually the most prosperous, the states with the lowest, well, duh — workers with less money to infuse into their communities.

    Really, people — you’re on a progressive blog, why the hell are you repeating the zombie lies of Rush and Billo?

    I can’t believe you’re still falling for that crap.

  56. judybrowni says:

    And if you hate unions so much, why not quit and get yourself one of those minimum wage jobs you love so much?

    But please make sure it’s at least at half the salary you’re making now, because you think that’s just hunky dory, too.

  57. sad4america says:

    The unions negotiagate the companies dropping pensions. and in our case it was dropped so the current older workers could keep theirs and get a bigger raise. The people in the union look only at the short term wereas good company owners look at the long term. The unions I know cannot represent its people properly because they are not lawyers and won’t hire them or use them so they get ripped off by these “evil companies”. Life was a lot different in the 50’s and 60’s too. People did not take 2nd mortgages on their house to buy a boat and most houses seemed to be a single income household, we have a better quality of life now with all the perks and healthcare is better. Yes life is more expensive but also a lot better

  58. sad4america says:

    The biggest Union state is Michigan and they have been in recession for depression for how long now????

      • MadDog says:

        Just a short reminder about our “friend” sad4america’s CV.

        He is a 23 year old who lives in Wisconsin. He went to college for a little bit, but didn’t stay for a degree.

        He apparently has traveled little, seen little, knows little and desires to know less.

        Much is generally learned from “experience”.

        sad4america apparently does not think so and puts his “lack of experience” up against the “experience” of those who have lived twice, three times, and even four times as long.

        And their degrees, graduate degrees, doctorate degrees, work experiences, life experiences and intellects are and should be considered irrelevant and meaningless when compared to sad4america’s lack of same.

        The “learning” that sad4america gets apparently comes from memorizing, repeating and swallowing whole Rush Limbaugh nonsense litanies from talk radio.

        To wit:

        1. Tax cuts solve every problem. Including acne and connubial bliss.
        2. Rich people are better because they are rich.
        3. He knows everything he needs to know already at age 23, doesn’t believe there is anything else to learn in life, and can’t fathom why others don’t stop learning too.

        Other than that, sad4america is a pretty knowledgeable expert on life.

          • MadDog says:

            Pardon? For you, anything!

            But are you sure you want a pardon? That would deprive you of your 5th Amendment rights. Can’t have that, can we? *g*

            How about a nice lil’ ol’ commutation? I hear Scoots has a slightly used one he’s flogging. Wants to trade up, but no takers so far. *g*

  59. sad4america says:

    This stuff works, are you living better because of “progressive values”. If yes then good for you if not then why do you believe in them so much. I am doing better because of my beliefs and they work for me. I don’t have to depend on others. I depend on myself and in fact get to help others because I want to not because some one takes my money and does it how they see best.

  60. sad4america says:

    The 6 states with the lowest minimum wage are minn., wis., geo, kansas, colorado, Arkansas. And their unemployment rates are 6.9, 5.8, 8.1, 6.5, 6.1, 6.2 respectively. Only Arkansas has a higher unemployment rate than the country average. So I don’t get where you got that higher minimum wage means better for the people and state?

  61. judybrowni says:

    Michigan a big union state? Maybe, before those compassionate car corporations did their damndest to do away with as many union employees as possible, which killed the local economy.

    Besides, what wrote was that the states with the highest minimum wages were actually the most prosperous (haven’t looked it up, but I doubt that’s the case with Michigan.)

    “Executive and business owners don’t take big salaries.” Um, no. CEO salaries are hundreds of times bigger then they used to be just decades ago — oh go look it up yourself, I’m tired of these baseless claims.

    Texas is doing quite well? Facts and figures, please. I do know their air is more difficult to breathe, because industry is highly deregulated there, so I doubt the corporations are more compassionate toward their workers than the citizens of Texas with lungs.

    Unions have BEEN FORCED to negotiate pensions away by those oh, so compassionate corporations, which is what I’ve been saying all along. By threats to take jobs overseas (which the corporations have been given tax credits to do so by Republican government), by using any downturn in the economy as an excuse — or just ’cause they fucking felt like it.

    GM is asking for our tax money so they can screw their workers! Which screws their workers’ community, which screws our economy.

    401Ks and IRA’s are not the equivalent of pensions, but in large part a scam by Wall Street — which those with 401Ks are learning in a disasterous fashion at this very moment.

    One of the reasons Democrats won this past election was millions of Americans opening their 401K statements this fall. The Americans lucky enough to have pensions haven’t experienced a similar sticker shock.

    Those what? maybe dozens of people who took out a second mortgage for a boat, if they even exist at all — THEY’RE the ones responsible for the mortgage meltdown???????

    [This comment in its original form had some inappropriate portions that have been excised. You are free to comment, even in an uninformed manner, but overly foul and pointed language is not a good thing]

    • sad4america says:

      401ks and IRAs are just vehicles for retirement funds, you can have real estate or bonds or money market accounts or cash in them, just because the stock markets go down doesn’t mean the 401ks and IRAs have to. If these vehicles went down then the money was allocated to stocks and riskier investment instruments.

      I don’t think GM should get more money, they ask the US for another 16 billion and go around and ask other countries for another 6 billion. Ford is surviving without money. The foreign based car companies are alive. Crystler shouldn’t get money either because their private-equity owners should put up money for their investment they got for a bargain.

      You seem to focus on the short-term and just not see the big picture

      • jdmckay says:

        401ks and IRAs are just vehicles for retirement funds, you can have real estate or bonds or money market accounts or cash in them, just because the stock markets go down doesn’t mean the 401ks and IRAs have to. If these vehicles went down then the money was allocated to stocks and riskier investment instruments.

        GE stock is now near junk level. BofA, CitiCorp about the same. Across the board… any board: big, NASDAQ, NYSE, same thing.

        Remember the term: BLUE CHIP STOCKS? It’s a historical artifact now, because there are none left, at least on US shores.

        Why is this… how did this happen?

        Because (short explanation)…
        a) Banks were allowed to combine operations w/investment houses. Despite massive historical evidence this was bad idea (eg: great depression… the 30’s one, not current unfolding deja vu) because, as happened previously, investment “discipline” was abandoned when said investor’s $$s were not at stake, repub congress pushed this through. Clinton, at urging of Greenspan via Rubin, complied.
        b) Glass Stegal abandoned, same investment gurus pushed for entire deregulation (eg: take cops off the beat because investment banks “free market” theology somehow reached moral equivalency Christian Values somehow) of their “financial products” (derivatives). Mantra was and continued to be: “we don’t need to watch ‘em ’cause they don’t need to be watched”. Contrary to most of news and right wing talking points, Clinton did not go along w/this one. Arthur Levitt protested vehemently, predicting just what has unfolded. Tom Delay’s response: shut up or Congress will defund the SEC.
        c) Investment banks began packaging mortgages as securities. The “bet the bank”… literally, on these investment “vehicles”. They went entirely unregulated, and Wall Street flooded the planet with them: some $70 trillion worth.
        d) They flooded US portolios everywhere: retirement accounts, mutual funds, state issued bonds, insurance company “investment”… everything.
        e) Rating agencies: Moodys, S&P, Fitch… all rated ‘em AAA w/out ever “looking under the skirt” to see what made these time bombs tick. Investment managers everywhere… Europe, So. America, and especially US bought ‘em based on AAA rating w/out taking ‘em apart and seeing for themselves if they were legitimate and sound.
        e) Returns on these things were high: 4-8% (sometimes more) w/a “guaranteed” AAA rating… solid as a rock!!!
        f) These “securities” were sold, repackaged, sold again, repackaged again, resold… each time investment manager taking huge fees while promising same high yields. These monsters (mortage CDS’s) were not backed up by underlying assets, rather they were backed up by each others (eg: Lehman backed up by Goldman/Sachs, GoldmanSachs backed up by Lehman, etc.) vapor paper: mortgage CDS’s.
        g) Money flooded to these things because US economic investment in the “homeland” flooded to China/Viet Nam/India etc: eg. cheap labor and unregulated manufacturing. Or to put it another way: US industry sold out health of domestic economy completely for a quick few $$ while abandoning consideration of standards and institutions long established in the service of preventing the big mess we’re now in.
        h) Those grade AAA investments were leveraged 45:1. This means for every dollar of underlying asset, 45 times that amount was sold as AAA bonds. And that doesn’t take into account the fees taken along the way, nor the falling underlying asset value: real estate prices.
        i) Mortgage brokers, pushing repub congress hard, got SEC regulators to look the other way as they flooded the mortgage market w/various forms of variable rate mortages (VRM/ARM). They did this because their commision on these VRM/ARM mortgages was +/- 3 times that of conventional mortgages (eg: fixed rate). The consumers (home buyers) who got swept up in Federal Gov fueled housing frenzy didn’t read or understand what was being perpetrated upon the. Nor did anyone squack about worst of the scandal: somewhere around 85% of those ARM/VRM “customers” were well eligable for less expensive & safer conventional loans. The only difference between the 2? Countrywide & that bunch made $billions more selling the funny stuff. Buyer beware, deliberate ripoffs… or as the republicans like to call it: free market at work.
        j) While US industry shipped all our econ activity offshore, so evaporated US consumer’s source of income to pay these bills (mortgages). The entire DOW upswing in BUSH era was built on one thing and one thing only: continuing increase in Real Estate value. US consumer’s disappearing income was replaced by dependence on value of their real estate increasing.
        k) The first round of VRM/ARM rate increases kicked in around March ‘08. Homeowner’s monthly payments went up 30/40/50…100% depending on circumstances. People couldn’t make payments.
        l) Foreclosures began for obvious reasons. In many cases, originators couldn’t find the “paper” because these things had been packaged and repackaged so many times there was no paper trail.
        m) As foreclosures increased, prices dropped because the pool of US citizens w/adequate income to make payments had dried up. Whether GM workers, software/tech engineers & programmers, manufacturing and just about everything else: the jobs had been shipped offshore and BUSH/repubs gave these corporations tax incentives to do so.
        n) Having put all our (US) eggs in one basket (Wall Street), and hammered a massively under informed public (like yourself) day after day on talk radio, FOX news and WSJ OpEDs with the same propagandic screeds: “free market at work”, “building wealth” (while they were actually stealing it), and “supply and demand determines price” (when mechanism was financial fraud as described above)… we are left we a US public largely uninformed of mechanisms that got us to the brink of ruin, and pumped so full of right wing bull shit they don’t know whether to scratch their watch or wind their ass. The only thing the know is they are broke, there’s no safe place to invest any $$ they may have left, and the massive consumerism of US which fueled all this stuff buying TV’s and Lexus’ is grinding to a halt and pulling down the world economy with it.
        p) BUSH’s “fix” (TARP) has put US taxpayer on the hook for all these really bad (toxic) assets by combining liability into US Treasury obligations… something that Republicans prior to Gingrich/Delay era would never ever have even considered, yet through these years all this has passed off to public as “conservatism”.

        So w/all due respect SAD, your screed about “smart investments” is as vaporous as US economy, because the only “smart investment” in America right now is no investment at all. We, as a nation… the $USD, our organic homegrown economy, the profitability of our corporate enterprises… it is flat ass gone. The $$ described as “increased productivity” over last 8 yrs was nothing more than cheap offshore labor delivering products back to US that were not producing US paychecks.

        There is not an institutional investor on the planet outside of US who is putting a dime into US stockmarket, because under current circumstances there is no belief whatsoever in a return. The US government has assumed the as-yet-undetermined cost of all those black market mortgage “securities”, but Bush and (sadly) Obama have not seen fit to force our financial institutions to legitimize their books to accurately reflect the losses. And it is this lingering black hole that is preventing any investment in US econ activity, and said activity will not resume until all that junk is available as reliable accounting numbers.

        You don’t know how it happened, you don’t know why it happened, and you think the little bit of prosperity you think you’re enjoying was accomplished just by you w/out any institutions or hard work by previous generations that made your opportunities available to you. Nor do you understand that in 8 short years the BUSH/GROVE NORQUIST free marketers you embrace have convinced you of myths while they destroyed the entire foundation that made it possible for you to get off to a good start in life.

        So congratulations SAD… you, like so many other millions of Americans, have been had and you don’t even know it yet.

        Have a good day.

        • sad4america says:

          Wow!!! Very accurate and step-by-step explanation of a major part of our current crisis. Yes I am young but I didn’t go down this path because of my short time on earth. I read books and utilized a critical mind at every piece of information I read. The complexity of the world’s financial markets have skyrocketed in the last 80 years but the same basic principles still apply. Their are rises and falls in the markets of all areas. During the good times people think nothing can go wrong and reduce their weight on risk and due diligence. During the bad times quite the opposite comes in and things seem that they will never turn around.

          It appears your whole argument was saying that anything in a 401k or IRA would have to lose a great deal no matter what. While I agree with you that much was risky some of this “irrational exuberance” if you will encouraged people to take more risk than appropriate and be more weighted into stocks. As I said you can be in cash or money markets accounts in retirement vehicles. Yes people as a whole lost a lot of money but the vehicle was not to be blamed but the underlying investment. These target date retirement funds I believe will bring a lot more stability to peoples retirement accounts because 1. People fear they don’t know enough to make their own investment decisions and balencing of their portfolios. 2. Risk will be automatically reduced as the person gets closer to retirement age which should be done. People from 55-65 or folks who needed money for college or what have you in the next five years should not have lost the 40%+ that the broad stock market did, because they should not have been in stocks.

          As for implying me to be ignorant, I can understand your position but also disagree. My opinions are truly different from many around here but I do not listen to a broker or a lawyer or a Realtor, or a financial adviser, or the talking heads on TV and radio, or the government for what I should do for the best for me. I take into consideration these things as well as many others. I look at history and try to learn its lessons, I don’t invest or do something unless I feel I have a solid understanding of something and could explain it to another. This is why I don’t listen to the aforementioned “experts in their field” because to often I ask a much needed answer and they either don’t know are uninformed, or consistently focus on either the short-term of things that have no real relevance.

          Maybe I am completely wrong, if I fail I will most definitely own up to it because their is never, in my own life in my mind at least, anyone I should blame but myself. I don’t think republicans are always right and dems are always wrong. I believe everything has become so intertwined that many problems result from opposing ideology butting heads in legislation causing problems in and of itself.

          Lastly our economy has been free market based for a long time and has always seemed to come back eventually. We are going more into “socialist” tendencies but I also think in time that it is the right thing to do. As a powerful country we seem to see ourselves as world police. The richest of the rich see themselves as people who should give back and fight poverty and our nation prosper. I think our government could focus more on that than the world police area but it will take the world cooperation and a great desire of the American people to want to help themselves

        • earlofhuntingdon says:

          Sad day for the MSM when a blog post can put in a nutshell the kernels they ignore and throw away. Thanks for your quick summary. As for its intended, rumor has it that ignorance is curable, but stupidity is terminal. Much of the MSM is too far gone; its owned by those who’ve gutted the economy and need to reaffirm their choices. As for their readers, the jury’s out, but that’s not a good sign. Thanks again.

  62. readerOfTeaLeaves says:

    ut Holstein argues that our political and financial leaders don’t get manufacturing, and don’t think it’s important. This is the crux of the Main Street vs. Wall Street debate, and it is shaping up as the core fight of economic policy over the next few years: do we get a justifiable return if we invest in making things, or should we focus on information-driven innovation?”

    Sorry to miss it in real-time. Look forward to reading comments later.
    However, I think the inability of finance to grasp the challenges, risks, complexities, and value of good engineering is an important topic that needs A LOT more discussion, so I’ll look forward to catching up later and hat’s off to everyone able to participate in real-time!

  63. judybrowni says:

    MY EMAIL TO HOLSTEIN:

    Subject: Still waiting for an answer to my question

    How are the GM workers supposed to raise a family on $600 a week? Could you?

    I’ll be happy to report your answer back to the thread at FireDogLake, if you have one.

    I might be less hostile to a bailout of GM, if they weren’t set on using it to screw the American worker, kill the union, and deprive their local communities of half the income those workers now inject into it.

    That’s a recipe for more economic spiral down.

    Add that to GM’s history of bait-and-switch on electric cars, their hostility to clean air, and their previous dedication to planned obsolescence and I doubt your book would change my mind very much.

    But I’ll read it, if you can honestly answer my question: How are the GM workers supposed to raise a family on $600 a week?

    • bmaz says:

      Hey, you know, I put Mr. Holstein’s contact info in the post. If you have something constructive to contact him about, people should feel free to do so. You however were on the edge of outright belligerence at many points today, and your last comment @153, that I, quite frankly should have stricken completely instead of kindly editing the vituperativeness out, was way over the edge. You were obnoxious with this in your face attitude to our guest here today, and I do not appreciate it in the least. Please do not abuse Mr. Holstein with your repetitive tripe. He, and several others, tried to respond reasonably to you, and yet here you are still going at it. Cease and Desist. Consider this to be a formal warning. This is not open season for you to get your ya ya’s out on kindly guests.

      • Rayne says:

        Thanks, bmaz.

        I’ve ordered a copy of Holstein’s book; hoping it will provide some additional insight into the near-term future since our household’s immediate prospects are so tightly wound up in capital equipment for the auto industry.

        Thanks to author Holstein for tolerating the rather rough-and-tumble here today, and thanks, bmaz, for the shark wrangling.

  64. earlofhuntingdon says:

    “Right-to-work” means “right-to-fire” with impunity. Anyone who’s held a job besides work-study watching basketballs deflate, and worked for a boss they didn’t get along with, would know that.

  65. judybrowni says:

    If Holstein can’t answer a simple question — why taxpayer dollars should subsidize a company killing the unions, and paying less than a living wage for a family — then why come to a forum at all? Why not just send us an essay?

    Poor, poor man. Facing up to GM’s faults, their history of bait-and-switch with both consumers and government, being asked simple direct questions.

    (A question I’ve seen before on this and other blogs — why should taxpayers pay a bailout which will be used for union busting?)

    I lived the bait-and-switch between GM and California and the electric car, which also has been detailed in the documentary “Who Killed the Electric Car,” so it should be no surpise to anyone that GM has a history of screwing the consumer, local government, the unions, their workers, and fighting against general public good, such as air quality standards.

    To neglect GM’s history in a forum on the auto company bailout would be foolish.

    And I still haven’t gotten an answer to my question.

  66. judybrowni says:

    Oh and another thing never addressed in this forum: GM is asking for a bailout, with plans to CUT jobs, not just replace $28 hr workers with $15 workers.

    Why aren’t we making it a condition of the bailout that GM NOT eliminate jobs?

    Again, a question that’s been asked on this and other progressive blogs.

    All well and good to be polite, but why should that replace answers and questions.

    • MadDog says:

      Why aren’t we making it a condition of the bailout that GM NOT eliminate jobs?

      Now you are for a bailout? Huh?

      Ok, if…if for example, GM required a $300 Billion bailout in order to NOT eliminate jobs, you’d be for that?

      If not, why not? Be specific!

      The points I’m getting at here are:

      You’re angry at GM (and perhaps others) for stuff they’ve done. So, what do you suggest they/we do?

      I’m not saying that the American Car Manufacturers have always been good for Americans. They haven’t.

      But what do you suggest be done?

      AFAIK, if we don’t bailout the American Car Manufacturers, millions more Americans will be out of work.

      AFAIK, with millions more Americans out of work, we will incur even more costs due to unemployment compensation, less spending of money on food, homes, cars, services across the entire spectrum of our economy, etc. simply because more Americans will have no income to do that spending.

      AFAIK, that sounds a lot like deliberate suicide.

      All well and good to be polite, but why should that replace answers and questions.

      It shouldn’t and I believe generally doesn’t. On the other hand, I’ve found that anger and a lack of politeness generally impedes any effort at communication. Don’t you?

      I’m not saying one shouldn’t be mad.

      I am saying that if in delivering your message, the primary thing the recipient retains is the anger and insult, rather than the real and important questions you ask, then the net message is anger and insult, and not those real and important questions.

    • billholstein says:

      The answer is that the federal government and the majority of the American people seem to have decided that GM has to get its cost structure in line with the foreign competition. They have no choice.

  67. iremember54 says:

    Think about bailing out these American auto manufacturers. These are companies that for years have been getting rid of workers who were their most loyal car buyers cutting their own throats. They moved jobs and plants out of country brought cheap parts in. Now their answer to viability is to cut more workers and close more plants. They have not had one bit of consideration for the workers or country.
    This is not the worst aspect of bailing them out that is that they will still be building mainly gasolene powered cars. Even if cars are more fuel efficient they still will use gas. The volt is an absolute joke it will be to expensive to buy use and maintain.
    There is no reason that they can’t produce cars to use ethanol natural gas and propane with the same engines and size of vehicles. It would take the Government to mandate it and help get the production and infrastructure to use them installed.

  68. readerOfTeaLeaves says:

    bmaz, if could synthesize what I see as a lot of the negative comments here — apart from the sad4…, whose ills and deficits MadDogs so brilliantly diagnosed — what I come away with is the sense that people really DO NOT ‘get’ engineering.

    IMHO, this whole thread really — and I mean really! — underscores Bill Holstein’s premise that part of the reason for the political incompetence around the auto bailouts is that the political class honestly does NOT ‘get’ engineering.

    And I’ve seen it before in other situations (like the highly qualified civil engineers who recommend not developing flood plains, and give excellent reasons and complete documentation and the policy makers’ eyes glaze over and they go out with their buddies from the Chamber of Commerce, and presto! when they return, they make a decision their buddies will like. God forbid they have to wrap their teeny, tiny little brains around the engineering issues! Heaven forbid!

    I see some of those same dynamics on this thread — people not recognizing the fundamental, very serious engineering issues, and the long term implications of those decisions.

    People need to get their heads out of thinking this is all about whether their GM car cost a lot of repairs; getting them to recognize that if GM doesn’t have a chance to have its years of effort and restructuring pay off we’ll all lose seems like the key issue to me.

    Kind of like asking Bob Corker if he really thinks it would have been smart for FDR to let Grand Coulee Dam get 90% toward completion and then throw his hands in the air and decide it was just ‘too expensive’. We would never have been able to benefit from 70 years of hydropower, although I’m sure a third party would have been glad to step in and clean up the profits (actually, Enron came close!).

    I can see why Bill Holstein is taking on ‘yeoman’s work’ just by reading this thread — it really underscores the dangers to all of us if Holstein’s basic ideas don’t become more widely understood.

  69. DWBartoo says:

    Bmaz, ya done good.

    You posts on this topic have attracted a ‘range’ of interesting opinion and offered superb opportunities for learning to those willing to avail themselves of the use of their thought processes …

    Bill Holstein’s perspective was appreciated even if, apparently, not wholly or, in part, embraced by all, or even most of those here in attendance. Hopefully, he might consider several return engagements?

    The discussion is not over, nor should it be. For it is important …

    Broad, and thoughtful discussion is spreading everywhere in this nation, and it is gathering momentum. Firedoglake, its founders, and those who have built it are daily gaining influence by deepening that discussion through the dissemination of factual information, informed conversation, and thoughtful opinion.

    The ‘process’ of learning together, of sharing ‘understanding’ and ‘appreciation’, is probably one of the most significant aspects of the new ‘medium’. It is also one of the most pleasant and rewarding of human experiences.

    Without a doubt, a greater percentage of the human populace are aware of a vaster reality and the infinitely more interconnected interdependence of humanity than has been likely, ever before in our history.

    The larger process of actually obtaining the changes so many of us are reasonably convinced are necessary, in so many different, and yet connected aspects of society and its assumptions (or vulnerabilities) is slower than many of us might wish or would hope.

    For many of our fellow Americans, our fellow human beings, the next five to seven years will be very difficult. Those who anticipate remaining comfortable throughout that period might wish to temper their sanguine expectations slightly with the realization that we are entering uncharted waters and could well founder on the shoals of widespread despair, spreading the disaster ‘upward’.

    To the degree that the comfortable are disinterested in the fate of those who are, already, quite uncomfortable, this society risks a much more fateful ‘consequence.’

    Those who view the future as ‘business as usual’ are either expecting a good deal of good luck to attend whatever ‘thoughtful’ preparations they’ve already made, which suggests that their lives, to this point have been successful enough for them to have evaded experiencing too much the other kind of luck.

    Luck is a strange concept. Some argue that no such thing exists. Others swear by (or at) it on what appears to reflect more than mere casual acquaintance.

    Those who argue against the existence of luck do so with a definite certainty. A significant number of those who deny the existence of luck maintain that one determines one’s own destiny; some say inspired moments, lead one to understand the moment and seize the day, others incline to signify moment by moment choices, suggesting that each and every moment marks our character and determines the human beings that we unfold into or expand into, or harden into, changing, as we all know we do, right before our very eyes, we feel ourselves age, and see our selves age … grow up, grow middle-aged, grow older (and yet, at times, feel “younger than that now …”)

    Still others are certain that luck need not attend them at all, that it only attends those who are not, absolutely certain of their ability to do whatever they want … or wish. These are the ones whom many in our society deem the most lucky of all.

    For they have power.

    Power is a strange concept …

  70. hctomorrow says:

    It’s time to cut through all the nonsense about General Motors “not making cars that Amrericans want to buy.” The truth is that GM has seized design and performance leadership over its longtime nemesis, Toyota. Toyota’s cars these days resemble appliances, i.e. refrigerators on wheels. They don’t break, but they hardly inspire.

    In terms of their physical appearance, GM vehicles have real attitude. The new CTS has a very bold and aggressive front end that designer John Manoogian came up with at the last moment. He and his team decided to take the V-shape that used to stop at the bumpers and let it plunge below the bumpers toward the ground. They also inserted grilles on the right front panels merely for decorative purposes. That nearly drove the engineers crazy because of the challenge of stamping a piece of sheet metal with an odd hole in the middle of it. But they did it. At first, the competition could not believe that GM had figured out how to achieve that.

    You have seriously got to be kidding me. We’re supposed to believe Toyota’s cars can’t inspire, and GM’s engineering is superior, because they put fancy decorative grills on a car?

    What, are we all 12 year old boys now?

    No, wait. I was smarter than that as a 12 year old boy.

    Toyota inspired my family to buy a Prius because it’s the best engineered mass market car available. It gets more than 40 miles per gallon, and the driving experience, for those who haven’t tried it, is indescribable. It’s more fun to be behind the wheel of a Prius than any other car I’ve ever driven, by an order of magnitude.

    So, high fuel efficiency, great reliability, tons of fun, and oh yeah, at least ten grand cheaper than the Volt. At least.

    But.. GM has grills! Fancy ones!

    Give me a freakin break.

    Then there’s this gem:

    But right now, the Americans are lagging behind Japan, China, South Korea and the French in developing these batteries that are considered more efficient and longer-lasting than previous generations of batteries, such as the nickel metal hydride battery that is in the Toyota Prius.

    Even FDL has mentioned the many problems with lithium-ion batteries for cars! It was a front-page post here!

    Lithium-Ion batteries wear out, even if you don’t use them. They are bad at handling temperature extremes (like, say, cars experience). Oh yeah, they also have a nasty tendency to explode when they fail (ala the various laptop recalls you’ve seen over the years).

    Oh, one more thing. A single country, Bolivia, holds half the world’s known lithium reserves.

    I wonder if they’ll hold us over a barrel when we start needing it in bulk to make the Volt’s 400 lb battery pack….

  71. hctomorrow says:

    Whoops, forgot to show my work on the Bolivia thing in my comment.

    Here ya go.

    Two highlights:

    Mitsubishi, which plans to release its own electric car soon, estimates that the demand for lithium will outstrip supply in less than 10 years unless new sources are found.

    And they have ended up in Bolivia.

    “The demand for lithium won’t double but increase by five times,” according to Eichi Maeyama Mitsubishi’s general manager in La Paz.

    “We will need more lithium sources – and 50% of the world’s reserves of lithium exist in Bolivia, in the Salar de Uyuni,” he adds, pointing out that without new production, the price of lithium will rise prohibitively.

    To begin with the pilot plant will produce no more than 1.2 kilotonnes a year.

    If an industrial plant is then built it may increase to around 30 kilotonnes by 2012, – thats just under a third of current production.

    But most lithium now goes to small batteries for electronic goods.

    Car batteries are far larger and Mitsubishi estimates the world will need 500 kilotonnes a year just to service a niche market. For electric cars to become the norm, it could need far more.

    Mitsubishi predicts that there will be a supply shortage by 2015.

    Also:

    Long-term, Bolivia’s government is wary of the environmental damage mass extraction could cause.

    The mining minister, Mr Eschazu, has a stark message for Western firms.

    “The capitalist leaders have to change,” he says.

    “If all the world had consumers like North America, everyone with a car, it would grind to a halt.

    “It is also going to generate pollution, not just from fossil fuels but also from lithium plants, which produce sulphur dioxide. This isn’t a magic solution.”

  72. judybrowni says:

    I’m not for a bailout of GM if we’re paying for them to cut jobs, bust the union, and then refuse to pay a living wage.

    Especially since the management GM has shown little regard for the consumer, their workers, the very air the citizens of the United States must breathe, in the past.

    What the hell is so difficult to understand about that? If we’re enabling their inept management with our taxes, why the hell can’t we insist they keep the jobs of workers who did their jobs, actually built the badly designed gas sucking shit buckets, and insist GM continue to pay those workers a decent wage?

    I thought the point of these bailouts was to create, or at the very least, save jobs — not eliminate them.

  73. bobschacht says:

    bmaz,
    Thanks for continuing this series. We all need to understand the role that the manufacturing industries play in keeping our economy healthy. I just recommended your previous post “Why American Industry (And Its Future) Matters” to my boss, who is also a futurologist. She doesn’t get the manufacturing thing, either. I hope your blog will help.

    Maybe it would be worthwhile to put a sidebar on the right like the Timeline Collection box with all the main posts here and the mothership on the economy– the U.S. Economy 101 required readings, so to speak.

    Bob in HI

  74. freepatriot says:

    I hate to be a naysayer, and piss all over the parade, but …

    That nearly drove the engineers crazy because of the challenge of stamping a piece of sheet metal with an odd hole in the middle of it. But they did it.

    first:

    uhm, metalurgy has been around for about 4000 years

    stamping a piece of metal with an odd hole seems to be more of a “cost” challenge than a challenge to metalurgy, so BFD, you can make odd shaped holes

    and second:

    Alliance Bernstein estimates that lithium ion batteries could be a $150 billion a year industry by 2030. It is a new industry waiting to be born. It’s a perfect example of the so-called “green industries” that President Obama says he wants to see in America

    do I really gotta do the google, and find all the stories from 50 years back that said the exact same thing about nuclear power ???

    I’m sure there will be as many environmental issues involved with batteries using lithium as there were with every other brilliant idea we ever had for powering cars. And I’m sure that right now we haven’t got a clue what those problems will be

    I’m not saying this isn’t the answer

    what I AM saying is “DON’T TELL ME, SHOW ME”

    I live in a world where politicians make batshit insane predictions all day long (see alan keyes)

    I tend to NOT take anybdy’s word for “IT” anymore

    and you haven’t convinced me

  75. judybrowni says:

    ”Obviously $600 isn’t a lot of money per week. What the UAW says is that the workers starting off in Tier 2 will eventually be able to move up to Tier 1 and make a better wage.”

    At which point, GM will find another reason to kick them out the door, just like they have the last group of workers to make a living wage for a family.

    And who knows, maybe the taxpayers will also pay GM for that bloodletting, too.

  76. judybrowni says:

    “The answer is that the federal government and the majority of the American people seem to have decided that GM has to get its cost structure in line with the foreign competition. They have no choice.”

    The “majority of the American people” were lied to, and told the autoworkers were making $75 an hour, by the CEO’s making 4 million, and the reich wing noise machine — and the federal government did nothing to correct that lie.

    The accounting has been hinky from the getgo, I trust it no more than I trust GM to do the right thing by anyone but those at the top of the structure.

    The Blue Dogs are corpratists, and look where that got us — if the point of bailing out GM is to save jobs, why are we paying them to cut jobs and salaries?

  77. judybrowni says:

    “Millions of Americans would tell you that the car allowed them to pursue their freedom, by living where they want, working where they want, etc. We have based our entire society and culture on the car, beginning in earnest after World War II. Other societies, notably Japan’s, haven’t. But for the United States to suddenly turn away from the car is impossible. It would take decades to make a significant shift. And by now, our population is widely distributed, making mass transportation largely unrealistic for most. These are the realities.”

    Where there is mass transportation it is used — in fact, during the last gas crisis, overburdened. And although gas has returned, for the moment, to half the rate, those who began using mass transportation have not abandoned it, as was expected.

    The car manufacturers and oil companies did their best to kill mass transportation (one good example: after WWII, they effectively bought the trolley lines in Los Angeles in order to close them down.) Enabled by our government with money for roads and freeways, but little to none for mass transit.

    When the government subsidizes mass transit the way it has subsidized travel by car, mass transit will be used. (Originally, the suburbs were built following the fingers of mass transit out in the country — and then the car culture was subsidized by our government, and mass transit was not.)

    I haven’t argued against cars, they should be a part of transit — but obviously if we’re waging wars for oil, pouring our blood and treasure down the rat hole of the internal combustion engine, car culture needs to be knocked off it’s pedestal.

  78. judybrowni says:

    from a 2004 PriusChat.com
    http://priuschat.com/forums/pr…..rofit.html

    Toyota’s group vice president for corporate communications, who e-mailed: “My sources tell me that we do, in fact, make a profit on every Prius sold now. Your position may have held some validity for the first-generation vehicle, but not today.” …

    With R&D [research and development] amortized over the number of vehicles sold thus far, there is no way it comes clear. But our thinking is that this R&D investment is to be spread out not only over the breadth of our hybrid line,” which is the Prius, the upcoming Highlander, the Lexus RX400h, plus another Toyota and Lexus, and possibly a pickup truck, ” but that it is the foundation for all our [hydrogen] fuel cell development, as well.

    “So when you say that we don’t make money on the Prius, you are technically correct. When do you say that critical mass has been reached unless you take out the long-term investment and let the car stand on its own? If you consider manufacturing cost, sales, marketing and distribution cost, the car makes money.”

    On that, we agree. And the money Toyota has invested in hybrids, and fuel cell development, will likely put the carmaker so far ahead of the competition that it won’t be long before these vehicles make money, no matter what definition you use.

    • bmaz says:

      On that, we agree. And the money Toyota has invested in hybrids, and fuel cell development, will likely put the carmaker so far ahead of the competition that it won’t be long before these vehicles make money, no matter what definition you use.

      Actually GM is far ahead of Toyota on the alternative R&D; in fact, Toyota is building their programs on the back of the lead that GM has taken.

  79. bmaz says:

    Where there is mass transportation it is used — in fact, during the last gas crisis, overburdened. And although gas has returned, for the moment, to half the rate, those who began using mass transportation have not abandoned it, as was expected.

    Well, that is true in urban and eastern areas, at least to some extent; but it is less true in the west and southwest (and probably the mid-west. A lot of people here seem to think that the country is just capable of transforming overnight into a mass transit and micro/green car society. I live in Arizona and know the west and southwest extremely well, and I am here to tell you it isn’t going to happen. And, for all the wrath people spew about trucks and SUVs, there are an awful lot of people out here that use those for work vehicles and, yes, they really do need them. There is no one size fits all solution to this panoply of issues, and it will not happen overnight. The most critical thing, to me anyway, is to get all the various factors at least turned around and pointed to a better, more intelligent, future. I do believe that GM has done this, and is still in the process of doing so. GM cannot transform without pain, and it cannot be done so while being everything to everyone. It is going to hurt, it will necessitate some loans, and jobs will be lost; but a vital piece of America will be saved, as will a whole hell of a lot more and crucial jobs. It will also help keep our economy from totally destructing. There is no perfect solution.

    • judybrowni says:

      “A lot of people here seem to think that the country is just capable of transforming overnight into a mass transit and micro/green car society.”

      I haven’t seen that overblown claim on this blog, certainly I haven’t written it.

      But if mass transit and greener technologies are’t subsidized to the extent that car culture is and was, there’s no way we can move to greener transportation future.

      How many more wars for oil can we afford? How many dead American soldiers? How many more GM bailouts? That’s where car culture fetishism has brought us.

      No matter what you say about trucks and SUVs, the majority were not bought by those who needed them for work. They were big fat ego toys, for the majority of buyers.

      Which is why the SUVs now sit stock still on the car lots — the boys who can’t afford toys any more aren’t buying.

  80. judybrowni says:

    By the by, the GM workers making $28 an hour, who are being kicked to the curb, despite our bailout — they don’t have mortgages to pay, or kids to send to college, or grocery bills or any other expenses now, surely those expenses will evaporate now that they’re being made redundant?

    Like the CEO’s working for $1 a year, those $28 dollar an hour employees have probably socked away enough millions to survive on their new salaries of $0 a year.

    I don’t know the Michigan figures, but in L.A. General Relief is $200 a month — a rough equivalent to the GM bailout, no?

  81. judybrowni says:

    GM cannot transform without pain, and it cannot be done so while being everything to everyone. It is going to hurt, it will necessitate some loans, and jobs will be lost;”

    The pain, and the lost jobs, are those of the workers — not the CEOs, who it’s been acknowledged earlier have compensation packages to fall back on, should the bailout work.

    We’re paying to toss workers out into the cold, at the same time we’re paying for compensation packages for those at the top.

    The pain isn’t equally distributed, and on top of the obvious unfairness, the way the pain is being distributed also won’t build a strong middle class.

    The bailout at GM is another example of the Trickle Down theory of the last 30 years which has brought us to the pretty pass we’re at now, economically.

  82. judybrowni says:

    “It wasn’t until Bob Lutz threw a fit and demanded that they start exploring extended range electric vehicles and hybrids that the organization sprung back to action.”

    And they just kicked Lutz to the curb, too. Which spells what for their dedication to the green technologies?

  83. tanbark says:

    I don’t want GM, Ford, and Chrysler to go out of business. I just want them to stop building overpriced gas hogs that STILL don’t have the reliability of the Japanese competition.

    As for Toyota not “penetrating” the Big Pickup market; so what? Just what we need; more Panzer-trucks with V-8’s that get 14 miles to a gallon; are loaded with foo-foo options that make some of them as costly as some of the more expensive sedans from Ford and Chevvy and Dodge; and which will saddle buyers with monthly duns that are in the house-payment range.

    We all know that Detroit is avoiding offering us the option of a bare-bones 4 cylinder work truck that is reliable and economical, like it was a punchbowl of the Ebola virus at a GM board meeting. To be fair, neither are the “foreign” builders, who have learned that pimping their rides will make them more money. Or, used to. It remains to be seen if that will obtain for the future.

    I’m sorry Bmaz, what I get off the “guest” is that we have some moral obligation to get far enough ahead in the rat race that we can afford to individually subsidize the Big Three’s lousy automotive decision making, and failing that, we have to subsidize them with astronomical bailouts.

    If they want the dough, the least they can do is make vehicles that reflect the rather parlous times that most of us are living in. This, they are, so far, only talking about. And that, I judge, not too seriously.

    Again, the best thing that happened to american drivers was the Japanese auto industry. And that applies to the ones who still buy american, who benefited from Detroit’s having to raise their quality or go under.

    As we know, with the economic sitch the way it is, people just aren’t buying new cars they way they were, and that includes Toyotas and Hondas and Nissans, etc., but I don’t think their american divisions are hurting the way Detroit’s are; they’re not as much into dinosaur-mode, and the fact is, they still build better cars and trucks.

    It’s not complicated; there are huge reasons for mandating that every personal vehicle sold here gets a minimum of 25 mpg, town and highway. Now that Detroit is standing in the welfare line, whining, it would seem the perfect time to do that.

    • bmaz says:

      I think you are reading things into Holstein that may not all be there; but all I ask is that people be polite. And, to be fair here, that last part was not necessarily pointed at you. that said, i don’t disagree with a lot of your thoughts here, and I think that, as a whole GM and Ford are headed to the attainable mpg goal you set out. They are closer than you might think. I will say this though, I know a lot of people that tow with their trucks, and a four cylinder just will not cut it, I used to tow a ski boat regularly from Phoenix up to a houseboat on Lake Powell and back. Not all that heavy of a skiboat either, less than 3,000 pounds, and there is no way I would have done it with a four cylinder. Same issue for many people I know that are contractors and ranchers; they need, and actually use those trucks. Granted, there are a lot of drugstore cowboys and suburban moms rolling around in vehicles that they don’t need. but there is a segment of folks that really do need and use the big lugs. Perhaps they could be sold, bought and licensed as work vehicles or something. I dunno, but that segment is out there, that I do know.

  84. tanbark says:

    BTW, Judi nails it, when she talks about subsidizing the CEO’s and upper-end of Detroit, while they weep crocodile tears for their lineworkers, when their lifelong wet dream, just like the rest of corporate amurka, is about busting the unions.

    • earlofhuntingdon says:

      A propos of your comment, Big Auto’s manufacturing jobs are being decimated in the UK, a leading European manufacturing location:

      GM subsidiary Saab also just filed for bankruptcy. Jobs are being cut at Vauxhall (aka, GM), BMW’s Mini Cooper plant, supplier GKN, and car dealerships everywhere. Guess Big Auto’s only problem is the nasty unions.

  85. judybrowni says:

    I’m not the only one asking the question about GMs real efforts to green, as regards Lutz leaving:

    “With his leaving GM, the future of the Volt becomes even more questionable to appear as a real car for sale in dealerships. Lutz was the Volt’s “rabbi,” bringing it from an idea to a car which may soon be ready for production. The question: does a Lutz-less GM have the will, and the money, to produce the Volt?”

    http://www.huffingtonpost.com/…..65400.html

    • bmaz says:

      Just because you saw something on the freaking HuffPo does not make it so. It was bullshit conjecture. I talk to people regularly very close to the Volt project, I do not believe it is in any danger at all. Unless, of course, GM is strangled by idiots in Washington. I also know a bit about Lutz; and the sheer speculation that author made is not what I understand. Lutz has done what needed to be done on Volt; it is execution and production from here on out.

  86. tanbark says:

    I agree about the towing issue, and some others, but I have an old 16 foot jonboat, and both of my toys tow it like it wasn’t there. Now; that isn’t a 30 foot cigarette boat, nor a 30 foot trailer. But if you’re towing those, presumably you are (or were) making enough money to be able to afford a six.

    What I’m arguing for, is a kind of Volkswagen-redux. With a pickup version, to boot. A lot of people don’t care a fig about power windows or seatwarmers or nav systems. They want to get from point A to point B, cheaply and reliably. This is a portion of the market that Detroit has been notoriously and willfully, ignorant of. Unfortunately, so have the foreign builders. I hope that changes.

    Specifically, the 22R engine from Toyota, and the vehicles it went in, was a knee to the groin for Detroit; why can’t they knee back? Of their own free will?

  87. judybrowni says:

    I have no doubt some bought SUVs for work — even in Los Angeles, I have a couple of friends who need them and drive them because they must.

    But one of those very friends wrote a joke about what most SUV use amounted to:

    SUVs are named for exotic places we’ll never go, like the Dodge Durango or the MGC Yukon. There should be truth in advertising: like calling them the Dodge Dubuque, or the GMC “I’m Going to 7-Eleven for a Moon Pie.”—Daryl Hogue

    GM’s hollow excuse was “We’re giving the people what they want,” whereas Toyota gave the people what they didn’t know they wanted or needed, yet. But was apparent to all but the US car manufacturers would be necessary for the 21st century.

    If GM is ahead of Toyota on Fuel Cell technology now, they accomplished that on the shoulders of Toyota’s earlier, groundbreaking r&d.

  88. judybrowni says:

    I’ll be happy to see the Volt sold en mass, if it ever appears.

    Cleaner air, less need of wars for oil, who could argue with that?

    If the Volt is not just another of GM’s “concept” cars that never see the light of a dealership.

    Another publicity sop, maybe, when GM’s actions — such as fighting tooth and nail for weak and watered down joke CAFE standards — speak otherwise.

    If GM isn’t bailed out by our government, with our tax dollars, it will have earned that a dozen times over.

    If GM was serious about keeping jobs, it would keep them, not use the bailout as another excuse to union bust and throw their experienced workers to the wolves.

  89. judybrowni says:

    I’d like to see GM strangled — a little bit — by the idiots in government, just cut off their breathing long enough that they agree not to fire workers, if they want the cash.

  90. 4jkb4ia says:

    “To secure these rights, Unions are instituted among men, deriving their just powers from the consent of the workers. That, whenever any form of Union becomes destructive of these ends, it is the right of the workers to alter or abolish it, and to institute new unions, laying its foundation on such principles, and organizing its powers in such form, as to them may seem most likely to affect their safety and happiness.”

    Damn you, Cory Doctorow! You did this! I want to look up the Book Salon with him at some future time.

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