Delphi is on it’s last legs for the reasons you’ve given and I don’t see how it can survive any mediation with GM.
The spinoffs make parts for many automakers both foreign and domestic. The wholesale decline of auto sales across the board are killing them all. The financial disaster of Wall Street makes it difficult to get credit. The push for lower wages and layoffs will surely dampen sales. Nobody can save them now. The middle class is evaporating. Restaurants ,shows and bars are closing at a rapid rate. Who will buy the cars? With homes foreclosing all around, who is not scared ?
Chinese workers were pulling down 200 a month. There was upward wage push . But the downturn has dropped their wages again. We have to build for the same amount plus the cost of shipping. We can not do it.
If we come up with a new and better green car ,they will just buy one and steal it. We can not avoid the inevitable.
The spin-offs made a priority of trying to diversify, which was part of the impetus for spinning them off to begin with. But it was slow going, and they make a very high percentage of their parts for their former owners.
Exactly. Essentially we are collectively doomed, and not just the auto companies.
The big picture, as pointed out by others in a different thread, is that the US as a whole has been living beyond its means, on borrowed money. Either the US has to increase productivity or start living within its means, i.e. on a lower standard of living.
The fact that we are manufacturing autos non-competitively is just one aspect of a broader problem.
My guess is that the way it shakes out eventually is that the US dollar declines significantly relative to other currencies. This makes imports more expensive, but makes exports more competitive, and we reach an equalibrium point at a lower standard of living. Some get hurt more than others, as always.
Business is hard? That’s your argument? Breaking a wild stallion is hard. Climbing Kilimanjaro is hard. Setting your own broken leg so you can crawl out from behind enemy lines is hard. Is this cutthroat, win-at-all-costs capitalism, or some kind of big business Special Olympics where everyone wins an ‘At Least I Tried’ t-shirt? You guys lose one election and you turn into a bunch of fragile daisies. If this is the new voice of conservatism, I’ll take Cheney and Rumsfeld back. At least those guys had some self-respect.
What are you talking about? My point was that GM’s real problem is that it has built an infrastruture it can’t afford, but it’s set up the rules such that it’s too expensive to get out of it, too. The correct answer is bankruptcy. Admit the company is busted, and go through the proper legal procedures to restructure debt and rewrite contracts and shed the dead weight. A lot of people have been saying that right from the beginning. But here we are, 30 billion dollars more down the train, and now Obama says, “hey, you maybe GM should just go into brankruptcy”.
The point is that if they can go through that, their current management team is capable of leading the company back to health. They’d actually been doing it - they just got hit by the crash before they could dig far enough out. But GM has revitalized its product lines and now makes cars as good as anyone’s. They just can’t afford to make them competitively because they are carrying too much baggage.
If you believe the economy will recover ,keeping the auto industry alive and able to compete is essential. If you see the end of capitalism as we know it, then bankruptcy is proper ,since they will fail eventually. The market is gone. The middle class is drastically diminished and not coming back. We have to be satisfied that on the way down some wealthy people made an even bigger fortune.