# The Big 3 automakers' plan **URL:** \ **Category:** Great Debates\ **Created:** [December 3, 2008, 12:16am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427 "2008-12-03T00:16:49Z")\ **Posts on this page:** 20\ **Page:** 6
**Author:** ![Keweenaw](https://avatars.discourse-cdn.com/v4/letter/k/da6949/32.png) [@Keweenaw](https://boards.straightdope.com/u/Keweenaw)\ **Post date:** [December 11, 2008, 1:30pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/101 "2008-12-11T13:30:50Z")
> [@ralph124c](#): > > First the US Governmnt desrves a major share of the blame. Why did people buy SUVs in the 1990’s? Because the government forced the big 3 to build small cars that nobody wanted. Gas was cheap, and people anted larger cars. The Michigan congressional delegation (headed by Sen. Carl Levin) fought and succeeded to have SUVs and trucks exempted from the mileage and safety standards that applied to cars. So, in this way, the development of economical cars was stunted. Then along comes $4.00/gallon gas-and the Big 3’s market collpased overnight. > So, in a perverse way, the government caused this disaster.😕 > If reasonable vehicle standars had been enacted (and SUVs nor allowed to trump the laws) the whole thing could have been avoided. What safety standards are you referring to that don’t apply to trucks and SUVs? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [December 11, 2008, 5:48pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/102 "2008-12-11T17:48:00Z")
> [@Tuckerfan](#): > > Right bill or not, its what we’ve got. Personally, I’m much happier with the idea of the government just cutting the Big Three a check, than I am with them just cutting the banking industry a check. While the Big Three might have been stupid in some of the things that they’ve done in recent years, the banking industry’s actions were _criminal_. > > No matter what the bill looks like when its passed, expect for _both_ sides to to try and renegotiate the terms of it once Obama takes office. I don’t know if they did something criminal, but it merely threatens to bring down the finances of the entire world. Ethics and morality were surely not a factor. Kashkarri was justifying AIG execs getting 3 million dollar bonuses from tax payer money ,yesterday. His attitude was that we don’t understand how important and brilliant these thieves are. They are looting away and cutting jobs. ---
**Author:** ![Palo\_Verde](https://avatars.discourse-cdn.com/v4/letter/p/65b543/32.png) [@Palo\_Verde](https://boards.straightdope.com/u/Palo_Verde)\ **Post date:** [December 11, 2008, 7:19pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/103 "2008-12-11T19:19:25Z")
It’s looking less and less likely that this will pass the senate. Even though, in a rare bit of bipartianship, both Bush and Obama are begging for this to go through ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 11, 2008, 7:49pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/104 "2008-12-11T19:49:36Z")
> [@Keweenaw](#): > > What safety standards are you referring to that don’t apply to trucks and SUVs? **ralph** has no doubt, again, gotten his facts scrambled. He is probably conflating the looser standards which light trucks enjoy under the CAFE standards towards _fuel economy_, with those of safety (where trucks have to meet identical standards, and have some **advantage** by nature of their height). He’s also swallowing the bilge water that the government “forced” car makers to build smaller cars, which CAFE standards do **not** do. [CAFE standards merely require the _fleet_ of vehicles produced by a car company to have an _average_ fuel economy (which has held steady at 27.5 MPG for nearly 20 years, now)](http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy). Building smaller cars is simply the _easiest_ way to obtain this goal. (Another way would be to make a few models which get dramatically higher fuel economy, like Toyota and others do with the Prius.) As I pointed out above, Toyota’s idle cut-off switch, boosted fuel economy by about 10%, yet nobody bothered to install them in production vehicles for about 30 years. Car makers claim that to make cars lighter, makes them more dangerous, and this limits the kinds of materials they use. I can’t help but notice that fiberglas is only rarely used in most vehicles, but the one car which has had a fiberglas body since its inception, the Corvette, does **not** have a reputation for being a death trap. Car makers in the past have used fiberglas in areas like the hood and trunklid on _performance_ editions of various cars, so clearly they’re able to sell and market cars made with fiberglas. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [December 11, 2008, 8:58pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/105 "2008-12-11T20:58:21Z")
The Fiero was a fiberglass car. It was small. I don’t recall a lot of stories about safety. It did burn though. The Saturn started off fiberglass. I am not sure it is a weight saver, metal is much thinner. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 11, 2008, 9:06pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/106 "2008-12-11T21:06:59Z")
> [@gonzomax](#): > > The Fiero was a fiberglass car. It was small. I don’t recall a lot of stories about safety. It did burn though. > The Saturn started off fiberglass. I am not sure it is a weight saver, metal is much thinner. The fires were caused by incorrect inadequate cooling of the oil system and were fixed. Early Saturns were _plastic_, not fiberglas, and the body parts they made out it were much lighter than comparable metal components, IME. ---
**Author:** ![MacTech](https://avatars.discourse-cdn.com/v4/letter/m/c0e974/32.png) [@MacTech](https://boards.straightdope.com/u/MacTech)\ **Post date:** [December 11, 2008, 11:39pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/107 "2008-12-11T23:39:43Z")
Actually, the SL and SC Saturns (first-gen Saturns) and the Ion and the early Vues _body panels_ were plastic over a steel structural spaceframe, the body panels were only there for cosmetics and aerodynamics, they’re not structural, the only sheet metal parts on those Saturns were the hood, roof, and trunk lid, the side panels were polymer ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [December 12, 2008, 2:07am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/108 "2008-12-12T02:07:34Z")
> [@gonzomax](#): > > Kashkarri was justifying AIG execs getting 3 million dollar bonuses from tax payer money ,yesterday. His attitude was that we don’t understand how important and brilliant these thieves are. They are looting away and cutting jobs. Just for clarity (and correctness): as I understand it, the execs who are getting bonuses _ **did not work in the financial section** _, but in other, successful departments. The idea is that they don’t want the good people to jump to a competitor who _will_ pay comparable bonuses. Personally, I think Wall Street bonuses are seriously out of whack, so I’m not defending those, but can you think of a better way to truly sink the company than only retain the worst people? ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 12, 2008, 2:13am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/109 "2008-12-12T02:13:49Z")
> [@Digital\_Stimulus](#): > > Just for clarity (and correctness): as I understand it, the execs who are getting bonuses _ **did not work in the financial section** _, but in other, successful departments. The idea is that they don’t want the good people to jump to a competitor who _will_ pay comparable bonuses. > > Personally, I think Wall Street bonuses are seriously out of whack, so I’m not defending those, but can you think of a better way to truly sink the company than only retain the worst people? The problem is: The worst people are the ones running the company, and after they sink it, they’re able to move on to the next one to bring down. Besides, if the people on the top move on to other places, that enables those folks (both good and bad) below them to rise up, which helps cut down on the amount of useless positions created simply to keep some exec from going elsewhere. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [December 12, 2008, 2:15am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/110 "2008-12-12T02:15:09Z")
> [@Tuckerfan](#): > > The fires were caused by incorrect inadequate cooling of the oil system and were fixed. Early Saturns were _plastic_, not fiberglas, and the body parts they made out it were much lighter than comparable metal components, IME. I was not implying that plastic made them burn. They just burned. I saw one do it . I was at the GM tech center when the Saturn came out. I was lifting and looking at the Saturn parts that were in the protype pile. Some suggested the Fiero was just an experiment in processes to prove the Saturn could be done. The Fiero sold all they made. It was successful. It was the 2 seater commuter car that Detroit should have always had available. Metal fenders are very thin. I really don’t think a lot of weight was saved.The color though was through and through. The replacement of a fender was simple. ---
**Author:** ![Leaper](https://avatars.discourse-cdn.com/v4/letter/l/4bbf92/32.png) [@Leaper](https://boards.straightdope.com/u/Leaper)\ **Post date:** [December 12, 2008, 7:41am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/111 "2008-12-12T07:41:04Z")
I had a sudden thought: has anyone directly compared the now-failed $15 billion “bridge loan” to plans that use that exact same $15 billion to more directly help the economy and the average Joe… er, citizen? Or to put it more generally, is there anything else that could be done with that $15 billion that have just as great, or more, of a positive impact than loaning it to GM? ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [December 12, 2008, 9:30am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/112 "2008-12-12T09:30:05Z")
> [@Tuckerfan](#): > > The problem is: The worst people are the ones running the company, and after they sink it, they’re able to move on to the next one to bring down. This might sound nasty, but please recognize it as simply being terse: That touches on my point how? Yes, you’ve identified a problem – and a serious one at that. Probably more serious than the grossly inflated bonuses, which I think are generally a result of the “short-term, nepotistic, revolving-door executive” problem you cite. If I understand _this_ situation correctly, though, the people who are receiving bonuses are _ **not the ones sinking the company** _. In fact, “_the ones running the company_” (top 60 execs, I believe) aren’t going to receive bonuses. > [@](#): > > Besides, if the people on the top move on to other places, that enables those folks (both good and bad) below them to rise up, which helps cut down on the amount of useless positions created simply to keep some exec from going elsewhere. Did you not write out your full thoughts, or am I missing something? _What_ “helps cut down on the amount of useless positions”? How is this different than the current practice of executive leapfrog? ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [December 12, 2008, 11:50am UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/113 "2008-12-12T11:50:19Z")
There’s one thing which escapes me: for all the doom and gloom being put about by GM et al, it seems that they’re talking about Chapter 11, not closing the doors. The airline business regularly floats with Chapter 11, so how is this really that big a deal? ---
**Author:** ![Rolken](https://avatars.discourse-cdn.com/v4/letter/r/df788c/32.png) [@Rolken](https://boards.straightdope.com/u/Rolken)\ **Post date:** [December 12, 2008, 12:55pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/114 "2008-12-12T12:55:20Z")
> [@Quartz](#): > > There’s one thing which escapes me: for all the doom and gloom being put about by GM et al, it seems that they’re talking about Chapter 11, not closing the doors. The airline business regularly floats with Chapter 11, so how is this really that big a deal? The differences are that when you buy an airplane ticket you’re not committing to staying with that airline for 5 or 10 or 20 years, and a particular decision regarding ticket purchases involves a lot less money than the decision of which vehicle to buy, plus you will almost certainly be needing some kind of servicing or parts down the line. So as the theory goes, the notion of bankruptcy is more fatal to a car company because people won’t want to be putting that kind of time and money into a product whose future backing they’re uncertain about. I admit that I’m not exactly a car history buff, but I don’t know of any situation quite like what’s going on now, so it seems reasonable to be skeptical of that line of reasoning. In particular, if the concern is consumers getting spooked about American cars, I’m not sure that Chapter 11 could do much more damage to their image than has already been done by current events, nor that an emergency government loan would repair it. ---
**Author:** ![Jonathan\_Chance](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jonathan_chance/32/701_2.png) [@Jonathan\_Chance](https://boards.straightdope.com/u/Jonathan_Chance)\ **Post date:** [December 12, 2008, 12:59pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/115 "2008-12-12T12:59:06Z")
Yeah, that’s my take on it. Given the events and news coverage of the last two months how could a consumer possibly have LESS faith in the long-term stability of any of the big three? Receivership is the way this thing needs to go. The sooner they pull the trigger on that the sooner the ground changes and solutions can be found. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 12, 2008, 3:56pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/116 "2008-12-12T15:56:03Z")
> [@Rolken](#): > > I admit that I’m not exactly a car history buff, but I don’t know of any situation quite like what’s going on now, so it seems reasonable to be skeptical of that line of reasoning. In particular, if the concern is consumers getting spooked about American cars, I’m not sure that Chapter 11 could do much more damage to their image than has already been done by current events, nor that an emergency government loan would repair it. There are a number of parallels between what’s going on with GM and Studebaker, when they died. (I typed up a thread the other night on the subject, but my browser crashed before I could get it posted. I’m going to rewrite it and post it here soon.) The only other time we’ve seen so many car companies on the brink of failure in the US was the Great Depression. I don’t remember exactly how many car companies failed then, but it was in the double digits. None of them, however, were very large, for the most part. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 12, 2008, 5:16pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/117 "2008-12-12T17:16:18Z")
> [@Digital\_Stimulus](#): > > This might sound nasty, but please recognize it as simply being terse: That touches on my point how? > > Yes, you’ve identified a problem – and a serious one at that. Probably more serious than the grossly inflated bonuses, which I think are generally a result of the “short-term, nepotistic, revolving-door executive” problem you cite. If I understand _this_ situation correctly, though, the people who are receiving bonuses are _ **not the ones sinking the company** _. In fact, “_the ones running the company_” (top 60 execs, I believe) aren’t going to receive bonuses. > Did you not write out your full thoughts, or am I missing something? _What_ “helps cut down on the amount of useless positions”? How is this different than the current practice of executive leapfrog? If the company’s in trouble, why should _anyone_ get a bonus? Yeah, sure, some people did well by the company, and a reward for them _would be nice_, but it doesn’t make much sense. It also creates an artificial climate within the company, because those folks won’t have the understanding of how bad things are, if they’re still living fat and happy. Were the company _as a whole_ doing well, then it would make sense to reward those folks who did well (and _not_ give anything to the folks who sucked ass). Having turnover at the top of a company helps cut down on the number of useless executive positions, since you don’t have to create a “Senior Executive Vice President in Charge of Paint Finish on the Mark V Model Turnip Twaddlers” just to keep a valueable executive in the company and _not_ have to worry about them heading over to the competition. It differs greatly from the current practice of “executive leapfrog” (great term, BTW) in that you have people moving _up_ and then out, rather than having someone come into the company who is _not_ familiar with the corporate culture, and proceeds to throw everything into chaos as they restructure things to their liking. The book _Built to Last_ profiles a number of long lived corporations in the US who’ve been _innovative_ for their history, and without exception, _all_ of them, have primarily selected their new executives _from within the company._ It tends to be the companies who pick _most_ of their to ranked executives from _outside_ the company that have done poorly. ---
**Author:** ![Digital\_Stimulus](https://avatars.discourse-cdn.com/v4/letter/d/aeb1de/32.png) [@Digital\_Stimulus](https://boards.straightdope.com/u/Digital_Stimulus)\ **Post date:** [December 12, 2008, 6:13pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/118 "2008-12-12T18:13:34Z")
> [@Tuckerfan](#): > > If the company’s in trouble, why should _anyone_ get a bonus? Yeah, sure, some people did well by the company, and a reward for them _would be nice_, but it doesn’t make much sense. If the successful people are going to leave otherwise, the company will then be _only_ comprised of the shittiest people. Seems like a “cut off your nose to spite your face” situation to me that leads to continued poor performance. Of a company that now has a large chunk of taxpayer money. We’ll have to agree to disagree, I think, although it’s not that I don’t understand your sentiment. > [@](#): > > Were the company _as a whole_ doing well, then it would make sense to reward those folks who did well (and _not_ give anything to the folks who sucked ass). This isn’t a family shop; as with any huge organization, the actions of one group are often wholly independent of others. Although I have to disclaim that I don’t know for sure if that’s the case here. Look, put simply: a company wants to keep the people who are successful in making it money. If the good ones are leaving (or going to leave) because they don’t get bonuses, then it only makes sense to try to keep them – possibly by giving them bonuses. If those bonuses will, in and of themselves, harm the bottom line, then of course they shouldn’t be given out. But if they’re a (relatively large) drop in a (huge) bucket that will result in better business performance in the future, it’s stupid to complain about them. It’s not as clear cut as shrieking “_bonuses **bad** _” – there’s a cost/benefit analysis involved. > [@](#): > > Having turnover at the top of a company helps cut down on the number of useless executive positions, since you don’t have to create a “Senior Executive Vice President in Charge of Paint Finish on the Mark V Model Turnip Twaddlers” just to keep a valueable executive in the company and _not_ have to worry about them heading over to the competition. Is this what’s happening here? > [@](#): > > It differs greatly from the current practice of “executive leapfrog” (great term, BTW) in that you have people moving _up_ and then out, rather than having someone come into the company who is _not_ familiar with the corporate culture, and proceeds to throw everything into chaos as they restructure things to their liking… Thanks – I had first written “executive roulette”, which carries an allusion to putting a gun to one’s temple, but decided that the metaphor’s foundation wasn’t there and opted for “leapfrog”. I don’t disagree with you here; it’s just not clear to me how it applies. After all, we’re discussing bonuses and good people leaving a badly performing company. ---
**Author:** ![kidchameleon](https://avatars.discourse-cdn.com/v4/letter/k/898d66/32.png) [@kidchameleon](https://boards.straightdope.com/u/kidchameleon)\ **Post date:** [December 12, 2008, 6:27pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/119 "2008-12-12T18:27:23Z")
> [@gonzomax](#): > > [Google Search](http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla:en-US:official&hs=Kw8&q=gm+profits+by+years&start=10&sa=N) 890 Million profit in one quarter,2007. That is also not long ago. Well good, then they shouldn’t need a loan. > [@gonzomax](#): > > The Fiero sold all they made. It was successful. It was the 2 seater commuter car that Detroit should have always had available. Not successful enough to continue to make after it’s five year run, with decreasing numbers made each year except one. ---
**Author:** ![Tuckerfan](https://avatars.discourse-cdn.com/v4/letter/t/eada6e/32.png) [@Tuckerfan](https://boards.straightdope.com/u/Tuckerfan)\ **Post date:** [December 12, 2008, 6:51pm UTC](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427/120 "2008-12-12T18:51:01Z")
> [@Digital\_Stimulus](#): > > If the successful people are going to leave otherwise, the company will then be _only_ comprised of the shittiest people. Seems like a “cut off your nose to spite your face” situation to me that leads to continued poor performance. Of a company that now has a large chunk of taxpayer money. We’ll have to agree to disagree, I think, although it’s not that I don’t understand your sentiment. But what’s one of the biggest reasons why people _leave_ companies? Is it _not_ a lack of opportunity? > [@](#): > > This isn’t a family shop; as with any huge organization, the actions of one group are often wholly independent of others. Although I have to disclaim that I don’t know for sure if that’s the case here. It doesn’t matter the size of the company. The profits from one division are often siphoned off to to shore up an underperforming division. In a way, that’s how GM ended up having so many problems. They pulled $5 billion from their other divisions to create Saturn. That handicapped the _other_ divisions in developing new models. Now, had GM’s investment in Saturn paid off in a big way, it would have been a good gamble. Since Saturn’s profits weren’t all that large, it wound up being a detriment to the operation as a whole. > [@](#): > > Look, put simply: a company wants to keep the people who are successful in making it money. If the good ones are leaving (or going to leave) because they don’t get bonuses, then it only makes sense to try to keep them – possibly by giving them bonuses. If those bonuses will, in and of themselves, harm the bottom line, then of course they shouldn’t be given out. But if they’re a (relatively large) drop in a (huge) bucket that will result in better business performance in the future, it’s stupid to complain about them. It’s not as clear cut as shrieking “_bonuses **bad** _” – there’s a cost/benefit analysis involved. Funny, Japanese and European companies _don’t_ have trouble holding on to good people, and they’re **not** paying those execs over 100 times the average workers salary. > [@](#): > > Is this what’s happening here? IME, the larger the company, the more dead weight it carries. Now, this extends to _all_ levels of the operation, not simply the top rungs, but dead weight at the top costs more and can inflict more damage than can a fuckwit assigned to pack boxes. > [@](#): > > Thanks – I had first written “executive roulette”, which carries an allusion to putting a gun to one’s temple, but decided that the metaphor’s foundation wasn’t there and opted for “leapfrog”. I don’t disagree with you here; it’s just not clear to me how it applies. After all, we’re discussing bonuses and good people leaving a badly performing company. But highly talented people _don’t_ leave corporations in droves, even in the worst of times. Most of them stick around, only bailing when it becomes obvious that they’re not going to be _allowed_ to make a difference in the company. [Previous page](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427.md?page=5) [Next page](https://boards.straightdope.com/t/the-big-3-automakers-plan/475427.md?page=7)