3% of GDP tied to domestic auto manufacturers

[Squisher]

Text

I've heard many people on these forums condemn the domestic auto manufacturers and call for their demise. Well, it seems that a good portion of the US economy is tied to domestic auto production and if they did die this could be the beginning of a downward spiral the the US economy cannot pull out of. Be careful what you wish for.

Autos impact on U.S. economy
Job creation

5
Jobs created for each auto job

355,000
Workers employed by automakers in the U.S.

783,000
Workers employed by suppliers

1.972 million
Workers employed by supplier vendors

1.1 million
Workers employed by dealers

Indirect impact

10%
Of all U.S. employment related in some way to vehicular transportation

1.7 million
U.S. jobs that rely on auto production, such as restaurant, retail, etc.

Economic clout

3%
Of GDP produced by auto sector

 

[jpeyton]

I hope they die...

...and are reborn as better, more efficient companies.

 

[ScottyB]

I hope they get replaced with some Japanese manufacturers that produce vehicles in the U.S.

 

[Slew Foot]

Originally posted by: ScottyB
I hope they get replaced with some Japanese manufacturers that produce vehicles in the U.S.

:thumbsup:

Ford can build all the POS cars they want in Mexico.

 

[rpanic]

3% of GDP from taxpayers.

 

[evident]

i hope could they die and get replaced with new american auto companies immediately that don't doesn't have incompetent management that make bad decisions. but unfortunately that can't happen quick enough so i don't want them to die because alot of hard working people will lose jobs in the meantime

 

[SP33Demon]

Even if we wanted them to die, it wouldn't happen because Toyota or Honda would just gobble em up for cheap.

 

[brandonbull]

It's just a stupid idea to stand by while US car companies go the way of the dodo.

 

[kamiller42]

I can't say I hope they die, but it is obvious the executives and the unions reap what they sow.

 

[techs]

Yeah, I'm sure Toyota and Honda can't wait for the US automakers to fail.
Then they can close their plants and move production to low wage countries.

 

[Genx87]

I dont want them to die but if they cant compete on their own we shouldnt be propping them up out of fear of what happens when they fail.

What will happen is either they figure it out or they get bought by a competitior. Either way what economic impact will there be? I would say all that will happen is we buy foreign cars produced within our borders.

 

[brandonbull]

Originally posted by: Genx87
I dont want them to die but if they cant compete on their own we shouldnt be propping them up out of fear of what happens when they fail.

What will happen is either they figure it out or they get bought by a competitior. Either way what economic impact will there be? I would say all that will happen is we buy foreign cars produced within our borders.

Just another way real wealth will leave our country. People would rather support companies that create fake wealth like investment banks and bail them out when they defraud us.

 

[Farang]

Originally posted by: ScottyB
I hope they get replaced with some Japanese manufacturers that produce vehicles in the U.S.

I'm not too familiar with the auto industry, but would their incentive to come to the U.S. be reduced if we did not have one of our own?

 

[LumbergTech]

Originally posted by: jpeyton
I hope they die...

...and are reborn as better, more efficient companies.

I love these people who pretend to support the free market and then start crying and whining whenever a company is going to fail. It must be the liberals and the poor people on welfare dragging down Chrysler. Not a poor business model that didn't take REALITY into account.

Basing your entire future off of giant SUVS (GM?) apparently was a bad idea. I could have told you that, and I am no analyst. They, however, with their paid PROFESSIONALS apparently couldn't figure this out.

 

[StageLeft]

I hope that they die so their employees can find better companies to work at.

GM's sales down 45% year over year, figures out today. The company is completely and utterly fvcked, might as well just get it done with, like giving up the run from the police and let them sentence you already so that you can get your time over and done.

Just another way real wealth will leave our country. People would rather support companies that create fake wealth like investment banks and bail them out when they defraud us.

I dunno about that, I think that the manufacturing plants in the US by Toyota, Nissan, etc. are real wealth. I seem to recall seeing a pretty damn big Ford plant on the way to Toronto when I drive there. "Domestic" is increasingly meaningless.

Face it, the days of the big three are sunsetting. The US should find some other industry to get super duper at instead.

 

[boomerang]

It's been said that if the domestics die, the transplants will most likely have to pull out of North America. They share many of the same suppliers. The transplants can't generate enough business to keep these suppliers going.

The potential is very real for all auto production to cease in the U.S.

Of course these words are wasted on the majority here. A lot of MBA's hang out here, a lot of armchair quarterbacks and folks with that 20/20 hindsite.

Be careful what you wish for, you just might get it.

 

[evident]

Camaro - engineered in australia, manufactured in canada, how "domestic" is that? how about the new Cruze that is really a daewoo and engineered in korea ?

how about my accord that was engineered and built in marysville ohio?
:music:born in the usa :laugh:

seriously though, foreign car companies have serious jobs in the usa as well. not as much as the domestic big 3 yet, but they are growing. just look at where all the laid off aztek designers went, honda to go ruin the new 09 acura tl

 

[SoundTheSurrender]

What is there to wish for when it's obvious that they are gonna fail? This is the core of capitalism. If a entity can't compete with others, why should it be saved?

 

[dullard]

3% is a blow, but not a massive blow. The American economy grows on average just over 3% a year. Thus, if we lost the auto manufacturer's we only be set back one year of growth. It would be painful, but not Earth-shattering. There would be aftershocks and the short-term pain may be more than 3%, but still that is only the difference between a decent economy and a stagnant economy. It isn't like going from a great economy to a depression.

Other auto manufacturers are hurting as well. The major auto companies are all expected to report declines in sales. They've oversold cars for years. They can't sell more cars to people who still have perfectly good cars that they just bought with their massive discounts and low interest financing that have been around quite a bit recently. Lets take it to the extreme. Suppose they sold multiple new cars to every person in the world this year. They'd have a huge profit this year. But the next few years will be the death of them. They'd still have to pay their employees and maintain the factories but they'd have no buyers. We are at that type of bust phase right now - they oversold for a few years, now they will seriously undersell to make up for it.

Lets stop the "American" company crap. Their designs are done world-wide. Their raw materials are obtained world-wide. Their parts are made world-wide. And the cars are manufactured world-wide. They aren't American companies any longer. Support them if they are good companies - not because of what country the USED to be from.

I agree with jpeyton. I hope they die and the "Pheonix" is reborn as a leaner but much better companies. Auto manufacturers have fought tooth and nail against any government interference in providing long-term solutions (cars that people would want in 10, 20, 30 years). They focussed solely on the short term (high profit SUVs). They will now reap what they sowed. We shouldn't prop up useless crap companies just because they used to be American companies. But, if they want to become new American companies that are efficient and focussed on the long-term, then I'd support limited governmental support.

 

[boomerang]

Historically, car companies that file Chapter 11 never get out of Chapter 11. They die.

But sometimes the urge to grind that ax is just too overwhelming. If it makes anyone feel better to wish that any company go under I say go for it. Sometimes, companies, and people just need to be taught a lesson.

I was young once too. I thought I was invincible. That the world revolved around me. That old guys like I am now, had their heads up their asses. I knew all the answers. I see now that I was cold-hearted and uncaring. Why would I care if the neighbor two doors down lost his job? Why would I care if they lost their house and their insurance? It sure wouldn't affect me and I was all that mattered.

As long as it's not me, who gives a shit?

 

[Squisher]

The thing is that the Domestics do have many products that compete with their foreign rivals, but too many customers have become jaded by many of the poor quality products they put out in the past. If people would just give them a chance they might be surprised. No one is asking for people to prop up the industry, just for people to realize that by falling back to their prejudgices they are only hurting themselves when a large portion of our industrial base is lost.

As for the domestics building cars on foreign soil and foreign car-makers building cars here, you are right. It does happen, but generally the bulk of the domestic cars and their content is made here and the vast bulk of foreign products are made abroad and even the ones made here are made from mostly foreign content.

 

[Puffnstuff]

If public funds are offered to the auto makers then there should be stipulations that it can only be used to develop and field fuel efficient green vehicles. They should not be allowed to continue the status quo with public money.

 

[alphatarget1]

The big 3 won't "die". Shareholders and bondholders might get wiped out if they declare BK but it won't be liquidation, but reorganization.

 

[ponyo]

Originally posted by: brandonbull

Originally posted by: Genx87
I dont want them to die but if they cant compete on their own we shouldnt be propping them up out of fear of what happens when they fail.

What will happen is either they figure it out or they get bought by a competitior. Either way what economic impact will there be? I would say all that will happen is we buy foreign cars produced within our borders.

Just another way real wealth will leave our country. People would rather support companies that create fake wealth like investment banks and bail them out when they defraud us.

:beer:

 

[FuzzyBee]

Originally posted by: kamiller42
I can't say I hope they die, but it is obvious the executives and the unions reap what they sow.

Yep. What percentage of the cost of a new US-made car is tied up in union pensions and benefits? The unions demanded those terms, and the executives agreed to them.