Bush Tells GM and Ford to develop more relevant products

[MikeMike]

http://online.wsj.com/public/article/SB...iUQ_20070126.html?mod=tff_main_tff_top

From the WSJ Today:

WASHINGTON ? President Bush said General Motors Corp. and Ford Motor Co. should develop "a product that's relevant" rather than look to Washington for help with their heavy pension obligations, and hinted he would take a dim view of a government bailout of the struggling auto makers.

In an Oval Office interview, Mr. Bush said that his administration has discussed the development of new fuel technologies with the nation's top two auto makers, which might make them more competitive, but that he has had no talks about the companies' finances.

Asked if he had spoken to GM Chairman and Chief Executive Rick Wagoner or Ford Chairman and CEO William Clay Ford Jr., Mr. Bush replied: "Not about their balance sheets." He added: "And I haven't been asked by any automobile manufacturer about a bailout."

Earlier this week, Ford announced sweeping layoffs and plant closings, amid falling sales and increased foreign competition that have sparked concerns one or both of the auto makers may seek bankruptcy protection. Both have denied such plans. But the prospect has fueled speculation that the federal government could face pressure to bail out the companies, as President Carter's administration did in 1979 with $1.5 billion in loan guarantees for Chrysler Corp.

Mr. Bush said little to suggest the companies should find comfort in that precedent. "I have been very reluctant -- I'm mindful of the past where at one point in time, a predecessor of mine was faced with that same dilemma," he said. "I would hope I wouldn't be asked to make that decision."

Asked if the government should take any pre-emptive action, he said: "I think it's very important for the market to function." He suggested he felt optimistic about the companies' prospects.

The auto industry's struggles could become a big political issue in this year's midterm elections and beyond, especially in Midwestern states such as Michigan and Ohio, where much of the industry's manufacturing base is located. Ford and GM plan to cut at least 60,000 jobs over the next few years, and the fallout could ripple across the auto-supply industry as well, whether or not the companies ever seek bankruptcy protection. While resisting a bailout could cost Republicans support among some voters, it also would serve to shore up their support among those who favor free-market solutions.

While neither GM nor Ford has explicitly sought a Chrysler-style bailout, the two auto makers have dropped hints they would welcome government help in areas such as coping with rising health-care and pension burdens and the high costs of developing fuel-efficient vehicles. And both are key administration priorities in 2006.

im just waiting for this one, have fun Pee&Nnnn

 

[GTaudiophile]

Good Bushie!

I would hate to see a bailout! Both companies manufacture sub-standard quality cars with overpaid unions. They've hug their respective holes. Fine by me if they fall into them.

Toyota FTW!

 

[Horus]

I'm afraid that, if Ford falls, all the other brands under that name will fall too...like Volvo, Aston-Martin, Mazda...or do their majority share just go back into the market?

 

[TraumaRN]

What they forget to mention is Chrysler paid back the government with interest...

But obviously Bush wants to make sure no one in the auto industry votes for his party...sheesh kinda harsh stance to take, it's not like Ford or GM have asked for anything yet, I mean he could at least be polite enough to hear them out instead of just saying in essence "NO SOUP FOR YOU!"

 

[techs]

Nothing liking getting business advice from a man who failed at every job he ever had.

 

[BaliBabyDoc]

I was considering posting this as well under . . . WOW! Bush actually has ONE good idea!!

Originally posted by: Horus
I'm afraid that, if Ford falls, all the other brands under that name will fall too...like Volvo, Aston-Martin, Mazda...or do their majority share just go back into the market?

Its unlikely any of those guys will go under. Volvo has essentially revised its entire lineup in the past 3 years except for their bigger sedans S80/S60 . . . and they weren't selling many of those anyway.

Aston-Martin is updated as well.

Mazda platforms are the primary reason Ford's small and midsize offerings have any hope at all.

Land Rover . . . I'm not so sure. The high end stuff is competitive (and still has cache) . . . their low end sux. They should probably drop the whole idea of a low-end Rover. Particularly, if they continue to use recycled Ford crap.

Jag is probably in trouble. The XK and XJ are alright but that's a tough market. The entry-lux stuff is brutal and Jaguar will NEVER be a player unless they take some Bush advice.:Q

 

[BaliBabyDoc]

Originally posted by: techs
Nothing liking getting business advice from a man who failed at every job he ever had.

You gotta give the guy credit for using eminent domain. Bushophiles claim he wasn't involved. But its quite obvious that "connections" and "backroom deals" led to the creation of the semi-governmental entity that had eminent domain powers to take private land. After taking said property (and levying taxes on the city of Arlington), a stadium was built for the Texas Rangers . . . who at the time were being run by . . . George W. Bush, bidnessman.

If it wasn't for that ridiculous episode Bush would probably be strung up with other two-bit corporate thieves of the 90s.

 

[BlancoNino]

Sigh

 

[GTaudiophile]

Originally posted by: Horus
I'm afraid that, if Ford falls, all the other brands under that name will fall too...like Volvo, Aston-Martin, Mazda...or do their majority share just go back into the market?

Ford would sell them to the highest bidders if possible.

As was said, brands like Volvo, Mazda, and Aston-Martin would likely survive. BMW failed with Rover already, so both it and Jaguar would be in trouble IMO.

If GM goes under...I'm not so sure about SAAB. But Hummer might survive because of their ties with the military.

Chrysler is what is keeping DCX alive right now as Mercedes is in trouble. Former Chrysler CEO, Dieter Zetsche, has now moved on to be CEO of DCX, so there is hope. And Mercedes is such an icon for Germany (as is VW) that their government would not let them go anywhere...nor be bought out.

 

[Zedtom]

I'm not in favor of government bailouts, and the taxpayers are growing weary of the pension fiascoes at United Airlines and elsewhere.

When the day comes that Toyota makes a move to takeover Ford, who's going to cry loudest?

 

[GTaudiophile]

Originally posted by: Zedtom
I'm not in favor of government bailouts, and the taxpayers are growing weary of the pension fiascoes at United Airlines and elsewhere.

When the day comes that Toyota makes a move to takeover Ford, who's going to cry loudest?

Why should they? What can Ford (or GM) possibly offer Toyota? Would be like a healthy body inviting cancer to come infect it.

 

[Genx87]

President Bush said General Motors Corp. and Ford Motor Co. should develop "a product that's relevant" rather than look to Washington for help with their heavy pension obligations, and hinted he would take a dim view of a government bailout of the struggling auto makers.

I like it.

 

[EXman]

Originally posted by: techs
Nothing liking getting business advice from a man who failed at every job he ever had.

good one </sarcasm>

 

[Zedtom]

Originally posted by: GTaudiophile

Originally posted by: Zedtom
I'm not in favor of government bailouts, and the taxpayers are growing weary of the pension fiascoes at United Airlines and elsewhere.

When the day comes that Toyota makes a move to takeover Ford, who's going to cry loudest?

Why should they? What can Ford (or GM) possibly offer Toyota? Would be like a healthy body inviting cancer to come infect it.

Toyota would be interested in the infrastructure that could be used in their long term planning. They would sell off and discard the waste. It's not as outrageous as you think.

 

[sandorski]

I'm sure GM/Ford could sell off their foreign holdings to raise money, but they'd have to have a bulletproof restructuring plan first. If worse comes to worst, they could kill their main parts(GM/Ford) and just keep their Profitable foreign parts. Either way they'll end up as shells of their former selves. Before all that though, they still have a chance of saving themselves, so we'll have to wait and see how it all plays out.

 

[EatSpam]

Guess the American automakers didn't contribute enough to Bush's reelection campaign.

Although I am surprised, as makers of expensive massive gas guzzling vehicles, GM and Ford would be the darlings of both the oil industry and the credit industry. Both of those industries have obviously paid their dues to Bushie, so one might think that GM and Ford might be higher priorities for him.

 

[Strk]

Originally posted by: BaliBabyDoc
I was considering posting this as well under . . . WOW! Bush actually has ONE good idea!!

Originally posted by: Horus
I'm afraid that, if Ford falls, all the other brands under that name will fall too...like Volvo, Aston-Martin, Mazda...or do their majority share just go back into the market?

Its unlikely any of those guys will go under. Volvo has essentially revised its entire lineup in the past 3 years except for their bigger sedans S80/S60 . . . and they weren't selling many of those anyway.

Aston-Martin is updated as well.

Mazda platforms are the primary reason Ford's small and midsize offerings have any hope at all.

Land Rover . . . I'm not so sure. The high end stuff is competitive (and still has cache) . . . their low end sux. They should probably drop the whole idea of a low-end Rover. Particularly, if they continue to use recycled Ford crap.

Jag is probably in trouble. The XK and XJ are alright but that's a tough market. The entry-lux stuff is brutal and Jaguar will NEVER be a player unless they take some Bush advice.:Q

Ford should be fine. Unlike GM, Ford remains profitable. They also have a massive amount of cash thanks to years of SUV/truck sales, so they can go a while before they're really in trouble.

GM still needs to figure out that cars selling for 30K+ shouldn't have interiors comparable to a Kia Rio.

 

[catnap1972]

Originally posted by: EatSpam

Although I am surprised, as makers of expensive massive gas guzzling vehicles, GM and Ford would be the darlings of both the oil industry and the credit industry.

That's what I don't understand--what exactly does Bushie mean by "develop more 'relevant' products"? More gas guzzlers to appease the oil industry (albeit what helped get them into this mess), or more small/hybrid cars that consumers want but at the expense of screwing over big oil (and the admin's money train)

 

[MonkeyK]

Bush said nothing that the auto manufacturers don't already know.

When William Clay Ford announced the upcomming changes, he specifically mentioned that Ford has to become better building cars that consumers want. He also said that plants have to be more adaptable so that Ford can turn around more quickly.
The troubling thing is that I did not hear him say that Ford needs to make more reliable products.

 

[TheSlamma]

GM, Ford and Junksler all work on the Baby-boomer quick buck mentality.

Use cheap parts, get the cars out the door now for cheap in big numbers and we'll fix it later or hopefully they will just trade em in for our new junk.

Well they made those dollars off the SUV boom and now it's all catching back up. Meanwhile Toyota and Honda were producing cars that last for an eternity and have a good resale value allowing them to bring their old car in for a great trade-in or a great car for their kids. LONGEVITY!

I hope Toyo and Honda both push aside the big 3 idiots and dominate all intelligent car buyers, we know the hillbillies and rednecks will stay with their domestic trash trucks and that?s fine.

They can blame pensions all they want, it comes down to people are tired of buying trash and the bills these companies get back from dealerships for warranty work.

 

[Zebo]

Originally posted by: techs
Nothing liking getting business advice from a man who failed at every job he ever had.

Hehe

Whay can't Ford just have family connections and wealthy friends bankroll thier failures? did'nt hurt Bush any look how "sucessful" he eventually became. I really can't believe he does'nt understand a little help can go a long way - He of course was showered with benefits. Knows the value of education and aid, that?s why they keep expensive private schools like Andover/YALE in business.

 

[CaptnKirk]

Younger generation consumers grew up exposed to Hondas and Toyotas.
There's no 'Brand Allegiance' to American products.

Used to be that Japanese vehicles were even worse than the domestic garbage, but as the kids grew up
so did the Japanese manufacturers - they didn't buy into the quick profit for nest Quarters Statement,
they looked ahead to 10 year product and market dominance.

The fatal flaw in American Busuness is short term profits and bottom line to the shareholders.

The point of change was when gas prices went up around 1973 and the American Auto Manufacturing sector
rolled out the worst vehicles they ever made to try to sell smaller cars against the compact imports of the day.

You don't see hardly any of the Vega, Monza, Pintos, K-Cars - they littered the side of the roads like beer cans and trash.

Given 30+ years of market maturity - we bankrolled the Japanese to replace our domestics.

 

[rahvin]

Originally posted by: DeathBUA
What they forget to mention is Chrysler paid back the government with interest...

Chrysler never borrowed from the government. The government provided a guarantee. Basically the Government cosigned the loans, because Chrysler never defaulted there was never a dollar of taxpayer money involved.

In addition, nothing is going to change with the automakers if they go into bankruptcy. What's going to happen in bankruptcy is the pension funds are going to be turned over to the government and in doing that GM will be making money again. As for Ford, they are not publicly traded and I seriously doubt they are at risk of bankruptcy, if they do manage to go forward with a chapter 13 like GM it will simply be to remove their pension obligation as well.

Make no mistake, GM is divesting GMAC so they can chapter 13 and get rid of the pension obligation.

 

[CaptnKirk]

Originally posted by: rahvin

Originally posted by: DeathBUA
What they forget to mention is Chrysler paid back the government with interest...

Chrysler never borrowed from the government. The government provided a guarantee. Basically the Government cosigned the loans, because Chrysler never defaulted there was never a dollar of taxpayer money involved.

Lockheed did the same thing with the L-1011 back in 1971 when Rolls-Royce of England filed for
bankrupcy - while Lockheed was their customer for the airplane's power plant.

Under Nixon, Lockheed secured a 'Government Guarantee' thay they would build the aircract if
England guaranteed that Rolls-Royce would stay in business and produce the engines.
No money from our Government involved, lockheed shut down for 90 days, Rolls restarted their engine shop,
the production delivery schedule to Lockheeds customers slipped by 6 months.

It's called 'Saving Face' - that's what we conceeded to have England's co-operation.

 

[Zebo]

The fatal flaw in American Busuness is short term profits and bottom line to the shareholders.

Every man for himself from the executive on down to the line will be the death of american business. We simply can't compete with a team mentality that thrives in japan and to a lessor extent Germany producing high capital goods and important future impressions/brands.

i still always buy american as long as it's avail just because I'd rather employ some american making $50 an hour and maybe buys somthing I make or service I provide than employ a japanese @ $55 who never will.