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Bush tells GM and Ford to develope more relevant product

M

MikeMike

Lifer
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.
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http://online.wsj.com/public/article/SB...iUQ_20070126.html?mod=tff_main_tff_top
 
i could see the democrats leading a charge to help them by instituting national healthcare. they could sell it as saving american manufacturing, supporting american companies, and supporting american workers and unions.
 
Originally posted by: Zanix
Great advice. I bet they hadn't thought to make a better product. 😕
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Clearly they haven't. That and they need to cut back on their pension benefits and healthcare to workers. Get rid of the damned unions.
 
Originally posted by: JulesMaximus
Originally posted by: Zanix
Great advice. I bet they hadn't thought to make a better product. 😕
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Clearly they haven't. That and they need to cut back on their pension benefits and healthcare to workers. Get rid of the damned unions.
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Agreed!

 
If it's a loan, i think that would be a good thing to do. The government would lose millions or billions anyways with all the unemployed workers collecting welfare.
 
Originally posted by: Looney
If it's a loan, i think that would be a good thing to do. The government would lose millions or billions anyways with all the unemployed workers collecting welfare.
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And loose even more if the company doesent make it after the bailout
 
Originally posted by: acemcmac
Originally posted by: Looney
If it's a loan, i think that would be a good thing to do. The government would lose millions or billions anyways with all the unemployed workers collecting welfare.
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And loose even more if the company doesent make it after the bailout
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How would they lose even more?

And if GM somehow goes bankrupt, which i highly highly doubt, they could liquidate all their assets to cover the loans. But more than likely, they would be bought out by another company.
 
It seems like these companies would not have as much motivation to change their business models to something more viable if they believe that the government is going to bail them out.

However, if they are faced with a "do or die" situation, they would be more likely do whatever is necessary to stay afloat.
 
Originally posted by: Ramma2
Originally posted by: JulesMaximus
Originally posted by: Zanix
Great advice. I bet they hadn't thought to make a better product. 😕
Click to expand...

Clearly they haven't. That and they need to cut back on their pension benefits and healthcare to workers. Get rid of the damned unions.
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Agreed!
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Yea cause the guy putting carpet in the corvette is behind the aztec design and the horriable way the comapny has been run. Not the guys at the top that just padded their golden parachute. :roll:

 
I think seeking bankruptcy protection is looking better and better to GM. Far from catastrophic, I think you would rather see GM obtain Court approval to break or renegotiate burdensome labor agreements and successfully renegotiate debt.
 
Rick Wagoner earned a salary of $2.2 million
Forbes #283 William Clay Ford Net Worth: $1.2 billion

Retire and live a nice life imo
 
You have to admit....the auto industry as a whole hasn't really changed much in the last 50 years. The 80s brought us fuel injection and better gas milage, but there really needs to be a new design to get the efficiency of the engines up. They're only about 30% efficient, if that. We need something that takes full advantage of the fuel source and solves those basic issues.

I just don't know if they'll ever be able to solve the puzzle though while using gasoline as the primary fuel. Hopefully someone, somewhere is working on the hydrogen idea and coming up with a new fuel cell. I'd really like to see the industry change and make transportation super cheap after the initial investment of the automobile.
 
I have an idea. Why don't they try making products that are reliable instead of making cars they WANT to break down so that you have to buy more sh1tty parts to put in their sh1tty cars.
 
Until GM and Ford stop making huges and gasoline hungry cars and trucks that are pushing to buyers to buy instead of making smallers and more fuel efficient cars, nothing is going to chabge for them. They should look at the competition (JAPAN comes to mind) that are making smaller and better cars with a lot of extra and making profits out of them -

Eltano
 
Originally posted by: Eltano1
Until GM and Ford stop making huges and gasoline hungry cars and trucks that are pushing to buyers to buy instead of making smallers and more fuel efficient cars, nothing is going to chabge for them. They should look at the competition (JAPAN comes to mind) that are making smaller and better cars with a lot of extra and making profits out of them -

Eltano
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GM is down $2500 in labor costs per car to toyota.
that is 1/6 of the price of a small car.
you tell me how they're going to make that up
 
Originally posted by: ElFenix
Originally posted by: Eltano1
Until GM and Ford stop making huges and gasoline hungry cars and trucks that are pushing to buyers to buy instead of making smallers and more fuel efficient cars, nothing is going to chabge for them. They should look at the competition (JAPAN comes to mind) that are making smaller and better cars with a lot of extra and making profits out of them -

Eltano
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GM is down $2500 in labor costs per car to toyota.
that is 1/6 of the price of a small car.
you tell me how they're going to make that up
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(not to mention that GM has completely redesigned its car line in the last 2 years, and ford has come out with their best mid sized car ever)

edit: damnit meant to edit not quote
 
Originally posted by: Looney
If it's a loan, i think that would be a good thing to do. The government would lose millions or billions anyways with all the unemployed workers collecting welfare.
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Most of these folks will receive hefty severance packages. Then they will find jobs. There's a reason why we have a steady 5% unemployment rate.

 
El Fenix, can you explain this please, I don't get it (I have a really crazy day so far and I have a brain fart). Are you saying that GM makes cars cheaper than Toyota?

"GM is down $2500 in labor costs per car to toyota.
that is 1/6 of the price of a small car.
you tell me how they're going to make that up"

Eltano
 
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