The American Spectator

Jay Molyneaux| 2.17.09 @ 6:45AM

It is truly sad to warch the demise of yet another American industry that actually makes something. We are truly on the straight road to becoming a third world country. I think we are entering second world status right now, sort of a Serbia that speaks English.

Peter Skurkiss| 2.17.09 @ 7:16AM

"The herd must be thinned," and let me add, the UAW must be neutered.

The NEW AGE of TRAVEL| 2.17.09 @ 7:24AM

Invest in public transport, is the way to go, high speed trains, connecting all the cities and towns all across America.

Time to invest in the future, not the past, you can live in one state and travel to work in another, it's fantastic.

Faffnir| 2.17.09 @ 7:40AM

We have high-speed transport between cities now.

It is called "airlines". They use marvelous machines called "aircraft".

There is a reason rail is no longer used for passenger travel: it is too slow and cumbersome. Distances in America are so vast that these "flying machines" are the most efficient use of time and money.

Mike| 2.17.09 @ 8:29AM

Not to worry, the US auto industry will survive. It's too expensive to ship that all that tonnage from the far east, particularly if the average MSRP is destined to shrink.

The US nameplates, however, are toast. The unions are parasites, and given enough time always eventually kill the host. Bye bye GM, Chrysler and Ford. Thanks for the memories.

frost| 2.17.09 @ 8:57AM

Eric has written several recent columns touching on the monumental problems facing the auto industry, all of them excellent. Suggest you search the archives -- they add up to a pretty thorough and unbeatable analysis.
And, for the "new age" lecturer on public transportation? Unless you're in the Northeast, forget it -- and what applies to them is not at all valid "out here" where the folks live...

Ryan| 2.17.09 @ 9:11AM

Watch out for Ford. They're actually making many of the right decisions. They weren't looking for a bailout from the government - just a line of credit - and had already divested itself from some of its bloat (Jaguar) and is doing a pretty good job on cutting back on dealerships and number of models - and building the right ones (Ford Focus, anybody?). Ford will survive, and if they can make the right cars at the right time over the next couple of years, probably flourish - UAW or no.

Look for Ford to be one of the first to turn a profit again.

SC Mike| 2.17.09 @ 9:24AM

Looking as dispassionately as I can -- I’m a car nut -- at Detroit’s offerings, there is quite a bit to salvage in the US auto industry. Chrysler’s toast, Fiat is the kiss of death: Nopar has no exciting product on sale or coming on line except for, perhaps, their new pickups with their fancy rear-fender storage bins, a great idea. But Ford’s F-150 will stop them nonetheless. Ford has quite competitive vehicles on the lot and coming down the line, so they could make it despite the UAW’s best efforts. GM is quite uneven in quality and salability, but does have “enough” if it can smartly winnow, something it’s proven inept at in the past. It’s albatross my be the Volt: it’s consuming vast resources, does not yet have a proven power supply, and may well be too expensive and troublesome to own in the coming days of reduced power on the grid, yet another triumph of the federal design studio.

Among the furriners, Toyota will remain king and Honda will remain in bid demand, but Nissan’s quality issues are hurting that brand, showing how mixing the Good (Nissan) with the Bad (Renault) produces the Ugly (Versa) and fuels Hyundai sales. (We can pray to the Lord above that the Chrysler / Fiat union will produce no offspring.) Finally, the Yurripeans will increasingly be challenged to find folks able to pay for their exquisite engineering. Barney and Maxine will see to that.

Curly Smith| 2.17.09 @ 9:30AM

There a couple of problems with what Mr. Peters suggests. First, it won't do GM any good to shut down car divisions since they'd still pay the workers via the "jobs bank". Second, the reason that we have so many "luxury" cars is that the automakers lose money on the "economy" versions. They need the mark-up on the added features to turn a profit.

For the US automakers to survive the herd must indeed be thinned. The most logical course is to prohibit the sale of any foreign built car and to shutter all non-UAW plants. After all, we can't let the billions we just sent to Detroit go to waste, can we? Or, we could address the core issue - that the labor costs are unsustainable and move forward.

Pat| 2.17.09 @ 10:58AM

Search all you want but it's difficult to find any analysis in this so-called "analysis" - stating what is obvious to everyone, yes - but analysis, where? To illustrate, I had this queer old duck of an economics professor in college who believed you could draw these elegant geometric shapes which would precisely describe our economy - but he always insisted the effects of govt. on the economy could be ignored. Ignored? Ok, he was an over-educated fool, but he had tenure and wasn't going anywhere.

So we can safely ignore the effect of government or governments on the auto industry? Reading this aritcle would give that impression but how realistic is that? All those folks dependent on the auto industry, all those midwesterners plus others scattered around the country vote - and can make their displeasure felt. FYI, markets don't vote, styling doesn't vote, technology doesn't vote.

Politics saturates everything - including automaking, unfortunately. For the car lovers, those perennial teenage boys pouring over their custom car magazines, autos and automaking should be a safe refuge from the slime of 24/7 politics. A place of safe retreat where politics can't penetrate the nostalgia or come between the love of a boy for his car. Sorry, but the politicians want to kill zero to 60 in 4.8 seconds - too energy wasteful. They want us to drive silent electric cars and they'll get their way through incentives (tax credits) or coercion (severe gas guzzler taxes). Actually, they'd prefer we all move back to cities, go vertical in our living quarters and use public transportation exclusively.

Ask yourself if you've ever heard of a single politician who doesn't love public transportation -and I mean a long term committment, not just a summer fling? People belong on subway cars, buses, trolleys, intra-urban trains, cross country trains, ferrys, et al - but personal cars are a luxury that can be eliminated. Allow a politician to date an environmentalist and you end up with 1.7 children who believe you should take the subway to work and ride your bicycle to the park on Sunday. Is there a thriving market in our future for custom bicycle magazines - flames on the fenders, pinstriping?

Paul| 2.17.09 @ 12:20PM

Car Guy, another great article. Thanks.

I'm with Mike, from above, on this. Thanks for the memories GM, Ford, Chrysler.

It's time for the partisan-union business structure to end, though I predict the Democratics in D.C. will keep them afloat thru the next presidential election (for their votes, campaign bribes and anti-Republican support).

Maybe after the rubble, a new non-union American company will emerge and start building high quality cars. I would buy their products and even invest in their future.

I believe the liberals want to use their Auto-Power to control us... by making cars and gas eventually unavailable and forcing us to take unionized mass transit.

The final conflict| 2.17.09 @ 12:33PM

If the Car industry goes, the Arms industry may be affected too. It whole parts of America becomes affected by unemployment and these states becomes not just goast towns, but goast states, what will happen then, will people leave these areas where will they go?.

Will the country be broken up? this is not a recession is is a deep depression that looks to be with us for the next 7 years and beyond, what is the answere and solutions?.

SC Mike| 2.17.09 @ 12:38PM

Pat –
We certainly must not ignore the effect of the government on the domestic auto industry, but the point of some of the above is that Ford has a good chance of making it unless even more happens. They surely are constrained by CAFE and other nonsense, but could squeak by.

GM could too, but only with significant federal support. It’s a bad idea, the corporation needs to shake off the ugly mess it’s made through Chapter 11.

Chrysler should die, maybe somebody will purchase the assets. The “Jeep” name has some value…

JTS| 2.17.09 @ 12:42PM

I quite agree, Professor Piffle! Why, just the other day I spied one of those amazing Iron Horses! It was crammed full of folks with all manner of wares and packages and set atop rails that took them to set destinations – what a marvel! Yes, the Horseless Carriage is quite a useless old contraption, with its efficiency and utility! Zounds, Piffle! Just the other day heard of a city that has Iron Horses underground stuffed with happy people! Imagine! Why, one could hop on his velocipede; peddle only a few miles to wait in the beautiful outdoors to board the Iron Horse - along with hundreds of his happy neighbors - for a short ride to another stop; he then can happily wait to board another wonderful riding gizmo – bus, trolley car or rickshaw – to take him to his destination! And then the wonderful ride back! And it will all be for free because the stimulus bill will pay for it all! Why, isn’t modernism wonderful, Piffle?!

Appleby| 2.17.09 @ 12:44PM

At the car show last week I was standing nearby when Audi fired up its new R8. The looks on the faces of car guys (and gals) matched those on the faces of Junior and Susie in Toyland. Every one of us turned to everyone else and said, "Remember when American cars sounded like that?"

For those of us who remember what it was like when three Corvettes and two Saleens passed by in a herd down that corner past pit out at Le Mans, there is no other sound worth hearing than the ground-shaking roar of American Muscle.

But then again, that was back in the day when American MEN sounded like that.

If you get my drift.

JTS| 2.17.09 @ 12:44PM

Invest in public transport, is the way to go, high speed trains, connecting all the cities and towns all across America.

Time to invest in the future, not the past, you can live in one state and travel to work in another, it's fantastic.
++++++++++++++++++++++++++++
I quite agree, Professor Piffle! Why, just the other day I spied one of those amazing Iron Horses! It was crammed full of folks with all manner of wares and packages and set atop rails that took them to set destinations – what a marvel! Yes, the Horseless Carriage is quite a useless old contraption, with its efficiency and utility! Zounds, Piffle! Just the other day heard of a city that has Iron Horses underground stuffed with happy people! Imagine! Why, one could hop on his velocipede; peddle only a few miles to wait in the beautiful outdoors to board the Iron Horse - along with hundreds of his happy neighbors - for a short ride to another stop; he then can happily wait to board another wonderful riding gizmo – bus, trolley car or rickshaw – to take him to his destination! And then the wonderful ride back! And it will all be for free because the stimulus bill will pay for it all! Why, isn’t modernism wonderful, Piffle?!

Paul| 2.17.09 @ 1:18PM

Public transportation is for poor people, and liberals want everyone, except themselves, to be equally poor, and dependent on them for all your transportation needs.

Dustoff| 2.17.09 @ 3:22PM

I remember when San Diego built the red trolley. Yes it was such a scream. but it wasn't long before the gangs found great way to go from once place to another and rob areas or give everyone on the trolley and hard time or rob them too. YEAH GREAT IDEA. "not"
Not including the damage they did to.

Howard| 2.17.09 @ 4:04PM

What do you mean Fiat is the kiss of death? I always associate Fiat with high quality well engineered cars with a large presence in the USA. I've got some swamp land that I want to sell you also.

I remember a neighbor has a Fiat in the 1960's. What a piece of cr*p.

Thomas| 2.17.09 @ 5:36PM

A the demise of the iron horse. Not. The automobile industry isn't going anywhere in the near future. Why? because the most efficient means of transportation in this country is the automobile. Except for the large rabbit warrens of America [cities like New York, Boston, Detroit, and Chicago] that have been building on a "public transportation" infrastructure for 100 years or more, most of the country needs the automobile. It is a necessity. The above mentioned cities are all on the verge of bankruptcy, by the way.

The demise of the American automaker is also not very realistic. Can anyone out there say bankruptcy? What is killing the American automakers is a disastrous business model that promises employee benefits that are just plain undeliverable. Re-structuring is on the way and the unions are not going to be happy.

2 Guns| 2.17.09 @ 5:39PM

Ford may make it, they mortaged all their assets a few years back, bought out a bunch of UAW workers and since the UAW agreed to a 2 tier pay scale ( newbies don't get as much in pay or bennies as the older guys get) they are sitting on a considerable advantage, well, as good as an advantage as you can get with a union.

The big problem, as Peters pointed out in an article a week or so ago, is over capacity. Plants need to close. In reality, if MOPAR goes, or GM or both, who ever is left should be in good position as capacity will go down.

I guess, we just wait and see.

Thom| 2.17.09 @ 6:29PM

I remember my first and last American designed car, a 1973 Ford Pinto. Beyond the car’s tendency to burst into flames at the most unfortunate times the car lived up to my expectations and Ford Motor Company lived down my worst expectations. Shortly after the car’s design flaw was fixed due to Federal mandates or else, my local dealer’s work force deliberately sabotaged the vacuum advance of my car not just once but twice in order to create a need for repair dollars. The first time I had the Dealership owner’s son test drive the vehicle to show him what was wrong with the drivability of the vehicle and he told me to my face he would put the car on the lot and sell it like it was and he saw nothing wrong with it. Along with drivability the MPG was in the tank. After some further research and testing on my own I found the black/white spark delay check on backwards causing the vacuum advance system to retard vs. advance. The wrong color end of the device was pointing to the carb and distributer. I chalked that one up to an honest mistake by the Ford mechanic that worked on it at first. The next year after the same routine maintenance I had the same problems. This time the spark delay device was installed correctly and working but there was no vacuum advance none the less. After some more research I found a small screw in the vacuum line. That was the last time Ford worked on the car and I got rid of it after 4 years and 62,000 miles. Friends of mine that owned later Pinto’s and what morphed into the Mustang II version had even worse horror stories. During the height of the publicity over the flaming Pinto an enlightened UAW steward made the observation that had the Pinto been built in Japan it would have still been the same Pinto meaning quality of car. An observant car person would have added that had the Japanese designed that car in Japan it would have come out something like the Datsum B210 which spawned what Nissan now has as a successful 40 year production of small, well engineered passenger cars. Same for Toyoto and Honda. What has always amazed me about the demise of the American cars is that the obvious problem has never been dealt with and year after year compounds the demise. I was making $2.40 an hour in 1973 while the UAW had an average Wage and Benefit cost of something around $22.00 an hour. Not bad for someone with just a high school diploma but like today, the average American car buyer can’t afford to pay the trendy high end prices for pickup trucks, SUV and luxury cars in order to offset that $73.00 an hour Wage and Benefit cost today. That’s 50% higher than my cost and I have a four year degree and 35+ years in the profession I’ve worked in since 1973. Somebody in the management that lives in Detroit is going to have to do a reality check if there is to be an American car company left in five years. Stupid is as stupid does…..

Detroit needs to drop the W. T. Grant’s business model, “we are losing money on everything we sell but will make it up in volume”.

Always trying to learn more...| 2.17.09 @ 7:04PM

Hey, "The final conflict":
I am usually more much more considerate of those less fortunate, but I have to say - you are an idiot. Go enroll in (and pass) ECON 101 before opining. Then go to ENG 101 and learn how to spell.

This is NOT a deep depression. Unemployment is not even two times the level considered to be full employment, not the 3+ times during the late Carter years, and nowhere near the 6+ times it was experienced during the "real" Depression. This is only the worst economy since the days of Jimmy "National Malaise" Carter, the least capable president of the 20th century.

If history has told us anything, it is that the government will always fund the arms industry. That is a core essential of national security - but of course, Mr. Obama and company seem all to willing to abdicate that responsibility. Considering all of the luncy in the national budget today (yes, Mr. Bush was a significant contributor, too) national security is one of the few constitutionally mandated funding requirements.

If you knew anything about econ, you would know that the U.S. Government reports each year based upon a cash flow basis. Any corporate CEO today who reported results on a cash flow basis would be thrown in jail for the rest of their natural life (due to the knee-jerk, expense generating Sarbanes-Oxley legislation - what a waste) . GAAP (look it up) demands liability accounting. That means that, if your corporation has a loan, it goes on the balance sheet, gets reported on your quarterly 8K (and myriads of other government mandated paperwork), and is recorded as a future liability. Do you have any idea how much current U.S. Government liabilities are?

$65 TRILLION - or more than the current GDP (look it up) of the ENTIRE WORLD.

OK. Where will the people go? Simple answer. I think the better part of history tells us that people will go WHERE THE WORK IS (I dare you to read the Bible, specifically aboout Joseph, followed by his 12 siblings). That is why my grandparents moved their families from New York and Pennsylvania to Detroit - the work prospects were better. That's why my family and I moved FROM Detroit 12 years ago - the work prospects were better. I am propsering much better in NC than I'm sure I would be in MI right now.

At the risk of sounding just a bit too much like Gordon Gekko (you aware of any context here?), at its most fundamental, greed is the motivation to seek out the best possible circumstances for one and one's loved ones. When taken to extreme, we see evil incarnated.

The only reason that people will not go where the work is, is their own personal manifestation of the bad part of greed - "I want to stay where I am, and I want the goverment to make it so."

Ponder that after (if) you ever receive an education.

DISCLAIMER: I do not even have a Bachelor's degree. I just learned to read and write - and apply what I've read and learned along the way.

Now - be a good minion and call your Democrat Rep (by all means, DON'T write them) and beg them for more of my money.

Grow up, assume personal responsibility, an leave my productivity and the future of my precious children alone.

P.S. Mr. Chagnon - are you still out there? This is "Re-Remembering Rita" Joe. Miss your comments, my friend!

Mike| 2.18.09 @ 1:35PM

Howard wrote:
"I remember a neighbor has a Fiat in the 1960's. What a piece of cr*p."

My dad bought a Fiat Spider in the late 1960s - mid-life crisis I suppose. The thing was in the shop every other month...Fix It Again Tony...until the engine finally burst into flames while stopped at a red light. Noone was hurt, but we were mighty embarrassed.

DaveS| 2.18.09 @ 9:34PM

What? No Red Phillips or Interloper on this thread? Anyway, conventional wisdom abounds. GM (ahem: read 'UAW') will survive - but not because of classic reasons. I think I'll see GM cars on lots in great numbers, even as I walk by them - picking up 5-cent deposit cans from the curb. There will be more Bob Cratchits out there than you can count as a result of Dem/BOH policies: people who look in the window but cannot buy, their children hoping at age 20 they can afford a bicycle.

Richard Baker| 2.19.09 @ 10:18AM

Trains work in Europe because the continent is small enough. Having ridden trains across the US as a kid was fun but aircraft are a more efficient use of everything and you don't need tracks, stations, sidings, and all the other infrastructure required.
The folks who think that a train from NY to LA is the "latest thing" have never ridden one.

Dr N. G. Nair| 2.23.09 @ 11:38AM

The American automobile industry can survive only if
(i) it cuts down its so-called models to just five or six;
(ii) the production cost is reduced, which of course may necessitate a reduction in salaries to the employees.
The association leaders should be taken into confidence. They should be impressed upon the need to reduce the production cost so that they can offer "cheaper" vehicles than the foreign ones. Most Americans now instinctively go in for foreigh cars, especially the Japanese vehicles, because they feel that these vehicles are far more technologically advanced than the American cars. As someone has remarked, where the American auto insustry emplyes one hundred persons, there the clever Japanese employ forty workers, the 'rest' of the work is done by robots.
The Americans are sadly out-dated in their technology. Updating it alone will help them.

Jack | 5.5.09 @ 9:31AM

Please, all of this is nothing but a hoax. Get real people! Don't believe everything that this goverment is telling us. Wake up and read some things for yuorself.

Bob Dickson | 5.6.09 @ 9:25AM

Lookie here you big wiged wall stree scandals, im not lestenin to nothin you says. notin but lyes

terrance | 5.18.09 @ 12:39AM

The GM and Ford will make it they are just to big and their cost structure is to big and they have no branding when you think of Ford or GM you think of nothing When you think of BMW you think of the utamate driving experince and that is what the car companies need to focus on offering something for out of the car than just a car by the way Japanese car compaines will be in the same boat in about ten years or so.