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Ford's Mulally: GM Would Drag Entire Industry Into Bankruptcy

Ford chief executive Alan Mulally just finished a meeting with editors and reporters here at The Post (here is the video) as part of his visit to town to present Ford's case for federal aid. He and the heads of the other Big Three automakers appear before committees in the Senate tomorrow and the House on Friday.

Mulally, who took over Ford after coming from Boeing in 2006, offered several insights into the industry and the economy. In the name of urgency, we'll just bullet his quotes here and flesh them out later:

-- "We really believe that if GM goes into bankruptcy, it will take the industry into bankruptcy."

-- We asked Mulally why, given the unique agreement between the Big Three and the United Auto Workers right now, the two sides don't rework their contract to start the big cost-savings benefits in January 2009 instead of waiting for the new contract to kick in in January 2010: "That's always a possibility," Mulally said, opening the door for an unprecedented emergency renegotiation, especially if President Bush does not sign any aid bill passed by Congress.

-- On the economy: "We see recovery starting in 2010."

-- On debt: "We don't want to have to borrow any more money."

-- Mulally has maintained that Ford is in good shape and doesn't need a federal bailout -- UNLESS the economy turns much worse. So Ford is asking for the ability to access up to $13 billion in emergency funds over the next year.

If Ford would have to tap into $9 billion of that, "I can't imagine how bad the economy would have to be," Mulally said.

If Ford would have to tap into $13 billion of that, "That would be depression-level economics," he said.

Mulally also said that Ford has too many affiliated dealers, which are most problematic in large urban areas, and the company is working to consolidate them.

He added that when he took over Ford, the company was "a house of brands," meaning it wasn't just one strong brand -- Ford. Since then, Ford has sold Aston Martin, Jaguar, Land Rover and its majority stake in Mazda. It is now shopping Volvo.

Being the keen investigative reporters that we are -- we also pressed him for details on his road trip from Detroit to Washington yesterday.

You may recall that Mulally and his fellow Big Three automaker chief executives were hammered by Congress two weeks ago for flying in private jets to come beg for federal money.

This time, Mulally, GM chief executive Rick Wagoner and Chrysler chief executive Bob Nardelli hoped to avoid another p.r. punji pit and drove to Washington in hybrid vehicles.

Here are the highlights of Mulally's 10-hour, 520-mile trip:

-- He and three other Ford executives piled into one Ford Escape hybrid SUV.

-- They drove straight through in one day.

-- Mulally took his turn at the wheel.

-- They listened to Sirius satellite radio, but not to music -- only news.

-- In a move surely meant to underscore the grim prospects for the U.S. auto industry, the four Ford road-trippers didn't even stop to eat: They ate box lunches (sandwiches) they'd packed in Detroit.

-- The four took the Pennsylvania Turnpike, which passes through the famous Breezwood, Penn., known as the "Town of Motels," a tourist stop as familiar to East Coast road-trippers as Pedro's South of the Border. Mulally, a Westerner, had never heard of the charmingly garish Breezewood, which probably boasts more lighted signage per square foot than Las Vegas.

-- Frank Ahrens
The Ticker is Twittering!

By Frank Ahrens  |  December 3, 2008; 12:14 PM ET
Categories:  The Ticker  | Tags: Alan Mulally, Ford, automakers  
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Comments

This actual started in the 1950s. Why do you think there is/was a Ford Falcon? Why Ford is just now realizing this, is absurd. The so-called "Big Three" are making the tax payer responcible for the mis-steps of the last 40 to 50 years. They, the big three, should declare bankruptcy and tell the unions off. The UAW is also responcible for this mess as well.

Posted by: 22opal22 | December 3, 2008 1:03 PM | Report abuse

Did I read correctly that this Ford executive has never heard of BREEZEWOOD, PA?! I guess he lives in the "other America?"!

Posted by: akilah68 | December 3, 2008 1:10 PM | Report abuse

Congratulations to Ford and Mr. Mulally for possibly weathering this storm nearly intact. They could come out as national heroes if they actually use some of the bailout money to bring back all the jobs they outsourced to foreign countries just to make a little more profit. If they make a fuel efficient vehicle with 100% US made content - I will buy it immediately. How many other patriotic US citizens would do the same?

Posted by: TedRyfiak | December 3, 2008 1:24 PM | Report abuse

Capitalism is Darwinian and the Big Three are clueless dinosaurs gawking at the blizzard as the snow drifts up around their necks.

These companies deserve to fail and let the chips fall where they may, for better or worse.

Posted by: CliffJohnson | December 3, 2008 1:24 PM | Report abuse

Have the legislators considered that maybe an industry-wide restructuring is what is needed. I do not think that they have considered it seriously: if they have considered it seriously, then where is the "plan" to which they have given consideration in this regard? Hmmm???

Posted by: DarylAtamanyk | December 3, 2008 1:25 PM | Report abuse

During the 10 hours these executive were driving instead of flying, how much business were they able to conduct? Flying on a private jet takes less time and allows the executive to continue working, something that is often not able to be done on a comemercial airline and in a car.

Posted by: ahashburn | December 3, 2008 1:27 PM | Report abuse

The Big 3 can point fingers all they want at each other. But the nation's finger is pointing at them. How are you going to regain prominence in your own industry? Figure that out now or you are definetly going the way of the Dodo.

Posted by: 10yrag | December 3, 2008 1:29 PM | Report abuse

They should now take the trip back to Detroit in a Kia Sorento, which would give them a better understanding of their problem.

Posted by: mickeyjay1 | December 3, 2008 1:35 PM | Report abuse

What mpg did they get on the trip?

Posted by: djoelt1 | December 3, 2008 1:36 PM | Report abuse

well, u have to look at it this way, part of gov's job is to waste our money so what better place then detroit. Your hear Dodd ,Pelosi talking bluster about "they better have a plan that works or else..." but thats all show and bs. They've already ok'd the $'s..wink wink. The big 3 are smart, they now want 30+ billion, gotta get the $'s when the goings good because when the plan fails they wont get anymore. This is big time payback to Mich for voting Obama and the UAW. Yes siree...change you can believe in !.

Posted by: snapplecat07 | December 3, 2008 1:39 PM | Report abuse

The FED just injected 8 Trillion dollars into the banks.

Why are the Big 3 going to Washington to beg for 40 billion?

It seems like this is exactly the type of loan the private banks could easily handle at this point.

If they need to, and they shouldn't, the Government could merely guarantee the loan if GM/Ford should default.

Meanwhile, GM/Ford need to cut prices by half to start selling cars. They need to get the Volt and the Ford Fiesta Econetic into the showrooms.

Posted by: jabailo | December 3, 2008 1:40 PM | Report abuse

During the 10 hours these executive were driving instead of flying, how much business were they able to conduct? Flying on a private jet takes less time and allows the executive to continue working, something that is often not able to be done on a comemercial airline and in a car.

Posted by: ahashburn

-Notice that no one else is complaining that they drove in instead of flying their private jets. In this economy people are no longer just handing out the benefit of the doubt, regardless of performance. I often get work done on a commercial airline so I don't know how you think it's some mythical feat to open a laptop in a seat while flying/waiting for boarding. I guess I'll have to tell my CEO that I'm miraculously efficient with commercial, but I could get even more done with our own jet. I wonder how well that will go over.....

As they drove from Michigan to Washington they were surely talking business and no doubt also seeing the state of road-side towns for over 500 miles. That should've given them some additional things to discuss as opposed to being 30,000 ft above the middle class that pays their multi-million dollar salaries.

Posted by: theobserver4 | December 3, 2008 1:41 PM | Report abuse

The auto manufacturers are toast. We should not give them money to burn. Next year will be even worse than this year. For some reason, the Asian manufacturers don't need a bailout. Why do you think that is? Check out GloomBoom.com

Posted by: GloomBoomDotcom | December 3, 2008 1:42 PM | Report abuse

Out of the 3 CEOs at the Big 3 I would put my money on Mulally. He's grown up at Boeing and was responsible for the development of the very successful 777.

In terms of fuel efficiency commercial airliners is a far more competitive market than cars so Mulally knows where he needs to head. He's already started cutting the fat from Ford, with more to come.

Maybe the other 2 in the Big 3 need to look outside of the auto industry for very bright execs. It's working at Ford.

Posted by: KHMJr | December 3, 2008 1:48 PM | Report abuse

The rest of the world is helping there auto companies financially in this world wide recession, why not us. I don't care how you look at this, it's loans paid back with interest. What we have here is some of our citizens thinking with there prejudice and not there brains.. You know, if it doesn't involve me , the hell with other people. Most of these comments have no idea of the trickle down effect, brainless thinking.

Posted by: shipfreakbo214 | December 3, 2008 2:02 PM | Report abuse

I would have loved to be a fly on the wall during that trip, oh and yes, it's spelled Breezewood!

Posted by: carol217 | December 3, 2008 2:04 PM | Report abuse

And so the cannibalism begins....

Posted by: sheehanjc | December 3, 2008 2:06 PM | Report abuse

Why don't the Big 3, consolidate and ask for the bailout money to create hydrofuel cell cars and the hydrofuel delivery system. This would in turn reduce our dependency on fossil fuels, save the consumer money and is good for the enviroment. In addition, allow US citizens to invest money to the bailout program by the Federal government (for a return in profit, like treasury bonds). Why bail them out to produce the same type of vehicles etc. What would be the point?

Posted by: donj230 | December 3, 2008 2:09 PM | Report abuse

Impose a ten cent per gallon GAS TAX for retrofitting transportation, money goes to high mpg, electric, vehicles, the time is now to do this and we also get less gas consumption due to elasticity.

call your congressmen !

Posted by: philosopherkingtomas | December 3, 2008 2:16 PM | Report abuse

Cry me a river Big Three. Maybe you wouldn't be going under if you hadn't killed the electric car and instead upped production while gas prices soared.

Posted by: chrisdunning1 | December 3, 2008 2:23 PM | Report abuse

So what is the answer to the original question? Why will a GM bankruptcy take down the entire domestic industry?

Posted by: bdulmaine1 | December 3, 2008 2:30 PM | Report abuse

I think one reason they all got in trouble was when they moved from distinct models for the niches and just went to families of floorpans. Back in the day when you could tel one model year from the next and Ford froma Mercury from a Chevy from a Buick froma Dodge from a Plymouth. When they went away from that model they ended up just cannibalizing sales from within and from each other.

Posted by: ronjaboy | December 3, 2008 2:48 PM | Report abuse

Why not weigh the costs/benefits?
40 billion in loans (which will presumably, eventually be paid back), or about 100 billion per annum in additional unemployment compensation, increased Medicaid or other health programs, additional payments to states and localities to make up for the loss of their property and business tax revenues, etc.
If about 3 million people lose their jobs who are either direct employees of the Big Three or employees of tier 1 to 3 suppliers, what is the negative multiplier effect upon other, unrelated businesses, such as grocery or shoe stores, in the affected communities? Maybe an additional 1-2 million, over the long term?
Another question may be: How deep and long of a recession are we, as a country, willing to endure? A mere 1981-2 type recession? Or , a 1930-40 type depression?
Refusing to bailout private companies may well be the best course of action, but don’t fool yourself into thinking it’s going to be “somebody else’s problem” if the auto industry, or any major sector of the economy, goes under. It will eventually affect everyone.

Posted by: Rational4vr | December 3, 2008 2:54 PM | Report abuse

So what is the answer to the original question? Why will a GM bankruptcy take down the entire domestic industry?
_______
Mullaly said some nonesense about supply and dealer networks collapsing. That's laughable. I don't See Toyota or Honda asking to save GM so some multi-brand dealers and U.S. suppliers don't disappear. In any event, unused capacity would be picked up on the cheap by Transplants and other investors.

More to the point, GM has 21% market share and falling. We are losing sight of the fact that GM is not the whole market and its particular demise will not create a car shortage or sustained lack of demand for components.

Posted by: wharwood | December 3, 2008 2:56 PM | Report abuse

The industry is already beyond repair by any amount of bailout. It can't be taken down any further. Its been down for 25 years since Detroit gave away the passenger car market to foreign Companies and went for low-quality, high-profit margin gas-guzzlers and trucks. America is bankrupt. If America can re-structure itself out of its bankruptcy, so can the Big Three with a Chapter 11. What's good for the country is good for Detroit.

Posted by: lionelroger | December 3, 2008 2:57 PM | Report abuse

They drove from Detroit... four of them in an Escape, no not a Navigator but an Escape. I'll bet a Lear is parked at some regional airport off of I70 with their name on it. Their BS is getting lower, longer and wider.

Posted by: whocares666 | December 3, 2008 3:01 PM | Report abuse

I'm relieved that they packed a lunch and troubled that Breezewood is news.

If Ford needs no actual bailout funding at present and GM and Chrysler are within weeks of the abyss, haven't we already found the Big One left standing? Keep in mind that in 1970, GM had about half of the market and was a candidate to be broken up. Now GM is 25 days from going out of business. GM in its present bloated form needs to die.

Posted by: SLMc37 | December 3, 2008 3:01 PM | Report abuse

If GM goes under, then it will take suppliers down as well. So that will take down not only Ford and Chrysler, but any other companies that manufacture in the us including Toyota, Honda and Nissan. Lucky for them, they have home governments that are willing to bail them out! So if people are really happy to put American automotive manufacturers out of business, we will slide into a depression!

Posted by: stilmore | December 3, 2008 3:03 PM | Report abuse

The statement was made that Ford would fail if GM went bankrupt. What specifically substantiates that statement aside from the strong possibility that GM would emerge a smaller but more competitive company as a result of undergoing the bankruptcy process?

Posted by: mjsmith4061 | December 3, 2008 3:22 PM | Report abuse

Road trip? Sorta reminds me of the infamous road trips of another era where Henry Ford, Firestone and Edison would drive around and invite politicians to "camp" with them.
UAW did not make this bed the big three are layin in, and the scab auto plants of the Implants need to recognize worker rights.

Posted by: tniederberger | December 3, 2008 3:28 PM | Report abuse

How about all three of you file chapter 11 and all of management, labor, retirees and vendors take the pain for 35 years of mismanaging these companies. Why should I or anyone fund your bad decisions? This is the end result of Congress making a horribly reflexive decision to spend money like water to fix the "crisis". These 535 geniuses would have subsidized buggy whip manufacturers 100 years ago.

Posted by: TravisBickle1 | December 3, 2008 3:30 PM | Report abuse

It's not a bailout. It's a loan, to paid back with interest. Why is that so difficult for people to comprehend? The banks were inexplicably bailed out. This is completely different

Posted by: rainking | December 3, 2008 3:33 PM | Report abuse

The UAW has destroyed the auto industry-- pure and simple. UAW workers are unskilled labor. They take no risks. They simply feed at the trough. It's time for Gettlefinger to realize his irrelevance.

Posted by: hz9604 | December 3, 2008 3:38 PM | Report abuse

If Ford's Executive Cabal was so stupid as to take the Pennsylvania Turnpike instead of I-68, I wouldn't bet on Ford remaining solvent.

As for all the "foregone work" occasioned by driving instead of flying, well...

1) Any trip between DC and Detroit using commercial airlines takes a minimum of 6 hours: 2 hours to get to the airport and check-in, 2 hours in the plane (door to door), and another 2 hours to deplane, get baggage, get rental car and drive to final destination.

2) Exactly what is soooo important about a FORD CEO's job that makes it imperative to buy and maintain a corporate jet to gain perhaps 1.5 hours of productivity? I've got a no-brainer for Mulally: DITCH the Lincoln-Mercury division. Ditch it.

Posted by: angelos_peter | December 3, 2008 3:42 PM | Report abuse

My concern for the WORKERS is such that I fear we HAVE to help out the Bogus 3...

But it HAS to be said-
IF THEY DIDN'T BUILD CRAP FOR GENERATIONS NOW, THEY WOULD NOT BE IN THIS SITUATION!

Posted by: kase | December 3, 2008 3:44 PM | Report abuse

Mulally has been cleaning up the mess at Ford since he got there over two years ago. He has already turned the company around, just as he did previously at Boeing--a company that's doing very well right now.

All these blind criticisms of "the Big Three" fail are ridiculous. Toyota and Honda, are struggling too. They just have more cash and don't have to deal with a lot of the inherently American cost structure issues, so they're not going out of business. And, assuming the recession doesn't turn into a depression, neither is Ford.

Posted by: squatty418 | December 3, 2008 3:45 PM | Report abuse

B.S.

Complete and utter B.S.

If GM is successful in extorting this money out of our brain dead congress, this country is truly doomed.

NO ONE is too big to fail. Let's begin teaching that lesson with GM!!

They SHOULD FAIL--That is the natural consequence of running a business into the GROUND!

Posted by: misssymoto | December 3, 2008 3:46 PM | Report abuse

Is it Chrsyler that I keep seeing ads for their giant pickups navigating their way through an obstacle course that seems more suited for army humvees?

What makes them so utterly senseless? Why can't they grasp the concept that they need affordable, fuel-efficient cars to compete with Honda and Toyota?

Posted by: bigdaddyfat | December 3, 2008 3:51 PM | Report abuse

These morons don't seem to understand that, for most working American's, the Depression is already here! What's more, we're darn certain that it has been caused by outsourcing, guest workers, the whole of the globalization claptrap AND WE WANT IT ENDED! So, if GM has plants overseas, close 'em down and bring the jobs home, or just go bankrupt! What we want is a government that listens to us (and we obviously still haven't got one with Obama, either!) We want tariffs brought back, punitive taxes on *investments" and investors, as well as corporations, that outsource jobs. We want duties and fees on goods and services that were outsourced - sky high fees that make it so unprofitable that the companies that did this will bring those jobs home or go out of business. We want Apple and Dell and Microsoft and IBM and GM and Ford and all of the rest of them to suffer as we have suffered. We want the same for the banks and Wall Street crowd, the "financial services industry" with it's parasitical, fraudulent, criminal preying upon ordinary citizens. We want an end to that vast security hole, that identity theft nightmare , caused by moving personal databases offshore to India, where our credit information, social security numbers, our family's health history, is bought and sold and traded around like so many baseball cards, abused by insurance companies and employers and various spam artists and other assorted crooks. We want an end to our public colleges and universities putting foreign students ahead of U.S. students in their admissions. What we want is an end to globalization! And we are fully prepared to see this country ripped apart if we don't get it!

Posted by: mibrooks27 | December 3, 2008 4:03 PM | Report abuse

What came first - the blacksmith or the bank? Everyone needs to look at the big picture and not just the little sliver of life in front of their face. The backbone of the USA is manufacturing which creates money-making and tax-paying jobs. Anything that creates or keeps more of those jobs here should be a priority. Unfortunately - that means GM should stay in business but straighten up.

Posted by: TedRyfiak | December 3, 2008 4:09 PM | Report abuse

How are they getting back to Detroit?

Posted by: bcarleton1 | December 3, 2008 4:14 PM | Report abuse

A couple of points:

1. Why not suggest a pay cut across the board to everyone, starting with the CEO's, in the auto industry?

2. Has anyone considered that aging baby boomers have finally lost their desire to spend all their money before they've earned it? Retirement looms large before many, many boomers and I know at least a dozen who started spending less over a year ago.

3. GM had an electric car in the 90s. If they had it ready for production by last summer, don't you think they would have made a killing selling them during the gas price increases?

4. Let them go chapter 11, re-organize their debt, and get rid of the unions at the bottom and the dead wood executives at the top.

Posted by: tony_in_Durham_NC | December 3, 2008 4:14 PM | Report abuse

During the 10 hours these executive were driving instead of flying, how much business were they able to conduct? Flying on a private jet takes less time and allows the executive to continue working, something that is often not able to be done on a comemercial airline and in a car.

Posted by: ahashburn | December 3, 2008 1:27 PM

-------------------------------------------

Mularky! I have known plenty of people to conduct business in either a car or coach on an airplane (including myself). Sure I didn't necessarily have leather seats or a desk sized-tray in front of me, but I made due, just as these execs should. If they were not productive, that's on them.

Posted by: SteadyState | December 3, 2008 4:20 PM | Report abuse

This is really great. See what congress can do if they only put our interest first.
I am sorry they have to drive a small car. But then this is their own doings.Hope the big three Auto giants have learn a good lesson. Treat the customers well and give them quality hybrid car at an affordable price. Then you will not be in this mess.Stop taking unfair big salaries and bonuses. Tell UAW to meet you all halfway so that their members will have jobs for now and the future

Posted by: ades2domanie | December 3, 2008 4:21 PM | Report abuse

What I see to be the biggest problem here: that a company was allowed to become so big that its life-force is directly tied to that of the national economy. Let's avoid this problem entirely in the future but not having any companies this big.

Posted by: legendarypunk | December 3, 2008 4:35 PM | Report abuse

Has anyone bothered to look at the number of automobile manufacturers that went out of business in the last century? Did America go belly up when any of those companies failed? I know the argument will be made that those companies produced inferior vehicles. Look at all of the gas guzzeling SUV's, trucks, and big sedans that are no longer coming out of Detroit. Duhhhh!!!

If we do bankroll the Big 3, how many of the jobs that they moved oversees will be coming back? Are we going to see more fuel efficient vehicles being produced domestically? Will we really see a business plan from a Detroit car company with its executives being held accountable for the benchmarks within those documents?

One last question...Are the executives and union workers willing to take hefty pay cuts across the board to keep they companies going? As one of those workers outside the automobile industry who still has a job and is being asked to do more with less, I'd genuinely like to know. How much it is worth to them, the exec's and workers, to keep their jobs?

Posted by: Tullus | December 3, 2008 4:38 PM | Report abuse

TedRyflak wrote: Capitalism is Darwinian and the Big Three are clueless dinosaurs gawking at the blizzard as the snow drifts up around their necks.

I agree with this. It appears however that the three blind mice can't quite grasp fundamental origin of species concept. The thing is, once they are visited by Darwin's ghost they then have to figure out another fundamental concept. Species as well as capitalistic enterprises must CHANGE to survive. Why humans, the most adaptive of all species in one respect, can't or refuse or are unable or unwilling to take a path of innovation instead choosing the old, tried and tired status quo is beyond my ability to speculate. A CEO should be CEO because he can innovate (like Jobs) not because he has a expensive diploma from Harvard business school and has an excellent memory for figures. If you take Apple for example. They come out with the thinest notebook. They come out with a great operating system. They come out with iTunes. They come out with iPhone. They basically take an idea and evolve it, refine it, improve upon it and it inevitably meets with market success. Is this really that difficult?

Posted by: LeeBurroughs | December 3, 2008 4:40 PM | Report abuse

Perhaps someone would like to justify how the UAW retirees should continue to get no-premium, no co-pay health insurance when many of the rest of us have to pay thousands, and many others have no health care coverage at all?

And the dealers......NADA....if you were to commission the world's most powerful electron microscope, and put my emotions under it, you still would not be able to see my sympathy for the crook dealers of NADA.

Haircuts for everyone!!! Make 'em Buzzcuts!!!

Posted by: angelos_peter | December 3, 2008 4:44 PM | Report abuse

We are not the only government in the world. Why can't other nations also help to bail out Ford, GM and Chrysler- especially if their companies rely on them for parts or have significant operations within their borders? I'm thinking specifically of Japan and Canada. For that matter, why can't GM Canada take full ownership of at least one of the GM brands, like Pontiac perhaps? Why can't Mitsubishi pick up the Dodge brand and Mazda pick up some of the Ford sedans? The Japanese are fat with our cash from years of trade imbalances. Why do we always have to be the checkbook for the world on things like this?

Posted by: ripvanwinkleincollege | December 3, 2008 4:45 PM | Report abuse

I worked at the Chrysler Design Center in research and development, and unless you hold a degree...it doesn't matter if it's in the auto field, (one engineer had a degree in forestry) they don't consider your opinion worth spit. example...when you take American jobs to third world countries to supposedly make more profit, you cut off your nose to spite your face, the very worker you have eliminated in America can't and wont buy your car EVER again! and the country you've exploited for cheap labor is still struggling with their own industrial age, and they can't afford to buy that car either! Greed! brothers and sisters is the way of American business!When Henry Ford raised the wage of his employees so they could afford to buy the product they build, it was ingenious! but those kind of thinkers are gone now, and We have gone from being a country to being a company! AIG, Freddy Mack, Fanny May, and the auto industry all want the American people to save them from their greed and excesses, the very people they have been putting the screws to. My co-workers in the late 80's or early 90's on their own time(lunch hours,& after work) built a two seater, mid engine, rear wheel drive car,you may ask why? Take a look at morning traffic or hell anytime during the day and count the number of cars with two or less people! it's around 98%!!The guy driving to work sees that, the exectutive sees the end of his $7.00 cigar as he is driven to work, or sees nothing from 5 miles high, have any of the big three built a reasonably priced shuttle craft that gets great mileage yet. they haven't and they won't until Japan does it first!we have sacrificed our skills and creative license for greed! Oh yeah. Back to the car my co-workers built...Mr. Townsend an exect. at that time took it to the Chealsea Proving Grounds and did his best to destroy it, and when he couldn't, it was brought back to the complex parked in a dark place with a tarp over it, and allowed to die a quiet death, and the guys who built it...well they were told if they did something like that again, there would be consequences.These are the things that happen when you allow big business to run America, they are in charge of a country and could care less about it's prosperity, that is until their greed stripped the assets of their own company and the U S Treasury as well! I could tell you about the car line released in and around the late 80's that had a known defective seat belt.... but that's a story for another day...

Posted by: onetimetraveler | December 3, 2008 5:01 PM | Report abuse

The car of the United States uses about 70% of the oil consumed domestically. Being not able to disregard as the cause is big SUV to which the car market increases now by 25% to be near though so a large amount of CO2 will have been exhausted. Moreover, only the sales depression of this SUV occupies a big part of the cause of Big three losing. It is necessary to review SUV by all means so that Big three may recover the achievement. Cars that disregard the environment and energy problems are produced, the administration is taken a measure, and it doesn't get it either.

In the background that SUV carried everything before one American market, there was a problem that had to be called adhesion of Big the administration and 3. Both politicss and markets in the United States will have to leave in a new century at the same time as reforming oneself so that the achievement of Big three may recover.
SUV has received various favors in the United States. For instance, the bill that is sure not to be applied corporate average fuel cost restriction (CAFE) introduced in 1975 to SUV and to be strengthened 40%90 year is voted down by lobbying. Moreover, above-mentioned (2718kg) SUV of 6000 pounds escapes the fuel cost restriction.

The exemption from the tax has been received. 38,200 dollars are deducted in maximums as well as the track and the commercial vehicle as for SUV though the cost of the car is deducted by the car used in the enterprise. Moreover, SUV is an exception treatment in a luxurious tax to the car of 30,000 dollars or more.

The government in the United States was to have given SUV the score by two (the environment and the tax). It was to have taken the measure and the strategy that Big three promotes it to say nothing of indifference to the stringency of global warming and the oil supply and demand with the government in the United States. Isn't the result to lack environmental measures and the energy measures not neither the United States of today nor an appearance of Big three?

As a result, the share of SUV to which various preferential treatment is received has expanded greatly as the sedan that occupies most shares in the luxury car market decreases to the half.

On the other hand, the crude oil price that was barrel (159 liters) ten dollar level in 2002 rose suddenly until the latter half of 140 dollar level in July of 08 years. It is hung on it and the gas price of the United States has risen from the level to 4 dollar level one dollar a gallon (3.79 liters). Sales of SUV kept decreasing so that it was hung on this sudden rise. A present finance crisis is not the main cause of Big three depression. You may say the end of the car to lack the energy strategy. It doesn't take still and be an end of the car to lack environmental measures.

Posted by: tyamoni | December 3, 2008 5:07 PM | Report abuse

I have never heard a bigger bunch of ignorant, short-sighted hillbillies in my life! Let them collapse? Let the Japs buy them? Just Kill them? Not a cent? -- Are you people absolutely insane?

Well, to all the knuclke draggers out there, what will you be doing for work when the Depression hits, triggered by the loss of the US auto industry and the multitude of industries that depend on it? Hmmm? Where will you be working? Because 10% of US jobs, from suppliers, to restaurants, to hospitals, to day care centers, to retailers and colleges, are in some way tied directly and indirectly to the success of the US Auto industry.

Do you people EVER think that if Honda needed aid, that Tokyo wouldn't support them in a second? You think that the Italians would allow FIAT to collapse? Renault? Citroen? Toyota? Volkswagen?

Bullsh-t! These manufacturers are national assets and extraordinary sources of jobs in their countries. Their home countries would do anything possible to save them if need be. But here, the mindless, pitchfork-wielding hoardes are content to turn their back on OUR national auto manufacturer-employers, regardless of the horrendous outcome it would trigger. Sure, throw trillions at banks owned partially by the Saudis (Citigroup) or at the investment firms who in part caused this crisis. But when the US automakers -- (you know the people who also build our military equipment and commercial vehicles and industrial products), ask for LOANS a fraction of the size the banks were HANDED without needing to beg for, driving to DC, oh no that just cant be!

The fact that some posters are willing to destroy an entire industry and millions of lives because they once had a bad master cylinder on their 22-year-old Ford Escort or because they NOW have come to Jesus and hate SUVs and trucks (they just LOVED them for the past 15 years!), really makes me wonder how truly dysfunctional is the US educational system.

Fortunately, and this is the first time I've ever thought this, the people in Washington actually seem to have the upper hand in this contest of wits.

I have confidence the Obama administration, and even the current Bush people, will do the prudent thing and grant the loans. The faster the better.

Posted by: hyperlexis | December 3, 2008 5:28 PM | Report abuse

Toyota...Honda...BMW...BMW...BMW...Range Rover...Mercedes...Range Rover...Mercedes...in that order...never have and never will buy American vehicle. They are too light, break down in a heartbeat, have warranties that require minimum payments before warranty services kick in, lose value within first 2 years , and are overpriced for the value, etc., etc., etc. What American made vehicle does anyone know about that provides bumper to bumper free maintenance for the first 50-100K miles, and free upkeep maintenance for the first 50K without cost like Mercedes, BMW, and Range Rover? The difference in the price is made up in the savings on maintenance and upkeep, and you get a much better vehicle that has value at trade-in.

Posted by: Beingsensible | December 3, 2008 5:39 PM | Report abuse

The consequences of not bailing out the Big 3 may be severe. The consequences of bailing out the Big 3 will also be severe. For years, the Big 3 have perpetuated the myth that they are the “American” auto companies while sending autoworker jobs to Canada, Mexico, etc. Meanwhile, Japanese (among others) auto companies have been bringing jobs to America. The last time I did a comparison, more of my Toyota was built in America than my brother’s car which was manufactured and assembled elsewhere. His died at 100K.

Big 3 executives have continued to draw high compensation packages and bonuses without regard to real, long-term company performance. Unions have likewise continued to hold a firm line until recently, now that the end of this legacy is looming. But America is being asked to foot the bill. I say, “Not so fast!”

Before the government steps in, the auto executives and union leadership should have to dig deep into their own pockets (many have enormous fortunes), much in the same way they would if they were a small business. Have them put their homes, retirement and children’s college accounts on the line, just as a bank would ask me to do if I were asking for these loans for my business. If they really believe in the crusade they are now championing, and are willing to put their money where their lobbies mouths are, then and only then should we consider asking the rest of America to pitch in. Otherwise let the free market be a free market.

Posted by: CareyCares | December 3, 2008 5:56 PM | Report abuse

Perhaps someone would like to justify how the UAW retirees should continue to get no-premium, no co-pay health insurance when many of the rest of us have to pay thousands, and many others have no health care coverage at all?

And the dealers......NADA....if you were to commission the world's most powerful electron microscope, and put my emotions under it, you still would not be able to see my sympathy for the crook dealers of NADA.

Haircuts for everyone!!! Make 'em Buzzcuts!!!

Posted by: angelos_peter

-Sounds like nothing more than sour grapes to me. Grow a spine and either negotiate these benefits for yourself or gather your co-workers and make a stand together to get it done.

Either way stop being a crybaby about what others have. (no I am not a Union member)

Posted by: theobserver4 | December 3, 2008 5:58 PM | Report abuse


What this shows me is that capitalism, when left to its own devices, is just a precursor to socialism. These guys got so big by buying/squashing competition and are now "too big to let fail" and need to be backed by the public.

Walmart is pretty big. What if they told the government that they needed billions or they'd walk?

In the future, we really ought to be more careful about protecting capitalism. How about that? Regulation to SAVE the free market!

Posted by: sacomment | December 3, 2008 5:59 PM | Report abuse

They should go back to Detroit by Amtrak (call it market research on the competition). ;-)

Posted by: citizenw | December 3, 2008 6:00 PM | Report abuse

not only the big three but the entire city of detroit as well as the state of michigan can fall off into lake michigan.

Posted by: ronaldtennillegeorgia1 | December 3, 2008 6:05 PM | Report abuse

Two days again my local Fredericksburg's Ford dealer charged me $60 for keyless remote (to open and lock the doors). $60!!!!

Ford builds crap and I'll never buy another one. Their engine-heads are built to fail, as each and every part of their vehicles. Heck the only non-American car maker that built a car worst then Ford was Jaguar. So what does Ford do? They buy Jaguar, go figure

Making money on parts and maintenance is part of GM and Ford’s long-term strategy.

Chrysler is not as bad as the other two but no where near as good as all other foreign car makers. Foreign car makers charge a little more but sell quality. I say the hell with them. They had ample years to win my business and failed terribly.

Posted by: question-guy | December 3, 2008 6:09 PM | Report abuse

I just completed my holiday trip home on Monday, and yes Breezewood is garish.

First, I never understood the hype about the jets. I felt that executives should be flown, they can conduct business and meetings while travelling. Maybe they could have jet-pooled or something, but then they would have to look at their competition for the entire hour and 10 minutes.

Second, maybe the can collectively tell the UAW to go jump, they could have decided on mergers.

Last, this article is really weak. The Post writers obviously are out of their league when talking to the auto execs, perhaps they needed a Detroit journalist to write their questions. This was like a Disney-level interview.

Posted by: JobOneDetroit | December 3, 2008 6:11 PM | Report abuse

Either way stop being a crybaby about what others have.
--theoberver4

-------------------------------------------
I HAVE health care, and pay plenty for it. By your Darwinian logic, Detroit should fold up and blow away. Fine by me. When that happens, the UAW and the white collar employees will find themselves asking, "Do you want fries with that?" And they won't have any health care. If they won't make any concessions, why should my taxes fund them? I don't need them or their business.

Perhaps you do business with them. If so, grow a pair and give them YOUR tax money. Keep mine out of it.

I'm wondering what it is you observe...besides the inside of your lower intestine?

Posted by: sasquatchbigfoot | December 3, 2008 6:13 PM | Report abuse

Posted by: ronaldtennillegeorgia1
not only the big three but the entire city of detroit as well as the state of michigan can fall off into lake michigan.
--------------------------------
Gotta love that good old southern intellect. Hate, hate, hate and when your done…hate some more.

Posted by: question-guy | December 3, 2008 6:15 PM | Report abuse

I have yet to hear why the failure of one of the big three would drag any of the others into bankruptcy. Could the loss of competition for resources and customers would possibly harm Ford? That would defy basic economic principles. Is it possible we are addressing an oligopoly.

Posted by: testerling | December 3, 2008 6:26 PM | Report abuse

Posted by: hyperlexis | December 3, 2008 5:28 PM
Bullsh-t! These manufacturers are national assets and extraordinary sources of jobs in their countries. Their home countries would do anything possible to save them if need be. But here, the mindless, pitchfork-wielding hoardes are content to turn their back on OUR national auto manufacturer-employers, regardless of the horrendous outcome it would trigger.
-------------------------------------------

Dude, I’m a life-long card carrying democrat who supported President-elect Obama (financially and in principle) and I still support him 100%. But the fact remains, Ford/GM builds crap, and it’s Ford/GM who ‘to turn their back on OUR national auto manufacturer-employers’.

Posted by: question-guy | December 3, 2008 6:27 PM | Report abuse

For half-a-century GM, Ford and the UAW have been buying off politicians. Now they think it is only fair to turn the tables and have the politicians bail them out. The only trouble is it ain't their money - it is our money. GM's millionaire lobbyist is married to Rep. Dingell - who was chairman of the Energy and Commerce Committee until last week, making sure to keep the gas hogs humming along. Everyone in Detroit and Washington are in bed together. This sick symbiotic relationship is depressing.

Posted by: alance | December 3, 2008 6:52 PM | Report abuse

When I was a pre-teen we drove from our home in northwestern Ohio (not far from Detroit) to DC and we, like many others, stayed the night in Breezewood. It took a while, but these guys finally seem to be seeing the handwriting on the wall, as well as the small-town America all of us saw when we drove from the rustbelt of the southern Great Lakes to our nation's capital.

Their "drive" may have cost a bunch in terms of their "per hour" salaries, but I don't think it could have been spent much better. The problem is not in the hours it took them to drive through Ohio, Pennsylvania, West Virginia and Maryland, but in the obscene (and I know it when I see it) compensation American CEOs give each other on their interlocking boards.

The head of Toyota makes $1 million per year. Offer him 5 times that to come to Detroit. Or hire the second in command at Toyota, Honda and Nissan to take over GM, Ford and Chrysler. Double, triple or, heck, even quadruple their salaries and they'll still earn a fraction of what these fat cats have been taking home for their miserable failures as CEOs.

Outlaw golden parachutes, and that would be a start. Allow shareholders to vote on executive compensation packages. That would help, too. And finally, prevent interlocking boards somehow.

That BS about not being able to hire capable people unless you pay them these obscene salaries is just baloney, as is proved by much more successful CEOs worldwide. The "global economy" seems to affect everything other than American CEOs.

Posted by: RealCalGal | December 3, 2008 7:37 PM | Report abuse

The Ford chief executive Alan Mulally certainly is correct in what he is thinking. Buick and Pontiac are prime examples even so Buick is partially foreign and their half should have been sold. Ford killed some autos by selling them, GM went the same route, killing the Saab, Saturn and Pontiac brands. GM destroyed Oldsmobile in order to birth a Saturn. Now Saturn is out of their infrastructure, Saturn Sky (oldest vehicle) looked OK to me. Saturn could have been handled by Cadillac, making a electric Natural Gas Hybrid using a Fuel-Cell. GM could have begun their economic attempt by stop leasing their Jets to other countries whom shelter Sweepstakes Organizers, Giveaway Organizers, and Promoters all trying to represent a Automaker while flying around America at no cost to them. GM did not use marketing dollars to launch the brands so many people were not even knowledgeable of those GM brands. The Aura 2007 (based on the Insignia) was another brand of GM car no one knew about.

Ford has a better option, Electric Vehicles that have Fuel-Cells and to help organize CTL Technologies with Coal Producers to make Liquid Coal so that the future in The Coal Fuel-Cell can evolve, also to consider Algae Green Oil which is a Diesel Biofuel and that means supporting a dual-fueled Engine like Diesel Fuel and/or Natural Gas (LNG), the Chinese have introduced many 4CY and 6CY Diesel Engines but no V8 Engines all for cars and trucks and that would make a wide served Hybrid Vehicle possible that would have support at truck stops without any intervention where Hydrogen and CNG must have separate interventions for Consumer's to have travel capability. A Nationwide Fuel Supply Hot Line should be endorsed that could automate for Consumer's locations available for the types of fuel available and that could be supported by GPS as well. If your looking for a Plan try My Project on and see that it does work and can be handled by Automakers, it would make the best cheap outlet for Engines and Transmissions and that boosts its assets so it pays the bill for Consumer's and that is the main stream ideal situation so the solution does not bog down Banks and Lending Institutions for all Consumer Vehicle Conversions since this is the main reason I refuse to borrow money from them I have it better than they think and I don't want to have to pay them for nothing. See: http://jonalist.bravehost.com/articles/evfcf.html

Posted by: MiJonAL | December 3, 2008 7:48 PM | Report abuse

Comment - "If they make a fuel efficient vehicle with 100% US made content - I will buy it immediately."
Well, I am waiting for the next Ford GT...wake me when it arrives, or Detroit dies; whichever is first!

Posted by: kondrek | December 3, 2008 7:51 PM | Report abuse

One has to wonder about many of the posters here: 1) How many people are aware of (or know) how much their prosperity depends upon other areas of the economy? 2) ALL elderly people get government provided health care insurance, including retirees of the Big Three (it's called Medicare), and GM retirees only get an additional $300 per month from GM for Medicare "gap" insurance. 3) For all the people here who don't want "their" taxes spent on bailouts, How much are you actually paying? Unless you're taking home over $100K (after pre-tax deductions), without dependents and large mortgage interest deductions, you're not paying any significant federal taxes.

Whether you support or oppose these bailouts, one should at least be educated in the issues before spouting off in support of the UAW workers, or denigrating the Big Three in comparison to the foreign transplants.

Oh,... and the "off-shoring" is pretty much irrelevant to the operating efficiencies and profitability of North American auto operations.

Posted by: Rational4vr | December 3, 2008 7:59 PM | Report abuse

I am amazed at the bitterness in these posts over the unions and the auto industry as a whole.

*The hourly workforce accounts for 10% of the price of an automobile. The rest is management, engineering, advertising, raw materials, etc. I can not possibly see how people perceive the union to be the largest cause of the auto industry's demise.
*Why is it hard for the taxpayer to swallow a LOAN to help out fellow Americans, but are glad to whip out a gigantic gift to the banking industry after they made some really bad decisions, too.
*The government should help out the auto industry since they themselves helped create this mess with free trade and outsourcing of jobs. Not because the CEO's deserve it, but all of the people who rely on the industry to make a living, and all of the people who rely on those people's dollars to make their own living.
*Some of you wonder how GM's failure could bring down the whole industry. I work for a supplier who supplies most of the major auto companies. GM is our biggest customer, and we will fail if they do. What we make can not easily be transfered to other countries or plants in the US. I know quite a few suppliers could be enveloped by other companies, but it would take a large amount of time to get our products up and running somewhere else.
*I have read where both Honda and Toyota have expressed desire for help for the Detroit 3 in order to keep their own suppliers steady.
*All of these "unskilled" union members are not as dull as some might think. For years, they have been offered tuition assistance, and many have capitalized on that. And they have had a good job and desire another. Also, you have management, engineering, accounting, advertising, sales, etc. who would also lose their jobs. All of these people would jump into the current, poor job market. Suddenly, it is not just everyone else's problem because these people are taking the job you might have had,or maybe even the job you currently hold. My job is in jeopardy due to this downturn on the auto industry, but I am not worried because I will be one of those taking your job, too.

Posted by: kelly19771 | December 3, 2008 9:08 PM | Report abuse

It's too late! The American auto industry has been making lousy cars for years. They got away with it until Toyota, Honda and the other foreign auto producers moved in. Now even a bailout can't save them!

Posted by: fstrimper | December 4, 2008 5:19 PM | Report abuse

Ford is actually a pretty good company and Mulally has them moving in the right direction. Toyota and Honda sales are actually down a higher percentage this year than Ford is down--they're down, but not as much as Toyota and Honda. GM is below that and Chrysler is down about 40% in sales. But Ford makes a good product and has held up well compared to the Japanese. Mulally's a good manager--proven in his time at Boeing--and he'll consolidate lines and increase efficiencies given time. I suspect Ford will do well in the long run and we shouldn't sell them short.

GM is another story, but it will cost less to give them a loan (with stipulations) than it would cost to pick up the pieces if we let them fail. So we should work something out that keeps them afloat, forces them toward more efficiency and a more forward-looking business model, and protects the interest of tax payers in getting paid back first--ahead of normal dividends, executive compensation, etc.

Posted by: davidmckittrick | December 4, 2008 6:09 PM | Report abuse

This is not a simple issue. For decades the US auto (and other) industries have been deteriorating. There are several factors driving this. One is our collective desire to make more money ... not necessarily as a result of creating more value.

This has resulted in US labor costs vastly higher than other, competitive industrial nations. Add to that ridiculous pension and healthcare costs, and US labor becomes very uncompetitive on a global scale. Other costs associated with US labor are the responsibility of the government with social security and medicare costs as well as the costs associated with regulatory compliance and reporting. Of course, over the years, the auto companies became huge (often jumbled) "organizations" that were less than efficient, quite bloated, and led by people with their own interests at heart. Add some erogance at all levels (corporate, union, and government) and you get what we have.

The automakers have been harshly criticized for making big, gas guzzling SUVs, trucks, minivans etc. Well, when you consider the costs associated with labor, healthcare, pensions, regulations, taxes, etc. etc., the only vehicles the US automakers could make money on were these types of vehicles. There is no money in selling compact cars, and businesses exist to earn money.

So, let's not be so quick to blames whomever is leading these companies now or any other individual or group. These problems were a long time coming and there is plenty of blame to go around.

Let's focus on a solution.

Posted by: facts-please | December 4, 2008 11:00 PM | Report abuse

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