Discuss Detroit » Archives - July 2007 » Say Ford and GM leave the US « Previous Next »
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Lilpup
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Username: Lilpup

Post Number: 2650
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Posted on Monday, August 27, 2007 - 2:23 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

What happens then? Would the Feds let them go without penalty? What would happen to the national economy?
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Gannon
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Username: Gannon

Post Number: 9911
Registered: 12-2003
Posted on Monday, August 27, 2007 - 2:37 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

They need a corporate charter within the US in order to operate business here.

They could move their HQs anywhere on the earth...and bank where most, um, convenient...but they'd still have to have some approved North American charter to do anything further here.

Would they risk it?

Most of 'em have offshore banking and derivative contracts to hide profits from government eyes...and they are gradually off-loading entire operations to other countries...so they are doing it in all but name only.
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Lilpup
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Username: Lilpup

Post Number: 2651
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Posted on Monday, August 27, 2007 - 2:44 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Ford and GM say factories in US face axe

"If a deal cannot be reached, Ford and GM negotiators have said the companies will have no choice but to move their North American operations to countries in Latin America and Asia where manufacturing costs are cheaper."

http://observer.guardian.co.uk /business/story/0,,2156191,00. html

(hope the US never again needs WWII style mass production)

(Message edited by lilpup on August 27, 2007)
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Sstashmoo
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Username: Sstashmoo

Post Number: 321
Registered: 02-2007
Posted on Monday, August 27, 2007 - 3:07 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

This is no surprise. If the union has any sense whatsoever, they'll take whatever the companies offer them.

The big 3 from a global standpoint, are hemorrhaging cash to stay here.

This could be a bluff, but it has teeth.

If they are serious and follow through, this would devastate the whole US economy and more.
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Kernlkurtzbickle
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Username: Kernlkurtzbickle

Post Number: 2
Registered: 08-2007
Posted on Monday, August 27, 2007 - 4:48 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

If Ford actually worried about labor costs, they wouldn't have paid Mulally $28 million for four months.

Those companies wouldn't move headquarters out of America though, or else the government would stop buying their cars for almost everything. They'd probably have no problem moving out their factories to China. Even Mexico is acquiring "high" labor costs to the point where companies find it cheaper to move their operations to China.

Tijuana is going to look like Detroit in the next 10 years, except no company as big as the Big 3 will be headquartered there.
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Ramcharger
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Username: Ramcharger

Post Number: 437
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Posted on Monday, August 27, 2007 - 4:53 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

This is why many Europeans have been fighting “Globalization” for years. Americans with their “Wal-mart” mentality are too stupid to foresee the outcome of their quest for cheap consumer goods. I hope all you people enjoy living on a dollar a day.
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Burnsie
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Username: Burnsie

Post Number: 1134
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Posted on Monday, August 27, 2007 - 9:56 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Kernlkurtzbickle-- Mulally's salary is a drop in the bucket compared to what Ford's total hourly and salaried pay is each year.
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_sj_
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Username: _sj_

Post Number: 2035
Registered: 12-2003
Posted on Monday, August 27, 2007 - 10:01 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Why should Mulally be denied his pension and benefits. In the overall grand scheme of things, what is $28 Million on the entire payroll, less than 200 workers.

quote:

This is why many Europeans have been fighting “Globalization” for years. Americans with their “Wal-mart” mentality are too stupid to foresee the outcome of their quest for cheap consumer goods. I hope all you people enjoy living on a dollar a day.



Stop with gloom and doom, this country has seen this before and gotten through it. Of course maybe if Detroit would stop thinking they control the entire planet when it comes to manufacturing.

(Message edited by _sj_ on August 27, 2007)
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Mikeg
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Username: Mikeg

Post Number: 1098
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Posted on Monday, August 27, 2007 - 11:36 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

There is absolutely no "new" news in this article.

GM and Ford have been global, multi-national companies since shortly after they were founded.

The "angle" being pitched in this article is that with declining market share in their home North American market, under-utilized plants here have been closed and that has the effect of "shifting operations away from North America". That does not imply that GM or Ford would - or even could - serve their current NA market by closing all their NA plants and shipping in vehicles made at their foreign plants.

Even before the advent of foreign government regulations and local content laws, GM and Ford were building vehicles in the countries where they had enough sales volume, since the costs and time involved with large-scale long-distance shipping of completed vehicles was not economically justified. It is still very difficult to economically justify shipping in more than 50-80K units/year of a vehicle produced in a foreign plant versus tooling up another plant locally.
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Gannon
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Username: Gannon

Post Number: 9923
Registered: 12-2003
Posted on Monday, August 27, 2007 - 11:52 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Mikeg,

Both companies have changed their 'global' posture within our lifetime.

Used to be they merely used the world as a source of cheap raw materials.

Now they're using it for cheap manufacturing labor, but not simply IMPORTING the labor and growing the country, they are exporting the damn factories and all their taxpayer-making blue-collar jobs...h-m-m-n-n, technical support white-collar ones, too.


We're on the other side of the equals sign now...and the leverage against us is made with huge tangible assets, while our strength is largely vapor...digits...service-econo my dissolving without growth, wealth destroying as efficiently as it USED to be creating.


Perhaps over a much shorter period of time, since the assumptions of the system lean towards unmitigated growth...with the meager safety nets based on a 1929 market. They didn't even learn their lesson with the spectacular failing of Long Term Capital Management.
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Sstashmoo
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Username: Sstashmoo

Post Number: 322
Registered: 02-2007
Posted on Monday, August 27, 2007 - 12:29 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

We are in this shape right now and only having this discussion because our "leaders" are allowing this to happen. The fix, starts with campaign finance reform.

Bush and his gang have made it abundantly clear that they have little regard for the auto industry. And further blame Detroit for it's failings.

Quote: "Those companies wouldn't move headquarters out of America though, or else the government would stop buying their cars for almost everything."

Do you really think that would stop them? In business, it's all dollars/cents and bottom lines. If they can trade the limited brand loyalty for cash, don't think they can't or won't.

The governments attitude toward the autos is a real slap in the face. These companies from a profitability standpoint should've outsourced manufacturing a long time ago. Yet, they've opted to stay out of loyalty to home and country. If they've made any mistakes from a business standpoint, thats it. Because the support they've received from the American people is marginal and support and cooperation from the government is totally absent.

Obama stands here in this city and tells us it's our own fault? I'm sorry, but the man is a total idiot.
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Mikeg
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Username: Mikeg

Post Number: 1099
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Posted on Monday, August 27, 2007 - 12:42 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

In the world according to Gannon, GM and Ford have raped the land for their raw materials and not content with having done that, they are now raping their workers at home and abroad.

Instead of simply offering up delusional rants, what would you suggest that GM, Ford and/or Congress do differently to get their NA costs in line with their NA sales?
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Lilpup
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Username: Lilpup

Post Number: 2653
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Posted on Monday, August 27, 2007 - 12:44 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

universal health care uncoupled from employment
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Mikeg
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Username: Mikeg

Post Number: 1100
Registered: 12-2005
Posted on Monday, August 27, 2007 - 12:46 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

And what do GM and Ford do in the meantime while they wait for that to happen?
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_sj_
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Username: _sj_

Post Number: 2041
Registered: 12-2003
Posted on Monday, August 27, 2007 - 1:13 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Twiddle their thumbs because they will be waiting a while.

quote:

universal health care uncoupled from employment



This common tale only holds true if after the those costs are reduced from $71 an hour it costs per employee that they do not create new needs to take the place of that benefit. Such as large pay raises, new PCs, cell phones, etc. Then they are right back where they started.
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Cambrian
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Username: Cambrian

Post Number: 1528
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Posted on Monday, August 27, 2007 - 2:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

If it where to happen it would be the final act of two once great companies that eventually petered out to businesses indistinguishable from any early 21st generic Wal Mart, Home Depot, or fill in any service conglomerate, model. Thinking the Chinese and Indian Markets will be loyal to any "former" American company, that willingly shifted wealth away from the whole of its own countrymen is quite foolish. The big 2 will find themselves competing with homegrown Indian and Chinese companies, and I assure you they won't win that contest. Look at history and you will see that any outside interest to colonize or exploit those countries did not work for any period of time. Think the English in India late 19th and Early 20th century, or the oriental trade to the US in the last 200 years. How many companies successfully transplanted them selves and survive today?
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Cambrian
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Username: Cambrian

Post Number: 1529
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Posted on Monday, August 27, 2007 - 2:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

TATA CONFIRMS INTEREST IN BUYING JAGUAR,
LAND ROVER. Indian conglomerate Tata Group confirms widespread media reports that it is interested in buying the Jaguar and Land Rover brands from Ford Motor Co. Chairman Ratan Tata tells CNN-IBN television that acquiring the two British boutique brands would give the company’s auto unit, Tata Motors Ltd., global reach. The deal also would reduce Tata’s reliance on its home market, which now accounts for 90% of sales.
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Mikeg
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Username: Mikeg

Post Number: 1104
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Posted on Monday, August 27, 2007 - 2:52 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Cambrian, you are obviously ignorant of the long-standing and high regard that Chinese consumers have for the Buick brand. Why shouldn't GM pursue that market again, even if they have to enter into a joint-venture to produce them?
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Cambrian
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Username: Cambrian

Post Number: 1531
Registered: 08-2006
Posted on Monday, August 27, 2007 - 3:03 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Nope! They are having to put 0% financing to move those buicks now as competition heats up:

https://www.atdetroit.net/forum/mes sages/5843/111400.html?1187833 043
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Lilpup
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Username: Lilpup

Post Number: 2655
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Posted on Monday, August 27, 2007 - 3:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

This common tale only holds true if after the those costs are reduced from $71 an hour it costs per employee that they do not create new needs to take the place of that benefit.



There's absolutely no reason to believe any such expenses would be created.

There *certainly* would be no additional expenses or wage increases for all the retirees currently receiving health benefits.
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Ndavies
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Username: Ndavies

Post Number: 2742
Registered: 10-2003
Posted on Monday, August 27, 2007 - 3:29 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Cambrian did you even read what you posted on that other thread?

GM's sales of buick were up 12% even without the incentives. Sure they are loosing market share, however there are huge numbers of new models/competition coming on the market there.

I see the incentives more as a way to jump start GM's lending arm in China. Most buyers in China pay cash. To get them out of the habit of spending cash, GM is trying to get them to finance.

If this was just about the price of the vehicle, they could easily slash the price to drive market share.

GM worldwide makes far more money off the financing side of the equation than the actual car sales. They are trying to capture a yet untapped market in China.

China consumers are soon going to discover the wonders of easy monthly payments. Why not try to capture the consumer and be their first lender.
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Mikeg
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Username: Mikeg

Post Number: 1105
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Posted on Monday, August 27, 2007 - 3:38 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

"Thinking the Chinese and Indian Markets will be loyal to any "former" American company... is quite foolish."



I provide facts that contradict your statement, facts which show a nearly 100-year old "loyalty" on the part of Chinese Buick consumers, yet you say I'm wrong just because GM has had to offer 0% financing terms to match the competition. I think you are the one who is being foolish.
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Cambrian
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Username: Cambrian

Post Number: 1532
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Posted on Monday, August 27, 2007 - 3:45 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The fact there is competition now is the point you are missing Mike. China was to be where GM could reign supreme, well it does not look so good now. 0% now, rebates later, before too long they will be where they are at here. Having to move those buicks below cost to get by. Do you really think GM could win by producing a cheaper car against a Chinese Car company in China? Come on!
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Ndavies
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Username: Ndavies

Post Number: 2744
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Posted on Monday, August 27, 2007 - 4:02 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

GM doesn't want to discount the car. They want Buick to continue to be seen as a near luxury model line. Discounting the price will not do that for them.

Buick needs to leave the cut rate bottom end of the market alone. Yes they will loose market share. However, they can rake in much higher profits by keeping the brand upscale.

Just like BMW, Mercedes and Porsche do in this country. They don't care about market share. They only worry about profits per vehicle.

Offering 0% financing in a country that doesn't finance vehicles only has one objective. That's growing the number of people who are willing to finance.
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Cambrian
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Username: Cambrian

Post Number: 1534
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Posted on Monday, August 27, 2007 - 4:14 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I dunno, may work may not. Anyways dumping everything here to pursue interests over there would be a foolish move just to punish the UAW. Talk about cutting off the nose to spite the face. History has shown us that while riding the highs and lows of any global economy, car companies that just focus on the upscale don't make it. Just look at how the 1930s shook out some of our best marques. Cord, Duesenberg, Auburn, and Piece Arrow.
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Mikeg
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Username: Mikeg

Post Number: 1106
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Posted on Monday, August 27, 2007 - 5:17 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

China was to be where GM could reign supreme...



Says who? You don't know what you're talking about. How many folks at SAIC have you talked to?

quote:

I dunno...



Now you're making some sense!
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Patrick
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Username: Patrick

Post Number: 4850
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Posted on Monday, August 27, 2007 - 5:21 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Seems to me that GM is doing in China what Toyota is doing here in NA. I guess sometimes it helps being "foreign" for a car company. Am I wrong?
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Mcp001
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Username: Mcp001

Post Number: 2925
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Posted on Monday, August 27, 2007 - 7:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Hoo boy!

Based on the statements made above, just wait until the SPP kicks into high gear.

You don't like what you have today...
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Cambrian
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Username: Cambrian

Post Number: 1535
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Posted on Monday, August 27, 2007 - 10:00 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Ole Mikeg gets pretty sore when someone questions the supreme wisdom of Rick Wagoner. I don't have to talk to the same people you do to have some common sense, in fact I'm glad I'm not. Some circles of our domestic auto business are not at all in touch with reality. If they were, they clearly would known better then to not have handed all the market share to Toyota and Honda they have in the past 6 years.
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_sj_
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Username: _sj_

Post Number: 2043
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Posted on Tuesday, August 28, 2007 - 10:13 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

they clearly would known better then to not have handed all the market share



They didn't hand it over, it was lost by all the circles involved in the game.
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Paulmcall
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Username: Paulmcall

Post Number: 348
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Posted on Wednesday, August 29, 2007 - 12:26 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

You can turn out the lights, the party is over.
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Cambrian
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Post Number: 1541
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Posted on Thursday, August 30, 2007 - 1:50 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

It's true that most of our Detroit Auto Management loves outsourcing, and who can blame them right? What can be wrong with increasing profits by slashing costs. I have a class at school where I am pursuing my engineering degree and most of the instructors are full timers in our Automotive community. One was telling us how he hires Engineers in India to do GM's design work and how hard these people work, how loyal and intelligent and they only cost GM 25K / year each. Sounds wonderful. Well he brought us pictures to show us how advanced the Banglore Tech center was and he went on about how being inside the building over there was just like being in a building at the Warren Tech Center. Then he showed us the surrounding community and it looked third worldly like the pictures you've seen from those adopt a child commercials. And most important thing I noticed was nobody was owning or driving GM vehicles. This is what we are failing to grasp here. Any investment over there to save costs adds nothing to the "growth" of GM. What's really interesting is GM expects loyalty from those they fired here to be replaced by Asians. The instructor wondered why americans were so unloyal to their home companies when compared to the Germans, unbelievable. Nobody in these companies says anything bad about Globalization, if they did, they would find themselves getting tapped on the shoulder during the next round of cuts. So Mikeg's comment above about how you won't find dissent at all when some one speaks about Globalization is true, but it's nothing to do with it being adopted as the right way to move forward with 21st century business, rather it is good old medi evil times kill off your critics to silence them.
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Unclefrank
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Username: Unclefrank

Post Number: 86
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Posted on Thursday, August 30, 2007 - 2:03 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

At least GM is selling vehicles in China. How is it doing in India?
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_sj_
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Username: _sj_

Post Number: 2066
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Posted on Thursday, August 30, 2007 - 2:17 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

Any investment over there to save costs adds nothing to the "growth" of GM.



Define "growth" as you used it in that sentence. Because many will tell you cutting expenses inspires growth.

quote:

Banglore Tech center was and he went on about how being inside the building over there was just like being in a building at the Warren Tech Center. Then he showed us the surrounding community and it looked third worldly like the pictures you've seen from those adopt a child commercials.



Just like how Detroit looks like a third world country, which just happens to be a surrounding community of Warren. You are being a little extreme by belittling a place you know nothing about.

(Message edited by _sj_ on August 30, 2007)
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Cambrian
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Username: Cambrian

Post Number: 1544
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Posted on Thursday, August 30, 2007 - 2:24 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Growth would be upwards trends of yearly increasing market share. Since GM now considers itself a Global Company, it would need to show a growing market share when sales from all markets are tallied up.
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Mikeg
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Username: Mikeg

Post Number: 1113
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Posted on Thursday, August 30, 2007 - 2:24 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

It's true that most of our Detroit Auto Management loves outsourcing, and who can blame them right? What can be wrong with increasing profits by slashing costs...



You need to take a few business and economics classes, my friend. The situation that GM, Ford and Chrysler are faced with in their home market is that they have a declining market share and are NOT making any profits, ergo, they must slash costs to bring them in line with their current revenues and market share.

Also, they can't indefinitely keep less-than-fully-employed workers on their payroll just so they can keep them as customers.
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Cambrian
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Username: Cambrian

Post Number: 1545
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Posted on Thursday, August 30, 2007 - 2:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

China / India threw down the challenge for us in a rigged game. There's no way imaginable we can cut enough, or globalize enough to where they can't go one step further. And all the while these Chinese and Indian Companies are growing and increasing their cash reserves while ours dwindle. No economics class I've ever took taught me this was a good thing.
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_sj_
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Username: _sj_

Post Number: 2068
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Posted on Thursday, August 30, 2007 - 2:36 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

Growth would be upwards trends of yearly increasing market share. Since GM now considers itself a Global Company, it would need to show a growing market share when sales from all markets are tallied up.



Market Share is one little piece of the overall equation that is growth.

I am sorry but the more I see the more I am convinced this is all more a of psychological than economical issue especially in this area who can not dare to see pre-eminence fall.

(Message edited by _sj_ on August 30, 2007)
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Cambrian
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Username: Cambrian

Post Number: 1546
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Posted on Thursday, August 30, 2007 - 2:37 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I wasn't trying to Be Little Indians SJ, just stating the fact thier nation is still quite poor. All though a growing percentage is becoming upper middle class, could that sustain enough car sales? Does thier infrastructure even promote vehicle ownership?
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_sj_
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Username: _sj_

Post Number: 2069
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Posted on Thursday, August 30, 2007 - 2:38 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

quote:

No economics class I've ever took taught me this was a good thing.



But they teach you economies of scale and effect of globalization which you had no problem with until you realized these others countries are developing and would start creating products and methods that the US, Japan and Europe dominated for half a century.

In the grand scheme of things the US still dominates by a large margin the overall GDP of the world Markets compared to China's paltry 5% and India 2%. But when you add China, India and Russia who were not in the game a decade ago you have competition, deal with it and accept it or just fade away.

(Message edited by _sj_ on August 30, 2007)
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Cambrian
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Username: Cambrian

Post Number: 1547
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Posted on Thursday, August 30, 2007 - 2:43 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

"....especially in this area who can not dare to see pre-eminence fall. "

To some degree you are right, so why would a company willingly commit to policies that spell out it's eventual demise?
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Sstashmoo
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Username: Sstashmoo

Post Number: 334
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Posted on Thursday, August 30, 2007 - 3:09 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Cambrian, Once again and as usual you are 100% correct.

Anyone that thinks the US can "Globalize" enough to compete with dollar an hour labor needs their head examined or has loyalty to somewhere other than the US. This country is being attacked from within and raped of its manufacturing and services sector. Given the character and track record of "our leaders" this comes as no surprise. Everything the man has touched, turned to shyt. The surprise is how everyone seems so passive about it. George Bush is right, we are BUD's as he calls us. Broke Underpaid and Depressed. And they intend to keep us that way.
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Cambrian
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Username: Cambrian

Post Number: 1549
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Posted on Thursday, August 30, 2007 - 3:30 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I think as SJ inadvertantly implied that our "Arrogant American" attitude leads us to believe that we can stay on top of China / India. That they are just another market for us to exploit. That the future will always protect us, because are divine.
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_sj_
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Username: _sj_

Post Number: 2070
Registered: 12-2003
Posted on Thursday, August 30, 2007 - 5:04 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Believe me it was not inadvertent. American Arrogance plays a large role not only in economy but also politics and it is role that will not provide any winners.

The difference though is that you believe we have to stop India and rest of the newly emerged markets. But I believe they are here to stay and we need to move forward knowing full well what they can achieve and what they could achieve. Hiding our heads in the sand with some patriotic rhetoric sounds great but the American slice of pie is shrinking and not because of what we are or aren't doing but because of these countries who are entering the market.

Of course the weak dollar makes it appear even worse.

(Message edited by _sj_ on August 30, 2007)
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Sstashmoo
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Username: Sstashmoo

Post Number: 336
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Posted on Thursday, August 30, 2007 - 7:32 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Quote: "we have to stop India and rest of the newly emerged markets. But I believe they are here to stay and we need to move forward"

Does anyone really believe we're going to continue to lose manufacturing and service industries, lose jobs and fall into a deeper state of economic decay and no changes are going to be made in regard to trade?

I don't gamble, but if I did I would load up on this will change after 2008. The Democrats are already rumbling about it, I think they'll make it a key election issue and I also think they'll retake the presidency because of it. That and getting out of Iraq. The fleecing of our jobs was a topic last election, the problem was then, not enough people were affected by it. It will be different this time.

We will "deal" with it, they will "accept" it and the problem will "fade away". Arrogant enough?
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Cambrian
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Username: Cambrian

Post Number: 1629
Registered: 08-2006
Posted on Tuesday, September 18, 2007 - 2:03 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The domestics are seriously delusional if they really think they can continue hang thier future on Chinese Buick sales.

PRICE SLASHING THREATENS CHINA AUTO PROFITS.
Relentless cutting of auto prices in China is sapping the profits of local and international automakers as foreign OEMs scramble to maintain their place in the fast-growing market, says today’s Wall Street Journal. Even so, the combined market share of Chinese automakers has climbed to nearly 31% in the first seven
months of this year vs. 26% a year earlier.
One reason for the intense price pressure is that the middle-class consumers who are now buying cars are more cost-conscious and care less about brands. Also, many Chinese carmakers are controlled by local governments who subsidize them for the sake of the local economy, allowing those OEMs to undercut the pricing of foreign automakers. Beijing wants to force a consolidation of the nation’s fragmented Chinese carmakers, but it doesn’t seem able to pull it off, according to the Journal.
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Ray
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Username: Ray

Post Number: 1012
Registered: 06-2004
Posted on Wednesday, September 19, 2007 - 7:50 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Quote:

Bush and his gang have made it abundantly clear that they have little regard for the auto industry. And further blame Detroit for it's failings.

I really have to disagree. If Bush was hands-off, the new Democratic Congress is zelously pursing a CAFE policy that is decidely anti-Detoit. May CAFE is a great idea for the planet, but its a disaster for the Big Three.

I think its strange that people think Bush is anti-auto. I hope the hatred of Bush does not color thinking on Mit Romney, who grew up in here and is a friend of the industry
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Cambrian
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Username: Cambrian

Post Number: 1632
Registered: 08-2006
Posted on Thursday, September 20, 2007 - 8:56 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

CAFE is a problem if the companies wish to keep producing a majority of the fleet which requires fossil fuels.
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Danny
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Username: Danny

Post Number: 6542
Registered: 02-2004
Posted on Thursday, September 20, 2007 - 9:28 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

Detroit and suburbs would be instant ghostown if The Big Three left Detroit and the rest of Michigan.
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Tkelly1986
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Username: Tkelly1986

Post Number: 408
Registered: 01-2004
Posted on Thursday, September 20, 2007 - 9:42 am:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

The biggest misconception is that when something/a bill intends to address environmental issues (such as curbing carbon output), the spin doctors make it out as "anti-Detroit" and that politicians in Washington do not care about the people of Detroit. That is not the case, it is just that some see the bigger picture and the bigger problems we have ahead of us instead of pandering to an industry that lacked foresight and has been crippled by bad decisions.

The auto industry will not go under because of the environmental lobby and bills that aim to benefit us all, it will go under because of a lack of affordable healthcare, union greed and its inability to adjust to the market (i.e. Huge SUVs are not the long term answer).

The thing that could help the auto industry the most is not stopping the enforcement of environmental standards, its shifting the healthcare burden from the company to the individual, (i.e. a single payer, social insurance style health care system). Hopefully the Dems can bring about structural change after the next election, as we have reached an epidemic in health care costs, with all signs pointing to this continuing. 15.2% of GDP now, with a projected level of 20% by 2012. Change is inevitable, its time for Americans to provide a credible opposition to the health care lobby (i.e. the AMA).
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Cambrian
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Username: Cambrian

Post Number: 1633
Registered: 08-2006
Posted on Thursday, September 20, 2007 - 12:51 pm:   Edit PostDelete Post   Move Post (Moderator/Admin Only)

I like your comments with the exception of "Union Greed". You'll notice with these latest contract talks only one side is going to leave the table giving something up.

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