richjoy

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  • Sharing Speculative Interest in GM
    I could write a book on this, but will be brief:

    1. Yes, Toyota did continue building the Prius when it was not selling. This only makes the point any business student would know--don't put all your eggs in one basket. When the market turned, their fixed-cost losses multiplied daily. For years, the 'former big 3' gave only lip service to investments in cars and fuel economy.

    2. Don't kid yourself, GM (and Ford/Chrysler) have known for years about the coming 'peak oil', about the possibility of terrorist attacks on Mid-East oil, and about the growing gasoline demand from emerging markets (which they helped to feed). Yes, they KNEW gasoline could go quickly to $4, $6, and even $8 in a very brief period--and that they might not have time to retool their plants. They simply made an informed (but stupid) decision to try to maximize profits, knowing the costs of being wrong.

    3. GM and the others agreed again and again and again to clearly uncompetive labor agreements that paid unskilled workers $50 per hour, plus benefits unavailable to 90% of the population. Together with the UAW, they made kings of the common man (which is fine if you don't mind unskilled workers being more highly compensated than you).

    4. The 80's and 90's are replete with one agreement after another curtailing foreign (mostly Japanese) competition to give our car makers 'breathing room'--which they obviously squandered every time!

    5. Bankruptcy is not an option. You might buy a $500 airline ticket from a bankrupt airline for a trip next week or month; but you would be a fool to invest $30k in a vehicle from a bankrupt GM. You don't expect your ticket to have a value after landing; but you certainly expect your vehicle to have a value after 3 or 5 years.

    6. What does ther term American made mean today? We have a host of wonderfully competitive high quality vehicles made in America by Toyota, Honda, Nissan, and others. With even our 'formerly big 3' vehicles containing 30-60% foreign parts, there is no logic in loyality to GM.

    7. It would be a huge mistake to bail out GM and the others. Yes, it would be painful for employees and shareholders. However, one of the best features of capitalism is "creative destriction' -- from the ashes of failed businesses rise new and more better businesses. DO NOT BAIL THEM OUT!
    Aug 27 20:11 pm |Rating: 0 0 |Link to Comment |View article
  • Is Anything Worth Owning in the Auto Industry?
    Sadly, it really doesn't matter what vehicles GM, Ford, or Chrysler market in the USA (or what prices, what new features, what quality levels, or what reliability)...the media will continue to present them in a 98% negative light.

    Within 5 years, the USA will lose a huge manufacturing base (remember WWII), a couple hundred thousand good jobs for the non-college grads, and our (former) place in the world...which is NOT to say they didn't contribute greatly to their own demise...

    The consequences of our auto-makers moving what they have left off-shore will be much more severe than most now realize...a very sad for America is just over the horizon.
    Jun 26 10:58 am |Rating: 0 0 |Link to Comment |View article
  • 2010 - An Electric Car Odyssey
    Here we go again...will we have 200 auto makers?...and 190 failed businesses?

    If those companies can make vehicles that get 100 or more miles per charge, so can GM, Ford, Toyota, Nissan, etc....and they have the warranties, dealer and parts networks in place.

    I welcome the new technology--and certainly those established companies need the push that is coming from new entrants.

    But I would not invest in these new auto companies -- not their stocks, and not $30,000 to buy their product if the established players are competitive.
    May 14 14:14 pm |Rating: 0 0 |Link to Comment |View article

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