dbd33

The Honda costs about $2,400 a year in routine maintenance. I don't find that outrageous but it makes your Buick look a bargain.

MarkG

Sell them.

Write off the debts and bring their crazy wage and benefits packages down to a similar level to Toyota and other manufacturers, and all three companies could be viable again, or large parts could be split off as independent companies. If they can't do that, then bailouts are just throwing good money after bad.

BTW, GM claim that wages and benefits for their Canadian workers add up to $77 an hour. That's far from what I'd call 'a decent living wage'; I should obviously have skipped university and got myself a job bolting tail-lights onto Buicks:

http://www.cbc.ca/money/story/2008/04/18/gm-caw.html

MarkG

What are you spending it on? Was that a Friday afternoon car?

The Buick wouldn't be so bad if it was different things breaking all the time, but, for example, it's now onto the third water pump in two years. At least it's apparently not one of the ones where the intake gasket blows and destroys the engine.

dbd33

Just servicing and trying to solve the problem of the fuel line coming detached. We get it serviced at the Honda dealer, being used to Fords the first time I took it in I was shocked at the bill. Now that we also have a VW, I've got used to import dealership prices, it also costs more than two grand a year in servicing though, admittedly, it gets driven a lot and uses expensive synthetic oil.

G77

Probably are - but the proper euro VW's are also known to have dodgy electrics - I had a Passat where the electrics were loopy on it!

Oakvillian

Novo, you misconstrue my comments, I suspect deliberately. The (formerly Big) Three are bankrupting themselves to service their pension funds. I cannot see how it is in anyone's interest - least of all the workers and pensioners - for their pension fund to implode.

If the management and unions had seen this coming - which they would have been able to if they (on both sides) hadn't been so singlemindedly trying to put one over on the other side whatever the long-term consequences - then working practices could have been updated, more equitable agreement could have been reached that kept financial commitments within the realms of a manufacturing company's ability to support, and they could all have built vehicles that suited the demands of a changing market.

Chrysler had a shot at redemption with a rescue (nobody except the US press bought Chrysler's line that it was some sort of partnership or merger) by Daimler-Benz. I suppose there were mitigating circumstances in there somewhere, but to an external observer it looks an awful lot like D-B gave Chrysler up as a dead loss.

If Ford and GM do go under, it will be catastrophic for US (and southern Ontario) manufacturing, well beyond the boundaries of the auto manufacturers. It is a very unedifying sight to have auto execs and union leaders effectively panhandling for government bail-outs, though as dbd said, they're probably more deserving candidates than the bankers. The problem, however, is that an injection of public money won't address the root problem: US manufacturers cannot turn a profit regardless of how much markup they put on their vehicles, because every penny they make and more besides is swallowed by the gaping maw of the pension and healthcare funds.

Blame for all that? I'd call it as a 3-way tie between management, unions and government/big oil (I can't separate those last two as the former is effectively the executive arm of the latter).

Oh, and your parting "yet"? I'm not so far away from your political standpoint as you make out. I'm never likely to be in a position to be that much of a bastard because, well, I'm not enough of a bastard to make the money in the first place

scrubbedexpat091

Companies go into Chapter 11 for reorganization, and Chapter 7 for Liquidation.

Individuals go into Chapter 13 for reorganization.

Individuals can also file Chapter 7.

Novocastrian

North American Workforce

Source: GM & Toyota, Dec. 2005

GM:
White collar: 36,000
Production: 106,000.
Retirees: 460,000
Toyota:
White collar: 17,000 Production: 21,000 Retirees: 1,600

Average Hourly Salary for Non-Skilled, Assembly Line Worker

Source: Center for Automotive Research

GM:
$31.35/hour
NOTE: Includes idle workers still on payroll and those on protected status.
Toyota:
$27/hour
NOTE: Includes year-end bonus.

Health Care Costs per Vehicle in 2004

Source: 2005 Harbour Report & A.T. Kearny Inc.

GM:
$1,525
Toyota:
$201

Average Labor Cost per U.S. Hourly Worker

Source: GM & Toyota

GM:
$73.73
Toyota:
$48

Atlantic Xpat

As someone whose retirement plans are, in part, funded by a Ford Pension I couldn't agree more!

You have the right of it and Novo is just generally being Novo. The big three bought Industrial Relations peace through good salaries and benefits. The unions are complicit in this as they looked to their members and retirees at the expense of all else. Fundamentally though, they are building the wrong products, badly and inefficiently at the wrong time.

Imagine if a forward thinking company had tried to bring a mid size diesel powered pick up into North America to ween the masses off their F150/GM Sierra/Dodge Rams? You know, something European/Asian like the Ford Ranger, Mitsibushi L200, Toyota Hilux etc. Sure, market penetration would have been a bitch at first but as gas prices went up the argument would have become compelling for many.

I don't believe the big three will all fail. The US economy couldn't stand it. I do believe that the prospect of an 'American Leyland' of some sort is very real. Who would play the part of Red Ken I wonder.

Finally, my hire car de jour is a Buick Lucerne. On the basis of a days driving experience of that alone GM deserves to fail!

iaink

There is no way the big three would go under without some sort of support infrastructure left in place, the vehicles are much improved in terms of performance and quality, and there would be some outstanding deals available, so Yes, I would have no worries about buying, if the price was right.


Personally I cant see the government letting them go under, Whats left of the USs manufacturing / blue collar jobs are are intrinsically tied to automotive, after bailing out wall-street it would be utterly bizarre for the automakers to go to the wall. There may be some changes, but they will be around for a while yet.

Novocastrian

Who the hell else do you want me to be?

Actually, there's nothing to disagree with in your post, nor in Oak's really. It's just that the Big 3 (management, not union) are reaping the consequences of their awful forward planning decisions in terms of the types of vehicle they produce in NA.

I find it irksome, that in this "Capitalism has no clothes" moment, people should point fingers at the union.

Eve N

Guys dare I but in.. What car should I be buying then? OH has his heart set on Dogde or Chrysler. I should be looking at the foreign cars isn't Toyota in trouble also?

Thanks

Danny B

Yes, I'm looking at a 2008 Chevy Tahoe later today. It's lost about $20k already and if I can get it for a decent price, why not?

iaink

They are not paying the workers $77 an hour, thats the burdened hourly rate that covers all the overhead costs and salaried staff costs, as well as benefits, CPP, EI etc etc.

We pay workers about $15 an hour, and our burdened rate is still around $60. The problem is the fewer cars you sell, the less hours you work and the higher that burdened rate becomes as the overhead remains constant to some extent. I expect that workers are getting about $20-25 an hour. In some of the ford plants I visited in the US, the long term production workers were making about the same money as the engineers!

The advantage the canadian plants have is the heathcare is largely government covered, so it costs the company less. They have to shut canadian plants for political reasons, but more often then not they work hard to reopen them on the quiet once the storm has blown through as the productivity and quality is better in the canadian plants, and the overall costs lower as healthcare is less of an expense.

Simon Legree

Well said and I agree. They especially like the health care aspect. I am told that are people down here who actually work just for health coverage. No pay just the coverage. As a matter of interest, the couple next door to me are in their forties, self employed and two teenage kids. I was gob smacked, staggered when she told me that they pay $2,454 PER MONTH for health insurance. Unbelievable. Be thankful for the Canadian Medical System, even though it is far from perfect.