Chrysler to close all North American plants for a month

getting awfully tired of the sky is falling mentality. This so called crisis is no worse than what happened to Japan when their bubble burst a decade and a half ago. Scaring the public by conjuring up images of depression era food lines is fearmongering to the tenth degree.

The quicker the big 3 declare bankruptcy, the quicker they can get their business model in line with competition from Japan. They may end up producing less vehicles but they certainly will not disappear. The supply chain is at no greater risk then the supply chain for aircraft manufacturers, IT or countless other industries where business has slowed.

If a bailout is passed, it will be done so as payback to unions who vote lockstep for democrats and i'll never buy an American car ever again.

this kind of thing is going to start to cause problems in the suppy chain as the small companies that supply all of the US manufacturers have to raise prices or shut down part or all of production. If a supplier has a lot of debt (e.g. from new equipment purchases) then they have to produce so many parts or they can't pay the bills. SKF and Timken, the bearing manufacturers for a lot of the US and Europe, have already announce furloughs as well. That means that the Toyota plant in the US can't get bearings from them either.

The supply chain is a complicated web and if it gets cut up the disaster will grow. It will take even longer to put it all back together again.

I don't like bailing out the greedy execs, fire them. The unions are going to have to make concessions. But if these things are done a bailout become a net positive impact. Sucks, doesn't it?

As far as Land Rovers and Jeeps are concerned my Toyota FJ will outdo them both and keep running reliably to boot!

"Jeeps while essentially total crap do still seem to sell however."

Amazing, isn't it.

Land Rover's are equally un-reliable, but at least they're good off-road.

Of the big three Chrysler is DOA as they don't have any new product and what they're peddling doesn't make the cut. Jeeps while essentially total crap do still seem to sell however.

are doing much worse than the foreign makers who use non-union labor?

The southern states, where these foreign auto-maker assembly plants are predominantly located, are pursuing essentially beggar-thy-neighbor and race-to-the-bottom strategies common in the developing world where countries compete to get procurement contracts from Wal-Mart. The less developed the locale the better because it reduces the wages workers will accept. Alabama ranks number 46 in terms of national wealth. And, to sweeten the pie, tax breaks have been offered.

The question is whether we can sustain the other type of industrial capitalism in which unionized labor is an integral component. Some unionized countries have done well in the age of globalization, such as those in Scandinavia. What we want to avoid permanently subsidizing money losing businesses. The Italians underwrite Alitalia and keep it on life support; we let Pan Am go bankrupt and capital underwrote new ventures, like Google or eBay.

Sarge,

How come according to the Federal Reserve Bank of Dallas a Big Mac costs $2.99 in Detroit but $2.49 in Aiken, Georgia?

Ascribing the lack of competitiveness to the union and/or its compensation levels is a very incomplete analysis of the labor problem. Additionally, when you start with the premise that the Big 3 is "shackled", it rather seems as though you have already made up your mind. And I doubt that anything I say would change it.

One of the reasons that the foreign makers can use non-union labor is that Americans cannot really afford to move to where the jobs are in the hope that they will be able to get a good one. Foreign makers went into areas of unemployment and workers were grateful for wages and benefits which undercut those provided by the union. Wait for the layoffs at the non-union locations before making up your mind. People tend to adjust their life-styles to their wages.

Additionally, another reason the foreign makers may be doing better is that they may just be delivering a superior product which provides better all around economies. Detroit makes good automobiles but they have suffered in quality--both in actuality and in consumer perception. While that is improving lately, it may be too little and too late. Additionally, perhaps the foreign companies provide better management.

There are lots of possibilities. Until management and ownership are restricted in their manner of dealing with labor, labor unions will be necessary. They have been good for the US.

I feel real sorry for the car wash bikini girls who will soon be out of pocket.

The lack of consumer credit is hampering sales... willing buyers for vehicles, but they can’t close the deals...

Maybe the consumers should only buy what they can afford; if they haven't got the money, don't buy. Save up for them instead.

= they use (in Japan) contracted (temp) labor. They don't need you = job gone. And many are now losing their jobs. Merry Christmas.

Shutting down the GM 1.4L engine start-up is bad. I know gas prices are down, but the Gov wanted GM to retool and build smaller (fuel efficient!!) cars --> now they can't even do that.

"Organized labor is not the problem here"

Of course the recession is the biggest factor, but how come the Big 3, shackled by the UAW, are doing much worse than the foreign makers who use non-union labor?

this is mostly a financial problem -people can't get loans. This problem should have been fixed with the 700B financial bailout, but obviously it has not.

-school loans are also a big issue -short term business loans

=raise interest rates and get people these short term loans that are very important for the economy to run. They (Gov) must fix this problem.

Can't sell cars --> why make them? Japan is giving their contracted workers the boot and UAW is telling people to go home.

VOR: "the big 3 can save a billion dollars a week shutting down its operations north of the border."

And lose all their business later by trying to reopen in the south. YOu see, they moved north in the first place for a reason -- better efficiency and less union problems. But, go ahead and close them, then give in the US unions.

30061015,

Those benefits eventually run out. They aren't perpetuities. Organized labor is not the problem here.

Many Americans, autoworkers included, live a few months from poverty. Absent organized labor they were out on the streets. I don't think that's where we want them.

the big 3 can save a billion dollars a week shutting down its operations north of the border.

Good. I hope the blue collar workers and salespeople all fall behind on their mortgages because of this. If we have to plow through the middle class to get revenge on a handful of executives, I'm all for it.

"...receive unemployment benefits and supplemental pay from the company that total about 85 percent of their normal pay".

Exactly why they are in the toilet now. How the hell do you stay profitable doing this? They have the audacity to ask US taxpayers to save them? If we could just tax ourselves into prosperity we would all be in Nirvana by now.