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Crisis In The Auto Industry-Who Is To Blame
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Dieseljim
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PostPosted: Thu Dec 04, 2008 6:24 am    Post subject: Crisis In The Auto Industry-Who Is To Blame Reply with quote

While much of the blame for the crisis the Big Three automakers are in must go to bad decisions made by management, a large share of the blame should also go to the oil companies and the market manipulators (oil traders) on Wall Street for the price gouging that dragged on for over a year, resulting in thousands, if not millions of unsold vehicles. Management's biggest mistake was to even build the gas guzzling SUV' such as Escalade, Excursion, Navigator, Suburban, to name a few, in the first place. That's not all, Congress gets its share of the blame for demanding more and more and more complex pollution control junk put on the engines of these and other vehicles, to the point where traditional mechanics do not know how to work on the vehicles when needed, That's not all, there are also those of us who are gullible enough to fall for Madison Avenue's slick advertising touting the alleged virtues of these gas guzzlers. As PT Barnum once said, "There is a sucker born every minute." He could not be more right in the case of the kinds of vehicles that have brought the Detroit Three to its knees. In this case, what it all boils down to is, "We have met the enemy and he is us."
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Hart Bus



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PostPosted: Thu Dec 04, 2008 11:54 am    Post subject: Re: Crisis In The Auto Industry-Who Is To Blame Reply with quote

Dieseljim wrote:
While much of the blame for the crisis the Big Three automakers are in must go to bad decisions made by management, a large share of the blame should also go to the oil companies and the market manipulators (oil traders) on Wall Street for the price gouging that dragged on for over a year, resulting in thousands, if not millions of unsold vehicles. Management's biggest mistake was to even build the gas guzzling SUV' such as Escalade, Excursion, Navigator, Suburban, to name a few, in the first place. That's not all, Congress gets its share of the blame for demanding more and more and more complex pollution control junk put on the engines of these and other vehicles, to the point where traditional mechanics do not know how to work on the vehicles when needed, That's not all, there are also those of us who are gullible enough to fall for Madison Avenue's slick advertising touting the alleged virtues of these gas guzzlers. As PT Barnum once said, "There is a sucker born every minute." He could not be more right in the case of the kinds of vehicles that have brought the Detroit Three to its knees. In this case, what it all boils down to is, "We have met the enemy and he is us."


I believe, perhaps incorrectly, that the PT Barnum full quote is that "there is a sucker born every minute and two to take him". If so then its more than one car company.

Another unmentioned hidden cost are the benefits and wages of the auto workers. Why does a man collect most of his salary until he is returned to work, even if it is two years or more. Most of us have to make due with Unemployement Insurance and then go a find a job, on our own, to support loved ones. If the unions continue to demand enforcement of contracts that add hundreds (if not thousands) of dollars to each car, how can the Big Three compete with the foreign cars, made here in the US that don't have unions.

If the unions don't give concessions for this bailout, then let the Big Three go bankrupt and let the US Bankruptcy court make the tough call.
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Dieseljim
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PostPosted: Fri Dec 05, 2008 11:28 am    Post subject: Auo Industry Crisis- Who's To Blame Reply with quote

In addition to the usual suspects of the UAW membership, Congress, and the top executives themselves, some of the blame for the auto industry's potential collapse can be laid at the doors of the oil companies and the people who manipulate the oil prices, the commodities traders. I believe it is time for Big Oil to shoulder some of the cost of the price gouging that has virtually wrecked the economy and brought the auto industry to its knees, aided by auto executives who kept insisting on building the gas guzzling SUVs that are at the heart of the trouble. While the Detroit Three brought on a good deal of this themselves, they were aided and abetted by Big Oil and the advertising agencies of Madison Avenue. Together with this subprime mortgage nonsense, we have the perfect storm of economic collapse. This mess affects bus manufacturers, too, since some of the parts needed to build buses come from the very same suppliers who supply the auto industry. As for workers in all industry getting pinkslipped, I would not be too surprised to hear of more and more incidents of someone going postal on their last day of work. It's happened before and will most assuredly happen again.
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Mr. Linsky
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PostPosted: Sat Dec 06, 2008 12:34 am    Post subject: Reply with quote

I can’t come up with answers as to what Congress should do about the present dire situation that the auto manufacturers find themselves in – I believe it may be a darned if you do and darned if you don’t scenario with no prediction as to how it will turn out.

However, I saw the handwriting on the wall as far back as 1985 when I wrote the following letter to L. B. Pryor, the then General Sales Manager of the Cadillac Motor Car Division of GM, in answer to his published statement that Cadillac sales had slumped due to a UAW strike which hurt his division more than any other.

“Dear Mr. Pryor,

I have read of the negative 1985 Cadillac sales figures, and your reason for this apparent decline, including a UAW strike that you claim hurt your division more so than any other in the company.

Well Mr. Pryor, I think you’re wrong!!

Speaking as a loyal Cadillac customer, and living in Long Island’s famous ‘Five Towns’ (which was the Cadillac capital of the world), I can tell you of the real reasons for this slump;

Your division has somehow finally managed to desecrate a name that has been synonymous with luxury motoring since 1902!

It started some years ago when you had the audacity to introduce the Cimarron, which we laughingly call a ‘Chevrolac’ and which no more deserves the prestigious Cadillac crest than the Chevrolet whose body it bears!

If that were not enough Mr. Pryor, you added insult to injury by expecting us to accept your latest ‘brainstorm’; take a good look at Cadillac’s 1985 ‘downsized’ versions (ie; the coupes, sedans and Fleetwoods) and tell me honestly that you can still call them Cadillacs!

Most of us who have cared enough (and spent enough) to make Cadillac a household name in transport don’t appreciate what it has evolved to, with its tiny trunk, ‘unimpressive’ front end and the lack of safety that a large car offers!

You people are just not receptive to what your customers want, and the 85 limousines more than prove this point.

The upper crust now shows interest in customized and elongated personal transportation, and several specialty companies are successfully marketing stretched Lincolns and even some leftover large Cadillacs.

As the only manufacturer of genuine limousines in this country you could have capitalized on this trend. Instead, you took the ‘hallmark’ or ‘flagship’ of the line and made it even smaller!! Maybe you can explain the logic of that Mr. Pryor! In fact, I dread seeing the changed Eldorados and Sevilles as I am certain that you took that bit of success and destroyed it!

I hope that my criticisms have not been to harsh Mr. Pryor, and that you take them in the spirit in which they are intended. Perhaps a few more notes such as this from your customers will help to bring back a heritage that is now only a memory!

In ending this letter Mr. Pryor, I will leave you with one short anecdote: there is a standing joke in my neck of the woods which implies that if you’re ever run over by a car it will probably be a Mercedes, a Jaguar or a Lincoln (no one seems to mention Cadillac any more!).

Thank you most kindly for your time.


I did receive a very polite reply from the addressee in which he noted that the then soon to be introduced 'world class' two seat Allante would compete with the then Mercedes 380 SL (and we know what happened there!), and that Cadillac still outsold Mercedes by 2.5 to one (I remember a time when the ratio was 75 to one!).

It's just a typical example of how the 'mindset' at GM helped to bring the company to where it is now!

Mr. Linsky - Green Bus Lines, Inc., Jamaica, NY
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Hart Bus



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PostPosted: Sat Dec 06, 2008 11:29 am    Post subject: Reply with quote

To follow-up Mr. Linsky's comment about the Cimmaron, let me tell two quick stories about that car.

1 - At the time the car was introduced, I was assigned to handle a real estate broker in Nassau County, NY for a CPA firm. He always liked driving big cars, preferably Caddillac. He goes one day to a dealer to look at the Cimmaron. The saleman sales that it can seat 4. The client looked at the saleman and said " providing the two passengers in the back are photographs".

2 - Back in 1997 my son and I went prowling the used car lots of Suffolk County to see if we could find a car in his price range. One of the cars for sale was a 2 door Cimmaron. HIs uncle who always loved Caddy's said that he could be in a Caddy for a cheap price. I told my son that he better put the front seat all the way back before attempting to enter. He did and it was still no sale. We ended up buying a 1987 Cougar from the dealer.

I think the Cimmaron was made because perhaps GM told them to make a compact car. Taking a Chevy Cavalier and slapping Cadillac skin on it was the cheapest and quickest way to go. Perhaps Caddy didn't want to do it, but figured lets put something out there that is designed to fail and GM will leave us alone.
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Dieseljim
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PostPosted: Sat Dec 06, 2008 1:14 pm    Post subject: Auto Industry Crisis Reply with quote

That wasn't the only disasterous decision that GM top brass made. Another one was the sale of the Electromotive Division (locomotive builder), getting out of the highway and transit bus business as well as slapping Cadillac skin on a Chevy Cavalier. I know someone who had one and you're right, it looked awfully cheap in more ways than one. This was an insult to Cadillac, which I wonder if that GM division could have made it as a stand alone company. As for the Escalade, I wonder what the heck is the Cadillac division doing in the light truck/SUV business, when a luxury car is their forte? No wonder GM is in such big trouble. Part of the mess was Roger Smith's doing and some of it goes back to James Roche. I have read John DeLorean's book, ON A CLEAR DAY YOU CAN SEE GENERAL MOTORS and it documents other monumental screwups by this company, one of the most notorious was the Corvair car, for which a companion van, which came in both panel truck and passenger Greenbrier configurations were sold. I rode in and crashed in a Corvair (rearender) and rode in the Greenbrier,too. By the time the problems with the Corvair were straightened out, the car's reputation was so badly damaged that it wound up discontinued after 1969, by which time it became a half way decent car instead of the killer machine it started out as.
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Mr. Linsky
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PostPosted: Sat Dec 06, 2008 3:00 pm    Post subject: Reply with quote

First, let me say that HartBus's comment about photographs of two people in the rear of a Cimmaron has to be the funniest thing I've ever heard! (and how true!).

There was a time when Cadillac probably could have eked out a living on its own but that's a very long time ago!

In the last forty to fifty years or more, Cadillac has been supported by Chevrolet sales just as Lincoln has been supported by Ford sales and the only reason for the existence of either division has been as a prestige symbol for their respective companies.

As far as Cadillac being in the truck business, they resisted until they saw the gains that Lincoln was making with their Navigator SUV's - it was a practical move for Cadillac at the time.

Didn't Ralph Nader's book 'Unsafe At Any Speed' stress the problems with the Corvair and how leaking oil fumes were killing its passengers?

The whole thing is amazing!

Mr. Linsky - Green Bus Lines, Inc., Jamaica, NY
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ripta42
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PostPosted: Sat Dec 06, 2008 7:27 pm    Post subject: Reply with quote

Those of you with, er, fond recollections of the Cimarron should check out the book Automotive Atrocities by Eric Peters, which devotes a chapter to the "Cadillac." My father in law had one years go (it would have to have been years ago, since I don't think any have been roadworthy for quite some time). He followed that one up with another fine piece of 1980s American machinery, a Chrysler LeBaron.
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Mr. Linsky
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PostPosted: Sun Dec 07, 2008 2:13 am    Post subject: Reply with quote

Michael,

I'll tell you what always amazed me; in the fifties when Cadillac was still the do all, end all in American Luxury transportation there were those few who, for whatever the reasons, gravitated to either Chrysler Imperials or Lincoln Continentals, and I'm not quite certain as to which were worse.

The Imperial looked like Bruce Wayne's 'Batmobile' and, if the 'push button' transmission selector didn't jam, or the older driver didn't mistake the 'R' for a 'D', that car could really peel rubber!

The Lincoln, which we dubbed 'the bomb', looked like a rolling bath tub that couldn't get out of its own way.

Ironically, most of the misguided eventually saw the light and switched to Cadillacs.

Mr. Linsky - Green Bus Lines, Inc., Jamaica, NY
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Dieseljim
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PostPosted: Tue Dec 09, 2008 6:47 am    Post subject: Automakers Bailout- Oil Companies Should Contribute Reply with quote

As far as a rescue for the automakers, I believe the Oil Companies together with the market manipulators at the New York Mercantile Exchange should pay a fair share of the package to keep the automakers in business, since, in addition to managerial mistakes, the oil companies, by their price gouging at the pump, together with the speculators who drove the price of oil sky high for a time helped create this mess that threatens to put this country into a full blown depression. I like the idea of banning golden parachutes for top executives in the auto industry. This ban should apply to ALL corporations as restrictions on executive salaries which should have been reined in long ago.Why should the average worker make all the sacrafices while many of these executives do little more than put Columbian blow up their noses while looting the companies they are supposed to be running. What's more a good part of this mess goes all the way back to the Reagan years, some before that. This "Greed is good" notion clearly began in the 1980s. The lawlessness of this outgoing administration just added to it. Jesus Christ Himself put it best when he said, " A man reaps the seeds that he sows." It could not be more true than for Corporate America and our corrupt Congress.
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ripta42
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PostPosted: Tue Dec 09, 2008 6:53 pm    Post subject: Reply with quote

Since this discussion only tangentially relates to the topic of surface transportation, let's keep it confined to one thread. Thanks.
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Dieseljim
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PostPosted: Wed Dec 10, 2008 3:58 am    Post subject: Duplication of Product Lines to Be eliminated Reply with quote

On the General Motors side of the coin, it is proposed that the Pontiac, Saturn lines together with Saab and Hummer be spun off or discontinued. I would add GMC truck to the list as Chevrolet has a truck line that is virtually identical to that of GMC other than cosmetic touches. In addition, consideration should be given to dumping Buick as well, especially if a merger with Chrysler is going to be consumated. The entire large SUV line would be dumped completely and that includes Escalade, Suburban, and the other gas guzzlers of that size. At Ford, my suggestion would be to either have the Mercury Division design its own cars independently of Ford or dump the entire Mercury line altogether. Same goes for All of the SUV's such as Excursion,Navigator,Expedition. It may be drastic surgery, but by getting rid of the wasteful duplication, both Ford and GM could become viable automakers once again. Chrysler seems to have just about had it as a stand alone company.
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RailBus63
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PostPosted: Wed Dec 10, 2008 9:49 am    Post subject: Reply with quote

There is so much blame to go around. Congress and the federal government mandated fuel economy standards years ago but did not include 'light trucks' as part of this, thus opening the garage door for the boom in SUV sales. Short-sighted management completely forgot the lessons of the 1970's and 1980's when they didn't have economical cars available to sell during the last energy crisis, and once again did little in recent years to offer more fuel-efficient cars because they could sell all those SUV's. Unions that refuse to give up outdated work rules while they get paid wages and benefits that are far greater than most American workers - I don't begrudge anyone the opportunity to collect as much pay as you can, but don't be surprised if that results in your company having severe business trouble if their competitors can build the same product for less.

And I'm not letting the American people off the hook either. Too many people were more than happy to buy those gas guzzlers and increase our dependence on foreign oil. We basically told GM, Ford and Chrysler that their business models were OK because we only want bigger and better, fuel economy be damned. Where was this big demand for hybrid cars before gas rose to $3 per gallon and beyond? If gas stays below $2 a gallon and the economy begins to improve, SUV sales will go right back up again. We as a country don't do thrift very well - we want our goodies and we want them now.
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Mr. Linsky
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PostPosted: Wed Dec 10, 2008 1:30 pm    Post subject: Reply with quote

R. B.,

Well said!

The one thing that bothers me about this sudden drop in gas prices is the fact that people will start guzzling once again and prices will jump sky high which is exactly what OPEC would love to see.

As far as a resurrgence in SUV sales, we can only hope that this supposed 'Car Czar' will put the skids on that!

BTW; did you know that aside from the fact that SUV's were exempted from fuel efficiency mandates because they are technically trucks, they also gave many owners of businesses huge tax breaks by claiming them for business usage! (while their wive's used them to shop with!).

Interestingly, during the height of the gasoline price gouging where we were saving at the rate of 60 billion gallons a year, I think the oil companies did a double take which is why we're enjoying this little intermission.

Mr. Linsky - Green Bus Lines, Inc., Jamaica, NY
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Dieseljim
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PostPosted: Thu Dec 11, 2008 4:04 pm    Post subject: When Selecting a Vehicle, Fuel economy Is a Consideration Reply with quote

When I first got my license to drive, I considered fuel mileage an important consideration in vehicle I wanted to drive and have carried that into trucks, where I also considered load carrying ability. The first Ford Ranger I had, a 1983 with long box had a good load carrying ability 1000 lbs, but the 2.3 litre 4 cylinder engine was not really any good. I blew up two of them before putting a V6 out of a Mustang II into that Ranger and went from Perry,NY to Claremont,NH and back, delivering a school bus hood for a friend of mine who runs an auto salvage yard. That V6 got good mileage. Next Ranger had a untility body and it, too got used for hauling truck parts for some friends of mine. One load included most of the components of a 3406 CAT diesel truck engine: engine block, crankshaft, piston packs, turbo, injectors, all on one load and I still got good gas mileage with it. Unfortunately this ranger, a 1984 truck painted a bright yellow was the one that got wrecked in a head on collision in 1997. Since then I have had a 1983 GMC diesel, F150 4x4, both got reasonably good fuel mileage. So I never went for the gas guzzlers like so many morons do. If it were up to me, the manufacture of these gas hog SUVs would be banned. Thus here is an example where I put fuel economy on a par with load hauling ability.
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