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Can the US auto industry survive?

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
GOLD Site Supporter
I thought this was an interesting and very positive development for the US auto industry and for GM in particular. Ford is still in very deep trouble, but anything that GM can do to make their cars more competitive would be good. I think much of its need fall in the engineering area because for whatever reason, GM cannot seem to make a car drive as tight as a European or Japanese car.

I had a recent drive in my neighbors new club racer, which is a special edition race ready Pontiac Solstice. It is nice, to be sure, but doesn't drive as well as a Honda on the same course. A partnership with Renault~Nissan might be able to help. And it sure can't hurt! The analysts seem to be mixed, but the market sure seems to feel it is a positive thing.



ap_small.gif

Kerkorian: Renault and Nissan receptive


By KEN THOMAS, Associated Press Writer1 hour, 16 minutes ago

A top shareholder in General Motors Corp. said Friday that automakers Renault SA and Nissan Motor Co. are interested in purchasing a significant stake in GM and including the Detroit automaker in their alliance.


Billionaire investor Kirk Kerkorian's company, Tracinda Corp., told GM Chairman and Chief executive Rick Wagoner in a letter that Renault and Nissan are receptive to the idea of including General Motors in their partnership and purchasing "a significant minority interest" in the automaker.


Tracinda, a large minority shareholder in GM, said the existing French-Japanese partnership has created "tremendous engineering, manufacturing and marketing synergies, resulting in substantial benefits and cost savings to both Renault and Nissan."


Shares of GM increased $1.48, or 5.39 percent, to $28.92 in midday trading on the New York Stock Exchange after the news.


Tracinda urged GM's board to form a committee to "immediately and fully explore this opportunity together with management," as it feels the alliance could help GM "realize substantial synergies and cost savings and thereby greatly benefit the company and enhance shareholder value."


GM, in a statement, said the Tracinda request "will be taken under advisement" by its board of directors. The automaker said it has not received any offers or proposals from Renault/Nissan about an alliance. GM said it would have no further comment.


GM has been engaged in an extensive turnaround plan in North America amid declining profits, high labor costs and growing competition from Asian automakers. The automaker announced plans last year to close 12 plants by 2008 and earlier this week announced that 35,000 hourly workers had agreed to retire early or accept a buyout offer.


Analysts offered a mixed assessment of whether an alliance would benefit the companies.


JP Morgan analyst Himanshu Patel said in a note to investors that it offered the potential for positive developments in purchasing, product development and in the growing China market.


"If GM management were to agree to such a partnership, we would view this as a major potential long-term positive for GM shareholders," Patel wrote.


But auto analyst Robert Barry of Goldman Sachs & Co. said he saw "little logic" in an alliance, noting that Renault has recently embarked on its own restructuring plan and Nissan has made strides on its own in North America, seizing market share from the Big Three. "We do not see the upside for Nissan from collaborating with struggling GM, certainly not in a manner that would require taking a GM stake," Barry wrote.


Tracinda owns 9.9 percent of GM's common stock and is GM's third-largest shareholder. Kerkorian has pressured GM to take aggressive steps to restore profitability and his top aide, Jerome York, was elected to GM's board earlier this year.
The letter also indicates that Tracinda has reached out to Renault Chairman Louis Schweitzer and Nissan Chairman Carlos Ghosn to alert them to its contact with General Motors.
In a separate letter advising Schweitzer and Ghosn of the GM correspondence, Tracinda noted that "as we recently discussed with Mr. Ghosn, Tracinda believes that General Motors, Renault and Nissan should explore a three-company, partnership-based alliance."


Officials with Renault and Nissan declined comment.
Renault owns a 44.4 percent stake in Nissan, which in turn owns a 15 percent stake in Renault. Nissan was on the brink of bankruptcy when Ghosn was dispatched by Renault to lead the Japanese company in 1999. The Brazilian-born Ghosn engineered a cost-cutting and morale-boosting campaign that revived the automaker.





Copyright © 2006 The Associated Press.​
 

Grooming Snow

New member
Yes and if you think they can't then just , stick you :toilet:and flush Don't blame the industry they have only built :lurk: what we wanted :( big trucks & SUV. If we would have only bought small cars then that what we would have. So bend over :moon: and take it.
WE can :hide: and play the blame game , but it take's time & Big $$$ to retool & they will we all just want that quick fixs and it won't happen over night. What it's all about is MONEY , we lost job in NE/WISCONSIN in the late 80's to MEXICO, Coleman Products no union we made wire harness for GM and other auto companies. But they wanted cheaper labor like 40 cents to a whole $2.00 an hour and big profits make's me want to :puke1:
And that all I have to say about that:tiphat:

JUST ONE MORE THING HappyB-day :US_flag:
 

AndyM

Charter Member
BIMP!
Just reading over this thread and seeing where things were in the U.S. auto industry three years ago.
 

Bamby

New member
Funny thing is I read through this whole post without noticing the post dates till the bump post. It's like current events and nothing has changed has it. If they would have started working on a viable small cars then maybe they would not be in this mess they are in now or would they.
 

Av8r3400

Gone Flyin'
The US auto industry builds what they can sell. Until recently it was large trucks and SUV's. Only when fuel prices jumped did the market scream for small cars again.

It takes some time for the industry to respond, it can't do it instantly. They can't have ready made designs ready to go for different market scenarios because of the ever changing government regulations.

Should we have government tell us (them) what cars they can sell or do we live in a free market?



(Oh, yeah. Never mind.)
 

The Tourist

Banned
I hope they don't survive in their current form.

However, and please read this, I hope the transition to newly improved products of actual worth and utility goes as smoothly as possible.

The car market is like the housing market. It fuels so many jobs and ancillary services that lots of people owe their very lives to a healthy market. A small drop in cars sales results in tens of thousands of lay-off, and some of those people will never work again. They'll take "early outs" and retire long before they planned to do so.

And let's face it. We can preach about light rail systems, buses, subways and bicycles, but for the most part families will own at least two cars per household.

My wife and I needed that option for decades. I worked at jobs going towards Madison, and she worked teaching at assignments going away from Madison.

If the entire USA would accept SmartCars for simple transportation, and only use heavy trucks for work or snow we would still be building automobiles and cutting the bloat.

I'm thinking about buying one, myself. My sharpening cases easily fit inside one of them. I can expand my sphere of service with lower fuel costs. I could easily "moth ball" my F-150 for six or seven months even in Wisconsin.

We had +100 inches of snow last year. I used 4-wheel drive less than ten times. Even with those blizzards, the roads were kept clear. And truth be told, I really only "needed" 4-wheel drive during one 17-inch snowfall. The rest of my use fell into the "optional" category as a safety feature.

We cheeseheads wear some very ugly clothing here for warm. We need it. It's time to drive cars we need, not simply because we want them.
 

BigAl

Gone But Not Forgotten
SUPER Site Supporter
The US auto industry builds what they can sell. Until recently it was large trucks and SUV's. Only when fuel prices jumped did the market scream for small cars again.

It takes some time for the industry to respond, it can't do it instantly. They can't have ready made designs ready to go for different market scenarios because of the ever changing government regulations.

I basically agree with everything you just said ,,,,,but , and you knew that was coming , The big 3 knew all the way back into the 70's with the oil embargo and gas crunch that American consumers were turning to fuel efficent cars . They tried to slam the foreign competition by telling us that the big 3 cars were better made and would last longer than the tin cans from overseas . They did little to improve fuel economy . They have finally admitted that they were not listening . Add to that fact the UAW has them by the family jewels and its a disaster waiting to happen .
Look what it took to save Chysler in the early 80's . The K car . It was a plain jane car that got decent fuel mileage and seated 6 . No lessons were learned .
 

Trakternut

Active member
Look what it took to save Chysler in the early 80's . The K car . It was a plain jane car that got decent fuel mileage and seated 6 . No lessons were learned .

And..........they sold a ton of 'em, many of which are still in regular service as "work cars" for blue collar folks who need a dependable and economical mode of transportation to their jobs.
My bro-in-law lived 12 miles out. He bought one for a few hundred bucks and drove the wheels off of it, finally getting rid of it a few months back when they moved into town and he could afford to drive his truck to work.
 

Spiffy1

Huh?
SUPER Site Supporter
Whether they'll admit or not, I still think, barring the peaks of fuel prices [and even then perhaps], the average American actually prefers big cars and decked out 4X4 trucks - if for no other reason than to keep up with the Joneses.

That doesn't negate the fact that the Big 3 are excruiatingly slow to change - even beyond reasonable testing and re-tooling; and for that very reason probably even do market to perpetuate the sentiment I just noted; however, when you have backward EPA regulations [ever wonder whether they're in bed with the oil companies or just that stupid? :eek: ]; obsolete safety features, ect.: it's that much harder to have a nice looking, nice driving, feature loaded (I just don't imagine the demands for "bells and whistles going away"), & fuel efficient vehicle at all.

Of course, without "exporting" the UAW, I don't see a bright future for the Big3 anyway.
 

The Tourist

Banned
the average American actually prefers big cars.

I disagree--slightly. Americans like what is stylish.

Hummers were stylish. Schwarzenegger had one. You could take one to a battlefield. Yikes, you could drive over the top of your neighbor's plain-jane SUV.

We now have one or two SmartCars and only one three-wheel (two wheels on the front, not the back) motorcylce in my neighborhood.

They stop traffic and draw a crowd wherever they're parked.

They're current. They're in the newspaper. Not all of the Joneses have one.
 

Av8r3400

Gone Flyin'
You don't need a micro-butt-ugly smart car for mileage and safety and style.

I drive a 2001 Volkswagen Jetta TDi. It is a 5-passenger, 4-door small sedan. 1.9L turbo diesel engine with a 5-speed front drive transaxle. I get between 45 and 50 MPG on a regular basis. It is about to turn 150K miles and has not given me any maintenance problems what so ever.

This car can't be built today because it's 6 airbags isn't enough and the amount of emissions this car expels (minuscule compared to a 2001 gas engine) to is too much. The new TDi's are much heavier (safety equipment) and get worse mileage (emissions equipment plus weight of the safety BS).

All thanks to the US governmental relationship with special interests.
 

The Tourist

Banned
You don't need a micro-butt-ugly smart car for mileage and safety and style.

Oh, I agree.

But you don't need a 7.0 liter, turbo-charged 4-wheel drive pick-em-up truck with a custom lift-kit to get a loaf of bread.

No one likes big custom engines more than I do. But there's a Copp's food store within easy range of my home. My Trek bike can easily get there. In fact, I can easily walk there.

We're in the middle of some snow storms as I write this. The roads are plowed and open. I could easily get a SmartCar there and back if I simply drive safely.
 

Bamby

New member
Even back in the 70's when gas was cheap there was a segment of the market that preferred small cars. There's always been a market for them. Maybe not as large a market but never the less there was one. Remember the VW's for instance they seemed to be everywhere. It's just they chose not to compete with the Honda's. If they would have made a good small car that handled and performed as well as the imports they could have sold enough to justify there existence.
 
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