The UAW Ad for the Auto Industry Bailout

[Red Arrow]

No machine is 100% reliable. There are always trade-offs between reliability and replacement parts sales.  I think that the Big 3 have crossed the line to the unacceptable area of reliability.  Some improvements have been made but they have spoiled their reputation.  One of the things about the late 50s Chevys was that they almost always got you home. It might be running on 6 out of 8 cylinders and the tranny might be noisy but you got home. None of them can say that any more. Little things are also very annoying.  My 98 Regal GS has now had 4 of 4 power window regulators fail because of a few cents worth of plastic.  The dealer parts cost to fix it is $350 each. Fortunately there are now aftermarket parts available for about 1/3 that cost. I don't mind replacing tires, brake pads (maybe even brake rotors), light bulbs and some occasional other moving mechanical parts. One window regulator would have been acceptable, but 4?  In the past, buying everything "heavy duty" got you what the engineers intended before the accountants altered the design. I have generally had good luck in that regard. There are many good things about todays cars compared to even 30 years ago. Engines go longer, GM trannys last longer than 70,000 mi, service intervals are generally longer, almost all cars are better able to keep you alive in a collision.  Where the US manufacturers have (at least in perception) fallen behind is in the cost to fix what should be little problems. Front wheel drive wheel bearings shouldn't be $600 PLUS labor. Dealer parts cost have always been high but I think they have priced themselves out of continuing maintenance.  That business has been known (at a former employer of mine) to carry a business through a slow sales period.  This is especially true if the customer believes that the failures are not unreasonable.  This is all part of a management philosophy of where to balance initial vs. on-going costs to own a product.

[we vs us]

White House extends $13.4 billion bridge loan to domestic automakers.  More will be available in February if needed.  The funds will be drawn from the TARP, but "If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury."  

According to the CNN article above,

quote:  The government will put other conditions on the loans, Bush said Friday, including making pay competitive with foreign automakers with large U.S. operations such as Toyota and Honda. Employees of foreign automakers generally make less than those in U.S.-owned plants.  

The plan also puts limits on executive compensation and perks such as corporate jets, requires the automakers to adhere to fuel efficiency and emission standards and open books to government scrutiny.  

The March deadline seems absurd to me, given that by all accounts this recession could last well into winter of 2009 or even early 2010, and that sales in any industry aren't likely to be turned around in that period.  It's also worth noting the heinous double standard here, given the absolutely free reign that troubled financial companies have received when being given their TARP funds.  But beggars can't be choosers, obviously, and a hobbled bailout is better than no bailout at all.

[cannon_fodder]

I started a thread just for the Bush Auto Bailout:

http://tulsanow.org/forum/topic.asp?TOPIC_ID=12327

This thread on the UAW has kind of run its course.