Streams

Are You Convinced?

Friday, December 05, 2008

Question: Did GM's VP of Sales and Marketing, Mark LaNeve, convince you? Do you think the auto companies should get a bailout? Comment below.

Comments [46]

A. Nonymous

How about bringing the GM jobs back from Mexico and Canada, and maybe re-opening Flint Michigan, before we give them a bailout?

Consider also that Toyota (built in kentucky) is not asking for a bailout.

I absolutely do not believe that its about unions or retirees. But i can easily believe that its about poor management and a long history of failing to respect the customer and the workforce.

In general, the bailouts seem to be about perpetuating those companies who are part the problem. We are wasting the opportunity to free society of these parasites.

Lets not save companies that are in the business of buying and selling mortgages and credit card debt, and more generally, lets not bailout companies that put greed above the good of society and their communities and society as a whole.

Dec. 18 2008 10:43 AM
Terry from Manhattan

Love the idea of $5000 vouchers to all citizens for purchase of a US produced car only. What about cars produced here, but DESIGNED by foreigners like the ones in SC and GA? Are they not "American" cars if they are built in the US by American workers? We have a definition problem. Are "American cars" only those built by failing companies in Detroit? Also, how did they all end up in Detroit?

Dec. 05 2008 02:27 PM
Terry from Manhattan

Love your show! The automakers cannot claim passivity and blame consumers alone for their demand for big, gas-guzzlers. It is Congress that created tax preferences and lower emission and safety standards classifying imported SUV's as trucks instead of cars. Our tax money underwrote the profit incentive to create SUV's and trucks as family and recreational vehicles instead of commercial vehicles? Why? What was wrong with station wagons as a class?

Madison Avenue can sell us anything, even Presidents. Detroit's advertising created our demand for their high profit, gas-guzzling SUV's, Hummers and trucks as the best "cars" for us! We did not dream it up. Detroit also has to take full responsibility for the design and marketing of the cars they cannot sell. Their losses are their own fault.

Regardless of country of origin, I would require all vehicles classified as "trucks" to be registered as commercial vehicles at a higher rate. I would reclassify and tax as “passenger cars” all SUV's and light trucks that are USED as passenger cars, and force their compliance with car safety, emmission, and other regulations. I would also raise all taxes on cars over a certain weight or with truck mechanicals or low mileage per gallon that make them un-green. We have to deter the purchase of SUV's and trucks for transportation.

As to bankruptcy, if I feel safe enough to take my life in my hands flying in the airplane of a bankrupt airline, certainly I will be OK buying a car from a bankrupt car company. This is not the holy grail, just a car company. Let them go into reorg and bite the bullet!

FYI spending air time on stupid names for a stadium is beneath you. Real names? Now you are talking.

Dec. 05 2008 02:22 PM
Julius from Manhattan

They should not be bailed out. It's not comparable to banking. But do the politicians dare to say no? In Europe the politicians can be much tougher because there is a welfare system that kicks in.

10 years ago, when Volvo was bought by Ford, Volvo had hybrid technology on the same level as Toyota. Now Volvo is ten years behind with cars twice the size.

An important part of the problem has been the low gas prices (less than half compared to Europe).

Dec. 05 2008 11:26 AM
Jerome from Prospect Heights, Brooklyn

Something I'd love to hear the auto execs address:

Both GM and Ford have sizable foreign car design and production operations, notably in Europe and Asia, including China (from http://www.gm.com/europe/corporate/about/: "In 2007, GM - for the second consecutive year - set an all-time sales record of nearly 2.2 million passenger cars and light commercial vehicles in Europe, achieving a market share of 9.5 percent." From http://www.gm.com.cn/english/corporate_info/company_inchina.html: "GM ended 2007 with an estimated market share in China of 12.1 percent. It has been the sales leader among global automakers in China for three consecutive years." Ford's efforts in Europe [long established] and Asia have had a rocky history--see http://en.wikipedia.org/wiki/Ford_Motor_Company#Global_markets). It's been suggested that foreign operations will be key to their future profitability. Are the Big Three learning well from their foreign experiences? Why are the Mercedes-Benz/ Swatch *Smart* cars and BMW's *Mini* being imported here, but not Ford's *Ka* (see http://www.ford.co.uk/ka/)? Is a U.S. "bailout" necessary to help them effectively compete abroad?

Dec. 05 2008 11:22 AM
Jerome from Prospect Heights, Brooklyn

This is indeed a tough policy issue...I don't really know where I stand.

Two issues that I haven't seen being addressed:

[1] Why "yes" to the banking industry but "no" to the auto industry? Perhaps because not all business functions are of equal value to an economy. The banking function seems to be more fundamental, or more structural, than auto manufacturing (even granting the car industry's large size).

[2] The argument that the U.S. needs to preserve a manufacturing base (we can't survive as only a service economy) reveals a possible flaw in the globalization ideology that's been promoted so widely in recent decades (countries' industries should specialize in only producing the goods that the global market "proves" are made most efficiently, no matter how painful the adjustment to this is, and regardless to the vulnerability to market whims this creates). Live by the sword, die by the sword?

Dec. 05 2008 11:21 AM
John Lobell from Manhattan

The simple fact is the Toyota and GM are not in the same businesses, and that GM cannot survive -- unless it becomes a Soviet style industry supported by government that make unwanted products.

What is going in is well described by Clayton M. Christensen in "The Innovator's Dilemma" and his follow up books.

Dec. 05 2008 11:07 AM
Erik from Queens

Can you imagine if the government gave a $5,000 voucher for buying cars from American manufacturers? The already overtaxed highway system would be strangled by a glut of new car buyers and the big three executives would bring home larger bonus as their stock portfolios increased. The only real benefit would be to the mechanics repairing these poorly designed vehicles

Dec. 05 2008 10:55 AM
Mark Brower from Weehawken, NJ

I do not own a car. I love to drive but do not NEED a car. How will this bailout build true and valid innovation to compel me or anyone else to buy new cars in the quantity really needed to keep the Big Three as healthy industries and employers? What about the abundance of the existing inventory of ugly and inefficient vehicles? And the ugly and inefficient vehicles that they continue to make? The technology and know how has always existed to create efficient low emission vehicles, even oil independent vehicles - do you think the Big Three really are willing to scorn, reject and ultimately reform their complicity with BIG OIL?

Dec. 05 2008 10:52 AM
Sue in Astoria from Long Island City/Astoria

If anyone is actually counting - No, am NOT convinced. And for those that are.. I offer what one of the Smothers Brothers said many years ago when told that many people believed that Nixon did not know about the Watergate coverup: "yeh...and some peolple believe that chickens have lips."

Dec. 05 2008 10:50 AM
Consuelo Hudgins from philadelphia

I understand that the foreign auto companies do not have unionized workers and benefits that domestic auto companies offer.
There is much talk about universal health care.Why don`t our politicians use this situation to start universal health care with the money planned for the domestic manufacturers?
It would be an indirect help to them and a great boost to many people.

Dec. 05 2008 10:43 AM
Cody Dennison from Brooklyn, NY

I'm a freelance designer. Back when Mark was with Volvo I helped put a lot of marketing materials together to create a spin of safety and quality of life. Mark left Volvo to go to Cadillac because, and I quote in his words, "the Product." Never mind the values of safety and quality of life. He's always been focused on sales, on numbers, on market share - his entire career. To hear him talk about the environment, about fuel efficiency... please, give me a break. The car companies waste billions in needless R&D, they sink untold millions into badly researched and haphazardly assembled financial instruments, they pump marketing up with adrenaline overload that pushes bigger faster engines. These companies don't deserve a break, what they deserve is legitimate, healthy competition to come up and serve them there long overdo paradigm shift.

Dec. 05 2008 10:39 AM
Evelina from Melville

It has been possible to build energy efficient cars and mass transportation for many years. The auto companies and oil companies have fought this. We, the consumers have to sign on to mass transportation and energy-efficient cars. Do they think we are completely stupid? They have created (or at least reinforced)the 'need' for SUV's and inefficient vehicles with their huge advertising campaigns. Make them reconfigure their factories to build vehicles for mass transit. In every industry, we, the citizens, now have leverage to decrease the gap between the super-rich and the rest of us. We must used that leverage.

Dec. 05 2008 10:38 AM
RosieNYC

No. They have been producing bad products for years while aligning themselves with the oil companies by focusing on gas-guzzlers and doing everything they could to hamper development of more fuel efficient cars. Let them file bankruptcy and face the consequences of what they have been doing all these years.

Dec. 05 2008 10:36 AM
bloomiegirl from New York

You have got to be kidding! Should have started designing better cars 10 years ago? How about 35 years ago when Americans started buying foreign cars? This guy either has no connection with reality, or knows nothing about the history of his business!

Why can’t they build cars that we want??? If these folks would build cars that we WANT to drive, Americans would FLOCK to the car dealerships.

P.S. The argument that Americans only wanted to buy big cars is kinda stupid when that's all that American car manufacturers were making. :p

Dec. 05 2008 10:36 AM
Kristopher from Asbury Park

When times were good and they were fat and happy, the automobile industry (along with the banking and insurance industries), spent tens of millions of dollars in efforts to take the teeth out of reasonable safety, environmental, and financial regulation.

They got exactly what they wanted from the Bush administration, and now they have the audacity to ask for a bail out?? Let them fail. Believe me, if the congress doesn't bail them out, they will all be scurrying for the protection of the same chapter 11 that they are turning their noses up at today!

Dec. 05 2008 10:35 AM
Cecilia from Brooklyn

Why is there so little outrage about bailing out the big banks? They are directly responsible much of this crisis but being given little blameh. The auto makers made huge mistakes, but how can we let this industry fail?

Dec. 05 2008 10:34 AM
Christian from NJ

If they were serious why did they fight against a higher mpg standards. Europe has had higher standards. Why are they not asking the oil companies for help since they worked with the oil companies in past on auto politics. The auto companies pushed the marketing of the big car, truck and SUV. We had no other choice on what to buy. Car companies make more profit on the big car, truck and SUV.

Dec. 05 2008 10:34 AM
LeoinNYC from Staten Island

Forget the $5000 voucher -- let's set a national goal of overhauling the entire US auto fleet by 2018 with vehicles that get 40-100mpg.

Dec. 05 2008 10:33 AM
Ty from Rye Brook, NY

Hello Brian,

Long time listener, first time emailer.

I have to say that Mr. Lenay sounded so much like a used car salesman, that I was unmoved by anything he said. I am tired of the 'dire warnings' that these hucksters predict every time they come before congress. Your comments about the disingenousness of all of their sudden 'conversions' is are spot on. I am revolted by the fact that the Big Three have, for decades, stubbornly REFUSED to innovate their technology, improve their auto designs, and be more responsive to real world situtions such as global warming and escalating gas prices.

Chapter 11, if its good enough for the Airlines, its good enough for the automakers.

No More Bailouts.

Dec. 05 2008 10:33 AM
Mike from Jersey City from New Jersey

Stupidity on the part of the Big Three is no excuse for ignorance by callers:

Facts:

1) The United States manufacturing sector produces more now than ever in history, although it does employ fewer people.

2) Many Detroit cars are of very high quality.

3) To discuss Detroit's problems just in the context of dumb management while ignoring Labor and Government's contribution to the problem is simply, well, as I said, ignorant.

Dec. 05 2008 10:32 AM
Katherine from Manhattan

Absolutely not convinced. The idea that they were late getting the electric car done is totally outrageous. They did make one and then they purposely squashed all of them (literally). (See "Who Killed the Electric Car") They should only get $$ if the CEOs are fired and the workers who actually know how to build a car retool to build electric cars etc. I'm sure they know how.

Dec. 05 2008 10:32 AM
Henry from Katonah

I was leaning toward some kind of bailout since it would affect an entire region of the country ( how did they all end up in Detroit, anyhow?) until I heard LaNeve. Are you allowed to say that you don't trust a guest, Brian? ( I agree with you, tho.)
Can't we take over the companies WITH ZERO managers ? Oh , that's not the American way.

Dec. 05 2008 10:32 AM
Maria from Brooklyn

Oh and by the way I'm listening now about the windfall profits tax on big oil - did anyone notice that Obama's transition website is now missing that campaign promise? Otherwise it might have been a great idea to have a compatible industries tax. Obviously corporate influence on Obama is already going strong - now it's our turn. People, we're not going to get anything if we don't start demanding it.

Dec. 05 2008 10:31 AM
Daniel from Brooklyn

You can't have manufacturing in this country by decree. If these companies are going to survive long term they need to figure out how to make themselves efficient enough to survive.

Dec. 05 2008 10:31 AM
Bill from Mamaroneck

There is one way I would trust them and one condition for a bailout: if the companies become owned and democratically managed by the employees.

If every American has a right to vote for their president they also have a right to vote for their boss.

Dec. 05 2008 10:31 AM
Robert from Manhattan

One presumes that the dog and pony hybrid caravan was more fuel efficient than flying corporate jets. That said, public transportation would have been much better. In this case, some seats on a scheduled commercial airline. Those planes were flying anyway. The Spin-Brigade Sedans used fuel (even if at at hybrid efficiency) that otherwise would have been conserved.

What a pity that the only way these guys can stay afloat is through flimsy PR spin. If only there were a way to save the jobs while banishing the bloated "leadership" to the drive-up window at Wendy's (hey, that's at least RELATED to cars). I fear that a bailout is necessary, but it should only be accompanied by a thorough housecleaning.

Dec. 05 2008 10:31 AM
Evelina from Melville

Give them half of what they asked for.
All top execs get pay cuts.
Fund the public transportation they've been fighting
Single payer health care--they sign on
Change advertising--consumer habits will change
We shouldn't give banks more bailouts either

Dec. 05 2008 10:31 AM
ajen from California

Not convinced... and I think they should go down. It is time for us as Americans to learn how to get our hands dirty and invest blood, sweat and tears in building up small businesses. Like the big 3... big corporations should go down. Yes, it would be hard on all Americans but you know what??? we would be better off... imagine... 1) we invest in building up mom and pop businesses within the community 2) we invest in infrastructure that supports clean and efficient mass transportation, etc... not only do we keep money flowing within our communities, we have sustainable jobs and commerce.

Dec. 05 2008 10:31 AM
Mark

I find it amazing to hear the US - a country which scoffed at the European statist model, and ordered the rest of the world to open up its markets to US companies - now calling state subsidies to its auto industry, and rejecting foreign industries, as a patriotic duty. The hyprocrisy is astounding.

Dec. 05 2008 10:31 AM
Kristin from brooklyn

While I am in the camp of being upset about the banks being bailed out with little oversight, I am torn by the bailout of the car companies.

I grew up in a rural area in Illinois where most people worked in the local industry. Any close of that company and many of the families would be out of work. My sister is currently in this situation. Her husband works as a car salesman and she is a stay-at-home mom. They are living off a bare minimum at this time. He is barely making above minimum wage as cars are not selling at this time. This has been over a month now and they are struggling with rent, bills, and food for my nephew and their family.

We, in urban areas, have to take into account what the differences are for those in rural areas who depend on manufacturing like this for jobs. I feel that many of the people I speak with in the city have NO perspective on the rural problem.

Dec. 05 2008 10:30 AM
david from NYC

I SAY LET THE OIL INDUSTRY BAIL OUT THE AUTO INDUSTRY, THEY MADE HUGE PROFITS FROM THE OIL INDUSTRY WHEN THEY WER IN THEIR POCKET.

Dec. 05 2008 10:30 AM
Tyler Crockett from manhattan

My mother works in anderson indiana, not for the big three, but in an industry that relies on business from employees of delphi (which is a large producer of gm parts). Nestle has recently opened a new factory in anderson which has, according to my mother, has saved the economy of the city. Based on this, there is no need to save the big three when the jobs can be absorbed by other industries, not to mention the upspringing of foreign car companies factories.

Dec. 05 2008 10:30 AM
Marshall McLuhan from New York City

I was under the impression that people buy what is advertised to them --- if the American automakers put a serious effort into advertising fuel-efficient cars, maybe people would buy them.

Dec. 05 2008 10:30 AM
Jay F.

How about a merger of the three?

Dec. 05 2008 10:29 AM
Tony from San Jose, CA

We have manufacturing in the US. I am working on supercomputers that help design computer chips. What about John Deere? We do have manufacturing here, GM is not the only company in this sector.

Can my company have free money too?

Dec. 05 2008 10:29 AM
ann rory from nyc

Why can't we take 30 billion from the 700 billion that Paulson controls to help the auto industry???? I blame the "paid for by big oil do nothing congress" and a complete lack of oversight for the mess we're currently in. The lack of leadership has been 30 years in the making.

Dec. 05 2008 10:28 AM
Nicholas from Bronx

Welcome back Brian!

Dec. 05 2008 10:28 AM
Steve (the other one) from Manhattan

The car companies lobbied against air, mileage, and safety standards and funded global-warming deniers. If we bail them out, this must be stopped - no wasting money on that.

Dec. 05 2008 10:27 AM
Nicholas from Bronx

After the reord profits over the past year thanks to the gas guzzlers, why can't Exxon bail out the big three?

Dec. 05 2008 10:27 AM
Deb from Larchmont, NY

Yes - with the condition that Congress also replaces all of the key decision-making leadership in each company with trustworthy smart business people we can trust to bring the industry back. The US car industry has known for years - if they read Consumer Reports - that foreign cars have been a better value for at least the last generation - and they have persisted in marketing their product using the "buy American" patriotic guilt trip! Clearly the current leadership has made poor decisions in the past -- it's time for new leadership, and that should be a condition of getting taxpayer support.

Dec. 05 2008 10:26 AM
Maria from Brooklyn

I think we must bail out the auto industry because so many American jobs depend on it - and it would certainly help the economy more than blowing hundreds of billions of dollars on the banks. The banks have used taxpayer money to buy out smaller competitors, rather than lending and getting the economy back on track. What we should have done with the banks, and we certainly should with the auto companies, is demand accountability in the form of public control, such as worker and consumer counsels to monitor how they spend the money. All of these companies we're spending money on, whether the banks or the auto industry, are undemocratic. If we the taxpayers were more directly involved, since we're the ones footing the bill, we could make sure that they don't blow it.

Dec. 05 2008 10:26 AM
Joseph Sannicandro from Purchase, NY

I just want to point out that despite the constant discussion of the rise of manufacturing in China, and American out-sourcing, we are as a nation still the number 1 exporter or manufactured goods on the planet. #1. We still manufacturer more than any other country, and the weak dollar has increased our exports (because they're cheaper overseas; connect the dots.)

So, the problem is the trade imbalance. We export more than anyone else, but we also import far more than any one else too.

Dec. 05 2008 10:26 AM
Len from No NJ

Hey Brian,

Do agree that the GM person sounded disingenuous, but I think All Polition's are also, -they just are So much more polished at hiding it..

Dec. 05 2008 10:25 AM
Daniel Greenwald from Munich, Germany

There should be strings attached about continuing to provide benefits and ensuring that job cuts are minimal. I'd rather see executive pay cut down to factory-worker level than factory-workers get fired.

Dec. 05 2008 10:23 AM
Noah from Brooklyn

I think that Mr. LaNeve is certainly correct on the account that we bailed out the banks who equally deserved blame for making mistaking and failing, which almost means that auto companies should be bailed out. I think there should certainly be requirements for them to get the bailout and they should be required to support a push towards socialized medicine, and yes I used the S word.

Dec. 05 2008 10:22 AM

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