Buying Domestic, Good or Bad

[Unit 5302]

Just saw the argument that buying from domestic auto manufacturers keeps more Americans employed in a thread.

True? False? Considerations?

I believe wholehartedly that attitude is why Ford/GM are in massive trouble right now. US consumers have allowed the domestic auto manufacturers to produce junk for the past 20 years, all the while, the import manufacturers have increased quality by leaps and bounds. Ford and GM relied on the "US consumers will buy whatever we sell them because of patriotism" concept because it was partially true. I look at the domestic Focus and it's European counterpart. Night and day difference in quality. While the US Focus spent about 1/2 it's usable life in the garage having recalls performed, the Euro Focus didn't have the same issues. Why?

While foreign manufacturers from Asia and Europe have moved many large scale production efforts to the United States, domestic manufacturers have moved more and more out of the country to Mexico. Ford's looking to close down dozens of US plants in order to increase profitability, and they will likely follow suit with the airline companies and sue to erase pensions that their employees were basing retirement on. GM is in the same boat.

How many years has it been now that the US auto makers have completely ignored the real problem? That they build junk compared to a lot of foreign makers? How many model names has Ford dumped because they had such a bad reputation that the cars could no longer be sold? Tempo, Escort, Contour, Probe, Taurus, etc. I have my doubts that the Focus nameplate will remain around much longer. Have they learned? No. Will they learn? My guess is that at least one of the domestics will fold or nearly fold before they might be able to turn things around. We'll have to see how the latest generation of vehicles looks 3-5 years from now. Unfortunately, that may be too late at this point.

The bottom line for me? I'm not going to buy junk, just because a US manufacturer built it, albeit they probably shipped the actual manufacturing to Mexico anyway. I can buy a made in the USA car from Honda, Toyota, BMW, Daimler Chrysler, Hyundai, etc. A car that was actually built here. While I realize the executives and a lot of the money for the sale of the cars built by foreign owned manufacturers goes overseas to their corporate offices, their CEO's on average make at least 10x LESS than their American CEO counterparts.

US auto makers have screwed their consumers and workers, and tarnished the reputation of the "Made in the USA" slogan domestically all while lavishing huge pay increases onto the executives. The only reason they've been able to do so is because they were able to take advantage of the pride and patriotism in this country.

[Mr 5 0]

I can't add all that much to your trenchant but accurate observations, Kell, but I'll try anyway .

While here and there, some U.S. models perform well and are not unreliable, on the whole, the quality of most U.S. automakers is poor when compared to Asian cars. Now, not everything 'foreign' is automatically good. German cars, for all their crowing ads about "fine German engineering" are notorious for poor reliability and high repair costs. I have a friend with over 20 years in the auto sales and auto repair business and he says that German cars (Audi is the worst) and Chrysler Corporation cars are nightmares in regards to repair work. Don't even think about buying one of those cute Chrysler Sebring convertibles. He claims they are a headache and won't even buy them at auction to re-sell because of customer complaints after the sale. So it goes.

While I had a splendid experience with my '90 Mustang, that was an already-proven body and drivetrain and I maintained it well. I found the build quality to be excellent, for the most part. Good for me, but I know many late-model Mustang owners are not as sanguine about their Mustangs quality and that would make me hesitate to dump some 25 G's into a new one, no matter how high the HP rating or how sweet the exhaust sounds.

As you know, I bought a new Honda Civic last year and have had zero problems wih it, except for a slow-to-rise driver-side window (when it was very cold out) which Honda repaired by replacing the window regulator, under warranty (and gave me a free '05 loaner while they did it). The build quality on the Civic is excellent. It was manufactured in Canada and only the automatic transmission is from Japan, for what that's worth. Unlike some American cars, the Honda Civic will hold about 60% of it's original cost over five years, which is fantastic. Frankly, even with the lack of real performance, the Civic is mostly pleasant to drive, if not exciting.

The current financial plight of the Big Three U.S. automakers is mostly a product of their own making, along with a terrible lack of foresight on their part. It isn't just obscene executive salaries, inflated worker costs or any other whipping boy the media comes up with. All of those add up, of course, but your original point remains valid: it's the lack of quality. A new car is a huge investment and people get mightily P.O''ed when that expensive new car breaks down and then turns out to have a crappy re-sale value, later. A buyer feels screwed over and resents it, big-time. When the Japanese (and other foreign manufacturers) presented a viable alternative, they went for it.

20 years ago I never would have even considered buying a Japanese car, economical or otherwise, Today, I own one, and not only that...I like it. Not because of advertising or any need to follow the herd but because they have been proven to be a solid value and worth the money, if that is the kind of car what you want. U.S. cars don't compete successfully with them, even as they keep trying. Your observations of the long string of failed Ford car models is a sad but all-too true example of the inability of U.S. manufacturers to do what's needed. I have discussed this with that car dealer/mechanic friend and he believes that the bloated U.S. auto manufacturers have such high overhead, from real estate costs, to federal, state and local taxes, to high employee salary and benefits (including the executives) that they have to cut corners to make a profit that will attract investors. Well, if that's the case, it ain't workin'.

[Unit 5302]

US manufacturers don't need to cut corners, and their sale prices are often proof. Their die hard old marketing campaign features cars that undercut the competition in price. They hope the cheaper vehicle will get buyers to jump at their model line rather than spending more for a foreign car.

Hyundai and Kia can point to the fact that sales practice works.... but the car people are buying MUST be of nearly the same quality.

While it's true that some domestic cars do quite well in terms of reliability, they do little to enhance the overall image. Even the some cars are good, some cars are bad reputation serves to provide an poor image of vehicles manufactured overall. It implies sloppy engineering and quality control. If Ford could build a 5.0 Mustang which was very reliable, why were their other cars such junk? There's no good reason for it because they proved they could build a good car. They just didn't want to.

Cutting corners isn't an option anymore. If the domestics want to remain viable, neither is undercutting the competition with lower prices until their quality reputation is restored.

It's true that a lot of German manufactured cars have poor reliability despite the "German Engineering" catch phrase. The Volkswagen/Audi 1.8T is the epitome of a piece of engineering junk. While powerful, smooth and refined, it grenades at 60k-80k with alarming regularity. The cause? A poorly designed/constructed timing belt on an interference engine. It's a well documented problem, but I don't believe they've ever taken care of the issue. Volkswagen is pretty hit or miss it seems. I've talked to a lot of people that have never really had a problem, and some that have had lots of problems. Regardless, I see a TON of high mileage German cars commanding a LOT of money in the used car market. I think most of it has to do with the driving experience behind the wheel. I know I was very impressed with my little brother's Jetta. He has an '01 Jetta, nothing special. It felt 10x nicer and newer than my brand new '02 GT though.

There are, of course, other problems besides just quality with Ford/GM. Marketing. How bad are the Ford commercials we all see? Oh man. They're awful, awful, awful. The music and the car names. Minor styling mishaps flattened out (new edge) quarter panels on the now defunct Cougar. With just a touch more work on the quality of the Cougar (it doesn't seem to have major issues, just a lot of minor ones) and some better advertising, it would have been a huge hit for Mercury.

Anyway, I digress. If the domestic manufacturers are doing poorly, and they need to cut costs, the very first place they need to look at is the executives. They claim the right to huge pay when the company does well so they should take the blame when the company does poorly.

[Mr 5 0]

Originally Posted by Unit 5302

US manufacturers don't need to cut corners, and their sale prices are often proof. Their die hard old marketing campaign features cars that undercut the competition in price. They hope the cheaper vehicle will get buyers to jump at their model line rather than spending more for a foreign car.

As you noted, that doesn't always work so well, anymore. Besides, you can buy a well-equipped econocar (like the Kia Reo) with a 100,000 mile drivetrain warranty for under $13,000., today. Few domestic cars can match that. Of course, the re-sale on the Kia is pathetic but then, so is the re-sale on most domestics.

Hyundai and Kia can point to the fact that sales practice works.... but the car people are buying MUST be of nearly the same quality.

Quite right. I assume that many American car buyers would rather have an 'American' car than one from South Korea but if the domestic econocar's quality is crap, they'll go for the better-built 'foreign' car.

While it's true that some domestic cars do quite well in terms of reliability, they do little to enhance the overall image. Even the some cars are good, some cars are bad reputation serves to provide an poor image of vehicles manufactured overall. It implies sloppy engineering and quality control. If Ford could build a 5.0 Mustang which was very reliable, why were their other cars such junk? There's no good reason for it because they proved they could build a good car. They just didn't want to.

While it's a reality that most major U.S. auto manufacturers carry a lot of pricy overhead and 'dead weight' that Japanese companies do not tolerate, I have to agree that sloppy engineering and poor quality control is very likely the main culprit for shoddy product. Well, screw them, then.

Cutting corners isn't an option anymore. If the domestics want to remain viable, neither is undercutting the competition with lower prices until their quality reputation is restored.

Apparently the U.S. auto manufacturers haven't figured that out yet.

It's true that a lot of German manufactured cars have poor reliability despite the "German Engineering" catch phrase. The Volkswagen/Audi 1.8T is the epitome of a piece of engineering junk. While powerful, smooth and refined, it grenades at 60k-80k with alarming regularity. The cause? A poorly designed/constructed timing belt on an interference engine. It's a well documented problem, but I don't believe they've ever taken care of the issue. Volkswagen is pretty hit or miss it seems. I've talked to a lot of people that have never really had a problem, and some that have had lots of problems. Regardless, I see a TON of high mileage German cars commanding a LOT of money in the used car market. I think most of it has to do with the driving experience behind the wheel. I know I was very impressed with my little brother's Jetta. He has an '01 Jetta, nothing special. It felt 10x nicer and newer than my brand new '02 GT though.

Image and perception are a very important factor in selling cars, as we all know. Until recently, when they finally got it right, Chevy sold tons of poorly-made Corvettes over the years because of the 'sexy' Corvette 'image'. They were slow, creaked even when new and were a chore to maintain, yet they still sold, even if in relatively small numbers as is normal for a very impractical, 'niche' vehicle.

While I've always felt that one or two individual accounts of good or bad experiences with a specific car doesn't mean all that much, I have to note that a friend owned a late '90's BMW that began falling apart at 100,000 miles but he was reluctent to let it go because of the 'feel' of the car and the 'prestige' it gave him. It was 'his Beemer' and his ownership inferred a status to him that he valued over practical aspects. He finally gave in and sold it when a head gasket went and the estimated repair bill was in the thousands. He now drives a late-model Jeep SUV. Go figure.

There are, of course, other problems besides just quality with Ford/GM. Marketing. How bad are the Ford commercials we all see? Oh man. They're awful, awful, awful. The music and the car names. Minor styling mishaps flattened out (new edge) quarter panels on the now defunct Cougar. With just a touch more work on the quality of the Cougar (it doesn't seem to have major issues, just a lot of minor ones) and some better advertising, it would have been a huge hit for Mercury.

Marketing and even design errors are part of the automobile manufacturing game and most manufacturers are guilty (or victims, depending on where you sit) of it. In my view, that's because far too many people are involved in the process of designing and marketing and you end up with sometimes ridiculously divergent views on what will sell - and how to sell it. Ford could really use another visionary, focused and aggressive executive such as Lee Iacocca today, but alas, that isn't going to happen.

Anyway, I digress. If the domestic manufacturers are doing poorly, and they need to cut costs, the very first place they need to look at is the executives. They claim the right to huge pay when the company does well so they should take the blame when the company does poorly.

I think both executive and worker pay is over-emphasized in these discussions. Both the line workers and the execs receive very good money, considering what they do. It's up to the stockholders to go to the annual meetings and make a stink about inflated executive pay if they believe it is harming their stock value. That happens, but I doubt it has any real effect. The auto manufacturer's boards of directors will claim that you have to pay big money for 'good' executive talent. The execs will blame the unions and 'the economy', which is ridiculous. The U.S. economy is booming but domestic auto sales are relatively flat and blaming 'the economy' is a lame excuse. Japanese brands sales are basically strong and show no sign of flattening out anytime soon.

I think we can agree that when we talk of auto sales and why the domestics are sliding ever-downward, the 'quality issue' is the 800-pound gorilla in the middle of the room that the U.S. automakers are basically trying to avoid seeing, even if more and more American car buyers, do.


I don't know if anyone else here is really interested in this issue, but I appreciate the dialogue and the opportunity to express my views, for whatever they are worth to anyone.

[RBatson]

I'm absolutely loving this thread! The whole matter of the fact is that the executives are making WAAAYYY too much and less attention is going towards the product(as with most US corporations). Well, that's conservative capitalism, isn't it. Whatever the market will bear, make as much as you can. Capitalism absolutely gives people motivation to work harder while giving others a license to steal. Its not right and could be the downfall of America. It's all about the profit, which is what I despise about the extreme right wing(giving everything I've worked so hard to obtain away to the lazy is what I despise about the extreme left wing). Let's be accountable for our products. I have a 2004 Ford and a 2002 Chevy sitting in my driveway right now.. Chevy gives better customer service, hands down. I don't even want to deal with Ford anymore, seriously. Their customer service is crap, total crap. They absolutely don't care about your problems while GM gives you a rental while your car is in the shop. This isn't just locally either, its everywhere I've taken my cars. The Mercury dealership(locally) is better than most though. I don't even want to talk about Dodge, though they have some vehicles that appeal to me.. I'll never own another Dodge.

I say put more attention towards the product and cut back on the excessive pay. While we're at it.. lets put more farmers to work and grow corn to make ethanol fuel. Why keep paying the outrageous prices for oil, we don't need it but... someone is making a dollar off it so let's capitalize on it! Right? WRONG! We don't need it! America has more natural gas than it knows what to do with yet we keep using oil... why?? SOMEONE IS MAKING A DOLLAR OFF OF IT! A car can run off of nature gas can't it.. YES! I say more ethanol, more solar, more wind. Heat houses with natural gas. We don't need all the oil we use but we keep using it.. WHY? Because someone(BUSH/CHENEY/SAUDI) is making a killing off of it. Absolutely ridiculous!(And some wonder why I despise the illiterate self serving president).

[Unit 5302]

I'm so tired of hearing GWB is the issue. A constant scapegoat for people that don't understand what they're talking about, "blame W" is the final reason why everything in this country is bad.

I'm not even going to dignify that catchphrase mentality with a more detailed response.

[RBatson]

I'm not blaming GWB for everything but to deny that he (and his sidekick) is the reason for the price of gas/oil shows your mentality and which side of the fence you stand on. If you want to applaud his Harvard education... damn, you hear the same speeches I hear. Standing there laughing at criticism because he doesn't know what else to do. What a joke.

[HoodStrype]

Originally Posted by Unit 5302

I'm so tired of hearing GWB is the issue. A constant scapegoat for people that don't understand what they're talking about, "blame W" is the final reason why everything in this country is bad.

I'm not even going to dignify that catchphrase mentality with a more detailed response.

100% agreed.

[Rev]

Originally Posted by RBatson

If you want to applaud his Harvard education... What a joke.

Interesting thread. It always is when Kell, Jim, and Rick are involved. But I think GWB is an Eli (Yale) rather than Harvard. To illustrate my opinion on the cars, I'll just say that my family drives a 2000 ES300, 2004 Sequoia, and then there's my beloved 1966 Stang. As far as dependibility, comfort, and value go, I couldn't ask for more than the Jap cars deliver. As far as fun goes, I'll take my '66 Stang any day (even without radio, AC, and heat, LOL).

Rev

[Mr 5 0]

Originally Posted by RBatson

I'm absolutely loving this thread! The whole matter of the fact is that the executives are making WAAAYYY too much and less attention is going towards the product (as with most US corporations). Well, that's conservative capitalism, isn't it. Whatever the market will bear, make as much as you can. Capitalism absolutely gives people motivation to work harder while giving others a license to steal. Its not right and could be the downfall of America. It's all about the profit, which is what I despise about the extreme right wing(giving everything I've worked so hard to obtain away to the lazy is what I despise about the extreme left wing).

Oh please. Stop the Marxist nonsense, Rick.

Capitalism is the engine that has made America the world power it is and has been since WWII. It allows anyone to start a small business and with hard work and some luck, be financially successful. Almost every big corporation in America - from Ford to Microsoft - were started by an entrepreneur with just an idea and lots of ambition. Those entrepreneurs - from the guy who owns the local auto repair shop down the road to the millionaire factory owner - hire and pay other people looking for work and thus, make the economy grow, as ours has, in stark comparison with europe and other western nations that have foolishly embraced socialism. These entrepreneurs often start by borrowing money from banks to start their business. Money that they pay back with interest, just as people have always done. Even the bible mentions bankers..and they are not condemned. Meanwhile, wage-earners choose to work for their wages and I don't think that $60,000. per-year auto workers are all that deprived.

To mindlessly state, as you did, that 'capitalism could be the downfall of America' is beyond ridiculous and speaks to a profound lack of understanding of economics on your part. Grumbling about executive salaries is nothing new but it has little bearing on the financial woes of domestic automakers. While the six and seven-figure salaries of top auto execs may look bloated to the average person (you and me) , they simply mirror what other high-level execs get in other industries. I hardly think that the salaries, no matter how large, of a few dozen top-rank auto executives working in a multi-billion-dollar industry is the reason Ford and GM are sinking. As Kell and I have noted, the lack of quality in many U.S. automobiles and resulting sales drop-off is a large part of the reason for their slide in the market.

Let's be accountable for our products. I have a 2004 Ford and a 2002 Chevy sitting in my driveway right now.. Chevy gives better customer service, hands down. I don't even want to deal with Ford anymore, seriously. Their customer service is crap, total crap. They absolutely don't care about your problems while GM gives you a rental while your car is in the shop. This isn't just locally either, its everywhere I've taken my cars. The Mercury dealership(locally) is better than most though. I don't even want to talk about Dodge, though they have some vehicles that appeal to me.. I'll never own another Dodge.

Fair enough. However, Honda customer service - including the free use of a low milegae, 2005-model loaner car - is also excellent, as I outlined in an earlier post. Maybe GM is catching on.

I say put more attention towards the product and cut back on the excessive pay.

Would you include the 'excessive pay' of unionized factory workers, too? 'Excessive pay' is a relative term and can be used against anyone who you happen to think makes more money than you personally think they should make. In any case, if GM and/or Ford do go under (unlikely) all those highly paid executives will be out of a job, right along with everyone else in the company. Now there is equality of outcome for you, something liberals seem to love.

While we're at it.. lets put more farmers to work and grow corn to make ethanol fuel.

Ethanol, last I checked, had a net negative energy balance. It actually takes more fuel to create the ethanol than you get out in ethanol. With the government 'help' you seem to admire, it sounds like another welfare progarm for farmers, financed by the already over-burdened taxpayer. No thanks.

Why keep paying the outrageous prices for oil, we don't need it but... someone is making a dollar off it so let's capitalize on it! Right? WRONG! We don't need it! America has more natural gas than it knows what to do with yet we keep using oil... why?? SOMEONE IS MAKING A DOLLAR OFF OF IT! A car can run off of nature gas can't it.. YES! I say more ethanol, more solar, more wind. Heat houses with natural gas. We don't need all the oil we use but we keep using it.. WHY? Because someone(BUSH/CHENEY/SAUDI) is making a killing off of it. Absolutely ridiculous!(And some wonder why I despise the illiterate self serving president).

Geez, I feel like I just stumbled into a looney leftwing website or something. Bush/Cheney and the Saudi monarchy are part of some conspiracy to 'force' Americans to consume oil they 'don't need'? That is simply anti-Bush paranoia manifesting itself and is not connected to any kind of rationality. Where do you get this kind of rubbish?

Here's a clue: it's not just cars but homes, business and many kinds of machinery that are designed to run on oil or oil byproducts, as they have for over 100 years. They cannot be 'converted' overnight and the conversion costs would be huge, so no one is jumping into it without real proof that the so-called 'alternative fuels' are actually feasible in the long term. Solar? Wind power? How very PC....and how equally devoid of reality.

Your anti-capitalism, anti-business and trite anti-Bush hysteria demonstrates the Marxist, anti-capitalist mindset that apparently drives 'liberals' these days and it is not pretty to watch, as your uninformed rantings here prove. Grow up and get real.

[Mr 5 0]

Originally Posted by RBatson

I'm not blaming GWB for everything but to deny that he (and his sidekick) is the reason for the price of gas/oil shows your mentality and which side of the fence you stand on.

Well Rick, conversely, to blame the President and Vice President of the United States for the price of gas and infer that they are part of some sinister conspiracy to keep the price high (for what...some sort of personal gain?) shows your clear lack of cognitive functions when it comes to Bush as well as a gross misunderstanding of both economics and politics. Thanks for making that clear for us.

If you want to applaud his Harvard education... damn, you hear the same speeches I hear. Standing there laughing at criticism because he doesn't know what else to do. What a joke.

George W. Bush has two degrees from Yale University. He is obviously inarticulate in many instances but that does not equate to a lack of intellect...it just makes it easy for his less-educated and lower-achieving detractors to mock him and feel superior even if they could never rise to the elected positions George W. Bush has.

As for President Bush 'laughing at criticism'....what would you have him do? Engage in shouting, name-calling arguments with reporters badgering him with accusations disguised as 'questions'? The president has to maintain a level of decorum others do not and all presidents laugh off criticism - because they have to.

[Rev]

Alternative fuel prices ebb and flow. It is possible to gain or lose as the pendulum swings. That applies to any energy producing commodity. Companies that capitalize on these ebbs and flows are not inherently evil or good.

Capitalism allows the judgement of energy companies to make a profit from good prognostications or losses from poor predictions. Why not? I don't think the world can be hoodwinked for very long on the true value of energy fuels.

I'm all for efficient use of fuels to supply energy. Let's just keep our perspective.

Rev

[RBatson]

Originally Posted by Rev

Interesting thread. It always is when Kell, Jim, and Rick are involved. But I think GWB is an Eli (Yale) rather than Harvard.

To tell you the truth, I really didn't know he didn't attend Harvard. I was just going on something Jim said a couple years ago where he said(or I thought he said) that Bush had a degree from Harvard and Yale. I may be mistaken but I do have a pretty good memory. Though I don't know what colleges he allegedly attended, his rehab and dwi do easily come to mind.

[Unit 5302]

Originally Posted by Rev

...Capitalism allows the judgement of energy companies to make a profit from good prognostications or losses from poor predictions. Why not? I don't think the world can be hoodwinked for very long on the true value of energy fuels...

For me, the important thing to be concerned about is that capitalism absolutely depends on a thriving free market economy with aggressive competition. When you eliminate the competition, capitalism can quickly go very bad.

Anyway, back the subject, which is NOT George W Bush, Capitalism or Executive Compensation directly.

Interesting article regarding a new Ford Motor Company executive bonus calculation. I feel the revised bonus adjustment due to repairs is a step in the right direction. It should help Ford execs focus on the quality issue, and it's a nearly direct admission that the cars Ford is producing are not as good as they should be.

Next time you have to dip into your pocket or purse because your new Ford Motor Co. vehicle has a problem, you can smile.

When you spend money to repair that car, it will cost Ford executives.

New FoMoCo Executive Bonus Program

That being said, an article from last year focusing on shortfalls in pension funding and executive pay indicates that Ford is one of the worst (this is a subjective assumption) based on the $12.3 Billion in unfunded pension money.

Article On CEO/Executive Pay vs Pension Shortfalls

Despite Bill Ford refusing salary, he apparently made more money than his counterpart CEO at GM due to the overall compensation package. Keep in mind, the executive pay numbers are for the top 5 executives in the company only. If those were the compensation numbers for the entire VP or higher employee group, it would be dirt cheap. Even so, when placed next to the deficiency in the pension, the $105M is only 0.9% of the deficiency.

According to Ford Motor Company, Bill Ford donated all of his compensation (including stock options/bonuses) to charity this past year. Hopefully it made for a good write off. When your company is in the red, it might be a good time to think about spending money more wisely, no matter how noble the appearance is.

[Mr 5 0]

So, Bill Ford gives his salary to charity but that is considered just 'a write off'? The guy can't win! What would you have him do? Commit Hari Kari? Would that help Ford recover it's market share? Let's face it, the 'workers' are always going to resent the 'boss', especially when the boss got his job because of his lineage and in Bill Ford's case, (just like George W. Bush) nothing he does will please some folks.

It's become obvious that many of us love to point fingers at what we consider excessive, unjustified executive compensation and howl about it to no end. However, in the greater scheme of things, it is NOT the main reason for Ford or GM's falling stock and market share. While executive compensation is a valid enough point to discuss, this penchant to harp on it seems petty and unproductive. I suspect that under the patina of concern for the car companies continued viability that is often expressed as the rationale for the complaints, it often comes down to envy, more than anything else.

The article Unit 5302 linked, as he noted in his comments, states that Ford executive pay amounted to only a fraction (9%) of the workers pension fund shortfall. It seems clear that when a company is bleeding money, it's easier to cut pension fund payments, which are a future obligation, than to suddenly stop or drastically reduce executive compensation that is an immediate obligation. It's like losing your job and stopping your savings account deposits but making your car payment. One can be deferred but the other cannot, at least, not without unpleasant consequences.

The cold hard fact is that well-educated, experienced top-level executives...in any business...have now and always will be well-compensated. That means hundreds of thousands or even millions in annual compensation. To make comparisons to their salary and that of floor workers (in the auto industry) and then pretend this is a horrible crime and so on, is simply ridiculous, in my view. I can agree that execs drawing huge compensation packages while the product is shoddy, company sales are laying an egg in the face of tough competition and the company stock is rated 'junk' is cause for questioning. However, I also feel that high executive pay is an easy and sometimes misguided target of stockholder and public wrath. It's clear that adjustments will be made at Ford and GM but I can tell you - with confidence - that shop floor workers at those companies will not be making one-tenth of what the top execs will be making, no matter what happens. That is simply the way of the business world. If Ford or GM actually did drastically reduce executive compensation, they would quickly see a mass exodus of most of those executives - and not all of them are as worthless as some may wish to believe. Ford, GM or any other car manufacturer won't risk that kind of loss just to appease those who see anyone in the executive suite making ten times what a riveter makes as evil.

So, we end up with failing U.S. car companies, shortchanged workers and executives being pilloried for making big bucks in the face of company disasters. Not a pretty picture. Lots of villains, lots of folks to point fingers at, including those assemblers who some want to see as noble, who did their part over the years to turn out poorly made cars while demanding fat salaries of their own, along with fat pensions. Somehow, they are held blameless while the execs, many of whom had/have little to do with quality issues, are castigated as rapacious and immoral, something right out of a 19th century Charles Dickens novel. As I have repeatedly stated in my comments on this thread, these auto company execs certainly have their share of blame to shoulder in the saga of the seemingly imminent demise of Ford and GM but to make them the whipping boy for all the problems that have led Ford and GM to the sorry state they are in, today, is missing the 'forest' because the 'trees' are getting in the way.

[Unit 5302]

Actually, I'm talking more along the lines of pumping the money back into Ford Motor Company somehow or refusing the pay that the board decided to grant. Like I indicated, charity has it's place. The place for it is NOT when you're company is in the red and shutting down factories. Also 9% isn't accurate. It's 10x less than that at 0.9%.

[RBatson]

Unfortunately its been a tough week for me and I somehow allowed myself to fall asleep in the middle of replying to your well thought out post. I see you got alittle personal. A little body check never hurts.

Originally Posted by Mr 5 0

Capitalism is the engine that has made America the world power it is and has been since WWII. It allows anyone to start a small business and with hard work and some luck, be financially successful.

Actually, that's what I love about capitalism. I've been thinking of starting my own business for years and recently have gotten to the point, finacially, where I may be comfortable doing so.

Originally Posted by Mr 5 0

Almost every big corporation in America - from Ford to Microsoft - were started by an entrepreneur with just an idea and lots of ambition. Those entrepreneurs - from the guy who owns the local auto repair shop down the road to the millionaire factory owner - hire and pay other people looking for work and thus, make the economy grow, as ours has, in stark comparison with europe and other western nations that have foolishly embraced socialism. These entrepreneurs often start by borrowing money from banks to start their business. Money that they pay back with interest, just as people have always done. Even the bible mentions bankers..and they are not condemned.

We aren't talking about entrepreneurs, but I think you know that.

Originally Posted by Mr 5 0

Meanwhile, wage-earners choose to work for their wages and I don't think that $60,000. per-year auto workers are all that deprived.

Who said they were. Hell, Toyota is paying Americans close to that in their American plants. Who said that the auto workers were deprived? Why the shot at auto workers, you don't like auto workers?

Originally Posted by Mr 5 0

To mindlessly state, as you did, that 'capitalism could be the downfall of America' is beyond ridiculous and speaks to a profound lack of understanding of economics on your part.

Oh really?? Mindless you say. When America is run by a foreign power I'll try to remember that.. hopefully it won't be in our life time. With the outsourcing of our jobs, to foreign countries, I find less money remaining here. We have jobless Americans yet companies are shipping in workers from India. Bush is trying to reform foreign policy to give MILLIONS of ILLEGAL immigrants US citizenship. That's right, ship them in and sell them land. 3yr work permits for everyone. And no, I didn't like Clinton's Nafta ordeal either.

Originally Posted by Mr 5 0

Grumbling about executive salaries is nothing new but it has little bearing on the financial woes of domestic automakers. While the six and seven-figure salaries of top auto execs may look bloated to the average person (you and me) , they simply mirror what other high-level execs get in other industries.

Not in other countries though. American execs make alot more than than their foreign counterparts. Maybe that is why Japan is doing so well, more emphasis on the quality than the profit. On a side note, alot of other industy leaders compensate themselves alot better than the auto industry. Some of the theifs reward themselves while thier company is going under and I'm not talking about illegal activity such as Enron. I'm talking about companies that don't have enough capital to operate for another 6 months yet the execs get outrageous bonuses and stock options.

Originally Posted by Mr 5 0

Maybe GM is catching on.

I really like GM at this point. I like the F250 better but will probably buy GM for the service.

Originally Posted by Mr 5 0

Would you include the 'excessive pay' of unionized factory workers, too? 'Excessive pay' is a relative term and can be used against anyone who you happen to think makes more money than you personally think they should make.

Again, what do you have against the auto worker? I've never done the job so I have absolutely no idea what its worth. I have done my job for 18 yrs and its not a job most people would stick with.. I make good money(relatively) but I work for it. I don't think you could judge it from your lazyboy. I'd like for the average person to start out at 9am, run all day, and return at 1am and show up the next day. Those steaks smell good on the grill at 5:30 while many of us have many hours of work left..

Originally Posted by Mr 50

In any case, if GM and/or Ford do go under (unlikely) all those highly paid executives will be out of a job, right along with everyone else in the company. Now there is equality of outcome for you, something liberals seem to love

Well if you feel that strongly then maybe you should buy some of their stock, its relatively cheap at the moment. Ford is valued at only $15 Billion though it does have umm.. over $154 Billion in debt with less than $21 Billion in cash. They are showing net assets of $7 Billion but that counts all real estate and investments they hold. Hmm.. their market cap was between $50-60 Billion not 5 years ago. A turn around would present a huge return on your money. I don't see it in Ford's future though, maybe GM's. GM is doing something about it, just today they laid off a good number of execs. Not only that but their customer service is head and shoulders over Ford. I think GM is the safer bet and Ford is going to pull a USAir(Chapter 13). Hopefully they won't go into chapter 11, I'd hate to see Ford disappear.

Originally Posted by Mr 50

Ethanol, last I checked, had a net negative energy balance. It actually takes more fuel to create the ethanol than you get out in ethanol. With the government 'help' you seem to admire, it sounds like another welfare progarm for farmers, financed by the already over-burdened taxpayer. No thanks.

Yeah? Well you need to check again. Brazil is practically run off of ethanol. Hmm.. what you got against farmers? Welfare program? I guess you'd rather pay them to NOT grow crops, like we currently do.

Originally Posted by Mr 50

Geez, I feel like I just stumbled into a looney leftwing website or something. Bush/Cheney and the Saudi monarchy are part of some conspiracy to 'force' Americans to consume oil they 'don't need'? That is simply anti-Bush paranoia manifesting itself and is not connected to any kind of rationality. Where do you get this kind of rubbish?

Really Jim? Everytime I read one of your post, on this subject, I feel like I'm talking to a mushroom thats buried under a pile of crap. Wash it off brother and open your eyes. They both were in the oil industry and if you think they aren't making something off the price of fuel then your nuts. I call it Bush's retirement plan, I hope he gets impeached(he should be for lying to the US public). Even the Bush supporters at work say that the price of fuel(at the pump) doesn't reflect the price of oil.

Originally Posted by Mr 50

Here's a clue: it's not just cars but homes, business and many kinds of machinery that are designed to run on oil or oil byproducts, as they have for over 100 years. They cannot be 'converted' overnight and the conversion costs would be huge, so no one is jumping into it without real proof that the so-called 'alternative fuels' are actually feasible in the long term. Solar? Wind power? How very PC....and how equally devoid of reality.

WOW! "Devoid of reality"! Really?! Well, I don't know if you read the thread I started about me riding my Harley to Sturgis, it took me 3 days, Jim... 2033 miles. It was quite a ride but I had to stop and take a few pictures on the way. One of the stops I just had to make was in Minnesota. That's right next to South Dakota, Jim. Funny thing is that it gets terribly hot there(100 degrees), during the day in August but at night it gets cold(50s). Anyhow, I saw this and just had to take pictures and I thought of our conversation years ago. See the attachments.

Originally Posted by Mr 50

Your anti-capitalism, anti-business and trite anti-Bush hysteria demonstrates the Marxist, anti-capitalist mindset that apparently drives 'liberals' these days and it is not pretty to watch, as your uninformed rantings here prove. Grow up and get real.

I'm not anti-capitalism, defendly not anti-business but you are right.. The moment I saw GWB's first interview I knew he wasn't presidential material. I just don't like people taking advantage of their position.. "capitalizing on it". The system just needs to be tweeked. The price of an asprin in the hospital should reflect the price of an asprin in the local drug store. That's not what capitalism is about.. that's theivery.

[Rev]

It seems a shame that the original post "domestic/foreign" choices have split into "personality" factions. I actually admire and agree with certain points made by Kell, Jim, and Rick. I know what my criterium are for the purchase of a new car.

It just doesn't seem relevant to me what the political leanings are for these afore mentioned "experts" as to the future of world automobile production /sales.

It's a world market. I just hope the US can compete. I will buy what suits me the best. Hopefully, that might include Ford, GM, and Chrysler. The last 10 years that has not happened.

Rev

[Mr 5 0]

Originally Posted by RBatson

Unfortunately its been a tough week for me and I somehow allowed myself to fall asleep in the middle of replying to your well thought out post. I see you got alittle personal. A little body check never hurts.

Well, Rick, I think you made some really boneheaded cooments about capitalism that required a strong response.

Actually, that's what I love about capitalism. I've been thinking of starting my own business for years and recently have gotten to the point, finacially, where I may be comfortable doing so.

Good. Yet, you casually label 'capitalism' as the possible 'downfall of America'. Can you even see the inherent dichotomy in that statement?

We aren't talking about entrepreneurs, but I think you know that.

Yes, we are. You obviously hold much resentment toward 'big business' but Rick, 'big business' is simply capitalism on a billion-dollar scale.

Who said they were. Hell, Toyota is paying Americans close to that in their American plants. Who said that the auto workers were deprived? Why the shot at auto workers, you don't like auto workers?

I guess those strikes they seem to have every few years is a demonstration of how happy the auto workers are.

Oh really?? Mindless you say. When America is run by a foreign power I'll try to remember that.. hopefully it won't be in our life time.

Pure hyperbole, Rick. Get real. Capitalism is hardly going to be the 'downfall of America', as you stated 'could' happen. Isolationist trade policies may look good but they do not work in the long run.

With the outsourcing of our jobs, to foreign countries, I find less money remaining here. We have jobless Americans yet companies are shipping in workers from India. Bush is trying to reform foreign policy to give MILLIONS of ILLEGAL immigrants US citizenship. That's right, ship them in and sell them land. 3yr work permits for everyone. And no, I didn't like Clinton's Nafta ordeal either

'Outsourcing' amounts to about 2% of the U.S. workforce and is only possible because of computer technology. The jobs outsourced are not high-wage jobs, either. I agree that the Bush plan to legalize millions of illegal immigrants is foolish and I oppose it, as do most conservatives, by the way.

Not in other countries though. American execs make alot more than than their foreign counterparts. Maybe that is why Japan is doing so well, more emphasis on the quality than the profit. On a side note, alot of other industy leaders compensate themselves alot better than the auto industry. Some of the theifs reward themselves while thier company is going under and I'm not talking about illegal activity such as Enron. I'm talking about companies that don't have enough capital to operate for another 6 months yet the execs get outrageous bonuses and stock options.

It's true that Japanese auto companies limit executive compensation but they operate in an entirely diffent social culture that is probably more moral than ours, at this point in time. We are not the same country we were 50 years ago, just richer and with better technology.

Yes, there are bad guys in the executive suites of American businesses but they are a minority. There are about 5 million corporations in the U.S., 16,000 of them with more than 500 employees and of course there will be the occasional corporate thief and dishonest executive - but they are a distinct minority. U.S. business, as a whole, could not survive if the majority of it's executives were all dishonest and making crap products.

I really like GM at this point. I like the F250 better but will probably buy GM for the service.

Your call.

Again, what do you have against the auto worker? I've never done the job so I have absolutely no idea what its worth. I have done my job for 18 yrs and its not a job most people would stick with.. I make good money(relatively) but I work for it. I don't think you could judge it from your lazyboy. I'd like for the average person to start out at 9am, run all day, and return at 1am and show up the next day. Those steaks smell good on the grill at 5:30 while many of us have many hours of work left.

Rick, once again, you are reading things into my comments that are not really there. Your penchant to want to engage in class warfare is a disappointment. In the case of the possible demise of some U.S. auto manufacturers, It isn't blue-collar versus white-collar, as you want to see the situation. I simply feel that when a major auto manufacture is failing, there is a lot of blame to go around. Some simply want to blame the 'suits', while some blame only the factory workers. I blame both - but as I have said...repeatedly...I don't believe that either executive pay or worker pay (and benefits) are the sole or even the major cause for Ford and GM's decline, just a factor.

Well if you feel that strongly then maybe you should buy some of their stock, its relatively cheap at the moment. Ford is valued at only $15 Billion though it does have umm.. over $154 Billion in debt with less than $21 Billion in cash. They are showing net assets of $7 Billion but that counts all real estate and investments they hold. Hmm.. their market cap was between $50-60 Billion not 5 years ago. A turn around would present a huge return on your money. I don't see it in Ford's future though, maybe GM's. GM is doing something about it, just today they laid off a good number of execs. Not only that but their customer service is head and shoulders over Ford. I think GM is the safer bet and Ford is going to pull a USAir(Chapter 13). Hopefully they won't go into chapter 11, I'd hate to see Ford disappear.

So would I - and thanks for economic update (I read the WSJ, too).

Yeah? Well you need to check again. Brazil is practically run off of ethanol. Hmm.. what you got against farmers? Welfare program? I guess you'd rather pay them to NOT grow crops, like we currently do.

Many U.S. farmers have been on the farm 'subsidy' dole for years - as you noted - and the ethanol scheme is just another political sop in the same vein meant to get the votes of 'big agriculture', who donate plenty to politicians - in both parties. Most farming today is done by big conglomerates. The 'family farm' is a quaint relic and the big farm operations of today do not need to be 'bailed out' with dubious fuel additive schemes, paid for by overburdened taxpayers.

Really Jim? Everytime I read one of your post, on this subject, I feel like I'm talking to a mushroom thats buried under a pile of crap. Wash it off brother and open your eyes. They both were in the oil industry and if you think they aren't making something off the price of fuel then your nuts. I call it Bush's retirement plan, I hope he gets impeached(he should be for lying to the US public). Even the Bush supporters at work say that the price of fuel(at the pump) doesn't reflect the price of oil.

Rick, that kind of rhetoric is simply far-left hysteria and not rational. Bush and Cheney were multi-millionaires long before they were elected to office in 2000. President Bush was born wealthy and is worth 26 million, today. His assets, like Cheney's, are in a blind trust that they have no access to while in office. The fact that they happened to be in the oil business at one time (but have been out of for years) doesn't automatically make them part of some sinister plot, as you foolishly claim. That is just loony, far-left hyperbole, again. There is simply not a scintilla of evidence for that reckless charge and you would do well to consider being able to actually come close to proving it, before so casually making it. You just look foolish.

President Bush certainly did not lie to the American people and at least 3 high-level, non-partisan investigations - including the '9/11 Commission' report made that crystal clear, in no uncertain terms. I guess you missed all that. Sorry, but you and the rest of the lefties that try to sell that canard by saying 'Bush lied' over and over will not make it magically be true. Your ridiculous contention that the Bush administration is part of some evil conspiracy to bilk the public in order to enrich themselves smacks of pure delusional paranoia on your part. How sad you choose to live with that kind of absurd fallacy as your rationale for resenting the twice-elected President of the United States. Get real.

WOW! "Devoid of reality"! Really?! Well, I don't know if you read the thread I started about me riding my Harley to Sturgis, it took me 3 days, Jim... 2033 miles. It was quite a ride but I had to stop and take a few pictures on the way. One of the stops I just had to make was in Minnesota. That's right next to South Dakota, Jim. Funny thing is that it gets terribly hot there(100 degrees), during the day in August but at night it gets cold(50s). Anyhow, I saw this and just had to take pictures and I thought of our conversation years ago. See the attachments.

A rather sharp diversion from the point, but thanks for the photos.

I'm not anti-capitalism, defendly not anti-business

Gee, you could have fooled me with the 'Capitalism could be the downfall of America' line. Were you just kidding?

but you are right.. The moment I saw GWB's first interview I knew he wasn't presidential material.

That's your opinion and you are welcome to it, for whatever good it does you. I and many other Americans disagree, including the 62 million Americans who voted for President Bush (over that intellectual giant, John F. Kerry) in 2004.

I just don't like people taking advantage of their position.. "capitalizing on it".

President Bush has not done so, even if you want to pretend that he has. Prove it and we'll talk, otherwise, you are simply smearing a good man for no real reason and with absolutely no evidence for what you claim.

The system just needs to be tweeked. The price of an asprin in the hospital should reflect the price of an asprin in the local drug store. That's not what capitalism is about.. that's theivery.

Overcharging is all-too common in hospitals because they lose a bundle on uninsured patients every year and in most places, they have to treat anyone who comes in. It stinks but that's the reality. Would you rather have hospitals turn people away who couldn't pay...or would you rather pay $3. for that asprin? There you have it.

[Mach 1]

Wow, some things never change. Unit, Mr 5.0 and rbatson still going at it years later!

Thought I would stop by. Man this place is dead! What happened? Everybody sell thier 5.0 for a 4 banger grocery getter?