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Thread: the gloves come off re UAW / Detroit versus non-union Southern State automakers

  1. #26
    Banned Melonie's Avatar
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    Default Re: the gloves come off re UAW / Detroit versus non-union Southern State automakers

    ^^^ an interesting anecdote ...

    A big southwestern car dealer set up a publicity stunt to try and attract additional business re US made autos. The dealer took a big Dodge pickup and tricked it out with huge tires etc. He then scheduled a media event where this monster truck would run over a Honda Accord. However, after somebody checked the vehicle numbers, it turned out that the Dodge pickup was actually built in Mexico while the Honda Accord was actually built in the USA.

    Yes, that's correct, while the media makes no mention of this subject, for a fact a significant portion of the US auto bailout will be used to preserve Mexican jobs ! Hey, at least the Canadian gov't kicked in a few billions to the bailout effort to preserve Canadian jobs.


    Foreign autos manufacturers sell more foreign-made autos than domestic made autos. You have to include those in the zero-sum game, which is now less than zero
    yes but ... with the but being that with the current strength of the yen Japanese automakers find it much more profitable to sell American assembled cars (with mosts costs denominated in US dollars) in the North American market rather than selling cars imported from Japan (with most costs denominated in Yen). The majority of the losses just reported by Toyota are the direct result of the Yen appreciating 15%+ against the US dollar over the past few months with no commeasurate change in US dollar denominated prices for Toyotas sold in North America. In all probability, this will result in a disproportionate reduction in the amount of future Japanese built cars imported for sale in North America, with production of US assembled cars remaining essentially unchanged.

    The more the US dollar gets trashed, the stronger the motivation for Toyota et al to avoid importing Japanese built cars into North America. The same phenomenon applies in reverse to Chrysler products manufactured in Canada and/or Mexico ! Arguably, this is one of the reasons that GM and Chrysler are balking at accepting loan money from the Canadian government, because the loan conditions would prevent them from closing down Canadian plants where rising Canadian dollar denominated costs threaten future profitability that is measured in US dollars.
    Last edited by Melonie; 12-23-2008 at 01:04 PM.

  2. #27
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    Default Re: the gloves come off re UAW / Detroit versus non-union Southern State automakers


  3. #28
    Banned Melonie's Avatar
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    Default Re: the gloves come off re UAW / Detroit versus non-union Southern State automakers

    and of course, now that GM and Chrysler have gotten the bailout money, it would appear that the 'urgency' of finding an economic solution has evaporated ...




    (snip)"Dec. 24 (Bloomberg) -- General Motors Corp. will try to win agreements to reduce debt and rework labor agreements in a span of less than three months as it pushes the start of formal talks into January.

    Such meetings with debt holders and the United Auto Workers will wait until at least Jan. 5, said Tony Cervone, a spokesman for Detroit-based GM. Informal discussions are under way now without Chief Executive Officer Rick Wagoner and senior management, Cervone said yesterday.

    The biggest U.S. automaker is working under a March 31 government deadline to fashion a survival plan. The $9.4 billion in emergency U.S. loans granted last week call for concessions by debt holders and the UAW to help GM end losses.

    “GM’s effort is going to be like herding cats,” said Kip Penniman, an analyst at KDP Investment Advisors Inc. in Montpelier, Vermont.

    Jan. 5, the companies’ first workday after the Jan. 1 New Year’s Day holiday, comes a day before the new Congress convenes. A wider Democratic majority will be in place for the Jan. 20 inauguration of President-elect Barack Obama, who inherits oversight of President George W. Bush’s rescue plan.

    “There won’t be anything that’s finalized or any kind of major breakthrough” until at least Jan. 5, Cervone said in an interview.

    Holiday Break

    GM and Chrysler LLC, which is to get $4 billion in aid, both will close their headquarters from today through Jan. 5, part of their traditional Christmas break, spokeswomen said.

    Bush’s aid plan under the Treasury Department’s Troubled Asset Relief Program for banks was intended to keep the companies from running out of cash by early next year and triggering a collapse costing millions of jobs at automakers, suppliers and related industries.

    Chrysler “is working tirelessly around the clock, and the company has no higher priority than to satisfy the loan conditions laid out by the government,” a spokeswoman, Lori McTavish, wrote in an e-mail. "(snip)


    point #1 - yeah right, working tirelessly around the clock, huh ? It appears to be 'business as usual' complete with (paid) holiday break !

    point #2 - the audacity of both GM/Chrysler and of the UAW is arguably astounding ... because both are supremely confident that the new democratic president and congress will reneg on Bush's condition that these automakers must be able to prove 'economic viability' by the end of March 2009 on 'pain' of having the gov't bailout loans called immediately due and payable.

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    Default Re: the gloves come off re UAW / Detroit versus non-union Southern State automakers

    ^^ Mel, the assembled imports have significant additional costs the domestic ones do not in addition to the relative strengths of their currencies and the faltering dollar. Besides the shipping costs and additional equipment for pollution and safety, these automakers need entry ports for storage, touch-up and equipment that is added on in port. Some of this add-on equipment may have been imported as well. I don't know much about duties and procedures needed for that. After these several additional factors, their precedures are somewhat indistinguishable from American-asembled autos.

    Good point about Mexico; I would not expect that country to help with the bail-out, as they are merely a receiver of benefits.
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