Ford & GM Imploding - Now What?

[Cardinal]

An honest no-flame question from somebody with no clue about the on-demand freight business.

Ford is laying off thousands, yesterday CNBC asked GM if they'll be bankrupt within three years, Bush says no bailout. Toyota sales up 10% in 2005, Big Three down a similar percentage. Surely this is bad news for the USAJet type operations and those in a similar business. Is the Ypsilanti crowd going to get hosed bigtime?

 

[pilotyip]

It is impacting USA Jet, but not to the extend that means the end of the world, we have changed our operations to reflect the change in the market. Yes we have boom times when the auto companies are busy, but our business model has changed. This month DC-9 passenger flying makes up most of our business. We have lots of contracted customers who are not automotive manufactures. BTW Honda and Toyota are also customers.

 

[rongaudier]

This is just a taste of things to come. Soon (within 2 years) the Chinese are going to introduce high quality modern cars and SUVs into our marketplace for a price no American manufacturer will be able to match. Much like most American manufacturing, our Automotive industry will be gone within 10 years.

 

[Rez O. Lewshun]

This is just a taste of things to come. Soon (within 2 years) the Chinese are going to introduce high quality modern cars and SUVs into our marketplace for a price no American manufacturer will be able to match. Much like most American manufacturing, our Automotive industry will be gone within 10 years.

And this is OK! Nothing last forever and that includes GM and Ford.

The USA introduces and perfects an industry. Once we have it figured out, we can pass it on to other countries (third world even). This is good for a few reasons. And one bad.

First, in our hyperconsumption society we are happy with China making almost everything. We have shut down factories in the USA to get our goods cheaper. Why not automobiles? Look.. blue collar labor is what it is. Even though Grand Dad had a good life making vacuums at Hoover and got a pension, those days are over... so don't expect that for yourself.

The US will keep its competitive edge of the world by engaging in innovative business and ideas. If we are busy manufacturing products on an assembly line we can't innovate. Take Microsoft for example.

Let the Chinese (and others) build all of our "stuff", including our cars. This allows the chinese to increase their standard of living. Now they are happy. Happy people don't want war. As long as the USA is the innovator we will stay ahead. We will be the first country in World History to dominate not by conquering but by innovating.

Now...here is the issue. Pilots are blue collar labor. As the US makes this shift, The Man, will want to replace Air Line Pilots and other pilots with foreign labor. There are many good reasons to keep US Pilots flying US Aircraft. The Mother of all Battles for the Air Line Profession hasn't even started.

Do you give to ALPA-PAC?

 

[pilotyip]

Ford and GM are either profitable or close to it everywhere in the world except North America. GM China is one of their hottest spots. I don't think GM or Ford is going away. Maybe in the future Ford and GM might exisit in the US as a marketing and design company only. A great job with a secure future could be fixing cars made over seas, that can not be exported.

 

[Gulfstream 200]

They are not going away, but they will never be like they were...and thats good. I think this downturn may be good for them in the long run. Its a harsh wakeup call to an industry that is completly out of touch, about 20 yrs behind.

The world is changing, isolation will not work.

for some light reading (lot of opinion) try "The world is flat" by Freidman.

may give some thought to the "damn chinese takin good american jobs" mentality.

 

[Draginass]

Let the Chinese (and others) build all of our "stuff", including our cars. This allows the chinese to increase their standard of living. Now they are happy. Happy people don't want war.
Do you give to ALPA-PAC?

The problem is the Chinese, North Koreans, Iranians, and a lot of other "people" in the world do not control their government. "Their" government controls them.

 

[Bryan D]

Alot of General Motors and Fords problems stem from the UAW negotiations or lack of on the companies part. The companies gave too much to the workers in terms of wages, pensions and benifits. They also lag in quality and efficiency but thats another story. The American automakers problems are many and varied but bottom line is the management failed the workers as did the union. Now we have thousands of people that can't afford an airline ticket so this industry is effected as well. Labor follows low wages. Industry first moved to Mexico, now it moves to China. I'm sure some country will eventually beat China in low labor costs and labor will move again. As bad as you guys in the airline industry want to hear it the "good ol' days" of labor unions is numbered (no flames please). Its out lived it's usefullness/effectiveness and if ALPA tells you any different well they are doing you a disservice.

 

[rongaudier]

If you want to read something really scary, do a google search on "peak oil"
or "hubbard's peak." It appears that oil is closer to becoming critically scarce than many realise. There are no viable alternatives to oil (especially for aircraft). The basic premise to Hubbard's peak is most of the oil to be found has been found. We are at, or very near peak production right now and production will only gradually diminish from here on out (following the normal curve, we are at the "peak" now). Demand on oil continues to rise with no end in sight (especially considering the rapid growth of China and India and the subsequent demand for oil by those countries). When the demand and supply curve begins to diverge, naturally the price will skyrocket. If you think the post Katrina gas prices were high, you haven't seen nothin' yet! Expect oil to virtually overnight hit $300-400 per barrel. Basically it will be far to expensive for anyone but the military to continue flying, so my bet is most of you young guys don't stand a prayer of finishing your careers in this business.

 

[pilotyip]

Ron, we went through this in 1973-75 when oil when from 6 to 20 dollars per barrel. In fact I wrote a term paper on alternate non-petroleum based fuels back in 1977. Hydrogen fueled airplanes are feasible, organic fuels are a viable alternate. Economics is great driving forces in developing alternatives. Ford and GM will build cars that do not need imported oil if it makes economic sense.

 

[duke600]

The US will keep its competitive edge of the world by engaging in innovative business and ideas. If we are busy manufacturing products on an assembly line we can't innovate. Take Microsoft for example.

Yes, look at microsoft who is building huge research and development centers in India and China. Engineering jobs are going overseas. There are millions of people in third world countries graduating with engineering degrees who can design stuff at a fraction of the cost.

As long as the USA is the innovator we will stay ahead. We will be the first country in World History to dominate not by conquering but by innovating.

Technologically the USA lags behind other countries. We aren't the worlds innovator but rather the worlds consumer.

 

[Rez O. Lewshun]

The problem is the Chinese, North Koreans, Iranians, and a lot of other "people" in the world do not control their government. "Their" government controls them.

I think you are just trying fit your politics into the situation. You aren't going to change the world...overnight, but you can buy some cheap stuff Made In China...probably alot of it...

I think the long term goal is not get China on the hyperconsumption plan. This will dilute and eliminate communism....

As far as Iran and N. Korea, it will take alot longer....

 

[Rez O. Lewshun]

Yes, look at microsoft who is building huge research and development centers in India and China. Engineering jobs are going overseas. There are millions of people in third world countries graduating with engineering degrees who can design stuff at a fraction of the cost.


Technologically the USA lags behind other countries. We aren't the worlds innovator but rather the worlds consumer.

Nonetheless, Microsoft is still a US company in control. The whole idea is to close the gap between the Haves and Have Nots in the world. Is the current disparity, globally, between rich and poor ok?

Look at it this way... if most 18-45 aged Middle Eastern men where employed and had discretionary income and lived in fun instead of fear...they wouldn't be so pissed off!

We are the worlds consumer... If everyone would reduce their consumption and turn that energy and resource (money) into betterment, we would be........well...better off.

So, what we should be doing is looking for ways to innovate. Get out of our mindless hourly labor jobs and start a small business.......

Flying Jets is a lot of Fun.....

 

[cargopod]

my toyota is more American made than my ford..

 

[pilotyip]

cargopod that may be true, but the money does not flow to American retireees or their familes, it goes back to Japan as profit for Toyota Corp to be invested in Japan.

 

[duke600]

We are the worlds consumer... If everyone would reduce their consumption and turn that energy and resource (money) into betterment, we would be........well...better off.

So where is our consumer spending money coming from if the jobs are going overseas?

It's not our money we are spending. It's borrowed money from foriegn investments. They are financing our spending spree.

Some of consumer spending comes from housing refinance which is only a gain on paper. Some parts of the country are seeing house prices go down. I've seen house prices in washington DC go down 20%.

 

[I.P. Freley]

cargopod that may be true, but the money does not flow to American retireees or their familes, it goes back to Japan as profit for Toyota Corp to be invested in Japan.

And it also goes back to Japan as profit for Toyota that gets invested in US design facilities and US manufacturing facilities. The money also flows to the dealers who sold the car, the manufacturers who built subassemblies and parts for the US-made cars, the people who service that car at the dealership or local repair shop, etc. It's not like a $30k car sold off the lot means that Toyota pockets twenty grand of that and Americans get screwed.

And as for the individual who claims that American-branded cars are "completely out of touch, twenty years behind"... That kind of thinking is, uhhh, completely out of touch, twenty years behind. It may be fashionable to think of American cars that way, but repeating the same tired dogma over and over doesn't mean that it's true. American cars are not the equal of the Japanese competition in most cases, but increasingly they are nipping right at the heels of those cars. I'll allow you five years behind the times, at most, but this isn't 1985 and to make the blanket statement that all those Fords, Chevys and Dodges are decades behind other comparable imports is just plain wrongheaded.

Don't believe me? Go drive a Chevy Cobalt, a Ford Fusion or a Dodge Charger and maybe you'll start to get the idea. Sure, the last two are based upon designs that debuted on foreign-branded platforms, but these are examples of autos that are right up there in style, performance and quality with the competition. As for trucks, most American-branded truck lines still are the standard-bearer in their classes... And more than half of all new vehicles sold are trucks, so this is no little part of the market.

As for the comment from earlier still in this thread, that the Chinese will be introducing high-quality cars in this country in two years, you are absolutely off your chump if you think that the Chinese cars headed this way will be "high-quality". The automotive cognoscenti have seen and driven some of these cars, and high-quality is simply not a term that applies. They'll be on about the same level that the Korean cars of the mid-80's were, which is none too good. Figure it'll take at least a decade for the Chinese to catch up to the even the Koreans, probably more... Yes the cars will be cheap, and there's always a market for cheap cars (early Korean, Yugo, etc.), but do you REMEMBER the original Hyundai Excel? If you do, I feel sorry for you. Must be tough having that nightmare.

 

[Rez O. Lewshun]

So where is our consumer spending money coming from if the jobs are going overseas?

Credit