Camino LS6

De Lorenzo nails it yet again

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http://www.autoextremist.com/

All I can say is A-freakin-men!

November 12, 2008

Tick, tick, tick...

By Peter M. De Lorenzo

Detroit. So it has come down to this for General Motors: 100 years of living, breathing American industrial and social history is on the precipice of total disaster, with the once-glittering corporate icon facing certain collapse if some sort of government financial aid package is not put together in the next 60 days.

Think about that for a moment.

The company that basically powered this nation through a century of progress and helped this country muster the strength to fight world wars - while contributing immeasurably to the fabric of America and the development of our vast middle class - is on the verge of filing bankruptcy.

Unbeknownst to the legions of people out there in “fractured” America, the ones who fill the Internet with bile and who project such a level of viciousness and unbridled glee at the thought of the collapse of our domestic automobile industry as if it were – amazingly enough - some warped opportunity for celebration, there are countless towns, big and small, scattered all across this nation that have grown up with GM as their main employer and the main source of income for thousands of American families.

I am absolutely convinced that the people who hate “Detroit” and want it to implode have not even the faintest of clues as to what it really means if it were allowed to happen. To those instant experts out there who are reveling at the thought of a major part of our country’s industrial fabric collapsing, I say be careful what you wish for - because if GM is allowed to fail, it will take the entire domestic auto industry down with it - meaning thousands of suppliers and dealers in towns making up a cross-section of America will go under too.

For the record, there are around14,000 domestic-oriented dealers in the U.S. employing approximately 740,000 people with a payroll of around $35 billion – that’s billion with a “B.” But that’s just the dealer side of the equation. When you add in the suppliers and all of the associated businesses that either directly or indirectly depend on Detroit for their livelihoods, we’re talking almost three million people who would be out of work in a matter of just a few months, adding up to a $150 billion loss in personal income.

Let’s take California, for instance. Judging by our reader mail, there seems to be a large contingent of people out there who adamantly believe that “Detroit deserves to die” etc., etc., and that whatever happens “won’t affect me.” But GM and the domestic auto industry’s collapse will most definitely affect Californians as well. NUMMI, a joint operation between GM and Toyota (the Toyota Corolla, Toyota Tacoma and Pontiac Vibe are built there) and the only San Francisco Bay Area car factory, is already reducing shifts and may even shut down its Tacoma pickup truck line due to the burgeoning economic slowdown. One of our readers who understands the ramifications of a domestic industry collapse passed this interesting local news report along about NUMMI, which said, "There are tens of thousands of additional jobs on the line besides the 5,000 at NUMMI. There are over 1,000 suppliers in California that provide parts. They in turn employ 50,000 people."

That’s just one factory. Now multiply that by the staggering totals involved if GM - which has 22 stamping plants and 26 powertrain plants in North America on top of its assembly facilities - and the rest of the domestic automobile industry is allowed to fail. The tentacles of this kind of cataclysmic disaster would spread throughout the nation like a virus that could not be contained.

I really don’t know why it’s so easy for people out there to dismiss the collapse of the domestic automobile industry as being some minor event that won’t affect them in the least, because each person who is part of that figure of three million represents a real family and real human story, all across this nation. It’s the mom and pop diners, stores and peripheral neighborhood businesses that depend on the workers who toil at these factories and plants for their livelihoods too. There are towns all across America that would simply dry up and blow away if the local GM or supplier plant shut down. That’s not an exaggeration, that’s a simple fact.

I have been vilified of late by numerous critics for shifting my commentary to a more political tone over this election year, but I don’t offer any apologies. This country is not only in the throes of a financial crisis, it’s in the throes of a fundamental identity crisis as well. We as a nation have been lulled into thinking that things will work out and that any unpleasantness headed our way will be mere speed bumps on our journey to becoming a state of perpetual consumer bliss.

Well, it just doesn’t work that way, folks.

We live in a global economy that isn’t big on history or what we as a nation once did or stood for. We have to compete, or else we will arrive at a point when our national future will transition from being one of destiny to one being dictated to us by a unsavory set of circumstances and interests not in line in the least with our hopes, our dreams or our thinking.

In order to compete in this global economy we have to get smarter in our schools and with our educational policies. A high school graduation rate of 50-60 percent should be anathema in our inner cities instead of too often the rule. Remedial classes for kids entering college (who are not able to handle freshman classes) should become a thing of the past. And our teachers need to be compensated realistically and properly so more of our brightest people can sign up to help shape our kids’ futures.

Even though we as a nation don’t seem to have the stomach for hard work and sacrifice any longer - hell, I’m not sure those words and their meanings are even in the lexicon of vast swaths of our population - we must get tougher in the midst of this global economy, and we have to steel ourselves for the kind of battles we’ll face. And that means shoring up our manufacturing and supporting our homegrown industries that are so intertwined with communities all across this still great nation. It also means that President elect Obama will not only be President of the United States, he will have to be CEO of America, Inc. too.

And America Inc. not only needs to be rebuilt, it needs to be fortified with new determination because there are far too many talented and creative people in this nation who can do extraordinary things and we need to make the idea – the idea that we can innovate, create, build and manufacture things that are the envy of the world - cool again, and take pride in doing so as well.

In short, this nation needs a wake-up call.

Anyone who thinks this country will not be thrown into a full-blown depression if the domestic automobile industry is allowed to fail is simply kidding themselves. We are facing a perfect storm of events that could spell disaster if we as a nation don’t act and act fast. And it would take years for this country to recover too.

As I’ve said repeatedly the time for all of the idyllic, “let the free market run its course” hand-wringing is over. It’s far too late for that. This country’s leadership needs to get these loans to GM and the rest of the domestic automobile industry in the next 60 days, or life as we’ve come to know it in this country – and I mean every part of this country – not just here in the Motor City, will be severely and unequivocally altered.

That tick, tick, tick you hear?

It's the time running out on the future of America.

Let’s hope that what needs to get done will in fact get done, before it's too late.

Thanks for listening.

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Well, let's hope this gets out to the masses VERY soon, because every word of that is true!

Don't believe me...go buy another Camry and see what happens!!!

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Anyone just hear that Wells-Fargo has gone bust? I'm trying to find a credible source but our business manager was saying he was just told they've gone bankrupt. Any sources out there?

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Anyone just hear that Wells-Fargo has gone bust? I'm trying to find a credible source but our business manager was saying he was just told they've gone bankrupt. Any sources out there?

Well, this was published yesterday, doesn't sound that way:

WF article

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Another great DeLorenzo piece.

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AP

Failure of auto industry could set off catastrophe

Wednesday November 12, 6:30 pm ET

By Tom Krisher and Ken Thomas, Associated Press Writers

Advocates: Collapse of US auto industry could set off catastrophic chain reaction...

http://biz.yahoo.com/ap/081112/meltdown_autos.html?.v=2

No kidding.

Absolutely, Longtooth.

This is deadly-serious business now. It has real consequences attached for all of us.

But, that article misses so many salient points - the authors need to do more research.

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Absolutely, Longtooth.

This is deadly-serious business now. It has real consequences attached for all of us.

But, that article misses so many salient points - the authors need to do more research.

No doubt De Lorenzo's article cuts more to the heart of the matter. The consensus among those I consider 'enlightened' is generally the same.

For those that would condemn the entire Industry and it's dependents downstream, I find their petty vulgarity on par with the 'proud ignorant' crowd.

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The Big Three have cut their combined U.S. hourly work force more than 40 percent since 2005, from 244,000 to about 139,000.
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A couple years ago, I tried reading The End of Detroit by this witch: I couldn't get through the first chapter. Her myopic view of the auto industry, coupled with the clear fact that her 'advance' came from Toyota's bank, sickened me. I put the book in a biohazard bag and threw it out.

What a lot of people don't understand is that there is an entire army of lawyers and 'consultants' dying for GM or Ford to fail because a lot of money is to be made by these pack of vultures. Just think of the lawyer's fees alone that will be raked in by major legal firms that will represent the unions, the suppliers, the dealers, etc as everyone piles on and sues each other in the event of a major bankruptcy.

This would be yet another nail in the coffin for the American hegemony, because rather than BILLIONS being spent on R&D and productivity improvements for manufacturing, the money would be spent on legal battles - which is HALF the problem with both our countries in the first place.

Again, more paper pushers would get rich, America would continue to build nothing and slide farther into obscurity and irrelevance.

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A couple years ago, I tried reading The End of Detroit by this witch: I couldn't get through the first chapter. Her myopic view of the auto industry, coupled with the clear fact that her 'advance' came from Toyota's bank, sickened me. I put the book in a biohazard bag and threw it out.

What a lot of people don't understand is that there is an entire army of lawyers and 'consultants' dying for GM or Ford to fail because a lot of money is to be made by these pack of vultures. Just think of the lawyer's fees alone that will be raked in by major legal firms that will represent the unions, the suppliers, the dealers, etc as everyone piles on and sues each other in the event of a major bankruptcy.

This would be yet another nail in the coffin for the American hegemony, because rather than BILLIONS being spent on R&D and productivity improvements for manufacturing, the money would be spent on legal battles - which is HALF the problem with both our countries in the first place.

Again, more paper pushers would get rich, America would continue to build nothing and slide farther into obscurity and irrelevance.

Again, 'BIZ, It'd behoove Canada to embrace GM to it's bosom and supply the wherewithal to get GM righted. What wouldn't that do to the pedantic media here? Likely make them even more liberal in splashing misinformation and vitriol around.

Oh, if only. We, your Southern neighbors, generally venerate someone or something, then take gleeful sport in slashing them/it to ribbons. I'm just focusing too heavily on the negative of late I suppose, but I'd be happy to see the naysayers in the media eat their words.

I still feel that after putting GM through the crucible of public opinion and scrutiny that an equitable 'fix' will be found. The last thing needed here is: Another 2 or 3 million souls suddenly (or agonizingly slowly) having to scrounge for work in an already ridiculously tight labor market.

Edited by longtooth
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A couple years ago, I tried reading The End of Detroit by this witch: I couldn't get through the first chapter. Her myopic view of the auto industry, coupled with the clear fact that her 'advance' came from Toyota's bank, sickened me. I put the book in a biohazard bag and threw it out.

What a lot of people don't understand is that there is an entire army of lawyers and 'consultants' dying for GM or Ford to fail because a lot of money is to be made by these pack of vultures. Just think of the lawyer's fees alone that will be raked in by major legal firms that will represent the unions, the suppliers, the dealers, etc as everyone piles on and sues each other in the event of a major bankruptcy.

This would be yet another nail in the coffin for the American hegemony, because rather than BILLIONS being spent on R&D and productivity improvements for manufacturing, the money would be spent on legal battles - which is HALF the problem with both our countries in the first place.

Again, more paper pushers would get rich, America would continue to build nothing and slide farther into obscurity and irrelevance.

Here 'BIZ, I scrounged this from my favorite enlightened souls from CNBC...

16 minutes ago

Big Three Bailout: What It Will "Cost" The Automakers

Posted By:Phil LeBeau

An old friend of mine always used to say, "There's no such thing as a free lunch." That's true. And now the Big 3 are about to find out the price they'll pay for a government bailout. Yes, whether you like it or not (and I have heard from many of you that you don't like the idea of a bailout) Washington will lend the Detroit the money they need to survive this crisis...

http://www.cnbc.com//id/27697969?__source=...C&par=yahoo

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Nobody said it would be a 'free' lunch. An equity stake is better than a loan because loans have to be paid back nearly immediately at a cost, which paradoxically would only worsen things in Detroit for the immediate future.

Current shareholders would have to see the logic to this plan since their current stocks are nearly worthless anything. A diluted stock base is preferable to bankruptcy; surely they can see that.

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Nobody said it would be a 'free' lunch. An equity stake is better than a loan because loans have to be paid back nearly immediately at a cost, which paradoxically would only worsen things in Detroit for the immediate future.

Current shareholders would have to see the logic to this plan since their current stocks are nearly worthless anything. A diluted stock base is preferable to bankruptcy; surely they can see that.

It's far too early to breathe a sigh of relief, yet I believe many are beginning to feel as the mouse, after seeing the shadow of the hawk having passed over it and moving on.

There'll be pain aplenty within GM in reconciling any 'assist' from the Government.

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Even with $25 billion to GM, by December 2009 they will be bankrupt again. All it does is delay bankruptcy until a time the economy is hopefully doing better and the impact of them going under won't be as bad. The problem is not whether or not they get a bailout (I am sure they will) but what they actually do with it. Wagoner and clan will screw it up. If they don't change their business model, come 2010-2011 perhaps Toyota will buy them and change it for them.

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Even with $25 billion to GM, by December 2009 they will be bankrupt again. All it does is delay bankruptcy until a time the economy is hopefully doing better and the impact of them going under won't be as bad. The problem is not whether or not they get a bailout (I am sure they will) but what they actually do with it. Wagoner and clan will screw it up. If they don't change their business model, come 2010-2011 perhaps Toyota will buy them and change it for them.

A few friends of mine that are TTBs (Toyota True Believers) have said they hope Toyota buys GM.. a horrifying thought, IMHO.

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Even with $25 billion to GM, by December 2009 they will be bankrupt again. All it does is delay bankruptcy until a time the economy is hopefully doing better and the impact of them going under won't be as bad. The problem is not whether or not they get a bailout (I am sure they will) but what they actually do with it. Wagoner and clan will screw it up. If they don't change their business model, come 2010-2011 perhaps Toyota will buy them and change it for them.

Baseless drivel, stupid assumption, and flawed thinking - again.

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No doubt De Lorenzo's article cuts more to the heart of the matter. The consensus among those I consider 'enlightened' is generally the same.

For those that would condemn the entire Industry and it's dependents downstream, I find their petty vulgarity on par with the 'proud ignorant' crowd.

You know, if GM and Ford we're smart, they'd use the negativity against them to start a social movement the likes of which has not been seen since the "Green" movement.

Just as it is patriotic to go "Green" it should be patriotic to buy domestics.

They could do it to... All they need is a good sociologist. (FOG raises hand) ;)

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That really is the heart of the matter, FOG. We need to foster a real sense of pride in our own capabilities again.

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