Tip to Ford & GM: your problems aren't with healthcare costs...

[FormerDittoHead]

I'm FUMING because I just saw the Today Show's financial correspondant look at the current situation with Ford & GM.

The problem: US auto makers can't compete with foreign imports, esp with the future increases in competition in small trucks and SUV's...

The solution:(???) 'These companies really have to look at how they can get their healthcare costs under control'. (????????)

My wife chimed in with a beauty: "U.S. healthcare costs are NOT why we're buying Hondas and Toyotas, (which usually cost more)..."

Perhaps this is why so many of American manufacturing businesses are failing?

[Tandalayo_Scheisskopf]

1. The national thrend, in word and deed...

Seems to be taking away health care access, in any way they can.

Why? Why would that be happening, outside of costs?

Possible answer: Cut down on petroleum consumption?

[Tace]

2. Privatize the Profits -- Socialize The Liabilities

[Coastie for Truth]

3. That's the business model of the insurance industry

"Privatize the Profits -- Socialize The Liabilities"

But the real problem with America's "Big Three" -- coming from Motown and the ev world - NOT INVENTED HERE

[screembloodymurder]

16. Good point.

Sounds like a company motto.

[aneerkoinos]

45. It is

the very nature of each and every sociopathic legal person called "corporation".

[cap]

4. the healthcare argument can be stood on its head

GM and Ford cant compete with Japanese companies who DO have national health insurance and good pensions. :)

Never mind they made the same mistake in the 70's --- went for bigger and bigger vehicles and then oil prices went up.

Their products just dont cut it --- I was willing to buy American until the reliability was not competitive.

Camrys get 200K miles.

[Dover]

6. When the oil companies permanently double the price for fuel, cars

will then be put on the road in large numbers that get twice the fuel economy. Until then, the oil companies (who must be in cahoots with the auto industry) won't risk losing out to the Japanese companies again....at least as regards the fuel issue.

[benevolent dictator]

10. Riight, the auto industry isn't making

cars that get 500 mpg because it's in cahoots with the oil industry. Riiight...

Believe me, if Ford and GM could make good cars that met all of the quality and safty standards and got a hundred miles to the gallon (and was large enough that more than one person could fit in it), they would, because people would buy them. Wouldn't you?!

[screembloodymurder]

17. You mean like the Toyota Prius.

Well maybe 50 mpg.

[benevolent dictator]

25. OK, but again,

Toyota, Honda, and Nissan all have a lot more they can spend on research because they don't have to spend as much on health care and other benefits. I'm sure Ford and GM are working on it, but Toyota got there first. They have a lot more they can spend on R&D.

Look, I'm not trying to say that Ford and GM can do no wrong, I'm just saying it's important to look at other factors, like the fact that they spend more on health care than on steel for their cars.

[benevolent dictator]

5. Ford spends more on health care

than steel for their cars(/trucks/SUVs).

Of course they can't compete with Japanese car companies that have their health insurance nationally paid for. I'll bet you Toyota and Honda have a lot more they can spend on R&D since they don't have to pay so much for health care. I'm not saying Ford and GM should cut their health care, I'm just saying you have to cut them some slack. If we got national health care here it would take a huge burden off of not just the big three but all companies. They could put more into researching better products and it would make us more competitive.

And you can't just blame them for selling the big trucks and SUVs. They make what people buy. You vote with your dollars about what kind of car you want to see next year, and people keep voting for Escalades, Expeditions and F350s. Hopefully that trend will change as gas prices keep going up.

[Dover]

7. "They make what people want to buy".......oh that old excuse.

Maybe that's a very small percentage of the equation, but not nearly the big picture. They are in the business of manufacturing desire...rather than just a product, through their advertising and have been working overtime through lobbiests to nullify the fuel efficiency standards. The tobacco company's did the same thing, as for instance when they targeted women and young people in order to expand their buyer base, and even added ingredients to their product to create addiction. You are naive. They spend millions on experts who instruct them on how to create desire, dependency, product buzz, and market niches where sometimes one doesn't even exist yet.

[benevolent dictator]

9. Perhaps that's true

but now that they've created those niche markets, that's what people want. They can't just suddenly stop making them because then Toyota and Honda will come out with another SUV or truck and fill the spot. People are still voting with their dollars, and they're voting for bigger, flashier cars.

That's what selling a product is about, after all. Do you think the world really needed Cheetoes? Probably not. But if Frito-Lay suddenly stopped making them now, some other company would take over production because people will buy them.

Once oil prices go up a bit more, I'm sure that will change.

And, that's still no reason not to buy other, smaller, GM or Ford cars.

[Dover]

12. It's already changed. SUV sales are slow. They are offering all kinds

of incentives to move them off their lots...but few are buying.

Toyota and Honda won't be producing any more SUVs unless they can bring the fuel efficiency in line with current fuel cost concerns enough to make them attractive again. (which they've had some success with in their hybrids).

And BTW....I don't know where the research for the "buyamerica" article comes from, but I seriously doubt the American-made label is what most car shoppers base their purchases on. If that were true, Toyota and Honda wouldn't be the automobile leaders in this country.
It's not a perception issue....American carmakers are behind the curve on what Americans want. They arrogantly ignored their customers and as a result alienated even those that might have been loyal. Loyalty is built by consistent positive experiences between customer and company/service as well as product satisfaction. They force-fed us gas guzzling behemoths even as we complained. They paraded their Hummers and thumbed their noses at those who might be worrying about dwindling resources even as we went to war in order to secure them. So don't bother with these arguments......no one is buying it. They screwed themselves.

[benevolent dictator]

26. If that's the case, I'm glad

that SUV sales are slowing. It's about time.

Maybe not all shoppers are willing to "buy American," but I know I am willing to spend a few bucks on something, be it cars or clothes or coffee, if I know it was made here.

American car companies still employ way more Americans than foreign car companies do. If everyone bought up the most fuel efficient cars they sold and left the other gas guzzlers alone, they'd get the message pretty quick.

[screembloodymurder]

18. Big Dic

"People are still voting with their dollars, and they're voting for bigger, flashier cars."

Do you work for GM or Ford?

[benevolent dictator]

27. Well,

I interned at Ford for a summer during high school, if it makes a difference.

Look, that's really not the point I was trying to make. But I know a ton of people who want or bought SUVs and trucks because they like to sit higher up and "feel safe" in their hugeass cars. Every other car on the road here seems to be some type of SUV or truck.

[fasttense]

14. Toyota and Honda aren't paying those huge CEO and executive

salaries. Maybe GM should consider cutting those salaries and bonuses before they cut health care.

[benevolent dictator]

29. I agree that CEOs make too much money

but the CEOs at Ford and GM aren't even in the top 100 for American companies with the highest CEO pay - according to the AFL-CIO - despite the fact that they're both in the top five largest American corporations.

[sendero]

47. "They make what people buy"

... well managed companies go beyond just "making what people buy".

Well managed companies also have done the engineering and have contingency plans for when "they want to buy smaller".

We went through this in 1973, were you here?, and there is absolutely no excuse for GM/Ford/Chrysler to get caught with their pants down AGAIN.

The reason they have and they will get caught is that their planning horizon is next quarter. That's it.

American automakers really suck so bad they deserve to die. I just hate that for every stupid greedy moronic manager there will be 1,000 workers who will lose their jobs. It is truly pathetic.

[many a good man]

8. Good argument for national health care

American companies can't compete because health care costs are out of control. It would benefit businesses of all sizes to be relieved of this crushing burden that is growing larger and larger each year. There should be a broad social consensus that govt must step in to rein in costs for the sake of saving American jobs, businesses, MedicAid and SS.

[benevolent dictator]

11. Defense of GM - from howtobuyamerican.com

http://www.howtobuyamerican.com/bamw/bamw-050507-gm.shtml

<snip>
As if the impending health care crisis in America was no clue at all, some even bring up the fact that GM spends over $1,500 per automobile just to provide health care to their employees, retirees and their dependents. By comparison, Toyota and Honda spend only a few hundred dollars per automobile, mainly because GM has been operating in the United States since the invention of the automobile and Toyota, for instance, only built their first plant here in 1987. Yet they still accuse that GM is "living in the past" even though Cadillac now outsells Mercedes, The Chevy Impala beat the Toyota Camry in initial quality and Consumer Reports detailed how Buick now beats BMW in reliability.

...

When you buy an American-made Chevy, you not only support more American workers, but also American investors, owners and stockholders. When you buy an American-made Toyota, you may help your Uncle Bob if he’s on Toyota’s payroll, but you’re hurting Uncle Sam since American companies pay about three times as many taxes to the U.S. Treasury compared to foreign-owned companies. That’s something to think about the next time you hear we have to cut benefits or raise the retirement age simply because the U.S. Treasury doesn’t have enough funds to meet its obligations to Social Security or other benefit programs.

...

The Detroit News recently published the facts, daring to go against the deceiving "foreign cars are built there and American cars are built there" rhetoric that implies it makes no difference if you buy an American-made Honda instead of an American-made Pontiac. The newspaper reported that American and foreign automakers alike were playing the "Made in USA Card" to attract buyers. And you thought consumers didn’t care. Poll after poll has shown Americans are even willing to pay more to buy American, let alone when quality and price are similar or equal. Most Americans advocate fair play and equality but eventually they will find out - possibly the hard way - that neither of these attributes apply in the automobile marketplace unless those Americans that should know better start buying American cars again. I’m not asking or expecting the die-hard import buyer crowd to stop their silly griping and buy American. GM’s future doesn’t depend on them. It depends on those Americans that really should know better.

As the Detroit News article boldly pointed out, GM has 82 major plants in the United States, while Toyota, Honda and Nissan combined have only 24. GM has more American salaried workers than Toyota has total American workers. With 194,000 employees in America, even after hard times, General Motors still employs six times as many Americans as Toyota, seven times as many as Honda, and 12 times as many as Nissan. As Business Week pointed out in 2002 (the last data I have seen on the subject), each auto-assembly job created by an American company also creates 6.9 other American jobs, where each auto-assembly job created by a foreign company creates only 5.5 other American jobs. This is true simply because American automobile companies get more of their parts from America.

</snip>

...more...

[Dover]

13. Well....why isn't GM lobbying for Universal Health Care then?

What do they expect people to do exactly?

Maybe they need to sit down and have a little chat with the Pharmaceutical companies...hmmm?

[FormerDittoHead]

37. Universal Health Coverage wouldn't be free...

...it would be paid with taxes, both payroll and (hopefully) corporate taxes which would be included in the price of the products as they are now.

Same goes for Japanese auto makers - their healthcare costs are included in the prices of their cars as well as healthcare costs are paid for through taxes.

I think this whole healthcare argument is a diversion against poor / evil management.

I believe they are intentionally driving themselves into chapter 7 which would allow them to break the union contracts like the airlines have done.

[idlisambar]

38. It shifts the burden

It is true that Universal healthcare would not be free, but right now the burden is placed entirely on the employer. If healthcare were funded through taxes, the burden could be distributed more widely, depending of course on the configuration of the taxes.

[benevolent dictator]

39. We spend more on health care per capita

than any other nation, yet have over 40 million people uninsured and another 30 million with health care 6 months of the year or less. Employers are responsible for providing the health care, and when they don't (Wal-Mart) that leaves their employees with nothing or on the public tax-funded health insurance anyway. When the employers can't afford health care for their employees (or flat out can't get it like many small businesses) then people just don't have health care and again, are either left with nothing or are on the public tax-funded health care anyway. When the employers do provide decent health care it costs lots of $$$. Especially with health care costs rising much faster than the rates of inflation.

I've read studies that show we'd actually have to spend less per person to get the same quality of coverage if health care were nationalized, mostly because Medicare and Medicaid are much more efficient at processing paper work than HMOs, plus you don't have those pesky CEO salaries to pay.

[Rapier2]

15. notes

Health care and pension are huge numbers for them. Without doubt they are losing market share based partly on design and overall fashion and desireablity issues as well as quality but let's not forget price.

I'm not here to defend their mantras about the cost issues but to pretend they are not real or material is stupid.

Pensions are probably the bigger ticking timebomb. They are underfunded. GM went so far as to borrow money in order to buy GM stock to put into their fund. A move of incredible stupidity if you want to actually fund your pension, which they don't.

Congress helped with the Pension Saving Act, or some such stupid name, almost two years ago when they allowed the pension underfunding to continue. It's only getting worse and congress will have to craft another bill to allow companies to further destroy the plans.

I have for years predicted bankruptsy for GM and Ford so they could abondon the pensions. Just like Studebaker did way back in 57. Bankruptsy will allow them to abondon health care and pensions if the courts let them and make no mistake, they will. It is either that or closing the doors and no judge in the world has the balls.

The aim of the powers that be has ALWAYS been to steal the pensions and savings of the average worker. It was bedrock orthodoxy even at Harvard Bussiness School up to the 60s that pensions were bad because it made for complacent workers. As far a defined benifit plans that remains the rule.

Only with the advent of tax advantaged accounts, IRA's and 401's where the money flowed directly into Wall Street did the aims and rhetoric change. These plans were DESIGNED to send money to Wall St. and inflate the financial markets. A direct government subsidy of the first order. It had nothing to do with savings people, and stocks have nothing to do with investment. It's all been a part of the biggest wealth transfer in history. Stocks are going to languish, under the best of circumstances, for years to come as the elite find ever better methods of extracing money right off the bottom lines of corporations into their accounts. (that's what stock option grants are all about. The expensing of which has been delayed for six months. In fact it will never happen. It's the way as I said for the elite to steal your money.) The trick will be keeping stocks from cratering. Limping along is enough to maintian the illusion that stocks are an investment. (over the last 7 years the total return on T bills is now higher than stocks. So much for the stocks go up 10% a year sillyness. The great bull market was a once in a generation thing and is over.


So anyway the benefit costs of the big corpoerations are real. They will be eliminated, by means legal and illegal which will only require the laws being changed.

[screembloodymurder]

19. Have you been on a sales lot lately?

"Without doubt they are losing market share based partly on design and overall fashion and desirability issues as well as quality but let's not forget price."

GM and Ford are discounting their SUV's like there's no tomorrow. Try and buy a Prius or Highlander below invoice. Hell, try to find one. If Ford put a hybrid engine in the Explorer, they could sell a million more units. It's that simple! Quit blaming their workers.

Who agreed to fund the benefits? My message to corporate America: Quit whining and pay your bills.

[benevolent dictator]

28. Ford HAS a Hybrid Explorer

I believe there's a waiting list for it, but I could be wrong.

My message to corporate America: Quit whining and pay your bills.

How, exactly, are they supposed to do that when everyone's rushing off to buy Toyotas and Hondas? Just a thought.

Besides that, Japanese car companies don't have to spend nearly the amount on health care that American car companies do, because Japan has national health care and we don't. Hence, they make more profit on their cars and can afford to do more R&D and make better, more appealing products.

[FormerDittoHead]

36. Ford has to license the hybrid tech from Toyota... also: Healthcare point

Just to show how far behind the curve they are...

>How, exactly, are they supposed to do that when everyone's rushing off to buy Toyotas and Hondas? Just a thought.

The point is that "everyone's rushing off to buy..." Japanese cars because THEY'RE BETTER, not because of some "fad".

I saw a Mercury ad on TV last night. You BARELY saw the car as you were looking at the HOT BABE selling it. That's the point. They think they can "sizzle" their way into sales, and not worry about gas economy, long term reliability or (in many cases) safety.

The market's changed (again) but they STILL think that hot women are the key to sales while they merrily make crappy cars while depending upon BS rating services like JD Powers, while everyone else is reading Consumer Reports and finding out the TRUTH.

I'm not talking about Marketing rocket science. I bought a Buick. It died in less than 80,000 miles. I will NEVER buy another Buick EVER AGAIN, and I live within walking distance of a Buick dealer.

>Japanese car companies don't have to spend nearly the amount on health care that American car companies do, because Japan has national health care and we don't.

Your argument suggests that health care is free for them. It's not. Japan's auto makers and its workers pay for health insurance through taxes. They don't get health care-tax exemptions for exports. The health care costs are included with the price of the cars just like they are here.

If you're saying, however, that a nationalized health care system would result in MORE EFFICIENT / LESS EXPENSIVE health care (by taking out profits) - THAT'S THE STORY....

[benevolent dictator]

40. Re: health care

http://www.autoweek.com/news.cms?newsId=102080

<snip>

Imagine how much stronger General Motors would be if it launched three additional new-model programs every year, each costing about $1 billion.

It could, if it didn't have to pay for its retirees' health care.

That is one of the most fundamental differences between GM and Toyota Motor Corp. GM pays for the health care of 339,000 retirees - and the number grows every year. In contrast, Toyota pays for fewer than 3,000 retirees' health care in Japan, a number that remains fairly stable.

...

Toyota and other Japanese car makers benefit from a national health care plan that reduces its obligations to retirees to almost nothing.

...

Toyota's health care costs are so negligible that they aren't even a line item in the company's financial statements. Toyota benefits both from the Japanese national health plan's coverage of retirees' medical needs and from the way that plan is structured.

Health care is paid for through a combination of mandatory payroll deductions from employees and employers. The cost is spread equally among various employers. That means older companies with large numbers of retirees are not at a disadvantage compared to companies with fewer retirees.

GM argues that it pays for more than its own employees and retirees. Indirectly, it pays for the approximately 45 million Americans who do not have health insurance. That's because medical providers charge higher fees to those who are covered by insurance to compensate for those who are not covered.

Toyota does not pay extra taxes to fund the government health care plan. Corporate income tax rates in Japan and the United States are virtually identical at just below 42 percent.

</snip>

Maybe you should look into how their health care system works before saying it doesn't matter that they have it or not.

Maybe GM and Ford could invest those billions into research and development if they weren't spending them on health care. Maybe if people bought their cars they could spend more on R&D, but instead you forget the companies that helped build the American middle class and go off to support foreign companies with no regard to the jobs your destroying. If you don't buy American because you feel loyal to the company, you should buy American out of respect and loyalty to your fellow countrymen (and women).

[benevolent dictator]

43. Also, Re: Ford's hybrid tech

All of Ford's hybrid technology was developed independently from Toyota's, but when they went to patent it, it was felt that their software was close enough to Toyota's that they just licensed the software rights rather than get into a messy legal battle that they may or may not have won.

[Dover]

20. So, given this theory, are you saying that GM/Ford WANT to go bankrupt?

And in order to achieve that what (besides the pension issue) have they done? Is that why they seem so disinterested in the public perception and their product's loss of popularity?

I'm not familiar with the requirements for bankruptcy claims.

And if "traditional" investments in stocks and 401K's, IRA's etc. are such a losing proposition, where/how DOES one invest and/or save?

[Warpy]

21. Of course. That's the only thing that will get them

out from under all that pension and healthcare liability.

The corporation will reorganize under another name and retain the fat military contracts. Retirees will be left out in the cold. Repuglicans will be smiling ear to ear, unless their inlaws worked for GM and are then forced to move in with them.

The rules of the game have changed. The new rules are: the rich win. You don't have a chance, so bugger off and die.

[Rapier2]

22. notes

That "besides the pension issue" isn't a besides thing. It is billions of dollars. So is health care, for retirees. The health insurance thing for current workers is another issue.

There are two things here, at least. The first is the dollars they see as a cost they would love to jettison. The second is ideological. They would love to stick it to the workers, simple as that. It goes back the the dawn of the industrial age and the 30's, when workers gained the upper hand. The resentment has festered.

As I said I cannot defend it, that isn't the point. These are the issues which might help drive the defaults.

In a sense I think many on top would love to declare bankruptsy. See the above reasons why.

Stocks are the investment that are contained in IRA's and 401's. (sorry if this sounds like snooty semantics) Don't listen to my crackpot opinion on the markets. If the general bearish financial and economic outcome I see as a good probability happens over let's say the next few years, at any time, there will be no good place to "invest" in financial assets. I could well be wrong.

As a principal I say sell all stocks, period. Not because of risk of loss but just because it has become the only way to protest the corporatization of the world. A pathetic protest though it may be.

As to the post above this one. The Primus and other alt vehicles are still a marginal bussiness. Not the bread and butter. At this point they have negligible effects on the profitability of any car maker. Yes,the US manufacturers seem again to be behind. Going forward it will be a big deal.

The gas price cutting into the truck SUV market has been the thing which precipitated this current crisis, and it is a crisis. The situation where those were the only products the US makers could get a decent profit margin on was a long long time in the makeing. Billions of words have been expended explaining why they can't make money on cars.

Everyone shares some blame, including the workers. No matter who is to blame the world has a 30% excess of car making capacity. Something has to give.

[BoogDoc7]

23. Something...

That I hae yet to notice that could be added in to ANY of these arguments is the matter that many Japanese cars are assembled IN AMERICA. How are those Americans who work for the Japanese auto industry treated? Do they recieve the same/similar benefits that the UAW guys get? Are their pensions more or less going to be paid, while the UAW may or may not be?

[idlisambar]

24. Toyota workers in America...

According to this article, pay is comparable for current employees. Toyota is obviously not going to face the same burden as GM, Ford from retired employees.

http://msnbc.msn.com/id/7693097/site/newsweek/

...
Toyota even loosely pegs its American workers' wages to the equivalent GM worker ($26.50 an hour versus $27.13), and never lays off anyone.
...

[Rapier2]

41. notes

But do they have these defined benefit retirement plans. I don't know but doubt it.

[Rapier2]

42. BINGO

UAL's pensions abondoned.
http://www.nytimes.com/2005/05/10/business/11cnd-air.html?hp&ex=1115784000&en=85a96434bd57fb43&ei=5094&partner=homepage

This is a huge deal. In the past pensions were abondoned when the companies went out of bussiness. Now there is a precedent they can do it as a part of reorganization.


GM and Ford will be on the courthouse steps by summers end. Chapter 11 here we come.

[Unborn]

30. Ford and GM's problems are exactly the same as ours

and for exactly the same reasons. American automakers don't buy American. If you walk through a GM, Ford, or even a Chrysler plant, count the number of American machines. The shear will be Toshiba, the presses, Komatsu, the hi-los, Toyota, the bridgeport mill won't be a bridgeport, it will be a Samsung mill, and nine times out of ten, the employee will be a Kawasaki robot. The nearest thing the US had to a robotics industry was GM-Fanuc and that's been gone for years.

The Japanese have always had intimate relations with their suppliers. But unlike our industries, Japanese industries assume a sense of loyalty to those suppliers. They bring many of them to the United States with them and continue to patronize them. American companies don't give a damn about their suppliers for a simple reason: "If they fail to maximize earnings for shareholders, managers risk removal by the equity holders..." http://hbswk.hbs.edu/item.jhtml?id=2891&t=moral_leadership

It is governance by share-holder equity. In other words, screw anybody the law allows and do it as hard as the law allows if that maximizes shareholder profit. So the supplier industries that the Japanese companies transplanted to the US now compete with our suppliers. The Japanese suppliers have their cash customer (Honda, Mitsubishi, Toyota, etc.) so their butts are covered. They can sell at bare bones to GM, Ford, Chrysler (oops excuse me Daimler) and if they make a single sale, even if they don't make any money, they have done two significant things. They have weakened their competition, and they have diversified their client base. Well, let's face it, we are the competition.

So Samsung or somebody sells the mill instead of Bridgeport and Bridgeport ends up laying somebody off. It's just one mill, right? Walk through a plant and count the American machines. Those machinists used to buy American cars. When GM and Ford don't buy American, those supplier industries fail... When we as consumers don't buy American, our supplier industries fail.

Our corporations need to see that it matters "where" they spend their money, not just "how much" they spend there. Of course, CEO pay and health care are huge liabilities too. But being forced to operate strictly for the dollar value of shareholder equity erodes the market base. Our skilled trades are dying, robotics suppliers often supply "turnkey" solutions, so our R&D gets dumped... all those jobs are lost. Wonder why sales are down? Maybe people don't have jobs?

Why don't people have jobs? Count the Accords, Corolas and Camrys.

[idlisambar]

31. This is what I have heard

It sounds like you know more than I do but this is not the first time I have heard that Ford and GM have become depedent on foreign-made parts and machinery.

"They can sell at bare bones to GM, Ford, Chrysler (oops excuse me Daimler) and if they make a single sale, even if they don't make any money, they have done two significant things. They have weakened their competition, and they have diversified their client base."

They have actually done three things not two. The third is that they have gained leverage over Ford and GM by becoming suppliers of machinery, components, and technology for which there is no domestic alternative. This leverage means there are limits to what Ford and GM are willing (and able) to do to compete against them. From this position, it is always prudent to give a little ground and settle into a comfortable 2nd place.

[German-Lefty]

32. So why buy American?

If certain companies in your country can't or don't compete screw em. Car companies have had a practice here in Germany of selling domestically expensively to subsidize exports. If these companies and thier unions are so willing to screw suppliers and customers, why should we take pitty on them when thier business goes south?

Besides there are plenty of nice people in Japan and Germany that need jobs just as bad as Americans. Buy your cars from us, our currencies will go higher, and then we'll buy something from you. It might not be a car. It might be in some other industry that is run better.

[benevolent dictator]

33. We still have to buy American because

we really don't MAKE anything else. We manufacture fewer and fewer things here every year, and those are the jobs that provide real income and real economic growth. Jobs like service and retail just recycle existing money, but manufacturing brings it in.

and then we'll buy something from you.

What are you going to buy from us that provides as many jobs that pay as well as the auto industry? How much are new cars? Let's say $20,000. Well that's an awful lot of union-made jeans, t-shirts and American grown coffee to buy. Especially when you can get the same thing made in a Chinese sweat shop for $10 less.

We have a huge trade deficit right now, so obviously the buying stuff made in other countries to get them to buy stuff we make here isn't working. Especially with our manufacturing moving overseas as quickly as it can, in part to avoid our incredibly high health care costs. You don't have to pay sweatshop employees in China a living wage and decent benefits.

We have few if any other industries in this country that provide the amount and the level of jobs that the auto industry provides. It just doesn't make any kind of good economic sense to not buy American cars.

[German-Lefty]

44. We buy your debt.

we really don't MAKE anything else. We manufacture fewer and fewer things here every year, and those are the jobs that provide real income and real economic growth. Jobs like service and retail just recycle existing money, but manufacturing brings it in.
You make debt, which we seem to want to buy a lot of. That and we seem to invest in your country which isn't too bad for you.

If countries would stop buying US debt, or the US would stop making new debt, we'd have to buy something else with our USDs. The dollar would go down until we found something. It's already gone down 40%.

Why wouldn't I want to invest my money in the US now?
1) The cost of labor is 40% cheaper than before.
2) The cost of capital goods produced in the US is 40% cheaper.
3) There are probably less taxes over there.
The only minues I can think of are:
1) We hate your politics.
2) We might fear unreasonable labor unions. Don't think so.
3) We have a fear of political instablity or war. Not really.
4) We have a fear that the dollar could crash more and we can't easily get out.
I'm not sure any of these makes sense except #1. I think foreign investment has increased.

I wonder if there's a downside that one day your country belongs to foriegn investors.

[benevolent dictator]

46. Buying our debt

won't employ people, and increasing our debt will eventually cause economic collapse. We can't just increase our debt infinitely; we need a way to repay it. I'm sure you wouldn't be very happy if you invested in our country by buying our debt and then we can't repay you.

It's just like people borrowing against the value of their house as it increases, then the housing bubble bursts and your house is worse less than you owe. If you lose your job or can't make your payments, then you lose your house.

[Unborn]

34. ok - whatcha gonna buy?

soybeans?
about the only things we still manufacture here are bombs and drugs. These are industries we subsidize and receive no benefits from. The only industry here is forging the chains that enslave us.

If we were on level ground, if the government either used our taxes to pay for health care and subsidize our export efforts, like they do in Germany, we would compete.

Losing our industrial base is a disaster. I'm calling for a Boston Tea Party - sink the imports in the harbors. Throw the circuit boards from Singapore into the sea (try not to pollute or litter though). When corporations are forced by law and shareholder equity to seek profits before social stability and local prosperity, our industries must seek the cheapest solutions: cheap labor, and subsidized imports...

It is not in Germany's nor Japan's interest to crush our middle working class. But they will. For years, foreign automakers have been depending on our markets. Now, they are destroying them by breaking the backs of unions and putting us all out of work.

But we deserve it. As consumers, we are stupid, greedy, and mean. We slit our neighbor's throat to save a buck at Wal-Mart... We buy imports because they are cheaper - especially when we are un- or under employed. Like the corporations forced to cut benefits to remain competitive, we sacrifice any economic advantage to our community every time we buy a non-local or non-union item, but we have little choice. Can't buy American if America doesn't have a product to sell. But you can't buy German without a job...

[idlisambar]

35. Thank your car companies for subsidizing exports

The practice may hurt German consumers in the short run but it helps your auto industry to be strong which is good for Germany in the long run. You should also thank your car companies for paying their workers well and investing in infrastructure instead of just giving operating profits to investors.

[whistle]

48. A dead fish rots in the head first....

...GM and Ford's problems are at the very top of the executive chain of command.