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December 03, 2008
Do the car companies have a good plan?
Russell Roberts
This (HT: Drudge) is supposed to be serious rather than funny. At the top of the article, the head of Chrysler threatens that if the government doesn't bail out the auto companies, it could trigger a Depression. Then this:
Congressional leaders are reviewing three separate survival plans from the automakers in preparation for hearings Thursday and Friday, as they weigh whether to call lawmakers back to Washington for a special session next week to vote on an auto bailout.
Officials at the White House and the Treasury and Commerce departments are also scouring the automakers' plans. White House press secretary Dana Perino said it is "too early to say" whether the companies have outlined a path toward viability that justifies new federal assistance.
"It sounds to me like the companies have given this a lot of thought and are willing to make some tough decisions," Perino said. "We just need a little more time to pore through the documents.'"
Let's look at the verbs: reviewing, scouring, poring, weighing. To what purpose? Congress and the White House are going to decide whether the plans are sufficient for a viable future of the auto companies? Why don't the Big Three save the money it takes to put together Congressional testimony and the time it takes for the people in charge to make the trip. Why don't they just take out ads in the Wall Street Journal and the New York Times outlining what they're going to do with the money. Then they can try this really novel idea. They can sell bonds and borrow the money. If the plans look good, people might lend them the money. If the plans are lousy, they won't get the money. Now I understand it's hard to borrow money when things don't look so good for your future. But that's why Congress shouldn't be lending them any money. Particularly because politicians don't have an incentive when they're spending other people's money to weigh, review, scour and so on with an eye toward the profitability of the plans. When people have lost faith in you because you've performed poorly, you have to pay a premium to get them to invest. That's a feature not a bug. The other thing I'd tell those execs: why don't you spend less time begging and more time trying to save your companies the old-fashioned way, by improving your product?
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Comments
The Detroit business model doesn't work anymore. We should view the bailout as more a way to delay the inevitable and not dump millions of workers on the welfare system at one time. Kind of like assisted suicide but slower.
Posted by: | Dec 3, 2008 2:20:57 PM
Because it's easier to get politicians to give you a handout than to actually do something useful?
Posted by: modgen | Dec 3, 2008 2:22:33 PM
From a G.M. executive:
“The first $4 billion is crucial,” he said. “We wouldn’t have asked for the $4 billion if we didn’t need it.” (http://www.nytimes.com/2008/12/03/business/03auto.html?hp)
That's good to know. Now could you comment on the other $30 billion?
Posted by: Josh Hill | Dec 3, 2008 2:40:19 PM
This is the dog-and-pony show that the politicians are putting on to convince us that they gave this some serious thought. I think this was a done deal weeks ago. The only question is how much the automakers will get.
Posted by: mayest | Dec 3, 2008 2:41:15 PM
Not to defend the Big 3, but aren't they doing what Congress asked them to do? A la "If you'll just come back to us with a plan, I'll vote for it."
The problem here, of course, is Congress. The one thing that we can hope for is that they're swayed by the public opinion polls, which show something like 65% are against bailing out the Big 3.
Posted by: tw | Dec 3, 2008 2:58:43 PM
Russ - look at David Faber's comment this morning on CNBC as to GM's "rosy" projections.
http://www.cnbc.com/id/15840232?video=948920850&play=1
Posted by: STS | Dec 3, 2008 3:16:33 PM
Coming from someone that has raised debt capital for companies, this is an absolute farce. Last I checked, a business plan is presented at the beginning of the process, and negotiations and verifications proceed from there as the lender gets more comfortable with the underlying business of the company. In this case, it appears the be working the opposite way. Where are the sensitivity analyses, the cash flow projections? In a way, I'd prefer that they just have handed the money over the first time, without trying to give it this air of legitimacy, if only for precedent sake.
Posted by: former banker | Dec 3, 2008 3:34:13 PM
I think the motivating factor here is the government's interest in keeping people in jobs. Its garbage, but follow me here.
If the auto makers go bankrupt or shrink suddenly and significantly, then many people will lose their jobs. Yes, eventually they could be and will be employed in more productive pursuits, but there will be a period of high unemployment. The government does not want a lot of unemployed people, mostly because the best way for a modern government to keep the peace is to keep as many people employed as possible. People with nothing to do are unruly and tend to get themselves in trouble. Employed people are too busy to cause the government trouble, since their mind is generally on their job, and they are too complacent to bother with the workings of the government. Then, congressmen get to keep their jobs.
So, Congress is looking at throwing money at a business/industry to keep many people employed and complacent, versus letting those same people become unemployed and cause unrest and ultimately risk the congressmen's positions of power.
Yeah, I don't like it, but it fits. It fits the financial bailout, AIG bailout, and its going to fit the automaker bailout and the health insurance bailout and the airline bailout... etc.
Posted by: Matt | Dec 3, 2008 4:01:12 PM
Former Banker:
You really don't think any of those pontificating a-holes on capitol hill could actually comprehend a business plan anyway did you? Just tell em what they want to hear and the money is yours...
Posted by: maximus | Dec 3, 2008 5:23:54 PM
My two favorite lines:
From Chrysler: "Providing Cars and Trucks People Want to Buy"
and from Ford: "“Success in the automotive business is based on product. No element of our Plan is more important than accelerating the development of new vehicles our customers want and value.”
Posted by: Nick | Dec 3, 2008 5:24:05 PM
We should view the bailout as more a way to delay the inevitable and not dump millions of workers on the welfare system at one time.
There's that false dichotomy again. Bankruptcy for the big three will not dump millions of workers on the welfare system. Bankruptcy isn't a magic trick where suddenly assets and jobs disappear in a puff of smoke. The big three may even survive bankruptcy and rise from the ashes. Chrysler did that once (sorta).
Posted by: Adam | Dec 3, 2008 5:37:18 PM
Why isn't the UAW help partly responsible for the destruction of the big three? Their inflexibility on everything from pay to benefits regardless of the revenues of the autocompanies is partly to blame for this mess.
http://news.yahoo.com/s/ap/20081203/ap_on_bi_ge/autos_uaw
Posted by: Ken | Dec 3, 2008 6:24:41 PM
The sad truth is that the industry just needs to scale way back. There are plenty of Americans who buy their cars and only their cars, just not enough to sustain the bloated costs imposed by the UAW, the feds, and the overly compensated executives. One union cheif on NPR today said it was the feds' bigotry against those who shower after work rather than before work that kept them from recieving help the first time around. My god, just print them some money so they will shut the hell up about it already! The sooner the state goes belly up, the sooner we can get on with ignoring it.
Posted by: seanooski | Dec 3, 2008 6:26:15 PM
"The other thing I'd tell those execs: why don't you spend less time begging and more time trying to save your companies the old-fashioned way, by improving your product?"
The five most reliable automakers in the study included two domestic makes. “Ford Motor Co.’s Mercury brand ranked second, followed by General Motors Corp.’s Cadillac. Toyota was fourth, and Honda Motor Co.’s Acura luxury brand was fifth.” The lowest-performing brand in the study, Land Rover, showed 344 problems per 100 new vehicles.
source: http://usnews.rankingsandreviews.com/cars-trucks/daily-news/080807-JD-Power-Study-Shows-Auto-Quality-Improving/
In other parts of the world, governments routinely help their domestic auto industries with tax breaks, reimbursement for research and development, worker training funds and — perhaps most significantly — state-sponsored health care.“It would be hard to find a country that has less of a broad infrastructure to support the auto industry than the U.S.,” says manufacturing expert Harley Shaiken, a professor at the University of California-Berkeley.
“I think many of the countries we compete with in automotive have a more significant investment in worker training, in broader forms of technical training.
“Certainly Germany and Japan do,” Shaiken tells Ward's. “Beyond that, I think there is a broader understanding of the importance of a manufacturing base to the health of an economy.”
Australia has pumped billions into its auto industry. Local and state governments have come up with millions more in the name of saving jobs.
For example, former Victorian state Labor Premier Steve Bracks recommended Australia spend A$2.5 billion ($2 billion) in assistance to promote vehicle manufacturing.
source: http://wardsautoworld.com/ar/auto_us_lags_auto/ (skip the intro ad)
A bigger question might be why economists who only have one purpose in life... analyzing the economy and factors that impact it... just can't seem to do that without 20-20 HINDSIGHT.
http://hallofrecord.blogspot.com/2008/12/economists-recognize-obvious.html
Posted by: Bruce Hall | Dec 3, 2008 8:37:27 PM
Well, you've convinced me, Bruce. I'm now happy for the government to take money from me and my children to give to these obviously worthy enterprises!
Posted by: mogden | Dec 3, 2008 9:07:05 PM
Where are the sensitivity analyses,
What for? We already know that they are highly sensitive to people not buying their crappy product. They feel your pain though and if you don't fork over the money, their bankruptcy will spark a deep deep depression which will mean ever so much more pain for you! Tres sensitive in that way. I'm too lazy to figure out how much of the U.S. GDP the overblown three account for but I'm sensing that this claim might be a wee exaggeration.
the cash flow projections?
That's very easy - What cash flow?
In a way, I'd prefer that they just have handed the money over the first time, without trying to give it this air of legitimacy, if only for precedent sake.
eh...from one former banker to another, I agree.
You really don't think any of those pontificating a-holes on capitol hill could actually comprehend a business plan anyway did you?
A long time ago I had a client who was subsidized by the government. They had to present their plans and projections to congress to obtain funding. From my limited personal experience the answer to your question is....LOL. You win understatement of the year award, Maximus!
Sadly, the UAW, along with past government shenanigans have destroyed American auto makers. Even more sadly, if they can't convince us to buy their cars by producing cars people want to drive at a price they're willing to pay, they will simply employ congress (literally) to force us to pay for the cars they produce anyway. The transportation on the road to serfdom is apparently provided by GM.
Posted by: Methinks | Dec 3, 2008 9:29:32 PM
In other parts of the world, governments routinely help their domestic auto industries with tax breaks, reimbursement...
In other countries they also have gulags, political prisoners and virtue and vice police. What's your point?
Posted by: Methinks | Dec 3, 2008 9:32:46 PM
I'd like to say that I was car crazy as a youth. I also very much liked diesel engines, even their sound and their smell. To me it was a get you home feeling.
But, they are but tools to me. I want the best, at the lowest cost. I do not want, and can not afford to be taxed to then pay higher costs for lower quality.
This is what governments at all levels forces me to do, in most everything. Housing, services, products.
Consequentially, I am less productive, as I am less able to afford better products and services.
Working harder, and longer for less doesn't motivate me as much.
I see the government,and in this case, the Big 3, and the Unions as my enemy.
I don't know any of these people, but for all my life they have directly or indirectly been taking from me.
I see the conduit of takings as the government, as if it was some King or something. I'm told that without this King, there would be chaos. Well, it seems like that already.
Posted by: Paul from Florida | Dec 3, 2008 10:07:08 PM
Now that we know GM wants to focus on 4 brands, Chevrolet, Buick, Cadillac, and GMC - this plan still makes no sense to me.
Within those 4 brands, there are 3 brands offering the exact same SUV products.
There are 2 brands selling the exact same pickup trucks.
AND
What kind of plan is it that says, to paraphrase: we will sell Saab, we will explore options with Saturn, we will sell Pontiacs, just not in their own branded dealership.
After thinking about that, consider, the Hummer brand has been for sale for almost a year and has no buyers.
What makes GM think anyone is going to buy a brand, whether its Saturn, Saab, or Hummer.
It seems to me that a much better plan would be to exchange every share of GM stock for a new share of GM stock AND a share (or percentage of a share) in HUMMER stock, SATURN stock, and SAAB stock. Let the GM shareowners retain initial ownership of these 3 excess brands, and then the shares, using market forces, will find a natural selling price, and a natural value. At the same time the top employees of each brand, plus the President of each brand can form/appoint a board of Directors.
I think this is a much more useful way for those 3 brands to be managed. It may be that Hummer on its own will regain favor with the military, and Saturn may be able to leverage its original catch phrase "a different kind of car company".
Thanks for listening.
Nett
Posted by: Nett | Dec 3, 2008 11:00:19 PM
I'm not religious, but AMEN.
If I could offer a slightly different perspective:
The New York Knicks NBA team is trading away some of it's best players, who tend to have the heftiest contracts, in order to salvage money to possibly sign a superstar during the 2010 offseason. LeBron James, Dwayne Wade, and several other stars are available. Though some are enticed, many fans find the Knicks decision making insane--what guarantee is there that such a strategy will work to help the team? And why is it acceptable to virtually forfeit two NBA seasons in the meantime? Someone who would otherwise spend money to go to a Knicks game decides to stop making this investment because it appears to him his team does not care about winning and he wants to watch a winning team.
Now, imagine if you will, that this fan was forced to continue to pay for a ticket.
This is analogous to a US car customer who does not want to give money to one of the “big three’ American car companies in the form of charity, stock investment, car purchase, etc. but is forced to give regardless. At least in the case of the fan, he once cared to attend Knicks games. I, however, never cared to purchase “big three” corporate stock or the cars that they manufactured.
If we are to accept these sad state of affairs, we’d think twice to see proposed “bailout” legislation as a “rescue”—in fact, the situation I’ve described isn’t even THAT rosy, it’s much worse...
At least in the NBA scenario the fan would be able to attend the game, even if he did not want to. There would be SOME SORT of return on the investment. The taxpayer, in contrast, is relinquishing earned income for the assumed benefit of the corporation, in order to finance something (what, we do not know exactly) being labeled a "bridge loan" (whose terms we are uncertain about, and another thing, is it really a loan when I give money but do not necessarily get it back? That sounds like the kind of odds I’d have in getting my money back from a thief who has robbed me, but may possibly, in a guilt fit, return what’s mine.)
Which leads us to this point: What does the taxpayer gain for his forced investment?
NOTHING! Not from making this initial investment.
The taxpayer would have to make AN ADDITIONAL, FUTURE investment in purchasing one of the companies car, or at least a share of stock in order to MAYBE garner some benefit (which is a stretch of the term—you may not need the car and you may want to spend the money that was donated to the stock purchase on say, an investment into your daughter or son’s college fund). And remember, this likely would be in addition to more tax money that will in probability likely be asked for and forcibly collected if the “loan” terms are adjusted to allow for more money to be “loaned”.
No you say? The explanation does not suffice! Well then where is the benefit coming from? Tell me, what is, in tangible terms, you know, something based in reality, the benefit?
An improved economy you say? Alright, so you're telling me I give money for someone from government (“from above” or is that “from below”?) to deliver me some righteous judgment that professes that the economy is "strengthening"? Awesome. Remind me never to make deals with you again...and no, I’m not an anarchist. I just thought that I was given a right to my property, including but not limited to my money...isn’t that what the whole independence struggle was about—no taxation without representation? Oh wait, our founders were flawed characters so of course they had nothing to offer with regards to government insight--but Barney Frank is perfection?!
This is the height of insanity. And yet most tend to be comfortably numb about the state of affairs. Perhaps if ESPN sports were discussed in this context during the six o'clock evening Sportscenter, some more forceful resistance could be garnered?
It was said that this election proved that Americans yearned for something new and different. Instead, what is needed is a return to the principles guaranteed in our birthright document.
Posted by: Lukman | Dec 4, 2008 1:07:18 AM
mayest,
Yes, wouldn't it be nice if the government were swayed by public opinion surveys? You added that in a somewhat nonchalant way so allow me to accentuate: The government is resistant to public opinion! Is it safe to say the government is broken? Who cares, change is coming! The Dow was up! A politician told me that it's going to be okay!
Posted by: Lukman | Dec 4, 2008 1:16:34 AM
The only thing the politicians are "reviewing, scouring, poring and weighing" is whether the votes they will keep from UAW members will outweigh the votes they will lose from the public who are opposed to the bailout.
Well, that's what the Democrats are doing because they are the only ones who have any UAW votes to protect. What the Republicans are doing is anyone's guess but it's probably just being stupid, as usual.
Posted by: Flash Gordon | Dec 4, 2008 1:53:55 AM
Every time I read about how our very survival as a nation depends on taking money from Americans who build Toyotas, Nissans, Hondas and Volkswagens and giving it to people who build Fords, Chevies and Dodges, I have to wonder how we survived the demise of Studebaker, Deusenburg, Cord, and Auburn?
Posted by: brotio | Dec 4, 2008 1:55:54 AM
Toyota, Honda, Nissan and Volkswagen are building cars in the US, and it appears they plan to do so for well into the future. There will be American-made cars. They just might not be made by corporations whose headquarters are in Michigan.
Posted by: brotio | Dec 4, 2008 2:01:34 AM
If only one of our political leaders had the fortitude and ability to express Russell's viewpoint.
Micheal Moore was on Larry King last night discussing the auto bailout. I hate to admit that I agreed with at least one thing he said. Something like, "one condition of the bailout should be that they pulicly denounce capitalism. We've been making products you don't want to buy, but we're still getting your money." Of course, then he basically wanted to nationalize the auto companies and put them on the task of mass transit.
Back to Russell's viewpoint. I'm concerned that we live in a society where it seems the mainstream simply dismisses such notions as Russell's viewpoint here as if it were quackery that isn't even in the realm of consideration.
Posted by: Seth | Dec 4, 2008 7:22:55 AM
Matt: "Congress is looking at throwing money at a business/industry to keep many people employed and complacent,"
I don't think Congress is throwing money at an industry. They're only considering throwing money at 3 of the 15 auto manufacturers who sell cars in this country.
If the demand for the automobiles GM makes is down, how is giving money to GM going to keep workers employed? It may keep those workers paid, but are they going to continue building cars that don't sell?
matt: "versus letting those same people become unemployed and cause unrest and ultimately risk the congressmen's positions of power."
Well, government leaders could also alleviate that unrest by:
- increasing the length and size of unemployment benefits;
- funding more retraining;
- providing incentives (lower taxes) for businesses to locate in Michigan and Ohio;
- funneling more government work to high unemployment states;
- taking over retiree pensions after GM and Chrysler fail.
Matt, do you see whay those alternate measures might be more successful in the long run than would be throwing money to failed businesses?
Posted by: John Dewey | Dec 4, 2008 8:53:58 AM
In other parts of the world, governments routinely help their domestic auto industries with tax breaks, reimbursement...In other countries they also have gulags, political prisoners and virtue and vice police. What's your point?
Methinks... perhaps it is the obvious that is so difficult to see. The same economists and followers who so highly praise the "efficiency" of the Japanese [and Korean? and European luxury?] brands are the economists and followers who conveniently ignore the part that the national systems for those manufacturers play in reducing their competitive costs... making them so "efficient."
Yes, subsidizing has its costs... and its rewards. I don't see that the costs of unemployment and debt and weak dollars are that beneficial to consumers [you].
And then there are the costs that the U.S. government mandates piles on top of business... their wish is your command.
It is absolutely true that in the same fashion as textiles, shoes, steel, televisions, and many other products, the U.S. does not have to have home-based manufacturing. We can either import what we need or simply supply the labor and give tax breaks and land for foreign manufactures to locate in Alabama. In return we can export... dollars?
So, now we have consumers with no savings and manufacturers with no equity. Well, we always can rely on hope and change.
Posted by: Bruce Hall | Dec 4, 2008 9:29:51 AM
Bruce Hall --
I don't buy it. Cars are long-term propositions. When I look through the Consumer Reports used car guide, I see a lot of red circles for Toyota and Honda and lots of black circles for GM, Ford and Chrysler. I suspect that in 5 years, those Detroit-built 2008 cars will show the same pattern.
Even if Detroit has managed to permanently solve its quality problems, it's too little, too late: they need a decade of solid quality across their entire product lines to attract customers. I only see evidence of a few recent isolated successes.
Good riddance. (full disclosure: I am jaded by a particularly crappy 2000 Ford Taurus.)
Posted by: Chris | Dec 4, 2008 9:43:30 AM
Bruce Hall: "It is absolutely true that in the same fashion as textiles, shoes, steel, televisions, and many other products, the U.S. does not have to have home-based manufacturing."
U.S. manufacturing GDP, in inflation adjusted real dollars, was higher in 2007 than at any time in history. U.S. service sector GDP, in inflation adjusted real dollars, was also higher in 2007 than at any time in history.
There are many reasons our economy has continued to grow despite the decline of the U.S. automakers. One reason is all the small businesses which have sprung up in right to work states to serve the auto plants owned by Japanese, German, and Korean companies.
Posted by: John Dewey | Dec 4, 2008 10:01:00 AM
Chris, so we have selective data acceptance: J.D. Power's vs. Chris' 2000 Taurus.
John, let's hope you are right about the effect of losing the domestic industry and its supply chain versus the foreign industry assembly plants and the small businesses that have cropped up around them. I suspect that you'll find the equation doesn't quite balance because so much of the component build-up of the foreign brands is non-U.S. manufacturing. Mom and pop stores are an important piece of our economy, but hardly the stuff of economic or technological superiority.
Posted by: Bruce Hall | Dec 4, 2008 10:50:30 AM
Bruce Hall: "Mom and pop stores are an important piece of our economy, but hardly the stuff of economic or technological superiority."
Sorry, but you're showing a bit of ignorance about small business. "Small business" does not equal "mom and pop". Almost all of our industrial giants and technology leaders of today started as small businesses. Small businesses have added millions of jobs in the U.S. the past 25 years.
Though I noted the small business impact of foreign-owned auto plants, those plants also attract billions of dollars in manufacturing capacity from large firms. In September, for example, Lear Corp announced it was expanding its auto parts plant in South Carolina which supplies the Spartenbuyrg BMW assembly plant. In October, LSP Automotive Systems announced a $45 million expansion of its metal stamping faility to support the same plant.
Auto industry suppliers of all sizes have added over $2 billion in manufacturing capacity around Greenville-Spartenburg since 1992. That BMW plant is just one of the many foreign owned plants which have generated many thousands of high paying North American jobs the past three decades.
The auto industry in the U.S. is doing just fine in right-to-work states. I have no desire to pay thousands extra for my vehicles in order to fill the pockets of Michigan's unions.
Posted by: John Dewey | Dec 4, 2008 11:17:32 AM
Good riddance. (full disclosure: I am jaded by a particularly crappy 2000 Ford Taurus.)
I've had two Saturns, and I'm very happy with my '03 Vue, but ironically, despite high levels of reported customer satisfaction, Saturn was a financial flop and is now on the chopping block. I didn't want the Vue when I bought it. I wanted another Saturn L-series station wagon, a fuel efficient alternative to SUVs that suited me well, but GM stopped making them.
I want one of these now. Where is it written that the same Big Three domestic automakers must dominate the U.S. market indefinitely? The last time a new automaker emerged in the U.S., Microsoft didn't exist, and by the time Microsoft appeared, AMC was on life support. If our markets are so free, why is that?
Posted by: Martin Brock | Dec 4, 2008 11:46:17 AM
Dr Russell,
What Congress is weighing is not a bail out and it has nothing to do with productivity or economic viability. It is a welfare plan, no more, no less. The whole idea is to keep workers employed, not produce cars.
Posted by: Nick C | Dec 4, 2008 1:23:16 PM
Bruce --
That's a straw-man. The comparison I was making was: JD Power's rating of new cars v. Consumer Report's ratings of used cars. JD Powers looks at problems which crop up shortly after purchasing; CR looks at those problems over time. It's quite possible for a car to have few initial problems, but a lot of later ones.
Posted by: Chris | Dec 4, 2008 1:25:31 PM
"Even if Detroit has managed to permanently solve its quality problems, it's too little, too late: they need a decade of solid quality across their entire product lines to attract customers. I only see evidence of a few recent isolated successes."
You and Bruce are both arguing over a moot point. It doesn't matter how great the initial quality or dependability of a new Escalade is when people don't want Escalades.
One of the reasons the Mini Cooper sells so well is that its a really high quality small car made with quality materials, by a company with a reputation (which I feel is misplaced based on personal experience) for building quality cars (BMW).
You can build a really awesome Escalade that is top quality, corinthian leather seats, all the gadgets and gizmos in the world, and never needs so much as an oil change, and sell it for $60,000. If it gets 11 miles to the gallon on my commute into DC, I'm still not buying one.
Detroit (and most of the rest of the world) is convinced that we Americans want huge cars with huge motors. Does my Mom really need a V8 in her BMW? No. If it had a 140hp 4 cylinder, it'd be just fine by her (I dare say she might not even notice), but they don't make a 7 series with a 4 or 6 cylinder motor in the US. She'd buy one with a smaller motor if it'd be cheaper or better on gas (she drives alot), she really only wants it for the slick doors that close themself if you don't close them all the way, the soft leather seats, and the godforsaken iDrive. They make cars like this (though I can't say for sure if they do for the 7) for other markets, why not here???
GM COULD be a winner... if they figured this out before the rest of the world caught up. The problem is, they won't. A Chevy Prizm reworked by Ferrari engineers, hand assembled by Ferrari employees is still a cheap piece of trash made from cheap materials and sold for cheap, its just a very well assembled, slightly better engineered one.
Posted by: Gary | Dec 4, 2008 2:17:37 PM
Bruce Hall:
In return we can export... dollars?
You mean I get a car and they get pieces of paper? If you actually understood economics, you'd know why that's not a bad deal at all.
Posted by: James Hanley | Dec 4, 2008 2:54:45 PM
Martin Brock: I want one of these now. Where is it written that the same Big Three domestic automakers must dominate the U.S. market indefinitely? The last time a new automaker emerged in the U.S., Microsoft didn't exist, and by the time Microsoft appeared, AMC was on life support. If our markets are so free, why is that?
That Aptera is pretty slick. Any idea on a price range?
I've got three concerns about it, though. One is that 3 wheel layout(as opposed to 4) make it a motorcycle, not a car, in the eyes of the NHTSA and others, thereby exempting it from safety standards. Although the increased risk could make it more exciting :-)
Second concern is the recycled materials content that they proudly tout. I suppose this is based on more my dislike of the "holiness" associated with recycling than on a problem with the car itself.
Third concern - the all electric model. 100 miles range/charge is great, but will it get anywhere near that in Pittsburgh when it's 20 degrees out, you're driving home in the evening, and the heater and lights are sucking down current too? And how much current does the "standard 110V outlet" need to supply in order to charge the car?
Also coincidentally Martin, I share your gripe about GM and wagons. I have an '07 Vue which I bought because I wanted a wagon, worked for GM at the time, and the HHR and Vibe were much too small. I'd have really liked a midsize car wagon though.
As far as AMC, and brotio's earlier comment about Stude, Cord, Duesenberg, Auburn: whether one agrees with the bailout or not I don't think those companies are the best analogy. None of them were really more than small volume niche manufacturers. Incidentally AMC never went bankrupt, they were kept afloat by Renault from 1980 on and eventually bought by Chrysler.
Posted by: Christopher Renner | Dec 4, 2008 5:23:32 PM
Any idea on a price range?
Aptera says $25-30k next year or the year after, only in California.
One is that 3 wheel layout(as opposed to 4) make it a motorcycle, not a car, in the eyes of the NHTSA and others, thereby exempting it from safety standards.
The motorcycle status is deliberate, because it permits driving in the HOV lane without a passenger. As for the safety standards, I'm a skydiver, but Aptera claims much attention to safety.
100 miles range/charge is great, but will it get anywhere near that in Pittsburgh when it's 20 degrees out, you're driving home in the evening, and the heater and lights are sucking down current too?
Agreed, but it's a commuter car, and I live half a mile from work and a mile and half from downtown in Georgia. I see it as a second car and wouldn't drive it far on less than half a charge. Aptera also has a hybrid in the works with a small gasoline engine, like the Volt I suppose.
And how much current does the "standard 110V outlet" need to supply in order to charge the car?
Good question, but they won't sell many cars if the current required is too great.
Posted by: Martin Brock | Dec 4, 2008 7:21:14 PM
I offer a similar take as Russ. Congress is not the only group that buys pap like "Corinthian leather," but they're the only group with its hands in my pocket.
Posted by: MHodak | Dec 5, 2008 9:48:17 AM
How about an auto buyer bail out?
http://www.terrypochert.com/detail.php?ID=63
Posted by: Terry | Dec 5, 2008 5:37:48 PM
I think I have a better plan. What do you think?
http://www.terrypochert.com/detail.php?ID=63
Posted by: Terry | Dec 5, 2008 5:39:31 PM
Before I knew it,...
Posted by: business management | Dec 10, 2008 8:39:09 PM
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