Lately I have been really bothered by all the people talking about the financial crisis, credit crisis and all of the current economic concerns… people who really have no idea what they are talking about and are just spreading misinformation. The latest topic of peoples concern is the government plan to help the domestic manufacturing industry. People…They cannot retool 100 car plants… that costs money and it is something that businesses cannot borrow. Another thing is if 2.5 million people end up losing their jobs, it will cost more in a few months of unemployment than it will to help they find financing to continue operating. Not to mention the depression of wages, municipal and state taxes…. and property values.
But the following blurb from Jeff summarizes it well.
“Mr.Cohan’s op-ed article about GM is indicative of the real problem…nobody knows what they are talking about. Please spare with me with all your ruminations about, socialism, the free market, GM’s corporate culture, labor unions, worker productivity, labor costs, currency fluctuation and of course the gran-daddy of them all…American cars are NOT as good as their japanese counterparts. BULL!
Unfortunate for us, our asian counterparts had a business plan which had nothing to do with building a better car. Their cars were inferior for the longest time. If you don’t believe me, tell me how many japanese cars older than 20 years do you see on the roads , the answer is none because they all rusted away because they built them with recycled steel that did not last. Check out Barret Jackson Autions, how many japanese cars are in those auctions; none because the few that survived are undesirable. In the last 20 years, their cars did get better, but not as good as the US press reports about them.
The US never infiltrated the asian market in the same way they have ours. The asian people like US cars, but they are so heavily tarriffed, they are unafordable there. More importantly, Japan’s goverment backs their domestic auto industry to reduce costs so their cars unfairly compete with US autos.
Its all part of their plan to take over the world auto industry (which seems to be happening as I write this email). The secret culture of the japanese companies have used their influence to affect US policy.They hire the same Washington special interest lobbyists that keep assault weapons readily available to hunters and terrorists alike and if you ask me, they should not have access to our legislators.
But wait, their business plan allowed them to not just purchase our media companies, but the souls of the people giving their opinions about their products. This is America and anything and everything is for sale..how much would you like to pay?
When was the last time consumer reports or any other trade magazine ever negatively reviewed a japanese car? Never. Do they report that the single most unreliable V6 engine is built by toyota because it will likely seize due to oil sludge…of course not…they report about the “cheap” interior that GM put in its new corvette selling for $45,000.00 that beats all other cars on the planet selling for well north of $100,00.00. The japanese auto industry controls our media and government policy…so what do you think happens?
30 years ago, we never imagined the US auto industry would be wiped out under such a confluence of negative market forces, but japan and Lee Iacocca did. If you are one of those people who actually believe the US Government should not help then don’t be concerned when 3 million (or more)of your fellow workers are out of a job, the US economic decline dramatically increases, the US loses its ability to manufacture a cars, trucks and military vehicles, and since japan may soon have no competition, toyota can charge you $35,000.00 or whatever it wants for a corolla hatchback.
I can’t wait for the new era of theoretical economic bulls–t that will be used to justify the unintended and devastating consequences to the long term American economy.”
Another well written critique
“YES !!! Mr. Cohan, you are absolutely right !!! Let’s all grab our torches and hoods and hang GM. Better yet why stop there?, let’s get Ford and Chrysler too and completely devastate the heart of the manufacturing industry of USA.
They are not asking for free money as many morons think. What they want is low interest loans to recapitulize and restructure because no one else will lend them money because “doom and gloom” credit analysts and bloggers have driven their stock down so that speculators can short it making it worthless.
For those of you who weren’t around in 1979, Chrysler Corporation was in the edge of bankruptcy (just like now). The board brought on a new CEO from Ford named Lee Iacocca, who by the way, was instrumental in the development and production of the Ford Mustang, one of the best selling cars of all time in America (hard to believe that at one time America bought the cars that were built here) He asked the government for million of dollars in loan guarantees and offered the union workers jobs at a certain rate of pay which they could accept or strike and if they did strike he would just shut the plants and everyboby would go home.
Well guess what!! I was with Dodge at the time and the workers unions agreed and he got the money and everybody went back to work and the people were lining up to buy those K-cars and help an American icon, and all they were getting besides a car was a $200 rebate, where now $2000 rebate is not enough!!!
He paid back the loans (tax payers money) with interest long before they were due. What a happy ending right? I was still with Dodge in 1984 when the new minivans Dodge Caravan and Plymouth Voyage were introduced and we had long lists of people waiting to buy them. All Toyota had was a cheap imitation that would not stand up to one of our products.
I get sick of hearing about the big 3 not building the cars that America wants. Tahoes and Suburbans, SUV’s, and full size trucks were selling well until gas hit $4.00++a gallon.
I don’t see where an American family of 5 with a dog and camping gear could jam up inside a Toyota Corolla, (maybe a family of 5-feet tall Japs could) or tow a boat behind them 35 MPG cars you all brag about. America had a lifestyle very different than our Japanese friends, we want bigger because we desire a better quality of life and comfort that is why we live and work in America and we don’t live with three other families in a one-room hole in Tokio and eat rice and fishheads for dinner.
I don’t know what years you are refering to Mr. Cohan but your star company Toyota’s stock was trading for around $117 on October of last year and even as early as the beginning of 2008. Today it is trading for around $67. Almost 50% off.
The truth is they gained their market share in the 80’s not by making a better product but by “dumping” their product in our market. For those of you who don’t know what dumping means, it means selling for less than it costs to build, selling under cost to gain market share and then raise the price to the consumer.
It shows you their sales are down too and so is Honda, Nissan, Mazda, BMW, Lexus and so on. You want know why? Because people are losing their homes, their 401K’s and IRA’s are worth half of what they were a year ago and the country is at the edge of a depression. And your answer is not to invest in an American company and put more people out of work.
The bright side of this is when these foreign investors come to take over these factories and failed businesses it will tickle down eventually to everybody and all the morons who yelled “HANG ‘EM” will be in the same soup line as me, only thing is I will have a better place in line because my industry will fail first. What business will you consult when there are no businesses, in what college will you teach when no one has money for college?
I hope for all of our sakes that doesn’t happen.
Where is Lee Iacocca now that we need him?
God Bless The United States of America.”
Slightly less tact
“Mr. Cohan, you are obviously clueless and have no business blogging on a topic that you know nothing about. GM is consistently at the top in all categories when it comes to quality and safety, and routinely ranks higher than it’s foreign competitors. For you to say they can’t complete globally is absurd. GMs largest growth of late has been in Latin America, Africa, the Middle East, China and Russia. Is that not the sign of a global company? It is dumb @$$ people like you, that have no clue what they are writing about, and continue to bash the US auto industry and it’s employees. Your opinions are helping to create this mess by influencing John Q Public with your false information and is a major reason the economy is in ruins. By the way genius, the 25 billion they are asking for is a loan, not a gift like was given to the financial industry. I guarantee you won’t see the execs at GM throwing a 400K bash to celebrate. Why don’t you write about the insurance cos. that are using their bailout money to party”
Next if you start looking at housing starts, all this talk about a recovery under way in the housing sector looks way out of place. The current recovery is more like a dead cat bounce and the scope of the fall shows this. With all the losses still to come I don’t know of too many investors that will invest here unless the rate of return rises dramatically. For that too happen the price has to fall much much lower. Someone making the median income, should be able to afford the median house on a fixed rate mortgage and on a normal amortization. Median household income has gone up in the last 40 years, but almost all of those gains have come from the increase in working women. A single person making the median income should be able to comfortably (<30% of income for housing expenses) be able to afford a decent 2 bedroom apartment or a bungalow. Thats not the case here in Canada nor in the US. Let the prices fall until they do. People seem to have this natural tendency to use any discount they may get to buy more house, so in the last 20 years of falling interest rates, longer amortization and dual incomes houses have been bid up ridiculously. 
Note: I hope Obama manages to push China over the edge and this whole mess gets accelerated. Prediciton:US calls China a currency manipulator and places tariffs on imports or forces China to float their currency.US Rates skyrocket because you have just taken away the largest buyer(China kept their currency pegged by buying US Notes)The Chinese Yuan used to be much much stronger versus the US dollar. 1.5 versus the 6+ it is today.If the Yuan appreciated half of that most of the wage advantages would be erased, but the infrastructure in the US is gone. Short term the US would get a taste of Cost push inflation, long term the US would be forced to get more competitive.