Comments on: Breathtaking Capital Destruction

By: toyota camry parts

toyota camry parts — Thu, 30 Apr 2009 00:41:27 +0000

GM will not survive just with bailouts they need to do more to survive. I think Ford have ways to get some money. All I know is GM is still in big trouble.

By: Engine Hardware Kit

Engine Hardware Kit — Thu, 23 Apr 2009 22:47:10 +0000

The bailout for this 2 auto companies was paid for their dept last year 2008. I don't think its good to give them another because they will just burn it like nothing.

By: Random Links XXIV « Random Musings of a Deranged Mind

Random Links XXIV « Random Musings of a Deranged Mind — Wed, 15 Apr 2009 00:09:15 +0000

[...] http://www.willwilkinson.net/flybottle/2008/11/17/breathtaking-capital-destruction/ [...]

By: Statesman

Statesman — Fri, 20 Feb 2009 04:28:03 +0000

[...] This ought to put it into perspective for you. The amount of capital being destroyed by these companies is unbelievable… and now your government wants to dump public money in them, with no sure chance of return? You can’t make this stuff up: This is what I find particularly disturbing: with that $465 billion, “GM and Ford could have closed their own facilities and acquired all of the shares of Honda, Toyota, Nissan, and Volkswagen.” [...]

By: wheelywheel

wheelywheel — Tue, 17 Feb 2009 23:50:55 +0000

I think they got some high ranking people that don't give good decision. With that investment we all suffer the effect.

By: Helen Atwood

Helen Atwood — Mon, 16 Feb 2009 05:53:42 +0000

your blog is awsome

By: Elsie M Aiken

Elsie M Aiken — Wed, 04 Feb 2009 04:23:18 +0000

Excellent, entertaining, useful reading, Thanks !!

By: dieter

dieter — Wed, 19 Nov 2008 00:32:02 +0000

Only the Astra is a true Opel and these come as sedans and station wagons with a variety of engines including diesels and smaller engines. The Saturn Astra seems to be marketed as a hip, sporty european car. Over here it is considered to be a boring, normal, sensible car, like a Corolla. The sporty versions are driven by car modding proles.

Anyway, Corollas, Civics and Accords sell like crazy in the US. These are the cars the Astra, the Corsa and the Vectra/ upcoming Insignia are competing with in many markets, so they should be able to be competitive in the US market as well.

P.S.:
The Cadillac Catera seems to be an Omega. The Omega was not a success and has been discontinued. Opel could never establish itself in the luxury segment.

By: charlie

charlie — Tue, 18 Nov 2008 23:38:49 +0000

americans will buy opels?

What?

See: Cadillac Catera, Saturn Aura. Saturn Vue, Saturn Astra.

The Aura is an opel, and its American sized cousin Malibu outsells it by 10x. The Vue is dead in the Water. I have yet to see an Astra on the street, despite it being on of the best selling cars in Europe.

Need I continue? The new Saab 9-3 is basically an opel and is a sales dud, except for the convertible made for the American market. The Caddy BLS is mocked by American car journalists, but it an Opel, and Caddy won't sell it here for fear of public ridicule.

The rest of GM's Europe lineup is mostly re-badged Korean cars.

By: BenjaminTseng

BenjaminTseng — Tue, 18 Nov 2008 21:29:41 +0000

I won't admit to being an auto industry expert, but it seems to me that your government ownership logic is somewhat oversimplified. Just because government funds own a piece of a business does not mean that (a) the business is nationalized or (b) that the government acts differently than any other profit-seeking group. You use the example of R&D subsidies — that's a good example of how a government stake would induce the government to improve its investment's profitability, but, not only do I doubt that R&D explains the large cost gap between the Detroit 3 and other manufacturers, I think that what a government stake in a business means is that the government is actively controlling the costs of production — forcing worse terms on labor and suppliers.

As someone who's a bit pro-market, I would much prefer unions demanding terms rather than the government exercising its supreme authority to force workers and suppliers to charge less, regardless of how “profitable” (one wonders how “profitable” to society if society as a whole is forced to charge less just so a few select businesses can benefit) that result is.

By: quadrupole

quadrupole — Tue, 18 Nov 2008 16:06:32 +0000

Germany does not have single payer health care, they have employer provided health care (albeit with strong regulation and a universal safety net to pick up the poor).

By: Mario Villarreal

Mario Villarreal — Tue, 18 Nov 2008 16:02:49 +0000

Government will certainly have the incentives to intervene, in order to –supposedly- save jobs, regions, or whatever other questionable reason they may have. That’s a fact. We may have a better chance trying to influence how they intervene. So far, some have argued that the capital injection to the auto industry will be a loan, not a gift. That is sort of fine so far. My proposal is that the loan goes to Toyota and Honda, so they can buy GM and Ford. I know. I am dreaming.

By: dieter

dieter — Tue, 18 Nov 2008 15:14:39 +0000

GM Europe isn't really the same company. It is mostly Opel, which is a german car manufacturer that GM bought in 1928 but has remained fairly independent since. Opel is highly profitable and unionized btw. GM uses Opel to dump billions of its debt each year and now demands pay cuts for german auto workers.
The situation is basically like DaimlerChrysler turned inside out, with a german subsidiary propping up the unviable american owner and both the management and the unions at Opel don't really like this abusive state of affairs.

Americans do like Japanese imports, so they probably would like to buy Opels too. The reason this isn't done doesn't seem like a sound business decision, but rather a symptom of the "not invented here" syndrome. A wise business decision would be to let the germans take over and run the show.

Since Opel is now in danger of being brought down by the whole GM fiasco, Germany is now seriously considering to step in. Proposals range from governement grants to nationalizing the whole thing. I don't see the latter happening though, unless of course GM went bankrupt finally, so the good parts would be up for grabs.

By: Micha Ghertner

Micha Ghertner — Tue, 18 Nov 2008 02:03:58 +0000

If Japan/Germany/Korea want to take from their own citizens in order to subsidize cars purchased by American consumers, I fail to see the problem from the U.S. consumers' perspective. Free stuff is cool. As long other countries are willing to give us cheaper cars than we can make ourselves, I say we take the freebies and call it a day.

By: Jason O.

Jason O. — Tue, 18 Nov 2008 01:05:31 +0000

Watch out, KJ, you just identified some seriously inconvenient truths for the anti US auto industry advocates:

The Bank of Japan has vigorously pursued a weak yen policy for 3 decades to facilitate their exports to the US.

When you get an MBA, there's one point when everyone gets down and bows to the Kaizen philosophy...but what you don't learn about is that the Ministry of Finance dictates what large tier 1 suppliers (like Denso) must charge OEMs for their components. Then the MOF dictates what the tier 2 suppliers charge the tier 1 suppliers...and so on. That's not just price fixing...it's the central government fixing prices.

And the larger point that is always missed by the anti US industry crowd is that the Japanese/German fully loaded per unit labor cost advantage is because the Japanese and German governments are single payer health care systems,

A Japanese/German advantage, that is, until the new US OEM/UAW contract kicks in and takes health care and other post employment benefits off the OEMs' balance sheets and into a VEBA trust operated by the UAW. A creative free market solution to the issue of rising health care costs that the free market fundamentalists now want to destroy...

...and send at least a million people into the waiting arms of the unemployment line/welfare state.

I'm sure that libertarians and conservatives are proud of their principled stand on this issue. I'm sure that some of Pyrrhus's advisors praised him on his principles as well.