US Car makers "Bail Out" fails...

Originally Posted by Pistonheads

The automotive industry, world financial markets and hundreds of thousands of workers around the world are waiting on a statement from the White House today, following the Senate’s failure to back the Big Three bailout bill in a vote last night.

The failed bill means President Bush and the Treasury Department can provide the only possible salvation for GM, Chrysler and Ford, possibly by redirecting funds from the enormous $300bn budget already earmarked to rescue US financial institutions.

Yesterday before the Senate vote, the Bush White House made clear its view on the possible collapse of the auto industry. Responding to US jobless figures that last week reached their highest level since 1982, a White House press said: “The economy is in such a weakened state that adding another possible million jobs is something our economy cannot sustain at the moment.”

After the vote, another White House spokesman described the result as ‘disappointing’, and said options would now be evaluated.

With share prices sliding in Asian markets and Europe as a result of the vote, pundits in the US say an early response from the White House is required to prevent carnage when Wall Street opens later today.

The rescue package failed because the Big Three’s labour unions failed to agree to Republican demands for a swift move to pay parity with workers at foreign-owned car plants in the US.

I think basically the US Government requested the unions for workers to take a pay cut for 12 months to help the situation and the unions refused.

Personally I think a 12 month pay cut is better than no job or car industry....

Im sure Matty will add more detail

Could you imagine ford and GM going under?

One can only hope

Fingers crossed hehe

I read somewhere that GM are so inefficient that it costs approx $2,000 to construct a car compared to Toyota's $300. Also, Hondas rise to fame is due to their ability to quickly adapt to changing market conditions by investing heavily in the factories with the aility to change models of cars.

It will be really interesting to see what car companies are left at the end of this recession. I think it can only be a bad thing wiith companies such as BMW, Fiat and other "smaller" car companies possibly disappearing and maybe someone like Toyota having a dominance over the new car market pushing prices up due to the lack of competition.

Fiat and VAG won't go, I can't realistically see Renault/Nissan going, although PSA could well end up partnering with Renault or a Japanese make to stay alive, but the rest of the EU/US makes might seriously struggle.

I can see this as only good thing for the industry in some ways, but as you say, it could well hurt competition, and will inevitably hurt jobs.

However, what harm would there be with Honda and Toyota leading the way, it can only be a good thing. And with the 2009 emergence of a SAIC/NAC owned MG/Roewe, and a possible launch of TATA car's, maybe even using the Rover brand in Europe (although I doubt the UK), it could be time for the Asian manufacturers to take over.

If you think about it though, with the likes of Honda and Toyota being the main brands, it would be mad to actually have reliable car's all the time, it could set a new industry standard for what we expect reliability wise...

Unfortunatly TATA are in the shit as well - they have already been in talks with the government for a £1bn loan to help them out....

Toyota have the most efficient production system around and have hald that title for years. They did actually help the US manufactures about a decade ago, though Ford, GM and Chrysler failed to make the most of the advice they where given.

With all the Investment in car production I can easily imagine multimodel manufactures becoming less and less and, for example, the Astra, Focus, Mondeo etc etc becoming their own brand in their own right... ie the Astra Motor Company.

I remember studying about how efficient Toyota were at making their cars, also about how all the Jap firms have taken over the world of motorcycles in the last 20 years, wuite interesting.

Will be an interesting few months ahead of us i think.

I'm hoping we won't have to start driving Asian cars like Tatas. They're seriously sh*t.