View Full Version : Kia Optima more American Made than Ford Fusion


speedtigger
04-14-2012, 06:10 PM
So, I was going to go get a Ford Fusion lease to replace my Mercury Milan lease. This would have been my 3 Ford daily driver in a row. Being the patriotic type, I just assumed that buying a Ford was the right thing to do. After all, they did not take any money from the government like GM did.

My wife on the other hand drives a Hyundai. She told me I should consider a Hyundai. After I stated that buying a Ford was better for America, she said: "Is it? Are you sure about that?". She said that I should have a look at the sticker first. Being a car guy, I was set back a bit by the idea that my wife might know more than I on the topic. But, we went to the Hyunda and Kia dealers to take look. She was right.

The Ford Fusion had 30% American made parts and was assembled in Mexico. The Kia Optima had 48% American made parts and was assembled in America.
The Fusion's engine and trans were made in Mexico. The Optima's engine and trans were made in America.

You could not be any more surprised than I.

Z Fury
04-14-2012, 06:23 PM
The only thing American about GM, Ford, and Chrysler is that their headquarters are in the US. They are probably the least "American Made" cars out there at this point.

Damillio
04-14-2012, 06:58 PM
Known this for awhile.
If you want to buy American, Toyota Camry is actually #1

1ltcap
04-14-2012, 07:14 PM
So, I was going to go get a Ford Fusion lease to replace my Mercury Milan lease. This would have been my 3 Ford daily driver in a row. Being the patriotic type, I just assumed that buying a Ford was the right thing to do. After all, they did not take any money from the government like GM did.

My wife on the other hand drives a Hyundai. She told me I should consider a Hyundai. After I stated that buying a Ford was better for America, she said: "Is it? Are you sure about that?". She said that I should have a look at the sticker first. Being a car guy, I was set back a bit by the idea that my wife might know more than I on the topic. But, we went to the Hyunda and Kia dealers to take look. She was right.

The Ford Fusion had 30% American made parts and was assembled in Mexico. The Kia Optima had 48% American made parts and was assembled in America.
The Fusion's engine and trans were made in Mexico. The Optima's engine and trans were made in America.

You could not be any more surprised than I.



the ford fusions are great cars. they seem reliable so far....at least my customers cars do.

the hyundai/kia is built in georgia i think. their quality went waayyyy up when the korean govt merged them together. that was around 2001 i think. newer than that, you've got great cars from them. older than that, they burn oil like mitsubishis........

BOBS99SS
04-14-2012, 07:30 PM
for the longest time i always said get that jap crap out of my way , i bashed those cars for so long just because i to feel you should buy american , when i found that out all i could say was wtf lol, serious ford,gm, etc are more jap crap than honda ,toyota etc lol, but i will say maybe that is the reason they have such good cars now lol, the new fusion 2013 look pretty killer, and these cars are getting great mpg, yes i hate the idea these cars are not all made here,but then again america is kinda going down hill while others are going up, but yes its a shock to find that out

Tainted
04-14-2012, 08:03 PM
Companies want to cut corners, outsource jobs, cheap parts, and cheap labor. Not surprising at all.

180ls1
04-14-2012, 08:29 PM
The only thing American about GM, Ford, and Chrysler is that their headquarters are in the US. They are probably the least "American Made" cars out there at this point.

Yeah thats really it but your putting more money in other Americans hands if you buy the Hundai in this situation.

the ford fusions are great cars. they seem reliable so far....at least my customers cars do.

the hyundai/kia is built in georgia i think. their quality went waayyyy up when the korean govt merged them together. that was around 2001 i think. newer than that, you've got great cars from them. older than that, they burn oil like mitsubishis........

My one of my friends has one and its really starting to show its age. Its 4 years old now i believe and there are all sorts of issues coming up with it. Nothing too serious though.

HoLLo
04-14-2012, 08:30 PM
Go buy a Volkswagen Passat. They are a top Car & Driver built car, and built in my hometown Chattanooga, TN! Support my local economy back home! :thumb:

beerwhiskeyjoe
04-14-2012, 10:30 PM
F150 is 75%, Edge is 70% and explorer is 60%... you still have some options from the blue oval.

In fact, for 2012MY the Fusion has the lowest parts content of any Ford besides the Transit Connect (0%). Ford is reportedly planning to bring Fusion production back to Michigan sometime in the next generation.

http://www.nhtsa.gov/staticfiles/rulemaking/pdf/AALA/2012_AALA_Alpha_rev3.pdf

NemeSS
04-15-2012, 12:41 AM
Companies want to cut corners, outsource jobs, cheap parts, and cheap labor. Not surprising at all.

How is this surprising to anyone?
American companies have "outsourced" and went for "cheap" labor. All the way back to colonial times. I hear eventually it was a contributor to a civil unrest of sorts.
these business practices are not gonna change any time soon. LOL
:corn:

RikkiTorment
04-15-2012, 02:59 AM
Didn't Ford take more money from financial funding than GM did with their bailout?

AronZ28
04-15-2012, 04:14 AM
The thing is you have to remember where the $$$$ goes back to headquarters. You buy a Kia, that's great that they employ a few thousand americans in Georgia to assemble their cars. There are still tens of thousands of employees back in Korea that work at headquarters, engineering, marketing, etc that you are supporting with your purchase $$$$.

You buy a Ford, granted you are supporting some Mexicans who built the car and its parts, but the $$$$ goes back to Detriot to support Americans working in marketing, finance, engineering, etc. The assembly line workers are just a portion of the people you support when you buy a car.

beerwhiskeyjoe
04-15-2012, 08:45 AM
Didn't Ford take more money from financial funding than GM did with their bailout?

Ford borrowed and has/is paying back 5.9 billion, at interest, from the federal reserve IIRC.

We invested a total of 60 Billion in GM, ~10 billion they've paid back so far, the rest we purchased as stock. We still own 26.5% of GM. A google news search show the current forecast is we will lose 21.7 billion from the investment. GM's stock will have to rise to $53/share from the $23/share its at currently to get an even return on our investment.

Those numbers do not account for the fact that GM hasn't paid any taxes since bankruptcy and do not include the small guy stock and bondholders who got absolutely screwed over during the bankruptcy.

No politics, just facts.

ULTIMATEORANGESS
04-15-2012, 08:48 AM
The only thing American about GM, Ford, and Chrysler is that their headquarters are in the US. They are probably the least "American Made" cars out there at this point.

any proof foreign automakers build more cars here than the big three?

KCS
04-15-2012, 09:28 AM
How is this surprising to anyone?
American companies have "outsourced" and went for "cheap" labor. All the way back to colonial times. I hear eventually it was a contributor to a civil unrest of sorts.
these business practices are not gonna change any time soon. LOL
:corn:

Now thats funny. :whip:

supernova1972
04-15-2012, 09:35 AM
I hate how ignorant some people are about this subject. Just because the company is based in American doesn't mean American anymore. One of the locals I work does some switching in the yard in Indy that was built just to switch out the GM and Chrysler plants, both of which shut down, and Ford shut down a factory just south of where I grew up, but we work the Subaru plant up in Lafayette, there is a huge Honda plant about 45 minutes from here, and Toyota opened up a plant about 10 years ago where I grew up and is still expanding and adding jobs.

RikkiTorment
04-15-2012, 11:01 AM
Ford borrowed and has/is paying back 5.9 billion, at interest, from the federal reserve IIRC.

We invested a total of 60 Billion in GM, ~10 billion they've paid back so far, the rest we purchased as stock. We still own 26.5% of GM. A google news search show the current forecast is we will lose 21.7 billion from the investment. GM's stock will have to rise to $53/share from the $23/share its at currently to get an even return on our investment.

Those numbers do not account for the fact that GM hasn't paid any taxes since bankruptcy and do not include the small guy stock and bondholders who got absolutely screwed over during the bankruptcy.

No politics, just facts.

So is this untrue? Because I am confused about the subject. Everywhere states that Ford received $2 billion more than GM did in their bailout with a much lower rate of interest to pay back.

http://jalopnik.com/5704575/

speedtigger
04-15-2012, 11:15 AM
The thing is you have to remember where the $$$$ goes back to headquarters. You buy a Kia, that's great that they employ a few thousand americans in Georgia to assemble their cars. There are still tens of thousands of employees back in Korea that work at headquarters, engineering, marketing, etc that you are supporting with your purchase $$$$.

This is a consideration. But, just like you can't assume where a car is manufactured, I don't want to assume that all of the administrative and engineering is done in this country either.

SM105K
04-15-2012, 03:09 PM
My SS was made in Canada........:usa:

1ltcap
04-15-2012, 03:56 PM
So is this untrue? Because I am confused about the subject. Everywhere states that Ford received $2 billion more than GM did in their bailout with a much lower rate of interest to pay back.

http://jalopnik.com/5704575/

looks to me like hat article says that they bought paper from those besides gm and chrysler. little different than buying up the companies debts.

speedtigger
04-15-2012, 07:04 PM
My SS was made in Canada........:usa:

Your emoticon does not appear to be holding a Canadian flag.

1ltcap
04-15-2012, 08:48 PM
My SS was made in Canada........:usa:

as are the 5th gens. i believe that the 5th gens are engineered in austrilia?

RikkiTorment
04-15-2012, 08:58 PM
as are the 5th gens. i believe that the 5th gens are engineered in austrilia?

They are also built in Oshawa, Ontario. I will be up there in a little over three weeks. They open the plant yearly for tours in June, I may try to make that too! :nod:

WS.6#384
04-15-2012, 09:31 PM
Love my Kia Optima. 35mpg all day, clean solid car.

1ltcap
04-15-2012, 10:21 PM
Love my Kia Optima. 35mpg all day, clean solid car.

got a friend that's doing 32 in a 6 banger mustang.

Irunelevens
04-15-2012, 10:43 PM
Just buy the car that you like the most that fits your wants/needs the best. Consider all options. Nobody benefits in the long run from you buying a car simply because it's from a certain country...eventually the company rests on its laurels and doesn't feel the need to really improve their product. Then you get exactly what happened to the Big 3 the past ~20 years or so.

SparkyJJO
04-15-2012, 10:43 PM
got a friend that's doing 32 in a 6 banger mustang.

I did that in my 98 Camaro V6 all the time as well.

My current 99 has a couple go fast goodies that prevent that from ever happening :jest:

1ltcap
04-16-2012, 08:45 AM
I did that in my 98 Camaro V6 all the time as well.

My current 99 has a couple go fast goodies that prevent that from ever happening :jest:

aahhh yes obiwan....but was yours over 300hp, and running 13's? :D

SparkyJJO
04-16-2012, 09:36 AM
aahhh yes obiwan....but was yours over 300hp, and running 13's? :D

This car did a 12.06 quarter mile by the previous owner.

Irunelevens
04-16-2012, 09:45 AM
This car did a 12.06 quarter mile by the previous owner.

Pretty sure he was talking about the V6.

SparkyJJO
04-16-2012, 09:57 AM
Pretty sure he was talking about the V6.

I thought he meant my 99 (it's a V6 also).

Sorry OP we've hijacked the thread :hijack:

1ltcap
04-16-2012, 10:07 AM
This car did a 12.06 quarter mile by the previous owner.

dam....THAT is cool. did it do it stock?

the new crop of 6 banger hot rods is pretty dam incredible.

Nick V.
04-16-2012, 10:13 AM
. After all, they did not take any money from the government like GM did.


:confused: i thought everyone knew ford took money before the bailout.

speedtigger
04-16-2012, 10:57 AM
:confused: i thought everyone knew ford took money before the bailout.

I actually did not know. It was news to me.

This article even shows that their credit arm had taken the most money of anyone:
http://blogs.cars.com/kickingtires/2010/12/report-ford-took-federal-funds-too.html

1ltcap
04-16-2012, 04:27 PM
a blog?

SparkyJJO
04-16-2012, 04:31 PM
Follow the cited links.

beerwhiskeyjoe
04-16-2012, 08:47 PM
So is this untrue? Because I am confused about the subject. Everywhere states that Ford received $2 billion more than GM did in their bailout with a much lower rate of interest to pay back.

http://jalopnik.com/5704575/

Whoops, you are right, I got confused. The other 5.9B I was thinking about must have been DOE energy loans or something like that. But we do know now that Ford has paid everything back, with interest. Lets see what GM does....

NHRATA01
04-17-2012, 10:06 AM
Ford didn't borrow from the government, but they went with GM and Chrysler to ask for a line of credit be made available (which they didn't end up using). Ford/Mullaly had the luck/foresight to mortgage every single asset they owned before the financial crash in '09. By the time the other two realized they were going to run out of money, the financial crisis was in full swing and none of the banks were lending, they were too busy trying to save their own asses. That also meant they had virtually no recourse to go through Chapter 11 since they could not get financing. At that point it was either Chapter 7 liquidation or government intervention. It's worth noting that both the Japanese and European auto manufacturers either received government assistance during the recession or were told it would be available if needed.

FWIW in bankruptcy bondholders are considered unsecured debtors, and stockholders are virtually nonexistent.

Jon5212
04-17-2012, 10:25 AM
The thing is you have to remember where the $$$$ goes back to headquarters. You buy a Kia, that's great that they employ a few thousand americans in Georgia to assemble their cars. There are still tens of thousands of employees back in Korea that work at headquarters, engineering, marketing, etc that you are supporting with your purchase $$$$.

You buy a Ford, granted you are supporting some Mexicans who built the car and its parts, but the $$$$ goes back to Detriot to support Americans working in marketing, finance, engineering, etc. The assembly line workers are just a portion of the people you support when you buy a car.

+1 to that... nobody seems to look at this.

I get tired of Honda and Hyundai saying this... ultimately the profit goes overseas... not to America.

speedtigger
04-17-2012, 11:51 AM
I get tired of Honda and Hyundai saying this... ultimately the profit goes overseas... not to America.

Profit is actually a small percentage of the total price of a car. So, I am not too concerned about just profit. On a 30k car, may 1.5 k is manufacturer profit. I am more concerned about the other 29k.

Irunelevens
04-17-2012, 02:41 PM
Profit is actually a small percentage of the total price of a car. So, I am not too concerned about just profit. On a 30k car, may 1.5 k is manufacturer profit. I am more concerned about the other 29k.

Thank you.

67RSCamaroVette
04-17-2012, 07:31 PM
Profit is actually a small percentage of the total price of a car. So, I am not too concerned about just profit. On a 30k car, may 1.5 k is manufacturer profit. I am more concerned about the other 29k.

Ding! Ding! Ding!

It'llrun
04-17-2012, 10:13 PM
Didn't Ford take more money from financial funding than GM did with their bailout?Not even close. Ford Credit took loans for like 16Billion. GM got over 30Billion in the bailout, not including GMAC. Their total was something like 52Billion.

The thing is you have to remember where the $$$$ goes back to headquarters. You buy a Kia, that's great that they employ a few thousand americans in Georgia to assemble their cars. There are still tens of thousands of employees back in Korea that work at headquarters, engineering, marketing, etc that you are supporting with your purchase $$$$.

You buy a Ford, granted you are supporting some Mexicans who built the car and its parts, but the $$$$ goes back to Detriot to support Americans working in marketing, finance, engineering, etc. The assembly line workers are just a portion of the people you support when you buy a car.This is pretty much right on. You could also point out, Ford still makes several vehicles in America, possibly more than any other automaker.

That said, my 1990 Mustang came with a radio "Made in Brazil" as I recall.

Still, I don't care anymore where anyone gets their vehicles. Personally, I look for the most "American" I can get and while many think it's a Toyota, for me it simply isn't. I've actually owned one and it was a great little car. I just don't really want another enough to go buy one. Since I prefer pickups, I'll likely stick with Fords. I don't hate the others, or even dislike them. Nor do I care at this point that our government helped the other two major manufacturers rob Americans. To me, Ford is the most "American made" I can find and they still happen to make the best pickups money can buy.

So is this untrue? Because I am confused about the subject. Everywhere states that Ford received $2 billion more than GM did in their bailout with a much lower rate of interest to pay back.

http://jalopnik.com/5704575/Jalopnik isn't including GM in that story... at all, really. They're talking about the financial arm (GM dumped), called GMAC. It was part of GM before the bailout. http://projects.propublica.org/bailout/main/timeline It may take a few minutes, but there's an overall timeline. In it, you'll be able to notice a 30.1Billion bailout for General Motors, and there's more still in that timeline. I'm thinking GM's total "bailout" was some 52 billion, which I stated above. Some people have the total at even more.

This is a consideration. But, just like you can't assume where a car is manufactured, I don't want to assume that all of the administrative and engineering is done in this country either.In America, you need not assume where a car is made. It says where it was made right on the window sticker. That isn't to say it tells where each individual part is made, but where the vehicle was put together and where its engine and transmission were built.

It seems odd to me, that in our "global" economy, any vehicle maker would do all its research and engineering in America. After all, they sell in other countries as well as America.

I actually did not know. It was news to me.

This article even shows that their credit arm had taken the most money of anyone:
http://blogs.cars.com/kickingtires/2010/12/report-ford-took-federal-funds-too.html4th paragraph(1 sentence) tells us, however, that information has/had nothing to do with the bailout. It also wasn't before the bailout, which someone else apparently said(that it was).

NHRATA01
04-18-2012, 08:01 AM
GMAC was a part of GM prior to the bailout, however they sold the majority stake (to Cerberus, ironically, the same guys who pretty much killed Chrysler and left it's carcass for the government to fix) for cash back in '06, when GMAC was pretty much the only profitable part of GM. They divested the remaining holdings of GMAC during the bailout, and GMAC as a separate entity received a pile of bailout dollars like several other large banks. But it's not really correct to roll up the GMAC dollars in GM's bailout.

It'llrun
04-18-2012, 04:23 PM
GMAC was a part of GM prior to the bailout, however they sold the majority stake (to Cerberus, ironically, the same guys who pretty much killed Chrysler and left it's carcass for the government to fix) for cash back in '06, when GMAC was pretty much the only profitable part of GM. They divested the remaining holdings of GMAC during the bailout, and GMAC as a separate entity received a pile of bailout dollars like several other large banks. But it's not really correct to roll up the GMAC dollars in GM's bailout.I can agree with that... so I looked to see a real seperation and ... http://projects.propublica.org/bailout/list/index found it. According to that list, GM took 51B without GMAC and has repaid 23B.
GMAC(now Ally Financial) took 16B and has repaid 3 billion.

This leaves GMAC owing 13 billion(they've supposedly paid 3billion in interest, which would lead one to believe they still owe at least 16b, but whatever).

GM only owes 28 billion more... :zzz:

RikkiTorment
04-18-2012, 08:41 PM
I can agree with that... so I looked to see a real seperation and ... http://projects.propublica.org/bailout/list/index found it. According to that list, GM took 51B without GMAC and has repaid 23B.
GMAC(now Ally Financial) took 16B and has repaid 3 billion.

This leaves GMAC owing 13 billion(they've supposedly paid 3billion in interest, which would lead one to believe they still owe at least 16b, but whatever).

GM only owes 28 billion more... :zzz:

How many years ahead are they on paying it back? That's another thing to keep in mind as well.

It'llrun
04-18-2012, 09:12 PM
How many years ahead are they on paying it back? That's another thing to keep in mind as well.I don't know the time limits set in the 1st place, but it won't help Americans in the least if they pay off the loans early. It will only help GM. Paying it on time earns more interest for the lien holder("We, the People").

NHRATA01
04-19-2012, 10:33 AM
I can agree with that... so I looked to see a real seperation and ... http://projects.propublica.org/bailout/list/index found it. According to that list, GM took 51B without GMAC and has repaid 23B.
GMAC(now Ally Financial) took 16B and has repaid 3 billion.

This leaves GMAC owing 13 billion(they've supposedly paid 3billion in interest, which would lead one to believe they still owe at least 16b, but whatever).

GM only owes 28 billion more... :zzz:

Except the problem is that outstanding $28B is not a loan, so we won't collect any further interest. Best hope to recoup the money on paper is for the stock price to rise significantly, but that won't happen as long as investors know the feds are going to flood the market with their shares at some point and effectively dilute everyone else's.

To be fair to GM, one could do an in depth economic exercise on the external revenue generated by saving GM (such as employee income taxes, corporate property taxes, capital expenditures, etc, etc) and you would find out the actual loss is quite a bit less than the paper loss.

It'llrun
04-20-2012, 01:09 AM
To be fair to GM, one could do an in depth economic exercise on the external revenue generated by saving GM (such as employee income taxes, corporate property taxes, capital expenditures, etc, etc) and you would find out the actual loss is quite a bit less than the paper loss.I'm not interested in "being fair" to GM. When was GM ever fair to me??

All those tax incomes the gov't gets, but might not be getting(had it not wasted billions on GM and hundreds of other institutions) don't matter. Some other companies would've, as they always have, taken up where those who failed left off, or the product would have to be considered obscure, obsolete, unnecessary or useless. That's the American way.

1ltcap
04-20-2012, 07:49 AM
To be fair to GM, one could do an in depth economic exercise on the external revenue generated by saving GM (such as employee income taxes, corporate property taxes, capital expenditures, etc, etc) and you would find out the actual loss is quite a bit less than the paper loss.

so what you're saying, is that spending billions, in order to be able to collect millions in taxes is a winning deal? you should run for president.

also, does anyone realize that gm wasn't going to close their doors, or stop building cars? they'd have reorganized. kinda like they did. just without us all paying for it.

NHRATA01
04-20-2012, 08:23 AM
so what you're saying, is that spending billions, in order to be able to collect millions in taxes is a winning deal? you should run for president.

I'm saying that sometimes you spend a buck to make two.

also, does anyone realize that gm wasn't going to close their doors, or stop building cars? they'd have reorganized. kinda like they did. just without us all paying for it.

Please tell me how they could have reorganized under chapter 11, when they were never going to secure that level of financing in 1Q09? No bank was going to loan them that kind of money back then, the credit markets were crimped down hard and banks weren't lending period. They would have gone to right to liquidation. The government was the only entity with enough capital to loan them enough to get through reorganization.

I'm not going to argue the politics of the bailout, not really appropriate for this forum.

NHRATA01
04-20-2012, 08:27 AM
I'm not interested in "being fair" to GM. When was GM ever fair to me??

All those tax incomes the gov't gets, but might not be getting(had it not wasted billions on GM and hundreds of other institutions) don't matter. Some other companies would've, as they always have, taken up where those who failed left off, or the product would have to be considered obscure, obsolete, unnecessary or useless. That's the American way.

There are plenty of companies that would have picked up for the loss of GM/Chrysler auto sales. Wouldn't have been American ones, and the money and jobs would flow offshore. I'm not really going to get into a political discussion of whether or not it was the right thing to do. But the US government throughout history has supported industries of strategic importance that couldn't necessarily survive on their own.

speedtigger
04-20-2012, 08:28 AM
also, does anyone realize that gm wasn't going to close their doors, or stop building cars? they'd have reorganized. kinda like they did. just without us all paying for it.

You are saying that as if that possibility was a certainty. I don't think that was the case. I think we were looking at a wholesale breakup of the company with some or many pieces being sold to foreign interests. If a new GM would have emerged it would not have been what we know as GM now.

With that being said, I still would have let them tank. Survival of the fittest is the rule by which business plays in the US and it is the only way to ensure that we have the strongest companies moving forward.

Another thing that people don't realize is that the trouble that the auto makers got into was not just a result of poor auto sales. The majority of their trouble was caused by their participation in the markets. When the markets tanked and their corporate portfolios crapped out, they no longer has the assets/capital to finance their day to day operations. That was the real problem.

1ltcap
04-20-2012, 08:35 AM
I'm saying that sometimes you spend a buck to make two.



Please tell me how they could have reorganized under chapter 11, when they were never going to secure that level of financing in 1Q09? No bank was going to loan them that kind of money back then, the credit markets were crimped down hard and banks weren't lending period. They would have gone to right to liquidation. The government was the only entity with enough capital to loan them enough to get through reorganization.

I'm not going to argue the politics of the bailout, not really appropriate for this forum.

no, you're right.....it's not in this forum. but they would have come up with the money. there is no way in hell that they were in business for as long as they have been, and suddenly became too stupid or irresponsible with their money to need to do this.

in the case of the govt, you spend a buck or two to lose a billion or two.

It'llrun
04-20-2012, 10:46 AM
There are plenty of companies that would have picked up for the loss of GM/Chrysler auto sales. Wouldn't have been American ones, and the money and jobs would flow offshore. I'm not really going to get into a political discussion of whether or not it was the right thing to do. But the US government throughout history has supported industries of strategic importance that couldn't necessarily survive on their own.That's your opinion, but we've seen, throughout the history of the combustion engine, new taking the place of old, businesses sprout up from seemingly nothing, businesses fail and others coming to light... That's simply called capitalism.

We don't know that Ford wouldn't have picked up much of that slack, hired thousands of those employees, or ignored the situation entirely. We don't know that companies like Penske wouldn't have jumped in. There are some multi-billionaires in America and some love cars enough to have started their own brand. We don't know that any would've, but we certainly don't know that none would either.

Do I think non-American brands would've gained sales if GM and Chrysler had folded entirely? Sure I do. Do I think that would've been a problem forever, and they'd have simply soaked up all the wants of Americans? Not even the slightest chance.

As stated above though, GM and Chrysler had no intentions of closing their doors. Mass layoffs did happen, and probably would've regardless. However, the reorganization process could've "cleaned the slate" on debt, so to speak, for each company. In all likelihood, they'd have been able to save more jobs(albeit at a lower pay). They'd have gained the right to renegotiate contracts and dump off massive losses. That's what reorganization is about. Someone still would've been "out in the cold" for those processes, but it wouldn't be the American tax payer across the board and more importantly, wouldn't have contributed to the largest massive national debt increase in the history of America either.

Each company could've (and would've) sold off several things, like parts of their car collections(GM did indeed do that), which earns money. They'd have sold land and properties with existing buildings. They'd have slated to erect new buildings in a less expensive manner. They'd have gotten rid of hundreds of overpaid "office help" types, including perhaps half of their engineering teams, saving millions annually.

The point is, they'd have jumped directly into a path of less spending, more saving and more scrutiny of their own products. Both did this, Chrylser most, probably... at least it looks like it, perhaps because they produce such a low number of models. With governmental intervention, they did some of these things, to a much smaller degree. America as a whole paid for poor business management. Had it been my business, making say 1,000,000 annually, our government wouldn't have even looked it over. Perhaps the biggest reason would be, they'd think they gained nothing... They don't realize it yet, but that's exactly what they gained having done what they did. Spent a bunch for nothing.

As to your last statement, I think we're soon to see how true that rings, based on NASA ending it's space entry program of the shuttles. We'll see if people like Richard Branson can get it done for less or not. I can say we've seen many new styles of space craft since the end of our shuttle program and none have even hinted at reaching the cost... We're talking billions and billions less spent. Of course, they're not into outer space yet either(they've gotten there, but only very briefly). With that, we can't say private industry is better. I think it will happen, but that's me.

NHRATA01
04-20-2012, 11:00 AM
no, you're right.....it's not in this forum. but they would have come up with the money. there is no way in hell that they were in business for as long as they have been, and suddenly became too stupid or irresponsible with their money to need to do this.


Well, there were two issues with GM. First is their auto business was unprofitable for years, and was covered up by GMAC's booming profits during the housing run-up. GM sold half for some money to try to keep right-ing the ship. The problem is once the economy crashed in late '08, they were stuck with GMAC's huge losses due to their subprime exposure, like many large banks. So the only profitable arm was now an enormous albatross. Then of course since the economy slumped, auto sales fell off a cliff so even though they had begun to turn around their product portfolio and make profitable vehicles, it was too little too late and they couldn't be profitable at the volumes vehicles were selling at. GM ran out of cash in late '08. Bush admin tossed them a few bil in late 4Q08 and 1Q09 to get them through, since the lame-duck admin understandably did not want to get involved in something as complex the bailout. New admin was faced with the choice of either letting them go bankrupt and liquidate (again, as I mentioned private financing was not available, so liquidation was the only option), keep throwing good money after bad to keep them afloat, or do a government sponsored re-org, sort of a faux Chapter 11. That at least allowed them to shed capacity (brands, plants) and uncompetitive union contracts and stipulations and lowered their overhead. It was essentially what GM needed to do for the better part of a decade, but couldn't without filing for Ch. 11 bankruptcy. But for the reasons I mentioned, the timing was during a unique situation where private funding was unavailable due to external circumstances.

That's basically the problem in a nutshell.

NHRATA01
04-20-2012, 11:26 AM
That's your opinion, but we've seen, throughout the history of the combustion engine, new taking the place of old, businesses sprout up from seemingly nothing, businesses fail and others coming to light... That's simply called capitalism.


It's a nice and simplistic view, but the practical application proves otherwise. I offer the example of the "too big to fail" banks that were bailed out in '08. Sometimes the collateral damage exceeds the cost of keeping the business running. Sometimes the strategic need for the business outweighs it's profitability. The government has been bailing out the US steel industry for about 40 years. Someone likely rationalized that importing all of our steel from China and Japan may present a problem when we need to build tanks and warships. Thus an uncompetitve industry was given protective tariffs.

As stated above though, GM and Chrysler had no intentions of closing their doors. Mass layoffs did happen, and probably would've regardless. However, the reorganization process could've "cleaned the slate" on debt, so to speak, for each company. In all likelihood, they'd have been able to save more jobs(albeit at a lower pay). They'd have gained the right to renegotiate contracts and dump off massive losses. That's what reorganization is about. Someone still would've been "out in the cold" for those processes, but it wouldn't be the American tax payer across the board and more importantly, wouldn't have contributed to the largest massive national debt increase in the history of America either.

I don't think you understand finance and how bankruptcy works. GM had no money to fund operations by late 2008. None. They could not buy parts, could not pay employees, could not pay utility bills. Pay freeze, layoffs, none of that mattered since they could not fund their operations any longer. Their debt obligations far exceeded their cash flow and available assets. At that point 2 things happen: 1) they either reorganize, where a loan is floated to them so they can fund operations while they restructure, or 2) they liquidate, sell assets, close up the doors and creditors receive some amount of compensation but take a loss. As I've mentioned ad nasuem, 1) could not happen due to the liquidity crisis. Had GM gone bankrupt at any time before September of 2008, they would have been able to do what you suggested.

Each company could've (and would've) sold off several things, like parts of their car collections(GM did indeed do that), which earns money. They'd have sold land and properties with existing buildings. They'd have slated to erect new buildings in a less expensive manner. They'd have gotten rid of hundreds of overpaid "office help" types, including perhaps half of their engineering teams, saving millions annually.

Again you are off the mark here and not really understanding what it means to be bankrupt. Their assets were not of sufficient value to cover their debts. Saving millions annually or selling a car collection for a million more means nothing when you are losing $15 billion in a quarter. There was also the issue that they would have been sold for far below market value (no one wants a large manufacturing plant while the economy was shrinking), and any potential buyer would have had a hard time securing a large enough loan to purchase such properties in the first place for the same reasons GM could not secure a privately financed Ch. 11.


As to your last statement, I think we're soon to see how true that rings, based on NASA ending it's space entry program of the shuttles. We'll see if people like Richard Branson can get it done for less or not. I can say we've seen many new styles of space craft since the end of our shuttle program and none have even hinted at reaching the cost... We're talking billions and billions less spent. Of course, they're not into outer space yet either(they've gotten there, but only very briefly). With that, we can't say private industry is better. I think it will happen, but that's me.

He won't, because it's quite simple. There is no profit motive to go into outer space. Sure, you will have a few multi-millionaires spend some play money to go into sub-orbit - it does not even hit low orbit. The craft goes to 70k feet. The SR-71 officially could go to 85k. For comparison the Shuttles orbited at 2.1 million feet. It's not close to analogous. Private industry is not always better. It is only better where there is a profit, and there is no profit in discovering things in outer space merely for the betterment of humanity.

1ltcap
04-20-2012, 12:39 PM
It's a nice and simplistic view, but the practical application proves otherwise. I offer the example of the "too big to fail" banks that were bailed out in '08. Sometimes the collateral damage exceeds the cost of keeping the business running. Sometimes the strategic need for the business outweighs it's profitability. The government has been bailing out the US steel industry for about 40 years. Someone likely rationalized that importing all of our steel from China and Japan may present a problem when we need to build tanks and warships. Thus an uncompetitve industry was given protective tariffs.



I don't think you understand finance and how bankruptcy works. GM had no money to fund operations by late 2008. None. They could not buy parts, could not pay employees, could not pay utility bills. Pay freeze, layoffs, none of that mattered since they could not fund their operations any longer. Their debt obligations far exceeded their cash flow and available assets. At that point 2 things happen: 1) they either reorganize, where a loan is floated to them so they can fund operations while they restructure, or 2) they liquidate, sell assets, close up the doors and creditors receive some amount of compensation but take a loss. As I've mentioned ad nasuem, 1) could not happen due to the liquidity crisis. Had GM gone bankrupt at any time before September of 2008, they would have been able to do what you suggested.



Again you are off the mark here and not really understanding what it means to be bankrupt. Their assets were not of sufficient value to cover their debts. Saving millions annually or selling a car collection for a million more means nothing when you are losing $15 billion in a quarter. There was also the issue that they would have been sold for far below market value (no one wants a large manufacturing plant while the economy was shrinking), and any potential buyer would have had a hard time securing a large enough loan to purchase such properties in the first place for the same reasons GM could not secure a privately financed Ch. 11.



He won't, because it's quite simple. There is no profit motive to go into outer space. Sure, you will have a few multi-millionaires spend some play money to go into sub-orbit - it does not even hit low orbit. The craft goes to 70k feet. The SR-71 officially could go to 85k. For comparison the Shuttles orbited at 2.1 million feet. It's not close to analogous. Private industry is not always better. It is only better where there is a profit, and there is no profit in discovering things in outer space merely for the betterment of humanity.

actually, spaceship one went to 361k feet. i think that's how high virgin galactic is planning their spaceship 2 to go.
there's also x-prize teams working on orbiters, and i think moon landers. privately. there is money in it, as will be shown within the next 20 years.

using tarriffs to protect an industry, is not the same as bailing them out. the banks didn't all need it either, but some were forced to take it anyway from what i've heard.
if i'm not mistaken, the banks were mostly in trouble due to govt. practices forcing them to take risky loans? and didn't freddie and fannie(also govt operated?) play a BIG role in the banks running into problems.

if they were in the position of losing that much each quarter, then they were playing a shell game with themselves, and gmac, probably using it as a tax shelter. i've seen small businesses do this. if they let it go that long, then they deserved to fail......and should still have been left on their own. i'd say this very same thing if it were ford in their position.
even if it were foreign manufacturers that took up the slack.....toyota, subaru, kia, hyundai, honda, nissan, bmw, all of them build cars here in the usa......so there'd still be americans being put to work, along with the people working for the supplying companies, and their employees.

when it comes right down to it, it all seems to come back to govt. interference, and traders. perhaps it's time to get rid of certain things on the trade market(wallstreet), and get the govts nose out of business.

NHRATA01
04-20-2012, 02:08 PM
actually, spaceship one went to 361k feet. i think that's how high virgin galactic is planning their spaceship 2 to go.
there's also x-prize teams working on orbiters, and i think moon landers. privately. there is money in it, as will be shown within the next 20 years. I was just going by the numbers I read online, that show 1 at 70k feet. But now looking further I do see II is listed at 110km so my bad. Quite a bit lower orbit than the shuttle. But that's off topic anyway.

using tarriffs to protect an industry, is not the same as bailing them out. the banks didn't all need it either, but some were forced to take it anyway from what i've heard.
Correct, quite a few of the smaller banks took the money and then quickly paid it back. I know at least Wells Fargo paid back pretty quickly, but quite a few large ones kept the money for awhile. In any event there's not much difference between a tariff or a bailout. It's using the government to tilt the competitive favor in a company's direction.

if i'm not mistaken, the banks were mostly in trouble due to govt. practices forcing them to take risky loans? and didn't freddie and fannie(also govt operated?) play a BIG role in the banks running into problems.
Eh, not really. That tends to be a tired line used by a few pundits with an agenda. The root causes were pretty deep and wide, but the main problem was the banks overleveraged themselves to the point where only a few bets had to go bad for the whole system to crap out. The large investment banks created the Mortgage-Backed Security, which basically bundled up a bunch of sub-prime mortgages into an investment vehicle, then ensured them against default by AIG, and sold them to investors with the same grade as a US Treasury bill (in other words, basically an investment guaranteed to pay off). With the total value of MBS's out there, AIG knew they could cover only a fractional percent of them defaulting before becoming insolvent. But of course that would never happen since the real estate bubble could never pop. And, well, once the real estate bubble burst AIG had no ability to pay, and took down a number of banks like Bear Sterns and Lehman in the process. And this was exacerbated because a number of firms bought MBS's on margin, in other words they took out a loan from somewhere else to buy a bunch of MBS's that yielded a higher rate then the loan they took out to buy them in the first place.

But in any event, sub-prime loans went from something like 3-5% in the early '00s to 20% by '04ish. Not because the government was suggesting the lower class overextend to buy a house, but because there was global investor demand for MBS's because they yielded more (since the person paying the loan was paying a higher interest rate on his mortgage due to the risk) than a bond and were guaranteed against failure as I mentioned above.

if they were in the position of losing that much each quarter, then they were playing a shell game with themselves, and gmac, probably using it as a tax shelter. i've seen small businesses do this. if they let it go that long, then they deserved to failTo be honest, I don't even think they were smart enough to do that. Wagoner was under the delusion that his product portfolio (thanks to Lutz) kept getting better and better, and that vehicle sales would keep growing. Except they peaked in '08 and still haven't recovered. It didn't help that gas prices hit a high in '08 and GM was still overly reliant on large trucks and SUV's. Funny part at the end of this article from June '08 (which reiterates much of what I've posted about GM's situation): http://www.forbes.com/2008/06/30/gm-debt-credit-biz-manufacturing-cz_jm_0602gm.html After all the words about GM's dire financial situation, they basically said "GM predicts an uptick in the economy at the end of the year". Well that sure as hell didn't happen.


when it comes right down to it, it all seems to come back to govt. interference, and traders. perhaps it's time to get rid of certain things on the trade market(wallstreet), and get the govts nose out of business.

Only thing is in the same sentence you're complaining about government interference, but then suggesting someone to regulate Wall Street. :)

1ltcap
04-20-2012, 02:36 PM
I was just going by the numbers I read online, that show 1 at 70k feet. But now looking further I do see II is listed at 110km so my bad. Quite a bit lower orbit than the shuttle. But that's off topic anyway. yea, i know it's off topic......it was something that amazed me though. they went to the point of carrying a sign after one of their record flights. it said" spaceship 1 NASA 0.


Correct, quite a few of the smaller banks took the money and then quickly paid it back. I know at least Wells Fargo paid back pretty quickly, but quite a few large ones kept the money for awhile. In any event there's not much difference between a tariff or a bailout. It's using the government to tilt the competitive favor in a company's direction. i'd figure the larger ones probably hung on to it to try to make it work a little extra for them.
as for tariff/bailout? there is a HUGE difference. you yourself stated the example. tariffs on imported steel is not giving money to the american steel companies to keep them going, whereas bailing them out would have. true, it is still govt. interference, but it is totally different. i believe that they were at one time charging pretty hefty tarriffs on imported cars? and this is part of the reason that so many imports are built here now?


Eh, not really. That tends to be a tired line used by a few pundits with an agenda. The root causes were pretty deep and wide, but the main problem was the banks overleveraged themselves to the point where only a few bets had to go bad for the whole system to crap out. The large investment banks created the Mortgage-Backed Security, which basically bundled up a bunch of sub-prime mortgages into an investment vehicle, then ensured them against default by AIG, and sold them to investors with the same grade as a US Treasury bill (in other words, basically an investment guaranteed to pay off). With the total value of MBS's out there, AIG knew they could cover only a fractional percent of them defaulting before becoming insolvent. But of course that would never happen since the real estate bubble could never pop. And, well, once the real estate bubble burst AIG had no ability to pay, and took down a number of banks like Bear Sterns and Lehman in the process. And this was exacerbated because a number of firms bought MBS's on margin, in other words they took out a loan from somewhere else to buy a bunch of MBS's that yielded a higher rate then the loan they took out to buy them in the first place. i think that what AIG was doing, is what most insurance companies do. but then again, that comes into another whole topic with what those guys all do with their money.

But in any event, sub-prime loans went from something like 3-5% in the early '00s to 20% by '04ish. Not because the government was suggesting the lower class overextend to buy a house, but because there was global investor demand for MBS's because they yielded more (since the person paying the loan was paying a higher interest rate on his mortgage due to the risk) than a bond and were guaranteed against failure as I mentioned above.

To be honest, I don't even think they were smart enough to do that. Wagoner was under the delusion that his product portfolio (thanks to Lutz) kept getting better and better, and that vehicle sales would keep growing. Except they peaked in '08 and still haven't recovered. It didn't help that gas prices hit a high in '08 and GM was still overly reliant on large trucks and SUV's. Funny part at the end of this article from June '08 (which reiterates much of what I've posted about GM's situation): http://www.forbes.com/2008/06/30/gm-debt-credit-biz-manufacturing-cz_jm_0602gm.html After all the words about GM's dire financial situation, they basically said "GM predicts an uptick in the economy at the end of the year". Well that sure as hell didn't happen.



Only thing is in the same sentence you're complaining about government interference, but then suggesting someone to regulate Wall Street. :)

yea i know i'm kinda contradicting myself in that last statement. the problem with wallstreet though, is that those guys panic at the drop of a hat.

speedtigger
04-20-2012, 02:49 PM
That's your opinion, but we've seen, throughout the history of the combustion engine, new taking the place of old, businesses sprout up from seemingly nothing, businesses fail and others coming to light... That's simply called capitalism.

It's a nice and simplistic view, but the practical application proves otherwise.

Sometimes "a simplistic view" is superior to hyper rationalization. Especially if the "simplistic view" is based on solid principles.

1ltcap
04-20-2012, 02:56 PM
Sometimes "a simplistic view" is superior to hyper rationalization. Especially if the "simplistic view" is based on solid principles.

i wish automotive engineers would subscribe to that outlook. :bang: :D

It'llrun
04-20-2012, 03:49 PM
It's a nice and simplistic view, but the practical application proves otherwise. I offer the example of the "too big to fail" banks that were bailed out in '08.That's an example of proving the practical application otherwise... using an impractical application? There's the entire problem in a nutshell. Our government stepped in where it does not and never did belong. I could easily argue they made it worse, but I won't bother here. The obvious fact is, your example is completely impractical. The actual practical application of capitalism explicitly excludes your example by its very definition.

Sometimes the collateral damage exceeds the cost of keeping the business running.At which point, the business goes OUT of business, in a capitalism society.
Sometimes the strategic need for the business outweighs it's profitability.Aside from things which actually protect a nation on the whole, there is nothing.

The government has been bailing out the US steel industry for about 40 years.Not really. The American steel industry decidedly disappeared beginning in the mid-late 1970's and what's left of it is a small fraction of what it was before 1975. Not to mention, tariffs are not bailouts. and that is not to mention, tariffs rarely work well for the country intending them to help.

Someone likely rationalized that importing all of our steel from China and Japan may present a problem when we need to build tanks and warships.Thus, the billions of tons of steel in America still sits. The "strategic" part may have been to use less of ours and more of theirs.
Thus an uncompetitve industry was given protective tariffs.Really? Then why August of 2009 the 1st month in more than 50 years that America was a net exporter of steel?

I don't think you understand finance and how bankruptcy works. GM had no money to fund operations by late 2008. None.So says you. GM actually reported having money, but needing more because they were about to run out. That's what led them to their bailout in the end. http://money.cnn.com/2008/11/07/news/companies/gm/ $82 billion in assets isn't exactly "None" where I grew up.

They could not buy parts, could not pay employees, could not pay utility bills. Pay freeze, layoffs, none of that mattered since they could not fund their operations any longer. Their debt obligations far exceeded their cash flow and available assets.Can you show any time in which GM actually stopped buying parts, paying employees, or paying utility bills? I'm not talking about "employees" who are laid off(though we do know they paid employees to NOT show up for work) or fired or for vehicles not in production or buildings not in use either. They did mass layoffs and tried to freeze pay, but could only do that for non-union employees while that contract was intact.

At that point 2 things happen: 1) they either reorganize, where a loan is floated to them so they can fund operations while they restructure,Until recently, that's always happened through banks or private investors. There's our problem at this point. The investors became the public. Reorganization has a name, you know. It's called bankruptcy and I can't think of a time when the government ever took so much control of one. The only closely related case was Chrysler in the 80's. They filed bankruptcy.

or 2) they liquidate, sell assets, close up the doors and creditors receive some amount of compensation but take a loss.Closing the doors doesn't always have to happen. Considering all the assets GM had, most of which it still has, it seems that wasn't a problem. They did eventually file bankruptcy, after all.
As I've mentioned ad nasuem, 1) could not happen due to the liquidity crisis.You can mention it all you want. That won't make it correct. I can say every horse has three heads and 60 tales. That doesn't prove they do. By the same token, we know for a fact that GM actually did have money and billions in liquidity at their beck and call. Their goal was simply to not use it. They admitted being close to broke and not wanting to file... Ultimately, the got federal help and filed anyway.
Had GM gone bankrupt at any time before September of 2008, they would have been able to do what you suggested.What makes it impossible to do what I suggested, since they filed in June 2009? What was so significantly different over those 9(roughly) months, that made it so GM couldn't do the right thing(according to bankruptcy law at the time).

Again you are off the mark here and not really understanding what it means to be bankrupt.Not for nuthin' here, but so far you're proving incapable of making your case. They actually did some of what I said(and I said so in that post), so why do you think I'm off the mark? I stated facts, not just opinion.

Their assets were not of sufficient value to cover their debts.That is your opinion. It's is only an opinion. You're entitled to it, but don't sit there and tell me I don't have it right because you suspect something else to be the reality. Again, repeating yourself will never change the actual facts. The fact is, GM did have assets and did indeed sell some, but not even close to half, let alone all of them. That said, it's not all about assets in their case because they were a massive company which actually creates assets and profits by their actions. Why should I have to bail them out for making poor decisions, like paying upper management millions each year, believing 100% that they could not afford to do so? If I decide to give you $1,000 a week because you exist, but I only have $800 a week to spend, I'm nothing more than an idiot. Why doesn't GM fit into that category as well, and have to suffer as I would? Because they're massive? BALDERDASH!

Saving millions annually or selling a car collection for a million more means nothing when you are losing $15 billion in a quarter.1st, go look at my link above. At the time, GM said it lost 4.2 billion... Roughly 3.5 times less than you're stating. It's not just 1 car collection, and that's the point. GM had plenty(and still has) they could have gotten rid of, but chose not to get rid of on their own.

There was also the issue that they would have been sold for far below market value (no one wants a large manufacturing plant while the economy was shrinking), and any potential buyer would have had a hard time securing a large enough loan to purchase such properties in the first place for the same reasons GM could not secure a privately financed Ch. 11.If a building or several, for that matter, goes on sale for 1 tenth of its appraised value, why wouldn't a real estate mogul such as Donald Trump buy it and wait? It wouldn't likely break that kind of person. There went that hard to finance argument.

GM didn't need a publicly financed Ch. 11 when it had 82 billion in assets. It had 82 billion in assets. GM did what I suspected it would, selling off many properties it didn't need, a portion of a massive auto collection, brands it either sold or dropped. All of that could've been done without governmental intervention. Many believe GM would've been better off if it had. That's not even considering the thousands who got hosed on their stock investments.

He won't, because it's quite simple. There is no profit motive to go into outer space.Richard Branson didn't become a multi-billionaire by taking risks without knowing the possible result would benefit himself greatly. You're convinced there's no profit to be had, but the guy who is actually doing it thinks you're wrong, and he won't stop his plans to tell you that himself.

Sure, you will have a few multi-millionaires spend some play money to go into sub-orbit - it does not even hit low orbit. The craft goes to 70k feet. The SR-71 officially could go to 85k. For comparison the Shuttles orbited at 2.1 million feet. It's not close to analogous. Private industry is not always better. It is only better where there is a profit, and there is no profit in discovering things in outer space merely for the betterment of humanity.Several people have already put down their $20,000 (10%) down payment.

Private industry is not always better... In cases of defense, it is not. Pretty much everything else, it is. It's not like the US government, or any other, for that matter, was responsible for flight in the 1st place.