This post is a response to Joseph Romm's post, "Mo' money, mo' problems," on the future of the American automotive industry.
-----
Most Americans rely on their cars to drive to work or leisure but never realize the auto industry is important to their pocketbooks, too.
When the economy sinks, consumers delay purchases ... starting with a new car. Consumers who want to buy may not get credit, and 90 percent of new autos are financed.
It's a depression in the auto industry today.
October auto sales were the lowest in two decades, down 32 percent from a year ago. When adjusted for population growth, 2008 auto sales may fall to post-World War II levels. In September alone, 1000 dealers closed their doors.
The entire industry's condition affects far more than just a dozen automakers. In all 50 states, communities big and small rely on the greater auto industry. Just like bank failures rippled through the economy, the auto industry has a large ripple effect ... one that reaches to your community.
Nationwide, 13 million jobs are auto-related. Every auto plant job generates another five jobs among suppliers and the surrounding community; by comparison, a Wall Street job generates two additional jobs.
Even if there is no auto plant nearby, your community may depend on auto manufacturing. The auto industry is one of the biggest purchasers of aluminum, copper, iron, lead, plastics, rubber, textiles, vinyl, steel, computer chips and more.
Auto sales account for 20 percent of U.S. retail sales and generate tax revenues of more than $10 billion, so the plunge in auto sales is affecting your state's treasury right now.
It is vital to the U.S. economy to have a healthy, competitive auto industry, and the next 100 days are critical.
The potential failure of one or more automakers would cut up to 2.5 million jobs in the first year as production ground to a halt throughout the industry, according to a report released on Nov. 5 by the Center for Automotive Research.
That may be why President-elect Barack Obama offered his support for our industry:
Few have been harder hit by our credit crisis than the workers who make our cars and the companies that supply their parts. Now, when it came to rescuing Wall Street, Washington didn't waste a minute. But now that autoworkers are suffering, Washington's put on the brakes. It turns out it could take a year for the auto industry to get the loan guarantees we passed a few weeks ago. Well, the workers who are being laid off and the companies that are seeing their sales drop -- they can't afford to wait a year, they need help right now.
There is cause for hope in the auto industry ... because we are reinventing the automobile.
In last year's energy bill, Congress approved $25 billion in loans to help automakers retool for the next generation of fuel-efficient autos. We supported the mileage increase in the energy bill, and automakers are working to achieve the unprecedented 40 percent increase in fuel economy across our entire fleet.
In 2009, dealer showrooms will boast about 140 models with highway fuel economy ratings of more than 30 miles per gallon. That's an increase of 25 percent over the number of 30 mpg products offered in 2008.
Model year 2009 vehicles will include 25 hybrid and eight clean diesel models, as well as autos employing fuel-efficient technologies like continuously variable transmissions and cylinder deactivation. Many products planned for just a few years from now don't run on gasoline at all.
But money makes progress possible.
Building autos is a capital-intensive industry. A new power train can cost $1 billion to build. The federal government estimates that the new mileage standards will cost automakers $115 billion by 2020.
So long as our industry remains viable, we're on the right track.
Our industry plans to be on the leading edge of the new energy economy. Our work towards meeting a national solution could create the biggest wave of "green jobs" our nation has seen as automakers produce more cars that use less fuel and produce less carbon dioxide.
But first we need to get through the next year.
-----
The Alliance of Automobile Manufacturers is a trade association of 11 car and light truck manufacturers including BMW Group, Chrysler, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi Motors, Porsche, Toyota and Volkswagen.
Top 25 reasons to give a damn about climate change
Comments
View as Threaded
Delay And Deny Posted 8:41 am
12 Nov 2008
The problem is that industries want to be socialized at a time of new technology -- when we need capitalists more than ever before!
The auto industry is a case in point. Like most Dow companies, building cars is now a commodity business. Even the more esoteric technologies like hybrid are getting cheaper as you say. And with the eventual rise of fuel cell cars, that have only one engine, cars get ever simpler to build, and maintain.
It would be stupid to pour more money into a shrinking business like autos, at a time where we need to fund the new industries like Green, alternative energy, nanotechnologies and web-semantic technologies.
The problem is this: too much capital has been tied up in declining DOW industries. We need to move that capital into the hands of individuals.
At this point, the Government should be a virtual feeding through for people. We should be putting grants of $80,000 or $100,000 there for the taking -- whether someone wants to create the next material for hydrogen storage or simply wants to figure out a way to turn wangsters on the street corner into local aldermen.
We need to decouple the individual, with all his brain power and talent, from the machine organization, which uses only 1 percent of his ability.
Every person should have the same rights and funding as these businesses.
Permalink
Luddhunter2 Posted 8:58 am
12 Nov 2008
But I must rant on the bailout mentality.
The statist handout begging whiners from the left and the rightwing-monopolist-oligarch-sucking punks must be creaming in teir collectivist/fascistic jeans over these daily bailout calls. This is the 72 green smelly virgins they dreamt of when their pillowbiting Knight in Shimmery Satin, Barney Frank, and his p_ss-boy Chris Dodd, and the libertarian-in-name-only Alan Greenspan aided the sabotage of the housing market years ago. The inevitable socialist/fascist bailout coup going on now must be like a never-ending orgasm for the Leviathan-knob-slobbers.
F_ckin parasites, all of them. But be careful what you wish for. There is only so much tax extortion money you can use. They can't bail out every bloated, overregulated, govt co-opted, union-slacker-infested dinosaur company. Some will die a horrible death, with screwdriver turning union idiots losing their 45$/hr jobs that would be $10/hr in a free market, and losing their pensions, and having to work their last 5 years for Toyota at 1/3 the pay. Justice served for parasiting for so many years.
And when the money runs out, the useless unionized b_stards might just have to compete and add value to stay employed. Or do they all still run to their mommies and breast-feed when for comfort when they worry about having to get a real job?
No charge for the Luddhunter's tough love today.
Permalink
Tasermons Partner Posted 2:42 pm
12 Nov 2008
Dude, the Japanese and Korean car companies already did that...20 years ago.
And you expect the Americans to catch up with them in just a few years?
Yes, we've all heard 'bout the Chevy Volt and a few of the other more innovative models, but even according to the industries own predictions, they don't plan on pushing those models into a significant portion of the overall production.
Why? Because they think it's "less cost efficient" to produce that more "conventional" models.
And yet, had they focused on those more innovative models to begin with, their companies wouldn't be hittin' bottom right 'bout now.
Ironic, no?
Plus, the number of jobs provided and the economic impact that you quoted in your article are for the automobile industry as a whole...including foreign car companies. In fact, a significant amount of the jobs and economic impact are from foreign companies.
The thing is, the foreign car companies aren't in danger of collapse.
They just want a bailout primarily for American car companies, which actually produce far less vehicles for the American public than the foreign companies do.
The thing is, foreign car companies, in general, are far more efficient, have better gas mileage, safety features, require less maintenance, and have better customer satisfaction ratings than the American companies do.
And their vehicles are generally comparable (or cheaper) in price.
And it's not like they're takin' away American jobs. The majority of cars produced by foreign car companies and sold in America are made in America.
At plants that are on American soil and hire Americans to work 'em.
And unlike the American companies, they aren't subsidized by our own government to nearly the same extent.
So, the question is, with the foreign car companies already producing better products, at reasonable prices, by using American workers, why, exactly, should we subsidize (more than we already have) the American car companies who, in fact, now make up a minority of the cars sold in the country?
They say they need to money to increase production on fuel efficient vehicles...why not just go with the car companies that ALREADY make fuel efficient vehicles, and have done so for decades?
Afterall, the best way to increase America's fuel efficieny would be if the companies who make the most inefficient vehicles went under and stopped production.
Then, everyone would buy and drive the more fuel-efficent vehicles produced by the other companies.
Permalink
cneal Posted 12:49 am
13 Nov 2008
The auto industry needs a shakeup, and to accomplish it, one of the Shrinking Three needs to shut down. This industry doesn't need a bailout. It needs pure capitalism's tough love. Bankruptcy for the most inefficient firms will do more to revive the industry than Congress ever could.
vigorousnorth.blogspot.com
A field guide to the wilderness areas of American inner cities.
Permalink
Wolverine Posted 7:31 am
16 Nov 2008
Second, "what's good for GM is good for America." Sieg Heil! The auto industry, along with the other destructive industries it supports and relies upon like the oil industry, is destroying the planet. If Americans really want change -- and I for one don't believe for a second that they really do -- they should be willing to let this evil industry die and change to public transit for industrial transportation.
Permalink