truth about domestics

Jon Stewart provided his opinion on GM’s recent filing for bankruptcy on the Daily Show with Jon Stewart Tuesday night. Check out the video for his take. It’s also pretty funny, if nothing else.

While I’m not a big fan of Jon Stewart and his super-liberal-viewpoints, he did make a good point: banks that made nothing, nothing tangible, were given cash with no questions asked and few strings attached. General Motors and Chrysler make a product!

I don’t agree with him saying that GM could have filed for bankruptcy a while back for “free.” Many things GM has done until now has been in preparation for bankruptcy, which will hopefully make it a quicker trip through the courts.

And I am still dumbfounded by the ignorant comments I hear and read about why we (the taxpayers) are giving money to these companies. Well, the way I (and well-educated individuals) look at it is as so: if the US government allowed the companies, or more specifically GM, to fail, the cost would be a lot greater than that already incurred. Significantly greater! I am no economist, but the tax base of the millions of people becoming unemployed has got to be worth something. So to all of the naysayers: SHUT IT! Until you can provide a better solution, don’t speak.

Elon Musk, the CEO of Tesla Motors, was on Dave Letterman last night talking about the Tesla Roadster and their new Tesla Model S. Let me just get this out of the way: what a bunch of idiots! Musk and Letterman!

They went to great lengths discussing the Tesla Roadster and how awesome it is. Then, Musk had the pleasure of ripping on GM for destroying the EV1 cars after the program was canceled: “…when was the last time you heard anyone doing a candle-light vigil for the destruction of any product, let alone a General Motors product.”

Eventually they went on to discuss GM’s Chevy Volt. Letterman tore it apart for having a range of only 40 miles. The problem is that not once did he mention the range-extender feature of the car, nor did Musk have the courtesy to correct him.

Musk did mention once that the Tesla Roadster costs 100K; but I guess since letterman has enough cash to buy one outright, he didn’t bother to put 2 + 2 together and realize that Tesla is NOT producing cars for the average person.

I respect Tesla’s initiative, and the fact that it’s based out of the United States. But now knowing that the company (Musk is at the top after all) has absolutely no class, I will stray away from their cars…oh wait, they only have one limited production roadster to show for their effort; there is nothing to even consider!

Oh, and where did the geniuses at Tesla come up with the name “Model S?” I think they can only dream of the Model S being as revolutionary as the Model T was. Show some respect.

Watch the video for your own take on these fools.

Good news for GM in China; sales in March were up 24.6% from a year earlier to a record 137,004 vehicles. The sales increase can be attributed to sales in China rebounding slightly and strong sales of Buick and other vehicles developed in a joint venture with SAIC-GM-Wuling Automobile Co.

Sounds like General Motors isn’t doing everything wrong. With the Chinese economy showing signs of improvement, and many economists predicting that China will be the first to rebound in the global economic recession, it comes as no surprise that their sales were up. Again proof, that GM’s woos are not only from its own doing.

Read the full article at The Wall Street Journal.

In a speech to the Detroit Economic Club, the CEO of the U.S. Chamber  of Commerce, Thomas Donohue, stated that protectionism and isolationism is not an appropriate way to save the auto industry. Donohue said that a protectionist policy will only hurt American jobs and the economy. Additionally, he said that said policies would also hurt America’s commitment to its global trade rules.

While I agree with Mr. Donohue, and other economists, about isolationism and protectionism not being a good policy, I believe that Mr. Donohue does not see the bigger picture. As I have stated (or ranted) before, this is not about protectionism; this is about playing the global trade game fairly. The United States has one of the most open trade policies of any other nation. Countries that are part of the European Union tend to practice protectionism on a level that makes it fair for their domestic companies to compete with foreign competitors.

But what about countries like Japan? Do they practice free, or fair, trade? No; they do not. They are not even close to practicing fair trade. Otherwise GM would sell more than 10,865 vehicles in Japan in 2008 (this is after a 35% sales increase from the previous year); there were 5.08 million vehicles sold in Japan last year (6% decline from 2007). A quick calculation shows that GM had a market share of 0.214%; wow, that is awesome!

Read the article at The Financial.

Booyakasha! Who is leading the automotive industry in technological innovation…that’s right, one of the domestic automakers: Ford!

Alright, now that I am done cheering for one of the home teams, the news goes as such: Ford outperformed all other automakers in what they call “the quality and significance” of its technology patents. I take that to mean, Ford had many patents, and many of which have actual importance and significance. Good news!

Read the full article at Ward’s Auto.

Talk about hypocritical! This is incredible…first they (elected government officials) tear apart the three auto executives for flying into Washington DC, and now they give themselves a bonus? A $93,000 bonus!

Oh, right, this must be part of the stimulus package to help Americans get back on their feet amidst a giant recession. Among the highest unemployment rate in 40 years and millions of home foreclosures, the Congress must have felt that they are doing a great job. Now, I get it…

Hello and Happy New Year! I haven’t had a chance to post much lately, but now truth about domestics is back at it. With a New Year, we will be bringing a lot more truths about the domestic auto industry.

We are currently working on exciting videos and new content. We’re still working on fixing the layout of the website. And, lastly we added some advertisements to help pay for the website hosting.

A word about the advertisements: we are using Google to host the ads, which means that they will throw anything related to autos in there. This means that there will be advertisements relating to non-domestic auto companies. This is FINE, because we are NOT anti-import vehicles, we are simply trying to expose the truth about domestic vehicles.

Support the cause, keep reading, and tell others about this site!

-Alex

Source: Detroit Free Press

So you’re against the automaker “bailout?” But did you know that taxpayers (i.e. you, if you’re a US citizen) have already provided financial support to foreign automakers, right here in the good ol’ USA?

As Stephen Collins states in his editorial Tax Fairness for U.S. Automakers, the U.S. automakers are asking for financial support on the order of $16,000 spread amongst approximately 240,000 employees (for all three automakers). In comparison, the state of Tennessee has offered Volkswagen tax incentives and other subsidies to the tune of $577 million, which equates to $288,000 for every job created.

Similarly, Toyota is getting its share, equaling $300 million for building a plant in Texas, which works out to $150,000 per employee. And in Alabama, Hyundai, Toyota, Honda, and Mercedes are getting incentives equal to $111,000 per employee.

But there is a difference between the financial support that the domestic automakers are asking for and that received by the foreign automakers: the loans provided to the domestics are going to be paid back, whereas the incentives provided to the foreign companies will never be paid back.

If you ask me, I think the financial support is worth it…

-Alex

Source: Tax Fairness for U.S. Automakers

So here goes…one of my first serious posts on truths about domestics.

I was driving into work today and listening to the 89X radio station, as I usually do in the morning. During my commute, the main topic of conversation was yesterday’s 237-170 House approval of the $14B financial support package for the D3 and a South Carolina dealership’s controversial and racially charged advertisement campaign. As I was listening, a number of callers called into the radio station to give their perspective on the D3 situation.

I have a lot of respect for Dave, Chuck, and Lisa (the three hosts of the radio station), but I noticed that a lot of the callers still had the wrong perception of the D3. They were clearly misrepresenting the industry, Detroit, and the United States as a whole. So, for my first real blog entry, I’d like to make some comments to some of the radio station listeners:

Call 1: The first caller I heard mentioned that Honda builds cars here in the US. In fact, he says, Honda builds over 80% of the cars sold in the US, in the US. Plus this caller says the resale value of Hondas is very high, which also helps stimulate the economy.

I’ll begin by stating that even though Honda has plants here in the US, and it may build a significant portion of the cars sold here in the plants here, it is not 80%. Honda still sold fewer cars than Chrysler this year, and GM sold more cars than Toyota. All in all the D3 still make ~50% of the cars sold in the US.

And what about the number of assembly plants Honda has in the US? Well, Honda only has three (3) assembly plants in the US, one in Alabama and two in Ohio. Just look at how many assembly plants GM has in Michigan (http://gmdynamic.com/company/gmability/environment/plants/facility_db/index.php?submitForm=true&mode=state&state_id=22); hint, it’s more than three. Granted Honda has other facilities, that build engines, parts, stampings, etc., but so do the D3. And this doesn’t take into account the actual development resources… All in all, the rule of thumb is that less than 1/3 of the revenue of foreign auto manufacturers, for the cars sold in the US, stays in the US, the rest goes back to the auto maker’s home country. Most of D3′s revenue stays in the US…

Finally, what does the high resale value of a Honda have anything to do with stimulating the economy? The perception that Hondas are better than anything else out there is actually wrong, and so are their high resale values…

Call 2: Another person called in explaining how disillusioned she was by people who blame foreign car owners for the current situation. She mentioned that she drives a Honda and has had it for seven years and hasn’t had one issue with it. In comparison, the previous GMC that she had was taken in for six recalls. She also claims that the pro-domestic consumers who blame foreign car owners are hypocrites and that they should look at the tags on their cloths.

I’ll begin with this: she has had the Honda for seven years, and assuming that she drove the GMC for at least five years, that would make her last domestic purchase 12 years ago! Most will agree that auto quality has increased tremendously in the past 15, 10, and even 5 years! Even for Honda and Toyota. Just because she had a bad experience with a domestic car 12 years ago, it doesn’t mean that they are all junk now; think about it. Check the major publications, quality of GM, Ford, and Chrysler vehicles are on par with their foreign counterparts. And in some cases, even better. So if this caller feels that there is no need to shop around at the domestic auto dealerships, well then, she is only hurting herself.

And the hypocrite comment: you made a very good point, but it seems like you drew the conclusion that we might as well give up on all industry here in the US, since everything is made somewhere else. This is the whole point of helping the domestic automakers: we need to help them to keep the industry in the United States, it is just that important!

Call 3: Another person called in, and he clearly did not have an understanding of Econ-101. He questioned the possibility of how it is possible that more money stays in the US from the D3 when they do not even post a profit.

Was he serious? It’s not about the profit; it’s about the revenue that the company brings in from selling vehicles: paying their employees for developing the vehicle, manufacturing the vehicles, and selling the vehicles. Since the D3 clearly do more of that here, more of the money stays here.

Call 4: One listener sent in an email, and Dave read it on the radio. This person was frustrated by a dealership ad which advertised a Malibu, which this person really wanted, and when he tried to purchase it, the car ended up costing more than he/she though it would. Plus, this person was mad that the car is fuel inefficient. So this person settled on a small Kia (I don’t remember the exact model), that is cheaper and more fuel efficient.

I am not even sure what to make of this. The person first needs to realize that most dealers own both domestic car dealerships and foreign car dealerships. Claiming that a domestic’s auto dealership is evil because of its bad advertising and a foreign car dealership is great because this person seemingly got a good deal from it is just wrong. This person went from purchasing a mid-size sedan that by all accounts is as good in quality, efficiency, and cost as its major competitors and purchased a smaller vehicle that is cheaper and more fuel efficient. I hope the smaller vehicle was cheaper and more fuel efficient; that just seems to make too much sense…

Those are all of the calls I remember from the show… Again, my initiative (and the goal of truth about domestics) is too set the record straight on the domestic automakers, and clearly, these callers were misrepresenting the truth.

-Alex