Saturday, November 15, 2008

Save the Auto Industry

While many Americans including yours truly did not want the gov't to bail the financial world out We do need to save the auto industry.

I am sure many disagree for very valid reasons but you are wrong in the long run and here is why.

For many years now we have let many industry's and jobs go to other country's and have devastated sections of the country with little care how it affected those people or the nation as a whole. The auto industry is different in many ways. If we do not bail these guys out the direct impact on Ohio and Michigan will leave these states virtual ghost towns. It will be completely impossible to find enough jobs in those states to cover the amount of people who will be unemployed. The revenue those states would lose will cause them to collapse. There are also the dealerships, parts manufacturers, the parts sellers, repair shops that would directly feel the collapse of the U.S. auto market. Of course there also the side business's that would be affected in those towns. It maybe the local barbershop, restaurant or retail store. It would be widespread in many communities and I think would cause the U.S. a major recession if not a depression.

Then you have this. Many people have been commenting of the years about the loss of manufacturing jobs in this country. How can so easily give up on the industry that built America.
If the auto industry had never happened in the U.S. we would not be the nation we are today in terms of size, strength or power. Those are the people who retooled their machines and helped build the planes, tanks, boats and other equipment in both World Wars. Without them we would be very different today. They helped rebuild the nation after WWII buying selling cars at affordable rates and the nation expanded. They were important to us as a nation. They helped us grow. We can not just give up on them.

The other thing to remember is that only 14% of the worlds population own vehicles at this point in history. There is much room for growth, just not in the United States. If we are to be a player in the world economy then we need these guys.

As the world grows and continues to become more closely tied together do we want to become a nation of consumers and not producers. As the world continues to grow new leaders are and will emerge. The country's that will rise towards the top will be the producers. They will have the power.

We must become a nation of manufacturing again.

To save the auto industry we will have to be tough on them. They did this to themselves by being arrogant, blind and just plain stupid. The labor costs are ridiculous. Here is an example,
my father had to buy an oil hose for his GM pickup. He went to the dealer and the price was $113.00. He decided to check the price at the auto parts store and it was $38.00. Well how does Detroit expect us to pay $113.00 when you can get the part for $38.00. Yes the quality may not be the same however the price difference is asinine. There is no good justification for that difference.

Here are some of my solutions before they get any bailout money. They may be tough in the beginning but will pay off in the end.

1. Cut 60% of all staff not directly associated with production.
2. Cut 20% of all production staff.
3. A five year hiring freeze unless they increase sales by 20%.
4. Cut production so there are only 14 days worth of inventory on the auto lots.
5. All vehicles will need a 5 year 100% bumper to bumper warranty.
6. Cut model production by 50%.
7. All models must be get 35 real world miles within 5 years.
8. All cars must be some version of a hybrid within 5 years.

My two pet peeves that should be addressed are these.

1. We want set prices on your cars. Most Americans dread buying cars because we have to dicker on the price. There should set and fair pricing on vehicles. The negation of vehicle pricing leaves the majority of us with a very bad taste in our mouths.

2. Stop with all the option bullshit. There some options that should come with every vehicle. They are am/fm radios with cd's and mp3 players. All vehicles should have front, side and rear air bags where applicable. All vehicles should have ac. All vehicles should have cruise control. All vehicles should have a basic GPS. All vehicles should have blue tooth capabilities. All vehicles should have power windows, locks and seats.

Currently you pick out one or two of these options and package them together and add thousands off dollars to the price of the vehicle, then you have more options for more money.
Make these items standard.

That is enough for now.

Thank you and have a good day.

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