Saving the US Auto Industry

[tw]

Originally Posted by monster

i quake at the prospect of what that will do to the parts industry.

Good part companies will simply make more parts for productive companies that actually let engineers do designing. Those who cannot meet fundamental quality concepts (that are required by the better auto companies) will die. A victim of their inability to adapt to quality defined even by Deming in Japan in the 1950s.

Some must die. They ran to manufacturers who buy parts only on price. Whose autos demonstrate what happens by ignoring Deming, innovation, and other reasons why GM and Chrysler must now enter bankruptcy.

Jobs must be lost, in part, because bean counters played money game rather than surrender the company to innovators. 1991 - GM was four hours away from bankruptcy. Instead GM played money games such as shorting pension funds, then inventing a myth about legacy costs to hide their mismanagement.

Since too many Americans continued to buy their myths and crap, now the damage must be deeper and more painful. Time to save these jobs was back in the 1990 when it was obvious what was needed. Just another example of why good Americans buy using the free market - ignore anti-American myths such as "buy American".

Time to save those jobs was when Clinton tried to do it by giving them hundreds of $millions to design hybrids. Clinton administration knew what was necessary to save jobs. The solution was subverted by the George Jr administration and Congress that stopped demanding innovation from automakers.

Time to pay. Fundamental economics demands that it be painful.

Of course, GM today all but said they will go bankrupt on 1 June. Chrysler has little hope of averting bankruptcy. Now that GM no longer had Wagoner, GM is slowly admitting how bad their company and products really are. GM also will shutdown factories for up to 9 weeks this summer. At least GM will not make the mistake of manufacturing more bad vehicles as Chrysler did in 1978.

[monster]

Originally Posted by tw

Good part companies will simply make more parts for productive companies that actually let engineers do designing. Those who cannot meet fundamental quality concepts (that are required by the better auto companies) will die.

right.

You have no idea about this business, do you?

Most parts companies make parts for all manufacturers. Not just the select few who meet your "good" criteria. they do their job and they do it well, but they haven't been paid for a while. By good and bad auto companies alike. Because when the bad ones don't pay, the good ones say "well why should we pay either?" And once the debtors go into chapter 11, they're protected.

[tw]

Originally Posted by monster

Most parts companies make parts for all manufacturers. Not just the select few who meet your "good" criteria.

Those manufacturers manufactures will (in the future) be making more of better parts for better cars. If Chrysler disappears, the manufacturers make more those other parts for other companies.

Meanwhile, yes, many part companies must disappear. The time to avoid this problem was four, ten, and twenty years ago. Those who foolishly could only sell to GM (who did not go through a process of earning the right to sell to Toyota, et al) probably will go under. But time to have worried about this was many years ago when the problem was obvious.

My sympathies to a part company president who sat next to me and said, "GM will show me how to cut my costs." But then, his own statement should have (and hopefully) told him to start making parts for better companies.

We have all suffered because, "Reagan proved that deficits don't matter." So we voted the idiots back in office rather than fix the problem. Bankruptcies today could only have been averted back then - fundamental economics. Now many companies must go under.