The 7 Worst Ways to Rescue Detroit

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Even with bailout plans in place, making a corporate turnaround is still a very tough job for the management.
I tried out various business strategies at http://rescue-detroit.industrymasters.com
This is the strategy that worked best for me:
1. Sell off the high stocks for Luxury Cars and SUV with reduced prices and high marketing budget
2. Rise customer service level to get more competitive
3. Invest in Compact Cars, Small Cars and Hybrid Cars as these segments grow a lot
4. Discontinue the old Luxury and SUV product lines

Dave G. M. of FL 4:07AM December 30, 2008

I own three vehicles at present. they are all American made. The oldest is a 1983 chevy pick up. The next is a 1991 Lincoln town car ( it has 240,000 miles on it and I still drive it everyday. The third is a 1995 Buick Lesabre it has 228,000 miles on it. Not that any of these cars are perfect but they still run well and have needed minimal work done on them.I have nothing against any car makers. How well a car performs has as much to do with how it is taken care of as much as how well it was built.

of 2:29PM December 19, 2008

The 8th Worst Way to Rescue Detroit is to do nothing about the UAW and the crippling effect it has on the industry. I find it quite surprising that no one seems to be talking about the mammoth pink elephant in the room. There are immense problems that arise with unionized labor and that is a seperate disucssion altogether but any system that rewards "time spent" and not "merit based" is inherently flawed and stymies growth, competitiveness and creativity.
The big 3 needs to go into bankruptcy, dissovle the UAW, and if merited, restructure under chapter 11 which may include a government capital injection.
Keep the UAW and we will be having this discussion again a year from now.

JOSEPH JELINEK of FL 11:19AM December 08, 2008

As long as gas is under $3.00 a gallon no bank or sane government is going to loan them money to retool for fuel efficient vehicles. Everyone assumes that there will be a small window of time for low gas prices to be inflated by speculators and the cartel. A better plan would be for the government to declare imported oil price and supply as a national security issue. As a stick slap a $30.00 a barrol tax on imported oil (use revenue for infrastructure), this would create a stable bottom on oil prices high enough to ensure conservation and demand for fuel efficient vehicles. As a carrot, offer taxpayers huge credits on American made (I don't care by who) fuel efficient, and or hybrid and or flex fuel vehicles and or electric xehicles. In short make it so make it so only a fool would not take advantage of the chance to get a new vehicle that was primarily made in america and would be a would be part of a movement away from imported petroleum. The detroit three claim they can compete, give them enough of a competative advantage to level the playing field amd make them prove it. Americans would be willing to pay more for gas if asked and the plan makes sense(especially if it is sold as a way to stick it to the oil sheiks). Tell the banks that we have bailed out that they should finance car makers that embrace this strategic initiative because it will be profitable. By doing this we are helping detroit, but that they must earn the billions one care at a time, we are ensuring that the american auto industry (workers) will have plenty to do and we are investing in something that will create a critical mass to move us out of the cluches of OPEC.

Chris Thomas of OR 9:29AM December 07, 2008

Chapter ll is the way to go. Restructuring so that the hourly rate workers, and their retirees, get reduced packages that were gained by strikes when GM was selling cars and did not want to shut down during the good years.
Until American auto manufacturers are on an even footing with Honda, Toyota, etc., there can not produce a profitable, American made, auto.
Paying off the UAW when strike threats were made was not the only problem. GM just would not build autos that had over 30 MPG consistantly and in many instances the reliability was suffering.

Ex Pontiac Motor Salaried of TN 3:30PM December 06, 2008

A few of the comments here are correct.The author of the article is NOT.I think you should check your facts about reliability.Unfortunately the domestice automaker gets 3" Bold type if they recall 100,000 vehicles while Toyota or Honda get an asterik at the bottom of the page when they recall 2,000,000.Every quality assessment of the current vehicles will tell you that Ford quality is equal to or better than Honda or Toyota.WE as Americans have all contributed to the problem we have now.The Big 3 aren't perfect but we have made it impossible to be profitable.We let foreign countries come here and build product while they DON'T allow us to do the same.WE as consumers won't pay for the green car. GM builds more hybrids than Toyota or Honda but they don't sell because the technology is too expensive and WE consumers won't pay the price.Toyota loses money everytime they sell a Prius.WE Americans have allowed the UAW to pile all of their healthcare on us instead of asking them to pay some portion like the rest of us do.We Americans have allowed the ridiculous abuse of the job bank by the UAW where people don't have to work to get paid.What other industry in the world allows this?Oversight is necesssary for any bailout that's for sure.The Alabama senator that keeps bad mouthing Detroit should be removed from office.He is so biased his opinion has been paid for.He authorized Billions in assistance to Mercedes,Nissan and Toyota to come to his state.Has anyone addressed that?One writer is correct:We asked for all of the big SUVs that we were offered.We DEMANDED THEM.Now we chastise the Big 3 that it was their fault.Who are we kidding.Everyone contributed to the problems we have.Everyone needs to participate in helping the industry that supports over 12% of the entire US labor force.If you think this recession is bad, don't help the Big 3 and see how DEPRESSION feels.

Steve of MO 1:23PM December 06, 2008

As with every new concept, nothing new is perfect yet must be measured by virtue of it merits. Fuel cell automobiles are new technology, lack a fueling infrastructure, expensive, untried and risky, all valid arguments until the economy collapsed and desparate measures are now needed. Fuel cell vehicles use less resources to manufacture, are environmentally friendly, provide new employment avenues in many areas, are proven technology and are available now!!! The cost like anything new is prohibitive at present but just as everything else will become affordable once mass production and mass appeal take hold. The hydrogen gas used by the fuel cell is produced domestically providing an economic incentive to our economy, retooling assembly lines is simplified by lack of complexity of the vehicle and fuel can be produced "in-house" as needed. The auto companies can install fueling stations at their dealerships as revenue generators, the oil companies can begin installing hydrogen pumps in their stations, greenhouse gases will be dramatically reduced, gasoline prices will become bargain basement, Mom & Pop businesses will thrive, new fuel cells will power everything from computers to forklifts, our energy crisis will be lessened and opportunities will expand for everyone eliminating our employment crisis. Fuel cells may not be mainstream today but with a little enthusiasm, effort and support, will become mainstream in the blink of an eye. Europe, Iceland, India, China, Abu Dhabi, Japan, etc... have all invested in operational hydrogen power industries with hydrogen fuel cell automobile currently being leased by Honda, GM and Hertz. The key to America's survival is hydrogen the freedom fuel!!!

Ray Fisher of NM 9:27AM December 06, 2008

My thoughts ...
1. Do not treat the Detroit 3 all the same. What? Are you kidding? Are we supposed to tailor the bailout to each car company as they see fit? Who makes the distinction of what each company gets? Ever heard of the saying "beggars can't be choosers"?
2. Don't force them to build green vehicles. Hmmm. If they were going to do it on their own don't you think that they would have so already? Left to their own thinking they will be back at SUV's in 12 months. We have to FORCE them to make the changes that they cannot make on their own.
3. Don't pre-empt the possibility of bankruptcy. This one is as wrong-headed as it gets. If there is any reasonable chance of bankruptcy then no one will buy a car from that maker. Its that simple.
4. Don't appoint a federal car czar. Wrong. Wrong. Wrong. If they want $25B of taxpayer money, then it has to come with some serious federal oversight.
5. Don't place the whole restructuring burden on Detroit. This is a smokescreen to focus the issue off of the carmakers and onto someone else. Ignore it. Crappy domestic cars is what created this mess, not some arcane state laws about dealer franchise rules.
6. Don't subsidize cars. Why not? This allows some of the taxpayer money to flow through directly to the people who are funding the bailout instead of all of it going into the back pockets of the carmakers never to be seen again. Why shouldn't the consumers who buy these new super-efficient cars that are supposedly coming from Detroit 2.0 get something too?
7. Don't penalize their competitors. Finally, one idea that actually makes sense.

Tom of CA 5:58PM December 05, 2008

Few folks who have real common sense would buy the autos that Detroit is selling and plans to sell in the next few years. The leaders in congress and some tree huggers want electric or hybrid cars that are not yet really practical. Remember how long your cell phone battery lasted when it was new and how long it lasts now? Sorry, but I usually drive a new car for 10 years but the new ones Detroit wants to sell won't last that long and the cost of ownership will be much more on a relative basis.
The management and unions have destroyed the US auto industry with bad decesions and inefficient business models. Bailouts will just prolong the agony.

Marvin Peterson of OK 1:57PM December 05, 2008

FORCE big labor to get serious about keeping the big 3 competitive with the "transplants" who are operating nicely in the right to work states, and paying decent wages to their employees.
Big labor's strong-arm negotiating and lavish lifestyles for its executives have made the big 3 non-competitive. Its time for a change...but this must begin with the unrealistic labor union contracts being trashed.
I say send big labor packing and let the companies retool to become efficient like the transplants.

Iggy1962 of AL 10:30AM December 05, 2008