Main Street Key to Auto Companies' Health
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This document analyzes the challenges facing the American automotive industry and argues that the future of the Big Three American automakers (GM, Ford, Chrysler) depends on changing negative public perceptions. It notes that while foreign automakers receive government support, the American automakers have not. Failure of one or more American automakers could have severe economic consequences across many industries due to interconnected supply chains and loss of manufacturing capacity. The document urges Americans to reconsider their views of American-made vehicles and support the American automotive industry.
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Main Street Key to Auto Companies' Health
- 1. eMOTION! REPORTS.com Automotive/Aerospace Industries Systemic Intelligence www.emotionreports.com Automotive Industry Analysis 2008 Martha Hindes: Main Street Holds Key to American Auto Companies' Health
- 2. eMOTION! REPORTS.com Automotive/Aerospace Industries Systemic Intelligence www.emotionreports.com Automotive Industry Analysis 2008 Main Street Holds Key to American Auto Companies' Health Despite historic quot;Bridge Loanquot; actions, the fortunes of the U.S. auto companies will be made or broken by average Americans who unknowingly depend on their survival. DETROIT, December 11, 2008 -- If there is a truly bright spot emerging from the hearings on Capitol Hill in Washington, D.C., it won't be about money being sought, with stringent conditions, for America's home grown auto companies. It won't be the spectacle of a contrite Rick Wagoner, CEO of General Motors Corp., trying to fend off the hostility of empowered legislators. It won't be the smirk of a congressional representative or senator from the Deep South enjoying the deliciously satisfying ability to make the head of one of the world's largest corporations try to construct answers to questions designed to be unanswerable.
- 3. “The drumbeat of cynical, ill-informed judgment has resounded repeatedly, fed by negative comments iterated so often that even ironclad proofs of their falsehood can't neutralize the impact. What hasn't helped either is the perception that upstart, loosely regulated quot;ideaquot; companies infused with government grant money and quot;angel investorquot; or other private capital funding can develop super, fuel-efficient future cars that American companies can't. The presumption of course is that these fledgling entrepreneurs understand needed vehicle technology fixes while the American auto companies don't.” Chevrolet Volt Chaparral Racing Concept Image: GM Unanswerable, of course, because the answers are so complex. They take a lifetime of industry acumen to begin to comprehend what is being explained. Unanswerable because sorting out an answer assumes a perception of the vastly intertwined areas involved in automotive technology and development. That includes physics, advanced engineering, electronics, marketing, environmental concerns, consumer fickleness, usage needs, contradictory laws and regulations, and financing and developmental money among them that go into the design, development, creation and purchase of just one mass produced automobile. FEW LISTEN The bright spot will, in fact, be the full realization of a rancher in Wyoming or a food processor in Miami or a sales representative in Rhode Island that toppling an automotive chief executive and taking down with him the company he was there to defend will be taking the keystone out of the structure of the country we all call home. Those workers won't represent everyone. It's more likely they won't even represent a substantial minority of their working colleagues around the country who get up in the morning, drive themselves to work and -- beyond filling up their vehicles with gasoline -- probably give little thought about what it took to travel there.
- 4. But for those immersed in the day-to-day business of participating in the auto industry or following its every step, such a realization would have to be a victory. For many, a sliver of light appeared in the last few days when surveys showed that GM and its compatriot companies Ford and Chrysler actually gained some credible approval for financial help from beyond their home or manufacturing bases. It suggested that some can visualize that the domestic auto industry is not just a small quot;nuts and boltsquot; corner of the American economy, but the country's lifeblood. 2009 Lincoln MKS Image: ER It isn't that the American auto industry hasn't tried, despite the headwinds. Neil Macdonald, a reporter from the Toronto, Ontario, Canada-based The National report on CBC gave a stand up commentary shortly after auto financing talks began. He summed up the feeling of many outside of the Midwest’s rust belt territory. Ignoring the impact on his own country's dependence on the American auto industry, he wrapped up his televised Washington report on the U.S. Big Three, stating: what do you expect when you make junk. Beyond exposing his innate lack of knowledge and understanding, he rather succinctly summed up the longstanding feeling of many Americans across the country that American cars quot;...are junk.quot; quot;...don't have any technology.quot; quot;...get lousy mileage,quot; quot;...fall apart.quot; Many of these perceptions are from people who haven't been near an American- made car in years.
- 5. Peugeot e-motion concept Image: Peugeot OMINOUS ECHOES The drumbeat of cynical, ill-informed judgment has resounded repeatedly, fed by negative comments iterated so often that even ironclad proofs of their falsehood can't neutralize the impact. What hasn't helped either is the perception that upstart, loosely regulated quot;ideaquot; companies infused with government grant money and quot;angel investorquot; or other private capital funding can develop super, fuel-efficient future cars that American companies can't. The presumption of course is that these fledgling entrepreneurs understand needed vehicle technology fixes while the American auto companies don't. But maybe some fallout of the capitol fiasco can change perceptions. After what seems like forever, with a dismal U.S. jobs report staring back at them, slightly larger numbers of Americans who responded to recent surveys have recognized that an American auto industry needs some help. There's an indication that the prospect of a failure by one or all of those companies would be akin to shoving a boulder over the edge of a cliff, with no way to slow its momentum, or get out of its way, or haul it back up over the rim. Instead, it would take everything with it as it descended. That would devastate direct industry supplier companies, lunch counter proprietors, create a loss of property taxes that support local schools as a result of continuing home foreclosures, and a myriad of seemingly unrelated business entities as the collapse began to crush those with even remote connections. It would be stark evidence of the validity of the quot;six degrees of separationquot; theory -- that everything is related, it's just a question of the degree of distance.
- 6. Maybe those who quot;get itquot; see that the result of domestic auto industry failure would be unimaginable, for the small western town, the overpopulated California city, the struggling Midwestern metropolis fighting to keep its municipal head above water. PRESERVING THE HOME FRONT Consolidated B-24Js being produced at Ford Willow Run Plant 1944 Image: Ford “Foreign companies with manufacturing facilities in Alabama and other non-traditional auto states may have been provided with lucrative tax incentives and other deals on the table as a lure that couldn't be ignored. They certainly have provided lots of well-paid jobs. But if a national emergency ever occurred where an auto plant needed to convert to work on advanced defense equipment, it wouldn't be done at Toyota at Georgetown, Kentucky or Honda in Marysville, Ohio, or through the ports of Baltimore or Los Angeles. Those entities would take direction from their home bases in Germany, Japan, Korea, even China, where the money goes at the end of the day before small bits of it trickle back in the form of shareholder dividends. Even the geniuses at Homeland Security wouldn't be able to make up for such a lack of homegrown manufacturing capability.” Those individuals who finally quot;get itquot; must have been appalled at the realization of the importance of the nation's waning manufacturing capability not owned by a vague, unidentifiable and distant corporate boss. They are the ones who finally dug deep enough to understand that a country that can't make a sedan without foreign help also can't be called upon to make the massive amounts of soldiers' transport
- 7. vehicles, tanks or other heavy duty equipment needed for self defense if a militarized conflict emergency demanded them. They also might realize that while Congress was cutting a switch to give American car companies a thrashing behind the garage, that by administering such overt justice they were injuring the very ability of those same companies to continue the corrections being demanded and gutting the main street perception of their worth. Those who quot;get itquot; might even have listened long enough to learn that the U.S. Big Three -- General Motors, Ford and Chrysler -- have spent decades improving their products, refining quality on a previously unknown scale, worked cooperatively in pre-competitive partnerships to create the advanced technologies needed for a new century. They might understand those three American companies build millions of fuel efficient autos and trucks, including a dozen gas-electric hybrid vehicle models, and ecologically-friendly alternative fuel vehicles that can run on wood alcohol -- ethanol -- that can be made from wood chips, swamp grass, or garbage. Even junk corn crops converted to ethanol, with nothing wasted, can leave leftover mash for easily digestible animal feed that -- as a sidebar -- would eliminate the problem of bovine creation of methane gas that contributes to global warming. All these could quickly help replace U.S. dependence on oil from the ground being parceled out by foreign governments. GOING IT ALONE Ford CEO Alan Mulally and Executive Chairman Bill Ford Image: Ford They might quot;get itquot; that all this is achievable without the massive, ongoing financing routinely accorded to Toyota, Honda, Nissan, Hyundai and more by Japan and other offshore companies by their respective governments. All this is achievable without American ports taking in unlimited supplies of foreign cars and trucks along with other consumer goods. And all this despite the bulk of the mainline newspapers, magazines, radio and television broadcasters crowing about the inferior products from American companies and their indoctrination that the only quality alternative is a vehicle from a foreign-owned competitor.
- 8. Maybe these people who quot;get itquot; understand the message that it takes an income to have money to buy things, and without cash or credit earned at a job nothing is likely to change except a lengthening of unemployment lines and more quot;foreclosedquot; signs on American homes. For years, as foreign-based automakers fed from their governments' financial troughs, the North American quot;Big Threequot; could not. With the exception of such efforts as the 16-year-old Freedom and Fuel Partnership collaboration of those firms with the U.S. Department of Energy, there hasn't been desire at the federal level to consider such a supportive role. Trade bills that could have alleviated the imbalance of a wide open door coming into the country but barely cracked open going out might have made up for some of that lack. But they weren't on the federal agenda, and that could have created dissension among America's valued trading partners. Foreign companies with manufacturing facilities in Alabama and other non- traditional auto states may have been provided with lucrative tax incentives and other deals on the table as a lure that couldn't be ignored. They certainly have provided lots of well-paid jobs. But if a national emergency ever occurred where an auto plant needed to convert to work on advanced defense equipment, it wouldn't be done at Toyota at Georgetown, Kentucky or Honda in Marysville, Ohio, or through the ports of Baltimore or Los Angeles. Those entities would take direction from their home bases in Germany, Japan, Korea, even China, where the money goes at the end of the day before small bits of it trickle back in the form of shareholder dividends. Even the geniuses at Homeland Security wouldn't be able to make up for such a lack of homegrown manufacturing capability.
- 9. REVERSING THE SLIDE So if there is any redemption from the brutal Washington hearings designed to beat the American auto industry into submission and into a self-fulfilling prophecy of destruction, it is the possibility that even a handful of those persons previously uninitiated in the reality of the vehicle world will start to understand. And when someone realizes that it is his or her actions, even to a small degree, that could be the faint beginnings of a tidal wave of positive impact, then it's a start. It's a start that actually can change a country's direction and its fortunes the way a few people surfing online grew into the kind of unstoppable surge that recently swept in unprecedented political change. It starts with only a few steps. And as with the historic 2008 national election in November, Americans again can prove that when they really quot;get itquot; they will act. Who's to say a realistic viewpoint about the auto industry couldn't foster a similar kind of direction. How the whole scenario of auto hearings, the dangling carrot of a financial savior, the threat of a neophyte automotive czar controlling an industry impossible to understand short term without being an insider, will play out is a huge question at this point. The days, weeks and months ahead will sort out whether those three companies remain viable or are forced into bankruptcies that almost assuredly would result in dissolution and a fire sale of assets to those with the money to purchase them, particularly China. The difference will be whether the everyday men and women who work in the local hair salons, or law offices, or movie production houses will be willing to look at and purchase the American badged vehicles with as much style, quality, value, and long- term worth as those from sanctified foreign-owned competitors. If they do, it might even be the start of a second main street tsunami. -- Martha Hindes, Executive Editor ### Publisher’s note: The conspicuous lack of reference to Chrysler, LLC is an extension of our understanding that owing to significant off-shore based financing associated with its acquisition, it is not American owned or controlled. Until clear evidence emerges that this state of affairs has been reversed, Chrysler should not be allowed to participate in any loan guarantees or other federally originating resources brought to bear to preserve, perpetuate and revitalize the critical U.S. industrial base. 1953 Corvette Image: GM
- 10. Report compiled by eMOTION! REPORTS.com staff and its consultants. Fair use is hereby authorized for media, academic, government and corporate entities for research and reportage purposes with appropriate acknowledgement. Copyright 2008, All Rights Reserved eMOTION! REPORTS.com (www.emotionreports.com) is an automotive/aerospace industries research and analysis site that targets professionals within the academic, media, corporate and government sectors. It has also created an environment wherein white papers and other scholarly research can be presented to a broadened, yet still very defined, audience, inclusive of 'Quantum Parallel: The Saint-Hilaire Quasiturbine as The Basis For a Simultaneous Paradigm Shift in Vehicle Propulsion Technology” and “Crisis On Asimov: A Vision of 2085”. The site utilizes a dedicated server maintained by Seneca Communications (www.senecacom.net) a full-service Telecommunications Provider specializing in advanced VoIP solutions both here and abroad. Publisher: Myron D. Stokes; Associate Publisher: John T. Chuhran; Executive Editor: Martha Hindes; Web Editor: Matt Siporin 74 W. Long Lake Rd. Suite 103, Bloomfield Hills, MI 48034 248-695-0009 emotionmag@emotionreports.com mstokes@emotionreports.com eMOTION! REPORTS.com Related Analyses: Restoration of GM Viability: A European Solution of Einsteinian Simplicity? EDT Wednesday, 2 July 2008, 838pm UTC(or GMT/Zulu) Thursday, 3 July 2008, 00:39:49 http://www.emotionreports.com/downloads/pdfs/GM_ANALYSIS070608.pdf The (GM) Empire Strikes Back: 2008 Chevrolet Malibu http://www.emotionreports.com/downloads/pdfs/Malibu2008.pdf Kerkorian and Renault-Nissan Overtures to GM Have Overtones of Hostile Takeover; Success Would Represent Clear Threat to Industrio-Economic and National Security http://www.emotionreports.com/downloads/pdfs/MEDIAADVISORYUPDATEGMRN8606.pdf National Security, Economic/Industrial Base Ramifications of Possible Renault-Nissan/Ford and GM/Toyota Meldings. Unless Action Taken Immediately, U.S. May Lose Control of its Manufacturing Base, Joining Great Britain http://www.emotionreports.com/downloads/pdfs/R11.pdf http://www.emotionreports.com/downloads/pdfs/Renault2FrG050508[2].pdf The Japanese Exodus: Japan Firms Quietly Leaving China; GM Facilities At Risk http://www.emotionreports.com/downloads/pdfs/Japan_Exodus_English12505.pdf
- 11. U.S. Business and Industry Council: An Organization Worth Joining; State of GM, Ford and Suppliers Confirms Economic War A Palpable, Pervasive, Reality http://www.emotionreports.com/downloads/pdfs/USBIC_ER_Analysis_42906.pdf Boeing Going? http://www.emotionreports.com/briefing_room/boeinggone.html Aerospace Giant In Fight of Its Life http://www.emotionreports.com/Sonic_Cruiser/sonic_cruiser.htm Lessons From Toyota: A Global Grand Strategy For Boeing http://www.emotionreports.com/downloads/pdfs/LESSONS_FROM_TOYOTA_BOEING.pdf Super-Globalism: Strategies For Maintaining A Robust Industrial Base Through Technological, Policy and Process Improvement http://www.emotionreports.com/downloads/pdfs/Super4[1].pdf The Stonecipher Departure http://www.emotionreports.com/downloads/pdfs/Stonecipher_Departure3905.pdf Military Transformation Through Analytical Process: The Inter-University Seminar on Armed Forces and Society -- An Interdisciplinary Approach http://www.emotionreports.com/downloads/pdfs/sius1.pdf Book Review: The Core and The Gap: A Review of Thomas Barnett's The Pentagon's New Map: War and Peace in The Twenty-First Century http://www.emotionreports.com/downloads/pdfs/barnettreview3-19-04(2).pdf Crisis on Asimov: A Vision of 2085 http://www.emotionreports.com/downloads/pdfs/Asimovalltogether6904.pdf Boeing Supersonic Transport Program 1962-71 http://www.emotionreports.com/downloads/pdfs/boeing.pdf Copyright 2008 GHHLLC