“This is not the American dream; this is the Auto Industry Nightmare”

It's none of the federal government's business (much less "responsibility"), Jill.

The Big Three's bloated and paternalistic business model is long obsolete and is long overdue for revision and reform. The well-performing auto companies in the USA furnish the model the Big Three need to emulate.

Here in Michigan the problems range beyond the plight of the Big Three, and aren't limited to the disaster in Detroit. Michigan is exporting jobs and people. Currently home prices and rents are decreasing rather than increasing as they have in all other places I've ever lived.

Let Granholm and the traditional anti-business Democratic government of Michigan reform itself.

The automobile industry in the USA has long thrived -- in the Southeastern USA.

The candidate that takes this to task. Will win in the Fall.

Lord what is it going to take for the democrats and the Republicans to wake up the destruction that ever increasing gasoline prices are going to have on this country with no end in sight.

I know. Lets whoop out the talking points and blame it on the other party.

Good plan.

While Congress fiddles. America burns.

No one can "save" the domestic auto industry for the simple reason that it has outlived its usefulness through decades of lousy products, worst business decisions, failure to see future trends and the globalization of a market where there are fewer big players and many more niche manufacturers.

Sad but true.

I'm afraid there will be an enormous federal bailout of the Big Three, which is a great moral hazard without any evidence that the Big Three will become modern and successful in exchange.

I believe many even in Washington will wisely resist any demands for such a thing, despite a repetition of the same claims made during the Chrysler bailout long ago, that the consequence (if the company went bankrupt) would be even more costs in the form of unemployment benefits and other forms of assistance. Also don't forget that the pension obligations of the Big Three are enormous and if they were dumped on the PBGC, that would be an additional economic shock. The size of the shock likely would compel a reduction in the current cap or maximum amounts of a PBGC replacement pension that already exists. Nobody getting a PBGC pension has any right to expect 100% replacement and the current cap likely will have to be lowered if the huge pension obligations of the Big Three were assumed in the event of a bailout or as one part of or one form of a bailout.

http://www.pbgc.gov/workers-retirees/benefits-i...

And of course, there will be new pressure on Obama to extend Medicare to the Big Three or some other health care assistance, which other businesses will promptly demand, too.

"fewer big players and many more niche manufacturers"

I not only was surprised that the Big Three apparently didn't visit California (where auto trends are set and where design is best conceived) in the 1980s when some people there absolutely refused to buy a US car or be seen driving one. They were still thinking it was the 1950s or 1960s. Some may still do so today for all I know.

Not only that, but (to address what Shaun said) why didn't GM divest itself into an independent Chevrolet and other companies long ago, for example?

No one can "save" the domestic auto industry for the simple reason that it has outlived its usefulness through decades of lousy products, worst business decisions, failure to see future trends and the globalization of a market where there are fewer big players and many more niche manufacturers.

Exactly. The market has spoken. You can only make vehicles with poor reliability and low fuel efficiency for so long without facing the economic realities.

With that said, the sh*t healthcare system we have in this country isn't helping domestic business at all.

"The candidate that takes this to task. Will win in the Fall."

In Michigan, probably, and othe industrial-zone areas, maybe, but the rest of the nation won't care, as they really don't care about the Big Three (they prefer other products and many have long done so).

And even elsewhere, in other depressed parts of the country, will people instead be resentful and jealous they didn't have their problems "taken to task," too?

Upstate New York (similar condition to Michigan, similar government Blue Nation traditions and failures) has expressed a desire to be rescued for ages, for example.

And what of Appalachia or the Delta country along the lower Mississippi (or the Gulf Coast Katrina sites)?

The depression is the result of one thing. Gasoline prices. Nothing else. This economy was relatively healthy until gasoline doubled in a year and suddenly everyone who over extended themselves suddenly were not ready for a doubling of gas prices and rising food prices in conjunction with the price of oil.

So the candidate who figures out how to bring the price of gasoline down and convinces that his program is the best by November when gasoline is 5 and 6 dollars a gallon will win.

Pure and simple. Im betting on McCain cause the democrats simply dont want to drill and their only solution seems to be with a candidate who will solve all our energy woes in the year 2030. Great.

What about today, tomorrow. Next week?

While Congress Fiddled America Burns.....I hope we think about voting them all out and getting some new ideas into the mix. YOUR congressman sucks......Vote him out...YOURS and MINE.........SUCK!!!

"The depression"

There is no depression. There is a recession, but even this is nowhere as bad as the media and shriekers would have you believe. Plenty of us did not participate in the real estate bubble and we didn't assume an unsustainable mortgage (and it is not our obligation to pay taxes to assist those who did). You are correct that higher motor vehicle (and now fuel, and later other things') prices affect this economy, and it is this which is affecting everyone, not merely some who already were in bad situations primarily due to their own choices. (Something else more broad in scope than the mortgage non-"crisis" [sic] is the overuse of credit such as the use of credit cards to pay for everyday and even discretionary, e.g., Starbucks or fast food, purchases and this should be compounded now that we're seeing inflation start to be created because of the effect of oil price increases on transportation of everything.)

"So the candidate who figures out how to bring the price of gasoline down and convinces that his program is the best by November when gasoline is 5 and 6 dollars a gallon will win."

If Obama promises (threatens) to establish price controls or tax subsidies to lower the costs, he deserves to lose.

"What about today, tomorrow. Next week?"

That's what is important. Not 10-20 years from now, and questionable.

One _possible_ answer to Obama's interventionist problem: maybe in a few months we could have cheaper fuels if a crash program was directed toward this.

http://governor.mt.gov/hottopics/faqsynthetic.asp

http://news.nationalgeographic.com/news/2006/04...

http://www.post-gazette.com/pg/08175/891993-28.stm

(Or will the Usual Suspects howl loudly enough, "Don't dig any coal! Say NO to Big Coal!" and this idea be abandoned as quickly as any new drilling for oil?)

Unfortunately there is nothing free in this world. ICGP has been around for awhile. It produces clean coal or syn gas that is used to fire clean burning coal plants. Unfortunately nothing is free.

Did I say that already?

Once again the syn fuel idea sounds great until you realize that it is coal fired plants that must create it which in essence uses a tremendous amount of water to do so.

Theres that darn water thing again. When clean coal is fired up then water is sprayed into the mix and the molecules combine with water to drop out making the syn fuel clean.

Today electricity consumes about 140 million gallons of water per day or about 40 percent of all water consumed daily in America. By firing up syn fuel plants you will be creating fuel but at the cost of water. In essence to feed our thirst for fuel we would then be paying 1000 dollars a month for water.

Alas nothing is free in this world.

Did I mention that before?

Wow - thanks for all the comments - I am going to be sure "Liberal Lucy" - who is the writer and whose father is the subject of the post and lost job, sees all of them.

I don't know that I've ever written about this topic before but being in Ohio and having Cleveland named today as the city with the largest population lost, well - it struck a chord with me.

I do want to make one thing really clear because apparently a couple of folks have inferred something I didn't intend to imply: when I wrote, Now what - Obama, McCain - I was asking to the wind, really. I do care what they have to say about this, but by no means did I mean to imply that I thought or think the gov't is the only one who can or should solve the problem. Rather, I look to them to hear their full compliment for what they think should be done for people like Liberal Lucy's dad - not a seminar on why it's happening but rather, as I did write, what now. That was all. Come on - you all know I do that a lot. :) I like to know what other people think - especially when I know that I am really out of my comfort zone - and this area is very much out of that, with the exception of my social work and volunteer experience. I can't stand human suffering - remember the movie, The Terminal? I couldn't watch it - the guy who ran the airport was too cruel just to be cruel and get Tom Hanks out of there. I literally could feel the meanness and just couldn't watch.

Anyway - so - thanks. Interesting answers. I guess I'd also say - what can be done to keep from getting in worse condition and how do we make sure no industry suffers in this way again?

JMZ,

So, this is what the country has come.to. In the face of adversity, there is only a list of can't do this and can't do that, or fake promises of gas price reductions.
That hard times are coming for a lot of people, I have no doubt. But i won't accept that nothing can be done until every possiblity for what could be done has been thoroughly examined. That Liberal Lizzie should be dismissed so readily to stew in her own suffering is unacceptable. That's the true American nightmare: that we should sink to the level of dog-eat-dog and every man for himself..
Only authoritarian regimes think of their citizens as if they were disposable waste.

There are a growing number of pocket success stories in green industries. Installations don't require higher education, only training. One such success story exists in South Bronx, NYC, a blighted area if there ever was one.
The jobs provided are having an mpact on the entire community.
Obama referred to green industries in one speech, but he gave no details.

The stumbling block is getting these companies started. Entrepreneurs so far prefer stable neighborhoods, like Manhattan with its wealthy residents. Elsewhere, foundations provide seed money (grants or loans) and advice. I read about one case, (in Mass ?) where a grass roots group of locals formed a commitee to actively solicit start-up funding and expertise, and it worked.

In other areas family farms and farmers' markets are making a comeback, some with organic foods.
There are possiblilites, but it takes determined leaderhisp to take advantage of them.

I can't believe that in this country, with so many brilliant people, and think tank upon think tank, the best we can do is to say we can't do anyhting.
That's not how we got through past disasters, ones much worse than this.
The only difference that I can see if that too many of us have lost the will and the sense that we're all in this together.

I'm not willing to forget Liberal Lizzie, and I still have some hope that America's 'can do' spirit is not dead yet.

You have an entire industry that is tied to Gasoline prices. AS those prices continue to climb even Toyota and Honda and the like will start feeling the pinch. I own two cars and a Harley. I have spent a lot of time this summer on my Harley which gets 42 miles per gallon.

I grew up on motorcycles and I used to smile when it took a buck to fill up the tank. Now it takes almost 20 dollars. Lord have mercy.

These people hitched their wagon to a falling star. General Motors, Ford, Chrysler are only the first to fall. Honda and Toyota will not be far behind them. If gasoline is 8 or 10 bucks a gallon then vehicles that get 33 miles to a gallon will collapse as easily as did those who get 16 miles to the gallon at 4 dollar gas.

People seem to be thinking this gasoline thing is just going to go away once some imaginary force waves a wand. It is not and America is NOT in a position to change things. The only thing that could assuage a world melt down would be for Opec and the world oil producers to get together and freeze oil prices at the current levels for one year or two years while the world adjusts.

Will they? Not likely and if they dont. Then Honda, Toyota and even Harley are soon begging for help. The trailer industry is in a shambles. Travel is going down the tubes. Boats and jet skis and snowmobiles are hurting.

A world gone mad with oil is now paying the price. A country gone mad.........the USA........because she is the most recreation minded country on earth..........is in the worst shape of all. Unless this is fixed quickly..........this country will implode.

There is no fix for this. No magic bullet.....no Obama led miracle. There is only more to come. Enjoy your 8 dollar a gallon gasoline as China and India eat up even more and more Oil as their nations suddenly demand the same things the rest of the world has been enjoying for decades.

There is no fix but there is a disaster looming.

This time Im afraid that the government so burdened with debt has not the resources to fix GM, Ford and Chrysler. Green dreams............they dont call it a dream for nothing.

Ok - Tyrone if you are reading, I'll write you but this is kinda funky! The entire TMV screen is showing up inside a comment box? And I can only write the comment in the comment box that's inside the screen that's showing up in the real comment box? Ok - I am not on drugs, I swear (well, Celebrex - does that count?).

Ok - gonna try and see if this works! It might leave the comment on the other screen?

Runasim - I agree with you re: focusing on the good stories - the ones that say there are opportunities here. I believe that but I can't speak for Lucy that they're more or less in shock - even when you live around it happening, when it happens to you, you know? Like when a loved one dies even though you knew it was going to happen?

Anyway - I can't make excuses for her, I am only saying that it struck me. I expect, from the little I know of her, that she and her dad et al will move on and do what they need to and regroup and all - but it can be really helpful to commiserate - for so many reasons, not the least of which is to get more suggestions for solutions.

Which you gave. :) And that's the best part. :)

Phew - ok - that is a bit better. I am no longer looking at a TMV screen inside a comment box. :)

Neocon - this isn't like me to usually say, but why are you suggesting that the gov't should fix GM et al? Someone commented on my blog that it's all the Democratic urban leaders fault. But that's absurd - there are layers, they have responsibility but why aren't we faulting the greed and corporate refusal to accept anything less than a certain profit level? Why is it that Honda or Toyota can make changes that succeed and our auto companies can't don't or can't make those changes impact their bottom line successfully?

There's no single soul that can fix it - or that broke it. But your pessimism is really not helpful either.

Enjoy your 8 dollar a gallon gasoline as China and India eat up even more and more Oil as their nations suddenly demand the same things the rest of the world has been enjoying for decades.

You can take solace in the fact that we are China's biggest customer, so if we stumble, China will too. If demand for oil here plummets because of a bad economy, it should plummet in China as well.

I was not saying we should fix them. In fact Im saying we cannot fix them.

The energy crisis is going to destroy half of this nation if were not careful. You have not only automakers but Trailers, RV, Winnebagos, Boats, Jet ski, Snowmobiles. Gas stations, Auto parts stores, Mechanic shops, Oil change facilities, I mean the list goes on and on and on that is tied to the oil and gas industry.

To try and blame or say that GM is at fault because the world let gasoline go thru the roof is silly but by the same token its going to take 3 triillion dollars to retool all these companies to make room for life after gasoline.

In the mean time I suggest that if something is not done about oil and gas prices today then we are in for a depression and not a recession. Your friend and her family are just the first casualties of this war. There will be millions and millions more.

The unintended consequence of the wars in Iraq and Afghanistan is that oil prices continued skyward and everyone believes if we just come home it will all be better. They still have not grasped the reality that demand is exceeding suplly now.