11.18.2008

Auto industry perspectives:

UAW President Ron Gettelfinger:
"The costs of failure are unacceptable"
"This isn't just about three large Michigan-based companies and the 240,000 people who work for them, including 150,000 of our members. It's also about thousands of car dealerships that are anchor businesses in cities and towns across America. It's about thousands of small and medium-size businesses -- employing millions of workers -- that provide parts, logistics, research, engineering and other goods and services to Chrysler, Ford and General Motors. If a major domestic auto company were to fail, a significant number of supplier companies would also be in jeopardy. This would quickly affect all the companies that produce autos in the United States -- including Toyota, Honda and Nissan -- because many of them buy parts and services from the same group of suppliers."

Washington Post, Nov. 14, 2008

Kid Penniman, KDP Advisors:
Restructuring has already been achieved
"The Detroit automakers have, in essence, been pursuing an out-of-court restructuring over the last three years.  These efforts have produced a competitive labor contract with the UAW, a viable solution to reduce retiree health-care expense, and a substantial downsizing of capacity and headcount.  Incremental gains achieved through bankruptcy would be minimal in comparison and would likely result in even further deterioration of enterprise values as consumers would be far less likely to purchase an expensive vehicle from a bankrupt manufacturer, with or without government guarantees."

Jonathan Cohn, The New Republic
"This is not your father’s Oldsmobile you’re rescuing"
"Rescuing the auto industry is not, as so many people suppose, a question of giving Detroit one extra shot at transformation. It's a question of giving Detroit a chance to finish a transformation that was already underway."
The New Republic, Nov. 14, 2008

General Wesley Clark, New York Times:
“What’s good for GM is good for the Army”
“[W]e must act: aiding the American automobile industry is not only an economic imperative, but also a national security imperative…
“[A]s Detroit moves to plug-in hybrids and electric-drive technology…automakers are developing innovative electric motors, many with permanent magnet technology, that will have immediate military use. And only the auto industry, with its vast purchasing power, is able to establish a domestic advanced battery industry. Likewise, domestic fuel cell production — which will undoubtedly have many critical military applications — depends on a vibrant car industry.”
New York Times, Nov. 16, 2008

Toyota:  "Devastating” for the entire industry"
"We're worried. We're concerned about it," said Mike Goss, a spokesman for Toyota's North American manufacturing unit in Erlanger, Ky. "The vehicles we build in North America use about 75 percent local content, and much of that is coming from the same companies that supply the Detroit Three."
Mike Michels, Toyota's U.S. vice president of media relations, said the failure of one or more of the U.S. automakers would be 'devastating"  for the entire industry.
Bloomberg News, Nov. 17, 2008