A decade ago we watched events leading up to the dot-com-era implosion, and this morning we witnessed a milestone of the drawn-out automotive bust: General Motors is now a bankrupt company. Economic history is peppered with booms, bubbles, and busts of various sorts, but the current automotive struggle seems different—perhaps more human.
Posts Tagged ‘Industry Assistance’
The auto meltdown: 'It's all about the parts'
March 31st, 2009
By: Tim Heston
By: Tim Heston
"It's all about the parts. It's all about the parts."
That was Jean Jennings, editor-in-chief of Automobile magazine in an interview yesterday with Marketplace host Tess Vigeland. Her comment really hit home with me, particularly after digesting the auto industry news and opinion that have been bursting out of mainstream media this week.
Her five words overshadow all the finger-pointing. Who's to blame for the automakers' woes? Some say it's the unions and the health care packages those unions negotiated, or the unions' work rules. Others say companies like GM have too many nameplates to sell efficiently. Others say the dealer system is broken.
Personally, I'm tired of the blame game. In this economy, even Toyotathe poster child for lean and founder of the Toyota Production Systemis talking of possible layoffs and going hat in hand to the Japanese government.
Auto suppliers get relief
March 24th, 2009
By: Tim Heston
By: Tim Heston
A friend of mine in college couldn't wait to get to Detroit.
A mechanical engineering major, he loved cars. He worked at summer co-ops trying to get his foot in the door. He'd talk about designs, inside and out. And though I never saw him do it, I bet he was the kind of guy who ran his hand across a well-made vehicle, admiring the flawless fit and finish. He admired all the parts that made up a logical whole, and together they made up a system that could continually be perfected.
Last week the government lent a hand to makers of those parts who for too long just haven't been getting paid. The Treasury Department announced $5 billion in aid to auto parts suppliers, a number far below the $25 billion suppliers had wanted. But it's something, and at a time when taxpayers cringe as they read about bailout after bailout, the industry isn't taking that $5 billion for granted. Advocacy groups are applauding the measure, but concerns abound.
Who's paying for the bailout?
March 16th, 2009
By: Tim Heston
By: Tim Heston
As bad bailout news emerges unabated, we continually hear that finger-wagging phrase that, once uttered, we hope makes these unabashed bankers hang their heads in shame: Taxpayers are shouldering the burden. I've heard the phrase so much that I'm beginning to think we're all serfs toiling in the mud, stopping only to be harassed by the evil tax collector (that is, the government) who snatches what few gold ducats we have managed to scrape together to bail out these Lords of Finance.
Hope in metal fabricating
March 5th, 2009
By: Dan Davis
By: Dan Davis
If metal fabricating is hard work, metal fabricators are working especially hard during these economic times. Matrix Metalcraft is no exception.
The 25-person shop in Clinton Township, Mich., is working hard to chase down new business while the automotive industry remains moribund. The 9-year-old company had developed a good reputation for quickly turning around quality prototypes for new automotive projects and even doing some small-scale production work, such as fabricating parts for right-hand versions of domestic models destined for export. Good reputations in slow industries, however, don"t do much good.
Extending a lifeline
February 25th, 2009
By: Vicki Bell
By: Vicki Bell
Did you watch President Obama's speech before Congress last night? According to CNN.com's Quick Vote, 27 percent of the nearly 140,000 survey respondents didn't watch. I have to confess that I'm one of the 27 percent. As I've said in the past, I prefer to read a speech rather than watch or listen as it's delivered, so that I can tune out the applause and commentators' remarks.
When do we say enough already?
February 18th, 2009
By: Vicki Bell
By: Vicki Bell
While my neighbors are circulating e-mails about the newly opened Irish pub that's within walking distance (conserve fuel and drown your sorrows) and notices about how to reduce the tax assessments on our homes—after all, our home values have dropped; one more reason to hit the pub— GM and Chrysler are asking for billions more in aid.
Back in November 2008, National Association of Manufacturers (NAM) President and CEO—and former governor of Michigan— John Engler stressed the importance of a stable auto industry in economic recovery. He said, "We're talking about close to a million jobs in America—we're talking about a lasting impact on our industrial production in the United States. We simply cannot afford to let the auto industry fail."
We know, John, but how much do we have to pour into what is fast becoming a money pit before we say enough already?
Good news for Michigan
February 4th, 2009
By: Vicki Bell
By: Vicki Bell
If any state could use some good news, it's Michigan, which is on track to reach an unwelcomed milestone: 10 consecutive years—a full decade—of job losses. The U.S. Department of Labor's Bureau of Labor Statistics reported today that of the 49 metropolitan areas with a population of one million or more, Detroit-Warren-Livonia, Mich., has the highest unemployment rate at 10.6 percent, 3.4 percent higher than the 7.2 percent national rate.
In last night's State of the State address, Michigan Governor Jennifer Granholm said, "I will not sugarcoat the severity of the crisis we face. This past year has been brutal." Before launching into the list of actions her administration is taking to improve conditions, Granholm warned that things likely will get worse before they get better, but they will get better.
Efforts to improve conditions received a shot in the arm yesterday when Gov. Granholm announced that the Michigan Economic Development Corp. (MEDC) is helping 10 companies grow in Michigan and is backing four brownfield redevelopment projects. Now that's good news.
Putting a smile on a banker's face
January 19th, 2009
By: Tim Heston
By: Tim Heston
Away from the revelry on the National Mall in Washington, auto industry executives and insiders have spent much of January in Detroit at the North American International Auto Show, an annual event that, for obvious reasons, has been toned down significantly. One of the few areas not in such a funk, though, is the industry"s continued push for hybrid and electric vehicles. Toyota unveiled its new Prius® and GM its plug-in Volt®, set for production in 2010.
That"s something managers at Ultimate Hydroforming I"m sure are glad to hear.
Metal manufacturers on bailouts
September 17th, 2008
By: Vicki Bell
By: Vicki Bell
The September Fabricating Update e-newsletter discussed recent U.S. government bailouts of Fannie Mae and Freddie Mac. Since the newsletter went out, AIG also has been the beneficiary of a government-backed bailout. Lehman Brothers and Merrill Lynch weren't as lucky.
This newsletter also mentioned that General Motors, its domestic rivals, and suppliers are seeking government assistance. The Wall Street Journal reported that GM is lobbying Congress to approve low-cost loans to the industry. The company says it would use such a loan to fund the retooling of a Hamtramck, Mich., assembly plant to give it the capacity to build 60,000 Volts annually.
Newsletter readers have strong opinions about the bailouts, as evidenced by their feedback.
