it can't be a blank check, if they are going to bail them out that better come with a huge list of demands...forget golden parachutes, demand complete reorganization, huge cuts, new focus. i.e. I'd sell/cut Buick, Hummer, Saab and then go through the brands cutting models. GM makes 89 vehicles and many of them are pretty much copies of each other and compete with each other. Notice how honda only has 10 models, 1 for each class. This lets them make 1 good car for each space, instead of 4 half-assed ones.
Startup idea wouldn't really work, it costs way too much money to bring a car to market, and there aren't that many startups in the automotive space, Tesla is pretty much it.
Personally I'd want GM/Chrysler and Ford to go into a joint venture for a new brand to sell a full line of electric/hybrid vehicles. The space is too costly of an investment to take on by one company. This way they can spread the risk and work together on the same technology. And people looking for electric vehicles wouldn't be locked down into funky looking hatchbacks as their only choices.
> Startup idea wouldn't really work, it costs way too much money to bring a car to market, and there aren't that many startups in the automotive space, Tesla is pretty much it.
I think that I you set up a incubator with $200mln for pre-seed VC, with a priority for potentially labor-intensive and/or automotive businesses, you'd see some significant job creation. Not enough to offset GM layoff overnight, but at least the solutions provided will be sustainable.
it costs close to 1 billion dollars to setup a factory to produce a single model. The only reason Tesla is able to do it for a 1/4th of that is because they aren't doing mass production, and their vehicles are using Lotus Elise parts. So the 200 mil will be a drop in the bucket in the auto space.
And even if they did that, the job creation will do no good to the typical worker whose family worked on the same assembly line for 3 generations. Granted some of the jobs will be back when Toyota or Honda or some other successful car company buys GM's assets. But GM is one of the biggest manufacturers in the world, and right now there isn't really that much demand for new cars. I read that last month Honda(whose stuff pretty much flies off the shelf) sold 25% less cars than the year before.
I'm not saying they would be mass-producing cars. I'm saying, creative innovative people will think of something nice to do with 200 mln and 200.000 good pairs of hands.
Yeah... I read somewhere that the GM bailout should come with the requirement of replacing their current vehicles with a hybrid/electric/whatever lineup in X number of years.
I would be happier about a bailout with those sort of strings, but in general, reading that Executives at these car co's have been deriding climate change evidence and the need for hybrids/alternative fuels, makes me skeptical that refunding these companies is the best way to fix the car problem.
On another note, this stuff sucks. Everyone loses if we bail out poorly run companies, but there's a very high cost to letting them go under. Good luck, Mr President-Elect.
Sometimes a one time upfront cost is optimal than a high overhead for all your operations. Its like sorting an array of integers (O(nlogn) so you can rapidly search it with Binary Search (O(logn) rather than having to do a linear O(n) every time.
It sucks for the people in Detroit and Michigan as a whole. Their education system has not yet caught up to the fact that the name of the game is "value added".
Also, now that "peak credit" has hit (shortly after peak oil last december) I do not see the trend of American families buying a brand new car every 1 to 2 years continuing. Much more effort is going to have to be spent making your manufacturing base as efficient as possible -- simply because the car buying cycle will likely be an "every five-six years" trend from now on.
Startup idea wouldn't really work, it costs way too much money to bring a car to market, and there aren't that many startups in the automotive space, Tesla is pretty much it.
Personally I'd want GM/Chrysler and Ford to go into a joint venture for a new brand to sell a full line of electric/hybrid vehicles. The space is too costly of an investment to take on by one company. This way they can spread the risk and work together on the same technology. And people looking for electric vehicles wouldn't be locked down into funky looking hatchbacks as their only choices.