backtop

Print E-mail del.icio.us 181 comment(s) - last by zombiexl.. on Oct 22 at 9:14 PM

GM is betting big on small cars like the Chevy Cruze.

Ford's European-bred Fiesta is also coming our way.
"If we suddenly went to $1 or $1.50 a gallon, that would be really bad" -- GM vice chairman Bob Lutz

It seems as though automakers just can't catch a break these days. The rocky economy and credit crunch resulted in a horrible month for auto sales in September. Every single automaker posted sales losses for the month. Even perennial overachiever Toyota witnessed a sales decline of 31.8% while Chevrolet and Ford witnessed drops of 11.2% and 33.8% respectively.

Compounding the dreadful state of the auto market were the record high fuel prices witnessed over the past six months. In May, we saw the Honda Civic, Honda Accord, Toyota Corolla, and Toyota Camry surpass the Ford F-150 in sales as Americans scrambled for more fuel efficient vehicles.

In late June, General Motors suspended the development of its next generation full-size pickups and SUVs. The company also announced plans to close four of its truck plants by the end of 2010 in order to focus on small vehicles like the upcoming Chevrolet Cruze.

Ford also felt pressure from lagging truck sales and idled its Dearborn truck plant and announced plans to convert its Cuautitlan Assembly Plant in Mexico -- which currently builds full-size trucks -- to build the sub-compact Fiesta.

So one would think that all is well now -- the automakers saw the changing trend in consumer demand, so they pivoted. Well, it's not quite that easy according to the Los Angeles Times.

With fuel prices now dropping at record levels -- 35 cents in two weeks -- auto manufacturers are wondering if they made the right move to make drastic changes to the lineups/production levels. "Do you hope for gas prices to go down so you can sell a lot of trucks again, or do you hope for them to remain high so you can justify your investment in fuel economy," questioned auto industry analyst Aaaron Bragman.

Outspoken GM vice chairman Bob Lutz seemed quite worried about the sudden change of events. "We may hate high fuel prices, but they've been driving us in the right direction when it comes to fuel economy. If we suddenly went to $1 or $1.50 a gallon, that would be really bad."

GM and Ford announced their production changes when gasoline was forecasted to top $5 a gallon in the near future.

Toyota too has cut production of its full-size Tundra pickup in response to sharply lower demand and dropped plans to introduce a diesel variant of the truck. However, Toyota spokesman John Hanson said that the company would be able to adjust to customer demand should the need arise, "If consumers start demanding trucks, we think we can still make as many Tundra pickups as they need."

This is most definitely a turbulent time in the auto industry. Plunging profits and falling sales sometimes call for desperate measures. Just over the weekend, it was announced that GM and Chrysler are in talks to merge, while Ford is considering selling its 33.4% stake in Mazda. One thing is certain, however, this is just the beginning of a huge shakeup in the automotive landscape.

Comments     Threshold


This article is over a month old, voting and posting comments is disabled
I think
By Spivonious on 10/13/2008 11:04:25 AM , Rating: 5
I think that people won't go back to trucks, since they know fuel prices won't stay low forever.




RE: I think
By krotchy on 10/13/2008 11:08:29 AM , Rating: 5
I think "Intelligent" people wont go back to trucks because they know fuel prices won't stay low forever...

However the general population has very little memory for the long term and is easily swayed by a "what can I get now" philosophy. Its half the reason for the sub-prime mortgage crisis and the massive amount of consumer credit debt.

I wish you were right, but I know that the general population will likely never be smart enough to think long term.


RE: I think
By othercents on 10/13/2008 11:47:12 AM , Rating: 5
I don't think this article is just about trucks, but really the big picture. People are just not buying new vehicles. Many people are getting smart and buying a decent used low mileage vehicle or keeping their current vehicle and saving themselves from having a large car payment.

The overall financial market (because of those over spenders) is making it hard for individuals to get loans for anything. I would expect the auto industry to have had their worse sales month in September.

Other


RE: I think
By Cypherdude1 on 10/13/2008 12:24:45 PM , Rating: 5
You're right. Judging from the posts on this thread, I can tell few people are realizing just how bad the economy is. It is true the credit markets are freezing up . I hear that there are few customers even showing up at the car lots, new or used, because they can't get any credit. If a car buyer, new or used, can't get credit, there won't be any deal at all. That's the real reason why ALL the carmakers are posting lower sales. BTW, the price of gas will NOT drop to $1 a gallon. I don't know where that GM exec. got that figure but it's ridiculous. In order for gas to drop that low, you'd need oil to drop to $10-28/barrel and that's not going to happen. Doesn't anyone remember the Clinton years when this happened? Gas dropped to $1/gallon because oil dropped to $10/barrel.
quote:
The overall financial market (because of those over spenders) is making it hard for individuals to get loans for anything. I would expect the auto industry to have had their worse sales month in September.


RE: I think
By Mitch101 on 10/13/2008 12:30:44 PM , Rating: 5
I cant speak for other areas but the used car lots by me (North Charlotte) are loaded with BMW, Hummers, SUV's, and Corvettes. All late models too and it appears they aren't selling either. The used car lots are looking more upscale than the regular dealerships in the area.


RE: I think
By lotharamious on 10/13/2008 3:26:50 PM , Rating: 5
quote:
BTW, the price of gas will NOT drop to $1 a gallon. I don't know where that GM exec. got that figure but it's ridiculous. In order for gas to drop that low, you'd need oil to drop to $10-28/barrel and that's not going to happen.

Everyone knows (Lutz, too... I know it's amazing he knows anything intelligent) that gas will not drop down to $1/gal unless there is a SERIOUS recession worldwide. What is possible is oil at $40-$45/brl until early 2010, before it spikes to $200 because of the exiting of the global recession. This would correlate to about $1.90 at the pump average for the entire US. It's very possible. And that scares the autos because they bet the wrong way, essentially wasting their money.

I do think the autos made the correct decision however. They're looking long-term, and oil, long-term, will skyrocket, even though it should drop another $30/brl in the next 6 months.


RE: I think
By Solandri on 10/13/2008 3:55:16 PM , Rating: 2
The pre-OPEC oil embargo price of gas of about $0.35/gal corresponds to about $1.65/gal now after you adjust for inflation. So it's highly unlikely we'll see gas get down to those prices.

Even though gas prices are going down, I think the experience has permanently changed how Americans think about the variability of gas prices. Previously, a big increase in gas prices was going from $2.20 to $2.65. Now everyone knows it can go from $2.65 to $4.50. When thinking of buying an SUV, people ask themselves, "well how much could gas go up?" The answer back then used to make them more comfortable with buying a gas guzzler. The answer now will leave them uncomfortable even if gas drops all the way back to ~$2/gal.


RE: I think
By Nik00117 on 10/13/2008 4:24:51 PM , Rating: 2
I agree, the market is indeed different then it once was. The car makers need to keep on the path they are now cause truth of the matter is fuel effiecent cars are the way to go.
\
GM is run by a bunch of morons anyways I work in a career field that directly interacts with GM on a yearly basis and each year I come out thinking how dumb GM is when it comes to business.


RE: I think
By lotharamious on 10/13/2008 5:36:48 PM , Rating: 1
quote:
GM is run by a bunch of morons anyways I work in a career field that directly interacts with GM on a yearly basis and each year I come out thinking how dumb GM is when it comes to business.

I don't have personal relations with GM, but the dozen or so people I do know that work for them say the whole company is a shit show. Bad PR, bad image, bad everything.

That's just what I've been told. Take that as you will.


RE: I think
By crleap on 10/13/2008 7:27:35 PM , Rating: 3
You hit the nail on the head. It takes 3 weeks for it to trickle down to $2.99 a gallon here right now, but I'm waiting for the morning I wake up and it's jumped back up to $4.19 overnight. It's going to happen, and I figure soon.


RE: I think
By Mitch101 on 10/13/2008 12:27:41 PM , Rating: 5
Totally agree with you there. Our focus over the next year is to remain employed and pay down debt while trying to squeeze another 2 years out of our current vehicles because of all the talk of what should be arriving from car manufacturers in 2010.

I am not a tree hugger but I certainly don't want gas prices to effect my income if I can help it.

Our new president may also play a role in whether alternative energy vehicles may be an option to consider going forward.


RE: I think
By JediJeb on 10/13/2008 12:30:07 PM , Rating: 2
Maybe people are starting to realize that a car can last more than 3-5 years and are starting to hang on to them longer. My truck is 12 years old with almost 200k miles on it and is still as good as when I bought it. One dent and a couple scratches isn't reason enough for me to trade it. If people start treating houses and cars as long term investments instead of fashion statements that need to be updated every few years then the sales are really going to fall off.


RE: I think
By The0ne on 10/13/2008 12:50:08 PM , Rating: 2
I plan to keep my 2nd for another 10 years. I'm not sure why some people don't have this train of thought. I still have my first car after 10 years and it's still running. I only bought the new one because I...could. But it's not a DD, the old one has twice the mpg. 10 year old technology that gets better mpg, go figure :/ Sad really.


RE: I think
By Spuke on 10/13/2008 12:56:31 PM , Rating: 3
quote:
Maybe people are starting to realize that a car can last more than 3-5 years and are starting to hang on to them longer.
The only realization here is that your average person can't get a loan to buy a new car. You CAN still get loans though as evidenced by California's 50%+ increase in home sales in the last 4 months (over 400k homes sold each month). It's not totally dried up just a lot more difficult than it's been in the last 10 years. Which, to be honest, may not be all that bad considering that EVERYONE could get a loan before.


RE: I think
By masher2 (blog) on 10/13/2008 2:22:34 PM , Rating: 4
> "Which, to be honest, may not be all that bad considering that EVERYONE could get a loan before"

That's the point most people (including our government) seems to miss. The best thing for the economy right now is a short-term decrease in credit availability, to allow overheated sectors to return to normal, and to allow rates to equalize with market risks. What people are seeing as the disease is really the cure.

The Fed kept interest rates far too low for far too long, and Freddie Mae made far too much money available to people who could afford their home financing only as long as the market was rising. Even now after the crash has hit, those organizations are taking just the opposite action that they should (FM just lifted the charge for mortgage insurance fees, to "keep housing affordable for low-income applicants").


RE: I think
By Spuke on 10/13/2008 4:09:16 PM , Rating: 2
quote:
Even now after the crash has hit, those organizations are taking just the opposite action that they should (FM just lifted the charge for mortgage insurance fees, to "keep housing affordable for low-income applicants").
If they keep messing up, they're going to end being a sub to Bank of America or Wamu/Chase.


RE: I think
By FITCamaro on 10/13/2008 2:58:48 PM , Rating: 1
I am approved for the GTO I am buying once I sell my Cobalt. And with an even lower interest rate.


RE: I think
By zombiexl on 10/13/2008 4:17:36 PM , Rating: 1
You have a cobalt? why, oh why? Two of my friends have those and like them, but i think they are too small. Of course I have 2 kids and usually at least one extra kid tagging along.


RE: I think
By lagomorpha on 10/13/2008 6:46:57 PM , Rating: 2
If a Cobalt is too small then your kids are too fat.


RE: I think
By Tsuwamono on 10/17/2008 11:48:01 AM , Rating: 2
Or you're 6'2 and all your friends are above 6 foot. That could be it too...


RE: I think
By zombiexl on 10/22/2008 9:14:42 PM , Rating: 2
So you think the cobalt can fit 5 comfortably? Maybe your brain is to thin to do the math of 2 kids and usually at least one more tagging along.


RE: I think
By Alexvrb on 10/13/2008 9:33:54 PM , Rating: 2
The Cobalt is a small car. It's kind of like saying "You wear size 9 shoes? Why, oh why? They're too small for my feet!"

Anyway, maybe he has a Cobalt coupe - in which case, plenty of room for 2.


RE: I think
By William Gaatjes on 10/13/08, Rating: -1
RE: I think
By Fanon on 10/13/2008 1:43:23 PM , Rating: 2
I think intelligent people know that fuel prices fluctuate and won't stay low or high forever. Therefore, they buy what they can afford to buy.


RE: I think
By Reclaimer77 on 10/13/08, Rating: -1
RE: I think
By William Gaatjes on 10/13/08, Rating: -1
RE: I think
By Reclaimer77 on 10/13/2008 1:55:29 PM , Rating: 1
Yup, I got excited and made typos and errors and frankly didn't care to go back and edit them. Point ? Or are you really using the spelling rebuttal tactic ?


RE: I think
By William Gaatjes on 10/13/2008 2:00:42 PM , Rating: 1
No it was none you have described. :)
Relax, i am not a typo fanatic unless it's my own post.
I found your choice of words rather amusing. :)


RE: I think
By lotharamious on 10/13/08, Rating: 0
RE: I think
By Reclaimer77 on 10/13/2008 5:47:46 PM , Rating: 2
" Someone " is driving a 1994 Mazda Protege LX. You know, the four cylinder ? Its funny but when I pull up to the pumps there isn't a magical Economy Car price, I pay the same as everyone else.

Just because I have a problem with the OP calling everyone who buys a truck a moron, doesn't mean I am one.


RE: I think
By spwrozek on 10/13/2008 8:04:14 PM , Rating: 2
I agree with you. I own a truck and my wife has a 4 cyl Saturn SL that gets 41/25 mpg. Guess what we drive around for groceries, or trips around town, or any trip which we do not need to bring a lot with us? Yet I still have the truck for my mountain bikes, snowboards, skis, kayaks, and trailers. I bought a truck and I am not a moron (although I have a GMC Sonoma which is a small truck, I get 21/17 mpg). Thanks for defending me.


RE: I think
By Reclaimer77 on 10/13/2008 8:47:22 PM , Rating: 2
OMG you STILL own a truck !?? Well thats just not acceptable. Gas is still too cheap apparently. We MUST raise it to $10 / gallon so idiots like you are FORCED to do the right thing and stop being so selfish !!111!!!

:)


RE: I think
By Nfarce on 10/13/2008 9:09:01 PM , Rating: 5
Well said R77. One other thing you won't hear people like the "truck/SUV" haters tell you is that at least half of the trucks sold in this nation are sold to people who need them: plumbers (you know, like the one who asked Obama the other day about his income tax plan and Obama said "we will spread the wealth around"); electricians; lawn maintenance folks; handymen; your other typical hard working blue collar men (and women).

I have one (full sized Chevy) because I can't tow a boat or camper with an Infinity G35 sedan very well (nor would I want to tear that car up doing so). It also comes in handy for taking things like the lawn mower to the repair dude, bringing plants home from Home Depot, bringing firewood home, football game "tailgate" parties, yadda yadda. In short, there is no shortage of me finding some use for mine seemingly at every turn (literally). Americans are not like Europeans; the majority of us don't live in tiny or cozy towns and big cities where tiny cars are useful (if allowed at all) and mass transit it pletiful. We are spread out. And that's one of the great things of this land we live in. We can choose to live in a city and not own a car at all, or we can choose to buy farm land in middle America and own a truck.

That said, even if people are jealous or whatever their motivation is for hating truck owners, they should at least grow up enough to know that a LOT of truck owners out there need one to make a living.


RE: I think
By just4U on 10/14/2008 2:52:51 AM , Rating: 2
Being in Construction I agree with you totally.


RE: I think
By MamiyaOtaru on 10/14/2008 4:29:12 AM , Rating: 2
Look a nerd! He used big words!
/dumbjock


RE: I think
By foolsgambit11 on 10/13/2008 3:55:23 PM , Rating: 3
First, let me say that I don't totally agree with the OP and his insinuation that people who buy trucks are morons. There's definitely a legitimate market for trucks.

But let me get this straight, you believe the fault for the current economic situation falls on government and utilitarians? Socialist utilitarians, specifically? So those would be the people who feel that the means to achieving the greatest good for the greatest number of people is socialism, I assume? And you decided the OP was one of these socialist utilitarians because.... he seems to dislike truck owners?

I'll admit it, I'm probably a liberal in your view. But when you have something to say, I don't just sum it up as "blah blah blah, I'm a nazi" (or whatever ad hominem attack might kind of fit). Your arguments after the introduction were strong enough to stand on their own without stooping to insults.

Lastly, I would point out that people are anticipating that the number of foreclosures will continue to go up (barring government intervention) for at least another year. Some estimates are that as many as 25% of home loans may end up in default. I'd imagine the true extent of the 'crisis' lies somewhere lower than that number, though. That would still leave the 'huge' majority of Americans as responsible with their finances. But even 8% of home loans is millions of people who were irresponsible with their finances (I prefer personal responsibility, even for those 'duped'. It's their fault for not doing the necessary research). As long as you're going to accuse the OP of being ignorant of the facts, I thought I'd try to give a more accurate assessment of the situation than your cherry-picked numbers.

In other words, I agree with much of what you say, but you make me want to argue against you because of your strident tone. That's my own personal character flaw.


RE: I think
By Spuke on 10/13/2008 4:21:52 PM , Rating: 2
quote:
But even 8% of home loans is millions of people who were irresponsible with their finances (I prefer personal responsibility, even for those 'duped'.
Although, that number is probably true (haven't looked it up), most of that number resides in the states of California and Florida. It's not really representative of the state of the nation as a whole. To make that number more accurate, you would need to break it down by state.

And 8% really isn't that big even if you look at the amount of home owners in trouble. The VAST majority are STILL on time. Should the 8% be trivialized? Yep, because 92% of home owners ARE on time with their house payments.


RE: I think
By Solandri on 10/13/2008 4:40:40 PM , Rating: 2
quote:
But let me get this straight, you believe the fault for the current economic situation falls on government and utilitarians? Socialist utilitarians, specifically?

There's some frustration among the right that the public's blame for the current economic situation seems to have fallen entirely on their mantra of deregulation. I never really "got" how Democrats complained about Reagan's "teflon" image until now. No matter what Republicans say about how Democrats were also complicit in causing this, none of it seems to stick in the public's mind.

Frankly, there were two forces which were complicit in causing the housing bubble. Republicans loosened regulation thus allowing banks and lenders to make riskier loans. Democrats encouraged the same banks and lenders to loan to low-income folks (a greater portion of whom had poor credit). Both of these two agendas synergized into a orgy of lending which led to higher prices. When you make more people eligible to buy a home, the demand for homes increases. When demand goes up, prices go up. It's as simple as that. The Republicans didn't really try to stop Democrats' efforts because banks and lenders were making money hand over foot from the loans. Democrats didn't try to stop the Republicans' efforts because more lower income people were becoming homeowners. It was a win-win, or so they thought.

quote:
Lastly, I would point out that people are anticipating that the number of foreclosures will continue to go up (barring government intervention) for at least another year. Some estimates are that as many as 25% of home loans may end up in default. I'd imagine the true extent of the 'crisis' lies somewhere lower than that number, though. That would still leave the 'huge' majority of Americans as responsible with their finances. But even 8% of home loans is millions of people who were irresponsible with their finances

The problem now is that the effect of the housing bubble's burst has trickled down into the rest of the economy. At this point, I think the default rate on mortgages has less to do with the soundness of the loans, and more to do with how the economy reacts to the credit crisis. If frozen credit markets cause businesses to go under, people will lose their jobs, be unable to make their mortgage payments, and will default. That can happen regardless of whether you were responsible or irresponsible with your finances when getting a mortgage. At this point I think your chances of defaulting due to a poor economy / losing your job are much, much higher than your chances of defaulting because you bought more house than you could afford. The side-effect has become a bigger problem than the cause.


RE: I think
By andrinoaa on 10/13/2008 4:59:15 PM , Rating: 1
The mere fact that up to 8 million people got it wrong with loans says some something about your "free at all costs" culture. It says that 8 million people had "the american dream" but didn't quite get there. The myth that deregulation and small government is the way to go, surely has hit the wall. From the outside , you guys got rid of government responsibilities and loaded up the "War Machine".
This economic bubble had its birth when Iraq was bombed. A trillion dollars and still rising. Trillions in national debt. Its like a home that lives beyond its means. Lots of time bombs that all seemed to go off at once.


RE: I think
By Ringold on 10/13/2008 9:22:23 PM , Rating: 2
quote:
The mere fact that up to 8 million people got it wrong with loans says some something about your "free at all costs" culture.


Silly me, I thought it was reflection upon the failure of public school education. People make stupid choices, and you blame government? Beautiful. If someone drinks a bottle of Jack Daniels, then gets in a car, and ends up wrapped around a tree, is that the governments fault too? They're all stupid choices.

quote:
The myth that deregulation and small government is the way to go, surely has hit the wall.


Lets see. According to wikipedia, which sites a NYT article, the total US mortgage market is 12 trillion dollars. Bloomberg said Fannie and Freddie held 5.2 trillion of these, or 43% of all US mortgages. Also throw in some VA-backed mortgages, "low income" housing, and other types of market manipulation like allowing home mortgage interest to be deducted from income for federal taxes that amounts to a government policy of encouraging 100% home ownership rates, whether or not people are capable of it.

What part of all that market manipulation and 43% of mortgages being owned by government-sponsored enterprises leads you to believe that this is a failure of the free market? Where the hell is the free market here? By this logic, France is a rapacious, hard-nosed supercapitalist state. This is like saying farming is a capitalist, competitive international market, and ignoring the massive subsidies and protective tariffs.

quote:
This economic bubble had its birth when Iraq was bombed.


What credible person who knows whats gone on really believes Iraq is relevant here? A range of government policies going back many years, the Federal Reserve lowering interest rates too low for too long, and simultaneous housing booms taking place in Europe all contribute, but the expense of Iraq has been a comparable drop in the bucket. A relatively small number of men are tied up there, and part of that "expense" goes right back to US-based firms and as wages to soldiers. In that sense, if Iraq has damaged the economy, welfare, Medicare and Medicaid are every bit as bad; they're all just redistributions for reasons other than economic activity.


RE: I think
By Felofasofa on 10/13/08, Rating: 0
RE: I think
By masher2 (blog) on 10/13/2008 11:53:41 PM , Rating: 4
> "The free market has failed by allowing predatory lending"

And once again, someone steps in to point fingerd of blame everywhere except where they really belongs. There's nothing predatory about offering someone a loan. Even a balloon mortgage isn't predatory -- especially when the lender is required to inform the recipient in big bold letters that they'll have to acquire a new loan when the original expires.

Given that as many as half the defaulted loans may be fraudulent and/or held by illegal immigrants, the "predatory" part here is the loan recipients preying on the banks-- and ultimately on us the taxpayers.


RE: I think
By Felofasofa on 10/14/08, Rating: 0
RE: I think
By masher2 (blog) on 10/14/2008 12:46:43 AM , Rating: 3
> "It is when you know full well that the recipients have no capacity to pay it off"

You couldn't possibly be further off base. Lenders follow a set of rules to determine eligibility....rules set by the government , not by them. Had they chosen to deny any of those loans, they would have been breaking the law. In fact, Barack Obama himself sued Citibank under the CRA (Community Reinvestment Act) for it doing just that -- denying loans to people it didn't think could repay them.

> "it's a classic case of Capitalising the profits and Socialising the losses"

It most certainly is. However, Fannie Mae, Freddie Mac, and the bailout in general is about as far as one can get from a capitalist enterprise as possible. There is no such thing as "socializing the risk" in a free market.

Since you entered this thread with a misdirected diatribe against capitalism, I think this statement of yours indicates you've finally realized just how seriously you've lost your way.


RE: I think
By Felofasofa on 10/14/2008 1:21:20 AM , Rating: 2
quote:
Lenders follow a set of rules to determine eligibility
No they didn't, they were way over zealous in their interpretations, liquidity was there, Bush didn't try to stop it, and so it marched on.
quote:
There is no such thing as "socializing the risk" in a free market.
Oh really? So what is a tax-payer funded bailout, plus reduced living standards, anything but a socialised loss.
quote:
However, Fannie Mae, Freddie Mac, and the bailout in general is about as far as one can get from a capitalist enterprise as possible.
Freddie/Fannie were saved because the Chinese had a $400 Billion exposure, end of story. Not bailing them out was unthinkable. You really don't understand the precipice your country stands at. Change is beyond your control now, although this has obviously not sunk in yet.


RE: I think
By masher2 (blog) on 10/14/2008 1:41:16 AM , Rating: 3
> "No they didn't"

They most certainly did. But under the Community Reinvestment Act (CRA), The Equal Credit Opportunity Act (ECOA), the Fair Housing Act and several other pudding-headed federal programs, lendors cannot deny loans if they meet government-set criteria. Point of fact, when Citibank attempted to stop making loans to people it felt couldn't afford them, it was immediately slapped with a class action lawsuit.

See Buycks-Roberson v. Citibank Fed Savings Bank for details. The settlement agreement forced Citibank to dramatically increase the number of subprime mortgages it underwrote.

> "So what is a tax-payer funded bailout, plus reduced living standards, anything but a socialised loss"

Since you've forgotten your own words from 2 hours ago, allow me to repeat them: "The free market has failed".

The free market didn't fail here. Government meddling is what failed. As it always does.


RE: I think
By Felofasofa on 10/14/2008 2:07:03 AM , Rating: 2
quote:
The free market didn't fail here.
It did, the government didn't tell Bear Stearns to lend $30 for every $1 on deposit. Greedy buggers at the top did. The models are history now, what banking is left is being partly nationalised. Whether you like it or not, regulation is coming. Good riddance to the money go round. Despite what you think, I'm no communist, but a small business man willing to compete in a free market, but I would see no loss in the removal of the derivative/futures market, in which values get very difficult to determine.


RE: I think
By nycromes on 10/14/2008 9:07:31 AM , Rating: 2
Let me just add one point that should trump all other points here.... no one forced the borrowers hands. They signed the loans on their own accord, they should have known better. I know many people who were offered mortgages that they couldn't afford and didn't accept them.

Bottom line: If people did what was in their best interests in this situation, they wouldn't have signed loans they couldn't afford. The predatory lending wouldn't have mattered and we wouldn't be in this situation. You can blame blame blame all you want, but in the end, the responsibility for one's situation falls squarely on the shoulders of the individual (at least in this situation).


RE: I think
By masher2 (blog) on 10/14/2008 9:20:34 AM , Rating: 3
This crash wasn't caused by Bear Stearns; it was caused by the meltdown in the subprime market. Bear Stearns hedge funds were all linked to mortgages.

Further, you seem to have lost your train of thought. You initially blamed this all on "predatory lending"....but Bear Stearns didn't loan money to homeowners. So which is it?

Still further, blaming this all on "greed" is about the most utterly puerile response possible. The federal government caused this massively expanding subprime market. And take a look at what happened to any bank which didn't participate in it-- they lost so much market share during the boom years that most wound up being marginalized or bought out by their larger competitors. When the Fed sends signals, banks either listen or perish. It's not their fault those signals were false.

> "but I would see no loss in the removal of the derivative/futures market"

Then tell the government to stop promoting it. 90% of the derivatives market is nothing more than a bet on how the Fed will move interest rates -- a business the government shouldn't even be responsible for in the first place. Individual banks themselves should set rates, just like prices are set in a free market.


RE: I think
By JediJeb on 10/14/2008 10:17:16 AM , Rating: 2
And take a look at what happened to any bank which didn't participate in it-- they lost so much market share during the boom years that most wound up being marginalized or bought out by their larger competitors.

I agree with you on everything but this statement is a little to generalizing. When I got my home loan I went through a small local bank, they required at least 10% down with a co-signer if you couldn't go 20% down. They have only 4 branches in two counties, so very small operation. There are many banks like this out there in the rural areas, and they have faired quite well even through all this mess. The big banks like Citi, Chase, Wachovia ect are the ones hurting because they have become too big. They all say then need to grow to be able to provide better service at lower cost, but yet my local bank provides me free checking, refunds my ATM fees nationwide, gives 5.5% interest on my checking, has free bill pay service and internet banking. I think a lot of this is possible because it doesn't owe a huge portion of its profits to a large number of stockholders. This is the problem with most companies, either the stockholder or the customers can win but rarely both. So many companies have started out with a mid priced high quality low volume product then ended up with a low priced, low quality high volume product once they went public ( this applies to manufacturing, retail and banking if you think about it).


RE: I think
By Felofasofa on 10/14/2008 8:36:09 PM , Rating: 2
quote:
You initially blamed this all on "predatory lending"....but Bear Stearns didn't loan money to homeowners. So which is it?
It's both. No one factor caused this. The end result is the same. More to come as well. Think personal credit.
quote:
Still further, blaming this all on "greed" is about the most utterly puerile response possible.
Yeah right greed had nothing to do with it, get real, and keep up the personal attacks, it really strengthens your arguments. As if discussing the US going down the financial gurgler is so sacrosanct. Bad luck, it's happening, and there is absolutely nothing you can do about it. Losing financial hegemony is a bitter pill to swallow, so I understand your grief.


RE: I think
By Reclaimer77 on 10/13/2008 5:24:59 PM , Rating: 4
quote:
Frankly, there were two forces which were complicit in causing the housing bubble. Republicans loosened regulation thus allowing banks and lenders to make riskier loans.


This is an outright lie. That bill was passed by a completely Democratic majority in congress back in 1970-something. I'm sure some Republicans DID vote for it as well, but to say " The Rebublicans passed " it is being , at the least, misleading.

Also your outright wrong about what it did. The bill REGULATED the mortgage industry by forcing them to offer loans to people who , before, would have been rejecting by lending institutions. Because it wasn't " fair " that people were being rejected based on their income and monetary status. Hmmm now I wonder, what party does that sound like ? Making decisions based on feelings...

The government CREATED the sub-prime market. This is NOT an example of deregulation.

Every single time the government interferes in private markets there is a negative reaction. I'm amazed people like you still don't get that.


RE: I think
By MamiyaOtaru on 10/14/2008 4:38:19 AM , Rating: 2
You're not talking about the same thing. The law mandating loans for lower income houses was indeed the Democrats' responsibility. But he seems to be talking about Gramm-Leach-Bliley, repealing the prohibition on investment banks owning commercial banks and vice versa, which was passed by a Republican congress.


RE: I think
By Reclaimer77 on 10/13/2008 5:13:13 PM , Rating: 2
quote:
, I assume? And you decided the OP was one of these socialist utilitarians because.... he seems to dislike truck owners?


Many reasons. I mean, did you actually read his post ? Hes across the board wrong and liberal in all his assumptions.

1. Gas prices, in his mind, are the only reason those " idiots " aren't buying SUV's and trucks anymore. Forgetting the fact that foodstuffs is at an all time high and consumer confidence across the board is low.

2. People buying to fit their needs or wants are somehow ignorant idiots because they didn't conform to a current trend or something the OP " knew " was coming. Is this not America anymore ?

siiigh ok I'm stopping. This is why I said " bla bla bla hes a socialist ". Because when you argue with a liberal or communist, I end up writing a million words and they STILL won't see your point anyway. Its also hard to debate against someone who seems to be lacking understanding of such utterly basic and simple ideals to most of us.

Please, read his post again. Note the liberal slant, the socialist talking points, his use of class envy warfare. And, of course, the lack of common sense or understanding about how things actually work. Hes doing a HELL of a lot more than simply " not liking " truck owners.

quote:
Lastly, I would point out that people are anticipating that the number of foreclosures will continue to go up (barring government intervention) for at least another year.


This is just a prediction.

quote:
As long as you're going to accuse the OP of being ignorant of the facts, I thought I'd try to give a more accurate assessment of the situation than your cherry-picked numbers.


So wait, my factual number gets outweighed by your PREDICTED figure ? I'm the one cherry picking here ?

quote:
In other words, I agree with much of what you say, but you make me want to argue against you because of your strident tone. That's my own personal character flaw.


Well it takes a big man to admit character flaws. Good post man, no hard feelings of course. I'm glad you agreed with most of what I said and got the gist of my argument. Thats enough for me.


RE: I think
By Yossarian22 on 10/13/2008 7:16:52 PM , Rating: 4
Its really an atrocity that a post like yours exists. If you are going to disparage a term, please take the time to learn how to spell the term and what the term is. If you can't do that, don't attempt to sound intellectually superior

A utilitarian argues that we have a moral obligation to do whatever brings the greatest amount of happiness to the greatest number of people. Your association of socialism with utilitarianism is "asinine" (1 "s" by the way). I can be a capitalist and be a utilitarian at the same time; all I have to do is believe that capitalism brings the greatest number of happiness to the greatest number of people.

Your post can be summed up as "bla bla bla, I'm not a very intelligent libertarian." Its amusing that libertarians have their image tarnished not by dissection of their ideals, but by idiots like you. Your inability to notice the irony of saying "libs and enviromental wackos" and "Sure its the Internet, but honestly, who the hell are you to make judgements on millions of people you don't even know ?" in the same breath speaks volumes about your intelligence and integrity.

And really, do you think 8% is a compelling number in and of itself? If I said that 8% of banks were failing, you'd probably be kind of worried wouldn't you?


RE: I think
By Reclaimer77 on 10/13/2008 7:23:46 PM , Rating: 1
Ah a parody post. How amusing and original.

Come up with your own format, lightweight.


RE: I think
By Yossarian22 on 10/13/2008 9:50:57 PM , Rating: 3
Again, you demonstrate an inability to grasp English. A parody necessarily copies the format of what it ridicules.

The above is moot anyhow, as my post was not a parody. It simply pointed out the stupidity of your post. A quality that you cannot remove from your comments apparently.


RE: I think
By nycromes on 10/14/2008 9:08:49 AM , Rating: 2
Uhh... you did copy his format to a certain degree.


RE: I think
By Spuke on 10/13/2008 11:15:04 PM , Rating: 2
quote:
If I said that 8% of banks were failing, you'd probably be kind of worried wouldn't you?
I wouldn't be worried because 92% of banks are still good.


RE: I think
By Felofasofa on 10/13/2008 11:43:27 PM , Rating: 2
quote:
please take the time to learn how to spell
Sorry for being pedantic, but grammar is worth checking as well.
quote:
the greatest number of happiness
Such as in this case.


RE: I think
By advanceduser on 10/17/2008 12:05:16 PM , Rating: 1
8% ? Where did you get that figure? Its more like 4% per Transunion

http://newsroom.transunion.com/index.php?s=43&item...

"The national 60-day mortgage delinquency rate among mortgage borrowers is expected to continue to rise throughout 2008 from a value of 3.53 percent in the second quarter of 2008 to just over 4 percent by year end," said Carson. "This is primarily due to the continued economic weakness in certain segments of the country combined with the continuing fallout of the mortgage crisis."

However, TransUnion forecasts that later in 2009 the rise in mortgage delinquency rates will taper off as economic conditions improve and home prices begin to stabilize. As far as state projections go, Nevada (8.7 percent) is anticipated to experience the highest average delinquency rate by the end of 2008, while North Dakota (1.3 percent) is expected to show the lowest level of delinquency.

Now keep in mind the industry total is 12 trillion, so at 4%, they could have paid off all the bad mortgages with under 500 billion, and made them worth 100 cents on the dollar instead of forcing banks to accept government ownership and investment.


RE: I think
By bentonar18 on 10/13/2008 2:11:34 PM , Rating: 2
There are still lots of people that can use trucks IF (big IF) gas stays affordable. I live in a rural area, and the most common "soccer mom" vehicle is a 4-dr full-size pickup. It has to double as a station wagon and a work vehicle, so it makes sense to have a full-sized truck. Gas is a little cheaper out here in the country, too... A truck is still an intelligent choice out here; it allows me to make a living.


RE: I think
By Staples on 10/13/2008 2:12:15 PM , Rating: 1
Give this guy a 6.

I think we will see a spike in truck sales next month. It may not be an increase of over the same month last year but it will be a smaller loss than we have seen in past months.


RE: I think
By Davelo on 10/13/08, Rating: 0
RE: I think
By JediJeb on 10/13/2008 5:49:46 PM , Rating: 2
Gas will never again drop below $3 and he knows it.

That's odd, gas where I live just hit $2.86 and seems to still be falling.


RE: I think
By Spuke on 10/13/2008 11:17:57 PM , Rating: 2
Unless you live in CA, gas is already below $3 a gallon. It's the lack of demand that's currently driving down prices. I foresee prices going down even further once car sales pick up and people continue the current trend of more fuel efficient cars. It is quite possible that we could see $1.50 a gallon gas in some areas.


RE: I think
By rudolphna on 10/14/2008 1:16:58 AM , Rating: 2
or new york, where its 3.24 because of all the gas taxes here


RE: I think
By Reclaimer77 on 10/14/2008 2:43:25 AM , Rating: 2
Wait.. are you saying oil is getting cheaper because people are " buying more fuel efficient cars " ??


RE: I think
By Spuke on 10/14/2008 12:20:22 PM , Rating: 2
Nope. Demand for gas is down which is lowering gas prices.


RE: I think
By stryfe on 10/15/2008 3:57:09 PM , Rating: 2
That and you can't mount a gun rack on a Ford Fiesta!


RE: I think
By Gzus666 on 10/13/2008 11:09:57 AM , Rating: 2
I think you are assuming the average consumer actually thinks about that. They see cheap, they dive on it. Average consumer doesn't have that kind of forethought.


RE: I think
By therealnickdanger on 10/13/2008 11:17:53 AM , Rating: 4
I think people that need or really want trucks will do what they've always done throughout history: buy trucks.


RE: I think
By kamel5547 on 10/13/2008 11:47:18 AM , Rating: 1
People won't go back to trucks because no one will give them a loan for one... at least for now.

People are very good at rationalizing any decision they make, whether or not it is actually rational.


RE: I think
By paperfist on 10/13/2008 11:49:50 AM , Rating: 2
Eh maybe they should apply fuel economy to trucks?! I need one for work and would happily pay more for a fuel efficient truck which the auto industry keeps as their dirty little secret. The EPA never made them count toward their MPG ratings so they never bothered to compete at that level and now they have a chunk missing from their back sides.


RE: I think
By DeuceHalo on 10/13/2008 12:19:35 PM , Rating: 2
I completely agree. I still need a vehicle I can tow my boat with on the weekends, and a little Prius isn't going to cut it. If I could get a fuel efficient truck, I'd do it.


RE: I think
By Cypherdude1 on 10/13/2008 1:55:59 PM , Rating: 2
Actually, a little Prius could cut it, if you dropped a truck engine into it.

B ^D
quote:
I completely agree. I still need a vehicle I can tow my boat with on the weekends, and a little Prius isn't going to cut it. If I could get a fuel efficient truck, I'd do it.


RE: I think
By masher2 (blog) on 10/13/2008 2:27:50 PM , Rating: 5
> "Actually, a little Prius could cut it, if you dropped a truck engine into it..."

And stiffened the suspension, added a transmission intercooler, increased the load-bearing capacity of the rear tires, and possibly strengthened the frame and/or rear bumper assembly.

There's a bit more to towing than raw horsepower. :)


RE: I think
By jRaskell on 10/13/2008 5:16:57 PM , Rating: 5
quote:
> "Actually, a little Prius could cut it, if you dropped a truck engine into it..."

And stiffened the suspension, added a transmission intercooler, increased the load-bearing capacity of the rear tires, and possibly strengthened the frame and/or rear bumper assembly.

There's a bit more to towing than raw horsepower. :)


And Voila, you have a 20mpg Prius. ;)


RE: I think
By SavagePotato on 10/16/2008 10:40:12 AM , Rating: 2
Wouldn't you feel silly though when your front wheel drive prius's front half was driving away from you while you in the back half of the car and your trailer were still sitting at the stop light because the car broke itself in half?


RE: I think
By itserix on 10/13/2008 12:02:06 PM , Rating: 2
i think there are still a lot of people rely on trucks for work


RE: I think
By jimbojimbo on 10/13/2008 2:23:25 PM , Rating: 3
For every 1 person that uses a truck for work there are hundres of people with SUVs that never go off roading or tow anything.


RE: I think
By drebo on 10/13/2008 4:14:37 PM , Rating: 2
And it should be their perogative to buy any damn car they want to. I drive a mid-size because I don't want to be crammed into a sardine can. Some people have 4-5 kids and drive a Suburban or a Tahoe because they'd prefer the extra size and power to that of a minivan.

At what point did the government get the right to tell me which cars I can and cannot buy? At what point did they get the right to tell car companies which cars they should and should not be making?


RE: I think
By lagomorpha on 10/13/2008 7:03:56 PM , Rating: 1
"At what point did the government get the right to tell me which cars I can and cannot buy? At what point did they get the right to tell car companies which cars they should and should not be making?"

At what point did the government get the right to tell me my car has to pass crash tests and have air bags? At what point did they get the right to tell car makers what features needed to be in their cars?

If anything crash testing should be done like this:
Crash vehicle being tested into a common compact car. If the dummies in the compact car survive then the vehicle passes. It is my right to endanger myself with my vehicle choice, it is NOT YOUR RIGHT to endanger others by purchasing a landdreadnaught with a bumper height that puts others at risk. Oh and btw I'm not an environmentalist but I've pissed on the door handles of hundreds of Suburbans and Expeditions.


RE: I think
By Nfarce on 10/13/2008 9:26:29 PM , Rating: 3
quote:
It is my right to endanger myself with my vehicle choice, it is NOT YOUR RIGHT to endanger others by purchasing a landdreadnaught with a bumper height that puts others at risk.


If the government says it's safe for the road, then IT DAMN SURE IS MY RIGHT . You sound like a fascist. Stay off the damn road if you feel threatened then. But do NOT tell others what they can and cannot drive. Comparing government safety regulations to the CHOICE of buying what you want that PASSES government safety standards is nothing but fascism.

quote:
Oh and btw I'm not an environmentalist but I've pissed on the door handles of hundreds of Suburbans and Expeditions.


I'd be careful if I were you, dude. I read about one guy getting so severely beaten when caught doing that he never walked or looked the same again...and the truck he peed on didn't belong to the attacker.


RE: I think
By porkpie on 10/13/2008 10:09:51 PM , Rating: 2
quote:
Oh and btw I'm not an environmentalist but I've pissed on the door handles of hundreds of Suburbans and Expeditions
Very classy of you. I bet you clean your ears with your car keys when you go out for a "fancy" meal at the local BBQ joint too.


RE: I think
By Spuke on 10/13/2008 11:23:03 PM , Rating: 3
quote:
Oh and btw I'm not an environmentalist but I've pissed on the door handles of hundreds of Suburbans and Expeditions.
That's really dangerous and stupid dude. But, feel free to continue doing that. The gene pool gets a little murky sometimes and requires occasional maintenance.


RE: I think
By Noya on 10/14/2008 1:43:53 AM , Rating: 2
quote:
I've pissed on the door handles of hundreds of Suburbans and Expeditions.


No, no, no...you got it wrong.

You pee into a water bottle and poor it down the HVAC vents at the bottom of the windscreen!


RE: I think
By Solandri on 10/13/2008 4:18:41 PM , Rating: 3
For those of you born after the 1970s, back in the '70s everyone had a station wagon. It was the minivan of the times, great utility and could haul the kids around with some adult guests.

When we children of the '70s grew up, we did not want to own a station wagon. That would mean we were turning into our parents, and we did not want that. The first answer was the minivan from the mid-'80s to '90s. But that quickly picked up a "soccer mom" reputation that many of us didn't like. Then came the SUV with its tough, off-road image. It was perfect - it let you do the exact same things as a station wagon or minivan, but without having to admit that we were like our parents or the harried housewife shuttling her kids around.

That's why SUVs were so popular even though the vast majority of them never went off-road. Vanity.


RE: I think
By AntiM on 10/13/2008 12:46:07 PM , Rating: 2
I don't think anyone has anything to worry about as far as gas prices going to low. GM should and other automakers should stick to their plan of making more fuel efficient vehicles. Gas may drop temporarily, but it will certainly climb back up. It could very well be over $5/gallon in 2 or 3 years. With the volatility of the Middle East, there's no telling what might happen. I think fuel efficiency is a safe bet.


RE: I think
By BarkyMcWoof on 10/13/2008 2:30:29 PM , Rating: 2
There will always be some level of demand for pickup trucks. The best selling vehicle may not be a pickup again.

After the 1974 gas crunch, everyone thought there would never again be a return to the gas hog. The gas hog did return, more powerful and bigger than ever.

All that can be said for certain is that things won't stay the same.


RE: I think
By gregpet on 10/13/2008 2:35:58 PM , Rating: 2
I agree. The public has seen how FAST gas prices can rise and will not want to lock themselves in to a gas guzzler. In addition, the automakers will not build gas guzzler cars/trucks (in quantity) because they have felt the sting as well. I believe that the cycle has been broken. We would have to see cheap oil for years (like what we saw in the 90's) before both manufacturer and consumer would take a risk on buying/building non-fuel efficient vehicles.


RE: I think
By cokbun on 10/14/2008 2:11:12 AM , Rating: 2
kids, say no to trucks.


RE: I think
By kake on 10/14/2008 2:40:39 AM , Rating: 3
I drive a full sized Chevy pulling a trailer every day for my work (electrician). My next vehicle, in a year or two, will be an equally full sized truck. Be it GM, Ford or Dodge, the price of fuel isn't the deciding factor, it's what I need to do with my vehicle.

My wife's car isn't really a car either, although a CRV isn't quite an SUV, we could get better mileage with a true "car", I don't fit well in cars, no matter how far the seat goes back, and our kids (around the five year old range) love being able to easily get in and out and walk around inside the vehicle. My legs fit, the seat's nice, and it still gets me head and shoulders above traffic while doing 30mpg down the road.

Don't knock the truck because it's useful. Don't knock the SUV because it's comfortable. Don't knock the small car because it's getting 40mpg. People buy what they need or what they want and can afford. Don't group us into a lump and say, "they won't."


RE: I think
By Hiawa23 on 10/14/2008 2:57:12 PM , Rating: 2
This is how we ended up here in the first place. Just cause gas prices are going down, these automakers, particuliarly the American companies better make damn sure they move forward in pushing for more fuel efficient vehicles, & the electric, & hybrids. I don't care if fuel goes down to $1.99/gallon, the United States must also continue to push more for our own drilling, & pursue with reckless abandon alternatives, regardless of how much gas goes down, cause one thing we can count on is one day it will rise & we will continue sending over $700billion to these foreign nations.


huh?
By JasonMick (blog) on 10/13/08, Rating: 0
RE: huh?
By Master Kenobi (blog) on 10/13/2008 11:07:11 AM , Rating: 2
As the economy makes its climb in ~2 years (it should bottom out and stay low for the next year) the gas prices will start to climb again. I think we can get used to seeing $3.50 gas for the long term.


RE: huh?
By Spuke on 10/13/2008 1:02:13 PM , Rating: 2
quote:
I think we can get used to seeing $3.50 gas for the long term.
Welcome to California. Gas is $3.45 a gallon where I live. Those of you that want higher gas taxes can always move out here. In comparison, Arizona is at least 50 cents lower than here on average.


RE: huh?
By jimbojimbo on 10/13/2008 2:23:20 PM , Rating: 3
Hey, how about Chicago? It's $3.95 as of yesterday and taxes are more than likely to go up again. Thank you, democraticats.


RE: huh?
By Nfarce on 10/13/2008 9:30:11 PM , Rating: 3
quote:
taxes are more than likely to go up again. Thank you, democraticats.


Well according to the Democratic vice president candidate Joe Biden, paying more in taxes is the "patriotic thing to do." Now put that sh!t eating patriotic smile on and bend over. :)


RE: huh?
By Brandon Hill (blog) on 10/13/2008 11:07:27 AM , Rating: 2
By "bad", he means that people will then want to buy those gas guzzling full-size SUVs and pickups which they have been shying away from due to high gas prices.

Those full-size vehicles are some of their most profitable vehicles -- it also doesn't help that they have closed full-size truck plants and shelved plans for their replacements in order to focus on small cars.


RE: huh?
By Reclaimer77 on 10/13/08, Rating: -1
RE: huh?
By JediJeb on 10/13/2008 11:26:42 AM , Rating: 5
It is a similar situation to the late 80's early 90's. When I started college in 85 I entered a program in Coal Chemistry doing research into using it to make gasoline because crude prices were up. By the time I graduated, the crude prices had fallen and noone was hiring people for coal research. Luckily my skills were in chemical analysis so I found work in and Environmental Laboratory testing drinking water, monitoring cleanups of waste dumps and a little of everything else.

Im not an Environmentalist nor a Liberal at all, but from experience I have seen that the changes to more efficient energy products will not take place when energy is cheap unless there is some type of mandate to make it so. Free markets are great, and our system I believe is one of the best for keeping the economy flowing ( except for the choices of a few banks that were just stupid ), but when the financial incentive is gone for developing better technologies those thing shift back into low gear. Just like the automakers trying to keep up with changing demand, the energy companies are going to go the cheapest route, but when the research slows we end up being caught with our pants down when something like this last huge jump in energy prices hit.

If the attitude of the general public can be changed from the " it's all about me" idea that has been pounded into us for years now, to the " what can you do for your country( or fellow citizens)" that JFK inspired once and was more common in years past, then we would be able to move forward with cleaner more efficient energy technology and many other things that are needed today. Things can change for the better, and new ways of doing things can thrive, but there will need to be some voluntary sacrafices made by everyone to make it happen. We need people to say " let's do it" and not " you do it, then I will follow" . Otherwise we are just going to keep repeating the roller coaster ride we just took.


RE: huh?
By Spuke on 10/13/2008 1:05:43 PM , Rating: 2
quote:
We need people to say " let's do it" and not " you do it, then I will follow" .
I agree here but most people are followers not leaders. Even those here that suggest we quit following won't take the lead either. It will happen, we're on that path, but it will take a long time before we get there.


RE: huh?
By William Gaatjes on 10/13/2008 1:36:17 PM , Rating: 3
Amen.

Give him a 7.


RE: huh?
By Jimbo1234 on 10/13/2008 1:56:42 PM , Rating: 2
Okay, let's do it! ... you first.


RE: huh?
By JediJeb on 10/13/2008 6:04:46 PM , Rating: 2
Actually I am. Im working on a way to reclaim the heat from the water that goes down the drain and send it back into a water heater. Of course now that I told that someone will find a way to beat me to it lol.


RE: huh?
By masher2 (blog) on 10/13/2008 10:12:08 PM , Rating: 2
> "Im working on a way to reclaim the heat from the water that goes down the drain and send it back into a water heater"

I have such a system in my home...installed in '99 when I built the place. It's simply a heat exchanger that uses the warm water from the drain to prewarm the cold source for the shower.


RE: huh?
By Spuke on 10/13/2008 11:40:45 PM , Rating: 2
That's pretty neat. Is it something you built or can one buy a pre-built system?


RE: huh?
By masher2 (blog) on 10/13/2008 11:58:36 PM , Rating: 2
I ordered it prebuilt, though I imagine anyone with copperworking skills could knock one together fairly easily.


RE: huh?
By JediJeb on 10/14/2008 10:22:45 AM , Rating: 2
Darn, another good idea I had that someone beat me to. I thought it up the other day while taking a shower and thinking of all the heat just going down the drain.


RE: huh?
By masher2 (blog) on 10/13/2008 2:36:53 PM , Rating: 2
> "but when the financial incentive is gone for developing better technologies those thing shift back into low gear"

Of course...because cost is nothing but a measure of the amount of resources it takes to produce a product. The "cheapest" way to produce a product is almost always the most efficient.

We've known how to turn coal into diesel and gasoline for decades (the Germans were doing it in WW2). But it takes a substantial amount of both energy and capital-intensive machinery to do it. As long as oil is cheap and plentiful, it doesn't make sense to force the market to use such a process, simply because we think it should.

But have patience, young Jedi. Research continues even when implementation does not...and every year, we burn more oil. At some point, the shift will happen wholly without government intervention. And that's the point it should occur, for maximum economic benefit. Anything before that is simply premature.


RE: huh?
By andrinoaa on 10/13/2008 5:21:14 PM , Rating: 2
Sorry masher2, but to be pedantic, "The "cheapest" way to produce a product is almost always the most efficient." is a rather rash generalisation. How do you define efficiency?
Amount of energy required or amount of cash required? lol


RE: huh?
By masher2 (blog) on 10/13/2008 5:57:24 PM , Rating: 2
> "How do you define efficiency?"

The least amount of inputs (resources + labor) for a given output.

> "...is a rather rash generalisation"

Of course it's a generalization. It is hardly rash, however. A company purchases resources and labor to create a product. The minimum price of that product is therefore set by the cost of the inputs...and, assuming any degree of competition, the actual price will track closely to that.

Certain luxury goods (perfumes, designer clothing, etc) don't follow this model obviously...but for anything even approaching commodity pricing, it is indeed an excellent rule of thumb.


RE: huh?
By JediJeb on 10/13/2008 6:29:14 PM , Rating: 2
Oh if only I were a young Jedi, most of the time I feel older than Yoda.

The coal to gasoline process is not one that is practical today unless crude prices go even higher than what they did receintly. It just takes too much energy for the energy you get out of the gasoline in the end.

Of all the new sources I have heard about lately I would believe the Deep Well Geothermal has promise. For automobiles I would think Diesel would be our next step before all electric since the technology is already mature. Then Diesel Electric Hybrid such as is used in Locomotives, with all electric last because the battery tech really does need to improve first. That will also give us time to improve the electric infrastructure to handle the increased demand of the electric cars.


RE: huh?
By Reclaimer77 on 10/13/2008 5:43:47 PM , Rating: 2
quote:
If the attitude of the general public can be changed from the " it's all about me" idea that has been pounded into us for years now, to the " what can you do for your country( or fellow citizens)" that JFK inspired once and was more common in years past, then we would be able to move forward with cleaner more efficient energy technology and many other things that are needed today.


Sure your not a lib or environwack ? Quoting JFK certainly isn't doing much to convince us.


RE: huh?
By JediJeb on 10/13/2008 6:01:07 PM , Rating: 3
I only quoted JFK because even a Lib can say something intelligent once in a while, though it is a great while usually.


RE: huh?
By Reclaimer77 on 10/13/2008 5:35:59 PM , Rating: 2
That this post got a -1 is proof enough DT is overun by kids and libs or one in the same.

Higher gas prices are never a good thing. Gas is a need, just like food, and no matter how much you wish it were so the world isn't going to stop using it just because you're convinced its the devil.

Enjoy your hybrids or " Smart " cars all you want. Why do you people desperatly NEED gas to get higher and higher ?

Markets cannot sustain high prices on necessities forever. I cannot wait for the day when you idiots get a clue or shut up long enough for us to drill our own oil and end this pointless dependence on overpriced foreign oil.


RE: huh?
By Spuke on 10/13/2008 11:52:02 PM , Rating: 3
quote:
Enjoy your hybrids or " Smart " cars all you want. Why do you people desperatly NEED gas to get higher and higher ?
Because they think that only people's driving choices and habits are the only things that will be affected. When everyone is driving a small car, desired or not, then all will be good with the world. At least outwardly, which is all that counts really. Who cares if commercial trucking, plastics, home heating or anything else uses oil? That's someone else's problem. As long as I appear to be doing my part, that's all that matters.


More gas taxes ahead
By zornundo on 10/13/2008 11:56:08 AM , Rating: 1
As gas prices start to trend lower, the us federal gov't needs to up the excise tax on gasoline. It needs it, bad. That way gas prices won't get too low and car companies and the highway trust fund both win ;)




RE: More gas taxes ahead
By Expunge on 10/13/2008 12:01:56 PM , Rating: 5
I am already paying ENOUGH in taxes. We have a consumption tax and that is enough. If you want to pay more taxes, drive more. Otherwise NO to more taxes.


RE: More gas taxes ahead
By DeuceHalo on 10/13/2008 12:09:27 PM , Rating: 2
And what do you think happens/propose when it shoots back up again? I certainly don't want to pay what a lot of the Europeans do for gas.

Besides, you say this like the US government never re-appropriates money for other uses.


RE: More gas taxes ahead
By Doormat on 10/13/2008 12:56:03 PM , Rating: 2
Its been suggested that the US institute a price floor for gasoline at $2.25/gal (before taxes). I don't know if it would work - oil companies and gas stations might just keep the price at $2.25, keeping the profit for themselves instead of letting the government collect the difference between $2.50 and the actual price as a tax.

The idea behind the price floor is simple though - to prevent a huge drop in oil and gas prices from killing projects like the Volt.


RE: More gas taxes ahead
By masher2 (blog) on 10/13/2008 2:44:24 PM , Rating: 5
Price controls -- either minimums or maximums -- are always monumentally bad ideas. If gasoline truly does become dirt cheap for another decade or two, that simply means that much more time for battery technology to mature.

Instead of high fuel prices forcing us all to buy $40K Volts in 2010, it would simply mean we'd buy them in 2020...but at a far lower price and less consumption of resources.

And let's also not forget that electric cars aren't in themselves the answer. An overly rapid adoption of electric car technology would simply transfer the problem to our electric grid. Until the nation changes its collective mind about nuclear power (or develops a few quantum leaps in both solar and energy-storage technology), we simply can't power a fleet of electric vehicles.


RE: More gas taxes ahead
By Daigain on 10/13/2008 4:27:59 PM , Rating: 2
While I do agree that price controls are bad, and that something as simple as a lowest cap for petrol really does nothing but discourages people to drive. What you need are viable "solutions" that you want to change into, right now there are no good car solution for Americans but a gas car or no car. There for any kind of tax or gas cap would just be there to decrease people's ability to drive.

I think that once you have a alternative, taxing gas to the level where the alternative is the best choice are not always a bad thing. I do think that there's a dilemma here where taxing a fuel to a level where other fuel sources become the best choice takes away some of the market economies freedom and also the free will of the people. But at the same time once the change reaches a certain point it is likely it could become beneficial to the people. I do think that such choices are just to intrusive to be made by the federal government and should probably be addressed at a state level.

An example, until a few years ago most Swedish homes where heated by oil. But the politicians decided that the alternatives with pellet burners and heat extracted from underground water would be financially viable options and they started taxing heating oil to the degree where a pellet burner would have paid itself in 5-10 years. Now when the most of Swedish homes had switched to alternative heating, a oil bubble peaking at ~150 did not hit these home double. While their cars became much more expensive to drive, heating their homes did not.


RE: More gas taxes ahead
By drebo on 10/13/2008 5:18:23 PM , Rating: 3
quote:
taxing gas to the level where the alternative is the best choice are not always a bad thing


Are you kidding me? That's about the worst possible thing you can do for a free market. All it would accomplish is to keep prices artificially high and screw the consumer.

An alternative is only needed if the primary ceases to be more efficient than the alternative. Right now, it's not. I'm not going to pay a $10,000 premium on a car to save $10 per week in gas. The market doesn't bear that as a solution. For the government to come in and MANDATE that I have to pay that $10,000 or PAY an extra $10 a week...well, I should hope that you can see what's wrong with that scenario.

Right now, there are no viable alternatives to gasoline engines. There are alternatives, sure, but none that make sense right now.


RE: More gas taxes ahead
By Daigain on 10/13/2008 6:16:59 PM , Rating: 2
I am not kidding you, taxes exist and that's that. The question is how you use them, you are of the opinion that to use tax to lower people's use of gasoline would be wrong. Then is it also wrong to use tax to get more people willing to work? Of course more people willing to work probably sounds great while inhibiting people's use of gas with tax sounds bad to you.

But if you agree that any form of taxes are needed then you have to accept that the government uses taxes to meddle in the market all the time.

The example of house heating is pretty simple a person that 10 years ago got a heat exchange unit from ground water would today have made money even if the government would not have raised taxes on heating oil. This means that Americans that would have put down $10,000 10 years ago would have saved that in oil bills by now. Now how many Americans have alternative heating systems installed? I dare say without fact checking that the numbers are too small to even consider. While in Sweden they are the the majority, with tens of thousands of jobs in drilling holes for ground water heat exchange or developing and assembling pellet burners have been created.

While explaining this I do understand that meddling in the free market is not good or even desirable thing to do, but to think that it can not also be a good thing in some cases is to me to be a little bit too close minded.


RE: More gas taxes ahead
By barclay on 10/13/2008 8:42:08 PM , Rating: 3
> "... taxes exist and that's that. The question is how you use them"

Taxes were once seen only as a necessary evil needed to fund government. Unfortunately, modern politicians increasingly see tax policy as a tool to encourage/discourage certain behaviors they deem desirable/objectionable.

While tinkering with the tax structure can be less draconian than an outright decree, it still constitutes statist nannying, with all ineptness and unforeseen consequences that go with it. For example, many of the problems of the US health system are the result of tax policy originally implemented in WW2 that strongly encourages individuals to have their health care provided via their employer -- a very inefficient and costly approach.


RE: More gas taxes ahead
By Daigain on 10/14/2008 6:07:22 AM , Rating: 2
My point was that you can not do anything to the taxing model, not even lower taxes so people make more money without it being tinkering and nannying with unforeseen consequences.


RE: More gas taxes ahead
By Doormat on 10/13/2008 7:13:13 PM , Rating: 2
And as I've mentioned before, 42% of the US LDV fleet can be converted to PHEVs like the Volt and its no big problem.

Google's energy plan had a very good illustration of how its NOT a problem. They showed that even if PHEVs were ramped up to 90% of vehicle sales by 2030, we'd still only be at around 40% of total LDV fleet by then.

We have plenty of time to expand power generation resources (nuclear and renewable) and improve the grid (which is actually more important than building new sources). We can wait for solar grid parity in the late 2010s and wind's grid parity in the early 2010s and decide how to move from there with each source.


RE: More gas taxes ahead
By drebo on 10/13/2008 2:06:24 PM , Rating: 5
Price fixing on ANYTHING is an absolutely TERRIBLE idea. Why did the Great Depression in the 20's last so long? Price fixing. It didn't solve anything. They instituted fixed pricing for food and no one was able to buy it. Farmers plowed it under. It was counter productive.

Incidentally, this is EXACTLY what this bailout bill is doing. It's basically telling the market that it's OK to sell houses at prices that the market can't sustain. Which is exactly why the market went into a ~2000 point skid the second the bill was voted on. What needs to be done is for the banks that screwed up to go bankrupt, liquidate, and for housing prices to fall back down to levels that are self sustaining.

Where I live, the mean housing price 2 years ago was about $400k. No one fresh out of college, or even older people, can ACTUALLY afford that house. Not only that, but people who bought their homes 10-15 years ago were using the equity like a bank account to buy crap they couldn't otherwise afford. What happened was that people were borrowing beyond their means, and banks were letting them. Both parties are at fault here, and price fixing is NOT the answer.


My fellow Americans...
By gochichi on 10/13/2008 1:20:05 PM , Rating: 1
... are a bunch of short sighted idiots that'll go right back to guzzling away as soon as the prices hit a moderate level.

The government needs to get involved with the auto industry to make sure that we are not (as a country) at the whims of soccer moms everywhere. These "individual choices"... gasoline gluttony is destabilizing this country and the world economy. If God willing, petrol prices go down to sustainable levels I hope that this goes into industry and freight so that the economy gets healthy again... not even more empty SUVs with a lonely broke passenger.

There are so many SUVs and trucks as it is, the market has gotta be oversaturated. It's time for a new type of vehicle.

If prices fall below $2.00 I hope the government increases CONSUMER fuel taxes like mad to ensure that we don't fall again by the conceit, stupidity & selfishness of our populus. You need to be able to move goods and services at a low cost (I'm thinking freight trucks right now) so fuel costs dropping could be a real blessing IF the government provides more direction and vision (regulation) this time around. Buying an F-150 to move a couch once a month is NOT a valid reason to have a truck. SUVs are trucks people, they are TRUCKS.




RE: My fellow Americans...
By mdogs444 on 10/13/2008 1:47:02 PM , Rating: 3
quote:
at the whims of soccer moms everywhere.

quote:
not even more empty SUVs with a lonely broke passenger.


Im single, no kids, and just bought an 08 Chevy Tahoe LTZ 4wd v-8.

Its feels great to know I can piss off a no good, liberal, democrat who wants everyone to do as he does.

If I lived next door to you, I'd back my car up to the border of your lot, and let my TRUCK run all day with the exhaust flowing around your yard.


RE: My fellow Americans...
By Ringold on 10/13/2008 4:11:46 PM , Rating: 2
And I bet the savings you got on a Tahoe due to the massive drop in demand goes a long way towards offsetting the higher fuel cost. For used SUVs and Trucks, I bet it completely offsets the higher fuel costs.

But of course, financial arguments won't win, gasoline is immoral in all amounts


RE: My fellow Americans...
By andrinoaa on 10/13/2008 5:04:08 PM , Rating: 2
All you need is another million or so to follow suite.
Does wonders for the efficiecy of the economy as a whole. Just think, all those savings pissed against the wall
" because I can".
Are these the rantings of a rational and sane person? lol


RE: My fellow Americans...
By mdogs444 on 10/13/2008 5:19:56 PM , Rating: 2
quote:
Does wonders for the efficiency of the economy as a whole.

So now I have to live my life and buy material items that are good for all? I thought I went to work for me? And to think, I though my tax money going to bail out stupid wanna-be homeowners was enough. After all, 1/3 of American doesn't pay taxes - and I would go out on a limb and gamble that majority of those being bailed out fall into that 1/3.

quote:
Just think, all those savings pissed against the wall " because I can".

Isn't the goal of success and working your way up up the corporate ladder to achieve a lifestyle that you are happy with - while using your monetary funds to purchase items of need, as well as items that are not needs because they make you happy?

quote:
Are these the rantings of a rational and sane person? lol

Absolutely they are. They are just not rants of a delusional socialist who wants everyone else to do as he says.


RE: My fellow Americans...
By Ringold on 10/13/2008 8:54:11 PM , Rating: 2
Kudos to you, as I didn't even understand what he was trying to say. Buying an SUV or truck right now, particularly used ones, is taking advantage of big market dislocations to save money. Indeed, you made the market more efficient by taking advantage of it. He seemed to think the fuel efficiency was a bigger issue.. but money is money, and money represents resources involved, so money saved in any way is improved efficiency. People also buy virtually everything for a variety of reasons; if fuel efficiency was the only thing important about cars, we'd all drive card board boxes.


RE: My fellow Americans...
By andrinoaa on 10/14/2008 12:16:47 AM , Rating: 2
You guys don't get irony, do you? My you guys are so defensive!


RE: My fellow Americans...
By Spuke on 10/14/2008 12:18:09 AM , Rating: 2
quote:
So now I have to live my life and buy material items that are good for all?
Well..yeah. You can still buy things that you enjoy, as long as it's on the publicly acceptable personal enjoyment list. SUV's and trucks are not on the list anymore. You can still have sports cars (non V8 powered, of course), boats, and sand rails. Oh, you can still have a truck as long as you submit an approval letter stating how you will be using it. There's absolutely NO reason to own an SUV, all of that sh!t can fit in a Prius anyways.


RE: My fellow Americans...
By andrinoaa on 10/14/2008 12:30:53 AM , Rating: 1
Me thinks the death of the king is very much exaggerated!
( cant remember the exact quote ). I don't know where the notion that we are all becoming socialists and you must only do this or that comes from. If you want to buy a Gorilla for a pet , well thats fine so long as it doesn't affect anyone else. I guess the point is that if everyone has the redneck attitude, you guys are going back to square one. If you need a truck, buy a fucking truck. NO ONE WILL STOP YOU. Be warned, we may laugh.


RE: My fellow Americans...
By Spuke on 10/14/2008 12:47:41 AM , Rating: 2
quote:
If you want to buy a Gorilla for a pet , well thats fine so long as it doesn't affect anyone else.
It's hard to do anything without affecting something else. As long as no laws are broken and our pursuit of happiness is not impinged, we are free to do as we wish. We may not all agree on our fellow man's choices but those choices belong only to him. If you truly disagree, lobby for a new law. Start at the local level, it's easier.

PS - Feel free to laugh at and ridicule me. For some ungodly reason, I've never caved to peer pressure. Hard headed I guess.


RE: My fellow Americans...
By andrinoaa on 10/14/2008 1:01:33 AM , Rating: 2
Mate, if laughing at you is as bad as it gets, we wouldn't be dead for quids!!


RE: My fellow Americans...
By Reclaimer77 on 10/13/2008 5:53:14 PM , Rating: 2
lol Amen brother !

quote:
If I lived next door to you, I'd back my car up to the border of your lot, and let my TRUCK run all day with the exhaust flowing around your yard.


I would pay good money to see that :D


What the deal with GM?
By JackBurton on 10/13/2008 11:07:48 AM , Rating: 1
Why do they have to put all their eggs in one basket? They can still produce trucks AND invest in R&D for alternative fuels. With the gas prices dropping, they can just slow down their pace. So when the gas prices DO go up, they aren't scrambling like they have been.




RE: What the deal with GM?
By BigPeen on 10/13/2008 11:36:43 AM , Rating: 2
Because R&D is very expensive. Engineers make good money, lab time, supercomputers, those are all expensive. You can't have everything. They have to make forecasts and make desicions about what to invest in based on those forecasts. If the forecasts are wrong, they aren't as profitable.


RE: What the deal with GM?
By Expunge on 10/13/2008 11:38:11 AM , Rating: 2
Because they have a limited amount of resources.

The market dramitically shifted from large trucks and SUVS to small cars with fuel economy. And you have to go with the market or go out of business.

The issue GM sees with this shift is they have changed their focus and shifted R&D dollars to smaller vehicles which is what $3.50 a gallon supports. If we go back to $1.50, people won't really care if they get 22mpg or 32mpg. They will want performance and capability not economy, which means GM needs to refocus again which means more money in R&D.

Having said that 2 weeks ago I broke down and bought a HHR to get the 30mpg since my commute can be 60 miles one way and I have to say it is a heck of a lot better only using 4 gallons of gas to go to work and back instead of the 7 gallons my S10 4x4 ZR2 would drink.

The money I save in gas per month pays for half the car note if not more.

To the comment of $3.50 gas is here to stay by another commentor:

Addressing the dramtic downturn of gas prices I would expect $2 gas to stay if not go lower. The reason is OPEC and hedgefunds delivered a good swift (and deserved) kick to our country by hitting where it hurts, our wallets. The way to respond (and we have done so) is to drive more effcient vehicles and use more mass transportation. By responding to high oil prices with this new behavior it has led to a nearly 10% reduction in fuel consumption from last year for the U.S.

When you have a shift of that magnitutude, it sure makes it hard to justify $140 for a barrel of oil. Then factor in that you have Iraq fixing to add 2+ million barrels more oil to the market and the Saudi's upping thier oil production from 9+ million barrels a day to 12+ million within the next 18 months.

I think we should not see gas prices reach $3 a gallon for the forseeable future.

My 2 cents.


RE: What the deal with GM?
By theapparition on 10/13/2008 12:43:44 PM , Rating: 2
I completely agree with you, but for one exception.

Even IF (which is doubtful) gas were to reach $1.50 anytime soon, I don't think this would necessarily be bad for the automotive industry. Quite the reverse.

While I agree from a business unit perspective that companies like GM have completely shifted thier production away from large cars and trucks, and lower gas prices would seem to buck that trend. The worry is that consumers would once again flock towards trucks/SUVs and that the automakers would once again be caught off guard. However, there is one factor that you haven't considered, and that's the new CAFE regulations. Despite consumers preferences, automakers will need to do what is necessary to meet those new requirements, and that's by limiting production of trucks/SUVs.

Regardless of consumer attitudes, more fuel efficient cars will need to be produced, and we the consumer will be forced to like them.


RE: What the deal with GM?
By Spuke on 10/13/2008 1:12:14 PM , Rating: 2
quote:
automakers will need to do what is necessary to meet those new requirements, and that's by limiting production of trucks/SUVs.
Actually, R&D money will be put into making trucks/SUV's more fuel efficient. You'll see more hybrids, diesels, and smaller displacement, direct injection engines. Irregardless of CAFE, if you don't give the consumer what they want, you go out of business.

In all reality, people will just get in line for the few trucks/SUV's available which will drive prices up on those vehicles while the smaller cars will languish on lots. The used car market for trucks/SUV's will shoot through the roof too. If you're in the market for a truck/SUV, I'd get one now before the prices go into the stratosphere.


RE: What the deal with GM?
By andrinoaa on 10/13/2008 5:14:40 PM , Rating: 1
I thought people stopped buying trucks, thats why the big three are in the shits. Why would they keep making things that don't sell? nice theory, must have stayed up all night.


RE: What the deal with GM?
By Spuke on 10/14/2008 12:24:14 AM , Rating: 2
Truck sales are down but are still selling. BTW, Ford trucks still outsell ALL hybrids combined by 10k units. Throw in the other automakers trucks and it's not even close. Also, of all the auto companies that are down in the toilet (and they're ALL down), GM is the one that is down the least by a good margin. Since they're seen as the ultimate f%$k up, how do you explain that one? Hmmm.

I don't need theories dude, this publicly available information. Took me 5 minutes to find it too. LOL!

PS - Did you know the celebrated car companies like Honda and Toyota are down in the crapper too? I thought small cars were taking over the market? Hmmm.


RE: What the deal with GM?
By andrinoaa on 10/14/2008 12:42:13 AM , Rating: 2
Sorry,you are right on this one. They just have to close all the factories that don't make money and only sell the trucks from a smaller base. They wont go out of business selling trucks, but they won't be the powerhouse they used to be by only making money selling trucks. However the trend is pretty conclusive. Smaller cars are increasing their market share and you can draw the graph yourself in 5 min.
I don't think anyone can explain short term trends....who knows?


RE: What the deal with GM?
By Spuke on 10/14/2008 12:35:11 PM , Rating: 2
quote:
Smaller cars are increasing their market share and you can draw the graph yourself in 5 min.
I definitely do not disagree here. As for the short term trend, most cars are down in sales for the most part but hybrids seemed to have dropped more than gas cars. The Prius had sales similar to the Camry's total sales not too long ago and now they've dropped to half the Camry's sales. The Camry Hybrid has taken a huge dump too. Maybe it's because of the price premium on those cars.


Manufacturing
By snownpaint on 10/13/2008 12:09:18 PM , Rating: 4
I work for a small manufacturing company, and I have to say it is the hardest company to run I have ever worked for.. Planning has to be done at least a year in advance for the following 6 months. Production time can miss hot trends, and banking on the next venture depends greatly on the success of the current one. Fluctuations in costs can great effect margins from one run to the next making prices hard to determine in planning. Especially, during these tough times, it is hard to wrap your head around all the variables and make a plan you can make work 6 months down the road. And this is only a small company that sources our factories, I can't imagine what they go through.

In the end, betting on high efficient vehicles is a safer bet then trucks. Gas may, for a really short time, return to previous prices, but it will never go below. In the long run it will only go up and faster then current inflation rates. Also, US car manufactures can take these high efficient US car designs and work them into overseas sales. As American starts heading in the direction of the rest of the world's car owners, the car will become a machines of driving and destination achievement as we are seeing.(unlike the 50's + 90's) Trucks will still have a small market, but the left over stock and used stock will be around for a while and only the few that really need it will be buying. I don't see closing plants as the key, if anything, they have to start looking at redesigning these plants to manufacture multiple different car types. Look at what it takes to transform the assembly line to change manufacturing types, Breaking it up into modular functions that can be swapped through the years of production. Too much money is invested in these plants to wash it clean and start over (overseas??).. Diversify and allow for quick (year+)changes in the market trends to be accommodated quickly and as efficiently as possible.




RE: Manufacturing
By Spuke on 10/13/2008 1:37:50 PM , Rating: 2
quote:
I don't see closing plants as the key, if anything, they have to start looking at redesigning these plants to manufacture multiple different car types.
You make great statements in the first paragraph then totally ignore them in the second. Profit keeps your company in business. People switched to fuel efficient cars because of high gas prices. If gas prices go low and stay that way for even a short period of time (say 4 years), then people will think everything is "back to normal" and shift their buying habits accordingly.

People have already demonstrated with their dollars what vehicles they prefer to buy and held out as long as they could before cracking. People are STILL holding out as evidenced by Ford pickup trucks continuing to sell more than all hybrids combined (by 10k units). Throw in the other manufacturers and it's not even close.

Diversifying too much is a waste of money as you'll have cars that no one wants sitting on lots just in case the market changes. That's just plain stupid. You switch when the market demands it in order to keep profitable. And profits keep you in business not philosophical viewpoints.


RE: Manufacturing
By snownpaint on 10/13/2008 4:29:59 PM , Rating: 2
Profits can be from your asking price on a product or from your reduced manufacturing costs on an existing product. Which is where I was going with closing factories. I guess I should have said "redesigning these plants to quickly manufacture different car types the consumers are asking for"

If let say it cost you $1 billion dollars to build a factory and you pump over a million cars out of it, that's a $1000 per car out of the gate.. If you can use that same factory and update it for $500 million you just cut costs and increase profits, in compared to building a new factory for a new type of car. If you can make these changes fast and modular in design to apply to other factories when a new car is ready to be manufactured, you just cut start-up manufacturing costs and increase profits. If you can do this fast and efficiently, you just increase market share on a new market.

In the car industry diversifying is what made Toyota and other overseas car companies grow so fast and become so profitable, look at their product lines, look who was the first out with what the popular demand asked for, which leads to advertising/marketing the companies image. It seems from this article reactive action isn't suiting the American car companies to well. They like running with the same old thing.

Gas will never hold at year 2000 prices, to much demand and too much growth in other countries. With that said, even if the prices do hold do you think that "reduced pay at pump" is going to lead back to big cars, or do you think people will spend that money on other toys?


RE: Manufacturing
By Spuke on 10/14/2008 12:31:55 AM , Rating: 2
quote:
It seems from this article reactive action isn't suiting the American car companies to well. They like running with the same old thing.
They like making profits too just like the other automakers. And I can understand them being cautious about switching. I'm sure the others are wondering the same thing, just not publicly.

Public image doesn't mean squat if you aren't making any money. ALL of the automakers are down in the toilet right now. Profits will be lower across the board.


RE: Manufacturing
By andrinoaa on 10/14/2008 12:56:34 AM , Rating: 2
Like I said, the trend is for smaller vehicles. Its just the cycle of cheap oil had led the big three into a false sense of indestructability. They knew the trends but didn't anticipate its arrival so soon. (sorry officer, I didn't see the train until it hit me!)


RE: Manufacturing
By Spuke on 10/14/2008 12:42:43 PM , Rating: 2
quote:
They knew the trends but didn't anticipate its arrival so soon.
No one saw it coming. LOL! And ALL of them are in the crapper, sales wise. ALL of them are expecting lower sales numbers. This is not a domestic only f$%k up here.


Investment in fuel economy
By Fireshade on 10/13/2008 11:06:43 AM , Rating: 1
quote:
[...] or do you hope for them to remain high so you can justify your investment in fuel economy,"

That's a stupid question. Such investments always pay out in the long run.

If you can enhance your fuel efficiency design, it also means you can make your big-ass engines deliver even more horsepower given the same piston volume.
It also means you can can build lighter engines to reach a given number of horsepower. Lighter engines -> less material -> less transport costs -> etc.




RE: Investment in fuel economy
By JediJeb on 10/13/2008 11:31:50 AM , Rating: 4
But if your investment in improved fuel economy is made in smaller vehicles with less power to make the economy, and people don't want to buy it, then you have lost money. I think that is what he was getting at. If they make the Volt and by the time it comes to market everyone wants an SUV again, then that time and money will not be recovered.


RE: Investment in fuel economy
By whirabomber on 10/14/2008 9:16:29 AM , Rating: 2
I do believe the fuel/economy burn will last a little bit longer than 2010. I'd say by 2012 the US will be used to $3-4/gal gas prices and the SUV will be back - just not as strong as before. Personally, I'd buy an E85 H2 SUT if I needed a truck as it *only* gets 2-3 mpg less than a less versatile truck, dollar for dollar.


RE: Investment in fuel economy
By Fireshade on 10/14/2008 10:18:40 AM , Rating: 2
quote:
If they make the Volt and by the time it comes to market everyone wants an SUV again, then that time and money will not be recovered.

It is this kind of short term and making-a-fast-buck thinking that has brought the US auto industry their current problems. It leaves them no flexibility.

I'm not talking about betting your dollar on a single product - the Volt per your example. That'd be like keeping water out of a sinking ship.
You have to think broader: fundamental R&D should be usable across the vast range of a company's products. Fuel efficiency is such core technology and knowledge.
So R&D investments will pay back: in the long run the R&D that's paid for by these investments provides an well-needed advantage.


RE: Investment in fuel economy
By Spuke on 10/14/2008 12:52:35 PM , Rating: 2
quote:
It is this kind of short term and making-a-fast-buck thinking that has brought the US auto industry their current problems.
And the companies that you say were thinking long term are not doing any better than the one's that supposedly thought short term. As a matter of fact, The Great Satan, GM, is doing the best out of everyone. Honda is down 20% and they have mostly fuel efficient cars. Why are they down? They, according to you, thought ahead. They should be unaffected.

Toyota down 29.5%
Nissan down 36.8%

How about GM, The Great Satan? Down 16%. And here's the kicker, they're actually UP 4% from the 2nd quarter and UP 3% from the first quarter! LMAO! I thought GM didn't get it, was selling sh!t that no one wanted, clueless, etc etc.


RE: Investment in fuel economy
By Fireshade on 10/15/2008 9:43:37 AM , Rating: 2
Toyota is down 29.5% because of the increasingly bad economy this year . However, GM has been showing a downward trend year after year, with massive layoffs. Not Toyota. That shows GM has a structural problem.
Don't forget to factor in what reorganisation (massive layoffs / write offs / closing of production lines) does to their balance figures. Accounting "tricks" can make your figures look good as well, especially useful for stock value and towards your shareholders.
It's good to hear their relative improvement over last year, but they need more long term strategic development to make them solid, and not just a fluke.


By BZDTemp on 10/13/2008 2:58:39 PM , Rating: 1
After all we are talking about three companies which fail almost completely when trying to compete on foreign ground. And that is while the competitors are able to do better and better on what should be the big three's home turf.

I know having a national car industry is a matter of pride for most people but the support only goes so far once people need to put cash where their feelings are. Especially if they do get a better deal going elsewhere!

I hope the big three can make the transition to making cars really able to able to compete with the European and Asian car makers. However the odds seem slim!




By masher2 (blog) on 10/13/2008 3:32:45 PM , Rating: 3
> "After all we are talking about three companies which fail almost completely when trying to compete on foreign ground"

Eh? You have it entirely in reverse. Essentially all of GM and Ford's profits come from their overseas sales...their losses are strictly from their domestic operations. Last year, for instance, GM had profits in Europe, Latin America, Asia, and the Middle East -- and a record loss in the US.


By Solandri on 10/13/2008 4:58:17 PM , Rating: 2
Honest question, I'm not trying to imply anything here. I simply don't know.

Could that be because most of the R&D is probably located in the U.S., while their overseas operations are pretty much just manufacturing and sales?


By masher2 (blog) on 10/14/2008 9:22:58 AM , Rating: 2
R&D costs are amortized across all lines which utilize them. The real difference in the cost structure is the UAW...not just the higher labor rates, but the immense retirement costs as well as featherbedding and other union practices that reduce productivity and increase costs.


Gas will start going up Wednesday November 5th
By Mr Perfect on 10/13/2008 12:40:07 PM , Rating: 2
Gas usually goes down before the elections, so I'll be tanking up on the 4th. :P




RE: Gas will start going up Wednesday November 5th
By The0ne on 10/13/2008 12:52:17 PM , Rating: 2
This time, however, it's that and the economic meltdown :)


By Spuke on 10/13/2008 1:14:28 PM , Rating: 2
In that case, we'd better "stock up" on some stocks too. ;)


Never wrong
By Basekid on 10/13/2008 11:29:01 PM , Rating: 2
It is never wrong to invest in fuel economy. So they should not be worried.




RE: Never wrong
By Spuke on 10/14/2008 12:35:57 AM , Rating: 2
quote:
It is never wrong to invest in fuel economy. So they should not be worried.
If no one buys it then it becomes a matter to be worried about.


RE: Never wrong
By Finnkc on 10/16/2008 10:39:40 AM , Rating: 2
"Do you hope for gas prices to go down so you can sell a lot of trucks again, or do you hope for them to remain high so you can justify your investment in fuel economy," questioned auto industry analyst Aaaron Bragman.

You and Mr Aaaron Bragman share a common 1/2 brain.
If no one was buying into fuel economy before the bust then how did Toyota and Honda ever sell anything? Face it the American Autos are dying because like the rest of the US they are caught up in their own bubble and when it bursts the world looks very different to them. Then they claim they did not see it coming and how shocking it all is.

please.


Wha?
By elFarto on 10/13/2008 11:54:44 AM , Rating: 3
A Fiesta is a sub-compact to you guys? It's not that small.

Regards
elFarto




RE: Wha?
By dubldwn on 10/13/2008 3:06:12 PM , Rating: 2
You'll think its small when mdogs launches you off the embankment, sets down his Pabst, and complains about the potholes.


Realistic crude prices are history
By Beenthere on 10/13/2008 1:05:37 PM , Rating: 1
As soon as world financial markets stabilize, the price and consumption of crude will rise rapidly. As long as consumers will pay outrageous prices, the OPEC / oil industry Cabal will charge outrageous prices and laugh all the way to the bank. All of the cash is flowing in one direction and this is ruining economies worldwide.

When you remove all discretionary cash from consumers to line the pockets of OPEC et al, you have an economic collapse. If you tie together crude oil prices along with excess home mortgages and bad Wall Street investments, you end up with the perfect storm.




RE: Realistic crude prices are history
By masher2 (blog) on 10/13/2008 10:15:17 PM , Rating: 2
> "As soon as world financial markets stabilize, the price and consumption of crude will rise rapidly"

Crude began dropping long before the financial market crash. It's the normal boom-bust cycle oil prices follow. My prediction from this Feb. of a rapid rise to $150-$170/bbl, followed by a slower descent to under half that seems to be holding true.


By andrinoaa on 10/14/2008 12:22:44 AM , Rating: 2
Thats it Masher2, no worries , just keep on sending more money to the Arabian retirement fund. After all, your mate ringold thinks its his duty to help them out, lol. Now I am only having fun, don't lecture......


By Doormat on 10/13/2008 12:48:49 PM , Rating: 2
If gas prices drop below $1.50 it will be because the world economy has collapsed. I dont see the price of oil dropping below $60/bbl at all. Even this morning so far its rebounded from the high $70s to around $80/bbl. Which is fine, $80/bbl is an OK price to have for a while, the issue is will the refined products catch up to this price (gasoline, diesel, aviation fuel, etc).




By masher2 (blog) on 10/13/2008 2:29:38 PM , Rating: 2
Not that I'm against domestic drilling (far from it), but the storm-engendered volatility in fuel prices is due primarily to a lack in refining capacity, not simply the price of oil.

The last refinery built in America was in 1976...the same year the last amendment to the Clean Air Act was passed.


"There is a single light of science, and to brighten it anywhere is to brighten it everywhere." -- Isaac Asimov

DailyTech Poll
Do you use copy/paste on your smartphone? 




17 Comments









botimage
Copyright 2010 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki