On Wed, 03 Dec 2008 09:29:33 -0500, Joseph Gwinn
wrote:
snip
Cars wear out. Cars last something like seven years on average, maybe
ten years for some kinds, and are replaced. (Yes there are cars that
can be babied to last forever, but very few people really do that, or
even want to.) So all car companies in the west (where essentially
everybody has a car) are fighting over the replacement stream. They are
not waiting for the population to suddenly double, and never were.

Joe Gwinn
----------
Which is why this part of the post was important:

(6) Before Congress reconvenes to debate the "rescue" of the
domestic automotive industry, it is critical that at least a
preliminary estimate of the number of new vehicles that are
actually needed, AND CAN BE SOLD WITHOUT DISCOUNTS, REBATES AND
SPECIAL ZERO INTEREST FINANCE PACKAGES, be obtained. It is clear
that we have entirely too much domestic production capacity, and
any attempt to preserve this overcapacity is foredoomed to
failure. Imports simply exacerbate this domestic overcapacity
problem.
.......
The "transplants" continue to increase their domestic [US]
production capacity, thus exacerbating the overcapacity problem.
When the automotive market rebounds VW will have their new
facility on line, and their product line is now directly aimed at
Detroit, being compact to midsize cars with fuel economy,
performance, and style. The econoboxes will be made in China and
imported.
http://www.autoblog.com/2008/07/15/v...ttanooga-tenn/

Ignoring legacy costs such as astronomical debt loads, pensions
and wage rates, a very major problem is that the domestic car
companies will be attempting to compete using older machines,
located in older buildings, in colder climates, sited for
yesterday's traffic patterns, while the transplants will be using
newer, many state-of-the-art, machines, in newer buildings,
located in warmer climates, and sited for today's traffic
patterns.

A largely ignored problem is the considerable rancor and ill will
that has developed over the years between the Detroit automotive
companies and their supplier and dealer base/networks compared to
the imports and transplants.

One item to remember is that bankruptcy can also be initiated by
a petition to the court by *THREE* creditors [involuntary], in
addition to a petition by the corporation [voluntary], and there
does not appear to be any reason why *MANY MORE THAN THREE*
dealers and suppliers, currently being forced under by Detroit's
"slow pay policies" [both suppliers and dealer rebates], price
re-negotiations, franchise terminations, abusive vendor
warranty/quality claims, etc. etc. would not chose to take the
corporations down with them.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).