The Auto Industry: What’s Happening With Your Money?

Have you ever wondered what will GM and Chrysler do with the bailout money they received from the U.S. Government? Well GM has decided to take $1 billion of that and invest it in Brazil to avoid the kind of problems they face in the home market.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the government and will be used to "complete the renovation of the line of products up to 2012."

It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.Meanwhile, he cut the company's revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales.

What kind of problems do the U.S. Automakers face? One big one is the UAW. Here is just one example: Ford also operates a state of the art factory in Brazil. (remember they didn’t ask for bailout funds!) This factory streamlines production and makes operations more efficient. Ford can make 5 different types of vehicles here. This is because Ford allows suppliers to be integrated into the assembly line process. So the suppliers making the seats, the dashboards, the fuel systems … they have assembly lines right inside the Ford factory. Makes sense, rather than relying on shipments of parts. No waiting. No shipment costs or delays. Ford even has it’s own shipping port for exporting vehicles right outside the plant.
Wonder why it’s in Brazil? The UAW is opposed to this type of innovative manufacturing. They are opposed to innovation that would actually help their employer because they stand the risk of losing jobs. And if they lose jobs, they lose power.
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Is buying An American Car Impossible?

The other day I wrote a blog about buying American cars and got some comments about is it really possible to buy American? With Toyota being built in Alabama, BMW in South Carolina, and GM and Ford in Mexico there is not a simple answer but I will try to simplify it for you.
Foreign car manufacturers generate billions of dollars in jobs and community infrastructure in the U.S., but there is a difference between Detroit's economic footprint and that of its foreign rivals.
The Center for Automotive Research says Detroit's Big Three employed almost 240,000 people in the U.S. at the end of 2007. Foreign makers had about 113,000 U.S. employees at the time.
The key difference in how the Big Three and foreign brands support jobs in the U.S. comes outside the factories, according to a 2006 study by the Level Field Institute, a group formed by Big Three retirees in Washington.
"What's driving the difference in jobs ... is investment in research, design, engineering and management," Level Field President Jim Doyle said in a statement on the 2006 study.
The Center for Automotive Research said the Big Three had 24,000 engineers on U.S. payrolls in 2007. The Japan Automobile Manufacturers Association said its member companies had 3,500 U.S. research and development employees in 2007.
Look at it this way: You buy a Toyota that was built in Indiana by American employees. That purchase is helping out an American Family. I buy a Ford that was built in Mexico. My purchase is helping out a Mexican Family. However, my purchase is also helping out American retirees of Ford who put in 30+ years When Ford first hired these people, they made a promise to them. I'm just helping Ford keep that promise.

The United States is a service based economy and unless we can put our once booming industries back into place, this great nation will continue spin downwards. Fortunately, it's never too late and we can turn this around. Should Americans buy American cars? Absolutely!

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The American Automobile: What happened to "Buying American?

Growing up in the 60s my family, grandparents, and as a matter of fact EVERYONE owned an American car. Check out the Video below for those who have never seen a vintage American Auto ad, or if you haven’t seen one in a while. I lived in a small town back east and all you saw on the roads were American cars, flags on houses and everyone knew their neighbors.

As GM and Chrysler make their way back to Capitol Hill, what do those execs see? Do they see that America only buys American now? I think not. That in itself should be a huge wake up call for them and us as consumers.

American car companies need to not only build good cars, (and they do build good cars) they now need to look at going green also. Go American and green! What a concept. Our auto companies need to create a way for Americans to identify with their new vehicles.

G.M. in the 60s and 70s did this with the advertising slogan “Baseball, Hot Dogs, Apple Pie and Chevrolet.” Ford did it with “Quality is Job One.” And Dodge with “Big, solid, built to command”

We as Americans should get back to the “buy American” mindset. Easier said than done, just ask anyone under the age of 35 if they would buy an American car, most would opt for a hybrid or a Japanese vehicle because of the green factor and fuel economy. A lot of American’s have believed all the press written about how Japanese cars are better than American and get better fuel economy; just not so. Check out this consumer report article from December 2008.

So Ford has led the pack with it’s refocusing of it brand and is not taking any bailout money. Look for Ford to do a lot more than the other two. GM talks about change but you don’t see too much of that on their site. Chrysler has said they are going to eliminate at least 3 models probably more, and both GM and Chrysler are asking for more bailout money.

I for one hold out hope that we get back to the “Buy American” for America. Long gone is the muscle car age of the 60s and 70s, but what about the green car era of this age? It would be great to see the streets filled with American cars again and the flags on the houses would be a nice touch.

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1960's Ford commercial

Classic-Ford1960 - More amazing video clips are a click away