From: MV (MV@dc9.tzo.com)
Date: Mon May 15 2006 - 05:57:47 PDT
>>And if GM goes under because it's ignored the rest of the world
That is really not true. GM has had Opel in Europe for years. They had
plants in Iran and South Africa when I was working for them. In fact
their overseas operations may be in better shape than their domestic
manufacturing. GM is now big in China. Sad but true. No US car maker
has been successful selling cars in Japan. They basically make it
undesirable to do so.
I think the big problem is that at one time GM had 60+% of the US market
share and now they are down in the 25% range. That means excess
capacity, excess workers, and excess pension funding for what they are
now making.
>>Who's going to pick up the slack? Toyota/Honda will likely.
I wish, but that isn't happening when I talk to traditional parts
suppliers. And when it comes to machine builders, forget it, Honda and
Toyota buy their machines from Japan. Daimler Chrysler on the
otherhand, with the Mercedes plants here in the USA, buy many of their
machines from US suppliers. The Germans work a lot differently than the
Japanese. The Japanese tend to buy from Japanese companies first and
then buy from other suppliers if they really have to. I think it is a
cultural thing more than anything else.
If GM goes bust (still very possible as Delphi folks are near a walk
out) then you will be able to watch a big black hole develop in the
midwest sucking down housing prices and basically cratering the economy
in the region for years. My father-in-law is trying to sell a house in
Dearborn, MI right now and it isn't moving after two price drops. It's
been on the market for 3 months now. Not an expensive house - about
$90K. He said he local papers are being flooded with repo houses now.
Banks are selling them cheap to recover the debt and depressing the
housing market. That's just the beginning.
Most of the Auto/Truck/MV design and manufacturing ability comes out of
the midwest. The traditional rust belt, Chicago, Detroit, Cleveland,
Pittsburgh is still the heart of heavy manufacturing in the US. Most of
the companies that I deal with (industrial manufacturing) are right on
the edge of closing down. The price of steel and fuel is killing the
industry. The economy in the Midwest is not in good shape. You heard
of our governor selling/leasing the toll road to get cash. That was
basically a move of desperation to try and jump start the state economy.
Have you seen the price of copper recently? I buy a lot of wire and
cable. A roll of power cable I bought two months ago for $125 is now
$237.00. Steel has more than doubled in price. Fuel is way up -
everyone knows that. Gold is going through the roof. But we aren't
making much more than we did a year ago. That means that our currency
is being devalued. You effectively made a lot less this year than you
did last year if received the same pay.
GWB wants everyone to believe that the economy is in good shape so we
all keep buying stuff. I know better. It's right on the edge.
Dave
Ryan Gill wrote:
> At 12:08 AM -0400 5/15/06, MV wrote:
>
>>
>> I once read that in Indiana, there are about 250 parts suppliers to GM
>> located here. There is only one GM assembly plant in Indiana. There
>> are roughly 40 parts suppliers to Toyota in Indiana and there is one
>> Toyota assembly plant here also. Huge difference.
>
>
> And if GM goes under because it's ignored the rest of the world and
> concentrated on the US market, while Toyota has looked at the other
> continents, what's going to happen to those domestic suppliers selling
> mainly to GM? Who's going to pick up the slack? Toyota/Honda will
> likely. Honda Makes the Goldwings in the US, only to my knowledge. They
> export them from here to the European and Asian market. I expect that if
> their demand rises, they'll start buying more parts from the US market
> to fill the gap.
>
>
This archive was generated by hypermail 2.1.4 : Tue Jul 18 2006 - 21:45:44 PDT