#OT# more insight on mirage of a Detroit bailout

I supported at least the initial Federal government loans and guarantees for Detroit to buy time while a more in depth evaluation could be made of the long-term viability American
automobile industry. The first installment of about 4 billion dollars has just been released to GM and the question of long-term viability is now being answered (but not in the way I had anticipated, with careful analysis and detailed projections).
One of the mantras chanted during the tin-cup cup congressional hearings was that the jobs at the US automotive suppliers would be endangered if GM/Chrysler were allowed to go b/k.
This was at least plausible, but the data now in appears to indicate that a major part of the survival/restructuring plan by the US "big three" involves "throwing their vendors under the bus" in order to obtain short term cost savings.
Recent media reports indicate that foreign suppliers have been contracted by Detroit automotive, for greatly increased amounts of specialty and standard fasteners, and molds/tools/dies.
So much for the pious cant and rhetoric about the need of taxpayer funds to "rescue" the Detroit big three both in order to preserve jobs there ==>and at their suppliers<==, and to preserve American manufacturing infrastructure/expertese from a national defense viewpoint.
It is clear that huge amounts of American taxpayer funds are being used to rescue [or make huge profits for] the Detroit bondholders, ==>and to rescue the foreign automotive component suppliers and mold/tool makers, not the domestic US industries.<= To rub salt in the wound, because of the Export-Import bank and other trade initiatives (their governments and ours), foreign suppliers are insured payment for their products/services, but domestic suppliers must rely on the bankruptcy process where they will be lucky to get pennies on the dollar, when [not if] the "ship hits the sand."
============ "Buy American, Get Chinese Engine"; Media Discovers Chevy Equinox Powertrain Source <snip> http://www.gminsidenews.com/forums/f13/buy-american-get-chinese-engine-media-discovers-chevy-equinox-powertrain-source-62527 /
============"General Motors to Increase Sourcing in China Auto manufacturer to spend 25% more per year on Chinese components through 2010.
By Nick Zubko      Jan. 1, 2008 -- While manufacturers are certainly split on the notion of sourcing overseas, General Motors recently voiced its opinion on the matter. The company told Reuters that it expects to buy more, increasingly sophisticated car components in China, the firm's fastest-growing procurement market, according to one of GM's senior executives. The company said that it will increase its procurement spending in China by 25% per year in the period 2005-2010. " <snip> http://www.industryweek.com/ReadArticle.aspx?ArticleID 494 =============== G.M. Says It Will Make More Vehicles and Buy More Parts in India
By HEATHER TIMMONS Published: April 18, 2007
General Motors has big plans in India.
In a visit to New Delhi on Tuesday, G.M.'s chief executive, Rick Wagoner, hailed the country's thrifty manufacturing culture and growing car market and said the company would significantly increase purchasing and production here. http://query.nytimes.com/gst/fullpage.html?res 04E3DD1E3FF93BA25757C0A9619C8B63 ================
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http://www.gminsidenews.com/forums/f13/buy-american-get-chinese-engine-media-discovers-chevy-equinox-powertrain-source-62527 /
Ha! Some headline. I wrote a 5,000-word article about that over five years ago. <g> If you attended IMTS in 2002 the major builders were all talking about GM's RFQs for the machine tools they were planning to ship to Shanghai, to make those engines.
-- Ed Huntress
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F. George McDuffee wrote:

=====================================================http://cuttingtoolengineering.com /
Ont. tool and die businesses fear bankruptcy without bailout
Chris Vander Doelen, Windsor Star Published: Tuesday, December 23, 2008
WINDSOR, Ont. - Thousands of people employed in Ontario's tool and die industry are nervously waiting to see if they are included in the government rescue plan for the Canadian portion of Detroit's auto industry.
If they aren't covered, as many as half of the hundreds of small companies which employ 14,000 people in the province - 9,000 of them in the Windsor area - could end up bankrupt. The companies are owed hundreds of millions of dollars by Tier 1 suppliers, or companies that supply parts, to General Motors, Chrysler and Ford.
The $4-billion loan guarantee package announced by Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty two days ago included "automotive suppliers" among its beneficiaries. The fate of the country's automotive machine, tool, die and mould (MTDM) industries could hinge on the legal definition of who is a supplier, people in the industry said Monday. =====================================================     And the dominoes start to fall...
--
BottleBob
http://home.earthlink.net/~bottlbob
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Yep, here in OZ we have GM, Ford, and Toyota actually making cars. And GM and Ford are having the same problems as the US - making big, gas guzzling cars of dubious quality that no one wants to buy. Fantastic deals going at the moment if you want to buy one. And our government is bailing them out as well - lots of money for a new plant to build 4 cylinder cars - based on the Chevrolet "Cruze" (?) so it will probably be something that people don't want to buy anyway.
I am amazed by the machinations and perturbations of the western societies - rampant capitalism has collapsed, but the people in charge (here, and in the US) don't seem to have noticed - they keep on trying to prop it up, using the same old methods (and bullshit) where a total rebuild of the system is required.
We are sitting on enough natural gas to last a thousand years (if you guys want it as well, no worries, - and we wont screw you like OPEC) ) but, is anyone going to actually DO anything with it? - nah, lets sell it to the Chinese, too much brain power (and effort) required to convert our transport system......
Hopefully, we will all get through it without too much personal damage -
Andrew VK3BFA.
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On Dec 30, 11:56 am, F. George McDuffee <gmcduf...@mcduffee- associates.us> wrote:

right. I can only say it should be expected that the big 3 would further try to cut corners by cutting the throats of their own workers and suplliers in order to escape to the really cheap labour- all the while foriegn manufacturers are moving production and assembly into namerica. but politically, this is good for us, because at a modest cost, the big 3 are showing their true colours and now it far more permissiable to let them bust while extending the bailout monies to the suppliers who have been operating at the point of the sword for too long.
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