NPR Podcast

Treasury To Loan Auto Suppliers Up To $5 Billion

Comments

Political Cartoons

Cagle Cartoons

A Peter Roff Blog post

Ford's Auto Bailout Lesson: Consumers Like Rugged Corporate Individualism

July 28, 2009 02:37 PM ET | Peter Roff | Permanent Link | Print

By Peter Roff, Thomas Jefferson Street blog

It should come as no surprise, as Rasmussen Reports said Tuesday, that the recent government bailouts of General Motors and the Chrysler Corporation have affected public attitudes toward the U.S. automakers. But rather than pitch in to help the struggling manufacturers continue to stay afloat, 46 percent of Americans indicated to Rasmussen that they were more likely to buy a new car from Ford—if they were, in fact, buying a new car—because it did not take government money in order to keep its doors open.

Call it a competitive advantage for Ford. By staying away from the bailout, the company has potentially increased its share of the market place by a significant amount, especially among those who insist on "buying America" as a political statement.

Only 13 percent of those responding in the national telephone survey said Ford's refusal to request government assistance made them less likely to purchase a car from the automaker in the future. But that's less than the 19 percent of Americans who said that someone in their family or a friend chose not to buy from Chrysler or GM because of the government bailout.

In additional good news for the carmaker, 51 percent of those Rasmussen identifies as "investors" said they were more likely to buy a Ford, along with 41 percent of non-investors. Those working in the private sector were, by 11 points, more likely than government employees to purchase a Ford because it didn't seek a bailout.

Not so much by engaging in a rugged defense of the capitalist system, as founder Henry Ford might have done, but simply by staying out of the way, Ford has improved its public image. This may be a useful lesson for other large corporations—which many times act as though they believe doing things that work against their own interests, as when oil companies provide corporate support for environmental groups—about the way to the heart of the American public.

"The chief business of the America people is business," President Calvin Coolidge famously told the American Society of Newspaper Editors back in 1925. It is not, he might have added, looking for a government bailout.

The Onion Info-Graphic Article on The Auto Bailout

The Onion is an American "fake news" organization. It features satirical articles reporting on international, national, and local news as well as an entertainment newspaper and website known as The A.V. Club. It claims a national print circulation of 690,000 and says 61 percent of its web site readers are between 18 and 44 years old.^[2]

-Info from Wikepedia

Auto Industry Crisis

The big three American automobile manufacturers spent much of last week lobbying Congress for a portion of the economic bailout, lest they go under. How did they get to this point?

1970: United Auto Workers fights for and wins 12 paid hangover days a year for its members

1977: Inspired by the hit motion picture The Spy Who Loved Me, Chrysler wastes four years trying to manufacture a car that turns into a submarine

1985: Ford spends the majority of its R & D budget designing sweet new "Chevy Sucks" decals

1991: Sales of the Pontiac Trans Am plunge after the car officially loses its pussy magnet designation

1997: Having meticulously crafted the 1998 Dodge Dakota to boast best-in-class payload and towing capacity, Chrysler decides to rest on its laurels for the next decade

1999: Chevrolet is sued for millions after it is discovered there is already a song named "Like a Rock" with the exact same lyrics and melody

2000: GM unveils the Buick Carbon, America's first mass-produced gas-coal hybrid vehicle

2001: At the Los Angeles Auto Show, GM introduces the Pontiac Aztek to raucous laughter, then stunned silence, then blood curdling screams of horror

2006: Oprah says her new favorite thing is non-American cars

CNN; on the auto-bailout

This is a great clip from CNN where Senators from around the country are bitch slapping the big 3 auto CEOs who are begging for our tax dollars to bail them out. The corporate jet questions are the best. What CNN didn't cover which would have been great to post, was the follow-up question that the Senator who dinged them on the corporate Jet asked. He said to all 3 of them, "you have all closed plants in Indiana and Missouri and moved them to Mexico and Canada, are any of you by a show of hands asking for a bail out package from any of those countries ?" "Let the record show that no hands went up." LET THEM FAIL !

Overseas Competition

Toyota and Honda are the major competitors for the U.S. automakers. Toyota is the world's largest automaker by far with more production and sales than any other company. Majority of the cars they produce are more fuel efficient than the Detroit automakers and for the most part, they are cheaper also. Toyota already has the Prius, which has huge amounts of sales, and is among the highest efficiency in gas mileage. Toyota also owns Scion, which has become somewhat of a fad in the U.S. it is a great first car because it is efficient and less expensive than most other cars of its caliber. Honda and Toyota have been producing Accords and Camry's for years with sky-high sales on both models. Honda, unlike the other car companies, is also involved in the production of motorcycles, semi trucks, scooters, and even boats. They are able to diversify and are strong competitors for Ford, GM, and Chrysler.

General Motors

General Motors is struggling to come up with ideas that will be better for this modern world. Gas Mileage and emissions come to mind while still producing 10-seater SUV's. Although they have created the "flexfuel" SUV's and they are also putting the final touches on their Chevrolet Volt, which is an extended range fully electric vehicle. GM recently finished construction on the most advanced automotive battery lab in the U.S. so hopefully they will perfect the alternative fuel situation soon.

Ford Motor Co.

I feel like Ford is the lesser of the evils because they are not as far in debt as the other companies. Just a few years back in 2005, Ford took out a 24 billion dollar loan expecting hard times so they are able to still effectively produce cars. Ford has, like the other companies, started putting lots of money and time into researching alternative fuels in an attempt to compete with the much more fuel-efficient overseas competitors.