End of the line for Vauxhall if the government refuse to bail them out.

chewmylegoff

Rochdale_Pioneers wrote: »

I agree with you completely about weeding out the over-capacity. Lets weed out the vastly-inefficient French factories. Lets weed out the huge over-capacity in executive vehicles and sports cars coming from Germany. Why on earth would you want to weed out the most efficient factories that produce mass market vehicles for export that we already have?

if i can steer you back on topic, the debate is about whether £1.5bn should be loaned to vauxhall, not whether we should shut down other car plants in the UK, don't think anyone has suggested that we scrap the nissan plant, e.g.

kennyboy66_2

Wookster wrote: »

How do you know things will go back to how they were before? I think we've all accepted that the last 10 years have been heady years, fuelled by cheap credit and reckless lending (for cars as well as houses). Cars are a big ticket purchase and the world has seen 10-15 years of astonishing 'growth.' There are absolutely NO guarantees that car purchases will return to their previous level!

It has been estimated that there is an overcapacity for car production of 20-30% globally, so someone bailing out some car industry somewhere is pouring money down the drain.

Who do you think it is?

Cars sold year by year in the UK

1980 1,513,761
1981 1,484,622
1982 1,555,027
1983 1,791,699
1984 1,749,650
1985 1,832,408
1986 1,882,474
1987 2,013,693
1988 2,215,574
1989 2,300,944
1990 2,008,934
1991 1,592,326
1992 1,593,601
1993 1,778,426
1994 1,910,933
1995 1,945,365
1996 2,025,450
1997 2,170,725
1998 2,247,403
1999 2,197,615
2000 2,221,647
2001 2,458,769
2002 2,563,631
2003 2,579,050
2004 2,567,269
2005 2,439,717
2006 2,344,864
2007 2,366,000
2008 2,150,000

itsnever2lateisit?

GM have had billions from the US Govt, it would appear that they are prevented from spending that outside the US. GM= American Leyland, they won't be around in a few years time, spending £1.5bn on one of its subsidiaries is lost money. Vauxhall, as I have said before is just a screwdriver assembly line, while it is important to those that work there, it is of little value to the UK as whole

lukekelly_2

Rochdale_Pioneers wrote: »

Why on earth would you want to weed out the most efficient factories that produce mass market vehicles for export that we already have?

For the same reason that we shouldn't subsidise a factory producing 100 million horse-drawn chariots every day however efficient it is. You need to efficiently make something that people are prepared to buy in the quantities you are producing it in.

Rochdale_Pioneers wrote: »

The factories here are NOT inefficient. Nissan Honda and Toyota have world-leading factories in the UK under direct threat caused by a lack of credit. Its not that peeople don't want new cars, its that they can't finance them.

Borrowing at the levels of 2007 -- people spending far more on consuming items like cars than they were earning -- is not available now and is not going to become available again in the near future. People and the car industry and going to have to get used to the new reality and that's likely to mean fewer new cars.

If the problem is that there are firms in need to credit who offer a sound financial investment for the banks that they are unable to take up due to the current financial turmoil then there is a strong case for government help to enable banks to make those profitable loans. I haven't seen any articles yet though suggesting that Toyota or Nissan are going to have to close factories because their credit lines have been closed down.

But, in response to your question about our need to decide whether to subsidise car manufacturing in the UK, my answer would be no. Give me the cash instead and I'll buy the best car I can find at the best price I can find.

mbga9pgf

Rochdale_Pioneers wrote: »

The factories here are NOT inefficient. Nissan Honda and Toyota have world-leading factories in the UK under direct threat caused by a lack of credit. Its not that peeople don't want new cars, its that they can't finance them.

I agree with you completely about weeding out the over-capacity. Lets weed out the vastly-inefficient French factories. Lets weed out the huge over-capacity in executive vehicles and sports cars coming from Germany. Why on earth would you want to weed out the most efficient factories that produce mass market vehicles for export that we already have?

Nissan, honda and toyota produce overpriced, overengineered cars that need about 25-35% knocked off the list price before I even consider going anywhere near buying a new one; how can they justify asking a similar price for a Civic as audi do for an A3? The two are simply not comparable.

The real issue is not the lack of credit, which got us into this unholy mess in the first place; it is what one other poster commented on; the demand for ever-increasing growth and profit margins. Engineering needs to go back t long term design and quality rather than throw away items. They need to sell at a loss at the mo if they want to keep their highly trained employees in work.

An example of this is furniture; why buy a rediculously overpriced piece of paper-thin wooden furniture from the likes of M&S when you can get a much better, higher quality piece from auction? The build quality of modern furniture seems to reflect the throwaway nature of our society.

Zagu

woody252506 wrote: »

They need to commit them legally to investing/researching/producing more climate friendly, efficient vehicles as a result of the government helping out.

They've had the opportunity to do that for years, but didn't really take it seriously, and now the public should pay for the r&d they couldn't be bothered to do?

Wookster

kennyboy66 wrote: »

[/COLOR]2000 2,221,647
2001 2,458,769
2002 2,563,631
2003 2,579,050
2004 2,567,269
2005 2,439,717
2006 2,344,864
2007 2,366,000
2008 2,150,000

It really does look like 2001-2007 saw abnormally large volumes. What's happening now is a realignment of production with demand.

Surely if the UK plants are as groundbreakingly efficient as Rochdale would have us believe then other manufacturers will want to use those plants...

Rochdale_Pioneers

Wookster wrote: »

Surely if the UK plants are as groundbreakingly efficient as Rochdale would have us believe then other manufacturers will want to use those plants...

That all depends on the total package on offer. Keep operating very efficient plant with zero subsidy, or keep operating a less efficient plant with higher MOGES that attracts long term subsidy - the poor plant may be a better long term proposition.

scooter100_2

itsnever2lateisit? wrote: »

Vauxhall, as I have said before is just a screwdriver assembly line, while it is important to those that work there, it is of little value to the UK as whole

Have you ever been inside a car factory?What is a screwdriver assembly line?Most modern car factories including Vauxhall are fully automated production lines utilizing complex manufacturing technology.A typical model launch will involve investment in plant and tooling which can cost £100 million + .As for being of little value to the UK fine you are entitled to your opinion, but both Vauxhall factories export over a £1 billion of product a year.If you think the UK can afford to lose this amount of exports you are sadly deluded.

lukekelly_2

If the situation is that one factory can produce cars for £10,000 and another for £12,000 but the more expensive factory is subsidised to the tune of £3,000 per car then I'd say let them throw their money away. By taxing their population and other businesses to pay for that inefficient factory they are greatly reducing the efficiency of their economy as a whole and will be losing out. I'd rather a stronger economy to an expensive white-elephant of a flagship.

If Vauxhall are profitably exporting £1 billion worth of cars a year then the factory will stay open regardless of any government subsidy. If not then we're paying for those exports and it's a complicated and expensive way to throw money away. Why not just mail your cash overseas instead? (And yes, in the grand scheme of things the UK could afford a £1 billion reduction in exports a year, particularly as imports are likely to fall with the economic contraction.)