In Defense of Detroit

The big 3 ....do they deserve to be bailed out after 40 years of miserable vehicles while the other manufacturers continuously pounded them silly....instead of a bailout the government would have to mandate that we all buy a Big 3 vehicle...the bailout is stupid to the extreme...it was both management and the union that has caused this problem working in tandem setting up a monoply and sucking the life out of a competitive indiustry that took 60 of the first 100 years to buildup and be profitable and then in the last 40 years to bleed to death by managment and the uions...all while the unions have created a monopoly....here we are they cannot be save...possibly restructured...the US government cannot make consumers buy their products and thats what it will take...whats the point of giving them $50 billion and then they are still uncompetitive because of labor and quality problems and we then turn around after saving them and refuse to buy the cars...as for the insipid stupidity of the unions...they say that only 10% of the cost is labor...well that is direct labor but what about the pensions and health care and the work rules that make the manufacturing sites unproductive...and therfore at the end of the day uncompetitive...give them money and not buy the cars whats the point...better to tell me how the government will force us all to buy one of the american Big 3 cars...the democrats are basically forcing all of us to fund these companies in the short term and once we go into the marketplace to buy a car the choice of most democrats that I know is to buy foreign...a word to the wise....there are not enough republicans, that usually buy american cars to save the industry...we need to all buy american cars...I find the cries from ex CEO's like American Airlines Crandall that we need to force a number of changes on the car companies and the democrats want to do the samee by the time we hand over $50 billion or so and put in all these demands the car companies and the workers will just fail....

If we as taxpayers are being asked to pay $25 billion dollars, why should it go to prop up the failed companies? What guarantee do we have they still won't implode 6 months, a year, two years from now? What is the common assumption about giving in to blackmail - once you start paying there's no way to stop?

There is no point in propping them up, and no point in allowing them to re-structure via a chapter 13 bankruptcy - if they could have restructured by now, they would have. They have proven themselves incapable of making the hard choices - more money won't suddenly get them to see the light.

Let's give the 25 billion to the state of Michigan instead, to pay for unemployment, worker re-training, housing assistance, etc. Allow the automakers to go into Chapter 7 bankruptcy, rather than 11, and let the proceeds go towards pension/health funds and if there is anything left over, the stockholders.

Any assets deemed salvagable will be purchased by some enterprising group of intrepid investors - let them rebuild a leaner auto industry, if that's possible.

The losses are inevitable, but at least this way everybody gets something, instead of most getting nothing. Postponing the pain by bailing them out will just be throwing good money after bad, and make the inevitable demise that much more painful. To just hand over money to three companies that clearly have run themselves into the ground is absurd.

Behind the creation of the US Interstate highway system was tire manufactureres. They wanted you to be able (enticed) to drive more miles so they could sell more tires. And, we fell for it. Sure we can drive all over the country - like that wasn't going to happen anyway!

I have oftened wondered about the relationship between Big 3 and Big Oil. Did anybody heat Dick Cheney or "W" endorsing any aspect of fuel efficiency or innovation at the Big 3? I mean - in EIGHT years GM and Ford sat back and sucked up the large profits from Silverados and F150's - and Big Oil just smiled as another 15 mpg Suburban or Excursion rolled off the assembly line. Then when a sizeable portion of America was suckered into 5 year financing contracts - Big Oil introduced depletion fear mongering - and their profits rose like never, ever before. Why doesn't Big Oil step in with their billions in profits and bail out the Big 3? Big 3 crawled into bed with Big Oil - and Big Oil won't even leave some change on the nightstand.

The UAW did originally serve a very valid purpose. The inhumane greed at the top of the corporate ladder forced the people to band together. They exposed these corporate execs as the uncaring, dis-honorable, money grubbing SOB's they truly were. But those days are long gone and the UAW holds on to those memories like they were yesterday. Their main purpose now is to skim money off the disastrously high wages of their "members". Let's see - we (the UAW) will bargain for higher wages in exchange for a slice of the pie. The more you make - the more we make. We're all in this together. Hmmm - sounds like cancer.

And there you have it. A re-occurring theme over and over again. The politically correct speech writers for these wheeling-deeling "Mr. Businessman" execs cover it all up with a few words about how much money their companies toss at those so less fortunate.

The very worst part of this is how easily the American public is suckered into following these Jim Jones KoolAid freaks time and time again. Folks - stop drinking the KoolAid. Learn how to think about the world beyond your neighbors shiny new SUV. The Pied Piper was not entirely fictional!
(Ray Stevens wrote a tune a long time ago entitled "Mr. Businessman". It still holds true.)

They aren't really a 'disgrace'. They are companies that have many problems: too high wages (which is their OWN FAULT, not the Unions), they have been making cars that are, bluntly, junk and too high maintenance, etc.
The best way to solve these companies problems..... bankruptcy, chapter 7 or chapter 11, take your pick! Just pumping money into these companies is NOT going to solve any problems.

I am a great fan of the cars made in Detroit, Michigan. I love the Ford Shelby Cobra's and Chevy Corvettes. Why are American automobiles not popular in The United states? it is my guess, that they are less unpopular outside of the United States. They would be loved in India. How could the affairs of Detroit and Michigan, be turned around? Perhaps, by giving the public of the United States, a bigger say, on what car's are to be built by the big three. The three big automakers are such national institutions, that they manage the manufacture of their cars, totally independently, and in a totally insulated manner. Why does it not matter to the American public, that corporations like GM do not make cars that are appealing? If such be the case of independence, and insularity, then what is the solution? Allow the independence of the national US car market, to develop, and allow GM to import GM cars made from plants in non US nations, and export US made GM cars to non US markets. In that way, the US car manufacturers, will be liable and accountable to the customers overseas, and the overseas plants will make cars which the American public find palatable.

I am fascinated by the way everyone refers to "the auto industry" when in fact we are talking about only three companies. The flaw in all these arguments is that no matter how much money the government give to these companies, they are never going to be able to survive without subsidies. It is not a question of $25 billion. It is a question of $25 billion a year forever. That was the communist system. They kept everyone employed and all companies in business regardless of the fact that they were not competitve. It was a bad system, and both China and Russia realized it and gave it up. My answer to all these people who want a bailout is, It's my money you are talking about. Keep your hands out of my pocket..

Lanceraye below corrected me that Truman, not FDR said that THE BUCK STOPS HERE. Of course that is correct.
In pennance, let me pass on some data just for comparison. Think of them as rough figures. Sources seem to vary by a percentage point or two, but this is a correct picture.
Mulally FORD 28.2 million dollars just to take his job at FORD, in addition to many other benefits, options, etc. Data from April of this year.
Wagoner GM 9.3 million in salary and benefits in 2006.

Toyota's top 37 executives earned a combined $21.6 million in salary and bonuses, according to filings with the Securities and Exchange Commission. U.K. firm Manifest Information Services, which analyzes proxy information, estimates Toyota's top executive, Hiroshi Okuda, earned $903,000 in 2006.

Oh my stars!!! I do not know whether to laugh or to cry.

And

At Honda, the top 21 executives earned $11.1 million, combined, in salary and bonuses, SEC filings show

Holy Mackerel. Now those latter two are specifically from US sources. no hocus pocus there.
And you know, these are all figures for single years. This happens year after year. American execs getting paid huge amounts of money to destroy wealth. Asian people working like mad to stay independent and viable, and buy US T bonds.

I believe I can rest my case here. Read it and weep people. It looks like the Japanese automobile executives have been suckered.
But the award for the biggest group of suckers will definitely have to be saved for American taxpayers if they bail out the Big 3.
Detroit is NOT something that is RIGHT with America. Not by a long shot.