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| Invidious comparisons |
| 2008-11-12 |
| Why bail out Wall Street and not GM, demand many people. Why do we care about bankers and not ordinary folks? I think this misses the point of the financial bailout. Whether or not it works--and I sure hope it will--I don't think very many people wanted to bail out the financial industry because we were so moved by the plight of those plucky traders on the mortgage desk. We bailed them out not because they deserved it--they didn't--but because if we didn't, there was a very big risk that they would take us down with them. This is not generalizeable to other industries. Money is weird. Finance is weird. There is no other industry that is, first, so tightly coupled, and second, severely affects every other industry in the country. Moreover, there are few other industries that are so vulnerable to panic. Strategic injections of capital can actually salvage operations that are otherwise sound. GM's operations are not otherwise sound. They have been headed for this moment since 1973. Conservatives blame legacy costs, and liberals blame management. They're both right. GM's legacy costs are crazy. So is the UAW leadership, which, goaded by the retirees, is knowingly driving the company into bankruptcy rather than negotiate clearly unsustainable deals. Those legacy costs would probably not be supportable by any company in a competitive environment; the UAW's expectations were created in an era of comfortable oligopoly, when all costs could be directly passed on to the consumer. And the poor quality control on American cars is, from all reports, the responsibility of the union, which maintains downright silly work rules that not even the most ardent liberal could defend in both the Big Three and their various parts suppliers. My favorite was the supplier plant that was forced to work in english measurement even though they had to sell parts in metric. But the examples are legion. But too, management doesn't seem to be trying much harder to keep themselves out of bankruptcy court. The company could have limped on for longer if it had, y'know, made cars anyone wanted to buy. That's not the UAW's fault. GM's management seems to have a positive genius for making horrible cars, as if they'd deliberately sat down and asked themselves how they could best combine ugly, inconvenient, and unreliable into one expensive package. What is government money going to fix? Will GM's management be so grateful to America that they decide to make an attractive, reliable vehicle as a thank-you gift? Will the unions realize that they owe the taxpayers a little more flexibility at collective bargaining time? Oh, hear that hollow laugh. Merging with Chrysler doesn't solve anything. It's like two alcoholics deciding that they could maybe quit drinking if they got married. Everything that's wrong with GM is wrong with Chrysler, in spades. Adding the chaos and expense of a merger will not improve the toxic rot of horrible labor relations and muddled management. They can't even save money in the traditional way, by streamlining operations, because it costs them so much to lay anyone off. They'll save on steel and electricity from cutting car lines. But they can cut those car lines right now. And steel and electricity are no longer the major costs of auto manufacturing. GM can't be saved. It needs to go into bankruptcy, which is the only possible way I can see to adjust its legacy labor problems, and possibly provide sufficient shock to the corporate culture to allow the company to make a competent car. Even that may not work. And it's going to involve a whole bunch of pain for everyone. But unless we're willing to essentially nationalize three auto companies, that pain is going to come, sooner or later. And if we want to keep auto workers from feeling pain, then we should just up and give them money. There's no reason to waste steel on a lot of crappy cars. |
| Posted by:tipper |
| #24 DILEMMA > WAR POWERS + "WORST CASE" NATIONAL CONTINGENCY > in case of major war, Washington Pols and the USDOD expect and plan for US AUTOMAKERS, etc. US-BASED INDUSTRIES TO BE ABLE TO QUICKLY PRODUCE ARMAMENTS FOR US MILFORS. US-based, US-owned Automakers = US ARMY-MARINE AFVS, USAF PLANES, + USN COMBAT SHIPS, including support, the "GUNS" OF POLITICAL "GUNS-AND-BUTTER" ISSUES. * E.g PAKISTANI DEFENCE FORUM > US SECDEF GATES FAVORS EXPANSION OF SCOPE OF US PREEMPTIVE WAR DOCTRINE TO INCLUDE OPTIONS FOR UNILATERAL US PREEMPTIVE NUCLEAR STRIKES. Against both GOVT-NATIONS as well as NON-STATE ENTITIES [Terror Groups], ETC. AS PERTINENT/NECESSARY. Also, SAME > THE MAPS OF THE MUSLIM WORLD, ASIA, AND AFRICA IS BEING QUIETLY REDRAWN DUE TO THE US-ISLAMIST WAR ON TERROR. |
| Posted by: JosephMendiola 2008-11-12 23:37 |
| #23 My 1995 Voyager has been great - I'd buy another if they still made that model. My 1995 Prizm (alias Toyota Corolla) has been great - but I tried the 2000 Chevy version & it was more like the Cavalier. Tried a Saturn - not bad but expensive to fix and my daughter kept wrecking it. Escort - real good for 80,000 then expensive stuff kept breaking. 72 Datsun pickup - fantastic. 73 Corona - sucked, but never left me stranded. 84 Marquis - solid but had this nasty intermittent electric problem. 68 Rambler - basic, but really practical and cheap and easy to maintain. I don't sense a strong pattern relative to national origin. |
| Posted by: Glenmore 2008-11-12 19:19 |
| #22 edit - "what car's best for you. Period. I've owned..." PIMF |
| Posted by: Broadhead6 2008-11-12 17:58 |
| #21 It's a free market - you buy what car best for you. Period. I've owed a 1985 Fiero - piece of shit. A 1985 Toyota Tercel - awesome car. A 1997 Ford Escort - good car. A 1999 Plymouth grand voyager - excellent van and a 2003 Dodge Ram - excellent truck. I'd love to be able to buy only American products. My dad worked for GM for 30 yrs. However, as a free market capitalist I say let them sink or swim on their own merit. Everytime you buy a big 3 car you support the UAW and by substitution the Democratic party. So why don't these latte sipping liberal Obama backers buy a big 3 car if they care so damn much? A lot of the obamaphants I see are driving Volvos and Prius'. I've had enough of the unions. This is just another vote buying scheme from the democrats. The auto industry is in trouble and it's their own fault. Fuck'em. If they get a bailout watch for the airline industry to get in line next. I won't hold my breath, W is no conservative, he'll cave. |
| Posted by: Broadhead6 2008-11-12 17:57 |
| #20 If GM was allowed to go bankrupt and then reorganized, minus the UAW and half its dealer network, there would be a good opportunity for a really competitive auto maker to emerge. Until then there's really no hope. |
| Posted by: Jolutch Mussolini7800 2008-11-12 17:18 |
| #19 Sure go ahead with this, and buy the Anheuser-Busch stock so I can draw my political cartoon of palosi sitting in the back of a recalled '08 silverado pick'mup truck with a case of beer mumbling something about how nobody will give her a loan and the value of a dollar ain't what it used to be. |
| Posted by: swksvolFF 2008-11-12 16:54 |
| #18 People act like these companies are just going to vanish if they go into bankruptcy. They'll keep lurching along as they are now. Job loses, even including suppliers, etc, aren't going to be any different whether they are in Ch11 or just idling 1/2 their work force. The only difference is in CH11 they will be able to shed the burden of the damn UAW and they will be forced to reorganize. Let them go under and let the UAW take care of those who lose their jobs! |
| Posted by: AllahHateMe 2008-11-12 16:11 |
| #17 For years, I've been making the argument that one should buy a big three vehicle to support US industry. But lately, I'm taking the opposite tack. Don't support something that should be allowed to die. Buy a car made by one of the other manufacturers which has a plant in the USA. |
| Posted by: KBK 2008-11-12 15:50 |
| #16 If they're gonna bail out the big three, this may be the last time I buy one of their cars. Then again, I'm a bottom-of-the-food-chain type who's never bought a new vehicle in his life. |
| Posted by: Thing From Snowy Mountain 2008-11-12 15:38 |
| #15 I have a 94 F-150 that I bought new, going on 200K and the 300 cid straight six still runs great, air even works still. The body is going to rot away to nothing, but the motor will still be running. Some cars are good ones when they roll off the line, some are lemons. |
| Posted by: bigjim-ky 2008-11-12 15:35 |
| #14 In my experience the dealers are the primary thing that drives customers to the imports. The import dealer contracts give the manufacturers more leeway in enforcing their rules. The domestic makers have to jump through a lot of hoops to discipline a dealer. The imports can do it much easier. |
| Posted by: Formerly Dan 2008-11-12 14:27 |
| #13 --- There is an analogy between the auto industry and the finance industry. --- There are a great many suppliers and their employees who depend on the auto industry. Minimal if any media coverage of the size of this vulnerability, rough figure I found was 4x the employment, 17 states who would have major damage from a hit on their auto suppliers, much more than from a failure of any one the "Big" 3. ---- Also, there is a liability for the federal pension guaranty program, to pay for the existing pensioners of the Big 3. Big money there. Again, no media coverage of the total amounts at risk. ---- I notice our esteemed representatives are gearing up to do another rush-rush, no consultation, railroading of a massive package through Congress. This will likely work as well as the Mother of All Bailouts passed a few weeks ago. |
| Posted by: Anguper Hupomosing9418 2008-11-12 14:21 |
| #12 Auto workers are a privileged group. They have been for a long time. This is not a rescue of the Auto companies. There are plenty of auto companies in the US besides the Big 3, Honda, Toyota, and Nissan come to mind. What will be done for their employees if they go belly up? No, this is a bail out of the UAW. And no entity more deserves to go belly up. F^*k em. |
| Posted by: Nimble Spemble 2008-11-12 14:17 |
| #11 The basis of GM's claim is essentially that they are too big or too important to fail due to their massive labor force. But how massive is their labor force relative to other American companies? It may be surprising that the following companies employ a larger number of workers than GM: Target, AT&T, GE, IBM, McDonalds, Citigroup, Kroger, Sears, and Wal-Mart. It is also worth noting that Home Depot, United Technologies, and Verizon all employ nearly as many workers as GM. The question must be posed: Should the government bail out all 12 of these companies and, if so, at what cost? I doubt that if Wal-Mart, with their 2.1 million employees, went to the government or the American people and demanded a bailout that they would receive much sympathy, let alone money. But if we are going to base worthiness of bailout on number of employees alone, then Wal-Mart is almost 7 times more worthy than GM. (I have largely neglected Ford, whose executives are also demanding a bailout. I believe that it is enough to simply state that Abercrombie & Fitch employs almost 7,000 more workers than does Ford. Would the failure of Abercrombie & Fitch's threaten the economy? I think not.) Mises Institute: Yet another GM Bailout |
| Posted by: KBK 2008-11-12 13:59 |
| #10 "I put more of the blame on the UAW. They are stuck in 1959." I would say 1954. But your point is correct. |
| Posted by: no mo uro 2008-11-12 13:55 |
| #9 Did you know that the #1 cause of headliner failure is temperature, i.e., parking in the sun, and that it does not matter what brand your vehicle is? Yeah, sure. I'll get my boss to install a roof over the parking lot. I've had one headliner failure. Chevy S-10. My daughter has had one headliner failure. Saturn. High temperature resistant glue isn't rocket science. Nor is building decent cars. |
| Posted by: KBK 2008-11-12 13:54 |
| #8 Oops. Forgot to change back. :-( |
| Posted by: Barbara Skolaut 2008-11-12 13:21 |
| #7 "to replace the radiator after she hit a vulture" Dang, OP - your family has all the fun! ;-p |
| Posted by: Va. Gal 2008-11-12 13:20 |
| #6 Owned Hondas for a while. Then I decided to help America, and I owned a Saturn for nine years. The first seven years were great. Had I known what was coming in the last two I would have sold it. Then owned a Rendevous. Stunk. Comfortable, nice enough, always in the shop. Always. Now I own an Enclave. Best car I've ever owned, period. Comfy, reliable, smart, decent power, looks great, and the best fit and finish I've ever had on a car, any car. GM is capable of making a decent car, but it seems like the people who make the final decisions don't understand the markets at all. The workers are capable of working hard and well but the union isn't capable of understanding how the world works now. Too bad. I'm hoping I hang on to that Enclave for a while. |
| Posted by: Steve White 2008-11-12 13:11 |
| #5 This editorial is right on the money. How is giving these companies money going to change anything? You know the dems won't put the squeeze on the unions to change. You know the management won't make the hard choices needed on their end. It is only kicking the can down the road a little bit. A total waste. That said, I have no big angst about the quality of American cars. I've had American, German and Japanese cars and they all had about the same quality level (the worst were German). The syling on American cars is not the greatest. I put more of the blame on the UAW. They are stuck in 1959. |
| Posted by: remoteman 2008-11-12 12:46 |
| #4 My parents wouldn't buy anything made by anyone else but Chevrolet until my mother bought a brand-new Caprice. It was in the shop eight times in the first year she owned it. After four years and dozens of problems she finally sold it at a loss and bought a Nissan. She owned that until she lost her drivers' license due to medical reasons - eleven or twelve years. It was in the shop twice - to replace the radiator after she hit a vulture, and to have the distributor replaced. If US car manufacturers want to remain in business, they HAVE to greatly increase quality control and cut costs. If UNIONS want to continue to exist, they'll have to learn NOT to kill the industries that support them. Unionized labor has killed quite a few national industries, and still can't seem to understand that they're part of the problem. |
| Posted by: Old Patriot 2008-11-12 12:13 |
| #3 I had the same problem with the headliner on my old Chevy. The dealer wouldn't fix it but they recommended an upholstery shop that did the work for a reasonable price. It's kinda hit and miss whenever you buy a car. But that old Chevy had 247,000 miles on it when I finally had it scrapped. It was still running strong but it had failed a smog test and the state of California had a program going where they were paying $1000 to owners of these old "gross polluters" to get them off the road and I figured that was the best deal I was ever gonna get from it. I almost cried when I turned it over to the wrecker. I have mixed feelings about this. I never thought GM cars were all that bad and I never believed that German and Japanese cars were all that great. The Pontiac I drive these days is reliable and comfortable. But I'm extremely uncomfortable with all these people begging for bailouts. This ain't no video game, kids. In real life there are consequences. |
| Posted by: Ebbang Uluque6305 2008-11-12 12:07 |
| #2 It's shameful that you toss aside supporting American-made products simply for your headliner. Did you know that the #1 cause of headliner failure is temperature, i.e., parking in the sun, and that it does not matter what brand your vehicle is? Go to the wrecking yard and see for yourself. Dealers don't do upholstery...never have, dude. You park in the sun, you tossed aside a 'mechanically reliable' vehicle and bought a foreign car because the Saturn was a POS? With your story & comments, I nominate YOU for 'idiot of the day'. |
| Posted by: logi_cal 2008-11-12 11:46 |
| #1 I bought a Saturn in 1998, wanting to buy American. It was mechanically reliable, but after less than 10 years, the roof liner started to detach and sag down in the passenger area -- just like every other GM car my family had ever owned. The Saturn dealership refused to fix it, even for pay! "We don't do interior upholstery work" they said. My new car is a Mazda, and I'll never buy another American car. I say let 'em sink! Bankruptcy is the best thing for them. Let the Koreans or Japanese buy their idle plants for pennies on the dollar, and start making decent cars. |
| Posted by: Scooter McGruder 2008-11-12 11:21 |