you realize the auto industry doesn’t NEED a bailout, right?

if the Gub’mint doesn’t give the big three billions of taxpayer dollars, they won’t go away. GM, Ford and Chrysler won’t suddenly cease to exist.

they might be bought by other auto companies or joint-venture firms and then restructured – but they won’t just disappear.

it is possible to make money building cars in the USA; just ask Honda, Toyota, Nissan, Mitsubishi, Subaru, Mazda, BMW and Mercedes. they build over a third of the cars made in the US each year.

and they’re not junk; compare the quality (actual and perceived) of just about any of these brands to that of the big three – and the “foreign” cars win almost every time.

maybe it would be a good thing if GM failed and was bought by Hyundai.

the big three build poorly designed, shoddily assembled vehicles from substandard materials. at a rather high cost. if the government wants to “save” the big three, this is what needs to be addressed – and not by handing them $25bn with an assurance that they’ll “do better.”

one of the first things that the government should do is bring US safety and emissions regulations in line with the rest of the world. Europe and India share the same emissions regulations, based at least in part on the Kyoto Agreement. the vast majority of the world (excepting the United States) follows the UN ECE regulations for safety.

but since the US charts its own course, it makes it difficult (or sometimes impossible) to import more efficient vehicles or export those that might be profitable in foreign markets.

bringing US regulations into agreement with the rest of the world would at the same time open new overseas markets for US manufacturers and foster healthy competition in the US domestic market.

the government (once again, assuming it should interfere) must also force concessions on the unions. some union wages are absurd; until the 2007 renegotiation with the UAW, US auto makers were forced to pay new hires $28 an hour. that’s $58,000 a year to bolt seats down. with no experience. some current UAW employees make over $80 an hour – $166,000 a year to assemble cars. which isn’t rocket surgery.

and they still do a piss-poor job of it. the vast majority of “American” cars are shoddily assembled when compared to their competition. the sinecure of these union jobs has lead to an understandable amount of laziness on the part of many workers.

i suspect the choice of inferior materials by many US manufacturers is partially attributable to the huge payroll costs – they have to cut somewhere to keep retail costs down.

don’t assume by all this that i’m anti-union, however. many of the things that we take for granted in the US (the five-day work week, the eight-hour work day, and the minimum wage) are due to the work of unions.

but something that unions in general (and the UAW in particular) seem to have forgotten is that the worker has a responsibility to his employer: employment is not a one-way street. the unions must work cooperatively so their employers can survive, rather than as parasites.

management isn’t blameless, however. the big three have been badly mismanaged for decades, constantly resisting upgrading plant infrastructure, modernizing vehicle designs and streamlining operations. they have instead gone for the quick buck – building SUVs with huge profit margins (that didn’t have to meet many emissions or safety standards, because of their classification as trucks). instead of concentrating on sustainable future powertrain technologies, they have been left behind by foreign competitors like Honda, Toyota and Volkswagen.

i don’t have a problem with management receiving huge paychecks – but compensation must be tied to performance. not the managers’ performance – the company’s. even if the management does everything right, if the company loses money they shouldn’t get a huge bonus. or any bonus, really – unless it’s something like stock or future-maturing stock options. incentive to turn things around, as it were.

so a bailout isn’t the way to go. let the big three “fail.” they won’t disappear; instead, they’ll come out leaner and stronger than before. the as-proposed bailout is simply reinforcing defeat, however many “conditions” it has.

quote of the day:

“The nine most terrifying words in the English language are, ‘I’m from the government and I’m here to help.’ ” – Ronald Reagan


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