Friday, December 12, 2008

Morning After Recriminations, the Auto Bailout

The elite and moderates are moaning this morning, over the failure of the Senate to pass the Bridge Bailout for the Automakers. Of course, to do this, they ignore things like logic, common sense, even a basic understanding of how economics works, and what the true goal of the bailout was. They do belatedly admit, that the bailout, was a temporary measure, until the Democrats take over the White House, and increase their majorities in the House and Senate, and they can pass a much larger more long term bailout, that would keep the Automakers going a lot longer.

Let’s be clear. The rescue plan passed by the House this week won’t fix the ailing automakers that are hemorrhaging cash as sales plummet. But allowing one or more of these companies to collapse into bankruptcy proceedings could potentially cause the loss of hundreds of thousands of jobs and even greater economic havoc.

Furthermore, if the Detroit carmakers are going to survive, they will have to completely overhaul the way they do business — and start building cars that people will buy. For that, they are going to need new leadership, a rational assessment of their long record of failure and, yes, a much larger infusion of government cash. 
Here's an idea, let the Detroit automakers produce cars that people want, instead of legislating to them what they have to produce under the CAFE standards. As I pointed out in the previous post, Bankruptcy is the only legal action that allows all the things that the pundits swear that Detroit Automakers need, legally. 

For example, let's say that Chevrolet feels that they have too many dealerships in California. Unless they grant the Car Czar the power to waive state franchise laws in California, unlikely with Pelosi as House Speaker, there is no way that Chevrolet can shut them down under the bailout. Yet, under Bankruptcy laws, those same dealerships that are impossible to shut down right now, would be very easy to shut down, and reduce the Company to profitability. 

The same things that the UAW was unwilling to promise to give up to get the Bailout, can be taken from them by a Federal Bankruptcy Judge without any review from Congress, or a Car Czar. 

Now, does anyone remember the United Airlines Bankruptcy from 2005? Anyone? The Communists supporters of Obama known as do. I know, it's probably not polite to laugh at the Communists who still cling to outmoded and demonstrably false beliefs, but it is rather fun. I'd cut and paste part of their tirade, but really, what part could I snip to show how out of touch they are. If you're unwilling to follow the link, let me summarize. 

The workers are what make companies function, and it's the workers who should be in control. 

The Unions were and are in control. They demand more money, for less work. Thus the company is left with a product that costs too much, and does too little. Hello, why would anyone buy one of those?

Four years ago, I bought a new minivan. I shopped around, compared vehicles, reviewed information on the internet. I searched for information for six weeks. I decided on the Kia Sedona minivan. Here's why. The car I got cost roughly half what the Ford product would have cost, with similar options, power seats, windows, etc. The Ford Product had a 3 year 36,000 mile warranty, while the Kia had a ten year 100,000 mile warranty. Are we seeing a trend yet?

So by purchasing the Kia, with my own hard earned dollars, I got more for my money, a purely capitalist ideal I'm sure, than I would have buying the Dodge, GM, Chevy, or Ford product. Being a rational, reasonably intelligent person, I couldn't figure out why I should or would pay twice as much, to get half as much, in a car. I asked some people, and the American Car buffs suggested that I should support American Jobs. 

OK, so I looked at the Kia again, and found much to my surprise, that when it's imported to the United States, a Pilot goes to the ship, and brings it to the Dock. This docking Pilot, is an American, and a Union member. The tugboat crews are similarly American. The people who unload the ship, are members of the ILA, UNION, as are the clerks that check the vehicles in. Most of the travel trailers driving to the dealers are Union drivers too. Lot's of American jobs right there, not counting the Dealership employees who prepare the car for sale, maintain it, sell it, and administer the paperwork to note the transfer of the vehicle. Why it looks like I may have for a short time, employed as many as sixty people all told, and that's just the Americans, in buying my car. 

Value is a lost art to American workers. The reason Walmart is so big, and successful, is they offer the shopper value for the dollar. More, not less, for the money. The UAW has forgotten that the reason they got where they were, was at one time they were the only game in town. However, Capitalist society means that someone is going to see an opportunity, and come in and produce a better product, and do so more cheaply, than you are if you're not careful. 

As we watch the pundits cry and gnash their teeth over the pain the UAW is probably going to have to endure, let's see who is starting an American Car Company, with a plan, and a good product idea. 

Creating a Police Car, from the ground up, to meet the needs of the consumer, the Police Departments, probably cheaper, and better, than the current trend. Wow, what an idea. Police officers driving cars that do the job better, than what they currently have. I'm sure Congress will step in immediately and demand that the company start producing hybrids or some other nonsense. 

If you want to save the Big Three, tell Washington to get the hell out of the Car Business, they don't have a clue what they're doing anyway. 


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