John Cole has come up with “A Bailout Plan the GOP Can Support.” After years of having it pointed out to him that violence in Iraq is comparable to that in Detroit and other American metro areas — and noting that Michigan has a large Muslim population — he put two and two together.
We need to invade Michigan and rebuild the state from the ground up. We will be greeted as liberators, we have clear supply lines, and we can easily rebuild the auto industry with the kind of money we spend on other countries we invade. Hell, our new Secretary of State, Hillary of Clinton, spent the better part of the past year fighting for the rights of average folks from Michigan, so think of the good will we have with the public. This is very doable. Just tell Congress we will give KBR no-bid contracts to fix Detroit.
In addition to being mildly amusing, it has at least as good a chance of working as handing $15 billion to the folks who ran the best automobile firms on the planet into the ground.
And maybe this time the Dixie Chicks will keep their big mouths shut.
Wait a sec. Doesn’t Detroit already get rebuilt after every time the Pistons win the NBA championship?
How would the math work out to giving every worker of the auto industry – let’s just say even those who work in the surrounding restaurants, hotels, stores etc… – an equal piece of the $15 or $25 billion or whatever we are giving away nowadays – what would this come out to? Just curious b/c I bet that is a lot of relocation/job retraining money esp since we are delaying the inevitable. PS Union reps don’t factor in since they can be a leach/bottom feeder somewhere else.
Well, there’s the key, Mike, to revealing that the real reason we’re dong this isn’t the workers. The real reason isn’t the car companies. It isn’t even saving Detroit, per se’. It’s all about saving the Unions.
Invading Detroit is not necessary, all the people there have to do is stop voting for Democrats if they want to no longer resemble a Third World country.
James you said,
Fair point but government the CAFE standards were a substantial root cause of the US car companies financial problems.
That needs to get much more attention especially since we are getting ready to apply a bunch more government to fix a problem that government caused in the first place.
Detroit’s Other Legacy Burden
If there were any truth to that statement, then the foreign companies who build and sell cars in the US would have the same financial problems. The fact that they don’t means this is not the root cause.
So you’re saying that if they weren’t unionized, Congress would be more than happy to let the US automobile industry collapse on their watch? Stop trying to cram your bogey men into every crisis that comes along.
And blocking the bailout is not all about killing the unions?
Um… no. They’d not need the bailout sans the unions.
It had better be, if you want to save the companies.
Bit – the realist in me thinks you are right – we are just stalling the inevitable or stalling until an even bigger bailout is necessary.
The dreamer wants to believe that we are truly saving the auto industry but more and more the evidence proves this is not possible.
Michael, you said
Which means you have not been paying attention to the product lines of the foreign and domestic companies and the massive differences between them.
The foreign companies excelled in producing high quality, smaller, fuel efficient vehicles. So the CAFE standards had no impact on them because their products were already CAFE compliant.
SUVs and light trucks were cash cows for the US car companies and were their most profitable product lines.
Unfortunately for the car companies (and their union workers) the CAFE standards forced them to make smaller, more fuel efficient cars. Cars that they had to heavily discount and made little if any profit on. Furthermore, making these cars consumed a massive amount of resources that would have been better used elsewhere.
Making these cars presented other challenges to Detroit.
1. These were car types that consumers preferred to buy from the foreign companies.
2. It forced Detroit to compete head to head against foreign companies who had a much better product offerings in this class of car.
3. Because of factors 1 and 2 Detroit had to discount cars in this class in order to sell them.
Again from the link I provided.
Detroit’s Other Legacy Burden
The government bailout is throwing government money at a problem the government played a substantial role in causing.
You do realize that your arguments are completely incoherent, right?
So the CAFE isn’t the root cause of the US automaker’s financial problems, it’s their inflexibility and crappy cars that did it.
And yet as you already mentioned, the foreign auto makers are making money on exactly that kind of car. So the problem isn’t that GM is having to make fuel efficient cars, the problem is that GM can’t figure out how to sell fuel efficient cars, while Toyota and Honda can.
That’s like saying if a baby food company can’t make money selling arsenic-free strained carrots, the government is causing them a problem by limiting the level of arsenic they can put in food. If GM can’t sell CAFE compliant cars at a profit, the problem is not in CAFE.
And people obviously want to buy Corollas and Civics, so I don’t buy the line about Ford.
Actually, I know the opposite. THe unions are at least half the cause of the current financial problems the carmakers find themselves in.
Because of the reasonable labor costs.
Again…. union and labor costs.
Until the unions are out of the picture, there is no point in throwing money at this.
Your lengthy arm waving can’t obscure the facts.
1. Detroit’s most profitable product lines were trucks and SUVs
2. CAFE standards forced them to manufacture smaller cars.
A. Which forced the US companies to compete head to head with the foreign companies in a niche that the foreign companies completely dominated in terms of quality and consumer preference.
3. This had substantial negative impact on the US companies profitability. The negative impact on their balance sheet made it much more difficult to survive the current downturn.
4. CAFE standards are one of the primary drivers of the current financial problems of the US car companies.
Detroit’s Other Legacy Burden
But that wasn’t your argument, Bithead, your argument was that the Unions were at least half the reason for the bailout the congress is proposing.
But then you’d have to ignore the fact that even at the same price point, people prefer foreign cars to domestic ones.
Even when the unions are out of the picture (because eventually the will have to be), there is no point in throwing money at this.
If you post that quote a few more times, maybe it will magically convince me. But I doubt it.
CAFE set a minimum average fuel efficiency for any company that builds or sells cars in the US. Foreign manufacturers decided to improve their across the board efficiency to meet CAFE. Domestic manufacturers decided to introduce extremely fuel efficient cars to counter-balanced their extremely inefficient vehicles, rather than simply improving the fuel efficiency of the vehicles they knew they could sell. I have a hard time feeling sorry for them.
You are not persuadable but you do provide lots of teachable moments. The fact that you are posting gibberish like
Show you are not paying attention and not responsive to fact based arguments.
You can choose to ignore the negative financial impact CAFE has had on Detroit but other people who are actually paying attention probably won’t.
Detroit’s Other Legacy Burden
The resources used to make those two unwanted cars could have been put too much better use and Detroit would be in much better financial condition.
Folks with a little common sense realize that.
Your statement below makes me suspect that you have little if any knowledge of engineering, manufacturing, business, or marketing.
Yet in spite of all that ignorance folks like you feel perfectly entitled to try and run the car companies.
No the foreign car companies already dominated that niche. They used their dominance of that niche to swallow large portions of the US car companies market share during the oil price shock of the 1970s.
Those extremely fuel inefficient cars were extremely popular with consumers and extremely profitable for the car domestic car makers. If they had been allowed to work in that niche they would have been better able to respond to the current market conditions.
I bolded that statement to emphasize just how ignorant you are.
Do you not realize that increasing fuel efficiency is not a matter of waving a magic wand and making it happen? Do you not think that if it was technically feasible that Detroit would have done it?
The unfortunate fact is that you start at Carnot cycle efficiency and go downhill from that point. It is simply not possible for the big vehicles that US consumers wanted to attain the fuel efficiency CAFE mandated.
Nice combination of ignorance and arrogance you have going.
But by all means keep serving up the teachable moments.
Let’s face it, not everybody works in a cubicle like on “office space”. A smugmobile will not carry a welder or tow a backhoe. When corporate average fuel economy was expanded to include 1 ton trucks that put an extra burden on domestic manufacturers who build the best and most popular full-sized trucks.
An F-350,with an average fuel economy of 14-17MPG,is every bit as fuel efficient as a four cylinder economy car getting 28MPG, maybe better.
They certainly are not crappy vehicles, but it takes a lot of small car sales to bring the CAFE back from the sale of one F-350.
BTW, last quarter sales for Honda and Toyota were down more than Ford sales.
The headline brings to mind the movie “Canadian Bacon” which , though not exactly the same, had a similar theme. It is a “must see”!
Specifically who blocked the bailout?. Was it the repubs or was it the dems?. As I see it, as the vote was taken, the Dems had the votes but 5 or 6 either voted against it or didn’t vote…and the top “didn’t vote” was on midst Harry Reid. So who blocked it???
AAAAAnd if Blago didn’t get popped selling that Illinois set would there not in all likelyhood been one more “yeah”???.
No doubt that GM has a P.R. issue against them. What was built in the 80’s is killin’ them now. But, that was then, this is now. They sold as many vehicles as Tayota last year, they have more hybrids than anybody else, they have more vehicles that get 30+ mpg than anyone else, the don’t get the tax breaks that the foreign/southerners get and if you notice, sales are down across the board. Honda just all but pulled out of racing and I expect the rest to do the same. Quality is on par if not better than the foreign manufactures…hell, they give 100,000 mile warranties.
As for trucks and SUV’s, they built a lot of them and sold a lot of them. They met demand. Do you think a $50k hybrid or pluggin is going to sell now???????????. Even at the peak of the gas prices, you can buy a LOT of gas for $50k.
There are a lot of legacy retirement costs/labor costs that the foreign automakers don’t have. Until we want to lower our standard of living to meet them, it is what it is but it’s not any one thing. Personally, I don’t get lowering our middle class standard of living while giving the foreign automakers all the breaks.
And for the record I am from Michigan but have no ties to automobile manufacturing.
I agree, but the problem is that we have lawyers and accountants driving their F-350 to the office every day, not hauling a backhoe. If they had been left as work-class vehicles they probably wouldn’t have been included in CAFE.
Yes, but if this were just a last quarter problem, then GM could easily weather the storm. GM has been hemorrhaging money for years.
It was most Republicans and a hand full of Democrats. But you already knew that, so what’s your spin?
So…. Who here complains when the Fed gov’t sets a minimum wage, but thinks it is perfectly OK when the Fed gov’t (as represented by a few southern Senators) sets a MAXIMUM wage?
Your hypocrisy makes me want to puke. (unfortunately, I have a strong stomach)
Works both ways. After all, why on earth would you need a bailout without fiscal issues?
Won’t caryy a camper, either, along with four people and all their stuff.
And why does that concern you?
Are you going to pay for the added vehicle to save a efw gallons of fuel? Are you going to pay for the insurance on my second vehicle so I can leave the truck home? I ahve need of the truck several times a year, and it serves my purposes well enough outside those times.
What business of that is yours?
No, I wouldn’t.
The quality issues are also being driven by labor costs. To meet the same price points they have to build lesser quality cars than other makers can afford to build. Reason? Union imposed labor costs and unfunded government mandates.
But you’re missing a connection between your two arguments, even though you’re trying to use one to prop up the other. Even if I conceded that Unions were the primary cause of the need for GM’s bailout, that doesn’t automatically translate into Unions being the primary reason for the support of GM’s bailout.
Most family sedans can do that, for a modestly sized camper. That’s how my parents did it when I was a kid.
I’m not saying you shouldn’t use it for every day driving, I’m just saying that if you’re going to do that, don’t complain when it’s subjected to the same regulations as my Taurus.
So we’re back to the argument that their cars don’t sell because they suck compared to their foreign competition. If you want to claim that it’s because of the cost of Union labor, I won’t argue against you. But don’t argue that people don’t want small fuel efficient cars, just because GM can’t make money off their small fuel efficient cars.
So, explain to us all how it is that the F150 is the best selling vehicle in the world, if we all suppsoedly want to buy rice burners.
Thing is, of course, when you do that, the truck won’t exist, because so regulated they won’t fufill the need. ‘course, you knew that, right?
The F150 isn’t the best selling vehicle in the world, the Corolla is. In fact, the entire F-series, taken as a whole, still comes in second to the Corolla.
Are you saying that if the F150 was subject to CAFE averages, it wouldn’t exist?