Saturday, December 13, 2008

I am puzzled


Now, I don't particularly support any of the bailouts goin' on, especially in their current form(s) - consensus seems to be that the $330B spent so far on the TARP bailout is largely cash that has been flushed down the proverbial toilet. But I am very puzzled that the auto industry bailout (which I don't support in its current form either) is being blocked by a handful of politicians with non-union foreign car manufacturers (and, undoubtedly, donators) in their states who are trying to use the auto bailout to bust the UAW - this after approving a mind-boggling $700B for a bank-industry bailout where some companies that have taken bailout money are paying bonuses to traders and executives, some of whom were instrumental in causing the crisis that lead to the bailout, in six and seven figure amounts; not to mention the money from the AIG bailout that seems to have gone to giant, lavish parties. Why the disconnect, fellas? If this is a stand based on your principles, we're all in big trouble.

Labor costs are certainly an issue, and the UAW has made significant concessions to try to help keep US automakers alive, but the much, much larger issue is that Detroit has been losing market share for decades because people, including myself, don't want to buy their products (see the mind-blowingly awful '88 Dodge Aires K Wagon featured above). Do we have to bail out the big three? I don't know, but those who would make this debate about union-busting are completely ignoring the actual issue, which is a decades-long record of poor, short-sighted management. When you're underpricing your cars by $2500 (average) against their Japanese competition (according to MIT's International Motor Vehicle Program, which studies such things) and you still can't stop losing market share, the core of the problem probably isn't labor costs.

4 Comments:

Blogger Micgar said...

I agree-the GOP is trying (once again) to blame our failing economy on the poor or the lower class in our country. Yes, uh huh, decent wages that have been hard fought for are the cause of the Big 3's problems. Meanwhile all the Repub pols in the South are making backroom deals with foreign automakers to come to their states and have low-paying, poorly benefited jobs. It works out perfectly for them, see?

6:46 PM  
Blogger Stew Magoo said...

Idiocy above notwithstanding I agree with you John (again, holy crap) that the entire problem isn't the UAW. It's a commitment to crappy, same as it ever was gas powered autos that, basically suck.

Yet you can't argue that when the "hard fought" wages are twice what foreign manufacturers are paying; something is wrong.

I'd love to buy an American car. But American cars don't appeal to me one bit. And I'm really not interested in helping perpetuate a failed business model under the guise of patriotism.

Don't underestimate the free market. When they stop sucking the customers will come back.

7:02 PM  
Blogger Micgar said...

Thanks for your input, Milton. The "free market" you speak of got us into this mess in the first place.

1:29 AM  
Blogger Stew Magoo said...

zzzz... How many previous bailouts of the automakers, their crappy cars and wonderful management techniques have there been?

6:11 AM  

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