Saturday, November 22, 2008


Yesterday's post was pretty incoherent, mostly because I was just tired. I shouldn't blog when I'm tired.

I'm still tired, but I'm going to try anyway.

During my podcast listening today, there has been a lot of discussion about the potential bailout of the auto companies.

This kind of aggravates me. These are the same companies that opposed seat belts and emission laws and fuel efficiency rules and air bags and building smaller cars, and now they come crying to the government for help? On private jets?

Similar to the financial bailout, it feels like this one is inevitable-literally millions of jobs are at stake, in not only the auto companies but also the suppliers and other associated companies. But it also feels like they deeply do not deserve it.


  1. I watched Michael Moore talk about it on Larry King last night.

    One reason they usually don't build smaller cars is because of what the customers need. That's the reason they have sold so many SUV's.... which they were able to make due to a loophole in CAFE after CAFE forced them to make too many tiny flimsy unsafe "regular cars".

    I am slowly working on a blog post about all of this. The perks and the overpay of the CEOs are part of the problem. The line workers being paid $73 an hour on average for a job that is really worth a lot less is another part of the problem. An even bigger problem is that American cars are still, overall, junk compared to Japanese cars.

  2. I dont think customers need SUVs. I have two, and I probably don't need them. But US auto companies made them because the tax laws favored them and because the CAFE standards allowed them to.

    CEO pay is definitely part of the problem- but I don't have a problem with line workers earning a decent wage. These companies are grossly mismanaged, and the CEOs who continually missed the boat on every innovation that came down the pike should be summarily dismissed.

    I don't think American cars are that much worse than Japanese cars anymore-but the problem is, people think they are, so they may as well be.

    The elephant in the room here is health care, though. All three CEOs are on record as favoring national health care-it is one of the major stumbling blocks keeping them from being truly competitive. It sends their costs through the roof, and adds nothing to the car.

  3. Different customers need different things. Some need SUV's, some do not. You are right about the CAFE loophole. CAFE prevented the companies from building the cars the customers needed, and the loophole let them make these cars... as SUVs.

    "but I don't have a problem with line workers earning a decent wage."

    If the company is "on the ropes", and the wage is excessive (much more than decent, way above market value), then it is time to look at it along with the other problems. Typically, line-worker overpay adds up to a lot more than top executive overpay.

    "These companies are grossly mismanaged,"

    As Moore said, the line workers aren't the ones who design the cars. The top management saw this coming... back in the 1970s.

    "I don't think American cars are that much worse than Japanese cars anymore"

    Overall, they still fall apart a lot faster. I know this from research, from anecdotes, and now from experience. This is not just a perception, it's reality. Toyota, Honda, and (last time I checked) Subaru have for ages eaten GM, Ford, and Chrysler for lunch in this area, and they do even now. The gap is narrowing, but it has been narrowing for many years now. But during this time, lowly Hyundai has caught up with the American companies and it too is starting to pull ahead.

    "All three CEOs are on record as favoring national health care-it is one of the major stumbling blocks keeping them from being truly competitive"

    Of course. The companies agreed to pay health care costs. And now they want to shirk it and dump their obligation on the taxpayers. They'd get the Federal government to pay the auto worker's wages if they could get away with it. It's a type of bailout, really.

  4. Well, the companies agreeing to pay health care costs was somewhat akin to Medicare and Medicaid-there was a genuine fear of a Socialist revolution, and the moneyed powers couldn't have that. So they throw a bone to working folks.

    Now that the bone has grown to an enormous, snarling dog, we all have to cope with the consequences.

    It's generational theft, really-I have been throwing money into a rathole for the last twenty plus years, and I firmly believe I will never, ever see a dime of benefits from Medicare or Social Security.

    It makes me want to go back to bed.

    By the way, let me just remark that I am pleased as punch that you choose to read and comment here. You are intelligent, and while I don't agree with you, it is a pleasure to read your words here.

  5. Well, thank you! Same goes for you.

    I too have my doubts if Social Security will be there when I am in my 60s.

    What we are looking at is a train wreck with Social Security. One that will happen a few decades down the track. But every time someone suggests the slightest change, they get demagogued to death. So the train wreck looks inevitable, still.


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