Friday, December 5, 2008

Bailing out Detroit

Yesterday, I was all in favor of bailing out the car industry because 1) I am worried about Detroit and 2) I am old and sentimental.
I should not have listened to the debate today; I changed my mind. I am so naive even in my advanced years that I thought they would come with a plan. They did not: they came with justifications for their need of money. With a few billions more, they cant even innovate, they are going to produce the same misunderstood cars and promote them through the same crooky advertisers.
I really thought yesterday, and that tells you how stupid I am, that they would come back and say stuff like:

- look, the average car price has been 40% of the median American salary every year since 1990: we are going to change that. Refrigerators and TV prices went down, we should do the same.
- We realize that hybrid cars are too expensive for now, we are going to propose a totally electric subcompact at a very low price and get into the low car rental with our unsold big cars. We are even going to offer a 10-days free rent of a big car to anybody who buys a small one. Most people buy bigger cars just to visit their mother once a year: let them do that for free.
- With all the battle for more electronics in everybody's car, we have forgotten that there is a market for cheap cars. We are going to look back at the Bug and the 2CV Citroen and produce an elegant go anywhere, cheap, robust little car with low gas consumption and low price for parts.
- We want to invest in a woman's car with stuff like a place for driving shoes.
- We are sick and tired of watching people take a buggy at the grocery store, fill it up, get everything out to pay, put everything back in, go to the car, put everything in the car and go to the house and take everything out again.From now on we produce our cars with a sliding buggy that stays upright, with a mechanism like ambulance beds. Furthermore, we are going to buy the patent to read the prices of the produces you buy directly in the buggy without putting them on a counter.

You see? That is a plan. Maybe not the best, but it is a plan.

Not only I am dangerously naive, I am also dangerously disappointed: let them die. Cut them in chunks and let a new generation of CEOs deal with each chunk.

With 10 billion dollars, you can pay and train 200,000 people for one year. Get 10 billions in reserve for pension plans(but it is not enough), 5 billions as a stimulus to small, bolder car makers. Who needs the old fusspots?

We need a car to love.
PS They are getting some money, thanks congress for that, but I still hope they will make better cars.


Anonymous said...

I'm glad you came to that conclusion since the taxpayers will be bailing out those incompetent, arrogant, overpaid idiots. The unions can take some of the blame. The minute you pay someone well over $100 an hour to secure a bolt on an assembly line, you loose your option to be competitive.

Anonymous said...

Well, why not take the dollars and cents completely out of the picture?

I think about the economy something like this: How many hours must the average man work today to earn a loaf of bread? How long to work to earn a hotel stay for 2 adults? How long to earn a washing machine? How long to earn a modest house? Now, compare those hour numbers with the same hours from the 1940s, 1960's, etcetera (and be fair, don't compare 1600 square feet of todays common house with 600 square feet of 1940s starter homes.... you get the picture).

This reasoning partly helps show where manufacturing efficiencies and materials refinements have benefited the consumer.

I do have to agree with anonymous, above, about the labor rates for auto workers. I've worked in a highly technical field, I was highly regarded for my skills, yet never broke $40,000 in a single years income, and that during the years when that technology was at its highest demand (it is now mostly offshore). Early in my career, I learned that just barely outside of my commute range, a GM plant worker was earning 10 times minimum wage for hanging a door on a Buick, with a robot assisting him/her all the while. That said, I wasn't earning 1/4th that much in Electronics Development Engineering, yet I had to repair my own vehicles because mechanics earned as much as the GM factory worker earned.

So, yeah, a few thousand overpriced workers aren't the focus of my concerns when my whole trade went to the lowest bidder. I now earn 2/3rds as much as I used to, and I had to get retrained into a medical field in order to get that much, just so I can ensure that I'll have a personal pension when I retire in 15 years.