Spot on
December 11th, 2008 at 11:43 am by David Farrar
Hat Tip: Kiwi Pundit.
I see no reason for them to be bailed out. There are many other car companies. If they collapse, that will provide opportunities for new companies to emerge.
Tags: Humour, United States
December 11th, 2008 at 11:50 am
No! Not the free market! We cannot allow it! Quickly, introduce a tax or ban something! I DON;T CARE WHAT YOU DO, YOU IMBECILES, JUST DO SOMETHING!!!
[Sorry, had a Cullen moment there]
Vote:December 11th, 2008 at 11:50 am
Are there really that many other car companies? If the big three collapse, there’ll be 3 million Americans left jobless, and that’s just America. There’d be a flow-on to other manufacturing plants around the world, and on top of that, local brands like Opel/Holden would be left without access to engines and components. If the American autoworkers unions will agree to help, and the big three reduce their retardly huge number of models on offer, they could get through this quite easily. The biggest problems are the unions and their own pig-headedness.
Vote:December 11th, 2008 at 11:57 am
The unions are a large part to blame. The new car companies would presumably hire staff on more sane terms.
Vote:December 11th, 2008 at 12:00 pm
Good one, DPF, good on ya for posting that.
ThinkBig; consider this.
How much money did the Pommie government spend propping up British Leyland/Rover over a 30 year period? Did they “save” it?
Guess what? More cars are made in Pommie-land today, than in the 1970′s, when the gummint was frantically pouring taxpayers money down a black hole to “keep the industry going and save jobs”.
GM and Ford and Chrysler should either sell bits of their businesses off to car manufacturers who can run them viably after a restructure, or they should go bankrupt and a statutory manager can do it for them.
You are quite right about the Unions and their pig-headedness. This is called “killing the goose that lays the golden eggs”. The highest-paid industrial workers in the world, courtesy of the American Taxpayer? This isn’t political economy, this is a shakedown, this is priveledge, this is gouging, this is a racket.
Vote:December 11th, 2008 at 12:01 pm
“there’ll be 3 million Americans left jobless,”
Idiocy has consequences.
Vote:December 11th, 2008 at 12:07 pm
Unemployment is an inevitable aspect of capitalism’s business cycles. The bailout is the equivalent of feeding an animal too short-sighted to feed itself. Sure, in the short run the animal lives, but in the long run, the species is no longer selecting for the most efficient, and the gene pool stagnates. If you want capitalism to produce efficient companies, you have to let the inefficient ones die.
If someone would just sit down and explain this to the three million Americans, I’m sure they’d never think of using democratic political influence to save their jobs at the cost of long-term industrial efficiency.
Vote:December 11th, 2008 at 12:11 pm
“Unemployment is an inevitable aspect of capitalism’s business cycles.”
This time its a result of socialism.
Vote:December 11th, 2008 at 12:17 pm
Part of the problem IMHO is the U.S. car marketers live in a hot-rod fantasy land. Instead of trying to figure out why Toyota Camrys and Honda Civics sell in huge numbers in America, and trying to copy or beat that formula, they continue building All-American whales like Chrysler 300Cs and Dodge Rams. And then they spend their energies trying to convince their customers that they owe it to themselves as Americans to be driving a big flabby V8 with a huge chrome grille. And surprise! Those that can’t afford to, don’t.
Environmentally it would be an absolute boon for the whole world if the U.S. makers and their dinosaur designs died out, leaving the American highways to be repopulated with good Japanese and European cars. But it looks like that’s not going to happen, unless the “Car Tzar” is REALLY unimpressed by what he sees over the next few months!
Vote:December 11th, 2008 at 12:24 pm
While the US political system, especially with a lame-duck (and lame-brained) President and a lame-duck Congress, always has a high capacity to do stupid things badly, I hope that the “big three” are left to fail.
Assuming that the firms file for Chapter 11 bankruptcy, the business will remain open, under the supervision of a federal judge.
What must happen is that the morons running these companies must be fired. Slow garrotting in public would be better, but that is now frowned-upon in civilised countries. They have proved over the course of decades to be incompetent. They make over-priced, inefficient, low-quality cars that their customers don’t want to buy.
Their competitors make low-priced, efficient, high-quality cars that their customers love to buy.
Whatever business plan Detroit is using, it is obviously wrong. Giving the people who designed and operated these plans any public money is a crime against humanity and common-sense.
Vote:December 11th, 2008 at 12:30 pm
I think they should be left to fail, and the pieces (eg plant, IP, workers etc) be picked up by other businesses. The bailout just sends a message to other mega businesses that they too can be exempted from the commercial prudence that is rightly demanded from the rest of us.
Edit: I agree with Ratbiter. Phew!
Vote:December 11th, 2008 at 12:56 pm
Yeah fuck the workers, shut down the industry!
Vote:December 11th, 2008 at 1:02 pm
And you know the real kicker. Well if you go to the good ole US of A especially the Mid West and the South and the industrial heartland you will find the folks say that the reason Kiwis and others dont buy their very fine automoblies are…………………..wait for it Cause our governments have high dutys and tariffs on them but dont have these on the Japanese and European car makers.
Yep thats what they think That we are all hanging out to buy Ford F150s Silverados Dodge Rams and thoise lovely other trinkets that pour outta their factories
Doesnt matter how much money the US government pours down the hole in the ground the US car makers are going to die the death of a thousand cuts.
Its 20 years too late for them. They dont have the capability or ability to design and build cars that the world wants at the price the worlds prepared to pay.
Meanwhile the Japs will just keep on keeping on growing their market share and taking over the redundant plants and labour as the Big 3 go slowly under.
Expect the Euro makers to combine over the next 3 years Either in JVs or mergers to try and stave off the Japs/Koerans and the big players in the future the Chinese.
Vote:December 11th, 2008 at 1:05 pm
Ford:
Fix Or Re-capitalize Daily?
Vote:December 11th, 2008 at 1:08 pm
Bedford = British Engineering Disaster Fixed Or Repaired Daily.
Vote:December 11th, 2008 at 1:11 pm
Every cloud has its silver lining if the disaster gets rid of bloody Holdens and Falcoons off our roads and the tossers who wank over them it will improve the world.
Vote:December 11th, 2008 at 1:20 pm
Of course it’s only the US car companies and they build useless cars. That’s why in the US, Ford (for example) has sales down 32%, Toyota’s sales are down 34%, obviously just the shitty products made by…wait, by who ? In Ford’s case the F150 line is still profitable, one of the few that is, and they’re actually increasing production of that model. It’s the rest of their line up that is a causing the pain. Ford does have good cars available from Europe or Japan, but Americans haven’t generally brought such models as Fords.
The Unions too have over recent years made significant concessions in their conditions although there is a large overhead from past agreements. The problems have been a long time coming, what distinguishes the US car companies is the extent of their indebtedness, with assets of around $60 billion, a net worth of $6 billion for, I think, GM. Thus their ability to withstand a credit crunch is very limited.
That said, I believe that the best option is Chapter 11 for all of them, because drastic changes are needed, and a bailout is probably not going to deliver. There will be job losses, and component manufacture failures etc, and sure, find ways to mitigate as much as possible, but over the longer term, some form of drastic restructuring is probably essential, and there is rarely a better time to start such things than now. But, that’s Democrat heartland, bailout it is going to be.
Vote:December 11th, 2008 at 1:23 pm
Does anyone know where this figure of three million auto workers comes from?
Figures from the US Department of Labor’s Bureau of Labor Statistics (http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&data_tool=latest_numbers&series_id=CES3133600101) suggest that total employment in motor vehicles and parts manufacturing was 827,700 in November.
I assume that includes all firms, not just the big three?
And Murray, I am certainly not suggesting that we fuck the workers and close down the US car-making industry.
The only way that all of the US: consumers, workers and bosses, owners and funders of firms, will be prosperous in the long-run is if US firms are profitable on their own merits. Propping-up one sector that is clearly failing will (a) make the rest of the economy less profitable (someone has to pay for the bail-out, and it will in part be workers in other industries that go broke because of the higher taxes their employers have to pay) and (b) simply encourage more workers to go into or remain in employment with US auto-makers that will fail eventually if they don’t radically change how they operate.
Vote:December 11th, 2008 at 1:39 pm
It would be good to see you being equally critical of the Citi Group bailout though. Since Citi got it’s US$25bn bailout they have announced a US$400m sponsorship for the NY Mets new stadium (to be named ‘Citibank Field’… should be Taxpayer Field) and also that they are sponsoring the College football Rosebowl championship.
Vote:December 11th, 2008 at 1:55 pm
George.
From memory the figure was from a recent article that appeared in the Herald, but from memory that also included dealerships and component manufacturers, so it’s a tad convoluted.
Vote:December 11th, 2008 at 1:59 pm
Audi: Accelerates Under Demonic Influence
Vote:Beetle: Battered Everywhere, Expect To Lose Engine
BMW: Big Money Waste
Citroen: Crap Interior Terrible Road-holding Owned Entirely by Nutters
Dodge: Drips Oil, Drops Grease, Everywhere
Fiat: Failure in Automotive Technology
GM: General Mistake
Retarded Engine No Acceleration Ugly Lump of Trash
SAAB: Swedish Automobile – Always Broken
December 11th, 2008 at 2:44 pm
Ahem, in London BMW = Black Man’s Wheels…
Vote:December 11th, 2008 at 3:58 pm
Yeah, dunno if I’d be gleefully whistling for the big three to collapse – there will be pretty heavy associated loses. “New car companies” don’t just spring up overnight and start pumping out thousands of vehicles and parts. But a bailout is flawed also. Unfortuanately, collapse it will have to be.
The problem is that the free market should have been left to self select a long time ago so you don’t get huge companies falling apart and destroying not only themsleves but associated industry, and even the workers financial lives.
The mentality that created these monsters is still very current and is still encouraged in commerce and universities. The players who talk about the free market don’t want the freemarket, they want the comfort and the self importance. Major culture and attitude shift required to fix this problem.
Vote:December 11th, 2008 at 5:21 pm
Andrew – Not announced, just did not cancel pre-existing agreements in light of bailout.
All – All three American car makers can and do make some desirable and competitive models. It’s just that they tend to cost too much because of excessive labor costs + there are additional financial drags from the excessive proliferation of sub-brands and models.
I favored the bankruptcy approach and I still think that a special form of bankruptcy is the only deal that’ll get past Senate.
Vote:December 11th, 2008 at 7:13 pm
THe 3m unemployed came from the “Big 3″s own lobby group, it’s a made up number.
THe “other” car companies in the US make 53% of the vehicles there with something like 50% of the work force of the “Big 3″. GM should chapter 11, Chrysler should chapter 7; Ford will probably survive anyway.
THese problems are the result of a cosy cartel of unions and management copllaberating in destroying shareholder value and they totally should be allowed to fail.
Vote:December 11th, 2008 at 9:19 pm
“I see no reason for them to be bailed out. There are many other car companies. If they collapse, that will provide opportunities for new companies to emerge.”
Actually, I’m not sure that it is as simple as that. The fact that they are car companies is irrelevant: they represent manufacturing potential. It was those ‘car companies’ that provided the basis for the industrial capacity that ultimately enabled the US to prevail in WW2. I really don’t think that it would be particualrly smart for any US politician to allow US industry to collapse, and be replaced by Asian industry.
Vote:December 11th, 2008 at 10:56 pm
KiwiGreg, strange, shareholders are the owners of the company so they are responsible for what ever management is in place.
But, I do find it amusing that the banks were bailed out and in some cases have kept on dishing out bonuses.
Strange bonus system, loss billions, get a million dollar bonus pay out.
As for the unions, bollocks, the management should have not given in to demands instead of buying peace at any cost.
Vote:December 11th, 2008 at 11:35 pm
Camryn – it remains that Citi shouldnt have proceeded with these new sponsorships in light of the bailout.
And it also remains that there should be just as much criticism of the bail out of white collar industries and groups like Citibank. Why aren’t we talking about Citi’s ‘excessive labor costs’??? I guarantee the average Citi employee was on a hell of a lot more than those involved in manufacturing for the big 3.
Why is it that ‘labor costs’ are only an issue when its low income workers involved??
Vote:December 12th, 2008 at 12:03 am
Obama’s presidency is going to go down in flames along with US industry.
It’s one problem John Key doesn’t have to worry about facing. You can’t lose industry if you don’t have it. New Zealand’s wealth is derived from agriculture. What country, the envy of the entire world.
Vote:December 12th, 2008 at 8:01 am
Well actually we USED to have a car industry – remember CKD imports. It was pretty much largely like the “Big 3″ – featherbed jobs for unionists so that consumers could pay more for cars.
Vote:December 12th, 2008 at 8:11 am
Getstaffed – You missed the best acronymn for a car name ever…..
PONTIAC = Poor Old Nigger Thinks It’s A Cadillac
Vote:December 12th, 2008 at 8:19 am
Greg
Its a small point but we used to have an assembly industry not manufacturing as such but your point is well made.
Our locally assembled vehicles only remained competitive because of huge tariffs on imports, even then cars were ridiculously expensive, in the mid 80′s a Japanese 2 litre sedan cost the same as a reasonable house in a reasonable neighborhood.
Vote:December 12th, 2008 at 8:29 am
Yeah sorry bruv. The better point is those jobs went, new jobs were created and everyone got to buy a wider range of cheaper cars. Taxing everyone through higher prices or actual taxes to provide a few with jobs is just a dumb strategy. Like “saving” GM and Chrysler. Doesn’t mean it wont happen.
Vote:December 12th, 2008 at 8:32 am
“And it also remains that there should be just as much criticism of the bail out of white collar industries and groups like Citibank. Why aren’t we talking about Citi’s ‘excessive labor costs’??? I guarantee the average Citi employee was on a hell of a lot more than those involved in manufacturing for the big 3. ”
Actually I don’t have any facts (which never stops me having an opinion) but I suspect the average GM employee does make more than the average Citi employee. Guys on the line in Detroit will be bringing down $70-$100k. Jo Teller at the local Citi branch will make half that.
Vote:December 12th, 2008 at 8:48 am
And dont forget the MASSIVE pension funds the Joe’s on the line have got thanks to the Teamsters et al (take note EPMU, y0uo need to be ‘oiganoised’)
These pension fund liabilities are one of the big reasons the motor firms are fucked.
Vote:December 12th, 2008 at 9:20 am
Awesome.
Vote:December 12th, 2008 at 9:59 am
Big Auto bailouts are a monstrosity. It is the American consumer who is sending them to the wall by choosing the products of other manufacturers. Then along come the US politicians who use the consumers own hard-earned tax money to transfer to the same manufacturers the consumer has chosen to not give their own hard earned spending money to. Ronald Reagan wouldn’t have had a bar of it.
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