Over the last year, as this unparalleled automotive sales depression has picked up steam, I have observed unprecedented vitriol directed at both Chrysler and General Motors. Here on TTAC; on Autoblog, Jalopnik, CarDomain, et al.; and in the mainstream press, the companies receiving federal aid have been criticized. I just couldn’t understand it. It’s as if the only vehicles these companies ever built were the Jeep Compass and Pontiac Aztek. Critics seem to have completely forgotten all the great cars both companies are building right now and have built over the years. At the same time, they’ve overlooked Chrysler and GM’s importance to their employees, suppliers and countless communities from coast-to-coast. “Stakeholders” who have a direct impact on as many as one-in-ten domestic jobs.
Then came the contentious debate about bailing out Chrysler and General Motors which culminated in President Obama’s address on March 30. Obama gave Chrysler thirty days fix its balance sheet and close its alliance with Fiat—or face liquidation. GM was given an additional thirty days to restructure itself or face bankruptcy. While Chrysler came within days of escaping bankruptcy, a few of its dissident bondholders balked and Chrysler was thrown into a Chapter 11 filing that many pundits felt it would it would ultimately result in liquidation. While many observers rooted for it to failure, Chrysler has emerged from bankruptcy with unprecedented speed. Congratulations.
Back in early November, in what seems like a lifetime ago, the talk in the automotive world was of a possible “merger” between GM and Chrysler. I thought that this was a bad idea and would quickly lead to the dismantling of the Auburn Hills automaker and the loss of at least 30,000 US jobs. I came out and said that there was a far better partner for Chrysler who needed small car technology that they couldn’t afford to develop on their own. That partner was Fiat, which had the obvious and complementary need to sell vehicles in the United States in its quest to become a truly global automaker.
On January 20, Chrysler announced it was in serious partnership talks with Fiat to merge their operations; a move that would help both cope with and survive in the deepening worldwide automotive sales depression. This sales implosion was not only was impacting weak regional automakers but successful global ones like BMW, Honda, and even Toyota. All were seeing sales volumes declining by 40% or more as the virus was spreading around the globe.
Then, as now, I believed that an alliance with Fiat was Chrysler’s best and probably last hope for survival and was pleased to see yesterday’s deal between Chrysler and Fiat concluded. I truly believe that it will have a positive impact on both companies and will give us, as car enthusiasts, additional choices. After all, what can possibly be bad about Alfa Romeos returning to our shores?
Meanwhile, it should be said that other nations have taken extraordinary steps to protect their home-based industries. Why shouldn’t we do the same, especially since we have provided completely open access to our market allowing them to build their export industries? For example, I have absolutely nothing against Hyundai and Kia. But what’s fair about the fact that South Korean manufacturers can sell more than 600,000 vehicles a year here in the United States, yet our manufacturers sell fewer than 10,000 units annually south of the 38th parallel?
Last year, when driving to cover the Los Angeles Auto Show, I was forced to take a detour off the freeway. I stopped at a Starbucks in the Asian enclave of Alhambra off I-10 to get my e-mail. As I pulled into the parking lot, I noticed something strange: there wasn’t a single American brand car in the lot. While there were a few BMWs and Mercedes, every single car in the lot was of Asian origin. I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders. Why don’t Americans? It’s because our market is so open that we can. In retrospect, maybe this explains why the American public—and our politicians—gives our own companies such a cold shoulder.
I hope the restructuring of General Motors is ultimately successful. The fact that some are calling for a boycott of “Government Motors” strikes me as absurd. Collectively, we as Americans will soon own 60 percent of New GM. Why would we not buy vehicles from a company we own?
[Read more of Rich Truesdell's work at automotivetraveler.com]
134 Comments on “In Defense of . . . The Chrysler and GM Bailout...”
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“Why would we not buy vehicles from a company we own?”
Because our vehicles suck, and because we are free to do whatever we like with our own money. Or at least we used to be.
People are up in arms because these bailouts go contrary to everything which makes America America: Democracy, competition, self-reliance, creative destruction, etc. It is an alarming step in the wrong direction, by a popular new leader who makes up the rules as he goes.
Why is this so hard to understand?
compare:
“we are free to do whatever we like with our own money. Or at least we used to be”
contrast:
“makes America America: self-reliance”
Hope you have a thick hide there Rich – you are about to get hammered unmercifully.
Because the bailouts should have been tied to mandatory Ch 11 from the very beginning. Because the “new GM” and Fiat/Chrysler will not save American jobs as more and more vehicles will be built in China, Korea, Brazil, etc. Because…
What’s fair about the fact that lots of Asians come to study at our universities, pay full tuition, and then go home, yet we don’t send our best and brightest to go study at South Korean universities? What’s fair about the fact that American software companies can sell millions of copies of operating systems and Starcraft in South Korea, but South Korean software companies don’t have near so much success with their Korean MMOs and online golf simulators in the US?
That’s a defense?
Listen, I didn’t ask nor do I want to be part owner of GM and Chrysler. Fair? If my brother works at a Hyundai plant here in the U.S. is he going to bailed out? Fair?
This is not about the producers of things in an economy…its about the consumers. American consumers have the right to do whatever they want. Bailouts circumvent consumer preference at the expense of everyone except those luck few “chosen” ones (UAW). It’s called freedom.
Good to see you here, Rich.
That Starbucks was in California, right? I’m not sure that buying Asian cars is an Asian-American thing so much as it’s a California thing. You might encounter a similar mix in any California parking lot.
Seriously, the Compass and the Aztek are the only negative examples of GM and Chrysler production? I propose the following ideas:
1. They were out of the top ten in product quality, except for Buick for at least 10 years. In my mind as a GM owner, their quality was bad for a lot longer than that.
2. Specifically bad moves that include:
-the Chevy Vega (two words – “oil burner”),
-the early version of the Nova,
-the endless recalls for major stuff from GM, Chrysler (and Ford)
-horrible gas mileage stats, even today, on most of their models
-the 1996 remake by GM of the stellar 3800 v-6 that actually made the powerplant much worse,
-transmission nightmares at Chrysler that nearly doomed the starship Minivan
-Lumina and Astro minivans that were butt-ugly, bad on gas, and had horrible build quality,
-as well as the Compass and the Aztek that you mentioned.
If the author thinks these are unfair stabs at history that have been corrected, talk to my friend with the Jeep unlimited that has had two transmissions, major suspension replacement, safety equipment needing replacement, all on a 2008 model.
3. All this from the same companies that didn’t have a hybrid or electric when gas prices spiked, or outright killed one (EV-1).
Nobody has changed position (less one Rick Wagoner, and one Bob Nardelli), so why should we expect there to be any change in the product from either company going forward?
I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders. Why don’t Americans?
According to this, about 1/3rd of the town population is of Chinese origin: http://cityofalhambra.org/about/demographics.html
While I wasn’t there, I am pretty confident that there wasn’t a single Chinese car in the parking lot.
If anything, that should be pretty telling that Detroit could drive a Chinese population to buy cars from Japanese companies, given the nastiness of Japan’s history in dealing with the Chinese. Unlike their counterparts in China itself, the Chinese-American population is not nearly so fond of Buicks.
(I know that Asians may appear to be a monolithic block, but you can rest assured that they are not. Not even close.)
Well thats certainly a breath of fresh air. The domestics have suffered a massive beating.Deservedly so,to some degree.
With the economy showing some signs of recovery,the governments of Canada and the U.S.had a choice. Prop up GM and Chrysler or deal with the ramifcations. The democratly elected governments made the choice. In the next election the voters can support or not support that decision.
The management at GM and Chrysler,and to some extent, the debt riddled Ford, need to take advantage of this breathing room. I can’t see the governments to continue writing checks,with no end in sight.
As a GM retiree, I only can hope that Mr Henderson has the jam to make this work. Cause Fritz you ain’t gonna get another chance.
to Ken G;
You obviously do not keep up with Global knowledge of the auto business. When you state that “if my brother worked for Hyundai, would they get a buyout?” (I know that Hyundai is not Japanese)
What do you think the Japanese government has been doing for years. They artificially set the Yen so that there products have a huge advantage in the market. Further, they tax our products so high that we cannot sell them there in a fair market. Finally, all the profits go back to Japan. Wouldn’t this be government intervention???
Read and learn before posting.
They still make optimists? Thought the last of those ran for the hills when the Dow went under 7000. I’m not going to agree with you, but I won’t get any of my pessimism on you either. Except this: I’m really tired of the “direct impact on as many as one-in-10 domestic jobs” type arguments. Seriously? Except in Michigan, the automotive industry is not that big of a player in our economy. Find independent sources for that kind of argument that aren’t funded by auto-industry special-interest lobbying groups. I’d love to read those studies, if any exist.
I really like that Mr. Farago is comfortable posting editorials contrary to the standard TTAC positions.
Often, I disagree with the TTAC editorials.
However, I see much to disagree with in Mr. Truesdell’s piece of today.
Re paragraph one:
- Product from the past shouldn’t be part of the decision making process.
- Even in the event of a conventional bankruptcy of both GM and Chrysler, not all of the jobs would be lost. Many workers would find work at Ford and other auto makers that would enjoy increased sales as a result of the bankruptcies. The people, suppliers and other stakeholders would get burned, but it’d not be as bad as predicted.
Re paragraph six:
- Just’ cause other nations are wildly protectionist, doesn’t mean that America should go off the deep end and impose heavier penalties on imports. A lack of protectionism is partially responsible for the envied America life style. Many nations protect their industries, but it’s to the detriment of their people in the form of higher prices. Question; How many Americans would want to trade their life styles for that of the average South Korean? If protectionism was the route to prosperity, then China’s 1.3 billion people would be all living the good life.
- Yep, I’m sure that part of the reason for low American auto sales in South Korea is due to tariffs, but I’d bet that even if Korea dropped all tariffs on US manufactured cars sales would still be very, very low. Can’t see hordes of South Koreans lining up to purchase duty free Dodge Calibers.
Overall, I gotta agree with Hugh Hewitt’s shouting that he’s not going to buy cars from GM or Chrysler as long as they’re owned and operated by the US Government. The US Government being so deeply involved in the auto industry is so wrong at so many levels. It’s a legitimate point to not want to reward the US Government by buying cars from a government run company. It’s fair reasoning to want to support the non-subsidized auto manufacturers. Perhaps people shouldn’t encourage the US Government to get involved in more businesses.
I agree with all the posts so far. I cant understand Rich’s line of thinking. I didnt want to “invest” in chrysler or gm. And im sure most everyone else didnt want to either. Not to mention the courts turned the bankruptcy laws upside down to GIVE the UAW majority ownership of Chrysler rather than allowing the bondholders to get in line first. Sad
Rich,
Your greatest mistake is “assuming” YOU know what’s “best” for other people’s money.
You do not. Trust me- that is one GIANT leap of faith.
Keep your hands out of my pocket, ok? Likewise, keep your hands out of my grandmother’s pocket….
It’s called THEFT! Don’t tell me this is a “loan”, ok? Stop with the lies and deceit already.
I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders.
I donno, because white people are tired of the years of excuses and the marginalizing of decades-long mistakes that led to bankruptcy?
Aztek and Compass alone: seriously? Let’s forget the years of neglect or recognition of mistakes to the K-car, Chrysler transaxles, GM box sedans from the 1980s, Diesel and aluminum block V8s from Cadillac, Piston Slapping GM trucks, Corvettes with roofs that fly off, and sub par interiors in 99% of Detroit’s offerings.
Maybe its because I am an Asian that drives American, but I feel this editorial has a serious problem in its lack of context as to why these automakers failed.
GM and Chrysler (and Ford, but they’re not getting our money yet) have been losing American buisiness because they built garbage for the better part of 3 decades. Meanwhile, those Korean manufacturers have done nothing but improve their products with every new model. Americans have the freedom to buy what they want, and most have very little tolerance for an inferior product. It’s one thing to go to WalMart and buy a $5 t-shirt that you know is going to be worn out by the end of summer, but to spend 25 or 30 thousand bucks for a midsize sedan with less than average reliability and absolutely poor build quality is inexcusable. Sure, American cars have gotten better lately, and in some cases have closed the gap between them and their foreign rivals, but it’s going to take a long time for them to win back the confidence they lost in the last 30 years. GM (and Ford, and Chrysler) more or less had a captive audience for years. Even with the popularity of the VW Beetle, the Big 3 still held a huge majority of car sales in America, and through poor quality and their cocky attidudes of “we can build anything and they’ll buy it because, hey! It’s American!” absolutely ruined it for them. I am all for supporting them if their products are good and suit my needs (currently I have a Chevy), but they can kiss my ass if they think I’m going to buy a vehicle just to support them. I’m American, and want to support this country’s economy, but it makes more sense to buy what’s best, not what’s most American.
What’s fair about using my tax dollars to prop up union-trashed private companies that have produced decades of product with spotty quality and service?
What’s fair about subverting the market’s voice by keeping factories and dealerships open as a perpetual jobs program?
What’s fair about demanding production of ‘greener’ vehicles that demonstrably do not sell and the market does not want?
What’s fair about government intervening in the affairs of a private company and firing its CEO (even if it was well-deserved)?
Although I have a neutral opinion of the auto bailout. I know GM and Chrysler have not been profitable for years but on the other hand we are saving jobs and an American industry.
The money being spent by the government is small change compared to the Trillion dollars it has spent in Iraq and the 700 Billion TARP bailout to purchase bad assets in financial institutions.
Rich, I for one am glad that you spoke your mind. It’s been something that I have been thinking for quite a while. Except, my writing skills leave a lot to be desired.
I continue to be surprised about the harshness of what is said in this forum on a regular basis. “Let them fail, etc.”. These are real people and they have an impact on everyone of us, whether it be the stock trader on Wall St. or the local store owner in Lordstown, OH.
In the end, no one may like it but government at the city, state, and federal level subsidize business at many levels. Farmers, professional sports team, and yes defense contractors are all subsidized at some level and have been for years.
GM and Chysler are an easy target for everyone to complain about. Personally, I am tired of paying farmers to not grow corn.
Richard Truesdell: Critics seem to have completely forgotten all the great cars both companies are building right now and have built over the years.
Chrysler isn’t building a single vehicle right now that could be characterized as “great.” At the most, it builds a few that are good – 300C, Charger and Challenger.
The “great” GM vehicles in production are the Corvette, Silverado, G8 and Tahoe/Suburban. Not enough to keep it in business.
And while I like GM and Chrysler vehicles from the 1950s and 1960s as much as anyone else, they have no bearing on what I might buy TODAY.
Yes Jimmy, I do have a thick hide.
On the issue of South Korean, our products are in essence excluded because there’s no reciprocity in the openness of each market. There’s is essentially closed to our products, ours is open to theirs. It’s that simple and this issue has been a major contributing factor, possibly as much as the issues of the UAW wages and legacy costs, to the decline of the US auto industry. For that I blame, and have blamed, our legislators in Washington who allowed it to happen in the first place and continue to this very day.
Current third party measurements show that many American cars are competitive with their European and Asian counterparts and in some instances are class leaders. The sad fact of the matter is that in the aftermath of the first OPEC Oil Embargo, US companies responded poorly and slowly to the changing dynamics in the marketplace. In 1976 the first generation Honda Accord was the perfect car for the time and Honda drove itself right through that marketing opportunity and has not looked back.
Many people don’t realize that one third of US new car buyers have never set foot in a domestic brand showroom; that a generation of car buyers is now lost to GM, Ford, and Chrysler. No matter how good a car the new Malibu is compared to an Accord, Camry, or even an Altima, it’s not on the short list of 33% of potential buyers. That’s a gap that’s hard to overcome. (I think that David is better qualified than I to speak on this issue.)
(Don, reports like J D Power — not that I agree with them — don’t seem to back up your assertion that our cars, as a whole, suck as you say. Rather that today, all cars, no matter where they are produced, have fewer problems and last longer than their counterparts from just 10 years ago.)
I’ve owned foreign brand cars and domestic brand cars so I have no ax to grind. But I do believe, as judged by the ill-informed comments I’ve read here on TTAC and other blogs, that I find it hard to believe that they are Americans saying them. I find them to be…short-sighted.
We are free to buy whatever cars we want, that is what makes our country great. But I also feel that the playing field is unfairly tilted against our own manufacturers. I just don’t see the same level of scrutiny directed towards lets say Toyota, on their product missteps. A good example are the rust issues that plague Tacoma pickups. If that rust problem was found in a Dodge Dakota, it would be front page news.
Then there’s the issue of productivity; love their vehicles or hate them, Chrysler tied Toyota in the 2008 Harbour report. Now shed of debt, and with a more competitive UAW contract now in place, Chrysler will be in a position to put more content back into their vehicles. I truly believe the era of Fisher-Price shiny, hard plastic interiors are a thing of the past at Chrysler. What evidence? Look at the interior of the new Ram. It’s not only class competitive, in many ways it leads the category in many respects.
Let the flames begin. Debate on this topic is generally, a good thing.
Wait a minute..The President didn’t fire Rick W.
It was a stipulation attached to the loan.The bank dosn’t force me to have fire insurance,they just won’t grant me a morgage,unless I do.
I agree it’s nice to see well written pieces on subjects that I don’t agree with, because it is educational to read what other people think.
It can lead to one changing one’s mind, if one has an open mind which is not set in concrete (sorry for the mixed metaphors).
Or it can lead to one saying to oneself, well here is why I disagree, which may make a person believe even more what they thought they believed in the first place.
Carm, as for “letting them fail” – the reason so many of us understand this concept is because this was the construct on which our entire American civilization was literally built.
Take risks, and if you fail, you pay the consequences. Take risks, and if you succeed, you reap the benefits.
Not take risks and you’ll be bailed out by friends in high places with money they’ve stolen via taxation (that is a morale risk), then when things go well keep the profits and never pay the debts back.
By the way, Rich? South Korea and the US have recently signed an automotive free trade pact. It was something like 6-8 months ago.
Or hadn’t you heard?
I’m not being rude – just factual.
Like American cars in Japan, American vehicles may not be well suited to South Korea. But American car companies will get to see.
Of course, what American cars will they try to sell there? “American” cars built in South Korea, Canada, or Mexico?
I walked into the Starbucks thinking to myself that Asian buyers, consciously or unconsciously, appear to buy homogeneously, supporting their nation’s car builders. Why don’t Americans?
We tried to. Who here remembers the 70s? 80s? 90s? Lots and lots of people bought Vegas and lots more bought Pintos because they were american. Lots of people bought Chevettes. Lots of people bought Omnis and Horizons and Escorts and Citations and Phoenixs and Omegas and Monzas and Skyhawks and Cavaliers and Neons. But for our troubles we had engine failures, transmission failures, cheap trim, electrical issues, horrible resale and one relatively minor $200 repair after another.
I still recall walking through a Toyota lot in the late 70s with a friend who was a body and paint guy. We started paying attention to the paint finishes on those cars. Every single inexpensive Corolla had a paint job and body assembly that would put most Chryslers, Buicks and Mercurys that cost twice as much to shame. Even the cheap ones were built with care.
Believe it or not, I am still sympathetic to the US companies. I want to like their products. But look at those that are 10 years old. Other than Panthers, Old Cherokees and pickups, what can you buy that will take care of you without costing you a fortune in repairs?
I didn’t ask nor do I want to be part owner of GM and Chrysler.
Government often does things counter to someone’s wishes. It’s called democracy. Might wish to get used to it.
Rich- you don’t seem able able to grasp that the domestics are not considered by a 1/3 of all car buyers becuase these buyers have been burned by them at some point in time.
Would you and buy a whirlpool dishwasher (even if it was American) if your last one was a piece of garbage? A lot of Americans have been burned by owning a crappy GM or Chysler vehicle in the past. There are too many other good choices in the market place that don’t have the negative stigma.
How many positive ownership experiences do you think people driving GM and Chrysler cars had in the 70’s and 80’s?
Carm, as for “letting them fail” – the reason so many of us understand this concept is because this was the construct on which our entire American civilization was literally built.
Take risks, and if you fail, you pay the consequences. Take risks, and if you succeed, you reap the benefits.
menno: I understand your point of view. However, the same approach should have been taken with all of the banks and AIG. My point is not to single out GM and Chrysler when there are a slew of companies in the same situation lately. AIG and Fannie/Freddy to name a few. The cow has left the barn and now we want to close the door? Sorry to late.
Finally, what I still cannot understand, is that if a bank is to big to fail, than isn’t it too big period? We broke up ma Bell, but yet these banks still exist?
To JPCavanagh: A Ford Ranger!
That said, every other single “domestic” vehicle I have owned in the last 35 years was an unmitigated piece of crap. Fool me once, shame on you. Fool me twice, shame on….you. Fool me nearly a dozen times, and I give up on ya. Sorry. No amount of heart tugging will carry the day further.
Even in the US justice system, you only receive a limited number of passes. At some point, prior performance really IS an indicator of future performance. Neither Chrysler nor GM have anything presently or in the pipeline that interest me. Both are bankrupt in more ways than one. Americans are not buying 17 million new vehicles on E-Z-Credit anymore, nor will they be anytime soon. Economic repressions always separate the chaff out from the wheat. Time to move on.
The US government should have let the market and existing legal precedent work this one out.
Rich: Nice tilting at the proverbial windmill of the mindset here at TTAC. And kudos to what was said above about Mr Farago allowing an editorial here that pretty much goes against most of what you read on the front page here and amongst the more vocal commentariat.
Union-trashed private company? That’s a nice one-dimensional view of a process that had plenty of active input from a lot of conservative white collar types ranging from the guys designing pieces of crap to the executives making decades of crappy decisions.
“what can possibly be bad about Alfa Romeos returning to our shores?”
Ok, what’s wrong is that I’m directly paying for it…even if I buy one or not.
Your arguments are all short term in nature and long term detrimental to what the bailouts supposedly intended – that is, save jobs, industry, etc…
When you remove the (or soften) the impact and likelihood of failure, you remove all incentive to actually fix the underlying problem.
Isnt a healthy domestic automotive industry worth ALOT more then a NO domestic automotive industry?
Our 60% investment in GM is in preferred stock correct? Whats the value of each share when we bought it? I assume really low, less then $2? When GM comes out of this healthy and shows that its strong and that stock rises its not going to take much at all to get a huge return on investment. Are all you going to bitch and moan and turn down the money?
My job relies heavily on the auto industry. I am a graphic artist at a shop that prints direct mail for the dealerships. Probably a job that no one really thinks about, but its here. As well as about 30 others job with in the company. If GM and Chrysler went under this company would not have survived. I can believe that 1:10 jobs is tied to the auto industry.
You gotta spend money to make money. Doing nothing and watching a huge part of America fall apart would have been much worse.
Rich, There is a reason why American cars don’t sell in certain markets: the ones that make better cars.
Toyota tried to be very helpful in selling rebadged Chevys in Japan in the eighties – epic fail!! The Japanese took one good look at the Cavaliers, and said yechh.
How well do American cars sell in Europe? No barriers there.
The problem with the “let them fail” peoples point of view is that those who made the mistakes aren’t the ones who pay the price.
Those who are/were at the root of the problem are mostly insulated from the consequences of these companies failures and in turn it’s the innocent ones left to pay the price.
You remember that saying “you don’t throw the baby out with the bathwater” same logic applies here.
I’m directly paying for it
Your taxes were raised by $71? When did that happen?
I didn’t ask nor do I want to be part owner of GM and Chrysler.
Me neither! I am a stockholder, and I have never chosen to hold any automaker. But now I am forced to do so against my wish.
long126mike responded:
Government often does things counter to someone’s wishes. It’s called democracy. Might wish to get used to it.
It was not democracy. Although a case could be made that we indirectly voted on it already in the last Presidential and Congressional elections, I don’t recall anybody outside of Congress being asked to vote on this.
By that standard, THIS is not democracy.
And no, I don’t “wish to get used to it.” I think I’m in good company, too. You see, our Founding Fathers couldn’t bear with “getting used to it (the “it” of their era, that is),” and that’s how America came to be.
Innovation and new ways of thinking often come out of dissatisfaction.
Rich Truesdell:
Not until last November did you discover that Californians were not buying American badged cars?
You could see the same thing almost anywhere outside of Detroit and certain retirement enclaves, long before 11/08. Some people need to get out more.
BTW, it is not the opinions and stories told on TTAC that drove Chrysler and GM to the ground, it was not purported trade policies with Asian rim countries, labor costs or the purchase of SAAB.
It was the quality of their products.
@menno:
as for “letting them fail” – the reason so many of us understand this concept is because this was the construct on which our entire American civilization was literally built.
Really? Where in our founding documents (Declaration of Independence, Constitution, etc.) is anything remotely similar to that kind of economic Darwinism set forth as a foundational construct of our nation?
Remember the Pilgrims? They took a big risk and most of them died for it. All of them would have if not for the generosity of the local Indians. You see, Menno, mutual assistance is unequivocally one of the founding principles of this country. In the words of Thomas Jefferson: “…we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.” I’m sure TJ wasn’t thinking about GM and Chrysler, but I’m also quite sure he wouldn’t agree with your merciless attitude.
It was not democracy. Although a case could be made that we indirectly voted on it already in the last Presidential and Congressional elections, I don’t recall anybody outside of Congress being asked to vote on this.
We are a republic which uses representative democracy. This is not a direct democracy. Our representatives do not need to consult you and every citizen for every decision they make after being elected to office.
If you want a direct democracy, you will need to start by shredding the US Constitution.
And no, I don’t “wish to get used to it.”
Fine. Tough swallowing your own words, isn’t it?
Paul Niedermeyer: How well do American cars sell in Europe? No barriers there.
GM and Ford already have subsidiaries in Europe that design and produce vehicles there for that market. Why should they compete with themselves?
And why waste time and money exporting an F-150 to Europe when it is completely unsuited to local driving conditions? Who wants to park a full-size pickup in London, or pay to fill it up at over $7 a gallon?
Rastus : I wasnt asking for sympathy at all so retract your claws there killer. All i was trying to do is make some people realize how many jobs, jobs they might not have thought about, actually do depends on the auto industry.
We print a pretty significant number of pieces each month. If our company went under our paper supplier would absolutely take a hit. As would the trucking company we use. Maybe they would have to lay-off a few employees. Our company sends so much mail to the local post office to be processed that with out us they would likely have to lay off a few people as well.
Im not asking for sympathy, just trying to get some people to open there minds to how deep the roots actually go.
Nice article, Rich. I agree with most of what you’ve said, especially in your followup :)
Totally off subject here . . . . quoting Paul Niedermeyer . . . “Toyota tried to be very helpful in selling rebadged Chevys in Japan in the eighties – epic fail!! ” reminds of last August in New Zealand seeing a familiar automotive face, a Cavalier, except, it was wearing Toyota badges!!! Talk about cognitive dissonance!
Dear ron h,
I’m perfectly aware and keep up with the global market in automotive manufacturing. You, my friend, obviously do not “keep up” with economics.
You should “read and learn” some 101 before posting. Mercantilism died 300 years ago as a economic theory.
Government intervention happens all of the time on both sides. GM and Chrysler need look no farther than their mirror (and CAFE standards and UAW) for their issues.
BTW: How exactly do the Japanese keep the Yen “artificially” low? And define “artificial” and “low”.
gslippy: What’s fair about government intervening in the affairs of a private company and firing its CEO (even if it was well-deserved)?
They weren’t forced. They didn’t have to take government money, they chose to, and that was a stipulation of the agreement. GM chose this path rather than just go bankrupt.
Mercantilism died 300 years ago as a economic theory.
Except for the nagging fact that the Japanese development model (you know, the one used by basically every successful developing country in the modern day) is neo-mercantilist.
pch101 wrote If anything, that should be pretty telling that Detroit could drive a Chinese population to buy cars from Japanese companies, given the nastiness of Japan’s history in dealing with the Chinese.
You took the words right out of my mouth. Japan has a terrible history with other Asian countries, especially China and Korea. The fact that Chinese and Korean Americans flock to Japanese cars isn’t Asian solidarity, it’s because of the overwhelming perception among car buyers (who are not nostalgic about American cars) that Japanese cars are simply better.
I’ve lived in the Seattle area most of my life and the import market penetration here is tremendous, and domestics have a very low reputation (I know this because I drive a domestic and over the years have been continually asked “why?”).
Decades of bad designs, shoddy quality, and deplorable owner relations sparked a buyer revolt. Consumers cannot be persuaded to purchase Detroit-3 junk at profitable prices when nimble competitors produce desirable, high quality, strong performers and look after customers.
Taxpayer bailouts are unlikely to save chronically incompetent zombie automakers General Motors and Chrysler in a market over supplied by topnotch manufacturers.
Sorry Rich, but you are way off base if you think that Asian’s only buy Asian brands. Stop by Orange County some time and see just how many Asians are driving BMWs, Audis, Mercedes and VWs.
If we want to play the “race” card, then you should be happy that we the white race are buying Mercedes, BMWs, Audis, Porsches, Fiats, Ferraris, Lambos, Renaults, Skodas, Vauxhalls, and VWs. Hey, they are produced by Anglos.
Maybe you should be grateful that we the buyers of the “best” products have forced the domestics to step up their game. I mean, if we all continued to buy their crap, they would not have had any incentive to make their crap better.
Where is the thanks?
Sajeev Metha
Maybe its because I am an Asian that drives American, but I feel this editorial has a serious problem in its lack of context as to why these automakers failed.
It’s the American Way Sajeev. It’s not their fault but our fault for not buying their product.