American Leyland Birthwatch 5: Plans, Trains and Automobiles

Edward Niedermeyer
by Edward Niedermeyer

The New York Times has an interesting piece today comparing automotive rescue plans to earlier government intervention in the railroads. As apt a comparison as it might be, the piece ultimately advocates exploring an option for the auto rescue based on Conrail, the government-owned rail holding company created in 1976. If the American Leyland model worked for trains it might just work for autos, right? “The ideological debate already in progress,” says Wharton prof Peter Cappelli, “is whether government should actually direct the auto companies, stepping into management, or passively give them more loans, and then get out of the way.” Hows that for a choice?

Since the two options have been chosen, the Conrail experience shows how the former option could work. After all, congressional activism in railroad restructuring created Conrail out of several failing railroads in 1976, cut its employment in half and returned it to profitability by 1981. Conrail was then taken private and persists to this day as CSX, stubbornly preventing Acura from selling its Civic rebadge in the US.

Success? Possibly. But the infrastructure-heavy nature of the railroad business makes it far more similar to traditionally-regulated businesses like energy and landline telecom than durable goods manufacturing. Competition is far more vibrant in the auto industry than in train transport, meaning that rationalization or “right sizing” alone can “fix” railways but for automakers the right business structure is only half the battle.

Actually building products that consumers respect and desire is something that government can’t conjure up with either blank checks or active nationalization. But since those are apparently the only options on the table, it’s time to flip a coin.

Edward Niedermeyer
Edward Niedermeyer

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  • Anonymous Anonymous on Mar 16, 2009

    The USA as it was is officially finished. If you like Peter Schiff and Jim Rogers you will enjoy Marc Faber (Dr. Doom) http://www.youtube.com/user/MarcFaberChannel

  • Robert Schwartz Robert Schwartz on Mar 16, 2009

    "I lived in Tokyo for several years, and learned some lessons about infrastructure and real estate from that experience." You forgot the part about firebombing the place so that you can start over with a blank slate.

  • CoastieLenn No idea why, but nothing about a 4Runner excites me post-2004. To me, they're peak "try-hard", even above the Wrangler and Gladiator.
  • AZFelix A well earned anniversary.Can they also attend to the Mach-E?
  • Jalop1991 The intermediate shaft and right front driveshaft may not be fully engaged due to suspected improper assembly by the supplier. Over time, partial engagement can cause damage to the intermediate shaft splines. Damaged shaft splines may result in unintended vehicle movement while in Park if the parking brake is not engagedGee, my Chrysler van automatically engages the parking brake when we put it in Park. Do you mean to tell me that the idjits at Kia, and the idjit buyers, couldn't figure out wanting this in THEIR MOST EXPENSIVE VEHICLE????
  • Dukeisduke I've been waiting to see if they were going to do something special for the 60th Anniversary. I was four years old when the Mustang was introduced. I can remember that one of our neighbors bought a '65 coupe (they were all titled as '65 models, even the '64-1/2 cars), and it's the first one I can remember seeing. In the '90s I knew an older gentleman that owned a '64-1/2 model coupe with the 260 V8.
  • SCE to AUX "...the complete Mustang model lineup to peruse"Will the fake Mustang show up, too?
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