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Sunday, February 22, 2009
Steve Chapman :: Townhall.com Columnist
Detroit as the Prodigal Son
by Steve Chapman
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In the New Testament story, a man has two sons. One of them demands his inheritance, runs off and squanders it all having a wild time, and ends up penniless.

At that point, he slinks home in disgrace, assuming he will have to beg forgiveness. But his father is so thrilled to have him back that he kills a fatted calf and throws a party to celebrate the prodigal son's return.

Not a bad deal, huh? Unless you're the other son, who worked hard for his father and avoided loose women but never got the big fiesta. He felt cheated, and it's hard to blame him.

People employed by automakers other than General Motors and Chrysler would be justified in feeling the same way. Last fall, facing bankruptcy, those companies sought and received some $17 billion in federal loans intended to keep them in business. Now they are back asking for more -- $16.6 billion for GM and $5 billion for Chrysler.

That doesn't count the $7.7 billion GM wants to improve fuel economy or the $5 billion its financial arm got from the Treasury Department. Nor does it exclude the possibility that they will demand more help in the future.

And what about the automakers that have not run themselves into the ground? They get nothing. Actually, they get worse than nothing: They get the privilege of competing not just against GM and Chrysler but against the federal government, which has unlimited resources and is now in full partnership with the two.

It's not just Ford, Toyota, Honda, Nissan, Volkswagen and all the other companies that sell (and often build) cars here that are seeing their wisdom and restraint punished. It's also the American people -- most of whom voted with their pocketbooks not to support GM and Chrysler but now see their money forcibly diverted to those automakers anyway.

For years, Detroit has been relentlessly driving customers away. In 1985, the Big Three accounted for 80 percent of all the cars sold in this country. Today, their share of the market is just 43 percent.

Their high costs and inferior reputation for quality have hindered them in competition for some 30 years. So in good times and bad, they lag behind more efficient rivals.

The financial losses they've compiled recently convey an unmistakable message from consumers: We are no longer willing to buy your vehicles at a price that pays you to make them -- if we are willing to buy them at all. The Big Three had a fat inheritance, and they managed to blow it.

Their overseas competitors, by contrast, had to start from zero selling cars in the United States, find customers, prove the worthiness of their vehicles and dealers -- even, in many cases, build factories here and train American workers to meet their standards.

Some companies, foreign and domestic, couldn't hack it. You don't see dealers selling Ramblers, Fiats or Renaults anymore. But many did exactly what our capitalist system requires them to do, only to be rudely informed that the requirements have changed. Instead of being rewarded for their achievements, they now watch as the government rewards failure.

Helping these two automakers means harming the rest. The market for new cars has shrunk and it's not going to regain its old size anytime soon. By rescuing GM and Chrysler, the government is taking future sales away from competitors. If one automaker gets the fatted calf, another one will have to do without.

In a normal market economy, things would proceed differently. The weak firms would file for bankruptcy and be forced to take drastic measures to cut their costs. They would shrink even more than they proposed last week and might even shut down.

These developments would be a bad thing for their shareholders and employees but a good thing for consumers. Competing carmakers would have the chance to hire their workers, purchase their factories, take over their dealerships and attract their customers. The economy would also benefit, because resources Chrysler and GM were wasting would be used more productively.

Instead, the government has impeded this process -- managing a neat combination of bad economics and blatant unfairness. In 21st-century America, it's good to be the prodigal son.

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Steve Chapman is a columnist and editorial writer for the Chicago Tribune.
 
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Why aren't the Big 3 profitable?
As an engineer with Tier 1 suppliers to the auto industry for more than 20 years, I can tell you the quality difference between GM/Chry/Ford vehicles and Asian vehicles is not that great. One bigger difference is that Japanese OEMs are willing to partner with and stand by suppliers more. The big 3 (particularly GM and Chrysler in my opinion) have cultivated such an adversarial relationship with their suppliers that we cringe when we have to deal with them. Having worked directly for the OEMs at different points in my career, I also know that they are big bureaucracies with a weird power structure (I felt secretaries were more respected and had more power than engineers designing their products). Furthermore, though many of the UAW people were solid, hard workers, many were also useless guys that would sleep on the job, get drunk, or get high and could not be fired. You can't run a profitable business if you can't get rid of guys like that. Eventually the solid, hard workers got an attitude because they knew they would never be paid more than the most useless guy on the team. I know that the purpose of the UAW is not to protect the worker anymore, it is to scam the company and ensure the useless are treated the same as the best.

This article leaves out some BIG details
LIKE THE MINOR FACT THAT THE FEDERAL GOVERNMENT HAD A MAJOR ROLE IN CAUSING A LOT OF THE BIG THREE'S PROBLEMS.

Since the early to mid 70's the federal government, mostly the Democrats with the urging of the "environmentalist" friends, has done nothing but impose regulation, after regulation, after regulation, on the Big Three that have all had the effect of forcing them to fork out millions, if not billions, of dollars to meet these standards imposed on them by a government that has NO BUSINESS telling them how to make cars.

GM, Ford, AND Chrysler all long ago got the message, FROM US, THEIR CUSTOMERS, that we wanted more fuel effiecient cars with better designs for appearances and safety. And they began to respond by having their engineers go to work designing them.

I KNOW this for a fact because one of my best friends back in Michigan worked at the Ford design labratories. They were already under pressure as early as 1973 from the top of the food chain to design cars that met the new demands of the consumers. And they were doing that when the Congress decided that THEY would tell the big three how many MPG's their cars should get(C.A.F.E Standards), how much pollution they should put out, what safety equipment they MUST have, etc, etc.

Since then the government has done nothing less than continually change these standards, making them more and more impossible to meet and costing the companies more and more money each year to completely retool ALL of their assembly lines to meet these impossible standards.

All of this has contributed to their problems. So while I'm agains the bailouts, it's not like Chrysler and GM have deliberatly tried to hurt their own bottom lines. With all the help the government has given them in that area, I'm surprised they've survived this long.

Forecaster?
GM should hire me, I have known for at least ten years that this day was coming. Don't big companies like GM hire analysts and consultants and forcasters to help them chart their course?

For the big 3 to try and say that they have only recently found themselves in dire straights, is a flat out lie. GM did not suddenly realize a few months ago that their business model was suddenly flawed, if they did I could have saved them billions of dollars. If this is the best thinking that Wagoner and his ilk can manage, then the board at GM should fire him tomorrow and hire me.

I don't know what Wagoner is paid but for half that I could have guaranteed a better result than he has provided. The UAW is a vampire that has sucked it's victim dry and is now coming after you and me. Thanks Mr. Wagoner, you gutless coward.

This Is Why We Have A Constitution
The Founders knew that if government had the power to interfere in the market it would act in just the manner it has. Protecting inefficiency and by extension punishing those that were successful. That the Constitution has been shredded and government made unlimited guarantees control of the economy for political ends.

We are stupid and deserve what is happening.

UAW bailout
Only a moron would buy a UAW produced car at any price or at any time in the future. The union has succeeded in funding blue collar pensions and benefits with taxpayer money. This is simply stealing.

big 3?
I don't believe Ford is going to get baiout money.Take a look at the ford factory in Brazil.They went there mainly because UAW wouldn't let them build it in the USA

Prodigal Son
It was a mistake by Bush to bail out the Detroit automakers, and it would be a mistake to continue to fund them. Corporate welfare, whether provided to financial firms or manufacturers, is an illegitimate use of taxpayer money, and worsens the economy.

As the author implicitly recognizes, the theological and inspirational aspects of the Parable of the Prodigal Son are inapplicable to government bailouts. Taxation to fund corporate welfare in fact is enjoined by the Commandment, "Thou shalt not steal."




Charlie S... you wrote:
"This article leaves out some BIG details
LIKE THE MINOR FACT THAT THE FEDERAL GOVERNMENT HAD A MAJOR ROLE IN CAUSING A LOT OF THE BIG THREE'S PROBLEMS. Since the early to mid 70's the federal government, mostly the Democrats with the urging of the "environmentalist" friends, has done nothing but impose regulation, after regulation, after regulation, on the Big Three that have all had the effect of forcing them to fork out millions, if not billions, of dollars to meet these standards imposed on them by a government that has NO BUSINESS telling them how to make cars."

This is all true, but the same constraints were placed on the foreign brands, and they have managed to prosper.

There is another point that . . .
has not been brought out. There is a certain amount of regionalism to take into account. You see a lot more AMERICAN cars in the midwest, center of the country and south than you see on both coasts. This has nothing to do with quality as it does with type of vehicle. There are a lot more pick up trucks and larger SUVs that people like and buy. It would appear that the AMERICAN auto manufacturers are catering to a segment of the population that HAS A NEED for larger vehicles. It is a mistake for our "government" to mandate what types of vehicles to produce. The free-market (along with energy costs) is enough to influence the vehicle-buying public.
P. S. Ever see a toyota pick-up with a snow plow??

Another UAW issue...

99% of UAW political contributions go to Democrat candidates - yes, even the ones who wish to ban cars.

Just imagine donating to your own murder. If that is not a sign of significant mental illness, than what is?

If the leadership of the workforce is that deranged, why would anyone trust their products?


DETROIT SHOULD BE RAZED TO THE GROUND

.....If we are going Bibical I favor a Sodom/Gomorrah solution ...

.....Detroit has three problems:

.....It is in the middle of a Red State that believes in raising taxes to solve every problem ...

.....the UAW has bled the life out of GM and Chrysler ...

.....And the biggest problem of all is the Federal Government regulations and mandates that make it virtually impossible to produce a decent affordable auto ...

.....The Democrats are in bed with the Unions and any tax money that goes to the auto-makers is really a back door pay off to the UAW .....COLOSSUS

Govt interference
Once individual states (california) started making "laws " regarding the types of cars that coud be sold in their state, the big 3 were doomed. I always felt that the companies should have told california to shove it. Namely, that they would not sell or build any more cars in california. It cost billions to design and build electric cars that no one bought. I think the people of california would have dumped their useless legislature at that time.

The oil companies should do that now, tell california to shove it. No more special gasoline blends. If california doesn't like it, too bad, they will stop selling gas in california and will close their refineries. Those special blends cost the rest of the consumers in the US millions. Someone has to stand up to these enviro-dictatorships sooner or later--it might as well be sooner.

Quid pro quo in spades
I don't recall this kind of rancor when the foreign transplants received mounds of government help to build in the U.S. Let me list a few; Toyota, Nissan, Suzuki, BMW, Mercedes, Honda. Is it ok to bring new jobs but not to protect old jobs? Is it GM's fault that its own taxes and that of its employees went to fund the competitions to its detriment?
Back in the 60's GM could have crushed any competition but for fear of an anti-trust action had to let competitors survive. Where was the outrage against that act of trade intervention?
When you add choices to a product type inevitably people will try the new. It is not completely a reflection on the old product line that they lost sales. It is a simple diffusion of the market. Look at the market for blue jeans. I think Levi is still the best. However so many choices and some branding genius have bitten into the Levi market penetration. Sometimes people buy a product based soley on brand image, i.e. Nike, Jordache, BMW. Often they offer nothing besides the image. Same with cars in some instances.
Lastly when the champions of free trade, the finance giants went hat in hand to the government for a bailout the auto industry could lose its moral reluctance to follow suit. (the suits?) To your credit, my TH audience, you were staunchly against that raid on the treasury also. It therefore comes as no surprise to see the same energy directed against the auto companies.
Nevertheless, many of the agruments posted here ring hollow when viewed over a broader worldview.
If the banks hadn't waddled up to the trough and the whole economy hadn't tanked I don't think this would be happening with GM. But then we'll never know that.
You can't expect to have principled government just some of the times for some of the people.

Re:DETROIT SHOULD BE RAZED TO THE GROUND
Sodom and Gomorrah?

Are you advocating the slaughter of several million US citizens, many who aren't employed by GM or Chrysler, and whose taxes have long supported this country economically and defensively, esp the RED federal tax recipient states?

Typical compassionate conservatives...LOL!!
COLOSSUS? Someone has an obsession with a 39 year old cheesy movie.

Maybe TX really should secede from the Union, and rejoin Mexico to become Temexico, I am sure that Bush would be amenable to becoming Emperor over it.


The Big Three
TAXES, REGULATIONS, AND ENVIRO-WACKOS

about the UAW circa 2009
Nothing written in the comments on the UAW is accurate. At least as it pertains to my GM/UAW shop. At least as to the last eight years or so.
More often than not it is the UAW that has to prod the local management to do its job.
I am a leader in the tool room and I have to tell my bosses that the guys want to be pushed more. We are daily shocked, frustrated and angry that management won't address the bad apples, live or die by quality and move some serious metal.
When your team is losing and the coaches won't coach you see many who quit while the game is still on out of sheer embarassment and a frustration just short of a workplace violence incident. We still have the pride, the dedication and the skill. WE need leadership.
I'll spare you the war stories.


PARA DIMZ
INTERESTING.
WHAT ABOUT THE EXTRA NICE RETIREMENTS?
WOULD THE UNION SACRIFICE MONEY TO STAY ALIVE?
WE KNOW ABOUT THE CEO'S PORKY INCOMES!

ELVIS

Even if only foreign companies were hurt
the auto bailout would still be morally wrong.

On the topic of another industry's impending nationalization: anyone notice how Medecine is the only profession being nationalized. I think doctors against nationalization need to organize and point out two things:

1. Legal costs are ALSO out of control
2. Therefore, we need a single-payer legal system.

Doctor and Lawyer nationalization need to be tied together to keep it from happening at all.

para_dimz
You are correct that it is management's job to motivate the workers. If that's the problem at GM, then the union has to go, because the union does nothing more effectively than interfere with management.

hoodaticus
I like the way you think. You ARE right.

Unfortunately, unlike lawyers, doctors cannot make themselves billionaires and purchase enough legislators to protect themselves.



para_dimz
I couldn't get too upset about the bank bailout because Government (us, though without our knowledge or consent) FORCED failure upon the banks, thru regulation and the CRA, plus the thug tactics of ACORN and others (wielding the threat of government action and bad publicity) who sought to put the poor into "their own" homes. Lenders were forced to abandon prudent lending practices. We would indeed be in deep doo doo if our financial system completely failed.

The auto industry, on the other hand, could be repaired and made slimmer and trimmer by way of Chapter 11 bankruptcy and reorganization. So THEIR bailout is mostly a gift to the unions, courtesy of the people the unions have poured their to. (Auto company stockholders and bondholders probably appreciate the help, too.)

baseballdoc
I believe Michigan is a blue state.

Razing Detroit is no longer an option. They have already committed suicide.



tj
If the American automakers somehow went out of business, Toyota would build a truck that could wield a snowplow.

The American automakers simply got caught with their pants down when the price of gas suddenly skyrocketed (again). They've been building the cars Americans wanted; suddenly their fickle customers wanted something else. It's darned hard for companies so big to make a U-turn.

Yet I know environmental wackos in Michigan who want no part of trying to keep gas prices lower by drilling for our own oil or building more of those smelly ol' refineries. Those people voted for Obama. I'm sure those people will support the Detroit bailout, so long as Detroit agrees to build electric cars.

Right Or Wrong.
Right or wrong the auto workers remain strong. There will always be enough money to bail them out. But it would be cheaper for Uncle Sam if they all stayed home while receiving their bail out checks. The U.S. is good at doing many things but not at producing a competively priced car.

Sneak in the old models

Here is the way to do it. I would bet the auto companies have an archives, so …………

Just sneak out the blueprints for the '51 Plymouth, the '55 Chevy, and the 78' Caddy, build them, and you will live.

Oh and one thing, fire all the computer programmers, so we don't have to hear a horn blow when you lock your car, and save billions of dollars by leaving that Tech-o-meter in the trash can.

Some Facts for a Change
Michigander writes (in response to Charlie, whose friend was a Ford engineer):

"This is all true, but the same constraints were placed on the foreign brands, and they have managed to prosper."

No, Michigander, I'm sorry, but that's not true.

To my knowledge, American fuel economy standards, pollution requirements and safety mandates have NEVER applied to foreign makes; not even those makes that have set up plants on American soil.

If the foreign makes have met any such standards at all, it's because the governments in their home countries imposed similar requirements on them (although the United States is the ONLY nation to have anything like a government-mandated "Corporate Average Fuel Economy" requirement).

More to the point, the foreign makes met the fuel efficiency requirements because their home markets dictated fuel efficiency more than, and long before, the American automobile market did. Small, fuel-thrifty cars have been the rule in Japan for decades for the simple reason that the Japanese have to import ALL of their petroleum. They have ALWAYS had to. This is one of the principal reasons why they went to war with us.

The same is true of Germany, Sweden and most of the other countries of Western and Central Europe, as well.

Chapman's column also totally ignores the obvious role the UAW has played in the American auto industry's problems. Exorbitant wage demands, even more exorbitant benefits demands (to the point where General Motors is paying more people NOT to work for it than it's paying TO work), counterproductive workplace restrictions, featherbedding, et cetera, ad infinitum, ad nauseam.

And yet, look who's taking the hit in GM's government-mandated restructuring. 47,000 jobs are being cut--all of them white-collar, and all of them non-UAW.

To blame the automakers' problems solely on mismanagement is to completely ignore reality.

MICHIGAN IS A BLUE STATE

.....Thanks Polly for pointing out my mistake ...I still remember when the Liberal States were RED but in Orwellian fashion the MSM changed the colors because many assumed correctly, that Red was a Communist color so they made the switch to color the Liberal States Blue ...

.....DDL MI .....I'm glad that you are content in your bondage ...in my case Texas has a budget surplus, no job shortage and no State Income Tax ...in addition the GM plant in Arlington is running three shifts with no plans to cut back or lay off employees ...their product? ...SUVs and Trucks .....COLOSSUS

replies to hoodaticus and elvis
hoodaticus: "You are correct that it is management's job to motivate the workers. If that's the problem at GM, then the union has to go, because the union does nothing more effectively than interfere with management."
Yes, pretty much. As in any business management has to push their own agenda. GM's just buckles. The corporate culture is trained and engrained type B. Sissies. Again, I'll save you the war stories but for this funny. My old supt., a classic type A personality, upon retirement mentioned that GM had spent tens of thousands of dollars on just him alone to train him to kiss my behind. I could tell he wanted to choke my chicken before he left the building on his last day just to have some kind of satisfaction. Poor guy.

elvis: "WHAT ABOUT THE EXTRA NICE RETIREMENTS?
WOULD THE UNION SACRIFICE MONEY TO STAY ALIVE?"
My pension will be $24,000/yr with 30 years of service. It goes up a few hundred a year for each additional year. Is that extra nice to you guys? It is what it is. If it lasts.
Money sacrifices you ask about, too.
All new hires get about 1/2 pay. They scale up to about 3/4 pay in several years. We gave up the much hated jobs bank. Looks like we're taking at least a part of the funds for retiree health care in the form of an equity swap; basically worthless paper. There are rumors in the mill that we'll give up the next two years' raises and the cost of living add on plus any future adjustments. That's unknown both as to being accurate and the value of it by me. Sounds like active worker health care will have premium co-pays and deductibles that are new. What has been absolutely hush-hush is changes in work rules. About that I'm totally clueless. Even the rumor mill is dry on that.

partly true, Rand Lamberth
"And yet, look who's taking the hit in GM's government-mandated restructuring. 47,000 jobs are being cut--all of them white-collar, and all of them non-UAW.

To blame the automakers' problems solely on mismanagement is to completely ignore reality."

That is all true. What you didn't say was that GM once employed several hundred thousand hourly workers and will by the end of /09 employ in the neighborhood of 50,000 in the U.S.

How many of you know that GM employs nearly as many hourly employees worldwide as they ever have? That's right. Most of those employees are in other countries. That may be changing this year due to the economic situation. But before that mess began GM moved hourly jobs overseas at stunning rates. Today white collar jobs are equally being outsourced.

Outsourcing
para_dimz writes:

"How many of you know that GM employs nearly as many hourly employees worldwide as they ever have? That's right. Most of those employees are in other countries. That may be changing this year due to the economic situation. But before that mess began GM moved hourly jobs overseas at stunning rates. Today white collar jobs are equally being outsourced."

I was aware of those facts, para_dimz. Thanks for pointing them out.

I have a pretty good idea WHY this has been happening, and I'll bet you do, too. And not just at GM, and not just in the auto industry, as well.

Here's a hint for everybody else: It has NOTHING to do with corporate jets, "flawed business models" or any other kind of alleged "mismanagement".

Outsourcin
para_dimz writes:

"How many of you know that GM employs nearly as many hourly employees worldwide as they ever have? That's right. Most of those employees are in other countries. That may be changing this year due to the economic situation. But before that mess began GM moved hourly jobs overseas at stunning rates. Today white collar jobs are equally being outsourced."

I was aware of that fact, para_dimz. Thank you for mentioning it.

I have a pretty good idea why GM and other companies (in a variety of industries) are outsourcing their labor--both blue-collar and white collar--at such drastic rates, and I'll bet you do, too.

Here's a hint for the rest of you here: The reasons have nothing whatsoever to do with corporate jets, "failed business models" or any of the other alleged trappings of "mismanagement".



Rand Lambeth
"To my knowledge, American fuel economy standards, pollution requirements and safety mandates have NEVER applied to foreign makes"

Then your "knowledge" needs another name -- some synonym for "complete BS."

One problem
With this column is that Ford built cars that were just as crappy as GM and Chrysler. For too long, it seems as if the automakers have had a perverse impulse to find the one good element in what they were doing, and screw it up.
Saturn hasn't quite been profitable, but had a strong, distinct image, and used cool plastic body panels that last forever. So the decision cameth down from GM corporate -- let's keep Saturn, but build them off the same platform as everything else... oh, and lose the plastic bodies.




Carlos @10:12 am
Yours was the best post on this thread thus far. You absolutley nailed the complete cognitive map of the Democrat voter country-wide, Michigan's liberal government, and the prototypical autoworker.

This gaggle endorses and/or votes for policies that will hurt them in the long run, and eventually, others. They've always done so.

The Democrats in office know this, and they know how to milk power out of these servile and near adolescent "thinking" groups of voters. Then again, Democratic voters are reactors, not thinkers, and such is the profile of most adolescents who demand to be parented.

Rewarding failure and corrupt policies while demonizing a pretend enemy will always glean power for the Dems. This is the kind of pathological "care" that our bluest of blue state wants. Here in Michigan it's "government uber alles", and "kill the competition" or you will lose in the next election".

My next auto will be a foreign make. Guaranteed.

This article gets a "5 check" rating from this poster.


it will require bankruptcy...

... or similar structured settlement.

There is no question that the big 3 have been mismanaged-- fat, dumb, and happy for too long.

But at the end of the day, buyers are not gonna' pay $1,600 more per car just for retired worker bennies that add no value to the car. Here is the telling part of a recent column:

"... guaranteed pensions and health care that ended up crippling GM, even after the company successfully negotiated with UAW members to decrease retirement benefits, which, honestly, is a little like quitting smoking after being diagnosed with lung cancer."

UAW members make TWICE--TWO TIMES-- what they make to assemble Toyota's and Honda's right here in America. The marketplace simply cannot pay H.S. grads $150k all-in to do a manual labor job. At some point, you have to pay the piper and file B/R to kill the cancer--> the union.

Jim 1:08
That's a good idea, I like it.

However, the environazis would have a hissy fit.
Just noticed something, do you realize that part of enviro is viro..could we say that the
tree huggers are a virus on the face of America?

a stunning reality
Toyota and GM sold the same number of cars worldwide last year-- but one made good $ even as the other hemorrhaged.

The key problem in Detroit is their cost structures, which in turn are union-driven and plagued.

Bankruptcy will almost certainly be necessary, because a B/R court can void the excesses of the union contract largess.

Auto industry in crisis

Just another problem caused by Liberals.

Conspiracy?
Michigan is Alabama North and Alabama is now Michigan south.

The Big three can’t compete in a state that has high taxes to support the

Standing Army, Federal camp followers, agents and agencies.

The labor cost is too high because of the taxes on labor and property taxes and cost of living are too high.

(The Union can take the blame but the union is part of the big government collective)

In order to make a profit all the car companies foreign and domestic have to build the parts and most of the carlines off shore.

It’s just a thought but I think Mexico will become the port of entry for all goods shipped to the United States via Texas.

As soon as a good part of the Mexican population is either in the United States or is killed off in the drug wars.

Thanks a lot LBJ and GWB.

Big Oil, Big Military, now Big Industry and foreign imports.

Why don’t we move the U.S capital to Texas?

Fight a war and then social engineer at the same time? 60's and 2000's

I’m just guessing?

Detroit in Michiganstan
A haj to Mecca during Ramadan from the Qur'an is a more appropriate analogy than the return of the prodigal son in the Bible.

Buy GM and give it to the UAW
This isn't my idea. Others may have already said it here. It would be more economical for the government to simply buy GM for $1.3 Billion and give it to the UAW. Let the employees OWN the company! Let them "fix it" !

Renault is indeed here
Minor correction: Renault is indeed in America, by way of Nissan and Infiniti (re)branding on some of their line.

Also, the Germans have also bailed out their own carmakers, as have the British.

For years
Big Three management negotiators kicked the can down the road because they feared strikes and the stoppage of cars on the line. As a labor attorney, my husband was amused at the attitude of these same company negotiators who criticized the experience of public sector negotiators as being too soft.They were supposed to be the tough guys. Non-Big Three workers of all kinds, professional, skilled and unskilled looked on with eny at the salaries, overtime, layoff protection, gold plated benefits they did not enjoy. Now, those very same workers who were outside of UAW-CIO protection, face paying taxes to maintain compensation they themselves do not enjoy.

Another point:government has so interefered with automobile companies it is part of the three legged stool leading to the demise of these comanies. The three legged stool is the company itself, unions and government.


para_dimz
"During the 60's GM could have crushed the competition....". If you meant foreign competition, in the 60's it was efectively non-existant. Back then, foreign cars fell into three categories which collectively accounted for maybe 5% of total sales. First was the small economy "sh*tbox" like the VW Beetle etc which was only purchased by those who couldn't afford "a real car". Next were the ultra expensive luxury cars like Rolls and Benz. Finally, there were sports cars, little two seaters that were a blast to drive, but not very practical for family transportation. This was before the two car family became commonplace.

BANKRUPCY
TELL THE UNIONS TO LINE UP, IT IS TIME TO SEND THE AUTO INDUSTRY TO BANKRUPCY COURT. JUST AS CHRYSLER EMERGED FROM BANKRUPCY BACK IN THE EIGHTIES SO TODAY IT IS TIME TO MAKE TOUGH DECISIONS AND ALLOW MARKETS TO CORRECT THEMSELVES.

Hey Steve...,,heads up!
The Prodigal son?......, Give me a freaking break!!! You ushered in the Prodigal Son. You worshipped at the Barry Dunham altar..You still do.

The fourth estate is DEAD. You helped.

I do not understand why I am still subjected to a YAHOO like you on a conservative website.

You are a complete DHIMMI!!!!!!


Gee Golly Steve,...,you do not know what a Dhimmi is? Yikes! That is why the Fourth Estate is dead!!!!!!!!!!!!!!1

Big Three problems their own doing.
The owners & managers of the big three and their unions have for nearly six decades been making promises to each other that both parties knew could never be kept. They didn't concern themselves with those who one day would keep the promises. The stupidity has lead to this colossal calumny, with the unions still deluding themselves that they are a special class and the government piling on unbearable regulations. Use the legal remedy: declare bankruptcy, reorganize with a business model that can compete with those that successfully build and sell cars in the USA. They can be successful because as others may have noticed, the big three are now, finally and perhaps too late, building great cars & trucks.

That's my story and I'm sticking to it.

Wheels

michigan folks...Romney...Para d
Were any of you people from Michigan
there when Geo. Romney was Gov. and
and Pres. of American Motors? If so.could you confirm this:
1. Romney (w/support) told everyone that everyones wages had to be cut including CEO's!
2. Eliminated many design engineers and saved Millions of dollars?(stayed w/same body looks)
3. Moved a plant to Wisconsin and saved
Millions of dollars?
I drove a Rambler during the mid 60's..I thought it had plenty of go and very simple to work on!
Mitt has said"we don't want these co. to go bye-bye but something has to be done--maybe
bankruptcy!?"
I guess Mitt doesn't score points w/ultra
conservatives by saying we don't want these
co. to go"!? He said we don't want them to go
he never said they wouldn't go!
Does the Gvmnt. play a role in hurting the
auto business?
Para dimz-- thanks for the input I think many people are bothered by that $150,000 a year for people who are not highly educated (degrees)?!

Just asking and curious....
Elvis



Prodigal Son Analogy Misapplied
I am not sure if I misread this article but I failed to see the analogy to the prodigal son.

The only analogy I see is the prodigal squandering his inheritance and I am not even sure that applies to the BIG THREE.

The prodigal son spent his inheritance on riotous living. He ended up destitute and broke. He was reduced to eating pig slop.

I do not see the big three eating pig slop heck they still fly corporate jets. I do not even see the union members eating pig slop. What I see is greed. Give me more and more because I do not want to end up eating pig slop.

I say let them eat pig slop until they come to their senses and humble themselves and come back to common sense business practices. Then like the prodigals' father I would be more than willing to celebrate their return to reason. Perhaps even negotiate a buy out. :)

Doesn't this fool know we
need a manufacturing base in this country?

According to Adam Smith...
...the author has it exactly right. What idiot says "We need a manufacturing base in this country!", as if they were the omniscient voice of wisdom.

We need what consumers tell the market place we need. Not what some twit dictates out of complete economic ignorance.

The fact is, that by clinging to the highest corporate tax rate in the developed world (or 2nd highest), we ensure that businesses will desert our shores for greener pastures in droves.

You don't ensure "a manufacturing base" by appeasing voracious unions and their enablers in industry and the congress, with money forcibly confiscated from those of us who still manage to produce in this unfriendly environment!

Right To Work states, and their non-union car manufacturers, are producing excellent merchandise and handsome profits, along with an enviable standard of living. Confiscating the fruits of their labor, risk, and sacrifice, to squander in Detroit is immoral, indefensible, and un-American!

Don't mess with my markets!!

BASIC ECONOMICS ARE IRRELEVENT NOW
I now will NEVER buy a car made by any company that has stolen my money to keep a failing business alive.

YOU FOOLS IN WASHINGTON HAVE A LOT TO LEARN.

ANY REAL AMERICAN IS NOT GOING TO SUPPORT YOUR BAD ECONOMIC GAME OF BAILING OUT FAILING BUSINESSES.

NO BIG THREE CAR WILL BE BOUGHT WITH MY MONEY EVER AGAIN.

PUT THAT IN YOUR HASHPIPE AND SMOKE IT!

ROWDY BOOTS

Terrible Analogy
This is a terrible analogy, the point of the story is the brother was not justified in his jealousy and anger - he needed to learn to forgive and love as well. God loving people enough no matter what they do to Him, and always accepting them back when they fail is the point of the parable. There's no valid comparison between angry Toyota automakers and bailed out Ford automakers as the two sons in Jesus' parable. And the government definately isn't the father, whose supposed to represent God...

Other than that, the article makes several good points, I just felt compelled to rant about this crazy analogy. Geeze Chapman... geeze...

Good to see Chapman writing sense ...
... for a change. This one was very well argued, showing up the fact that this bailout has real victims.

TrueLib: VA
Not all of us are stupid or deserve what is happening. Remember Lib Dem Obamaniacs have argued that the financial mess results from Republican deregulation – less interference by big government in the market or anything else. That includes less protection of inefficiency, actually encourages more efficiency through free market, capitalist competitiveness, and less to no punishment of the successful by lower taxes on corporations, small businesses and the rich who are capable of and do invest, driving the trickle down of economics.
Not all of us are stupid or deserve what is happening. Those who supported Obama from the shadows of George Soros and Islamic jihadists, e.g. Hamas, Hezbollah and others, and those who voted for Obama and the Congresses in ’06 and ’08 in their willful ignorance going to stupid deserve what is happening. The rest of us do not.
Obama and the Lib Dem-totally-controlled Congress growing big government with appointees who are tax evaders, nannies over states, power controllers and some in newly-created positions as Obama grows government are the guilty parties. Obama and his have taken essential bailouts due to Lib Dem interference, obstructionism of Bush and other Republicans before him, and pushed them by the Porkulus Bill with more to come.
All together this has bankrupted the U.S., driven us deeper into ruin, multiplied by large X factors indebtedness of our nation and all people who come after us – like our children, grandchildren, etc. Lib Dems and Obama have made the $ worth less than the paper on which it is printed, the coins less than the metal in them. (cont.)

TrueLib: VA-2
With Obama’s actions already and his plans – please see the Obama/Biden plan at whitehouse.org – these are deliberate, contrived and deceptive acts since he lied about transparency in government, eschewing lobbyist s of special interest groups and so far as I can tell all else in his “campaign rhetoric” as he has called it. He has a plan in mind for the U.S. and all its people, hope for changing all in the directions he, Michelle and theirs want us to go for the “betterment” of the America of the past that they hate.
So if you are a TrueLib you cannot have it both ways – blame the Republicans and at the same time praise our founders who knew as we know what Obama is doing has brought the U.S. to its knees for his end purposes.
Soon we will be ready to welcome with open arms those who have the money - the oil-holding and producing countries to bail out the U.S., save us from ourselves. To assure this Obama and the Lib Dems have blocked development of our own recources and workable alternative energy sources. Their plans are coming together nicely for them but horribly for all the rest of us, those who will not be part of the elite but rather slaves to our masters.

Bagaman is close
Bagaman. You are so right. Unions control the factory floor. But, it's the system, not the people that makes it that way. The manufacturing system, designed by management and a legacy from the days of no competition, creates the union/company conflict and puts the power over productivity into the hands of the worker.

The Production System itself needs to change. There are many ways to do that so the interests of the individual worker is aligned with the interests of the company. If the system is changed, Detrois can compete with anyone in the world. Those "good workers" you mention have the talent and creativity to quickly turn the whole industry around.

Am I the only person who remembers...
... that this is the second round at the government trough for Chrysler?

And am I also the only person who's ever seen Studebakers, Nashs, Tuckers, Stutzs, Cords, etc. in car museums and thought, "Gee! It's a shame you can't buy cars LIKE THAT anymore?"

Para Dimz is Correct
I have worked in and with suppliers to the US Auto Industry for the last 45+years, now retired. Para Dimz makes some good points, but so do many others. First, as far as GM, for whom I worked. As a result of catostrophic mis-management in the late 70's and 80's their doom was foreshadowed over 25 years ago. The Roger B and Lopez era placed GM in an adversarial relationship with its suppliers. The arrogant Lopez eliminated the partnership approach taken by transplant automakers with their suppliers. Roger B, an accountant, deemed himself an expert in manufacturing and efficient car design, he was a disaster. Also, the cowardly GM management caved to the UAW at every turn. The Union has every right to try and get as beneficial a settlement as they can negotiate. It is management's responsibility to protect the shareholders and customers. The incompetent GM management team just assumed, "hell I won't be here when it all crumbles, so why should I care".

Second, US autos are now on a quality par with the transplants. US wages are now competitive with transplants' wages. The yoke from which GM cannot escape are the immense legacy costs. It is not the pension costs that are the killing burden, it is healthcare costs for the UAW retirees. Para Dimz speaks of the sacrifices made by the Union, up until now these have been merely cosmetic. For example, they canceled the Job Bank, but there were only about 5,000 employees still in that program. The only meaningful steps from the UAW side are to adapt more flexible work rules and to seriously restructure the entire retiree healthcare program.

From GM management's side, after firing Wagoner, is to drastically cut back their product lines and reduce the size of the unprofitable dealer network. GM should consist of only Chevrolet and Cadillac, and about 1500 dealers. However, neither the Union or Management will take the steps necessary to restructure - bankruptcy anyone?

Doc Liberty: VA
Help me here please. You are such a young'n you have seen Studebakers, Nashs, Tuckers only in museums? What is the first new car you ever saw on the road, rode in or drove?

I'll bet your Stimulus Check you cannot buy a Hewlett-Packard pocket calculator or a shirt with a front chest pocket big enough to put it in, an IBM computer that required two men and a boy to lift and a sturdy desk to hold it, an electric or manual typewriter, or see a coal box out by the roadside at the end of your home's wooden walk, a coal bucket and a scoop to ladle coal into a potbelly stove either.

Tempus fugit, and things change. That does not necessarily make the old better than the new, vehicles included.

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