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Sunday, June 07, 2009
Steve Chapman :: Townhall.com Columnist
If Congress Ran a Car Company
by Steve Chapman
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The Edsel was one of the biggest flops in the history of car making. Introduced with great fanfare by Ford in 1958, it had terrible sales and was junked after only three years. But if Congress had been running Ford, the Edsel would still be on the market.

That became clear last week, when Democrats as well as Republicans expressed horror at the notion that bankrupt companies with plummeting sales would need fewer retail sales outlets. At a Senate Commerce Committee hearing, Chairman Jay Rockefeller, D-W.Va., led the way, asserting, "I honestly don't believe that companies should be allowed to take taxpayer funds for a bailout and then leave it to local dealers and their customers to fend for themselves."

Supporters of free markets can be grateful to Rockefeller for showing one more reason government shouldn't rescue unsuccessful companies. As it happens, taxpayers are less likely to get their money back if the automakers are barred from paring dealerships. Protecting those dealers merely means putting someone else at risk, and that someone has been sleeping in your bed.

The Constitution guarantees West Virginia two senators, and Rockefeller seems to think it also guarantees the state a fixed supply of car sellers. "Chrysler is eliminating 40 percent of its dealerships in my state," he fumed, "and I have heard that GM will eliminate more than 30 percent." This development raises the ghastly prospect that "some consumers in West Virginia will have to travel much farther distances to get their cars serviced under warranty."

Dealers were on hand to join the chorus. "To be arbitrarily closed with no compensation is wasteful and devastating," said Russell Whatley, owner of a Chrysler outlet in Mineral Wells, Texas.

But unwanted events are one of the hazards of operating in a modern economy that is subject not only to changing consumer preferences but occasional downturns. Absent the Obama administration's rash intervention, Chrysler might well have gone out of business -- in which case not only these dealers but all the rest would be left in the lurch.

*** Special Offer ***

Chapter 11 bankruptcy is not supposed to be pleasant for anyone. It's supposed to involve painful and expensive sacrifices that are slightly less dire than the consequences of liquidation.

It should come as no surprise that as these corporations find fewer and fewer buyers for their products, they need fewer car lots. Today, Chrysler sells about half as many vehicles in this country as Toyota, but it has more than twice as many dealers.

Does Rockefeller get complaints from Toyota owners about the grueling trips to get service? Chrysler, by the way, admits that the average customer's drive to the dealer will increase -- from 6.67 miles to 7.09 miles.

But once senators get the chance to micromanage business decisions, they are reluctant to pass it up. Sen. Kay Bailey Hutchison, R-Texas, proved that meddlesome government is not a Democratic monopoly. She proposed that Chrysler be forced to give its dealers 60 days to unwind their operations instead of less than a month, as the company decided.

Hutchison fondly recalled that when she was selling ads for the high school football program in her teen years, a car dealer provided the school's first sale. Retailers should be accommodated, she insists, because they have "nothing to do with the cost of the company."

But CEO Fritz Henderson, whose job, unlike hers, actually depends on knowledge of his company's cost structure, said the support GM provides to dealers amounts to about $1,000 per vehicle -- a figure that would be lower with a downsized network. Cost aside, the companies say an excess of dealers means some can't make enough money to serve customers well, damaging their brands.

While lamenting the fate of the unfortunate dealerships that will be dropped, the senators overlooked another group that will be deeply affected by the closures -- the remaining dealers. They can expect to capture more sales, boost their profits and even provide new jobs in sales and service.

One Detroit-area Chrysler dealer told a local newspaper that he plans to add at least 30 employees to his staff of 85. When that happens, don't expect a Senate hearing for them to express their gratitude.

Now that Washington has intervened to rescue these corporations, it can easily justify reviewing and even reversing their business decisions. But, as the senators proved, having the excuse is not the same as having the competence.

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Steve Chapman is a columnist and editorial writer for the Chicago Tribune.
 
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This is
a good reason to re-elect no one. They want to run private industry without any knowledge of how to do it. If it is such a good idea let the Congress person put his/her own money up to keep these dealerships open. I bet they will not be any to take the deal.

Time for Total Housecleaning
Agreed. They stay in office too long and develop personal interests in these issues.

Chrysler & GM bankruptcy
Chrysler and GM should have been allowed to go bankrupt initially.
They could have gotten out of labor contracts etc.
What the government ninnies have created are two more welfare corporations. Just like Amtrak, these government owned motors companies will just be sucking tax dollars for decades to come.
No thanks. I'm not buying. I'll just keep fixing my old cars.
When I buy new, it will not be Govmint Motors.

Not the closing, but the who..
Chrysler may well need to close dealers but by what standards are they deciding which ones get closed? From what I've read, the more solidly Republican the owner is the more likely the dealership is to be "De-Franchised."

AMTRAK
After the AMTRAK control by Government some 40 years ago President Nixon said that with three years people will be wanting to buy Shares in AMTRAK because it will be profitable. Today AMTRAK loses billions of dollars, no takers on the shares and #44 wants to introduce more trains into the system; at taxpayer expense, of course.

The real problem is that we had an uneducated citizenry vote in November 2008 and the speedy deterioration of the United States towards THIRD WORLD status is taking place at a rate faster than Khruschev could have dreamed when he pounded the table at the UN many years ago.

What if they build a car
and nobody buys it?

I certainly wont. There are other options, you know.

Government Businesses
Go here to read a lot about GM and how the government runs business. http://theblacksphere.blogspot.com/2009/06/obama-too-big-t o-fail.html This guy is HYSTERICAL!

IF CONGRESS RAN THE AUTO INDUSTRY?

.....WAKE UP CHAPMAN ...

.....Congress has been running the auto industry, in effect, since FDR signed the WAGNER ACT into law ...

.....Between the UAW and the DEMOCRATS the auto companies have been dancing to the tune of Congress for decades ...we are just now reaping this bitter harvest ...

.....OBAMA now tells the mindless mob that they own 70% of GM ...this is like saying that the public owns the POST OFFICE ...and the MSM drops to its knees to praise this charlatan .....COLOSSUS

With 537 bosses
in Washington, expect GM to fail.

Vote all of them out
The only way to stop the insanity is to vote every incumbent out of office first chance we get. It's easy, just take a list of your current representatives to the polls with you. Hey, make a few extra copies for your neighbors. If you see their name on the ballot, vote for somone--ANYONE--else. Time for our issues to be viewed through new sets of eyes. Those in power now can only see as far as their next election cycle.

What happened to the rumor
that mostly Weepubbican dealers were being closed?

If true, I've no doubt an enterprising conservative dealership would figure a way to survive and prosper.

When one door closes, another opens.

I also, am a strong proponent of VOTE ALL THE BUMS OUT!!! When elected hacks do not listen to the people, we no longer have a representative gubmint - it's called an oligarchy, a long standing tradition in the Third World, where progress is nil and modernity is only dreamed of.

We are spending $2.5 million/min.
to create this year's interest payment of %434 BILLION.

Consider, Bush' $500 billion deficit one year was so terrible the nation had to vote in the Dems. to *save* us.

When interest goes up with the inflation that's coming, the interest could be $1 trillion a year by itself.

You and I will soon own $70 billion in GM/Chrysler debt (altho' the Sup. Ct. may stop the Chrysler *deal*), but the fed. gov't/UAW will own the companies themselves that are now ordered to make *green* cars (1% of the market) and not offer SUVs or trucks.

Meanwhile, pension funds for the NEA and PERS members are being trashed in favor of the UAW.

I would say a good business in the near future would be a used car lot.

Buy gold.

Go to tea parties. Teapartypatriots.org has the calendars.

If this group was in charge 100 yrs ago,
They probably would have used the US treasury to guarantee the operations of wagon wheel manufacturers and buggy whip makers.

At least I can understand some of the liberal Dems--they've been conditioned to believe that if a little government is good, more is better. It's the GOP that I'm really ashamed of.

the real issue
I have worked for a dealership, and for two manufacturers. That does not make me an expert on finance, but I would love to see some backup for the statement that GM's cost per car to keep dealerships open is $1000. My guess is that it depends on your accounting rules.

The dealer takes the risk of opening and operating the dealership at a profit or not. Manufacturers do not own dealerships, contrary to what most people believe.

More in the next post.

The real issue 2
When I worked for two manufacturers, we had some cost for a factory rep to visit the dealerships. The dealer pays everything else. 10 years ago, one particular manufacturer that I worked for dropped field rep visits to about one per year. At that point, I was working for a dealer. No big difference to us at the dealership because our business with them was done on the internet, e-mail, etc. We paid for all the service test equipment, and I can tell you that is a HUGE chunk of money. The dealer is invoiced for those nice big posters that are hung in the showroom. And I know that there is a small profit margin to the car manufacturer when they buy it from the service equipment manufacturer and sell it to the dealer, and that can be legitimate.

It does seem silly for a town of around 110,000 people to have two Chrysler dealers (different brands though) across from each other. But let them fight that out. They have both been in business for at least 30 years in the same locations and are profitable. What is the increased cost to Chrysler or GM in that? I have some serious doubts.

But here is the much larger point. In a stroke of the pen, President Obama has the capability of destroying existing franchise law and contract law. Apparently many people see no connection between the details of their daily lives and the laws which bring some kind of order to our lives. Most Democrats and some Republicans support that kind of action because they that they or anyone they know will not be affected by that.

After all, Barack looked at me through the TV set, and he promised me personally that he will take care of ME! I know it to be true! I saw it in his eyes!

I think this has nothing to do with whether Chrysler or GM or their dealers are profitable. It is all about control. He absolutely does want to control as many companies as possible. Members of the political species are not capable of seeing that larger point. It IS about control.


the real issue 3
But there is one thing that they will recognize. I think that when you go out into the repair shop, or the sales floor, or into the office where the girls write the paychecks and submit the warranty claims, and where the custodians mop the floors, there are going to be a lot fewer automatic Obama voters the next time around.

So, I hope it goes to the Supreme Court and that the members of the political species who belong to belong to both parties are professionally and personally humiliated by a decision that will hopefully be based upon law. Maybe to the point that they go start there own country, the capital of which could be .......Chicago!

Capitalists can't manage Capitalism
We've seen that if we are to retain any manufacturing capacity and competitiveness for automobiles, the government has to take over.

Capitalists can't manage their own affairs and need constant bailouts from taxpayers to prop up the illusion that their business model is viable even as it is bleeding billions and totally uncompetitive.

Not only the auto companies shown the demiose of Capitalism, but the Wall street parasites who have pocketed trillions in fees and commissions, drained pension funds through bankruptcy reorganization to cheat employees, gambled and lost worker's retirement, made college savings evaporate, and "misplaced" rainy day funds on credit default swaps, off the books dark trading, and then demanded and received billions in tax payer give aways under Bush and the Conservatives.

Proof positive that Capitalism is a failure and cannot function with any long term viability. Capitalism turned America into a graveyard of insolvency, inefficiency, and despair and is unfixable.

Now heavy handed regulation, salary caps, punishment for CEO's and much higher taxes on wealthy idle elites are necessary to fix America and restore fairness and justice to our country.

Capitalists had their chance to lead and proved that like babaies, they cannot even manage their own affairs. The reign of crony Capitalists has been revealed for the illusion it always has been.

Now Savior Socialism must now mop up the mess.

Dont buy
There is one perfect option open to us all. Don't buy cars that have been bailed out. I certainly won't. I do not buy "Edsel's". Luckily, there are a myriad of other options. Good luck Chrysler and GM.

We are spending $2.5 million/min.
to create this year's interest payment of $434 BILLION.

Consider, Bush' $500 billion deficit one year was so terrible the nation had to vote in the Dems. to *save* us.

As to capitalism, Cong. and DC haven't let capitalism function in the car business since the orig. Henry Ford. They have added up to $1500 per car in safety, pollution, *green* demands, et. al. in the last quarter century, and backed archaic and obsolete unionism for political reasons, not ec.

The Cong. is as much to blame for mismanagement at GM and Chrysler as the front men in the car offices were.

I will soon own $70 billion in GM/Chrysler debt (altho' the Sup. Ct. may stop the Chrysler *deal*), but the fed. gov't/UAW will own the companies themselves that are now ordered to make *green* cars (1% of the market) and not offer SUVs or trucks.

Meanwhile, pension funds for NEA and PERS members are being trashed in favor of the UAW.

When interest goes up with the inflation that's coming, the interest could be $1 trillion a year by itself.

I would say a good business in the near future would be a used car lot.

I'm buying gold and never buying GM or Chrysler. I'm driving my Mustang until its carbon footprint reaches China.

Going to tea parties. Teapartypatriots.org has the calendars.


Congressional Snack Bar Bankrupt
Has everybody forgotten that in 2008, the congressional snack bar went bankrupt and had to close due to so many deadbeat Democrat Congressmen/women did not even pay their IOU's at the snack bar, and others wrote bad checks.

Tax Cheats and Deadbeats make up a large majority of the Democrat Majority in Congress and in the Obama Administration.

Such deadbeats as we have running the country, it is no wonder that they go out and recruit new deadbeats to go on the dole as a way of Keeping the Deadbeat Democrats in power.

Reply to First in Ma
You have a completely deluded mindset as concerns Capitalism vs Communism, which is what you propose.

This is not hard to understand, given you live in the Great Socialist State of Massachusettes, and likely a citizen of the Mother of Socialist Cities, Boston.

The Socialist states in the United States are the problems we have in the country generally. Socialist states tend to have large metro areas such as Boston, New York, Los Angeles, Chicago, Atlanta, Philadelphia, Newark, San Francisco, Seattle, and others, and these large socialist cities in socialist states have large populations of people on welfare. These large cities wind up with too much representation in our Congress, and they, therefore are able to pass legislation that forces Socialism on the entire country as a way of making the entire country pay for Socialism in Their Home States and Cities.

If we change how they apportion the congress for representation where territory gets representation rather than Crowded Cities who put a huge tax burden on the country, you will se a return to Pure Capitalism and Communism in the USA will die.

Dealer cost
The manufacturers will save money on less dealers because they will not have to offer incentives to get people to buy. With fewer cars on lots, and less lots period, you have fewer options when it comes to buying a car. So any cuts in profit will come from the dealers side, as they compete with dealers of different makes in their area. Get ready to pay closer to sticker price next time you buy a new car.

Government Car Company
You probably aren't old enough to remember the HENRY J, produced by Hanry J. Kaiser after WW II using Reconstruction Finance Corp. money.

A lousy product produced with little market research.

Look this one up and see the future of Obamamobile.

If Congress ran a car company. . .
the results would be about as risible as those produced by letting the president run it.

The only worse situation for a nationalized car company or for the taxpayers, short of an extinction-level asteroid impact, is the present one, in which both Congress and the executive branch are trying to be boss. Obama tells secured creditors to get lost, then pressures Chrysler and G.M. to jettison dealers with no apparent regard for the bottom line or much else besides personal favors and political paybacks. Congress says, "Wait a minute." The car czar cuts the companies' advertising budgets. Congress overrules him. The treasury secretary forbids production of alabaster-yellow convertibles. Congress makes them mandatory. This wasteful wrangling may go on for years.

H2OSkier proposed the only strategy with any chance of success: re-elect no one.

For sale One slightly used Constitution
In this article, Mr. Jay Rockefeller Dem. from West Virginia is leading a fight for capitalism. That, I applaud. But legally Mr. Rockefeller has no jusrisdiction Constitutional wise. You see, West Virginia is illegal as a State.
Article 4 Section 3 of the U.S. Constitution is as follows: "New States may be admitted into the Union, but NO NEW STATES shall be formed within the jurisdictioin of any other State. Nor any State be formed by the junction of two or more States or parts of States without the consent of the Legislatures of the States concerned as well as of the Congress.
Oh, I know it has been done but so many other desecrations happened in the period between 1861 and 1867 that I guess it really doesn't matter does it?
You see, West Virginia was severed from it's original State of Virgina. Even the demigod Thaddeus Steves admitted that when they accepted them that it was not by the Constitution.
Jay Leno, when discussing giving Iraq a Constitution, said, "Why not give them ours, we're not using it!"

Greyhawk ...
Thanks for putting First in Ma in his place! GM and Chrysler should have been hung out to dry. Then maybe the unions would have decided to take pay cuts of buy the company. Seriously, if you can't complete, then file for bankruptcy. Chapter 11 is no big shame.

Speaking about the Here's a little tidbit on the Henry J from a collector's web site: The Henry J was manufactured using funding using a government loan from the Reconstruction Finance Corp. Part of the agreement was that the car would sell for $1300.

Let's hear it for Capitalism!

It's time to boo First!

David in Texas
Not only am I old enough to remember the Henry J, but I rode in one. It was a plain little car with a Red Seal Continental Engine powering it.
Along with the Nash Metropolitan which had an English engine were the intoduction of the small cars of the 50's. However, small cars were introduced in the 40's such as the Crosley and the "Baby Austin"
Americans have never really taken to small cars, at least my generation and the previous one wouldn't. The new generation might accept it but we older ones liked the good rides of the larger cars.
I will never buy an "Obamobile" My Plymouth SE Minivan is as small as I want.
Take my word of experience as an old fogey, Nothing the Government has ever backed or run has EVER BEEN successful and with this administration it will stay true to form.

The Obozo Zone
I know a small town of 5000 - 20,000 people in Central Texas where people are just used to buying American. Why, because there are no foreign dealerships withing 70 miles. The local Chevy Dealer just got canned, I heard. If I'm him, or any one of the other thousand or so, I'm going Audi/VW/Toyota (if possible) and never looking back.

Closing those dealerships will decimate GM and I can almost guarantee that the decision to do so was made by the Obozo One himself. He is so full of himself that he cannot be counseled by any of his staff to STFU. The only good news is that it is just another step in decimating the UAW. Maybe when those people go out and get real jobs, they will see why hard working men and women in the private sector want the government the hell out of their lives.

Hey First
It wasn't free market capitalism that sunk the banking industry, it was government sub-prime mandates, followed by issuance of junk securities by FAnnie MAe et al.

GM sold 15 million cars last year. So did Toyota (who also builds cars in the States). GM lost $25 bil, Toyota made $15 bil. GM's mistake was getting in bed with unions. Their only mistake.

Call that a failure of capitalists if you want, but it is government that helps to force unions on industry. Have you heard of closed shops and right to work states? WHich ones have healthy economies nowadays?

What is really failing in this country is government. More specifically a government run by the UAW, Service Unions and Teachers Unions, and of course, Trial LAwyers. It is government that hemorages money and destroys incentive, and fosters crime.

Our economy and our nation is the strongest in the world and has been for many years because of free market capitalism. If you think that is because of idiots like Jimmy CArter and Lyndon Johnson, and Obama, you just are incapable of critical thinking. It is IN SPITE OF those idiots.

Greyhawk ...
Thanks for putting First in his place. (I usually don't talk that way about someone, but he really deserves it

When I was in government service, we had a favorite phrase, "There are two ways to do anything ... the RIGHT Way and the Government's Way"!

If the government ran a Car company ... I found something this from a club of "Henry J" collectors: The Henry J was manufactured using funding from a government loan from the Reconstruction Finance Corp. Part of the agreement was that the car would sell for $1300 ...

Need I say more?

Rick Wagoner, Eerily Silent
a from FLorida raises an interesting point to wit:
"Chrysler and GM should have been allowed to go bankrupt initially.
They could have gotten out of labor contracts etc."

I'll bet you anything that those companies have wanted to declare bankruptcy for a long time, but the Dems wouldn't let them because it would have decimated the UAW and of course, the millions that the UAW sends to congress.

THis problem could have been solved long ago at no cost to the taxpayer. Obama didn't need to give GM jack. Many companies cotinue operations under Chapter 11. Obama was just paying off the unions.

Finally, Rick Wagoner has been eerily silent since he got the boot. I can almost guarantee that Obozo has forbidden him to talk to the press at the risk of losing his pension and parachutes. These are the kinds of things we need a truth commision for. Someone needs to ask Obozo about this.

Addition to Fanasy Control's Comment
One only need to look at how the Obama administration has decided to divy up the "New Chrysler:" First of all, the law states that the bond holders are to be first in line to get their money back in a bankruptcy proceedding. Instead, they are now third in line, behind the Federal Government and the Union. Here is a break down showing approximately the ammount owed versus each parties share of the new company....

The federal government has loaned Chrysler about $12 Billion, but they will get 50% ownership of the new Chrysler (in the form of new stock). The Union is trading $10 billion worth of pension obligations for 39% of the new Chrysler. Bond holders were owed $27 Billion and only get 10% of the new Chrysler.
It appears that they had Tim Geithner work out the math....

Does anyone out there believe that if Chrysler or GM become profitable, that we will see any reduction in our taxes?! Wouldn't it be great if we could take someones elses money, without their approval, invest it in failing companies and keep the profits for ourselves?! No risk for us!!!


The truly sad aspect of this entire saga, is how most of the people here and around the workd have their heads in the sand and may not ever be aware of how our country and our freedoms are being stolen from right under our noses.

May God someday soon, again, bless the United States!

First
Yeah, Congress can run a car company. They have done such a great job with our government we are only $11 trillion in debt and growing my the minute. Government is even worse than Capitalism. At least, the way it used to be, when Capitalist made mistakes they made it with their money not ours.

To Fantasy Control in TX
You said:
"Our economy and our nation is the strongest in the world and has been for many years because of free market capitalism. If you think that is because of idiots like Jimmy CArter and Lyndon Johnson, and Obama, you just are incapable of critical thinking. It is IN SPITE OF those idiots. "

Really? Is that why Communist China owns America? Courteousy of Bush's extention of the failed supply side thinkers in Reaganomics or more properly "VooDoo Economics" as Bush I said in 1980 America is a much weaker country than it was under Carter.

Thanks to Free-market Capitalism, Americans get the worst of all worlds:
*insourcing of illegals to undercut American workers and create hardship on families
*outsourcing of American's jobs to 3rd world sweatshops where workers are treated like slaves working 13-16 hour days 7 days a week w/o protections
*sending manufacturing out of the country
*importing cheap toxic Chinese junk sold at Wal Mart as the dollar fell 60% in value under Bush.

These are all fruits of Capitalism where the race to the bottom is the goal of elites. Conservatives had their way for almost 40 years since Nixon and proved that they were incompetent as managers.

The solution is to dump Capitalism overboard and evolve to full scale Savior Socialism to fix America. We tried Capitalism and Conservatism. Both are ideological dead ends and unworkable for a modern nation.

Time to move forward to pure Socialism which is far more effiencent, transparent and accountable than Capitalism.

to h2o skier
You said:

"Government is even worse than Capitalism. At least, the way it used to be, when Capitalist made mistakes they made it with their money not ours. "

Actually, your wrong. When CApitalists make mistakes they are cry babaies and go to the government for bailouts and are rewardeed with tax payer money encouraging their stupidity, corruption and incompetence.

Sorry but Capitalism (just like Conservatism) is a dead end. It does not work. If it worked Republicans would still be in power. AMericans threw out Conservatives because they recognize that they are addicted to a mythological system of VooDoo economics that actually has ruined our economy.
Now the government will have to come in and mop the mess left behind by Bush and his crony capitalists and restore standards and integrity if there is to be anything more than a hollow shell left of the country.

To Grey hawk in AL
You said in response to my post:
"You have a completely deluded mindset as concerns Capitalism vs Communism, which is what you propose."

You need to go back to school and work on your basic reading comprehension skills. I didn't even mention (let alone advocate) Communism in the post you reponded to.Next time try reading the post BEFORE responding.

We are now seeing the massive corruption, poor planning, incompetent and grossly overpaid managers that was coddled under 8 years of Bush's Conservatism. I'm sorry but the failures of Conservatism are no longer acceptable to Americans. Socialism will replace Capitalism, because Capitalism in the end proved wasteful, inefficient, and eternally riddled with fraud and corruption on all levels. Morally indefensible and an economic dead end.

That's why Republicans were thrown out of office in 06, 08 and soon 2010 as they become a footnote in history as the party of dishonesty and incompetence. Time to move to a workable system to make America strong after 30+years of Conservative mismagement.

Socialism is now repacing Capitalism bit by bit and will continue because Capitalism is simply an inferior species of economic policy and cannot compete.

First
First! I may be wrong, but I belive The Conservatives had a majority for 12 years, 1995- 2007. During that time period, the stock market moved generally up (I know there were some down years) brom about 6000 to 13000. In 2007, when the Dems regained control of Congress, Our economy has been in a tailspin. GWB didn't do everything right nor did the Republican led Congress, but they certainly haven't taken us from prosperity to super indebtedness like the current administration is doing.

How about Competence vs Incompentence?
Before you argue capitalism vs whatever, consider the stimulus package. If they were trying to prove that government is the answer, how could they come up with such a bad plan? Name one item in this package that sounds like a winner?

What is an American Car?
Is an American car a Chevy assembled in Korea? A Ford built in Canada? Or maybe a Mercedes, Honda, Hyundai built in Alabama? A large percentage of the cost involved in building a car is the labor costs. Should these costs be paid to US citizens or other countries folks? Just wondering.
GM and Ford also build many cars in other countries for use in those countries (Germany and Australia come to mind). Yet these fine cars cannot be imported nor built to the same specifications in the US because of onorous regulations and requirements by our Government. jmho

Not a very illuminating column
All Chapman said to justify his thesis was:
"the companies say an excess of dealers means some can't make enough money to serve customers well, damaging their brands."

Problem is, I can't figure this one out, and it sounds like BS.

tkdblk made perfect sense. The dealerships should decide for themselves whether to stay in business, and absent a reason that doesn't sound like a load of doublespeak, the manufacturers have no interest in closing any dealerships.

In fact, it is hard to argue with the assumption that the more dealers who are out there selling their cars, the more cars they will sell to the public. But at what profit? Isn't that the dealers' problem, so long as the manufacturer gets its usual cut, or is somehow the final sales price linked to what teh manufactuer's revenue is?

If the dealerships can't make money complying with manufacturer requirements, they can close their own doors by themselves. Many, however, are obviously doing okay, and have no wish to do so, and so just don't understand WHY they are being ordered to go out of business.

There appears to be ample reason to be suspicious of these dealership closures.
It definitely seems like something strange is occurring here, and Chapman fails to illuminate.

Costs of dealerships
"But CEO Fritz Henderson, whose job, unlike hers, actually depends on knowledge of his company's cost structure, said the support GM provides to dealers amounts to about $1,000 per vehicle -- a figure that would be lower with a downsized network."

Why would that figure be less? The $1,000 would just go to another dealer.

Capitalism works
Toyota, Honda, KIA, Volkswagen, Daimler-Benz, and BMW seem to have no problem making capitalism work. 0bamamobiles will be the American version of the Trabant.

First
Bailouts started with the Democratic controlled Congress. The majority of the Democrats voted for the bailouts while the majority of the Republicans voted against them. The Socialist(Democrats) have been in charge of Congress since January 2007. Look at what has happened since that time. Downhill and picking up steam.

First
One thing you never addressed is the $11 trillion in debt the U.S. has. The government has not had a balanced budget for the last 50 years and it doesn't look like it will be balanced in my lifetime. What a great way to run a government.

The Old Capitalism no longer works
American auto companies have never been able to compete with the current Capitalist model.

We've been losing market share since the Volkswagen first came on the scene.

But, government run manufacturing is even worse. The car companies (and the rest of manufacturing in the US) need to change.

The old Capitalist model no longer works. It actually inhibits creativity and productivity growth.

There are better models that take advantage of American ideals. Quantum improvements in productivity is possible in the car companies and throughout manufacturing.

That is the only way to save the economy.

Be Kind to the Edsel
In all fairness, the Edsel as a car was a wonderful machine. My wife's family owned one when she was a kid. It got into a head-on with a Pontiac that totaled the other card; the Edsel drove away with a few scratches. Recently, she got in touch with a long-lost half-brother who informed her the Edsel has been restored and is still on the road, none the worse for the crash. I'm grateful because in those days of unpadded interiors and no seat belts, that car saved the life of the woman with whom I have spent the last thirty years.

The Old Capitalism no longer works
Amtrak loses $23 billion since 1990 and it's part of the "New" capitalism. Giving the union 17.5 % of GM and the government 60% is the solution? You've got to be nuts.

What's the difference?
People can go around in circles pretending to work or just get paid to sit around at home doing nothing. It amounts to the same thing. That's what GM has turned into, a glorified welfare program.

WHAT NO ONE IS TALKING ABOUT!
What no one is talking about is why FORD is not asking for $$$. The reason is quite simple. Instead of following the usual, incredibly incestuous hire only-from within tradition of hiring car executive f@@k ups they went elswhere. They hired the CEO from Boeing aircraft who, once he was in, saw that he immediately needed to get the company on firm financial footing. Yes, that is the same Boeing who has since the 1950's been the largest manufacturer of commercial airliners. Yes, it's the same Boeing who designed the B52 bomber in the early 1950's that is not only still flying today but will continue to defend us for at least a couple of more decades. If you hire someone from the best companies you will get what you need!

Congressional incompetence
Chapman touched upon a basic problem with Congress, it's our lregislators cannot resist the urge to meddle in nearly everything, regardless it's been made evident over the years that its meddling generally makes things worse.

For example, decaes ago Congress mandated that automoibiles must be manufactured so that auto engines could not be started unless the driver's seat belt was fastened. That caused such resistance from the public Congress was frightened into reversing its decision, proving that Congressmen are as cowardly asw they are foolish.

To H2O skier
You said:

"One thing you never addressed is the $11 trillion in debt the U.S. has. The government has not had a balanced budget for the last 50 years and it doesn't look like it will be balanced in my lifetime. What a great way to run a government. "

Factually incorrect. When Pres. Clinton was in office he not only balanced the budget but created a huge BUDGET SURPLUS of $230 Billion. Clinton mopped up Bush I's economic disaster and put America back on the path of prosperity.

http://archives.cnn.com/2000/ALLPOLITICS/stories/09/27/clin ton.surplus/

When Bush II came into office he saw the largesse and basically said, "hey let's blow this money on some foreign wars and give tax breaks to unworthy billionaires. No need to invest in the country or technology or rebuilding infrastucture, let's just have a war party torture people and sell out to China".

That's exactly what he did and has ruined the economy through 8 years of malfeasance and stupidity.

It will take Obama years to undue the disastarous economic policies of Conservatism.

Let's face it, Conservatives are simply unable to govern or manage the economy. They prove it every time from Hoover to Ike to Nixon to Reagan to Bush I+II. All created huge deficits and put our economy into recession or depressions. Republicans rely on the short term memory of the public and their Conservative base who simply do not rememeber how badly they screw up our nation.

This is why Americans vote out Republicans when they see how badly the country is being managed.This party simply does not have the knowledge, tools, leadership, morality, or even basic competence to run a modern nation state.

Steve Chapman
Yeh, see, here's the thing. The government is
not going to run the car company.

Socialism...really?
I have been reading many comments touting how great socialism would be for this country and how capitalism has destroyed it. I am wondering what socialist country these people are looking to for the inspiration of the theory that socialism is better. I am reading about how Americans have sold off to China, etc etc etc....I wonder if any of these people touting socialism has spoken to ANYONE who was raised in a socialist country. When we get down to it all the 'problems' started BEFORE Obama, Bush, Clinton et al. Until we get back to the original ideals of America this Country will continue to struggle. The basic tenement being that if one wants to be happy he is FREE to pursue that goal. It is not guaranteed happiness just because you were born American. Bottom line: WORK VS WELFARE

False comparisons, too
Chrysler has twice the number of dealerships as Toyota? Maybe, but most Toyota dealerships sell only Toyotas. Most Chrysler dealerships also sell Jeeps and Dodges. Hence comparison is misleading, because overall, a Chrysler, Dodge, Jeep dealership may have a much lower sales volume per manufacturer than a Toyota dealership, but overall sales among all cars could be very similar.

Also forgotten in the column is that
BHO is a wheeling dealing operator from a crooked neighborhood, and for all any of us know, the Chi-coms are promising BHO big campaign contributions in 2012 so long as he
does what he can to close smaller US car dealerships to force Americans
to buy more foreign cars.

Who is advising Chrysler to do this, and why, is the real question, which Chapman fails to answer. I would not be the least surprised if the reasons as corrupt as everything that got both BHO and the Big 3 where they are now. No one would.

First
You are factually incorrect. Clinton never had a budget surplus. What you are talking about is a sleight of hand and the Congress never had a surplus. BTW, the Congress was controlled by the Republicans during your "surplus" year. If you want the real numbers go to U.S. Treasury and look at the numbers: http://www.treasurydirect.gov/govt/reports/pd/histdebt/his tdebt_histo4.htm

and http://www.treasurydirect.gov/govt/reports/pd/histdebt/his tdebt_histo5.htm

Here is a copy of some of the numbers for you:
Year DEBT
09/30/2008 10,024,724,896,912.49
09/30/2007 9,007,653,372,262.48
09/30/2006 8,506,973,899,215.23
09/30/2005 7,932,709,661,723.50
09/30/2004 7,379,052,696,330.32
09/30/2003 6,783,231,062,743.62
09/30/2002 6,228,235,965,597.16
09/30/2001 5,807,463,412,200.06
09/30/2000 5,674,178,209,886.86
09/30/1999 5,656,270,901,615.43
09/30/1998 5,526,193,008,897.62
09/30/1997 5,413,146,011,397.34
09/30/1996 5,224,810,939,135.73
09/29/1995 4,973,982,900,709.39
09/30/1994 4,692,749,910,013.32
09/30/1993 4,411,488,883,139.38
09/30/1992 4,064,620,655,521.66
09/30/1991 3,665,303,351,697.03
09/28/1990 3,233,313,451,777.25
09/29/1989 2,857,430,960,187.32

Show me ONE year there was a surplus much less hundreds of billions as you state. The last balanced budget was 1957 when the total U.S. debt decreased by about $2 billion.

First
To supplement h20skier, the so-called surplus wasn't a surplus at all, it was an accounting trick. The "surplus" came from digging into the Social Security surplus that happens every year. Social Security sent money to the Federal government in exchange for Treasury bills. The debt still went up.

As it stands, Social Security will be bankrupt in 2016. The so-called Clinton surplus was supposed to go into real assets, not phanton T-bills, meaning the "surplus" did nothing more than generate even bigger debts.

Social Security doesn't have a trust fund, borrowing money from yourself doesn't create an asset you can draw on down the line when you chose to call in those loans.

First
You're listening to the America haters like Bill Ayers and Rev Wright instead of using your brain.

At 300 million people, America has 4 times the GDP of China at 1 billion people. China is socialist, America is free market. Our standard of living puts theirs to shame. You're listening to jackasses who tell you that forty million people in America are living below the poverty level. That's just sheer nonsense. Some guy in a soup line takes Michelle Obama's pic with his $400 IPOD. He's forty pounds overweight. Some twenty year old makes $20k/year and lives large with four buddies? Just a Dem guilt trip for votes.

I could answer every one of your hysterical rants in similar fashion. They are just pathetic. The US still manufactures a ton of stuff, and I wouldn't be surprised to find out that we produce as much food as the rest of the world combined. All this and a clean environment. Let the Chinese make the dirty crap. You're just spouting slogans.

As far as illegals goes, its the Dems that want to keep them, not the Republicans. Oh, and make them citizens. So that we can have 450 million Americans by the year 2050 (that's only forty years from now). How much polution and poverty do you think it will bring when we are trying to feed, clothe, house and transport that many people on foreign oil and windmill power? As far as sending jobs out of the country, hey, stuff happens. Our unemployment rate was at 5% under Bush with a nice 37 straight quarters of reasonable positive economic growth.

In 200 years, under a free market economy, the US has grown to dominate the world in almost every aspect. You, like almost everyone who voted for the Annointed One show a complete lack of critical thinking.

That,s Prosperity
The Obama auto will be almost like the Edsel,but just a little bit different,in that it will only have three wheels.That will save one-fourth the rubber.God knows;That,s prosperity.

mcnamara's folly
edsel ford even told wiz kid mcnamara that he heard that they were thinking about naming the car after him. he said do not name it an edsel because i think the name would bring down sales.

mr. (my family suffered during the vietnam war) mcnamara was about to be booted when jfk picked this a.h. to serve in his cabinet. lbj kept him around. the jerk mcn. cried and said he knew that the war was unwinnable but could not tell his boss.
b.s. the war in vn was won in the 1968 tet offensive. i was there in 69-70 and the cong and nva were beat and could not mount another tet offensive after coming out of the jungle to fight a conventional war. so much for edsels step daddy.

the edsel was a fairly good car. heavy, but had a big engine in the 15 cent/gal. environment where i lived in vogelweh u.s. housing area in germany. it attracted huge crowds where ever it was seen in 58.

adios,
ab
p.s. democrats are evil and republicans are stupid.

Kudos to h20skier and Fantasy Control
I read this entire thread and was particularly interested in First's comments.. I then read h20skier in reply #57 and Fantasy Control in reply #59 and they have debunked and demolished the false notions being pandered by First. If only First would open his/her mind (which is extremely difficult for close-minded liberals) and abandon the religion of liberalism he/she may learn something on this site...

I only add that if socialism is the answer, then why did the Soviet Union collapse and why does China produce products for pennies, pay workers peanuts, have a filthy environment and crush all ideas other than those of the State?
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