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Posts Tagged ‘Detroit’

OK, so George Bush has ensured that the U.S. auto industry won’t evaporate on his watch.  Thanks, George. You won’t be forgotten.  So, it’s over to you Barack. You’ve got a month to figure out how to save a multi-billion dollar industry that has been in self-destruct mode for the past forty or fifty years.  Good luck with that.  Clearly George Bush has absolutely no idea how to save an industry that for decades has embraced a policy of planned obsolescence. Like a modern day Icarus or a Sorcerer’s Apprentice, the Detroit executives thought they had it all figured out.  Half a century ago they decided that they could make more money by building  cars that would disintegrate on schedule, pretty much when the odometer reached 100,000 miles.  That way people would have to buy cars every five years or so and they would be assured of a stable market for their little time bombs forever.

So what does Detroit do now?  Everyone knows the Japanese, Koreans, and Germans build better cars for about the same price. And what about the Chinese? They have the ability to build cars every bit as good as the Japanese and Koreans at a lower price.  What happens when we start importing really good Chinese cars that sell for $10,000? George Bush clearly has no idea, so instead of creating a comprehensive restructuring plan and long term loan for the dunderheads in Detroit, he just boots the ball to Obama. Let him be the one to get the blame for the destruction of the auto industry after fifty years of greed and poor business practices in Detroit. The final implosion won’t happen on George’s watch.  Another brilliant stroke by the master of brilliant strokes.

The real question for Barack is this: how does Detroit dig itself out of the mile deep hole it has dug for itself these past fifty years?  First of all the economy is in freefall and credit for car loans is hard or impossible to get anyway. People are out of work. The overall outlook for the automobile industry, whether it is Japanese, Korean, Chinese, or German is very bleak. And now Barack and the geniuses in Detroit have to come up with a plan that will result in people buying even more American cars than they have in the past!  Are you kidding? Is that even possible? Who in their right mind is going to buy a car from these people?  First of all, Detroit already has a huge inventory of cars that no one wants. They can hardly give them away in their 2 for the price of 1 sales.  It looks like Obama’s task of saving the U.S. auto industry will be no less difficult than that of Hercules when he had to clean out the Augean Stables.

Perhaps the greatest problem of all facing the U.S. auto industry is a lack of trust.  Many people who buy Japanese cars fully expect to drive them for 200,000 or 300,000 miles. People who buy American cars pray that their rust buckets will reach 100,000 miles before they disintegrate.  So, even if Detroit started building quality cars tomorrow, who is going to believe them?  In these very difficult economic times who can afford to take a chance on a proven loser?  The answer is no one.  Detroit has to redeem itself and that will take time – years, lots and lots of years. So, if Detroit really does mean it this time, if they really do promise to be good and stop building cars that are deliberately engineered to fail, let them put their money where their mouth is.  It’s the only way, Detroit – you need to offer bumper to bumper 200,000 mile warranties.  You could do it if your new stuff is going to be so good.  If it isn’t – well then, you belong in the scrap heap.  The question then becomes what to do with the present crop of pre-engineered disasters.  There’s only one thing to do: give them the 200,000 mile warranty too.  I know they won’t make it – they’ll fall apart long before they reach 200,000 miles.  So set aside some money from Barack’s impending bailout for repairing these cars.  You need to establish trust immediately with the American car buyer – Detroit, you can’t wait a couple of years.

If the U.S. auto industry wants to survive in these times it has to compete effectively against the entire world. We’re in a global, multi-national economy now, remember?  Sure hybrids and electrics are nice, but with gas at about a buck fifty a gallon that isn’t a big issue today.  And forget about spending all the bailout money on designing really cool looking bumpers and grilles. Nobody really cares – after all they buy Japanese cars don’t they?

Detroit, if you are serious about surviving, start offering  200,000 mile warranties right away. Today.  Right now.  Otherwise, why don’t you just save all of us taxpayers a bunch of money and just call it a day.

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Detriot is drowning in red ink. General Motors says they need four billion dollars immediately or they will go out of business at the end of the month. The heads of the Big Three automakers are begging the government for help, but so far, nothing has been forthcoming – even though the government could use the idle TARP money for a bailout.  Does this have a familiar ring to it? Remember New Orleans? Remember how the people were begging and screaming for help from this government? Remember how people drowned in the streets and in their homes while President Bush was congratulating the head of FEMA for “doing a heck’uva job”?

Goldman Sachs is safe. Morgan Stanley is safe. JP Morgan is safe.  Bear Stearns is safe. AIG is safe. Wall Street is safe. What about Main Street? When the banks needed rescuing from the financial snares that they themselves had created, Secretary Paulson (the former CEO of Goldman Sachs)  immediately came to their rescue. Where is he now? Why is he silent? Why is George Bush silent as we watch Detroit drown? Do they have some sort of deeper understanding that we lack?  Is there something they know that we don’t know? Is it that they just don’t care? Is the U.S. auto industry simply irrelevant?

What, if anything, do Detroit and New Orleans have in common, and how are they different from Wall Street?  The answer is obvious: they are cities made up of common American people.  You won’t find the elite of New York or Washington wasting their time in these places.  In the world of George Bush and his fellow elitists there is little or no reason to save these people or their jobs. After all, if you ask George Bush he’ll tell you the economic meltdown is not his fault. It is the fault of those who were in power before him. What about Katrina and New Orleans? Was that George’s fault? Of course not; it was entirely an act of God.

There is a flinty coldness about George Bush, a disdain for the ordinary man.  There is also a disdain for the rule of law –  it can be seen at Guantanamo, Iraq, and at secret interrogation sites all over the world.  What is it that allows George Bush and his cronies to have such a deep disdain for the ordinary man?  What allows them to stand back, aloof, while so many suffer? What is it that allows them to amass personal fortunes and yet turn a blind eye to human suffering?  Make no mistake, it isn’t stupidity.  It is a deep, if terribly wrong and misguided philosophy, that informs their lives.  It is an outlook on the world that has been passed down for generations that must finally be called to account.  Neither the U.S. nor any other nation should have to suffer tyrants such as these any more, and the first step in stopping any future tyranny in America is to recognize it for what it is, because it infects our economy, our government, and our society.  I will be writing a series of articles about this problem showing the roots of this line of thinking and how it has long gone unrecognized.

Meanwhile, what will George Bush do for the people of Detroit if the auto industries fail? Where will they find food to eat? Will he send FEMA to their rescue? Let’s be serious.  Of course not. The best that George Bush will do for them is to offer the same advice that Marie-Antoinette, the Queen Consort of Louis XVI, once gave to the starving people of France: “Let them eat cake.”

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