Raving Sane

Money can’t buy them love (or “how cash alone won’t cure Detroit”)

Nov 20, 2008 Uncategorized

Yes, the big three auto makers are in a bad way. But money alone can’t solve their problems.

First, let’s be very clear, this is a product of our own making. If this was just a matter of tight credit and unmotivated buyers then all the auto makers would be hurting. Not the case.

There are several problems. First is that Detroit stopped leading the automotive world to pursue the easy dollar making large, inefficient vehicles. They lagged behind the other auto makers in their R&D of alternative fuels and technology. Instead of striving for efficiency, they happily sold America cars that stroked our cowboy, tough-guy, off-road, macho, bullshit ego

But they also are dealing with an auto workers union that is killing them. Retirement, benefits, and high wages make doing business hard. So they renegotiated, but the new deal doesn’t take effect until 2010.

So they want low interest loans so they don’t go bankrupt. Their case is if they file for chapter 11, then no one will want to buy their cars, which will propel them toward chapter 7 – shut down.

My gut reaction is to tell them to piss off. Beyond them reaping what they’ve sown, giving them money to continue to do the same thing that they have always done is not going to help.

How about this, we give $1000 tax rebates to people who buy efficient American cars. That way the big three have to compete for that money, and it spurs competition for greener vehicles. The US government could write 25 MILLION $1000 checks to help average people buy cars.

Even a straight loan would be alright IF the money comes with strings. Strong strings that will force them to drive their companies into the 21st century.

The big 3 going out of business is not an option that I enjoy. It would be a shock to our already hurting economy. 1.6 million workers would likley loose their jobs (our entire workforce is 140 million).

Of course Detroit will wine and bitch about not being able to retool to make more efficient cars. But who’s fault is that? Who had the poor vision to keep making cars like it was 1950? As Toyota and Honda were learning how to make electric motors, and fuel efficient cars, Ford released the Explorer, then the Expedition, then the ginormus Excursion. Chevy retooled their work truck, the Suburban, to become a 14MPG luxury SUV.

The way I see it, it time for Detroit to change or die.