I never thought I’d say this, but I think I might agree with David Brooks.
Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler?
Not if the US Gummint owns it outright. Yeah, this is pure Fabian Socialism. But if it were run like DARPA, what a fun bunch of products will be produced!
My sympathy for Detroit would probably be greater had they not spent the last decade taking my utilitarian workhorse – the pickup truck; and transforming it from a $15K job capable tool to a $35K fashion statement.
All three are guilty (as are those who bought them), but what about the legions of poor schmucks who actually need a truck? And while the howling for a bailout grows louder – Dodge has only lowered the price of new trucks about 10%. That doesn’t sound like they are in pain to me.
And is it tasteless for me to point out that Dodge isn’t even American owned? I do love a Dodge, but do we owe a bailout to Mazda America should they get in trouble?
I have been really surprised this past week at the level of vindictiveness that pervades blogger discussions of the auto industry. Wholely inappropriate when deciding what are proper policy decisions, I feel.
I’m in the industry, so I won’t be unbiased, but the quality of American cars is much, much better than it used to be, and there are a lot of new models in the queue that are coming out with better gas milage. Note that when it comes to fuel usage, we get more improvement out of upgrading a 15 mpg truck to 18 mpg, than in upgrading a 50 mpg subcompact to 100 mpg (assuming same total miles driven). … and the former we can do in a year or two. The later will likely depend on experimental (unproven technology). The strings attached to any bailout should first focus on the low-mpg vehicles.
Here is a good, sober analysis by a green activist.
Having had conversations with the rabid ecos, I sympathize with some of what you say; but I think my objections come from a different direction:
Truck sales from 2007
Ford F-Series: 690,589
Chevy Silverado: 618,257
Dodge Ram: 358,295
GMC Sierra: 208,243
19% of Ford diesel automatics will not re-engage Drive if started above 8,000 feet. They buy them back and sell them in lower altitudes. No Recall. And no fix. Hoping they don’t get driven to Colorado?
Dodge replaced uncounted automatic transmissions – depending on miles, proximity to a dealer, and the mood of the regional, because the unit was made of butter. On a 30 thousand dollar truck.
And Chevy as far back as ’97 was telling you the truck you tow with either can’t go above 60mph (overdrive range) or can’t tow. Because the tranny was made of butter.
And I want to know how you sell 1/2 million units at the blatantly bloated prices they are charging, and then tell me you need money to re-tool.
Has American business forgotten (listening to the siren song of Wall Street) the need to re-invest?
Unlike the ecos, I actually recognize the need to bail them out and don’t feel the need for punitive conditions.
But would really like to know where the money went.