Saturday, December 6, 2008


Okay, so my previous post about the Big 3 American car makers may have been overly harsh. I know, how uncharacteristic of me.

It turns out that GM is one of the best car manufacturers in the world. And really, does anyone make a better truck than Ford? Not to mention that Chrysler pretty much pioneered the mini-van. So, yeah, I'm wrong that no one buys their cars. A lot of people, worldwide, buy their cars. (Factoid, the Buick is one of the top cars sold in China! Who knew?)

So, basically, I was wrong about the importance of the Big 3. I have been set straight.

However, I do not think it right to give out a bailout. I am saddened that the American car makers are in such a predicament, but the truth is some mismanagement and poor acquisitions are playing themselves out. GM should not have given the United Autoworkers life-time pensions in exchange for lower salaries in the 80's. They probably shouldn't have spent so much money on Hummer. And most of them should have changed their business models to compensate for the tough competition in the US car market. I heard on the radio that in the 1950's, GM's goal was to have 40% of the market share in the US. Fine back then, but not possible now with all the brands available. (I guess that explains the protectionist arguments the Unions spout.) The problem is they are still manufacturing cars with that goal.

I would be thrilled if the automobile makers would actually put Congress where they belong with this thing. The cafe standards alone have aided to the sorry state of the automobile industry. When government gets into business, business suffers. So, I say the bailout should happen with the elimination of the cafe standards.

1 comment:

Karen said...

Actually, I put most of the blame on the UAW because mgmt has been held hostage by strikes and the threat of. If the workers strike then no cars are being manufactured and the big 3 lose alot of money everyday of the strike. What is mgmt to do? They put themselves in the position to negotiate terrible deals with the UAW, but what was the alternative for them?