Whither Detroit?

I’m torn, folks.  Really I am.

On the one hand, the Big Three ought to go down in flames. Mismanagement to the hilt. You know this. But if they declare bankruptcy, hundreds of thousands would be put out of work. And not just at the plants, but lots of other suppliers too, as well as mom-and-pop shops around the plants. And not just here, but in Big Three plants worldwide. Meanwhile, there may be honest-to-God bread lines in Michigan this winter. Total meltdown, in other words. The economy has been teetering on the brink of complete and utter disaster, and this may give it the last nudge over the edge.

And now we have an impending bailout bill. If I had to choose right freaking now: put all the regulation and oversight on the Big Three as is humanly possible and eject the current bigwigs, but go ahead and pass the damned bailout. It might buy us some time, and the economy might be stronger next year so that a failure of one of the Big Three might not sting us poor innocent saps as much. Hell: they might even survive, get smart and, longshot of longshots, come back. (Another thought: the Big Three can be bought fairly cheap at this point by some other interested parties — like Japanese auto makers. If they can swing it, they might as well pull the trigger on a takeover.)

So: what’s the endgame here? Is there an option that (oy vey) screws us less than Ford closing its doors?


All very thoughtful, but the kleptocrats are minding the store for another nine weeks.

Any bailout should require that they only build vehicles that get a minimum of 40 mpg, and that they can’t slash the pensions of retirees. I fear that regardless of what happens, the retirees will get screwed.

@SanFranLefty: Ah, so you favor requiring them to fail, I see.

They won’t mess with pensions unless they do go into bankrpuptcy.

Requiring them to “only build vehicles that get a minimum of 40 mpg?” Why not just pass a law requiring pigs to fly, as well?

The hostility towards business is amazing, as is the trust that government overseers are in any way likely to make better business decisions than industry executives (trust me, they aren’t).

For liberals, you all have a pretty nasty “survival of the fittest” attitude towards this. Why the hate for GM? Just because it built the SUVs that people wanted? Like Toyota and Nissan don’t also do so?

In other news, Retail Sale FAIL. This is gonna be an interesting Nondenominational Winter Holiday.

I think the hostility comes from:
1) The Big 3 were at the forefront of fighting the increased mileage standards. Yes, Toyota was involved too, but the big 3 made it their mission to stop increased standards. Lots of Libs are environmentalists.
2) The whole, they killed the electric car meme.
3) The failure to take on the Japanese (and now the Chinese and Koreans etc) with that 20 year saving grace. The Big 3 made inroads till they decided that quality was too expensive and went for profitability.
Personal story; My dad hates the Japanese (spent 10 years living under Japanese occupation in Korea) and bought US American for decades. After all the problems he had with both the Chevys and Fords he bought, he bought a Honda and never looked back.
4) Their arrogance (both the UAW and the Big 3.) The UAW for thinking wages could go up forever. The Big 3 for assuming that they didn’t need to understand foreign markets to sell cars.
5) The whole sending jobs to Mexico via NAFTA.
6) Most anyone who saw Roger & Me would not get any warm and fuzzies about GM. I saw it, I know guys who work for GM and I still don’t care for GM.

Personally, I’d like to see the Big 3 survive as outside of aerospace/defense, it is pretty much the only manufacturing left in US America, but there needs to be a change at the top and the culture. The only way that these guys will learn is via “creative” destruction.

@SanFranLefty: I say make the old people go back to work if they want their pension.

I don’t want them to go under because of the workers, the retirees, the whole chain of small businesses, that would be destroyed. I fear the consequences of the domino effect on all of us. The people at the top should be kicked to the curb with no golden parachute, however.

@Mistress Cynica: I don’t either, but unfortunately, and pragmatically, the only thing I see happening in our entire economy is a cascade failure in which, unfortunately, many people are going to be hurt. Mr. Ewalda (sp?) is a victim of this (as well as ageism), as well as several of my friends who are jobless, some of whom can’t get the dole because they were self-employed and didn’t pay unemployment taxes.

I am seriously opening up my home to people, even if 10 people are squished in, because I really am afraid that these folks will become homeless otherwise, and I wouldn’t be able to live with myself if they did.

I work in downtown Atlanta. I see what homelessness is. I see people underneath viaducts and near train tracks, with MARTA trains and Norfolk Southern trains going by. And I’m scared shitless that my friends or myself are going to become one of them.


Why not nationalize? Then we have direct control of what comes out of Detroit….

These are companies that still operate using a 1940’s model- they are set up for a time in which they controlled about 70 percent of the market worldwide, and where each individual company only really had 2 competitors. American auto companies stopped being free-market entities sometime in the middle of last century, as their anti-competitive policies and market dominance, as well as increasing government subsidies and tax incentives, began to shift them into quasi-governmental entities. So why not take control of the what we have paid trillions into anyway? We can wring our hands about socialism, but isn’t that what we have in these companies anyway- albeit a poorly managed, anti-egalitarian form of socialism?

We should take that shit over, run it for 20 or so years until new technologies firmly take root, then break them into small, competitive companies and return them to the free market.


You will never live under a bridge as long as Mister ‘Catt and I are around. You might have to come live in our tiny office, sleep on the futon, and eat Mac and Cheese with us, but you will never have to live under a bridge.

@Jamie Sommers:

Seriously! Besides, are there no workhouses? What of the debtors prisons, are they still in operation?

rptrcub: Nondenominational Winter Holiday The Birthday of Baby Jesus.


(Watching O’Reilly and Hannity fight in the War on Christmas while the economy tanks? Big heaping pile of AWESOME.)

The big elephant in the room that no one in power will talk about is healthcare, which is bankrupting the Big 3 as they try to pay for their workers and retirees. I read that alone adds $8,000 to the cost of a new car. I’m no engineer, but can’t they just buy an Accord, take it apart and reverse engineer a car that people wanna buy?

Nationalize the industry, then eliminate the age requirement for Medicare so that everyone has basic healthcare thus removing that burden.

But we can’t do that. That would be socialism, which would kill Jesus again. Better to wait until the entire system crashes. What’s that motto for our country? After exhausting every other available option, eventually America will do the right thing.

@rptrcub: they were self-employed and didn’t pay unemployment taxes.

Well, hello! But we do get stiffed for both halves of Medicare/Social Security. The Republicans never gave a shit about folks who work for themselves, which is one of many reason I’ve never given a shit about Republicans. Their free-enterprise line is bullshit.

Which brings us to…

@Tommmcatt Yet Again: American auto companies stopped being free-market entities sometime in the middle of last century

Galbraith, The New Industrial State. Corporations hate the open market.

@Prommie: In a Chapter 11 bankruptcy, the business can continue to operate. The people who get majorly hosed are the shareholders (wiped out), the workers (union contracts abrogated, a la the airline industry), and retirees (pension obligations dumped onto the feds as much as possible). Management can go ahead making cars that no one wants to buy until the next bankruptcy — if they can get financing, which in today’s economy is a big if.
What many people don’t get is that auto dealerships are really financial services companies. They borrow money to buy inventory and then finance sales to consumers through a captive finance company. They could be selling refrigerators for all the diff it would make. But — when financing dries up, ain’t nothing moving.

i just got a kick out of your dad refusing to buy japanese cars.
it’s why jews don’t buy mercedes. in my family anyway.

betcha a dollar they get bailed out.

@baked: I hope you’re right. It will make a great difference to people with no financial cushion .

I fully understand why.

My pro Korean father won’t go near a Hyundai or Dai Woo though. My dad likes a powerful engine and the V6 on his Accord is powerful enough.
If my dad weren’t so educated he would have been a Seoul Taxicab driver who takes joy in scaring the shit out of tourists with his crazy Kamikaze like driving. Note: I definitely have a bit of the Korean Krazee gene especially driving.

Silly car story. I was shuffled off to Korean camp in the mid 80s and I and a whole bunch of NA born Koreans were taken on a tour of a Hyundai plant (ironically, this one was making cars for export to Canada who was first to get the Pony and Stellar.) The tour guide was bragging about the all steel construction and leaded gas engine. I raised my hand.

“What about rust control? And we use unleaded gas.”
“The Hyundai has a very durable 5 speed…”

Explains why Hyundai had a hard time for the first 20 years in NA. Also explained in part why my fellow Koreans shunned me. No one likes a curious smart ass know it some nerd.

@Dodgerblue: Dude, I practiced Bankruptcy law prior to my current gig as lobbyist for the auto dealers, tell me what I do not know.

GM made the cars it did because the people WOULD buy them. They are not where they are because people would not buy the cars. What they found is that people would not buy their high-mileage compacts, they clamored for ever-larger SUVs. And this gluttony on the part of the public was ennabled by federal policies that kept our gasoline prices unnaturally low through the 90s and until recently. No wonder Japan and Europe have many small high-mileage cars, gasoline has been $3 and $4 a gallon in those countries since 1990.

Detroit also has to deal with providing health care to current employees and retirees, which Japanese and Europeans don’t have to do, and Detroit has an older workforce, a greater percentage of retirees to current workers, than those countries.

The US automakers happen to be in, and cater to, a country of pigs who chose big gas guzzlers because they could.

As far as quality economy cars, its frankly bullshit that US automakers can’t do it, they are doing it. Its a lingering negative perception.

This is knee-jerk PC bullshit and its the equivalent of cutting the economic throat of this country to let them die.

Oh, and the prius is public relations bullshit, too.

@lynnlightfoot: They fucking better get bailed out. They make something. The fucking financiers we just threw $3 trillion at make nothing, produce nothing.

@Dodgerblue: There’s nothing evil or pernicious about “captive” finaance companies, either, they in fact offer lower terms than you will find anywhere else for a car loan, because they have a vested interest in moving the cars out of the factory, off the floor plan, and into your driveway. It was only after GM sold a majority of its “captive,” GMAC, that GMAC tightened credit, both floor plan and retail.

And in the end, I can tell you, its not the liquidity crisis or the credit crisis or the unavailability of financing that is killing auto sales; there are no buyers. People are scared shitless and have stopped spending money, on anything, restaurants, retail, cars. Its all one phenomenon expressing itself in each industry sector in different ways, Outback Steakhouse can adjust to changing conditions by putting together a special $9.99 steak dinner deal, but it takes a little longer to design and tool and start making a 50 mpg car, but trust me, GM will do it, they say we’ll see the Volt in 1 year; where is Toyota’s pure electric?

@Promnight: I think the source of the Bush Admin’s hostility to a Big 3 bailout is that they hate the auto unions and don’t give a fuck about the union retirees. Those issues can be cleansed through BK the way that the “problem” of poor blacks in New Orleans was cleansed by Katrina. I’m convinced that the Obama Admin will find a way to keep the industry alive, which I think is the result we need. I also want to see a C7 Vette race a Tesla.

@baked: How about Siemens and I.G. Farben products? Cf Gravity’s Rainbow. They used slave labor; I’m not sure Mercedes did.

good point. my family’s aversion did not reach that level of understanding.
they just looked at that hood ornament and saw a swastika.

Add a Comment
Please log in to post a comment