Government Bailouts

So now the great American automobile manufacturers want a bailout.  Not just any bailout, but a Taxpayer Funded Bailout.

Why?

To listen to the executives of GM, Chrysler and Ford, it's gas prices.  The economy.  Unfair competition from overseas.  UFO's.  The Boogeyman.  Gravity.

It's most certainly NOT the fault of the executives of GM, Chrysler, and Ford.  Why, they come to work every day, work real hard, and help little old ladies across the street.  It can't possibly be them!

Can it?

First, a little history...

Way back when, there were dozens of American automobile manufacturers.  Most of them went belly up for various reasons, the depression, poor products, poor management, whatever, but some of them were either bought up by the Big Three or run out of business by the Big Three.  Remember, there were no effective laws against monopolies or some of the scummier business practices that went on back then.

So it's, say, the mid-1970's, and the Big Three are on top of the game.  They're in fierce competition, building the best cars and trucks in the world, making loads of money, and the US and our cars are the envy of the world.  They rarely advertised reliability because everyone knew they ran forever, and new cars were only bought when consumers saw new features they wanted.  Folks who got jobs building these works of art were considered lucky.  Movies and songs revolve around our cars.  Forget drive-thru's, you can get a full meal served while sitting in your car, complete with pretty waitress on roller skates and a table that clips to your window.  You can pull into a movie theater and watch a movie without ever leaving your car.  Hell, you can, uh, 'complete' your date without ever leaving your car!  There is nothing Americans love more than their cars.

When things are perfect, how do you make them better?

If you aren't a complete moron, you don't try.  Who hasn't heard the saying "If it works, don't fix it"?

If your an executive at GM, Chrysler or Ford, you make a new business plan.  One that, in the next few years, will make you even more money.  Instead of building reliable cars that run forever, make them piles of shit that won't last more than a few years.  That way consumers will be forced to buy a new car sooner.  Move some of your profit base from the actual sale of the car to parts and repairs, because hey, they'll need'em.  Build cars using cheap plastic and fiberglass, thus speeding up the falling-apart process.  Treat your customers like crap, showing them they aren't needed, that your cars are so wonderful that you can take or leave customers at your whim.  Shoot, don't even SELL the car to your customers!  Make them pay $20k or so, just for the honor of paying for it, then take the car back from your customers, place it in a crusher, and destroy it!  This will let the customers know they aren't worthy of owning your cars anymore, even if they pay for them!

Why stop there?  Build cars that are actually dangerous to drive!  Make it so if a customer is so foolish as to turn a corner, the car flips over.  Put the gas tank where it will explode if the car is rear ended.  A steering wheel that is nice and slippery  Hey, customers are so worthless, how about a device, we'll call it a "Safety Device", that, in the even of a collision, or even driving over a curb, will smack the driver in the face at 200mph, possibly killing them!

Oh, and if you think GM competes with Ford who competes with  Chrysler, think harder.  They do NOT compete against each other.  Like Democrats and Republicans, they cooperate very well.  In fact, they work closely together, shutting others out, passing customers to each other, and trying very hard to make you believe the only choices you have are them.  They decide amongst themselves what kind of garbage they're going to feed you, how they'll milk you for every penny they can, and how long they can bullshit you until you get fed up and buy a Toyota.

For the past 30 years, this has been the business model of American car makers.

Now it would be wrong for us point the finger at executives.  They had a couple partners in crime, so to speak, so let's pay them a visit.

Unions were started to protect the employees.  After all, managers had the law on their side, so workers needed a little something to see to their welfare.  In the beginning, unions did a lot of good works, protecting the pay, living standards, and safety of employees.  This needed to happen.

Then the unions, like the executives, got greedy.  They demanded more and more money and benefits for their members, but refused to demand their members provide quality job performance.  In fact, I have no doubt the unions would fight like tigers for slug employees who refused to do their job.

Finally we have the governments, both local and state, who, like the unions and executives, got greedy.  They saw the Golden Goose, and instead of budgeting for the eggs, decided they wanted more, squeezing the eggs out, and finally cutting the goose open for that last egg.  Taxes did a swell job of running businesses out of town.

Now they're in Washington, with their hands out, wanting us to save them, ironically the same people they've had nothing but contempt for decades.

In fact, they have such contempt for their customers that they'll demand our money (without giving us the cars, you notice) with tales of doom and gloom, millions of Americans out of work, locust swarms, plagues, and fat guys at the beach in thongs.  They even flew in private jets, putting the icing on the cake of their disdain for the people who are supposed to save their butts.

So if the Big Three are having such problems, what about BMW, Mercedes, Honda, Toyota, Nissan, and so on?  Certainly, they're sharing in the current issues with energy prices, the economy, gravity...

Turns out they aren't.  While they perhaps aren't doing as well as in the past, they aren't slobbering all over politicians looking for handouts.  They haven't gone flying around in private jets threatening people for money, like some two-bit mugger.  While folks wonder if buying a Chevy means they won't have warranty coverage a year from now, nobody has such concerns when looking for a Mini or an Accord.

For the past 25 years or so, Japan has had a reputation for sending us reliable, fuel efficient cars.  If you bought a Honda or Toyota, you could expect 20 years out of it, at least.  For the past 20 years Europe has been known for reliable fancy cars.

This wasn't always the case.  You wouldn't want to rely on a BMW built in 1970, or a Honda built in the 60's.  They were crap.  Cool, but crap.  There was a day when "Made in Japan" was a joke, more than Made in China is now.  European cars were notorious for not starting.  Everything would seem to be working, but the car just wouldn't run.  Crazy things.

These companies didn't send executives around begging for money.  They didn't do a lot of bellyaching over the economy, fuel prices, the weather, old football injuries, or global warming.

What they did do is get their act together.  They built more reliable cars.  They built cars people wanted.  They treated their customers like, well, customers.  When they saw a problem, they fixed it.  They did not act like they're customers were beneath them.

The question isn't why should we bail out American car companies.  Should we do it at all?

Jay Leno, a car enthusiast and, few people know, a good businessman, believes we should.  His argument is, if we help companies that do nothing but move paper and numbers around, we should certainly help companies that actually produce things.  It's pretty obvious that, when you look at the past 100 years, once we lose a company that produces something, we never get it back.

He may be right.  If we lose the Big Three, there may never be another American car.

I don't know if that would be bad.  The longer these three worthless companies are allowed to produce worthless products, the less likely it will be that we'll see an American car worth being proud of.  Ever.

On the other hand, should these companies go under, it's possible somebody else will come along and do it right later.

It's also possible that, after bankruptcy, one or two of these companies will somehow survive, and come through humbled, ready to do the right thing.

And if we never get another American car, that just might be a lesson to other American businesses.

A lesson in how NOT to run a business.

As far as their jobs are concerned, yes, that would be a shame.  On the other hand, when they sell you a pile of shit car that doesn't run, they don't show the same concern when you can't get to work.  When I was making $1200 a month, nobody at GM lost sleep when I had to cough up a month's pay to fix a transmission in their GMC Sonoma.  Twice.  In one year.  Also, a $3600 engine, a starter, U-joint, ball joints, power window motor, and whatever else I forgot.  Oh, this was a 1992 truck, and all this went on in 1995.  That's right, a three year old truck with all these problems.  Then there's the two year old Suburban that required $2000 of repairs over the course of 18 months.  Chrysler, well, we have Dodge trucks at work, and they're pure garbage, not just in reliability but in design.  Ford, in my opinion, is the best of the bunch, still, my father's car has broken down twice in the past month, and it's a year old.  My Ranger was falling apart at 60k miles.  Better than the other two, but not even close to my Toyota Pickup, which is 21 year old, has 150k miles, and is considered "low mileage" by those who know these trucks.

GM is well aware of the issues I had.  They did not fly anybody around in private jets, send lobbyists, or indicate in any way they gave a popping fart whether I could afford these repairs, whether I'd lose my job if I couldn't get to work every day, or how this would affect me, their customer, when I was stranded 200 miles from home at 2am, chunks of the engine littering the highway.

Point is, why should I worry about these people loosing their jobs after all that?  In most businesses, if you perform your job poorly, you lose your job.  Why should GM or the others be treated differently, especially when their poor job performance directly affected myself and others?

Should we bail them out?

The issue of whether they deserve it or not is irrelevant.  If it mattered, nobody would bother asking the question, because they certainly don't deserve it.

The issue of how this will affect the people who work for them is irrelevant.  As sad as it would be, it's not a reason for coughing up billions of dollars in taxpayer money.  This is called Capitalism.

The only issue that matters is how a bailout will affect this country in the long term.  The plan these executives are supposed to put together will be the key to how this bailout will work.  If they lean towards the Japanese business model, there's hope.  If they lean towards kissing the asses of various politicians, then whatever money you see going to them, well, you can just write it off and bad money after bad.  Like Chrysler, they'll all be in this position again, and again, and again.

That is, as long as we allow it.  I'm not big on calling my representatives, but I have called them this time.  I don't want a bailout at all, but if it must happen, I want a written plan on how they'll make cars that can actually compete with European and Japanese cars, not more crap that isn't fit for a junk yard.  I want to see how they're going to start honoring their warranties.  I want to see them compete with each other.

In other words, I want real results.  Otherwise, it's better to let the Big Three die out.  At least that way we could look back and lie to ourselves about how great they were and how unfair it is that they're gone.