I do not understand this. I understand why Boehner, McConnell, Graham, Shelby, and Corker are trying to hurt GM. For one thing, they're basic a-holes. Second, and in a somewhat more sinister vein, they represent states with large stakes in foreign car assembly plants, and they would like to see these European and Japanese manufacturers (and thereby their own states) prosper at the American automobile industry's (and chiefly Michigan's) expense. Third and most important, they want to strike a blow against the interests of labor and destroy the UAW, after which they can go after all the rest of our unions starting with the AFL-CIO.
But what's Obama's problem here? Why is there one standard for failed financial institutions and another for industrial corporations? Why is Rick Wagoner fired when the CEOs and boards of investment banking firms, mortgage brokers and stockbrokers are still sitting pretty, still doing the same things they were doing before, the very things that caused this whole downfall?
GM had no part in causing our problems. Because their core business is so dependent on the availability of credit to their customers, our automakers are among the chief VICTIMS, not the perpetrators, of this mess. Yeah, they focused on stupid SUVs and pickup trucks and let their business in sedans and coupes languish to some extent, but this was to cater to the stupid tastes of stupid American car buyers of recent years. They were selling what we were buying. There is considerable truth to their claim that Americans were not buying regular American cars -- we weren't, even though some of them, particularly mid-size and larger sedans, were almost decent.
I think back to the death of the American compact car, with Ralph Nader wielding the sword on which they were worsted, killing one of the most innovative automobiles, the Corvair, that appeared on the world scene in the '60s just before the car world began its transition away from American dominance. We made a lot of mistakes, some of which were on the part of our automakers and some that had their genesis elsewhere. Remember 1974, when we had stringent pollution controls but the technology had not yet evolved to meet those standards? Our cars were getting 7 to 11 mpg, and when you turned them off they'd diesel for five minutes, burning cylinder heads, valves and spark plugs so their expected engine lifespans were only about 40K miles.
Government added many burdens to the manufacture of our cars, increasing the price and decreasing the stylishness of American cars. All those weird safety mandates for car interiors (really, how many people impaled themselves on radio knobs?), bumper standards, and a million other little mandated nits made our cars more expensive, heavier, less efficient, and clunkier without contributing to sales. Naderism ran, and continues to run, rampant over the industry.
Our government mandated fuel efficiency, but did so meekly, setting standards that easily within the reach of European and Japanese manufacturers because their populations were already buying cars like that. Americans weren't, so those mandates presented quite a challenge, not just technically but as a business issue. Europeans and Japanese do not share our pejorative concept of "wussiness."
Here, a four-cylinder engine meant the Iron Duke and the inability to run with normal cars. Overseas, however, cars like the BMW 2002 and Datsun Fairlady (a.k.a. 2000) ran circles around our Pintos and Vegas and kept up with our Mustangs and Camaros. Here in America, a normal car had a V-8 and that's what we wanted. Sixes were for people who otherwise would be forced to buy used cars. Fours were jokes (and VERY rare on new car lots). This was not easy to modify.
But our automakers remained profitable and dominant on the world stage nevertheless. Indeed, our automakers remained profitable until last summer, when gasoline prices pushed through the roof, and then this fall when people could no longer get car loans due to problems completely outside anything automotive. I can't help but think that when credit once more becomes available to customers then these companies will return to a positive cash flow, like they have known for maybe 98 of the previous 100 years.
I have some trouble understanding the view that holds that these companies will remain unprofitable after the credit crisis is solved. The whole concept of bailing them out is to keep them solvent, and meeting their obligations to their workers, retirees, and creditors until individuals can once more arrange to purchase their products. It is not that their products are undesirable -- GM in particular is now selling highly desirable automobiles throughout its entire range. A very strange aspect of the conditions of this bailout is the possible elimination of Pontiac, whose G8 (an Aussie-GM Holden design) is as desirable a sedan as is built by anyone including MB and BMW, and Saturn through whose dealers the excellent GM-Germany's Opel cars are rebadged and sold. These seem to be the kind of cars we're trying to get.
I don't have an American car but we are seriously considering getting a Chevy Volt -- we saw it at the auto show and my wife loved it -- when the time comes to put our Prius out to pasture. I just hope that there IS a Chevy when the Volt is due to hit the market, and the chances for its survival might be enhanced if we stopped so publicly talking our automakers down and treating them, their employees, their retirees, their suppliers, and their stakeholders so roughly even as we coddle the robber barons of finance whose unbridled greed created their distress.
It's all because Obama and his advisors are in bed with Wall Street. It's the same old shit, different characters.
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