Tuesday, 18 November 2008

On Auto


Let's be quite honest here, if money is given to Detroit, it will be a short term bail-out in the fullest sense of the word, for the money will be given to businesses that have been in trouble and seemingly incapable.. or unwilling... to change their business plans... ever. Detroit... the most incestuous business in the world... has drawn upon its own people for decades, and as such has been unable to
design better cars, more economic cars, and cars that require fewer workers to build. They have been tied down by the unions and by their own histories and traditions, and as such have failed on a consistent basis. Compare the auto production by BMW in Spartanburg, S. Carolina with the production in Detroit, and one comes away with the idea that "northern" union based auto companies are
doomed to failure, while southern, non-union based auto companies are able to compete on the broadest world markets.

Sadly, we fear that Detroit will once again be "bailed out," and as it is bailed-out, its propensity to take action as is needed to end the union control and to redesign cars to smaller, more economic designs will wither and die. Two years hence... or at worst three... GM, Ford and Chrysler will be back at the taxpayer's trough asking for more money, and more money and then more money still. Fool me once, shame on you; fool me two and three and four times, shame on me.

The problem is that President-elect Obama is beholden to the unions, and he is particularly beholden to the Detroit unions, who helped him carry Michigan by a sizeable margin. Had it not been for the union support, the election in Michigan would have been far, far closer. Further, the unions helped to carry the day in Pennsylvania, in Ohio, in Minnesota, et al. President-elect Obama is more involved and more tied to the unions than any president since Lyndon Johnson, and that we find disconcerting... unless the President-elect shows very real leadership and chooses to turn his back upon the demands by the unions and the people of Detroit in particular and Michigan in general.

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