I've scratched my head many times over the general problems with the economy. I'm a geographer, not an economist. So I don't really have a good foundation here. Personally, I'm a strong believer in keeping markets as free (libre) as possible in areas where a market economy makes sense (durable goods, commodities, etc.). But I also strongly believe in a closed market or even government-run (re:socialist) operation where that makes the most sense (space exploration, basic necessities like health care, managing the environment, etc.).
I have held the belief for a couple decades that the US automotive companies - the Big Three - have been teetering on the edge of a horrible demise. Among the three, Ford has done the most to voluntarily reinvent itself and it shows both in their cars and their valuations. GM has done everything it could to fight reinvention - from forcing H. Ross Perot off it's board of directors to having to create an entirely separate company, Saturn, to even explore some of the ideas that Edwards Deming taught the Japanese after World War II. And of course, Chrysler has been a helter-skelter mess. The product of the first major bailout in the 80s, Chrysler continued to make some beautifully designed cars that weren't worth a hoot. You could always tell what part of a Chrysler was made by Mitsubishi - it was usually all that was left after a few years!
Now the UAW is an easy target in the bailout because it seems that GM isn't able to truly function in a free market. But it's the same managerial issues that keep it from really changing the way it works that creates the need for organized labor negotiations. GM management just has it's collective head stuck up it's tailpipe.
So, how do we create a "bailout" that is truly fair to Americans? I'm loathe to think we'd just give GM and Chrysler a fat paycheck. Instead, let's give the American people a nice tax credit for buying a new car. Let's divvy that $25B among 100M US households at $2500 per household. But you can't tie it to a particular purchase - otherwise we'd just be trading GM's problems for Toyota's and I think they both employ about the same number of Americans.
If this doesn't work, then GM should just close up shop. We can use the next $25B to retrain it's workers to build solar panels.
1 comments:
Car Mechanic
With all the talk about the ball out I have not seen anyone discuss public owned fleets. I work as a mechanic for a big government fleet. We are scheduled to replace 2,800 light trucks in 2009. Are we going to replace the Ford, Chevrolet, and dodge trucks with Toyota Tacoma's using tax payer money. This just doesn't seem right. Even If these trucks are made in the US the profits are pumped back into the Asian economy. Would the US tax payer like to directly fund a foreign economy?
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