Originally Posted by
BengeBoy
The fact that as a taxpayer I may end up funding the bail-out of auto companies who have been struggling with cost, quality, marketing, and labor relations issues for my entire adult life (I'm over 50) is very troubling to me.
Most of the media coverage and
PR by the auto industry in my opinion confuses the issues of employment levels with the survival of the companies. If the corporations survive, that still doesn't mean we'll be able to save all the job of the hourly workers in plants and at suppliers. Production needs to continue falling until production meets near-term demand; that will mean more jobs disappear. So a lot of the "domino" effect of problems of the auto industry are going to occur anyway (at least until the economy improves). I hope we aren't going to bail out the car companies so that they can keep producing cars no one needs right now. Nor do I see why we should help support so many domestic car dealerships when clear the car companies could efficiently distribute cars with many fewer dealerships than they have today.
For that matter, if they're going to use taxpayer money to support the companies, do the taxpayers get a say in what kind of cars are made. Do we need cars that produce over 200 horsepower or go 0 to 60 in less than 8.0 seconds? Do we need sunroofs? Should people with bad driving records be able to take out an 84-month car loan for a high performance sports car, or should they be forced to buy cheaper, used, beater cars until they clean up their records? Is the engineering talent at GM really focused on an energy efficient car of the future or how to squeeze yet another cup holder into the next generation of minivans?
I think if it's a slippery slope - if the industry wants public money to stay alive because having them alive is a public good than the taxpayers should force them only to build "good cars," and then sit back and watch while we figure out no one can agree what "good" is.
In the end, seems to me that the market makes better decisions on what kind of companies should survive than governments do.
To put it in more familiar terms:
If we're going to use taxpayer money to bail out the housing industry do taxpayers get a say in what kind of houses are built? Do we need houses with central air conditioning? Do we need cable? Do we really need houses of more than 1200 square feet? Are the architects really focused on energy efficient houses or on how to squeeze yet another electric appliance in the next generation of particle board and celotex McHouse?
The fact is we can demand they build a certain type of vehicle (and Ford's quality is at the top of the industry, BTW, so that tired argument doesn't fly), but that isn't going to help. In fact, one argument goes that we have effectively regulated what the 3 produce. The toxic combination of CAFE and cheap fuel has long made it such that it is more profitable to build high-markup trucks and "give-away" cars than to build efficient cars. As someone who has a 401k, I've tacitly played along with this, however much I might disapprove. I
want my retirement fund to make money.
The other manufacturers have, in their home market, somewhat more expensive fuel. This favors the small car, although it allows production of things like a Ferrari, an NSX, or an Aston Martin. The same company that brings us the Smart also brings the Unimog and various V-12 powered monsters.
In the pipeline from Ford, due in the next 12 months, is a B class that should average over 40mpg combined and a hybrid Fusion that's alleged to get 39mpg
city. Chevy is bringing the Cruze here soon - late '09, early '10, I think - which should be similar, plus the 2010 or 2011 Volt for which they are negotiating with the EPA for a 100mpg rating.
The top two contenders for European Car of the Year were from GM and Ford. One will be here in a year or two, evidently to be sold as a Buick, the other the previously mentioned B class Ford.
It really helps further the discussion if we can speak in specifics about which things are or aren't in the pipeline rather than issue generalities.