If You Let Your Dog Drive Your Car, Sooner Or Later . . .

by R. Elgin on November 21, 2008

in Asides

The WSJ has a very insightful article on how the American car industry drove into a ditch.

{ 12 comments… read them below or add one }

1 wjk, 검은 머리 외국인 November 21, 2008 at 12:25 pm: History will record it.

United Auto Workers killed off themselves.

Learned somethings from the article.

Big 3 can’t make a profit off of low margin small cars. So they don’t build them.

This is comedy. UAW is a joke. They are also fervent socialists. There’s a fervent socialist to be enthroned in the White House soon.
2 KrZ November 21, 2008 at 12:35 pm: I feel myself agreeing with the first post. Good God, what has become of me?
3 WangKon936 November 21, 2008 at 12:40 pm: wjk, quit while you’re ahead.
4 The Western Confucian November 21, 2008 at 12:51 pm: Most of the imported cars in America come from three countries: Japan, South Korea, and Germany. What do these countries have in common? They’ve all benefited from having their defense subsidized by Uncle Sam, thereby freeing up public monies to invest in industries and welfare.

America, in turn, in “exchange” for protecting these countries, has openned up its markets to their products, regardless of whether this is reciprocated or not.

Libertarian Ivan Eland pointed out the absurdity of this arrangement in Ungrateful Allies:

“Despite plundering their colonies at gunpoint (for example, the Spanish Empire looted the gold from Latin America) and creating sheltered markets for their goods overseas (for example, British mercantilism), even the formal empires of old were not cost-effective, according to classical economists. The informal U.S. Empire that defends other countries abroad using alliances, military bases, the permanent stationing of U.S. troops on foreign soil, and profligate military interventions is even more cost-ineffective. U.S. forces cannot plunder, and rich allies, such as South Korea, excessively restrict their markets to U.S. goods and services.”
5 cm November 21, 2008 at 1:30 pm: That mess with the UAW sounds very familiar. Sounds exactly like the Hyundai auto worker’s union. Actually UAW sounds tame in comparison to Hyundai’s union.
6 Nappunsaram November 21, 2008 at 9:09 pm: Hello? Did anyone else read the other half of the article that says those same companies are operating and/or building plants in the US??? These plants and companies are building small cars and selling them at a PROFIT. These companies are employing AMERICANS to build these cars in AMERICA. Nobody seems to mind or notice that, though, or mourn the towns that have sprung up around these plants.

American cars have been losing huge portions of the domestic (and world) market for years. This is nothing new, and what’s worse, they’ve tried to dictate to me what kind of car I should want (SUV, truck) instead of making a car that someone like me wants to buy (economy or mid-sized car). They put all their eggs in one basket, namely large light vehicles, instead of figuring out a way to make car manufacturing profitable.

I am pro-union, but I agree that the UAW argued for unsustainable benefits and shot itself in the foot. The concessions they did make don’t kick in until 2010, although I think that was in the article. Union members and leaders have to work together with the corporate entities to work out how to save all these jobs.

And another thing, if they’re going to ask the government for a handout, they’d better be ready to give something back. They want the money with no strings attached and without oversight (since they’re arguing that would be “nationalization” of the company), but I as a taxpayer want to know what’s happening with all this money.

Does anyone know if there’s a way to find figures of people working in the automobile plants from year to year? I’d like to see if the new plants employing people (mainly in the deep south) has resulted in the loss of employment at Detroit 3 plants.
7 silver surfer November 21, 2008 at 9:30 pm: Conspiracy theory: they’re deliberately driving the US auto industry into the ground so they can build cars in foreign brand factories that don’t allow unions.
8 silver surfer November 21, 2008 at 9:32 pm: So everything would be fine with the US auto industry if only either the government would pay for their mistakes or else the workers would pay for their mistakes.

How about they just stop making mistakes?
9 Nappunsaram November 21, 2008 at 11:22 pm: Agree with #8, silver surfer.
10 Uri Onara November 22, 2008 at 1:13 pm: I remember when Lee Iococca came here to Japan to DEMAND that Japanese buy more of his American cars. When confronted with the fact that GM did not even make a car with the steering wheel on the right-hand side, he simply brushed it off by saying that Japanese would likely prefer it to be on the wrong side and would even see it as a status symbol — because that was how they felt about the Mercedes Benzes that Japan imported directly from Germany (!). Iacocca pretty much became the stereotypical poster boy of what was wrong with America during the Japan bashing years — he came across as an arrogant and out-of-touch loser trying to bully his way and nobody was buying it.

Although I do think there are profound differences between the American market and Japan’s (many people in America even now are unwilling to give up gas guzzling SUVs, monster trucks, vans, and hummers, and most Americans truly need to drive greater distances, though the need to cart around much more stuff is more of a lifestyle choice), Japan’s fuel efficient and intelligently designed cars have already beat Detroit on its own turf. America’s car industry cannot be revived until it makes cars that even people outside of America want. Detroit’s problem did not happen overnight and it is not like they have not had 20 years to wise up and fix things.
11 wjk, 검은 머리 외국인 November 22, 2008 at 2:23 pm: Western Confu here is talking about disloyal allies of the US.
Germany, Korea, Japan.
are they really disloyal?
sure, they use US troops. Isn’t it a common understanding that they provide the US military with solid strategic holdings in west Europe and East Asia? I would say so, based on how Russia and China reacts with troop placement to counter it.

they also buy a chunk of US weapons.
Except for some stretches of years for Schroder and Kim/Roh, I think you’re stretching it to say these 3 govts were anti-American.

I would argue these 3 would be generally on the safe side of supporting the US with money and troops, even if the rest of the world did not.
12 The Western Confucian November 22, 2008 at 4:41 pm: wjk, you’re right that the “US military [gets] solid strategic holdings in west Europe and East Asia,” but what does this get the average American? Nothing. The game is up. The empire has no clothes. We’ve been played.