I continually get emails from friends, relative and listeners about the auto bailout package … and whether it’s a good idea or not.

For the record, I’m opposed to bailing out an entire industry. The free market would seem to dictate that if an entire industry is failing, maybe it’s time for them to fail.

Of course, not the entire industry is failing … just the “American” companies. I put “American” in quotes because as far as I’m concerned these companies are no more American than the Pope is Jewish. They’re headquartered in Detroit, but they make cars in Canada, Mexico, Europe and Asia. And they get their parts from the same places. Sure they make SOME cars and get SOME parts from the US … but they’re definitely not 100 percent domestic.

Considering I drive an “import” that was assembled in Ohio with 70 percent American parts and labor … I might just be a little jaded.

But the manufacturer of my “import” – along with the manufacturers of most other imports seem to be plodding along just fine. So it must be something about being based in Detroit that causes companies to FAIL.

Or are they failing? According to the most recent round of PR put out by those who love the big three, they’re selling more cars than ever. Take for example, this snippit from an email I got yesterday (for like the 10th time).

When you say that the Big Three build vehicles nobody wants to buy, you must have overlooked that GM outsold Toyota by about 1.2 million vehicles in the U.S. and Ford outsold Honda by 850,000 and Nissan by 1.2 million in the U.S. GM was the world’s No. 1 automaker beating Toyota by 3,000 units.

When you claim inferior quality comes from the Big Three, did you realize that Chevy makes the Malibu and Ford makes the Fusion that were both rated over the Camry and Accord by J.D. Power independent survey on initial quality? Did you bother to read the Consumer Report that rated Ford on par with good Japanese automakers.

Did you realize Big Three’s gas guzzlers include the 33 mpg Malibu that beats the Accord. And for ’09 Ford introduces the Hybrid Fusion whose 39 mpg is the best midsize, beating the Camry Hybrid. Ford’s Focus beats the Corolla and Chevy’s Cobalt beats the Civic.

So … if they’re doing everything right … then why aren’t they doing BETTER? If they’ve already fixed all the problems that plagued them … and are still asking for billions of dollars just to get through the next month or so … while at the same time saying that they’re going to shudder their plants for the month of January … why should we give them our money?

It really is a double-edged sword. Either their incompetent at building cars … or at managing the bottom line. Either way, it looks like they’re incompetent. I for one, don’t like to loan incompetent people billions of dollars.

I say let ’em go bankrupt … restructure their workforce … and work harder to sell a better, cheaper car. Otherwise, I feel like we’re just rewarding them for their failures.

And to those of you who say that if we let them go bankrupt, the country will spiral into economic chaos … what the hell do you think we’ve been doing for the past year?

5 thoughts on “Detroit’s double edged sword …”
  1. For the same reason we gave the Banks $$$ and for the same reason we keep rebuilding Iraq at the tune of 12 billion a month. No questions asked of the effort in Iraq or the Financial bailout..Go Leafs Go!!

  2. John, I agree with you wholeheartedly on your points on the Iraq war and the bank bailout. I opposed both vehemently and from the beginning. So I’m staying true to form by opposing the auto bailout, too. Your “Go Leafs Go,” however is just disheartening. Remind me again when they last won the cup?

  3. I talked about this on my podcast last week (conveniently located on my blog btw)…I love when people cite this JD power “Initial Quality” crap. That only covers the first 90 days of ownership. From JD Power’s website:

    Each year, tens of thousands of registered new-vehicle owners respond to J.D. Power and Associates surveys and report on the quality of their new vehicles during the initial 90 days of ownership. Consumers are asked to rate both the mechanical quality (i.e., defects and malfunctions) as well as the design quality (how well or easy a particular feature works) of their vehicles.

    As we all know, 90 days is all American cars are good for. Try checking back with the same folks at 30k. A first impression goes a looooong way, folks.

  4. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Sharon

    autoloans101.info

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