Not the Big One, but the Big Three
If any of Congress’ anti-bailout Republicans can produce a concrete plan to guide Detroit’s Big Three auto makers through Chapter 11 bankruptcy toward future vigor without compromising the actual Americanness of the American auto industry, then Congress ought to consider such a plan on its merits. In the meantime, however, Tom Piatak is right when he writes, “But even if the attempt to save the Big Three ultimately fails, both prudence and patriotism suggest that it is worth trying.” On unapologetically conservative grounds, the Economic Nationalist believes that Congress should appropriate from the Treasury the needed billions to bail out the U.S. auto industry.
Now, whether you agree or you disagree, the present public discourse on the topic nevertheless suffers an extremely serious flaw, a flaw which makes it nearly impossible to reach rational public conclusions in the matter and a flaw of which all this blog’s readers should make themselves acutely aware. The flaw: there is no such person, there is no such corporation, as “the American auto industry” or “The Big Three.”
It does not exist.
The next time you and I hear someone smirk, “Detroit ought not to have made so many big, gas-guzzling cars,” or, “The Big Three should never have signed those fat union contracts,” we ought to ask, “The city of Detroit? Which one of the Big Three?”
Because, if they all did it, whatever it is supposed to have been, then—does it not occur to us?—they might actually have had a good reason.
The Big Three are three distinct corporations, governed by three distinct boards of directors and operated by three distinct CEOs under three distinct business strategies, that—far from generally cooperating with one another (recent appearances notwithstanding)—have competed fiercely against one another for many decades. What they have in common is the collective representation of their workers by the UAW and their subjection to bad laws enacted by Congress. (The UAW? This article neither credits nor blames the UAW—the United Auto Workers—for anything in particular, but for better or for worse that labor union is indeed a significant common factor and, as such, cannot coherently be overlooked in analysis.)
One does not usually blame “truckers” as such for bad driving, “accountants” as such for embezzling or “boxers” as such for low blows. Rather, one usually singles out the incompetent trucker, dishonest accountant or dirty boxer in question. Why then should some among us be so quick to blame “auto makers” as such for leading America’s industrial decline?
Unless we were entirely unaware of the sweeping changes that Detroit’s auto industry has undergone since the bad old days of the 1970s, to blame the auto manufacturers in such a collective manner would make little sense. To blame Congress in such a collective manner would make rather more sense. Maybe we ought to look there.
* * *
The Economic Nationalist stands open to arguments that GM, or Ford, or Chrysler, had separately made strategic mistakes for which their respective shareholders should bear the burden—for, after all, some big corporation somewhere in America makes a big mistake probably every month of every year, for which its competition should and usually does punish it ruthlessly. However, to have to listen to folks who could hardly tell a spark plug from a flat tire bloviate in the media on the putative mistakes of “The Big Three” is a bit rich. Inductive reason suggests that when GM is in trouble, one should inspect GM’s management first for the cause. When the entire Big Three are in trouble at the same time, however, that is another matter entirely. In that case, one should expect the real trouble most likely to lie elsewhere.
It’s not the Big One. It’s the Big Three. It’s three separate companies, all in trouble because—as the Economic Nationalist would suggest—Congress has forgotten the proper use of a tariff. That’s not Detroit’s fault. If Detroit is allowed to be punished, anyway, then all Americans will pay the price; for, for the sin of letting our auto industry die of such shabby national neglect, there will be no easy expiation.
One hopes that enough Congressmen privately realize it, because this writer has seldom read or heard such a load of economic nonsense in the organs of big media as he has recently with regard to the Big Three.
HJH
December 10th, 2008 at 3:59 pm
The labor unions are largely to blame. I know that their workers want to be paid like lawyers and dentists are, but it’s not realistic. Higher wages are fine to a point but they mean higher prices.
December 3rd, 2009 at 3:29 pm
My opinion of why the big three is in trouble, and how to avoid automobile dealers entirely.
By Andrew T Taylor
HIPPITY HIP HOP HOOP
”……..goes the car advertisements ‘hell come on down, we are giving them away!!! Break that advertisement down into facts, and you will find its 99% [nonsense]. You don’t realize it. these people want your money, but they want to PICK & CHOOSE their customers. I don’t think so!!
Many [tawdry] tricks take place in dealerships, more than I can discuss here. The most laughable:
“all applications will be accepted”
Well, yes, they will take them. That is what that means THAT’S ALL! But getting APPROVED is another thing. If you’re going to give me a hard time, [I am not interested]. I am a busy man. I don’t have time for clowning around while you act as if the truck you’re selling is the holy grail.
1999 S10 for $5995 stock #12345
And lo and behold, that S-10 in nowhere to be found! But they DO happen have another one, at a much higher price.
Dealers want to [examine you ridiculously closely] for a loan, If they find one thing wrong, you’re done. They don’t allow you one blemish, but they can be as crooked as they wish,
This is an article of WHY the big three is in trouble. You won’t find this discussed in the media, who depend on auto advertizing for revenue.
The first thing you must do is avoid car dealers. The whole scamming system! by now you think I am crazy. here is how I do it.
I will Buy from an individual. It’s so simple
“Mr. Jones, what do you want for that truck”?
I would like $1200
“Okay, here you go”.
“Thank you here is the title”
Done deal. Try that at a dealer and see what happens!
Bad Credit…… I had no choice on that one. Sure…..it made life more difficult at first, but I learned ways around it… buzzwords like W.A.C, ir “if you qualify” Instantly tell me that I do not want to pursue, nor have anything to do with these exclusionary people. These people tell me that due to some invisible number that I must pay more money for the same goods and services
So if I (according to the dealer) am not as likely to pay back the money, I should be charged MORE money for the same thing, putting it even farther out of my reach? I refuse to play that game. How about they don’t get the sale at all? At least from me,
HURRUMPH!!! Thinks the car salesman to himself. “This guy doesn’t matter, because his credit stinks! He won’t let me charge him more, just because I can. He is a non-conformist. That ungrateful bastard! He just needs to go away…
OK I will……taking my money with me. I have the power, not you.
l multiply one refusal by millions and it ends up affecting the whole apparatus, right up to the factory who cries every year because sales are down! wonder why?!!!!
New Auto dealers will not talk to you about a new auto loan if your credit is below 730. That leaves out 46% of the public! Is it any wonder that GM is in bed with the government? This company is in total denial. They have forgotten that it is the common working class that makes a company. The ‘tier 1” customer they seek is rare, and will become even rarer as this economy goes south, and certainly not enough to keep a big company alive.
Do you know any company who would not be harmed by refusing 46% of its customer base?
So people like us don’t matter to you big three? There ARE a lot of us and we have spoken with our pocketbooks. Now you come running to the Feds with your hand out! SERVES YOU RIGHT. Going bankrupt, crying because you can’t sell enough of your products? YOU DID THIS TO YOURSELF! Where did you think these imaginary people with perfect credit were going to come from??? The people in the suburbs were not enough to keep you afloat? Hell you have catered to them for fourty years, forgetting the common man who made you successful to start with. You made up rules that locked the working class of people out of the possibility of buying a new vehicle.
You would think thatthe car companies would have seen the writing on the wall, but they are in total denial. Instead of opening up the market, on a workable basis they have clamped down credit even further…..going bankrupt, closing dealers…I saw the local dealers on local TV, just crying about it. AWWWWW……..poor dealers! Where was the publicity when poor people like us could not buy something decent to drive from you??? How does it feel to be forced to live like we do? It has taken years, but now reality is here!
I am self employed, and can easily afford a $500 a month payment…But I dont look good on “paper” So me, being somewhat resourseful (and a bit defiant), buy a 1984 Ford pickup with a bad transmission from Craigslist for $300. I also buy a parts truck for $50, and install its transmission in the 84. For a total of $350, Less than one payment, I have a truck that will last for another 5 or 6 years.*I then keep the money I would have given the dealer.
Who really lost money in this situation, me or the dealer, the factory and the economy?? One new truck not sold. One truck is of no affect to the bottom line… But multiply that by all refusals, and a quick run of the numbers result in millions of units not sold.
Now for you appearance wonks, who would look down on my truck because it’s old and out of style, I say to you……I am wealthier than you. I do not have payments or debt. If I do not make another dime, no one will come get it. you have the appearance of being wealthier because you are in debt up to your eyeballs…….ummmmm …….excuse me, just exactly What was you gloating about again???????? your new escalade and this old ford are made out of steel, plastic, paint and rubber. break both down to its basic elements, and they are exactly the same… I drive this old truck in your presence as a testament to your ignorance!
Of course, the powers that be do not like Americans who think out of the box in this manner. One trick they used is requiring auto insurance mandatory, then using credit scoring to determine the rates. Over the years, they have tried several times to get old cars off the road. If you are not mechanically inclined, old cars are not for you. Most repair shop does not like to work on them, even though they are simpler to maintain. I wonder why that is so? Is it just another trick to discourage old car use, and compel you to play the game??
Henry Ford knew that the model T could only be successful by placing it in the hands of the common people who needed it. The public responded. To say the Model T Ford was a success is an understatement. Mr. Ford’s liberal sales attitude resulted in over 29 million units being built. With that much profit, any default or loss was easily absorbed
The only Car maker I have any respect at all for is FORD. At least FORD was smart enough to not let the government get involved in their operations…
I will be the first to admit that I have an axe to grind with car makers and especially the dealers. More than once I have laid under an old car or truck in the rain, mud, and [muck], tiring to keep something on the road to put food on my table. As I sometimes risk getting pneumonia just because some exclusionary dealer wants to pick and choose their customers I will always remember that pasty-faced sneering salesman at Morlan Dodge in Sikeston mo.who tried to stand in my way! I now have a heated garage, and have stayed well-versed in electronics, so that doesn’t stop me either. I always have something to drive, bought for pennies on the dollar, and more cars and trucks waiting in reserve.
So as society pays an unreasonable price for a new vehicle, driving it around until the sticker in the window yellows, that’s fine with me. Once the new wears off if it, and the ashtray is full, and the wildcat dealers play with it, selling it used for 21% interest rate, and it’s worn out, then I will restore it, and enjoy it saving a bundle of money in the process that I didn’t have to give to the dealer or maker whom evidently, doesn’t want my business anyway.
Big three, you have done this to yourself. You have forgotten the people whom have made you big, the common worker. As you watch your sales evaporate, and your inventory grow, Just remember. You could have sold them IF you had the common sense to open up the market a bit with a reasonable apparatus of buying your product within reach of all. The antics of your dealers are your worst enemy. You set them up to sell your product and the dealers try hard to find reasons not to.
We, the common people have spoken, with our wallets and now, you’re feeling it. I guess we DO matter after all!
But as for me, the damage has been done because you have forgotten the common man. Until the day I die, I will never see you get one thin dime of my money directly if I can help it.
Andrew Taylor Sarcoxie MO
tempola@aol.com