Why The Big 3 Shouldn't Get Your Tax Money
| By Lazarus - Dec 4th, 2008 at 8:47 am EST |
| Also listed in: Foes of Corporate Welfare |
I'm against bailouts on principle for a lot of reasons in general: companies should pay the price of their own mistakes, we have limited resources that could be better spent directly paying down the national debt, putting people to work, etc.
But in the case of the Big 3 I've got another reason: they symbolize the utter contempt the auto industry has for the environment. It's not just the H2 limo I have in the picture. GM, Ford, and especially Chrysler are all low performers on fuel economy compared to their chief rivals: Toyota and Honda. It didn't have to be this way. In the late '90s American companies were making pure electric cars thanks to CA's zero emission vehicle mandate, but that got shelved.
Let's compare the most fuel efficient model each company has. That really says it all:
Toyota - Prius - 48/45 MPG
Honda - Civic Hybrid - 40/45 MPG
Ford - Escape Hybrid - 34/30
GM - Cobalt XFE - 25/36
Chrysler - Sebring - 21/30
We're getting our butts kicked and it shows in each company's profitability. Bailing out these clowns only rewards their mediocre product lineups.
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Here is the reason why we should bailout the Big 3 other than not doing such would lose another 3 million American jobs. You will lose the largest manufacturing unit in the United States, the heart and soul of American manufacturing. R&D goes with it. Technology goes with it. Engineering goes with it.
And more important, the auto industry has an enormous future in this world. Americans, we buy, in a good year, 17 million cars. China, India, all these countries are opening up. People are moving into the middle class. They're going to be wanting cars. You will carve the United States out of much of the future. But in terms of viability, what's killed General Motors and the others, is they have dropped the greatest, highest-paid guys who give the most in taxes, the cleanest, safest factories, dropped them into global competition against factories in places like China, whose managers would be in a penitentiary if they were doing in the United States what they're allowed to do over there.
Here's a novel concept. Be an American. Buy American. Three million of our fellow Americans are depending on us.
Second, these companies are not "American", they are multinational. They make their products here and in foreign countries, notably Mexico. Just like Toyota and Honda.
These companies need to get their shit together and a bailout won't help. If you really care about them let them feel some pain. The market will whip them into shape.
A bailout can't save companies that make products people don't want to buy. Period. That's capitalism.
These companies, while technically classified as multi-national, are based here, in the good ol' USA. The profits from their foreign subsidiaries come here, not Japan or anywhere else for that matter.
A bailout with strings will most certainly help them. I have no problem with legislating higher CAFE standards, R & D for "greener" vehicles, or better safety standards. I also have no problem with jacking up the tariffs on cars produced overseas and surcharges applied on domestically produced foreign cars.
But look on the bright side Lazarus, I'm sure with your postings of this nature the Toyota and Hyundai salesmen are thinking, "You got fooled now give me your money."
Vehicle production won't stop in this country because one or all of these companies goes bankrupt. Somebody will buy up the brands that have the potential to turn a profit. Fewer cars will be produced, but that's because demand for cars is way down right now.
As far a where the profits go. They go to the shareholders. There's no guarantee that the shareholders are in this country. Even if they are there's no guarantee that they'll use their gains to benefit this country.
The idea that it's patriotic to buy from these companies is beyond silly, since they are multinational. I'd say it's more patriotic to buy a Prius and reduce our country's dependence on oil.
We are also talking about the business which will be lost because they go down. Parts, upholstery, local businesses.
We are talking about many more that the union jobs. When they lose their homes where does the tax money come from?
It is not an easy problem...
I say, okay but deal with them as what they are... car salesmen.
Legally bind them to buy american and hold the reins tight.
peace,
marsha
peace,
marsha