Apparently America Doesn't Understand Detroit
by Dan Calabrese, Real Clear Markets: Apparently the rest of America just doesn’t understand. So says the Detroit News, the Detroit Free Press, Detroit-area talk show hosts and business and political leaders of all shapes and sizes. Mean old America. Criticizing the Big Three automakers without having our facts straight or understanding the car business. The car business is indeed difficult to understand from outside the Detroit bubble. It is difficult to understand hundreds of billions of dollars thrown at people and things that contribute nothing to the generation of revenue. It is difficult to understand how a company can believe it deserves to survive, in spite of the consumer market’s mass rejection of its products . . .To survive in business, you have to make a profit. Period. Nothing else matters. General Motors, Ford and Chrysler don’t do that, so they deserve to die. But if you want to understand why they don’t make a profit, all you need to do is look at two schemes concocted along with the United Auto Workers – the Voluntary Employee Beneficiary Association (VEBA) and the UAW Jobs Bank. The two entities work in different ways, but they have one devastating fact in common. Both require the automakers to pay billions to people who don’t do any work for them.
. . . No, Detroit. It’s you who doesn’t understand. Not because people haven’t been trying to warn you for decades that you were marching headlong into economic suicide, but because you didn’t want to hear it. And now your automotive bubble is about to explode and destroy you with it. Congress would be insane to help sustain the way this industry does business. It is utter madness. . . . [Full Story: Apparently America Doesn't Understand Detroit]
Tags: auto industry, bailout, labor unions, UAW, US Congress To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 9:52 PM - Post Link
2 Comments:
This is apparently just a ploy for the liberal illuminati in charge to give them the money. I bet there really isn't THAT much more to understand.
My letter to the editor, 12/3/08
Wednesday, December third you (Benton County Daily Record) ran a story telling of Sen. Prior's concerns about saving the automobile industry.
Going bankrupt will not shut down the automobile manufacturing industry in the United States; they will reorganize under terms of the bankruptcy. When the price tag gets down to what the "Big 3" is really worth someone or group will buy them.
If no corporation or private money wants to buy into the U.S. auto industry that is a red flag telling us the industry is a white elephant, a turkey.
It is a very complex issue but Sen. Prior made it worse by claiming 15,000 Arkansas jobs are at risk. I would make an educated guess he is lumping into that jobs at risk group people who operate car washes, oil and lube businesses, tire shops, used car dealers and neighborhood repair shops. Is the Senator trying to mislead us?
The government and Lee Iacocca set a very destructive precedent when Chrysler was given a dose of tax payer cash to get them back into the black.
Make no mistake, Congress is not trying to save an industry, it is trying to save the United Auto Workers which just happens to send huge amounts of hard working UAW member’s dues money directly to politicians.
Politicians and labor unions are a match made in hell.
Back off and let the forces in the business world sort out and fix the problems.
That has always worked in the past and will work now.
Lew
Siloam Springs, AR.
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