Thursday, November 20, 2008

Bail Out Detroit--then fire everyone.

Andrei Codrescu opines on America and Detroit the bail-out request from the automakers. As only a novelist can. Listen here on NPR and give me your thoughts. Moi, fanboys & girls? I say do it. In the spirit of real change, not just putting frozen Clintonians in the microwave (ya here me, Barack?), I say give them $100 billion. In essence, nationalize them. Then fire every senior executive. Re-bid everything from law firms to materials vendors. Hire go-getters, innovators, big thinkers. Tell the unions salaries will shrink and there will be hiring of minority youth in mandatory training programs, but benefits will increase--including nice touchy feely European massage and quiet room stations on the line. Go green--for real, not marketing b.s. Build smaller cars, smart cars. Cut production F-150 type redeck pickups, mini vans and any SUVs over a certain weight. 50% non-gasoline fueled. Put the example out to the Third World--which from all accoutns just wants to repeat our mistakes by importing muscle cars and gas guzzlers. Tell US communities we need smart roads with mag-lev technology within 15 years, and go about designing this new generation of vehicles. Yes--Minority Report and I, Robot. Impossible? SciFi? Hell no. It just takes will. And that's all it really about. What do you think?


Anonymous said...

Will power? Are you kidding? There are fools out there now buying Escalades because GM is slashing the price and gas prices are lower. The only thing keeping more retards from the mix is that finance companies have no $$$ to loan.

Lisa said...

Sometimes a little socialism is a good thing. This is one of those times. America's capitalism like railroads, highways and exploring frontiers would have gone no where without the government stepping in and shaking things up.

Ashe Hunt said...

Well put Lisa. And yes, it takes will and forward action to progress. Our ancestors did it and made this country we enjoy and take advantage of but we've let these companies and corporations, and PURE laziness, allow us to grow stagnant. No forward movement. Maybe this social paradigm shift we just endured, B.H.O., will expand into the other areas we need it to. I hope so. I like this planet. I'd like my great, great, great grandchildren to have a decent place to live they won't have to fight to just breathe in.

Hathor said...

What I never understood, why the right was so against the science of global warming and refuse to believe in the finiteness of oil; then spoke of the free market and entrepreneurship. Solving "The Problem" is what sparks innovation, markets and entrepreneurs.

Let Warren Buffet bail out the auto industry.

Anonymous said...

You can't go part-mag lev. You have to go all-mag lev (with the possible exception being residential streets). At some point we'll have no choice.

Anonymous said...

Dang you guys are smart! Lisa is right that even in capitalism, there has to be a socialism element and some times call for more socialism than others.

I think we have to have industries like the auto industry because it is one of the last industries that can employ relatively intelligent people without a college degree. That is huge in a place like Michigan where the unemployment rate is still above the national average. I think the Fed needs to convince the Big 3 to find a way to work collectively, even if that means a merger of 2 of the 3.

The unions? Looks like the unions are bleeding them dry as far as the profitability margin. Those contracts need to be renegotiated or start shutting down plants and out-sourcing.

Hathor, the pro-business types have not thought about balance because the profit margin is so huge for the oil industry. They also maintained the mentality of "we'll deal with it later" and huffed at the idea that they can still make the same amount of money on more efficient vehicles if the marketing was done properly.

Anonymous said...

SoCal 82 Tiger Says:

Professor – What have you been smoking? You don’t need a bailout to get real change by the Big 3… Let them all go into Chapter 11 and you’ll see all the competitive restructuring you can ask for. It’s already well know that uite a few major US airlines are in or have came out on the other side of Chapter 11 better off (Continental, Delta, & Hawaiian Airlines come to mind). Yes we may have lost Pan Am or TWA but the industry and consumer remains better off.
With Chapter 11 BK, I guarantee you will get:

·Executives Losing Their Jobs and Parachutes
·Unions Having To Redo Their Bloated Wage, Benefit, and Retirement Programs
·Vendors Having To Restructure or Reduce Their Receivables Accounts From The Big 3
·New Money & Idea People Finding A Way Back Into The Ash (Trash?) Heap That Is Today’s Detroit
·The Result: Like A Modern Phoenix Resurrecting You’ll See An Auto Industry Ready To Work On & Compete In The Future.

The new Big 3 (Or Little 3 or Big 2 or 1?) may no longer resemble our father’s automakers, but they will be leaner, hungrier, and more competitive companies that will replace the bloated leviathans we have today!!!

Professor this is not just a problem of corporate greed – Political and Union greed all helped to create this mess. Ever ask why does Detroit have to produce Hummers, Escalades, Avalanches, & Corvettes in the US to be successful??? Because the insanely high imbedded costs to produce cars in the US, make these vehicles the one;s that can support those costs? Speaking of unbelievable imbedded costs – Here is just one to start with: For almost 30-years Detroit auto workers who lost their jobs to technology were still being paid $31 an hour just to show up to the plant. These “industry job/welfare banks” kept 10-20,000 union workers paid “half pay” wages for doing nothing but showing up to the plant – That’s sound like a Mob scam strait out of a Soprano’s Episode… The result - $50 million in annual costs added to the price to make cars. NOW add that to the ridiculous executive compensation costs that rewarded failure, AND the political complacency bought from millions of donated dollars flowing in from both Detroit management and labor and you have THE recipe for disaster that everyone is responsible for creating, and now has everyone running like cockroaches for cover when exposed to the light of responsibility!

Oh and please spare me the discussion that these are necessary programs to be fair and protect workers – You can’t protect ANY workers if you don’t have a competitive auto industry in business. If you really wanted to protect workers – You should of offered them relocation assistance to South or Southeastern States where they could of gone to work in the successful new plants created by Toyota, Nissan, Mazda and VW. Oh that’s right those plants are located in right to work states where they actually have to produce to have a job and they only make $48 a hour (along with benefits and a better cost of living) - Not the $73 an hour they were making at the Big 3 Detroit Plants….

The problem with being #1 is that you have no place to go but down. EVERYONE in this tale thought there was no way US automakers would lose that place in America. They screwed the pooch when they took Americans and the global auto industry for grante!

BTW – I/we proudly own a “Redneck” F-150 4X4 for our weekend play! In addition to the 30 mpg Mercury and VW's we use for daily commuting.

Christopher Chambers said...


Chapter 11 is not going to solve this. A nice illustration is the airline industry (hey, indeed not just transportation but airline fabrication/manufacturing). Nope. Chapter 11 isn't transformation. That's the other irony wrapped by the bigger one. The automaker CEOs--pinheads as they are--look at this as a linear, black or white thing. Chapter 11 or handouts. They fear transformation more than Chapter 11. Gee I wonder why.

Anonymous said...

SoCal 82 Tiger Says:

Professor I not sure you have your analysis right... Management and Labor both know where it c ends up without a friendly government bailout - In a hearing before a 6th Circuit Judge in Detroit's East Michigan Federal Bankruptcy Court! If a real effort to change and reform is not presented in Chapter 11 by both Management and Labor (cut jobs, salaries, benefits, pensions, reorganize, etc.); then what they BOTH ultimately fear - COMPLETE LIQUIDATION through Chapter 7, is the final chapter to their story.

All the actors in this sordid mess dread Chapter 11 more. In this passion play they know that they have the friendly ears & hearts of the econ-challenged bleeding hearts in the Senate & House. So what that they took a drubbing by the posturing pontificators we elected. Reed told the Big 3 to come back next year with a better plan (and even more friendly ears & hearts?) so that they can get their bailout!!! When it comes to groveling for $25 billion what’s the pain of a little public humiliation??? Congress and our new President get their photo op and the Management and Labor dinosaurs in Detroit get their bailout – EVERYBODY wins but US Consumers & Tax-payers!!!

Hathor said...

The big trucks and SUV's have been extremely profitable with as much as a $9000 pure profit on each of those vehicles. Gravy for everyone. Why wouldn't the unions ask to make as much as management?
The thing is, if the auto companies would go into chapter 11, the pensioners would get screwed and the government would still have to take over paying a portion of the pension payments and would have a pull on Medicare services from retirees health needs. I am not sure if that would cost more or less than the 25 billion, but certainly something to consider.