Unfettered Blather

The automotive bailout seems to be the biggest news story these days and the issue isn’t the result of a simple linear progression of problems, but a collision course with disaster from multiple directions by all involved.

The hearings in Washington initially pointed out the attitude towards business in the entrenched management culture of the big three.

The auto industry initially came to congress preaching nothing short of Armageddon. Their first, cynical attempt was to try to scare congress and through media coverage, the public in to giving them a bailout to prop up their bad business practices. It didn’t work. Now they are trying to negotiate with congress and are resorting to token gestures of “good will” to sway public opinion. I doubt anyone thinks that a CEO giving up a corporate jet is going to have a discernable financial impact on the operation of a business than needs nearly ten billion dollars a month to operate.

While I feel the automakers do not deserve to be bailed out, I believe in the end they will be given taxpayer money. Fresh financial timber to shore up a rotten structure. I see nothing wrong with expecting a financial plan to be submitted with how the money will be spent and what returns we can expect in a specific framework. I have to do this if I ask for a business loan afterall but once the money is in hand I firmly believe it will only postpone the inevitable. Detroit wants money to weather what they see as a storm, not change directions. There mere fact they originally would be given federal money to fund their own research in to alternative fuel vehicles is absurd. Creating a better product is the responsibility of the manufacture to stay competitive. Why should they be rewarded or bribed to do it faster? Any industry that adopts such a view to something as fundamental as their continued viability has to be viewed with reasonable suspicion.

Detroit’s problems are blatantly obvious and have been preached to them for decades. Still they refused to do anything about it other than stay the course.

That being said, hybrids are not the answer. On a personal note, lets be perfectly honest, nobody really wants the damn things. They may buy them as a result of the recent and equally fanciful fuel crisis we suffered through, but that was necessity. Americans want trucks and SUVs and that desire has not changed.

Detroit refused to adapt and the collapse of the truck and SUV market is a prime example of the inept handling of the industry. Detroit steamed ahead with utter abandon when people started clamoring for better fuel economy and those associated with the industry made the case that Detroit would have to change to keep the market booming. Token measures were taken to help shore up sales when the crisis was in full swing but these weren’t real solutions and were little better than half-hearted measures several years beyond the point of no return.

There has to be some kind of award for any industry that can take something as strong and popular as truck sales and ruin them. The auto industry is accomplished at failure.

Yet they expect people to trust them with a bailout? The bailout for the automakers couldn’t come at a worse time. The public has been threatened, scared and forced in many respects to bailout failed financial institutions. We helped the airlines, an industry that has teetered on the brink of financial failure for years while continually sacrificing customer service. Now we are being asked to save another industry? Could this have come at a worse time

Despite all of the varied opinions , hype and spin most Americans realize that our financial and industrial institutions are fundamentally broken and unable to adapt and compete. We are being asked to fund the status quo on our diem and we are being blackmailed (the banks), threatened or scared in to submission. People now are well aware of this fact and are growing tired of it, it is a testament to the abuse of bailouts and the cynical attempts to use them as wells to sustain failure. In a society that shuns any form of discomfort it is a stark contrast that many people would rather face financial hardship instead of paying for billion dollar band-aids to be used on a patient with a brain tumor.

The biggest point to all of this mess is that it was completely avoidable. All of the challenges the industry faces today are a result of a stream of bad decisions from making poor quality products, failure to respect and compete with the foreign markets, refusing to find new and efficient technology in a timely fashion and listening to the pulse of the market.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.