“The American people will never knowingly adopt Socialism. But under the name of ‘liberalism’ they will adopt every fragment of the Socialist program, until one day America will be a Socialist nation, without knowing how it happened.”

Socialist Party presidential candidate Norman Thomas

Tuesday, November 25, 2008

Survival of the fittest applies to businesses too

I found this exerpt from an article by Peter Klein, linked over on RightThinking. It sums up exactly why the big three auto companies do not need a bailout, care of the American taxpayer.....

The proposed bailout of GM, Ford, and Chrysler overlooks an important fact. The US has one of the most vibrant, dynamic, and efficient automobile industries in the world. It produces several million cars, trucks, and SUVs per year, employing (in 2006) 402,800 Americans at an average salary of $63,358. That’s vehicle assembly alone; the rest of the supply chain employs even more people and generates more income. It’s an industry to be proud of. Its products are among the best in the world.

Their names are Toyota, Honda, Nissan, BMW, Mercedes, Hyundai, Mazda, Mitsubishi, and Subaru.

Precisely! The big three have the same invincible, entitlement mindset about selling cars as Obama voters do about getting a government check. They believe they are entitled to car-selling success. They keep making cars that nobody wants, at prices nobody can afford, for labor costs nobody should be earning...yet they whine that they can't be competitive. Please!

And don't try to tell me how the supply lines, parts industry, and service industries will suffer if the big three go belly-up. All those other car companies will swoop in and fill the void in a heartbeat. And if those support businesses are smart, they'll prepare to support cars other than the big three....just in case. If they aren't smart, they'll fail the same as the car companies do....and they'll deserve to fail for stubbornly insisting on being static in a shifting, dynamic car market.


David said...

Bailing out the bid three is analogous to fighting the wild fires of California. The fire will win everytime. In fact it is necessary to set things right with Mother Nature.

Get out your marshmallows!

Ed said...

Right you are, big D. I'm starting to see auto workers from Detroit making the TV circuit to defend their outrageous union salaries. Predictably they blame it all on management. Their criticisms of management are spot on and I couldn't agree more but, labor has to come in line with what the market will bear with respect to labor costs too.

We need to stop postponing the inevitable and let these behemoth companies fai in a controlled bankruptcy fashion. If anything can be salvaged from there, go for it.