By now, almost everyone has heard of the GM, Ford, and Chrysler bailout bill before Congress, which has spent the last couple weeks debating if they want to bail them out, and assuming they do, where to take the money from.
Now, I’m going to open this post by flat out telling you I don’t support the bailout of “The Big 3”. I don’t support taxpayer bailouts of them, or even banks, financial, and everyone else. When it comes to free-market private business, I’d much rather it stays that way, if they fail, they fail.
Now, conservative talk show host Rush Limbaugh and many other conservatives talk about how a lot of the “failure” in the auto industry is from the UAW Autoworkers union and other labor groups who strangle more and more money out of the companies they work for in wages and benefits, along with the fact that people do not want to buy the cars they are selling, the small fuel-efficient cars, and thus their business is being killed by the government, specifically CAFE standards and the like.
Now, I know I said Rush. Before you stop reading this, lets get one thing established before we continue. I am not the best fan of Rush. I grew up on listening to this man speak his often far-conservative views most of my life. My father, grandfather, and much of my family listens to him. I admit I listen to about 20 minutes of him a day on my way to work from school. That being said, he does make a few good points about this stuff if you listen carefully and ignore his rhetoric and self-praise. Moving on.
I do happen to agree that the government, specifically congressional Democrats, and unions, are killing the domestic auto industry. When Sen. Bob Corker (R-TN) told the UAW it should concede wages and benefits to be more in line with foreign automaker plant workers they, of course, refused to give up a cent. Now, I can understand it would be hard for union workers to give up pay, I really do, but do you want to keep your job, or be laid off within a year thanks to a crumbling, or even bankrupt auto industry? Small pay concessions to me seem like a small price to pay for the overall well-being of the company. Perhaps I don’t know much about union work however, I have never been part of a union, and frankly, I really don’t want to be. I think unions did a lot to improve the quality of life and work, and have certainly played a key part in shaping society over the past 100 years, but when tough times come down on every single person, union workers seem to feel that they are too good to reduce and conserve the way millions of other Americans have to when they lose their jobs, get salary cuts, or have to deal with economic burdens. Here, auto companies are paying out the ass for union workers, and for what, the threat of a strike when they ask kindly for them to chip in a little to benefit everyone? If you ask me, some kinda reform is needed for organized labor in this country, something that allows them to continue to improve workers rights and quality of life while allowing private businesses to remain competitive and functional.
The second is the government and their CAFE standards on cars. It is fairly obvious that this country is not, physically, or socially, like Japan or Europe. We are a massive nation, not small and compacted. Small and fuel-efficient cars do so well in Japan and Europe because most of their population doesn’t even drive, they take public tranportation like buses and trains, or walk. Those that do drive only drive probably small distances no larger than several US states or less, depending on what country we’re talking about here. The need for large trucks, SUV’s, and the like, are virtually non-existent. The Middle East, Africa, and other larger nations however, have seen rising popularity in small trucks, mid-size trucks and vans, and other larger vehicles because they haul people, cargo, or other goods between areas. Americans buy vehicles for what they use them for, primarily, and for status secondary. Trucks and SUV’s dominated the last two decades because of the increased prosperity of the lower and middle classes and the need to own such vehicles for families, work, and recreation. Small cars still sold well, but sold to more dense population centers like cities and suburbs, where large vehicles aren’t needed with the increased use of public transportation and less distance between home and work, school, or commerce. Take Boston for example, you can go almost anywhere you want on the T, there is little need for a car unless you were going out of the city. But in a smaller town, like the one I grew up in, West Carrollton, OH, the distance to school may be short, but to work or the mall three towns over, or other places, is greater, and even though we had public transportation, public transportation is in some cases, more expensive to use where a car would be a cheaper, more private alternative.
Getting back to the point, Americans do not want small, cheap cars, when gas is cheap. They simply don’t care. The time we saw small fuel-efficient car sales go up, was last summer when gas was $4 a gallon. Since the gas bubble burst, sales now probably fell, but large vehicle sales aren’t really moving either. People are still weary of what is going to happen next, and in “ultra-conserve mode” for some families, they are delaying the purchase of a new vehicle because of the unsettling atmosphere in our economy. For automakers to be viable again, they have to practically find a car people want to buy and produce a lot of them to make ends meet, which is the great challenge, cars aren’t like computers where computer technology changes, gets better, and gets adopted faster, cars are very legacy and slow when it comes to evolving to meet the current social standard. Hybrids are probably going to eventually take off as being the new de-facto standard in cars, but many technologies surrounding it and the nation’s power grid will have to take place before it will become viable, and that is what auto companies, and our government, should have been throwing money into the R&D of these things, years ago.
TL;DR: It all comes down to oil, and the fact that so many people are invested in oil that going in a new direction is going to take a lot longer, and probably be the most expensive thing this nation has done. Throwing more money at the automakers is not going to fix the inherit flaw in their business model that is they are unable to perceive what people really want, and it will not fix the government’s ignorance at the fact that it is killing the economy by listening to hippie environmentalist wackjobs who can’t grasp the notion that the majority of Americans plain don’t give a shit about the environment, doubly so in a recession when it is a matter of surviving or dying economically. If you want a green-friendly country right now, move to Japan and deal with a billion xenophobic people and their social problems, because a green America is not going to happen with cars.
also: Hybrid cars leads to possibly a reworking of this nation’s power grid system, and maybe even the eventually support for new or updated nuclear reactors. This is where our taxpayer money should be going to, research and development of new technologies to produce cheap renewable energy that Hybrid cars can use, not the shit can like where it’s heading now.
Yes, by shit can I mean the pockets of executives and Fannie Mae/Freddie Mac. Because even with the most infinite of oversight and accountability, people are corrupt, and cannot be trusted with public money they did nothing to earn.