Memorial Day Weekend 2009 (and More)

While I haven’t written a post in a week (and I’ll get into that later), we all need to stop and thank the men, women, and families that have served in the Armed Forces of this country, the United States.  It is not only those who have lost their lives in serving who need to be recognized, but those who are still living and their families.  The sacrifices may not be evenly shared among those living and dead, but the families that waited for their return have also sacrificed as well.


This past week has seen continuing GM’s steady march toward bankruptcy, and the frighteningly rapid developments of Chrysler’s bankruptcy.  The Obama Administration’s continuing influence in both of these automakers is extremely disconcerting, especially since Chrysler and GM both announced the termination of approximately 1900 dealers nationwide.  Further reductions in the workforce were also announced by both companies earlier this week.

To add to the governmenal interference is the passing of fuel mileage requirements, of which the automakers(!) agreed to. But then again, when the government owns so much of your company and they say “jump”, you ask “how high?” Never mind that in order to meet these new requirements GM is wanting to close down plants in this country and import cars from China.

Now I need to stop and ask: How is this going to save American jobs? I thought the reason for all of the government loans was to save American jobs.  But it sounds more and more like we’re saving Chinese jobs…

The bottom line is that no matter if the companies emerge from bankruptcy or not, both companies need to sell vehicles in order to survive. Otherwise…

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But then again, look at Amtrak…

Amtrak was created in 1971 to provide intercity rail service due to a decline in rail service. Part of this was due to overwhelming taxation of the industry as well as inflexible rail costs. An expanded interstate highway system and airline travel also contributed to this decline.

Amtrak was expected to break even by 1974. It has never broke even or made a profit, and lives only by government subsidy.

And we are expecting better for government-run automobile companies? Whom are we trying to snooker?

The Wall Street Journal had an opinion column by John Gordon which listed the following reasons with explainations why government cannot run a business. By the way, this is a must read.

  • Governments are run by politicians, not businessmen.
  • Politicians need headlines.
  • Governments use other people’s money.
  • Government does not tolerate competition.
  • Government enterprises are almost always monopolies and thus do not face competition at all.
  • Successful corporations are run by benevolent despots.
  • Government is regulated by government.

Need further proof besides the above cited article? Then consider the plight of the British automotive industry. What automotive industry, you ask? Exactly!! Ian Murray of National Review Online had this to say:

What we now face is a nationalized car maker, with the government owning 51 percent of the company and the United Auto Workers (UAW) union holding a stunning 38 percent of shares. Bondholders, who normally have first claim on a company’s assets, receive only 10 percent instead, and the current stockholders get the remaining 1 percent.

Consider that for a moment. The government and the current administration’s political fellow-travelers own 89 percent of an American company. This is a terrible precedent. Just ask the domestic British auto industry. Unfortunately, it won’t answer, because most of it went out of business when the British government tried the same tactic in the 1970s. The government attempted to save a dying domestic industry by nationalization and heavy investment in R&D to produce a “product-led” recovery. That recovery never emerged, because the unions put saving jobs before producing good vehicles (as I detail elsewhere). With the UAW now owning 38 percent of the company, should we expect anything different from GM?

And here is the crux of the matter – President Obama has political dues to pay, and in this case, it’s the UAW.  In the case of the banks, it was all of the financiers that “donated” money to the Democratic party.  Unfortunately, we, the taxpayer and our descendants for at least two generations, will be paying the bill.

obama_gm_chrysler_090330_xwide

If you’re not angry by now, then you should be…

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About Tom Roland

EE for 25 Years, Two Patents - now a certified PMP. Married twice, burned once. One son with Asperger's Syndrome. Two cats. Conservative leaning to the Right. NRA Life Member.
This entry was posted in Automotive, Government, Holiday and tagged , , , , . Bookmark the permalink.

5 Responses to Memorial Day Weekend 2009 (and More)

  1. I read earlier today that GM is going to get involved with Chinese cars. I don’t recall the details. But we all know how poor the quality control is with regard to products from China.

    The above gloomy statement made, let me take this opportunity to wish you a Happy Memorial Day, Tom.

  2. Z says:

    That’s the whole idea, I guess…Chinese cars, etc. Pelosi’s going over soon; she’s talked about how HOSPITABLE their invitation was to her! OH, she’ll have more Peking Duck than you could shake a stick at and have a MARVELOUS time giving America away………On OUR nickel. ONE WORLD ORDER.
    Why is obama pushing for FIAT, a company in great debt (tho improving ever so slightly only lately, which is also surprising,) to partner with Chrysler? Why is FIAT one of the 3 companies bidding for Opal in Germany when GM owns it now? WHY FIAT?
    What deal did the ONE WORLD ORDER make with Italy? I know, I sound nuts, but so many things are SO screwy lately! FIATTTTTT??!!
    Terrific post, Tom..comprehensive, good thinking, Thanks. And have a wonderful Memorial Day weekend. God bless our troops, and all those who went before them.

  3. LASunsett says:

    //Government is regulated by government.//

    Herein lies the entire problem. But it does not have to be so.

    Elections can regulate government, if only voters would have the guts to vote out the bums. It’s true, the next guy may not be any better. But if not, then he can be voted out.

    At some point, maybe these louts will get the idea of who they work for. They never will if we keep voting them back into office, for multiple terms.

  4. Tom says:

    AOW – The article for GM importing Chinese-made cars to meet Obama’s fuel economy directive has been around for a couple of weeks. Guess the Chinese need some return on all the Treasury bonds they own…

    Z – Pelosi is a politician who is in it for herself. Why not get a trip to China on the taxpayer’s nickel – she thinks that she is entitled to it.

    Fiat appears to be the only company out there willing to partner up with Chrysler, although they are not putting in any money of their own but small engine technology. It would be up to Chrysler/government to come up with the investment funds. And at the moment, Fiat appears to be in a better financial position in Europe to bid on Opel.

    LASunsett – I agree with you wholeheartedly except for one crucial point: Voters must be fully engaged in the business of government for this to succeed. That is not the case today, especially when we have roughly the same number of people voting in political elections as we do with American Idol, and with greater interest in a TV show than the workings of government.

  5. Joe says:

    The saddest thing about The United States of America is that it seems like a near majority of her citizens and leaders no longer believe that the principles of liberty laid down in 1776 are worth dying for.

    Re: auto industry and Amtrack – Everything the government touches runs at a deficit.

    They are like little boys with a national toy. Were it not so real and scary, we would be saying, “Aw…isn’t that cute. Trying to be all grown up.”

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