Socialized Manufacturing

It looks like Uncle Sugar at some point will be bailing out the Big Three auto makers, just like he took care of the banks. Before we all rush out to buy our hybrid Cadillac Escalades, here are a few things to remember:

• Just a day before the Big Three CEOs raced their private jets to DC to testify how broke they were, a new car assembly plant opened in the Midwest. Too bad for Messrs. Mullaly, Nardelli and Waggoner that it was a Honda plant. Chrysler, Ford and GM may whine about the rough shape of auto manufacturing in North America, but the facts don't support them. Honda obviously sees a reason to invest hundreds of millions of dollars here.


• The Big Three have crafted the image that they represent the auto industry in the U.S. But the Big Three should really be the Big Nine. Because in addition to Chrysler, Ford and GM, six other companies make cars here, from econobox manufacturer Kia to luxe maker BMW and including such marques as Toyota, Honda Nissan and Hyundai. So auto manufacturing is alive and well in North America.


• These Big Six employ thousands of workers, buy parts and supplies from vendors, and above all pay taxes. How ironic that Detroit, which could not beat them in the boardroom or beat them in the showroom, now wants their tax dollars (and yours) to subsidize three failing companies.


• The Big Three would like you to think that their troubles are tied to the current recession and the credit crunch. But anyone old enough to have voted for or against Jimmy Carter knows that the problem with Detroit goes back to at least 1974 and is fairly simple--Ford, Chrysler and GM don't make the cars that Americans want to buy. Period.


• Ford, Chrysler and GM have had 35 years to figure all what their customers wanted. Instead of looking down the road like Honda or Toyota in terms of product development, they managed their businesses quarter-to-quarter in order to maximize short-term shareholder value and drive up corporate bonuses. Perhaps no American industry has a such a record of short-sightedness.
• Maybe the hottest hole in this hell is reserved for the cigar chompers that have run the UAW for 70 years. If the suits managed quarter to quarter for 70 years, the union bosses managed pay envelope to pay envelope. A succession of these stiffs stole a page out of Lenin's playbook and played the class warfare card to justify their exhorbitant demands. Their selfishness would make Samuel Gompers look like Mother Teresa. Even as the Big Three get ready to expire, the union refuses to budge on any wage concessions, knowing that their bought-and-paid-for Congressional concubines will rescue the three companies without any contributions from the union.
• Messrs. Mullaly, Nardelli and Waggoner whine that their labor contracts put them at a competitive disadvantage with the other six companies who manufacture here. But Americans have always been willing to shell out more cash for overpriced, but popular, brands. Ask anyone with teenage kids.


• This bailout may even be unconstitutional because it violates the equal protection clause of the constitution. Why should the government decide that Chrysler or the Big Three should survive but another car company, or another industry, fail? Former Lehman Brothers employees are still asking that question.

Bailing out the so-called Big Three amounts to social engineering on the part of the government, something at which it has no skill. Take one look at our failing education system or Freddie Mac and Fannie Mae and tell me why we should let the government run auto manufacturing (make no mistake, when you pay for it, you own it), healthcare, or any other private industry.

Just thought you might like to know.