Everyone's A Car Guy Today

Seems my couple posts on GM have really set off a firestorm of debate about the future of GM, Ford and Chrysler. The New York Times, The New Republic, The Cato Institute have all posted on the topic this week. I'm proud to have instigated such a robust national debate.

As I see it, this debate is taking two forms. One side says (kudos to readers who know the source) "They knew what they were getting into. I say, let 'em crash." The other says the companies are well into a painful restructuring and with a little love (in the form of cash) they can reconstitute into viable businesses. Without that love (er, cash) the ripple effects will be nasty and brutish but not short (see a link at this post for access to labor cost data).

Without dwelling forever on this topic, how the competing political and economic forces in this debate are resolved speaks mountains about our country's economy for maybe the next 30-40 years (see this post about the Reagan/Volcker slaying of inflation, and how it impacted the next 30 years of life in America).

I, for one, buy the argument that letting these companies collapse is a bad idea, but in the absence of fundamental restructuring for the customer's benefit (instead of staying on life support for stakeholders) it's a giant waste of money and we should just let them implode.

1 comment:

Steven L. Baerson said...

Your comments may even be heard on CNBC this evening.