Detroit: A Riposte to the Bashers

[idlisambar]

Detroit: A Riposte to the Bashers

Never has the American car industry had a poorer press. No epithet these days seems too contemptuous in referring to the industry's managerial competence and no policy proposal too heartless in addressing the industry's high labor costs.

The American commentariat's "let-them-eat-cake" attitude was summed up by Mitt Romney in a New York Times editorial page article a few weeks ago in which he unapologetically advocated that the entire industry be allowed to go bankrupt. Yet the main "benefit" of a bankruptcy is merely that the industry's surviving businesses would be allowed to walk away from billions of dollars in obligations to retirees. One wonders how Romney would react if some ideologue casually suggested his pension be incinerated on a bonfire of free market theory.

Yes, some of Detroit's injuries are self-inflicted. But no industry is perfect. Not in the United States and not anywhere else. Even the American financial services industry -- so recently held up as a poster boy of supposedly world-class management -- is now seen to be less than infallible.

There was once a time -- some of us remember it well -- when Detroit led the world in both labor productivity and R & D. What went wrong? The most important reason for Detroit's downfall has not been incompetent management -- the executives running the industry in recent years are hewn from much the same timber as their predecessors of the 1960s. As for "greedy unions," labor seemed far more powerful in the 1960s than it does today (after all Detroit's wage rates in those days ran nearly four times those in Japan).

The elephant in the room is unfair foreign trade practices. Though you would never know it from recent reporting, for forty years the Detroit companies have been systematically undermined by foreign competitors' predatory pricing in the American market. They have been thereby starved of the adequate returns necessary to invest in new, more efficient production technologies.

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http://www.unsustainable.org/index.asp?type=article&contentID=39

[WHEN CRABS ROAR]

1. But remember this is the same industry that fought seat belts.

[idlisambar]

4. They've done a lot worse than that

Over the last 100 years, but that's not the point.

[whathappened]

2. good write up

people just don't get it , most of them are to young to remeber what the unions has done for the working people in this country , why do we even need to compete with anything that is not made in america , and for that matter bring all our jobs home and charge a import tax on all goods coming to this country again , shut this world trade shit down right now , and for all u non union older workers , think about how your money was made ,

[acmavm]

9. A lot of 'em are just too stupid and selfish to care. They've got theirs,

screw everybody else.

Oh, unless it's YOUR job being sent overseas this week, then it's time for a collective nervous breakdown. :sarcasm:

[boomerbust]

3. Chickenmitts

So Romney wants the union worker to have his standard of living lowered to the level of those that work for foreign automakers? Give it up Chickenmitts, the great conservative revolution is over.

[digidigido]

5. 1 word for you my friend, Pinto, the car with the exploding gas tank

When companies repeatedly put out cars and don't deal with recalls promptly and honestly
and also keep putting out cars that need recalls, they don't get treated with the respect of
companies that don't behave that way. It's kind of hard to want to bail out an industry for
34 billion, when the cost of all their stock doesn't even come close to that amount

[boomerbust]

6. Two words for you my friend

FU

[acmavm]

10. Uh, when was the Pinto last manufactured?

[yurbud]

7. bashing is not the same as opposing help: we should do what we should have done for Wall St:

help and discipline

[idlisambar]

8. I agree with that

but that's not what the article is about. It's about how the auto industry got to this point. It's important to understand why if we really want to do something effective in turning this industry around.