Sunday, November 23, 2008

What Didn't Happen This Week

There’s an old joke about the customer who asks the salesman, “How can you sell your product at such a low price?” The salesman replies, “We lose a little bit on each sale, but we make it up on volume.” What was never elaborated in that joke was that the salesman eventually went on to become the CEO of an American auto company, so I guess the joke’s on us as American taxpayers.

Stevedores at the shipping docks in Long Beach and Los Angeles report that there is no longer room to store the imported cars coming into the U.S. from Asia because nobody is buying the cars that are already unloaded there. Meanwhile, auto workers are facing layoffs at the GM plant in Bowling Green, Kentucky where the Corvette is manufactured because there are still unsold 2007 model Corvettes sitting on the paved lot down there, but the body style on America’s sports car hasn’t been changed in more than ten years, so I guess that GM could fudge the paperwork on those 2007 models and sell them as new. It would make about as much sense as anything else that GM is doing.

This week, the CEOs of GM, Ford and Chrysler flew from Detroit to Washington on their own separate private jets to appear before Congress, and this symbolically spoke volumes about what’s wrong with the auto industry. However, it was the things that DIDN’T happen which spoke even louder. What didn’t happen was that someone from the UAW (the “union”) was sitting there on the hot seat right alongside the CEOs. I’m sure that a top union official could have hitched a ride on any one of the three corporate jets if somebody had thought about the fact that the union is, perhaps, the most important player in all of this pathetic auto meltdown. What didn’t happen was that any of the auto CEOs thought to bring along a pencil and paper to make any notes. What didn’t happen was that any of the CEOs had the faintest clue about what to do besides begging for free taxpayer money. And most importantly, what didn’t happen was that potential car buyers saw or heard anything at all that would make them want to “buy American.”

That’s the fundamental problem, that there’s no logical reason whatsoever to “buy American.” The quality is second rate. The management is imperious and disgusting. Having an American auto service infrastructure years down the line is a highly remote possibility. The car value for the dollar spent is much less than with the foreign models, and when American car prices are actually lowered, the reduction is done with clunky rebates. Even a federal law requiring us to “buy American,” would not work because we’d still be free to drive what we already have until the American companies finally throw in the towel. When you lose a little bit on each sale, you really can’t make it up on volume.

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