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While Detroit Burns…

Posted by DENNIS SANDERS in Economy, Society.
Dec 12th, 2008 | Comments

Megan McArdle has written some good pieces over the last few weeks about the domestic auto industry. While I haven’t always agreed with her, she does put forth some sound arguments. But the day after the auto bailout bill dies in the Senate and Michigan newspapers are talking about what could happen next in my home state, what is McArdle talking about on her blog?

Holiday cookbooks.

Bad timing. Totally bad timing.

  • DLS
    Why is it bad timing? It's the holidays, after all. Besides, she has done a fine job already writing about the Detroit auto makers and the UAW. We already know the current bailout has failed, but that another attempt is going to be made soon, and it includes an effort by the Bush administration, which even is willing now to use TARP or other Wall Street (bank) bailout funds for this purpose.

    Detroit's auto makers are not "the" auto industry in the USA. They're not even the model; their model has been obsolete for thirty years -- the modern, vital auto industry in the USA is embodied in the "transplants" and located mainly in the South, not in the industrial Midwest. The public opposes a bailout of Detroit (and the UAW), and holds the Detroit automakers and the UAW in low regard. (Why didn't the Detroit auto makers relocate their headquarters and their minds to Los Angeles, the capital of automobile culture in this country, thirty years ago, and spend more time in places like Los Angeles to learn what the U.S. automobile market is really all about? Did GM not learn anything from the NUMMI rescue of its Fremont plant ages ago?) If the Detroit automakers file for Chapter 11 bankruptcy, it will surprise nobody except ostriches in Detroit and others who have a vastly inflated sense of importance about those companies. Bankruptcy is not only not any kind of surprise, but if anything, overdue. And even now the companies and the UAW have chosen not to make even the minimum of what's essential. Have the companies stopped hemmorhaging money yet? (Hint: This hemmorhaging should have ended and a serious plan for reform should have been all achieved _before_ the companies went to Washington stupidly and arrogantly expecting a bailout.)

    There is _no_ need and normal people feel _no_ reason to engage in excessive anguish about Detroit.
  • DLS
  • DLS
    As for the latest news -- GM is sharply suspending and reducing production.


    http://www.marketwatch.com/news/story/gm-cut-fi...

    http://www.freep.com/article/20081212/BUSINESS0...
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