The Auto Industry Bailout

I’ll start by saying I don’t support a government-sponsored bailout of the Big Three automakers in the U.S. Some quick rambling points:

  • I understand there are a lot of jobs at stake. However unfortunate, this is not a valid reason for the auto bailout.¬†
  • The Big Three have been struggling for years. The financial crisis is giving them an out.
  • If they don’t get a bailout,¬†they will file for bankruptcy, sell parts of the company, re-organize, and most likely become profitable automakers once again.
  • The government as auto industry manager? Seriously? That’s got to be a joke, because if it’s not, my brain might start to leak out of my nose.(I don’t hate the government, I just don’t think they should be making cars).
Here are a couple observations I have on the auto industry. It’s important to note I know very little about the inner workings of making a car from start to finish, etc. etc. Having said that:
  1. WTF is up with the process of going from concept to production? Why do the concept cars always look really sexy and awesome, then get totally destroyed by the time it gets to production? I’ve heard one simple explanation that goes something like this: the concept engineers come up with a car, then they send it to the production engineers who say “we can’t do this, this, this and this, it’s impossible” so they change everything to make it work. So they spend hundreds of millions of dollars on making a concept car that gets totally borked and re-designed? That seems like a broken system. I understand a car is a very complicated piece of machinery, but damn. Have you seen the before and after pictures of the Chevy Volt? (Before and after pics – the first one I took at Google campus):
I still like the newer look, but it’s still a big downgrade. This happens to be one of the most anticipated cars ever and I thought would be a good example.
  1. WTF is up with automobile advertising? Is it really worth spending hundreds of millions of dollars on a commercial for a truck with Dennis Leary as the voice-over, and then play it like 43 times during a football game? I understand there’s a certain value behind brand awareness, but c’mon. Auto advertising is broken and needs to be fixed. I think they could spend half the money and be twice as effective.
That is all.

4 thoughts on “The Auto Industry Bailout

  1. Another point – why is it that average EPA on GM vehicles has DECLINED since the 80’s? Did they really think it was smart to make cars that are less fuel efficient as gas prices, the cost of living, and several other economic factors have ballooned? They chose to make Hummers while Americans have turned to more economical vehicles. No handouts to bad business plans.


  2. Also Nate, American GM workers in American GM plants make >$70 per hr. American Toyota workers in Toyota's American plant make approx $35 per hr, yet the product is better. The UAW has got GM by the scruff of the neck, so to compensate for that overhead, GM has to strip down the quality and design of their cars, and then put out crappy products. People hate it when you point out Unions, but that wage disparity is completely insane. I watched a lot of the press conferences during the bailout, and the Union rep was front and center, refusing to even GUESS at a timetable for when GM could start to be competitive with Japanese companies and German companies. That refusal is what caused the bailout talks to break down, not that the bailout should happen anyway.

  3. Andy, yes; good point. Aaron, true; but how do we cut wages? The current auto workforce won’t even consider it. Hire new workers?

  4. Yeah, I don’t think wages will ever get cut, not in the current Union climate; instead, GM will just lay off workers. But I just wanted to point out that disparity…that UAW GM workers make 2x the salary, but the end product is one that no one wants to buy…which probably isn’t the fault of the workers on the assembly line.

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