Dude, where's our car industry?
First Chrysler shuts down 700 dealerships and signs on with the Italians, and now General Motors announces it'll officially jump ship Monday morning.
It would seem America's most prosperous business has resigned to the inevitable: the ride is over. Even Ford's chairman, Bill Ford, Jr., admits to the Detroit Free Press today his company "can't unilaterally solve" the car crisis. Already 187,000 American jobs are riding on this mess.
It would seem the Big Three has hit the brakes on competing as usual; believing otherwise would only be wishful thinking, now that the automakers find themselves firmly stuck in bankruptcy's crosshairs.
The feds are taking the driver's seat for G.M., and the century-old company now owes its bondholders more money than it has. Enter your taxpayer bailout cash next week, unless G.M. can convince 90 percent of its investors by tomorrow to trade up their bonds for preferred stock. So far, stakeholders have advised G.M. to get lost in traffic.
Republican bloggers haven't missed out on creating a conspiratorial controversy. They're suddenly accusing Obama of cherry-picking which Chrysler dealerships should close, namely those branches that contribute handsomely to the G.O.P. The president's spokesperson denies any role in the selection process. A public records search finds Ford, G.M. and Chrysler all slightly favored Democratic candidates during the 2008 election cycle. Another search proves oil companies overwhelmingly line the pockets of Republican politicians every year.
This week the brilliant consumer advocate Ralph Nader fired off a letter to Obama regarding his auto task force. Nader warned the president against driving G.M. into bankruptcy. He questioned whether the administration had "evaluated the social ripple effects on suppliers, innovation, dealers, newspapers [and] banks."
What sparked this ripple effect? You could blame our foreign oil demand. You could single out the wars in Iraq and Afghanistan. Or the lenders who lied to help homebuyers take on those pricey houses they could never afford. Or the homebuyers who lied to the banks about that personal capital they never had. You might blame the demanding auto unions and their pension payouts. And you'd likely be right on all counts. Welcome to Scapegoat City.
We can thank all of the above for contributing to mounting foreclosures and unemployment claims. People aren't working, so they're not buying cars. Cars don't sell, so auto companies don't buy local advertising time. Television stations force out experienced, contracted news employees to cut costs. Bosses encourage those who survive the ax to take unpaid furlough "vacations." And competing news affiliates now trade video, share helicopters and -- perhaps worst of all -- risk their independence on a daily basis.
But the American people will never shy away from an attractive sales pitch. This week French engineers unveiled their plan to hitch the American market in 2011 with the $18,000 AirPod, a car that runs on compressed air. Just plug it into the wall. And wait four hours. Give it time, and you can expect to get the equivalency of 100 miles to the gallon.
We've been down this road before. We get worked up about alternative fuels, but we never seem to physically embrace the idea. We often accuse efficient hybrids of being too new, too costly, too ugly. Remember the electric car? It briefly saw the light of day, but quickly disappeared when the government quashed the invention. The cars were hauled off, destroyed and eradicated from the public conscious.
But today's Washington Times reports that Ford and Chrysler will soon offer lines of battery-electric vehicles; how they'll manage to do this while closing plants and pink-slipping workers remains to be seen. It seems timing has never fared well for these revolutionary cars.
So really, dude, where's our car industry?
Stuck in traffic with that other Big Three -- the courts, the congress and the president -- and headed for one hell of a crash. And it's rush hour.
-P.F.
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