Auto Commendations

Kudos to Mitchell Subaru for continued good service and for finding warrantee information even without me asking about it and for a car long gone from deserving it. Saved lots of money on head gaskets. Mitchell’s a good company. They sell just a few types of car, each to its own division, and thus can share resources.

But then to the bad news. If you asked me what to do about the auto industry I’d have no answer. I won’t be in the market for a car any time soon (or much of anything else). And supplying billions in money to failing companies makes little sense. GM will simply last a few months longer and then the money will disappear with little worth to contracts. Or am I wrong about that? It sees to me that regardless of reasons or disagreements, everyone will feel the further losses.

Is the phoenix metaphor appropriate? What if everyone stopped purchasing vehicles, new or used? What would the industry request then? What happens to the people who labor in the industry, from the shop floor to the chemistry lab and the screw plant? It’s pretty obvious. I read in the paper about Bank of America layoffs today. The company is shedding, but shedding into what and for what and on whose dime (more obvious)?

What would an auto-less country look like? What would the new potential ceiling be?

Oh well.

3 thoughts on “Auto Commendations

  1. Mary Ellen

    Grant me patience (you know my math!), but if 2 companies are running competing businesses and one fails, isn’t that good news for the remaining one? I thought that was the basis of capitalism: healthy competition, and may the “best” one win. If GM folds, all of their car buyers will turn by necessity to Ford, Dodge, etc. The aftermarket business will still need to churn out replacement parts, and GM vehicles will join the ranks of all the other “no longer made” cars. Why is this bad?

  2. Steve Post author

    In my mind, it’s perverse to provide government support to any one of the companies, including the financial sector. But mine is not a “market” argument. I don’t think Congress should be setting company terms either.

    Mine is a HTG hypothetical: why would the Fed bailout a company from whom no one’s buying?

  3. Josh

    “why would the Fed bailout a company from whom no one’s buying?”

    1. Nationalisation
    2. Like his Dad Bush hasn’t a clue when it comes to domestic policy
    3. Democrats and Unions are allies

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