Will The Government OK New Car Design?
Written by: Tom Sawyer
I want to start off by making one thing perfectly clear: I do not think the government’s involvement with the auto industry signals the beginning of socialism in the United States. I think we are far from socialism, but right in the middle of what the Bush administration created/allowed and played a vital part in. I don’t think enough blame is placed in Bush’s lap, especially by those looking to find every crack in the Obama administration – an administration that was backpeddling from day one. Now back to cars.
Since the government is going to control 60% of General Motors, will Treasury Secretary Timothy Geithner, Energy Secretary Steven Chu or even President Obama make decisions on what cars may or may not be brought to market? Could someone from the White House give the go ahead for the next truck from Chevy or the next Cadillac to hit showrooms? For all of our sake, let’s hope the White House isn’t nearly as involved, but rather becomes Big Brother making sure GM really changes its ways.
One thing that worries me though is the attitude taken by President Obama. He said, “GM will be run by a private board of directors with a track record in American manufacturing.” Isn’t that what got us where we are today? I could have been the vice president (of GM) and sent the company to bankruptcy in the same manner that Bob Lutz did.
Speaking of Bob Lutz, he said 50 mile-per-gallon econoboxes wouldn’t sell. The sad part is he might be right. I know that I have beat this dead horse over and over again, but we (Americans) need to fall out of love with big trucks and SUVs. Similarly to how the car companies need to streamline, we need to streamline what we drive. It would be a good idea if businesses who rent pickup trucks started popping up so we could have availability when we need to haul something and drive more economical cars the rest of the time. The environment will ultimately be better for it and so will our wallets.
At least a few of those SUVs might not be American made in the future and I hope that turns Americans off. If rumors pan out, GM – they are calling themselves the New GM - plans to sell Hummer. It will be a unit of Sichuan Tengzhong Heavy Industrial Machinery of China. Didn’t Hummer originate from a US military vehicle making it one of the most American of all car brands? Hmm, something about Hummer being a Chinese automobile seems strange, but if it keeps them in the showroom I’m all for it.
Miraculously, GM reported an 11% sales increase from April to May. Even better (really worse) the Cadillac Escalade sold more than the same time last year. What is up with that? Now this is one I really can’t believe in light of GM’s bankruptcy; GM’s sales (down 29%), compared to last year during the same period, haven’t dropped as much as the following:
Porsche -29%
GM -30%
Mercedes -33%
Toyota -38%
Honda -39%
Mazda -40%
Can someone say bad management?
Tags: GM still not doing as bad as some auto makers, Hummer could be Chinese brand soon, The government could run daily operations of the "New GM"
June 8th, 2009 at 12:25 pm
Tom,
To address your opening statement I have to say I totally disagree. We are on the brink of socialism. The government now owns banks, car companies, is regulating executives pay, breaking legal contracts left and right, and will soon administer our health care. On top of that Obama’s philosophy and campaign promises have been that of taxing the rich even more to pay for social programs that cater to the poor. He believes the American capitalist system is unfair to those on the lower end of the spectrum and has every intention on leveling the playing field (as he so eloquently puts it) through horrendous taxation on companies and the wealthy. We’re far from Venezuela but that kind of government control doesn’t happen overnight, even with Obama in office.
Onto the cars. Let’s be honest, who do you know that will honestly admit that they like driving tin can golf carts around? Let’s also be honest and say that the only reason people drive those unsafe vehicles is to save money at the pump. You’ll also notice that the demand for hybrid and other green cars has plummeted since gas prices have dropped. (or course the economy has something to do with that as well) You will not see a rise in the demand for the put put cars until gas reaches the breaking point which is probably $3.50 a gallon. (purely a guess) I know there are tree huggers who drive these vehicles because they feel they are paying it forward to mother earth but the reality is, the average American (including myself) won’t purchase green technology until it makes financial sense. I’d love to have solar panels instead of paying the power company monthly but as a system suitable to supply power to my house still costs upwards and beyond 30k, I’ll be waiting a while before I jump on that bandwagon.
Let’s not kid ourselves, if the Obama administration is already regulating the pay of executives for companies who have received bailout money (that’s where it starts by the way, far from where it ends) it is safe to say they will be running the show. Not necessarily Obama himself but certainly one of his czars will take the reign. Anyone who has something riding on the success of these auto companies better be praying the government doesn’t run the whole show but it’s a bit difficult to think otherwise at this point.
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June 8th, 2009 at 6:21 pm
Hey, great post, really well written. You should blog more about this.
June 18th, 2009 at 4:13 pm
2 or 3 years of BHO financial enterprises and taxation will make people cry for the freedom and lower taxes of GWB. Not unlike Jimmy Carter, BHO ‘s policies will bring double digit interest, unemployment, and inflation. I did live through the 70′s but now we have a much bigger economy and a lot more people. Electing Reagan was a tax and smaller government revolution. BHO has sealed his political fate.
the next tax revolution will be in 2010. regardless of your politics, money talks. and at a 50% tax rate (fed, state, local) people who pay taxes and vote will not put up with it.
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