Matthew Yglesias is right to point out that bailing out car companies when they are making a product that at present is fundamentally unsuited to future profit generation is stupid, but he and his commenters largely place the blame on GM’s corporate culture. Let’s be honest here: speaking as a lefty (and a strongly pro-labour lefty at that), the unions own this idiotic idea just as strongly as management does.
As an Ontarian, I am deeply, deeply familiar with CAW president Buzz Hargrove’s seemingly inexhaustible ability to spew stupid bullshit, but Hargrove’s bullshit is not only stupid but short-sighted: every solution he has boils down to “the government should give auto workers money,” and he’s happy with that strategy regardless of whether that money goes directly to auto workers or to auto companies who will trickle it down to said auto workers. It’s almost like the right wing decided they needed the most stereotypical left-wing labour boss they could imagine, then went to a lab and had Buzz Hargrove grown in a tube.
Of course, the Ontario government particularly shouldn’t give auto companies money to maintain their operations in Ontario, because there is simply not enough money in the coffers to do that successfully, because people are buying less cars. They are especially buying less of the shitty gas guzzlers that for years have been the mainstay of Ontario’s auto production (the list of GM and Ford cars manufactured in Ontario reads like a Consumer’s Digest warning list). Consumer advocates have been saying for years that Ontario manufacturing needed to diversify before things got bad, but Buzz Hargrove wasn’t interested in that because skilled manufacturers might not necessarily be interested in joining the CAW if they weren’t making cars.
Now, things are bad, and it’s going to take a massive effort to turn Ontario’s economy around, and government investment will be vitally necessary to do it. But giving money to car companies, especially in Ontario’s case, is just a bad idea.
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10 users responded in this post
I hate the idea of bailing out car manufacturers. It was their out-moded ideas, unions, and half-baked solutions that got them into this mess.
Hey GM, maybe if you built a car that wasn’t a rolling piece of garbage, people would consider buying it.
I’m with both of you on this one. The American car companies should have gotten the idea back in the 80’s/90’s when the Japanese car companies were kicking their ass (which I believe they still are) that the model of production they had relied on for years was finally out of date and now that they have outside competition it’s was time for them to do some renovating. They ignored this of course and they’ve been limping along ever since. It’s time to send Ole Yeller out back.
Toyota is now the number one auto dealer in the world, thanks to GM taking a pitfall while the Japanese have been consistently building up market share.
So here’s your problem. You’ve got a major cornerstone of the US Economy that used to make money hand over fist and employee tens of thousands of (voting) citizens. This economic cornerstone has been run into the ground by the greedy and the stupid, but if the business fails then thousands will go unemployed and take out their wrath on the dominant political party.
How do you disentangle the innocent bystanders of a corporate collapse from the fuckwits in charge? Keep in mind, you have to accomplish this task without being labeled a “welfare queen” by the right-wing media and political establishment. Good luck.
Let ’em fail.
“But it’ll hurt the broad economy”, some cry. “All those workers out of work thru no fault of their own.”
First: Yeah, so? Second: bullshit.
We don’t negotiate with terrorist because once you do it encourages others. Same standard should apply to bailing out failed companies.
Let ’em fail. And maybe next time the management will be more likely to work for long-term stability instead of short-term profits. And the workers will use their union muscle to push for that and refuse to assemble loser cars.
I may not be as informed as you, but I can draw opinion on what I do know about this and the whole “bailout” buzz word now.
When a horse breaks it’s leg, you don’t coddle it and tend to it’s weakness as it will NEVER get better. You shoot it so something better can take it’s place.
I know I’m painting with the wide brush, but this is how I feel. I am open to being informed differently.
I’m just sick of these megacompanies’ every whim being catered to.
Cheers to you all.
If I’m not mistaken, the US (and maybe Canadian?) auto industries were struggling even when the bubble was at its biggest over the past few years. They produce a product which doesn’t compete in the market in quality or price.
The current woes of the economy aren’t going to be fixed with bandaids over the infected sores. I could ramble on and on, but suffice it to say when resources are already in short supply dumping loads of cash into the hands of people who have a history of poor decision-making isn’t the solution. Asking them to take their bloated cut before eventually some fraction of the money sees its way into the hands of the people who really need it isn’t ‘putting the money where it can do the most good’.
First of all, I live in Michigan so I am very biased where the auto manufacturers are involved. Just wanted to say up front that I cannot possibly be biased in this circumstance.
Execs are not entirely to blame here. During the seventies unions secured sweet deals from the auto companies that they are now paying for, a case of short sightedness on both sides.
But you cannot assume the machinery the auto unions have used for almost a hundred years could be scrapped so easily. The Japanese auto companies were able to start fresh after the second world war with a different work ethic. In terms of American car companies, unions that were put in place to protect workers have grown steadily more corrupt over the years to the point where they get bloated retirement deals.
I am not giving execs a free pass, but I don’t view the union worker as some poor benighted victim here. The minute Roger smith started closing down Flint plants to hire workers in Mexico they should have seen the writing on the wall and started working with auto companies to keep them healthy and to keep more jobs.
Katefan, did you actually read the main post, or did you just fire of a boilerplate rant when you saw the word “union”?
First off, I meant to say I cannot be UNbiased. I should really proof read before hitting “submit”.
Second, I did read the post and understand that our esteemed host made a note of CAW corruption. I was just pointing out that the same goes for American auto unions as well.
But yeah, I guess when I see the word “union” I see red. 🙂
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