Possumblog

Mantys are OUR state bird, not yours. Around these parts we call that poachin'.

Don't mess with Florida. We're bigger than you.

Mmmmmm--nothing like a nice plate of poached manatee!

Don't mess with Florida?! Waddya gonna do - raise your canes and shake them in anger? Rev up the Oldsmobile and peer up over the steering wheel? Instead of worrying about manty's maybe Floridians should figure out how to make proper barbeque.
[Just messin' with ya, sister Vachon!]

Was Catherine part of those 4th graders, or is she past that grade? It's hard enough keeping track of the ages of my young'uns.

And now for something completely different: I'd love to hear your take on the GM situation and how they seem willing to go Chap. 11. How the mighty have fallen. Ford may still survive though - go figure.

No, Marc--she's in the 6th grade now--she just turned 12.

As for GM, their problem is pretty much the result of building products only good enough to sell during flush times, but that aren't good enough (either quality, style, efficiency, price or various combinations) that people would still buy even in tough times.

It's a problem GM's had for longer than now, but it's only now that it's becoming evident. In a large enough market, there's room even to sell expensive crap--when the market suddenly contracts, people start shopping value. A car that's not quite as well designed, not quite as efficient, not quite as desirable but the same price as a better one is simply not going to sell.

And rewarding crappy manufacturers by buying their stuff even when there's better product is short-sighted and ultimately damaging to all consumers. Best product at the best price is always going to be the winner in bad times.

Obviously, their labor costs are a major part of the problem--they're fully capable of building better cars at better prices (and their workers are just as good as any other worker), but the way their costs are arranged right now, they can't.

Squawk all they want about so-called foreign manufacturers in other states (all major auto companies are multinational, so it's a fair bit disengenuous of the Big 3 to complain when they all have plants in other countries that make cars and parts for domestic sale) but at some point they are going to have to realize that they're either going to have to find a way to make more cars with fewer workers, or have the same amount of workers at a lower price. It's just the way things are--every job has a price that is based on supply. That's why jobs that are easy (or jobs where there are many who know how to do it) have lower prices, and why a grocery clerk won't be paid $200,000 per year. (At least not until the dollar gets to be like Papiermark.)

GM going bankrupt is a bad thing, but it would be far worse to keep throwing good money after bad. Just look at Great Britain and British Leyland. The British auto industry exists in name only--all the old nameplates belong to non-British companies. It got that way due to continued governmental protectionism and meddling and an inattention to the realities of the marketplace.

As usual, I think it best to recall the words of Winston Churchill--"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.”

I had heard GM has a lot of middle management "indirect labor" expense, besides the high labor cost plus benefits and retirement costs. They are a sad example of everyone wanting a bigger piece of the pie when things were chugging along OK, but when the market tightens they're stuck with fixed costs they can't shake due to labor contracts, static manufacturing processes/equipment and long-term vendor contracts.

Saturn should have been their "testing grounds" to innovate, keeping the Chevy-Pontiac-Cadillac foundation, but that got dragged down by their bureaucracy and labor unions. Honda and Toyota can come in, place a plant in the same area as a Saturn plant, using similar vendors and crank out a better car.

The US military relies on GM to supply their vehicles, so Uncle Sam will find a way to prop up at least part of the company deemed vital to US security. Otherwise I can see Chapter 11 helpful in cleaning up GM's labor costs and hopefully letting them design and build cars the public wants and will pay for (something besides the Chevy Bloat, er, Volt).

All I know is that nothing (GM included) will ever get better without there being free-market competition and sufficient profit-driven incentive to innovate.

As long as government meddles in the day-to-day operations and decision-making, we're not going to get a good product at a good price.