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Category: The Economy
Posted by: A Waco Farmer
Back in my old car-selling days, smart operators lived by this saying:

"Better to have half a loaf than no loaf."

But not the UAW, evidently. On one hand, they are spreading talk of an impending economic cataclysm if the Big Three fail, but, in the same breath, they refuse to buckle down, suck it up, and accept compensation packages comparable to the competition.

Give us billions to save our jobs, but don't ask us to take painful cuts.

Some other quick thoughts on the Republican stand last night to stymie the Fed Bailout of the Big Three:

1. Regardless of what Democratic leadership may say, the GOP is not responsible for this tragedy. Democratic leaders needed to stand up to the UAW. Kudos to Republicans for courage and principled behavior in the face of incendiary political rhetoric.

2. The Nancy Pelosi wing of the Democratic Party is committed to a radical political solution to a peripheral concern that they have falsely indentified as the core problem; that is, the San Francisco Democrats are convinced that the fundamental flaw in GM's business model is that they have not produced enough Toyota Prius-like vehicles.

Wrong. In truth, very few practical-minded consumers want to buy hybrid cars for ten thousand dollars more than comparable fuel efficient gasoline-driven models. If we hand the American auto-making franchise over to the "Earth in the Balance" crowd, it will not be long before USA Motors will be producing a Yugo-like, faux-environmentally friendly monstrosity that no one will drive.

3. Saturn is a profitable division. GM trucks and SUVs are not going away. The Chevy Malibu is worth owning. And the list goes on. Worst-case scenario: Chapter 7. Someone will come along and buy up these assets sans the suicidal labor contracts--and American auto manufacturing will survive in some form, go through a process of healing and regeneration, and inevitably experience a rebirth at some point.

4. The President should stay away from this impasse. The UAW and the Democrats are expecting him to cave. Standing up to this power play will be incredibly difficult. The PR will be atrocious: lame duck, Herbert Hoover, heartless SOB, etc. But he needs to let this thing play out.

One more thought: if the automobile companies are to be nationalized, let it be done by the next president.
Category: The Economy
Posted by: A Waco Farmer
Does anybody really believe the troubled American auto industry will rebound under the leadership of Nancy Pelosi, Barney Frank, and Henry Waxman?

Perhaps, if you believe the real problem is that we have NOT had enough solar cars and/or GM just doesn't pay their workers a living wage, you might be cheering the government takeover.

Otherwise, I think you can mark down this day as the beginning of the final death spiral for the Big Three.