Tuesday, March 31, 2009

Why The Hard Line on Cars?

If you can count your money, you don't have a billion dollars.
- J. Paul Getty

The question that's being asked, that I'm sure the administration wish wasn't is, "Why is Wagoner out but Pandit still in?" Or why is Washington taking a hard line with the auto companies but still letting the banks run free?

Easy - they understand the car companies. They don't have fucking clue about the financial ones.

The problems with GM, Chrysler and Ford (funny how nobody talks about them now) are easy to see for an outsider, and relatively simple in comparison to the clusterfuck that is the US banking industry.

Too many dealers, too many brands, too much union power, too many shitty cars, horrible business plans that involve leverage and lending more than quality products. Also, if GM or Chrysler files for bankruptcy protection, the fallout is much smaller than if the banks do.

What DC wants to see is a plan where dealership are cut SIGNIFICANTLY, entire brands are shut down, union issues are resolved, and quality is improved.

I mean, they called out Chrysler on how uninspired and crappy their products are. I'll be driving a Dodge Avenger this weekend, and I'm laughing at how terrible it reviews as a car.

Also, the money invested in the car companies is barely an interest payment on what they've invested in the financial sector. So they can tell them to fuck off now and eat the costs if it comes to that.

But, like most of the actions that get the press these days - it's a distraction. It's Bart jumping up and down yelling "look at me! look at me!" while Lisa hides the diorama in the floorboards. There's trillions being sunk into an industry nobody understands and which holds a much bigger risk than the auto companies ever could, but those details are complicated, muddied, and possibly not entirely legal or ethical. The government makes these other big moves and broad strokes to keep people from looking at the real issues and assigning any real blame.

Or maybe I'm wrong, and this is actually a tester. Obama gets tough with autos first, and if it works, he turns his heat vision to the banks and tells them to get their shit together and asks their corrupt and clueless CEOS to kindly fuck off.

Probably not though... at least not until he shitcans Geithner.

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