My parents have a 28 year-old Zenith television in their family room. It had space age technology – like a phone built into the TV (that was more annoying than helpful). Zenith was the company that invented the modern remote control. The idea of buying a Zenith television these days is more than quaint, it’s near impossible. The Zenith brand is now owned by the Korean electronics manufacturer LG and distributed in some stores as a lower end brand. The same fate as the RCA and GE brands. Once a manufacturing center of electronics, most, if not all, consumer electronics are now built outside of the U.S. In search of cheaper labor and better products, these companies left the U.S.
Ladies and Gentlemen, there lies the fate of the big three U.S. automakers: Chrysler, Ford, and GM; and I say let them die.
The CEOs of the big three along with their potential partner in crime, the head of the United Auto Workers union, showed up to beg the U.S. government for more money. It didn’t go well. Due to years of mismanagement, greed, arrogance, these automakers are no competition to the likes of Honda and Toyota. Add that to the fat cat contracts the UAW backed them into signing, they can’t do anything about it.
Congress should turn them away and tell them to figure it out on their own. If they can’t, then it’s capitalist darwinism. Everyone knows the arguments as to why they shouldn’t get any help – building more and more SUVs while Toyota was building hybrids. Fighting against increased fuel standards. Building cars with laughable quality. In short, they’ve made poor business decision after poor business decision. But that isn’t the reason they shouldn’t get help. The government was at least complicit in their failure by bowing to the pressure of lobbyist, and not leading. No the reason they don’t deserve help is that they haven’t changed, therefore any money we give them is good money after bad.
Why do I say they haven’t improved?
Toyota is prepping their third generation of the Prius, sells a hybrid Highlander, along with subcompacts like the Yaris and Scion XD. Honda has the Civic Hybrid, a hydrogen car, and a lineup of cars known for their fuel efficiency. The americans are rushing to catch up. Ford: one hybrid car, the Ford Escape SUV (with it’s Toyota engine) and another on the way. GM are all giant SUVs like the Cadillac Escalade or mild hybrids (which means they get slightly better mileage than a regular car). Chrysler? They barely have a fuel efficient car, much less a hybrid. Their first two hybrids will be the mega-SUVs the Durango and the Aspen.
American cars get a bad rap – I drive a Mercury Milan, a Ford product that gets great reviews for quality, that said, the good cars are few and far between. Case in point, the Dodge Avenger – built to take advantage of consumer’s penchant for retro styling, it looks great. It also has been recalled 6 times in it’s first year. And it’s equipment isn’t any better – a sporty looking car that comes with drum brakes? Buying this car is a waste of money. And while American cars are better, it’s faulty praise due to the history of American cars (look up the Ford Pinto).
It’s time the federal government take the training wheels off of the bike. We need to let these companies compete without on even ground, and if they can’t, then they fail. Continuing to prop them up after they make bad business decisions only guarantees that they will continue to make bad business decisions. I believe that these companies can become relevant again, but they need to get smaller, faster, and smarter. This won’t happen with the safety net they now have.