Anyone own a Zenith TV?

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?

Fuel Efficiency

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.

Quality

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.

 


  • http://nonbreakingspace.com/ the other howard

    On purely capitalistic terms, you’re probably right, and if there were to be another round of cash to the auto industry, there’d probably have strict conditions on how the money is spent and what would have to be accomplished. That said, the last time the government bailed out a car maker (Chrysler back in the late 70s-early 80s), the taxpayers actually made a profit on the deal.

    The only real quibble I’d take with your post is that comparing Asian car makers to their U.S. counterparts is like comparing apples to oranges. Or should I say government subsidized apples to capitalist oranges. Virtually all of the Asian companies you’ve cited in this post rose to prominence with heavy government assistance. Not just tax breaks, but substantive taxpayer funding. That includes Toyota, Honda, LG, Sony, Samsung, Hyundai, etc.

    Don’t get me wrong. I don’t have a problem with people not wanting to bail out the Big Three (or the millions of workers employed as a result of their existence). In fact, I don’t see a huge issue with letting them go to Chapter 11 and reorganizing. But putting companies like Toyota and Honda on a pedestal as examples of corporate self-sufficiency is a little like saying George W. Bush raised himself up by his own bootstraps.

  • Spencer

    @the other howard – I realize how out of practice I am writing. There were some points that you brought up, that if my post were better written wouldn’t be issues.

    I don’t necessarily have an issue with the government helping the big three out – it’s just that giving them money right now would be like giving your junkie relative a twenty – more than likely whatever they buy with it won’t be good. The big three are seemingly unrepentant – Ford’s big marketing campaign with Dennis Leary and many millions of dollars in commercials is for the F-150. If you go to Chrysler’s website, they don’t have a section about their green initiatives. To me it’s as if they don’t get it, and for that reason, I don’t want to give them any money.

    I almost feel that money given should be in the form of grants to further innovation and then the practical implementation of those innovations. Otherwise we’re just ensuring that we go down this bad path again.

    The fact that we bailed out Chrysler once, is example of all this.

  • http://nonbreakingspace.com/ the other howard

    I agree completely that there should be conditions set on any assistance they receive from us.

    As it pertains to Chrysler, I’d keep giving automakers bailouts if they can return us the profit that Chrysler did on the last one, because that’s a good sign that they’re at least doing something right.

  • Spencer

    @the other howard – I disagree. I think making a profit is not nearly enough. I want the companies to restructure the way they do business to be smarter, and make a profit that way. If making a profit means selling high price, high margin, and/or low mileage vehicles, then no – that’s not what we want.

    If we’re going to put money into these companies, then it’s more important that as a result, we use them to lessen our dependence on fossil fuels. Even if the company doesn’t turn a profit, but it’s churning out high quality, eco-friendly cars that Americans like, and that in turn makes us less dependent on OPEC – that’s an investment worth making.