{"id":1539,"date":"2009-02-18T16:24:06","date_gmt":"2009-02-18T21:24:06","guid":{"rendered":"http:\/\/www.jasetaro.com\/blog\/?p=1539"},"modified":"2009-02-18T16:24:06","modified_gmt":"2009-02-18T21:24:06","slug":"not-just-no-but-hell-no-gm-chrysler-seek-216-billion-in-aid","status":"publish","type":"post","link":"https:\/\/www.jasetaro.com\/blog\/2009\/02\/18\/not-just-no-but-hell-no-gm-chrysler-seek-216-billion-in-aid\/","title":{"rendered":"Not Just No, But Hell No: GM, Chrysler Seek $21.6 Billion in Aid"},"content":{"rendered":"

General Motors and Chrysler have submitted their recovery plans submitted to the U.S. Treasury and are asking for another $21.6 billion in government aid<\/a>.<\/p>\n

Not just no, but hell no… No amount of government aid is going to bring them back to profitability so long as the government forces them to build car consumers don’t want.<\/p>\n

Henry Payne writing at National Review online suggests<\/a> that:<\/p>\n

If Washington and Detroit were really<\/em> interested in returning GM and Chrysler to profitability, a restructuring might look like this:<\/span><\/p>\n

    \n
  1. Congress would eliminate fuel-mileage regulations (so-called CAFE laws) costing an estimated $85 billion<\/em> over the next decade. These arbitrary standards force automakers to make vehicles customers don\u2019t want, impose nonsensical regulations on how many cars a manufacturer can import from outside the Americas \u2014 and what’s more, is encouraging GM to spend $200-a-vehicle to make its fleet ethanol-capable (which a CAFE loophole rewards).
    \n<\/span><\/li>\n
  2. Concentrate on core products like sedans and light trucks instead of pouring millions into electric cars and other \u201calternate\u201d fuel vehicles. Companies like Hyundai and Kia produce not a single hybrid yet are gaining U.S. market share by making cheap, profitable automobiles that customers want.
    \n<\/span><\/li>\n
  3. Reduce manufacturing wages and benefits to industry-leading<\/em> rates, immediately saving billions and setting a baseline on which to build worker incentives as the companies become profitable again. Not \u201ccompetitive\u201d rates of $29 an hour versus $26 an hour at U.S. Toyota plants. Not \u201ccompetitive\u201d beginning wages of $25 an hour, but a beginning wage of $15 an hour (the average U.S. manufacturing wage) with a raise to $21 an hour over two years \u2014 which is what Hyundai pays its American<\/em> workers in its new Alabama plant.
    \n<\/span><\/li>\n
  4. Slash dealership overhead. At 20 percent, GM and Toyota have roughly the same market share. Yet GM is burdened with a staggering 7,000 dealerships versus Toyota\u2019s 1,500. Fewer and larger dealers would be better able to market, stock, and service the cars they sell and it would also make it easier for GM to slash its eight brands (Toyota has only three). Read the rest…<\/a>
    \n<\/span><\/li>\n<\/ol>\n<\/blockquote>\n

    Payne pretty much nails repealing CAFE rules and letting Detroit build cars consumers want will go along toward returning GM and Chrysler to profitability. Lets not forget even when gas prices were pushing $4.00 a gallon half the vehicles sold in the U.S. were light trucks. In November even as the economy was crashing and high gas prices still fresh in people minds the two top selling vehicles were pickups from Ford and Chevy… The Dodge Ram was No. 7.<\/p>\n","protected":false},"excerpt":{"rendered":"

    General Motors and Chrysler have submitted their recovery plans submitted to the U.S. Treasury and are asking for another $21.6 billion in government aid. Not just no, but hell no… No amount of government aid is going to bring them back to profitability so long as the government forces them to build car consumers don’t […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[26,7],"tags":[313,166,314,323],"class_list":["post-1539","post","type-post","status-publish","format-standard","category-economy","category-politics","tag-auto-industry","tag-bailout","tag-chrysler","tag-gm","entry"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pfpI7-oP","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1015,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/18\/cnsnewscom-union-workers-at-big-three-automakers-average-73-an-hour\/","url_meta":{"origin":1539,"position":0},"title":"CNSNews.com: Union Workers at Big Three Automakers Average $73 an Hour","author":"Jeff","date":"November 18, 2008","format":false,"excerpt":"The headline may be a little misleading but the article is worth reading: Union Workers at Big Three Automakers Average $73 an Hour By Pete Winn, Senior Writer\/Editor, CNSNews.com, Tuesday, November 18, 2008 Economists in Michigan, the long-time home of the auto industry, say they don\u2019t support the proposed multi-billion\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1104,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/12\/12\/treasury-throws-auto-industry-a-life-line\/","url_meta":{"origin":1539,"position":1},"title":"Treasury Throws Auto Industry a Life Line???","author":"Jeff","date":"December 12, 2008","format":false,"excerpt":"Damn! What is it with the Bush administration? Senate Republicans rightly stopped the auto industry bail last night and today the Bush Administration decides to use TARP funds to throw a life line to GM and Chrysler. From FoxBusiness: Despite the abrupt death last night of bailout legislation in Congress,\u2026","rel":"","context":"In "Money & Investing"","block_context":{"text":"Money & Investing","link":"https:\/\/www.jasetaro.com\/blog\/category\/money-and-investing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":997,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/15\/wall-street-journal-just-say-no-to-detroit\/","url_meta":{"origin":1539,"position":2},"title":"Wall Street Journal: Just Say No to Detroit","author":"Jeff","date":"November 15, 2008","format":false,"excerpt":"There's an interesting essay by New York University finance professor David Yermack in today's Wall Street Journal. Just Say No to Detroit Given the abysmal performance by Detroit's Big Three, it would be better to send each employee a check than to waste it on a bailout, says David Yermack.\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1141,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/12\/19\/son-of-a-bailout-bush-gives-auto-makers-174-billion\/","url_meta":{"origin":1539,"position":3},"title":"Son of a Bailout – Bush Gives Auto Makers $17.4 Billion","author":"Jeff","date":"December 19, 2008","format":false,"excerpt":"President Bush this morning morning announced a $17.4 billion bailout plan for auto makers. Under the terms of the plan GM and Chrysler would receive $13.4 billion in loans in December and January, with another $4 billion likely available in February. The deal is contingent on the companies' showing that\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1292,"url":"https:\/\/www.jasetaro.com\/blog\/2009\/01\/04\/wsj-let-detroit-build-profitable-cars\/","url_meta":{"origin":1539,"position":4},"title":"WSJ: Let Detroit Build Profitable Cars","author":"Jeff","date":"January 4, 2009","format":false,"excerpt":"I'm doing a little catching up this weekend and trying to read all the two dozen or so articles I bookmarked over the past couple of weeks. One of the items I bookmarked was Holman W. Jenkins Jr. December 31st Op Ed piece in the Wall Street Journal \"Let Detroit\u2026","rel":"","context":"In "Economy"","block_context":{"text":"Economy","link":"https:\/\/www.jasetaro.com\/blog\/category\/economy\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1026,"url":"https:\/\/www.jasetaro.com\/blog\/2008\/11\/19\/mitt-romney-let-detroit-go-bankrupt\/","url_meta":{"origin":1539,"position":5},"title":"Mitt Romney: Let Detroit Go Bankrupt","author":"Jeff","date":"November 19, 2008","format":false,"excerpt":"Former Massachusetts Governor Mitt Romney has a must read Op Ed on troubles facing Chrysler, Ford and GM in today's New York Times. Let Detroit Go Bankrupt By Mitt Romney, New York Times Op-Ed, Wednesday, November 18, 2008 Boston IF General Motors, Ford and Chrysler get the bailout that their\u2026","rel":"","context":"In "Education"","block_context":{"text":"Education","link":"https:\/\/www.jasetaro.com\/blog\/category\/education\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/1539","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/comments?post=1539"}],"version-history":[{"count":0,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/posts\/1539\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/media?parent=1539"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/categories?post=1539"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.jasetaro.com\/blog\/wp-json\/wp\/v2\/tags?post=1539"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}