Bailng out the Big Dog (Lovers)

For the third time in living memory (at least while I’m still alive) “Detroit” has screwed the pooch. Detroit meaning U.S. car makers, not Motown sound which has generated consistent profits while the auto companies dallied with the doggie.

First time was in 1973 when OPEC held an embargo and nobody came until Congress used it as an excuse to cause real economic damage, and the price of crude tripled. Link Oh, what the heck, let’s throw in the 1979 Iranian revolution when the price tripled again. That’s fair because six years was not enough for the carmakers to get smart and then get stupid again, they just stayed stupid all the way through. The point is they were making huge gas guzzlers – the fins on Cadillacs back then weighed more than most cars do today – and suddenly the public wanted little, gas-sipping cars that Detroit had no clue how to make.

The second pooch-o-phile incident was in the 1980s, when Detroit was suddenly faced with the surprising news that people liked cars that did not break down every 1000 miles. Detroit could not believe that people wanted to buy those little toy Japanese things. We beat the Japs! How the hell could red-blooded Americans buy cars from Misubishi, who also made the Zero that these same guys flew Hellcats against? Actually the war worked against Detroit in the long run. Japanese and German industry was all bombed to slag and rubble. They replaced it with industry that was 20 years ahead in technology compared to the stuff we had used to win the war. They also did not share the attitude that America was a population of geniuses who could do anything except make mistakes. The Japanese in particular listened to a guy named Deming, who showed them how to make cars that would run for 100,000 miles instead of 20,000. Two jokes come to mind: “Toyotas – they’re like cockroaches. You can’t kill ‘em.” And “FORD – either Fix or Repair Daily, or Found on Road Deserted.”

By the 1990’s Detroit had figured out how to make little cars that ran forever. Well, half of forever compared to Japanese cars, but good enough for them to whine that you were a freakin’ commie traitor if you didn’t buy American. By that time, gasoline prices had been going down for ten years, which by Detroit’s careful planning methods indicated the price would stay the same until Gabriel blew his trumpet for Judgement Day. Detroit went back to making big vehicles. They ran fancy computer-generated ads to convince the buying public that if your personal around-town vehicle had less than three hundred horsepower then you were clueless (if female) and sphereless (if male.)

This led to the third instance of canine cuddling. Detroit committed themselves to these land-based aircraft carriers with the passion of Romeo stabbing himself in Juliet’s tomb. And with pretty much the same result. World oil demand was going up, U.S. production was getting smaller, and in the Middle East people were blowing up oil wells and pipelines in order to kill people for obscure religious reasons. Gasoline was inevitably going to get more expensive. A lot more expensive, and it was when and how much, not if. So you would expect that Detroit would have plans on the shelf to switch and start cranking out little, long-running cars, right? If your answer is yes, would you please give me one logical reason why you would think so? The overwhelming evidence is that “long-term planning” in Detroit means calling ahead for a dinner reservation.

Who suffers if we don’t bail out Detroit? Who suffers is hundreds of thousands of workers who make parts and put them together to produce cars. Some of them have been doing this for thirty or forty years. Yes, their unions have gotten them super-good wages and yes, their unions have gotten them super-good medical coverage. This adds a couple of grand to the cost of every Detroit car. I know you resent this like crazy, because you wish you had that kind of a deal. It would make sense for Detroit to whine about those costs if it drove up the price of their cars. The trouble is that the Japanese make cars cheaper and sell them for more because they make cars that people want to buy. If Detroit made cars that people wanted to buy, then they could easily charge enough to cover the high labor and medical costs.

The culprits in Detroit are not the working guys who get paid ridiculously well for doing their jobs. The culprits are managers and planners – probably less than a thousand total among all the Detroit car makers – who got paid ridiculously well for not doing their jobs, but instead committing peterasty three separate times in as many decades. Here’s my remedy:

1) Bail out the car companies. $25 billion is cheap to keep several hundred thousand people at work. It’s about one year's pay and benefits for 250,000 workers.
2) Find those thousand or so managers and planners and
a) Take ‘em out back and beat the snot out of ‘em
b) Leave ‘em on the roadside with a vehicle of their own manufacture and $5 gas money for transport to the emergency room
c) Fine them collectively to recoup the $25 billion. It averages out to $25 million a head.There’s no doubt they’ve got that much; and they can figure out on their own how to distribute the wealth.

You might think it would be hard to identify who should be punished and who should not. But that shouldn't be a problem as long as we get it done before Bush leaves office.