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Date Posted: 19:49:06 11/14/08 Fri
Author: Jim
Author Host/IP: 68.238.210.144
Subject: Re: What's Wrong With General Motors

I'm sorry I haven't time at the moment to give your thoughtful piece an equally thoughtful response. I'll offer a few comments.

First, I suspect there's at least a LITTLE bit of mismanagement at fault in the decline of US auto industry. They may or may not have been making "good" cars over the past decade or so, but it seems they've been making the wrong cars if consumers aren't buying them.

Legacy costs: pensions, retiree health coverage, etc aren't some gift the companies commit to. It's part of the workers' compensation package. The industry's accountants could project future costs when they agreed to these things in contracts with their workforce. Sure, the increase in those costs has accelerated, but the companies could see that as it happened - no surprises. If they failed to put aside adequate resources to cover these obligations it's no one's fault but their own.

Do foreign automakers have a competitive advantage? Maybe, maybe not. I'm not convinced the issue of legacy costs tells the whole story. US automakers clearly failed to effectively respond to a changing world, a changing business climate, a changing economy. In the abstract, I'm inclined to say "tough luck!". But I realize the consequences of these huge corporations failing are grave.

I don't pretend to have a clue as to what might best be done to salvage this mess. But having just seen a big chunk of tax dollars going to bail out a bunch of scumbag bankers and financial speculators who should instead be headed to jail, I don't relish bailing out the Auto Execs and their shareholders. Nobody's going to bail me out if my business fails.

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