http://info.detnews.com/video/index.cfm?id=1189
Just beautiful. Now I get why Ford cannot build enough cars to satisfy demand in Eastern Europe.
Showing posts with label autoindustry. Show all posts
Showing posts with label autoindustry. Show all posts
Friday, December 12, 2008
Tuesday, December 9, 2008
Big 3 and US Auto industry
On a MarketWatch I often see comments that bailing out auto makers "is not capitalism". But I think that's precisely the point.
Concentration of autoindustry left us not with capitalistic companies competing on a free market, but essentially with a "ministry of automobile industry" represented by three huge beaurocratic hierarchies of Big 3. And, as any "ministry", it's not a profit maker.
The problem is what to do about it? Theoretically, we could break up these companies, say, making each brand a separate company. Maybe we even can make each assembly fatory an individual company selling their services to headquerters of brand companies. And we could also separate R&D centers selling their innovations to all brands. And their supplier chain is already detached and unified. That would stir up competition back, but temporarily it will result in raised price on cars and make things even worse.
What's even more hard is that they don't compete with other capitalistic companies. Toyota, Honda and Nissan are essentially a similar "ministry of autoindustry" of Japan. And competing with huge semi-governmental structures is next to impossible, that's why they merged together from hundreds of smaller car companies in the early 20th century in the first place.
Essentially what we learn from this is that even poorly managed corporate socialism is more efficient than free market. Otherwise we already would have many small competeing companies instead of three huge conglomerates.
And odd (and potentially wrong) idea on what we can do is to do bailout through people, give that money as a 0% deferered payment credit to US citizens to buy certified made in USA cars by these three companies. This way people will vote which company should stay and which go broke. And then break just one that went broke. We'll be able to check what will happen and it will be a good enough scarecrow to make all three push to the best of their abilities.
Concentration of autoindustry left us not with capitalistic companies competing on a free market, but essentially with a "ministry of automobile industry" represented by three huge beaurocratic hierarchies of Big 3. And, as any "ministry", it's not a profit maker.
The problem is what to do about it? Theoretically, we could break up these companies, say, making each brand a separate company. Maybe we even can make each assembly fatory an individual company selling their services to headquerters of brand companies. And we could also separate R&D centers selling their innovations to all brands. And their supplier chain is already detached and unified. That would stir up competition back, but temporarily it will result in raised price on cars and make things even worse.
What's even more hard is that they don't compete with other capitalistic companies. Toyota, Honda and Nissan are essentially a similar "ministry of autoindustry" of Japan. And competing with huge semi-governmental structures is next to impossible, that's why they merged together from hundreds of smaller car companies in the early 20th century in the first place.
Essentially what we learn from this is that even poorly managed corporate socialism is more efficient than free market. Otherwise we already would have many small competeing companies instead of three huge conglomerates.
And odd (and potentially wrong) idea on what we can do is to do bailout through people, give that money as a 0% deferered payment credit to US citizens to buy certified made in USA cars by these three companies. This way people will vote which company should stay and which go broke. And then break just one that went broke. We'll be able to check what will happen and it will be a good enough scarecrow to make all three push to the best of their abilities.
Wednesday, November 26, 2008
Rescuing Big 3 automakers....
Marketwatch, November 24, 2008
I already mentioned it to another post, but I wonder if help to Big 3 may be provided as a low or zero interest federal loans to Americans to buy one of these three brands.
1. You have to be US citizen or legal permanent resident (verifiable by SSN) and live in US
2. You can buy one vehicle of Ford, GM or Chrysler of your choice
3. Price must be fixed to MSRP+$300-400 for the dealer (Big 3 can force their dealers to do so as part of the deal).
4. The vehicle must be certified made in USA
5. Credit is low or 0% interest with deferred payments.
I'd love that. For a difference I'll get something from my tax dollars even if in a form or credit.
Big 3 will get their money but in a more natural way, also market will tell who of them sucks more and pay appropritely. And the money will also stimulate local economies on the way. Also, haugty j**/Euro-brand lovers won't use it, so it will go to poorer states like MidWest or South where people still have to drive cars from 70s and 60s. That will help them and also ensure that these cars won't flood the market soon afterward -- because those people will really need these cars.
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