More on the Auto Company Bailout...

Michael Moore on the Bailout

I don't always agree with Michael Moore, but he hits it right on the head in this interview. I've been a car guy as long as I've known what a car was, and as long as I've been working on and around cars I've known that the American car industry was digging itself a very, very deep hole.

What's so frustrating about General Motors in particular is how they refuse to trickle their own innovations down fast enough. They had fuel injection in 1958 and abandoned it, while the European carmakers developed it. As Moore says, they arrogantly said "The people will buy the cars that we make." ... until they didn't, and even then they refused to evolve. Their C3I computer control system and DIS ignition systems were fantastic and modular, they bolted them to most of their cars in the 90's ... but put nothing into truly revolutionary engine design. The Saturn twin-cam and the Quad-4 could have been SO MUCH BETTER, but they only managed to produce as much power in 1.9 to 2.4 litre forms as the Japanese carmakers were doing with 1.6 to 1.8 litres. Cadillac gets the wonderful Northstar engine, but the rest of the line doesn't.

One analogy I use all the time is that the 2 top-selling cars in Canada all through the 90's were the Civic and the Cavalier. I know every inch of a Cavalier. They break all the time. I know far less about the Civic. You don't see them as much.

I do see one problem with Moore's theory about forcing the automakers to make what the governemt wants them to make: A lot of Americans DO still believe in the Big Three's dogma. They've been trying to impose CAFE (Corporate Average Fuel Economy) numbers on them for years. All the carmakers have to say is, "We offered cars with better fuel economy, but people bought more of the gas-guzzlers, so our average fuel economy went up! Nothing we could do!" In a free market, the people are free to buy whatever they want. How can the government expect to dictate an average beforehand?

So to bail them out or not? To answer Larry King's question, "Who will build cars in America?", all you have to do is increase import tariffs and the foreign companies will build more factories here and employ more of us. They already are... the Civic and Corolla are both made right here in Canada! I really don't believe the companies will be allowed to go bankrupt, but even if they did, I don't think it would be as cataclysmic as many believe. There are only 50,000 CAW workers left working in automotive or automotive parts manufacturing. It would barely effect the national unemployment rate, and only drop CAW membership by 20%.

It will be interesting to see what happens. Personally, I like the scenario of a loan with MAJOR strings attached, namely that the American car companies can build only what the public needs, not what they want. Call this the Al Gore scenario. Development money should go into battery and supercapacitor technology to make series hybrids more realistic. Large vehicles for transporting 7 or more people will be rationally designed, not tarted up to look like something you could take across the desert with 1000 lbs of unnecessary plastic and 200 bhp of unnecessary engine. It's a great idea ... but nobody would buy it and the companies would tank anyway. Oh well.