Sunday, November 30, 2008

Detroit in Crisis

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My grandfather, A.W. Evans, became a Ford dealer in the Twenties and remained a Ford dealer until the late Sixties, when their little farm town, Glenavon, could no longer support the Ford dealership. His three sons were into cars. Two went to work for Ford after The War. One continued Evans Motors. My father worked for Ford Motor Company after The War in the Ford office in Regina. Our family has always driven Fords, except for a 1961 Morris Mini Minor and a 1961 Fiat 600 Seicento. Chances are that I will always drive a Ford as long as they make good ones.

General Motors replaced Ford as the world's number one automaker in 1933. Henry Ford II took over the Ford Motor Company during The War and brought it back from the dead. My father always thought General Motors would remain the number one automaker forever and that Ford would be lucky to come second. But for luck, and the generosity of General Motors, Chrysler would have been gone fifty years ago, following into history Hudson, Studebaker, American Motors, and dozens of other American car makers.

Unlike filmmaker, Michael Moore, I have a soft spot for the automotive business. I like 'em all, not just American cars. I love Italian cars, especially Ferrari, Maserati, and Lamborghini.

I was appalled to see Michael Moore a few nights ago on Larry King. He positively HATES General Motors. Moore believes that all American automakers should be driven out of business, or, failing that, that the lawmakers should "do what FDR did", take charge and MAKE them build better cars while building a rapid transit system and protecting the environment to boot.

Michael Moore's family all worked for General Motors (on the line in Flint). Moore places blame squarely on the heads of "management".

"Did you have a good childhood, Michael," King wondered?

"Oh sure, we lived a prosperous middle class life," Moore replied. "As General Motors workers, our family was paid more than other families. We had four weeks holidays every summer and we had retirement and health benefits too. But General Motors built lousy cars and they controlled the buying public with lies."

"Are the others the same," King asked?

"The same. They are all the same."

HATE HATE HATE. I think Larry King was getting tired of Moore. I was tired of him. Why doesn't he shave?

The truth is that Honda, Mitsubishi, Nissan and Toyota are in exactly the same business as General Motors, Ford, and Chrysler. They aren't building a rapid transit system, they are building cars. And the cars they are building are pretty similar to the cars American companies build.

"Just drive one of the imports around the block. You'll see the difference," Moore opined.

Actually, you won't see much difference because they all build cars the consumers want to buy.

My 1961 Morris Mini Minor got 50 MPG. I drove it through the Rocky Mountains in January to Vancouver and back to Regina. My Mini was one of few cars and trucks to get through record snows in Rogers Pass that winter. It made the trip without chains or snow tires! It was a dandy little car. The Mini had heart. But it was missing lots of things that people want more than 50 MPG, even today, things like a good heater. Yes, my 1961 Mini was a frosty little beast in November, December, January, February and March. I had to scrape the windshield inside while driving. The new Mini, which is built by BMW, is a much better car, but it doesn't get 50 MPG.

It's easy to get 50 MPG if one strips everything out and makes the car light and small with an 850 cc engine. Every pound one adds, has a cost. They could even build a fast powerful car that would get 50 MPG, but it would cost as much as a Lamborghini and it would not be as fast.

I'm afraid Michael Moore doesn't know what he's talking about — Moore is full of beans. That came through loud and clear on Larry King. The UAW/CAW is a major reason, possibly the only reason, American and Canadian autoworkers are in trouble. I am amazed how many people in the press share Moore's opinion. NY Senator Charles Schumer is full of it too, along with the Democrats who loaded the gun the UAW put against the heads of the American automakers all these decades.

Why aren't Honda, Toyota, Nissan, Mitsubishi, Subaru, Kia, Hyundai, Daimler, BMW, Volkswagen and the rest, forced to have the same labour costs as General Motors, Ford and Chrysler? Why doesn't Schumer demand that Wall Street provide Congress with a "business plan" for the trillions of dollars Wall Street firms have already been given by Washington? "Maybe they'll be back for more." Maybe Wall Street will be back for more. Bets? Maybe the Democrats will erect trade barriers to protect American industry. That is what Democrats have always done. Or is it too late to do that? Maybe they will start WWIII. Starting wars is what Democrats are good at too: WWI, WWII, the Korean War and the War in Vietnam were all Democratic wars.

It is not realistic to expect the North American auto market to be 99% "owned" by three companies, with one company getting the lion's share. Before the Fifties, there were many American auto manufacturers. After that, there have been growing numbers of imports, starting with Volkswagen and British Motor Corporation. BMC was once the largest motor company in Great Britain. It has been gone for years. It was not saved by being big, though that was the plan.

Returning to Ford, when one looks around the world, Ford sells cars. It has been the market leader in Great Britain for almost thirty years. It has a U.K. market share around 15% as it does in many other places. Ford does not own the market anywhere. It competes with dozens of other manufacturers. Outside the U.S., Ford is profitable. Building and selling cars is fiercely competitive. The competition is good. They learned from the best. If American automakers are destroyed and hundreds of thousands are thrown out of work, Americans can thank the people in Washington whose fingerprints are on the knives that are in the backs of GM, Ford and Chrysler. Autoworkers can thank their unions too.

Ford world-wide

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