Steve Rattner On The Auto Bailouts
I'm not going to spend a lot of time on this post because Steve Rattner's remarks are much more worthwhile. We have written extensively about the auto industry on here over the years. Most of our remarks have turned out to be spot on. As an engineer, as someone who has extensive experience in business process, in benchmarking, in management consulting, I have a firm understanding of the auto business and what ails them. Some of that ailment is a result of poor government policy, some because of a combative nature of the UAW and some because of failed economic ideology. But the vast majority of the failures of the American auto industry are because of horrible, insular management. In fact, horrible management led to the combative nature of the UAW. As we have remarked before, unions are simply market responses to hegemonic authority and concentration of power. It's the same dynamic response to tyranny that led to the concept of democracy.
By the way, Edmonds came out this week and said the government's Cash for Clunkers program likely cost $24,000 per vehicle. We used a lower figure in our napkin analysis based on the feedback of a Ford executive but regardless, the outcome is the same. Taxpayers were paying GM to build cars. For free. A general truth is that if government officials knew how to run a business and do so successfully, they would be running a business. I think this data point helps substantiate this fact. It's also why the home buyers tax credit is going to turn out to be a major flop.
Anyway, some interesting feedback from Rattner below.
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