WSJ Article: The Truth About Cars and Trucks (GM, Chrysler & Your Gov't)

[deejaydana]

Interesting read on the state of Detroit and YOUR government's involvement with and commitment to 'saving' the auto industry. How will this effect what Detroit builds going forward? Does the gov't have the right to dictate what Detroit builds when tax dollars are funding its operations? BK is inevitable at this point for the former 'big three' but what comes afterwards?

Lately some have doted, with wonderment and admiration, on the Obama administration's apparent willingness to drive a hard bargain with the UAW as it tries to impose a stage-managed replica of bankruptcy on GM and Chrysler. Please.

In a real bankruptcy, which is the natural fate of companies unable to meet their obligations, Chrysler and GM would be run (or liquidated) for the benefit of their creditors, not their workers. But, here, "pattern bargaining" will remain the law of the Detroit jungle. The UAW will continue to use its unnaturally augmented clout to extract uncompetitive pay and benefits (it can do no other given its internal incentives). As it has for 40 years, Washington will pitch in with one improvisation after another, disguised as energy policy, trade policy, health-care policy or environmental policy, to stop the rivets from popping off. Politics, especially Democratic electoral politics, will play a more dominant role than ever.

Entire Article:

http://online.wsj.com/article/SB124096698307566437.html

[Mooka]

I had never heard about these tariffs on cars vs trucks before. Makes a lot of sense.

Found this article:

Tariffs on Cars Are 2.5 Percent, But on Pickup Trucks 25 Percent

"Why the anomalous treatment of pickup trucks? This stems from a trade dispute of the 1960s. The European Community, the six-nation ancestor of today's 25-country European Union, had blocked American chicken sales. The Johnson administration responded by raising the pickup truck tariff from 8.5 percent back to 25 percent. Ducking each of the big trade agreements since the 1960s, the pickup tariff has stayed there ever since. "

[Kunia5]

What if it works? That will mean socialism works. The auto bailout must be stopped.

[deejaydana]

What if it works? That will mean socialism works. The auto bailout must be stopped.

Huh? Of course it CAN work. The Trablant worked, right?

[ChocolateCitySkin]

If the UAW owns 55% of the company wouldn't they be shooting themselves in the foot if they chose lobbying over sound product?

[88Comrade2000]

Well, you can say goodbye to alot of cars you love as the government dictates what Obama Motors will sell and what other automakers can produce.

http://autos.aol.com/article/car-news/corvette-demise/20090429001