The Detroit bailout

Regardless of all the reasons why Detroit’s in trouble the main issue is still one of inferior products being built. The cars made by Detroit are no longer the best in the market. Imagine for a moment instead of the auto industry it was the technology industry asking for bailout. Lets say for example, Sun Microsystems.

The outrage would be obvious.

There are several problems that the UAW and the car companies themselves list to the problems of their industry:
1. Higher employee payroll for Detroit companies compared to Honda, Toyota and Nissan. Sure, but its not a big factor.
2. More retirees with benefits that add to their costs. Also important but not a killer.
3. More dealerships with restrictive state laws that add to their costs. Yeah right.
4. Outrageous executive pay. Sure, it can come down, but its not going to make a huge difference.

None of this can take away from the fact that Detroit makes bad products that most of their customers detest. I don’t buy Sun gear now, and don’t want them bailed out. If they file for bankruptcy, awesome, they can restructure and get stronger to build better products.

The pretax profitability of Detroit’s cars is woeful because their products demand no better. BTW this is not yet another of those – “You are speaking of Detroit in 1980’s, drive an American car today” kinda rant. I have an Audi, Ford SUV (Explorer) and have also had the Acura, Mercedes, Toyota and a BMW (all over the last 5-7 years).

The worst of the lot was the Ford Explorer.

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