So. Alea iacta est, as Julius Caesar might have said, if there had been a major Roman chariot manufacturer in putative need of nationalization. The nation's largest automaker, our most iconic firm, is bankrupt, GM and Citigroup exit the Dow in favor of Travelers and Cisco.
The first obvious thing to say is that the only alternative the US government probably had to this massively expensive reorganization was probably liquidation. I take seriously the claims that there was no DIP financing available for the automakers.
However. The reason there was no DIP financing available is, at least in part, that there's no obvious upside here. The government is acting as if GM's main problem is that it stubbornly refused to enter the lucrative market for small, fuel-efficient cars. But the market for small, fuel efficient cars is not lucrative--they're the cars with the thinnest margins. And no one's making it up on volume, either: at the height of last year's oil spike, when barrels of Brent Crude were being quoted in first-born sons, small cars soared to . . . 20% of the American market. Yes, there was a glut of SUVs, but that's because American companies were making a lot of SUVs. Foreign companies make money on small cars because they develop them for lucrative home markets before modifying them for American production.
GM's main problem is not that the market is unreasonably unwilling to finance a potentially profitable company. Nor that it can't produce an awesome small car that shockingly few people want to buy. (Believe me, as the owner of a tiny, ultra-efficient car, I would that there were higher demand for my rapidly depreciating asset). GM's main problems are
1) A terrible, bloated cost structure
2) A terrible, bloated bureaucracy
3) A bunch of meh car lines
Which of these is the government going to solve? That terrible, bloated cost structure supports a bloated union whose jobs are the entire rationale for the government intervention. Leaning on the parts suppliers just risks UAW jobs further down the supply chain. Maybe we can take it out of the budget for copy paper and pencils.
Forgive me if I am skeptical that the government is going to show GM how to streamline its bureaucracy. Nor do governments historically have a good record as cutting-edge auto designers.
All the government can give GM is money. Our money. Perhaps we should change the name to American Leyland.
Copyright © 2009 by The Atlantic Monthly Group. All rights reserved.
The only thing I can think of that can save GM is much more automation. Robots can be turned off when demand drops.
"You never appreciate how smart a moron is until you try to program a robot."
Jerry Pournelle.
I've worked in industrial automation. The question I've had since is: What are we going to do with all the people displaced by the robots? Give them government make-work jobs? Put them on welfare?
Let them starve?
What did we do with all the telecom engineers back in 2002? There've been hordes of them looking for work around here.
To answer your question: we don't need to do anything with them. As humans with living brains, they'll find what to do with themselves.
Exactly, max. What did we do with all the craftsmen that were displaced by mass production during the industrial revolution?
Some of those workers will become machine operators (because an operator is much better at his job if he knows what it entails). Some of them will become technicians for those robots, others will go to make more robots...
Ugh. Shut it down and sell off the bones! The misguided embrace of the zombies GM and Chrysler, along with Obama's continuation of Don't Ask, Don't Tell, are the two greatest disappointments of the new administration. There is nothing (NOTHING!) so special about the automotive industry that it should be salvaged in front of a host of industrial and service sectors that are struggling through the downturn.
Does the government really any choice here?
The eventual death of the American car companies is going to cause a massive hit on the economy that will last for decades. However the only way to *prove* that they are doomed is by trying one's best (i.e. spending pot-loads of money) and having them fail anyway (see LeyLand)
If they don't, the government will be accused until the end of time of having sat back and allowed for the American middle-class to be demolished without even *trying* to help. After all, it is literally impossible to know *absolutely* that they couldn't be saved. (And who knows, maybe a miracle could happen!)
No political party is going to be willing to destroy themselves for the next 50 years simply on a point of principle.
Of course if this spirals into an inflationary goo - particularly if the precedent leads to nationalization of banks like Citigroup and other such things - the accusation will be very different...
"GM" and "the American middle-class" are not synonymous, nor even substantially overlapping entities.
GM almost declared bankruptcy in 1992. Ford and Chrysler almost declared bankruptcy in 1979-1982.
There are tons of examples of carmakers that have turned themselves into profitable powerhouses within a decade of nearing bankruptcy.
Unfortunately, most of them didn't have GM's labor load.
The new CEO is more of the same old, and not a fresh face brought in from the outside.
GM has made some really awesome products in recent years (CTS, Malibu, Corvette, and a few others)....but a few awesome products compared to the loads of crap means GM has made itself a substantial mindset that will need to be overcome.
Since GM needs to be massively cut in U.S. size (in all aspects), I'm curious to see the justification behind bailing out GM via $50-100+ billion to "save jobs" and then having to cut GM's jobs by about 30-40% within the next 12-18 months.
That'll be disgusting to watch.
This sequence of events could only have happened with a Democratic Party administration dealing with a heavily unionized industry. Had Chrysler been liquidated it might have been a great help to GM and Ford. We continue to have too much capacity that is too expensive, because companies have not been allowed to fail and union contracts are being subsidized by the taxpayers using money the government does not have.
The easiest way to salvage GM would have been to burn Chrysler down (while selling Jeep off). When Americans buy 8 million SAARs instead of 16 million, there's a fundamental overcapacity problem which cannot be fixed through merely tweaking. There's no law of nature that America needs 3 carmakers (in addition to the many transplant OEMs employing Americans).
For the taxpayers to see any payoff on their $50 billion cash investment, they need to see GM in the hands of motivated owners who will make the difficult decisions needed to save operations and make vehicles profitably. It's just not going to happen under government ownership. Obama will never force the UAW to make more than cosmetic cuts -- the new plan doesn't cut pay, pension benefits, etc, or worst of all, the crippling work rules that prevent GM from profitably making anything other than SUVs and pickups.
Finally, has anybody gone through why exactly it costs $50 billion cash to downsize GM? How much will taxpayers be funding rich buyouts of UAW workers (at least year's income) or stuffing the VEBA, under which UAW retirees enjoy much richer benefits than most other workers, including many taxpayers. Why are taxpayers subsidizing their above-market benefits? Why isn't Obama driving a harder bargain on all parties, not just bondholders, on behalf of taxpayers?
By the way, someone on another website mentioned a great point: Almost all of the historic turnarounds in the past took place with far, far less competition than there is today. The market is flooded with car manufacturers making several products for every niche.
BTW Megan, there are several small, efficient cars that are highly profitable (as a percentage of their overall sale price).
Those include the previous and future gen Mazda 3 and Mini Cooper. They are "premium" economy cars that tend to get alot of profit off of their option packages or a la carte options.
For instance, the new Mazda 3 will let owners get heated, power, memory, leather seating, xenon headlights, push button start, etc. while still driving an economical 4-cylinder sedan or hatchback.
I imagine selling 200,000-300,000 such cars a year, with a $1500 profit on each one (probably 7-10% margin on sale price), would represent a reasonable profit on just one model.
IIRC, the trick is to sell as many as possible during the model life as each sale drives down the cost-per-car of the R&D process. Course that follows for everything :)
Which, to me, really amazes me that Subaru and Mazda have done so well considering their price point and overall volume.
Joe
If last year GM held a half price sale on all of it's inventory (except the few top sales models) and turned it's inventory in to cash it could have filed for chapter 11 and would have had it's own internal DIP financing. Chrysler could have done the same as well.
GM could have then imported the small cars in to the US from it's overseas divisions when demand was up and by shedding it's legacy costs via chapter 11 it probably have made it could have survived.
Chrysler could probably have survived as well if it imported the small cars from Mitsubishi relabeled as a Chrysler product (with some cosmetic changes). Instead the GM bond holders like me have been taken out and shot and the taxpayers are going to get shafted just to bail one union out (albeit at the expense of other unions pension funds).
When given a choice between good, bad or worse, you can reliably place your bets on worst when it's the government doing the choosing.
All the government can give GM is money
And time. Same thing, really, in this case. Even if it just delays the massive layoffs for a year or two that, in our current economy, may be a good thing.
And, who knows, maybe the horse will learn to sing.
A good think in the abstract, quite possibly. But is it really $50 billion(or more) of a good thing?
The government just threw in another $30B. Suppose, very generously, that $30B keeps 300,000 people employed for another year. That's $100K per one-year-job. If you think that's a deal worth taking, I'd be interesed to know at what price point you would reject the deal.
An aspect of the takeover that gets relatively little attention is that we're doing all this without legislation. Maybe it's nostalgia, but I remember the good old days when Congress passed laws to do things
even less important than taking over a major industry. Nowadays, it seems that the president has the authority to rule by decree. Did I miss the news about the coup?
The coup happened in 2008. Now detention without trial, torture, and other formerly illegal acts are supported by Presidents in both parties. Heck, we have a former Vice President arguing that the current President treats enemies too well.
Correction: Coup was in 2000...
Questions for Meghan:
1) What is the percentage of cost to produce a car at GM that is labor costs?
2) Of that cost, what percentage is legacy healthcare costs?
3) What percentage of parts are purchased from third party suppliers? Are those suppliers unionized?
4) Does the ongoing bankruptcy of Delphi make you more or less convinced that costs can still be driven out of parts supply chain?
5) What is the lead time to get a new car to market?
6) What are the patterns of GM US subsidizing GM Europe with SUV / truck profits versus using GM Europe platforms to renew their non-SUV / light truck model lines?
7) What is the estimated level of secondary job loss if GM were allowed to fail?
The reason I'm asking is that I have no confidence that this post is actually based on any substantive knowledge of the US auto industry. I can guess some of the answers, but without displaying much evidence of knowing details about the US auto industry I wouldn't make so facile a comment as to suggest that GM is the new British Leyland - a forced amalgamation of companies with a combination of deeply stupid management at every level with union leadership unconstrained by any sort of centralized strike management.
Meghan could cut her work load on GM related posts by simply saying that she objects on principle and therefore is of the opinion that whatever the current administration does, it won't work.
(I don't object on principal but I doubt that it will work.)
There is simply too much capacity globally. You can't fix GM (or Chrysler or Toyota) when global productive capacity is 100 mm SAAR and global demand is 70 mm SAAR. The path of least resistance for margins is down. It is not unlike airlines. Until global capacity is reduced the industry will be in a persistent crisis. And the government's "compassion" only prolongs the crisis. As usual.
Don't worry everyone, the Obama Administration has some 31 year old who is going to figure it all out:
http://www.nytimes.com/2009/06/01/business/01deese.html
That article scares me more than anything.
Does our country really have a 31 year old without any real world experience in business playing (as the NYT describes it) a central role in this whole auto industry disaster?
I dont care how smart you are -- at 31, you simply dont know what you dont know, and that makes you dangerous.
Actually, that whole auto task force has nobody who's ever run a business, with the exception of some Wall St. types.
Wouldn't you think that, if you wanted t fix something, you'd try to get some people who've actually run a successful manufacturer, or retailer, or anything? You know, someone who has some idea how to actually make something or sell something?
Nope! They've got a bunch of politicos and assorted hangers on.
What Obama is doing is un-Constitutional.
Our Congress did not vote to spend money to acquire General Motors.
The TARP is not a $700 billion slush fund to be used however the President likes.
Will not ONE REPUBLICAN file suit to uphold the Constitution?
If not, I'll be god-damned if they ever get one more red cent of my money.
Will not ONE REPUBLICAN file suit to uphold the Constitution?
They didn't during the 2001 to 2009 period, why would they start now?
Way to keep on message....
Thank you...
Megan says:Foreign companies make money on small cars because they develop them for lucrative home markets before modifying them for American production.
But both GM & Ford have large European operations that provide the same function to them that the home market does to the Japanese & Korean producers.
The problem has been that neither GM nor Ford have tried to transfer their small car lessons from Europe to the US.
The problem has been that neither GM nor Ford have tried to transfer their small car lessons from Europe to the US.
Of course they have. If you hurry, you can buy an almost unmodified Opel Astra at a Saturn dealer. If you do buy one, though, you'll be in a select group -- sales have not exactly been robust. Ford sells the Focus in both the U.S. and Europe and both Ford and GM build mid-sized cars on the same platforms as their European counterparts. For small cars, though, the problem is that Americans expect small cars to be cheap cars, while Europeans don't (which is why European manufacturers don't import or build small cars for the American market -- the only exceptions are the VW Beetle/Golf/Jetta).
Every OEM makes less money selling small cars than SUVs/trucks. Consumers just aren't willing to pay as much for the comparatively slight difference in costs. In Europe, owning a large Chelsea tractor is a less viable option for plebians, so consumers are forced to pay whatever is required for small cars. That's not true in America right now, and with their higher cost bases, the Detroit guys just can't make money at the market clearing price for small cars here. This is consulting 101 -- price based costing vs cost based pricing (the latter doesn't work unless by fiat, and on the former, the D3 can't flex their costs to reflect the reality of market pricing).
Somebody mentioned a 7-10% profit margin on small cars earlier. That's fine, but gross margins like that will go nowhere covering gigantic fixed overhead costs. Being profitable for Detroit OEMs means selling trucks and SUVs at 20% gross margins running 2 shifts per day just to cover the overhead, and a third shift to actually make money.
You have to look at the difference in the markets. Both Europe and Asia FAVOR smaller cars. Here in the US that's not been the case.
All of the transplants, whether European or Asian, introduced larger vehicles - including SUVs - in the US market in order to cater to US tastes. Even the smaller offerings, like Corolla and Civic have grown in size over the years, as have the "midsize" Camry and Accord.
In Europe people pay quite a bit for a smaller car. Here, smaller equates "cheap". There are exceptions to that in the higher end of the market, but that portion of the market is not big enough.
Ford actually tried what you suggest with the Focus. They sold the entire lineup that was available in Europe, and VERY successful in Europe, here. There was a small 2 door hatchback, a sedan, a coupe, a 4 door hatchback and a wagon. The sales could not support that. Only the sedan and coupe survived. Of course, to meet US perception, those Focus offerings had to be low cost, so Ford didn't make any money.
Since American buyers equate small with "cheap", American makers could not profitably produce the small cars as long as their labor costs were much higher than the transplants. Labor costs stay relatively static whether a car is big or small.
Colin,
Yes, I noticed that article too in the Times. Imagine if Bush had been relying on some young whippersnapper, obviously unqualified by either education or background. Same breathless, gee-whiz coverage? I think not.
Spencer,
The biggest lesson was to can the high-priced German labor. GM knows what to do in the US - the UAW and its pals won't allow it.
Megan,
You make good points but leave one obvious one out: CAFE
As you ably point-out, foreign mfgs have a competitive advantage in small cars. The domestic industry is great at making big, powerfull cars and trucks, but our government penalizes this with CAFE standards.
It would cost our government nothing to suspend these rules. Point in case: The Chevrolet Camaro 8-cylinder 426 hp engine and all, is currently selling at about $3,500 more than the MSRP.
You forgot to mention GM's biggest Main Problem: A horrible quiality reputation.
United Auto Welfare workers spent 25 years churning out flimsy, unreliable pieces of crap. Generations of potential consumers turned to Honda and Toyota, never to return. Ever.
I saw that a car historian yesterday predicted that GM will be Obama's VietNam and I think that's accurate because GM is a business, with a bottom line. Unlike government bureaucracies which have NO accountability standards, it will be very plain for all to see if Obama's nationalization of Chrysler and GM is working as planned.
Come the next presidential election, GM will either still be owned by Obama or out of business. No entity in its right mind will ever step forward to purchase this Frankenstein. Especially after Obama calling bond holders vultures and speculators.
GM is Obama's Viet Nam quagmire.
Generations of potential consumers turned to Honda and Toyota, never to return. Ever.
I'm one of those. My parents bought some awful American cars. The only American car I've owned was a '76 Dodge Dart - the year they made the timing gear teeth plastic, but still had a metal timing chain. I got that one for free (from my parents) - everything I've paid money for has been from a Japanese company. Someday I'll consider Korean or German cars, but I'll *never* buy an American car.
Until capacity is reduced or demand expands the global industry will lose money. I noticed that Toyota went to the Japanese Govt for loan guarantees. The Japanese MOF went to Honda and asked it to focus on motorcycles and voluntarily reduce its auto output. Porche and VW aren't exactly profitable, and their marriage is put off.
As I read it, the only reason trucks are as profitable as they are in the US has to do with protective tariffs put on in the late '60s due to a trade dispute over chickens.
So we punished European truck makers which protected domestic car makers which made them over-dependent on full-sized trucks which blew up in their faces when gas prices spiked.
Add to this bad faith by manufacturers in union contract negotiations and mistrust all around and you have an "everybody is at fault" crisis with no accountability and no winners. But the big losers will be the taxpayers, who will have an 80% stake in a zombie who will try to kill off the living manufacturers.
How do you kill a zombie? Cut off its head.
Publius is correct. Dani Rodrik explains the market distortions in the domestic auto industry with the following:
http://rodrik.typepad.com/dani_rodriks_weblog/2009/05/the-chickens-have-come-home-to-roost.html
Tom West is also correct. Politicians do not do suicide: it violates their Code of Conduct.
No win, and plenty of blame to spread around. Ultimately, this is a damn boring story to read about. Let's move on to other s**tstorms now, shall we?
The truck tarriff is a massive and rarely mentioned part of the problem. Certain commentators want to give the domestic automakers a pass on focusing on the SUV and truck market, but usually they omit that it wasn't exactly a free-market for those vehicles that lead to that outcome. Maybe small-car margins are tight largely because of import competition instead of American's taste in cars.
Reporting requirements for both automakers will be suspended indefinitely. You will never learn how much they lose going forward.
I'd call you a terrible cynic, except that I expect you're right.
I just bought an American car this weekend--a Ford Flex. I got rid of my 9-year-old Escort, which I absolutely hated to do, because that has been a really great car. But let's face it: a two-door, even one that gets 38 MPG highway, is not a practical car for a father of 2. On the other hand, I can (and did) put the wife, kids, and in-laws all in the Flex for a trip to a restaurant for dinner. I'll probably still have the Flex in 10 years, when it will be a nifty carpooling-from-lacrosse-practice vehicle.
And that, my friends, is why Americans don't want small cars: no place to put the family.
Moving along in the illustrative microcosmic anecdote department, a Flex sells for several thousand dollars more than a comparably equipped Odyssey, Pilot, or Sienna. It happens that my wife has the screeching Korean shrew method of haggling down pat, and also that we managed to find a dealer 3 hours away on Amtrak that had one sitting on the lot making their turnover look bad, so we walked out a mere $1,000 above a comparable Odyssey. I thought it was worth it based on road noise alone, but seriously, that's not a sustainable cost model. The Ford family mover has to be cheaper than the Honda to sell well. And that's nothing to GM or Chrysler, whose cars get more black circles from Consumer Reports than anybody else, and therefore must be much cheaper than the competition.
Can Obama square this circle? No.
I assume you read PJ O'Rourke's guest review of the Flex family vacation in Car & Driver a few months ago. If not, you're now officially overdue!
I did not, although I undoubtedly should. I did see his piece in the WSJ this weekend though!
I just checked it out. A fun read and a great way to procrastinate boring documentation tasks at work. Here's the link for the Google-uninclined.
After seeing this I found the article - pretty funny, and he gives the car a pretty good score. Here's the link:
http://www.caranddriver.com/reviews/hot_lists/high_performance/features_classic_cars/2009_ford_flex_the_o_rourkes_do_utah_s_lower_left_feature/(page)/1
First off: congratulations. I wish you all the best with the new wheels.
Your point is excellent, and is largely lost on a great many environmentalists. America isn't Europe. Unlike Europe, we actually have a sustainable birth rate. Unlike Europe, no matter how painful this is for liberals to accept, we have land and we have spread into that land. We are nowhere near population-dense enough to make mass-transit viable outside of just a few cities.
We need cars that can haul families, and stuff. We're not Europe. As bad as liberals feel when they read that, it's still the truth.
And if we're talking about C&D magazine, Bedard did an *excellent* expose on how mass-transit would completely crash and burn if it wasn't hugely subsidized. If passengers actually had to pay the full costs of the metro-rail they ride, they'd weep - and then buy a car.
Mass Transit is just another "feel good," chewing up far more money than it's worth.
Good call, Stan. I forgot that it was probably still available online.
Many people have a misunderstanding about the role of the automakers in the center of the industrial ecosystem. Automakers are the single largest drivers for the price of steel. This occurs in two ways. Firstly, the automakers and their suppliers are huge consumers of raw steel. Secondly, the are the largest generators of scrap steel. The automakers conduct the scrap auctions that set the benchmark price for scrap steel for most of the country. This is important because scrap is the largest component in raw steel across the entire globe.
We are entering into an enviroment where there will be little scrap for steel making, huge bankruptcy losses, and relatively flat demand in other parts of the steel market. This will ultimately lead to global mill closures. Because scrap will be in short supply, mills will ultimately be unable to match price with demand. In an environment where access to working capital is limited, a raw material price spike could be deadly for many small manufacturers. Ultimately, this stretches far beyond automakers and their suppliers. Farming, trash hauling, and heavy construction are very exposed to the price of steel.
Heavy industry is bloated, and disorganized, and needs to be overhauled so that the automakers are no longer the center of the universe. For now, GM is still a pretty important player. Our industrial landscape is still largely organized around its skeleton. It is like the hippo in the lake. Big,slow, and scary but thousands of tiny fish eat its poop.... and the whole village eats the fish.
There was an alternative: Let GM go into bankruptcy and then have the government provide the DIP financing. The reorganization would have been pursuant to a court proceeding and the judge would have been far less motivated by political concerns or pressures. That's probably why the administration did not pursue that approach--too hard to protect/favor the UAW.
The US would have become a preferred creditor and had less influence and power over the revived company, as well as less problem with conflicts of interest.
On the other hand, conflicts of interest do not seem to bother the political calculations of this administration.
Keep in mind that the family demographics in the United States make small cars less palatable than in Europe and in many other parts of the world. We have larger families here, so minivans and SUVs have evolved to replace the large cars we used to drive with the bench front and back seats of the past. We like to denigrate "soccer moms" in the suburbs driving those kinds of cars, US families still typically have 2-3 children, whereas in Japan, Korea, China, and Europe, 1 child per family is much more the norm.
That's why small cars, even in an era of relatively high gas prices, remain stuck at around 20% of total car sales in the US. And CAFE will remain an albatross around the US automakers' necks, strangling their most profitable product lines, forcing them to produce ever more unprofitable small cars that their market does not want or need.
Um... that scrap steel was leftover from steel that was produced and bought. If the automakers aren't producing scrap, it means they aren't buying it in the first place which means that people who used the scrap can use the production that the automakers aren't. The problem will be overcapacity in new steel and undercapacity in scrap. But there are alternatives to steel for many uses so the market should be able to adjust. Also, someone else will start making more cars (thought not as many) so the demand won't fall off as much as the entire consumption by whichever company goes under.
I think the biggest problem that GM and Chrysler faced was the extensive UAW work rules that hobbled their operations more than the direct labor costs. Yes, the legacy costs were way higher than the nonunion transplants, and that is a consequence of past labor negotiations. But, in recent years, GM and Chrysler union wages weren't much different from Honda, Toyota, transplants. As I understand it, UAW contracts have literally thousands of pages of work rules. A nonunion Honda plant has much more flexible labor rules for its laborers. The strong labor unions prevent efficiencies of various kinds routinely achieved in nonunion plants. Ford, I believe, has been tougher about insisting on more flexible work rules than the other two to date. For example, Honda can switch a plant from making one model type to another very quickly - maybe a day or two - while very few GM or Chrysler plants can do that today. I think those work rules are part of the problem in doing that for GM & Chrysler. If gas prices go up & the market for small cars gets bigger, switch plants to those kind of cars.
Just looked up online the definition of "meh" and found this Twitter bit from John Hodgson:
Posted Feb 24, 2009
I enjoyed this exchange with John Hodgman on Twitter yesterday, reminiscent of my own rant on "FAIL."
hodgman: Did I ever tell you people how much I hate the word "meh"? Nothing announces "I have missed the point" more than that word.
hodgman: It is the essence of blinkered Internet malcontentism. And a rejection of joy. Also: 12 hive mehs in the replies SO FAR
hodgman: By definition, it may mean disinterest (although simple silence would be a more damning and sincere response, in that case)
hodgman: But in use, it almost universally seems to signal: I am just interested enough to make one last joyless, nitpicky swipe and then disappear
wordwill: @hodgman Isn't rejecting joy how one traditionally demonstrates one's superior cool? Though, at the same time, to hell with that.
hodgman: @wordwill yes. It's part of the toxic Internet art of constant callous one upsmanship. And it is a sort of art, but not for me.
Let me get this straight:
A car manufacturer who lost focus of their customers, dealerships, unions, budget, and plants is now going to be run by a government who has lost focus of their mission, citizens, and budget.
This is going to be a hoot to watch - how the unions drown from all this "help".
The government has no experience running a private enterprise, our fearless leader has zero experience in this area either.
Sadly our kids will pay for this debacle - or maybe they will just declare bankruptcy for the US too - really stick it to the Chinese for simply following the old saw "What's good for GM is good for America".
At the end of 2003, I bought a Ford F-150 XLT Supercrew and was able to both finance it 100% and Section 179 expense it all at once. Sweet!!! Did I care about the price? Only that I kept asking the sales guy to add stuff on. So I overpaid for for truck? I saved about $25K in taxes that year.
Free markets are great!
Perrym, I think you are vastly underestimating the statists policy of never having to say you're sorry. If the market doesn't want to buy the cars Government Motors is making, GM shouldn't have to change, the market will have to change. And so laws will go into effect forcing consumers to essentially buy cars they don't want that GM makes. Of course they won't put it exactly like that... there will be penalties on imports and CAFE type standards catered to favor GM, as well as deep rebates offered for GM-like cars, but it all amounts to the same thing.
Liberals have no truck with the law of unintended consequences. If their ideas don't work in the market, the market is broken, never their ideas.