Saturday, December 20, 2008

Real Political Issues vs Hot Button Issues

Coming out of the serious losses of '08, Republicans ought to be taking stock and finding a new direction. Republicans used to be a party of ideas (issues). We remember Ronald Reagan for "Morning in America" and Newt Gengrich for "Contract with America", ideas and issues. Whereas in this election Obama never expressed a single concrete idea (he still hasn't) and McCain just said "Vote for me 'cause I am a distinguished war hero". In the absence of ideas from either side, the election went to the pretty face and the resonant voice. Obama won 'cause he looked good on TV, not 'cause he expressed any good ideas.
If issues are the coin of the realm, Republicans need to distinguish between real political issues, foreign policy, financial regulations, immigration law, energy supply, taxes and spending, copyright revision versus "hot button" (aka social) issues ( abortion and gays). Sensible voters are concerned about steering the country safely thru a dangerous world, protecting the homeland from attack, and growing the economy. Although there are a bunch of voters attracted by the hot button issues, there are an equal number of voters driven away by them. For example, abortion isn't a winning issue, half the country is for it and the other half is against it. Plus the issue is moot, the Supreme Court has made it legal and there isn't much you can say after that.
The crucial independent voters care more about real issues and are often repelled by the hot button issues. Republicans need not repudiate their anti abortion and anti gay marriage stands but surely they don't need to talk about them all the time. Do like Sarah Palin did, although she is clearly against abortion, she never talked about it on the campaign trail.

Friday, December 19, 2008

Bush Caves to Detroit

Just now, Bush was on TV saying that he would give Detroit $15 billion out of the TARP money. No specific requirements for reform were laid upon Detroit. This ought to keep them out of bankruptcy court for a few months, long enough for the mess to land on Obama's desk.

Thursday, December 18, 2008

GM was building yet another plant.

According to The Truth About Cars, GM was building a brand new plant to make engines for the upcoming Chevy Volt. But, running out of money, they have postponed or canceled the project after spending a wad of cash on it.
More brain dead GM management. Here is a company with about twice as many plants as they need, yet they are building a brand new one? Dumb move.
Here is a company pinning its hopes on the new hybrid Chevy Volt, a technological first for GM, cutting edge battery, all new electric drive design. This is a high risk project, there is a good chance something won't work, or something breaks after they sell them. So, rather than picking an existing engine already in production, a low risk strategy, they were gonna use a brand new engine built in a brand new plant. And if anything were to go wrong with the new engine or the new plant, the entire Chevy Volt project is jeopardized. Only a brain dead project manager would make that decision.
First thing the GM bankruptcy judge should do is replace ALL of GM management.

They shut down theplants, but the UAW still gets paid

The big three auto companies are getting ready for Christmas shut down. Due to horrible sales, they plan to stay shut down for longer than usual. So far so good.
Except, the workers still get paid during shutdown. Nice deal and all, but with the auto companies broke and begging for Federal bailouts, it seems a little much to give the work force a month of paid vacation.

Tuesday, December 16, 2008

Will any amount of "stimulus" improve the economy?

Probably not. Consumers are fearful of losing their jobs, their health insurance and their homes. Plus money they thought they had in their houses and the stock market has been taken away. Given those two bummers, nobody in their right mind is going to buy anything that they don't absolutely have to have. Nobody has to have a new car, not this year anyhow, make the old one run a year or two longer. Likewise new houses, new clothes, appliances, luxuries, trips, sports gear and on and on and on. The only things we have to buy are food, furnace oil and gasoline. Lotta people are even passing on Christmas presents.
Until the economy looks less scary sales are gonna be in tank, no matter how much stimulus is thrown around.

And, while on the subject of Detroit

Ignore UAW's Ron Gettelfinger when he whines that only the union has been asked to make sacrifices. The stockholders have already lost heavily, GM stock is down to a couple of dollars a share. Banks and bond holders were willing to forgive 70% of GM's debt. But the wily and well connected UAW knew that Bush would cave to them even if the Senate Republicans wouldn't.

Don't Bailout Detroit

The big three automakers are in a death spiral. Their labor costs $75 and hour where their competitors, the transplant makers, pay only $50. They have too many me-too models of cars, and none of them are as desirable as Toyota or Honda. They are afflicted with brain dead management, particularly GM. No way can Detroit be profitable with higher costs and inferior products. Detroit's small cars must sell better than Corolla and Civic for them to stay in business. Giving them $14 billion now just lets them keep on losing money for a few more months.
Put them into chapter 11, rewrite their labor contracts to $50 an hour like the transplants, reduce the number of car models to something reasonable, replace their senior management and boards of directors, write off their debt, and close excess car plants. Reduce executive salaries to $250,000 max. Require that dividends and bonuses be paid out of profits after taxes. No profit, no dividends or bonuses. And clean up their books. Last year GM "wrote off" $35 billion of phantom assets they had been carrying on their books for years. What other scams are still hidden by the big three accountants?
Chrysler has a parent company, Cerberus, which has plenty of money to keep Chrysler afloat. I see no reason why us taxpayers should subsidize Cerberus.
GM is too big to be profitable ever. Break it up into four companies, Corvette, Chevrolet, Cadillac, and General Motors Acceptance Corp (GMAC). Ford might be able to make it on their own. Don't merge Chrysler and GM. Tying two troubled firms together merely assures that they both sink together. Leave them independent, there is chance that one might float by itself.