Monday, January 17, 2011

Drinking CAR's Kool-Aid

The Detroit News editorialized ("Back from the crash") last week on the revival of the Detroit auto makers:
By nearly every measure of success, Michigan's auto industry is now competitive.
Auto sales are on the upswing; corporate earnings are positive; productivity levels are on par with Japanese competitors; and quality is vastly improved, among other key benchmarks. Of course getting to this point hasn't been easy. Two of Detroit's automakers went bankrupt; thousands of jobs were lost; investors lost money; and many of the brands people loved have been eliminated.
"Hasn't been easy"?  How about: Hasn't really happened.  The "New" GM and Chrysler aren't really competitive if they rely on government-coerced screwing of bondholders on a huge scale; politically driven concessions in favor of organized labor dinosaurs; central planning from Washington; and massive infusions of involuntary taxpayer (sorry for the tautology) support.

The hometown cheerleaders find a lot to celebrate from findings by the Center for Automotive Research (CAR) -- not yet available on its website -- predicting 23,000 new jobs  to be created in Michigan this year in the auto industry.

Even though car sales have been increasing temporarily, it is hard to imagine that when high inflation wallops the American consumers and the price of commodities later this year, that the Big Three will create anything close to that number of jobs.

But Michiganders and unemployed auto workers especially are desperate for any good news -- even if it is manufactured by the Detroit auto news media who for years lapped up and regurgitated whatever hokum the corporatist flaks fed them.
We never want to face a major economic crisis again without the ability to compete through the worst possible circumstances. This means our industry must continue to build on its accomplishments of the last few years without pause, and be ready for any eventuality. Michigan's auto industry is ready for the auto recovery as it never has been before.
Well, our editorialists should tighten up the seat belt, because the recovery is illusory and a new major crisis is looming from which the bankrupt United States government cannot save the state's auto industry.

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