Monday, March 30, 2009

USA Auto, Inc.

The conclusion of the months of examining the Auto Industry by the Auto Committee appointed by the Obama Administration is that they are better off dead. After propping up the Auto Industry and letting them continue to burn cash, the Administration has basically decided that the Auto Industry would best be restructured in Bankruptcy.

The conclusion that the Bankruptcy Code is the best route for a streamlined Auto Industry is most likely the correct choice. The questions that arise from this conclusion are; Why did the USA waste Billions of Dollars waiting to come to this conclusion, and why is Bankruptcy not the correct choice for the Financial Industry.

The Financial Industry and the Auto Industry are both in trouble for similar reasons, bad management, greed, excessive loans, and no plan for the future. The Financial Industry continued to sell unregulated leveraged derivatives based on the premise that growth would continue indefinitely, every student of economics knows that this is not a true premise, yet, the Financial Industry in their quest for bigger and bigger commissions, profits and bonuses ignored the simple lessons of economics 101, growth is cyclical. The Auto Industry continued to build large SUV's because they were unregulated by CAFE standards, they made larger profits from them, and senior management paid themselves bigger bonuses based on sales. The Auto Industry had the opportunity and the technology available to build vehicles for the future, but instead put money into instant profit vehicles. When management and government have no vision for the future what we end up with is scavengers who are ready, willing and able to pilferage the future by taking advantage of the present.

The Auto Industry should have begun their road to alternative fuel vehicles in the 1970's, but through lobbying and keeping Politicians and Political Parties flush with cash they were able to have the regulations and laws adjusted to benefit their immediate needs instead of the future. Now that the future is here, the Auto Industry finds itself living in the past and unable to catch the future.

As the Auto Industry becomes part of the US Government, it is the responsibility of the Government to insure that a re birthing of the Auto Industry is midwifed through to a new vision and new vehicles that will benefit the society as a whole and not just the well heeled who amass profits from the advantages of the present. US Auto must recognize that the era of fossil fuel is dead and must be buried. US Auto must lead the way in alternative energy vehicles that will remove the needle of oil addiction from transportation. An Auto Industry must survive in this Nation least we become dependent on foreign vehicles for military needs, but it does not have to survive in its current form.
Add to Google

No comments: