Liddick: U.S. automakers have a duty to die | SummitDaily.com

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Liddick: U.S. automakers have a duty to die

When I lived in Armenia, I owned a Suzuki Samurai. This was an automobile banished from American roads for being “unsafe at any speed” ” meaning it had a tendency to kill those who drove it like knuckleheads ” but I received many offers from Armenians to buy it, often for more than it had cost. It was much more reliable, robust and well-equipped than any of the products of “Autovaz,” the vast Soviet-era auto company that gave them the Lada, the Neva, the Sputnik and other dreck on four wheels.

This memory came to mind as I followed the pleading from Detroit for a bailout. After years of building the biggest cars and trucks possible so they could be larded up with every imaginable accessory to increase profit margins, the not-so-big-anymore three U.S. automakers are facing an ugly economic truth: No one is buying what they’re selling.

Following the pattern of tantrums thrown by impossibly spoiled children, the howls for special favor are likely to increase both in intensity and in frequency until Congress relents ” at which point only the White House will stand between U. .automakers and the public’s money. No matter who occupies 1600 Pennsylvania Avenue then, my bet is on further profligacy. After all, we have to save American jobs, right?

Except that we don’t and shouldn’t. Our lawmakers’ misstep in allocating hundreds of billions of dollars to protect shaky financial institutions from the consequences of their bad decisions ” perhaps motivated by the guilty knowledge that Congressional mandates had a role in the chaos of the mortgage security collapse ” was bad enough. In the case of U.S. automakers, the wounds are self-inflicted, so a bailout rewards decades of underperformance, vigorously incompetent management and the sort of forward planning one expects in a “Three Stooges” movie.

Not to mention breathtaking obliviousness. Arriving in Washington in three separate corporate jets to beg Congress for the right to pick our pockets is one example of Detroit’s willful failure to understand. So are recent advertisements for the sort of vehicles that landed the big three in their current conundrum. When buying a small truck, I want to move large or bulky loads economically, with a reliable vehicle. I am not especially interested in racing downhill through exploding buildings or negotiating an obstacle course consisting of competitors’ pickups swinging from cranes, surfing the Internet all the while. That someone in a corner office in Detroit thinks I do is a colossal failure of business acumen, if not a comment on corporate sanity. Sometimes, no matter how big they are, dinosaurs must face extinction to allow other, better-adapted forms to flourish.

And no ” that won’t destroy the U.S. auto industry. Foreign manufacturers will continue their robust operations here, employing 80,000-plus people directly and more than 300,000 in partner industries. Perhaps U.S. carmakers will restructure in bankruptcy, taking a page from their competitors’ book and shedding the disastrous union-compelled work rules, featherbedding and legacy costs that have accrued over decades, raising Detroit’s per-hour wage rates to approximately 150 percent of its Japanese counterparts. If coupled with reforms tying executive compensation more directly to corporate performance, these moves would dramatically improve Detroit’s position in the medium and long term, strengthening rather than weakening our country’s economy. Expect this sort of reform to be accompanied by the loudest sort of caterwauling and special pleadings, which should be ignored. After all, we voted for “change” in the last election, did we not?

The alternative ” shoveling $25 billon of borrowed money onto Detroit in the wake of the $25 billion provided from the public till in June ” will only result in taxpayers losing $50 billion. There is precious little evidence that Detroit has either a plan to recover or the will to follow it ” if that will mean even modest paring of fat payrolls, overgenerous benefits and Byzantine work rules.

There are those trying to persuade us that these sums are “loans,” pointing out that the government could be paid back at a profit. What they neglect to mention is that the CEOs of the “Big 3,” when asked how they could reimburse and when, replied that they had no idea. If you thought subprime mortgages were at the heart of the financial collapse in October, what do you think this sort of lending will bring? Respond carefully: this is well and truly your money.

Or, we might just go all-out and buy the big three; in their current straits, they could probably be had for a song. Then, the United Auto Workers would be able to actually run a company, with the blessing of their new friends in Washington.

And we could all look forward to buying an American version of the Neva.

I can hardly wait.

Summit County resident Morgan Liddick pens a Tuesday column. E-mail him at mcliddick@hotmail.com. Also, comment on this column at http://www.summitdaily.com.