“In our judgment, based on experience elsewhere in American industry, the most constructive role the government can play at this point is to provide a short-term infusion of capital with strict repayment rules that will essentially require the auto makers to sell off their assets to other, successful companies.” Robert W. Crandall and Clifford Winston from “Detroit Needs a Selloff, Not a Bailout.”Just after the CEOs of GM, Ford, and Chrysler appealed to Congress for a $25 billion handout, Dan Sullivan did a survey of one hundred clients in his program for entrepreneurs. Q 1: Do you own a n American-made car? 23% said they did. Q 2: Will you buy an American-made car in 2009? 7% said they might. Q3: Do you own stock in any of the Detroit automakers? 0% did. Q4: Would you buy car company stock in 2009? 0% are planning to. Q5: Do you want any of your tax dollars going to a bailout of the automakers? 6% did.
Based on this mini-survey, you get some idea of the uphill fight the automaker CEOs are going to have in getting money out of the government. There’s a simple reason: Most Americans don’t like throwing good money after bad. The entire culture of car manufacturing in Detroit has been intellectually bankrupt since the 1960s. The problem is that since the end of WWII, the industry was set up to be an oligopoly of the Big Three to keep out any kind of competition by monopolizing labor forces, raw materials, and supply chains within North America. This worked for about 25 years until American consumers created a bypass by purchasing higher-quality, safer, more stylish, and more economical cars from overseas. This trend began in full force in the 1970s and has only gotten stronger. Now it’s time to break up the Big Three, sell off everything that’s useful and valuable, and let someone else produce much better American cars.
