Mark Steyn has an wonderfully-depressing article on the “bailout” of the Old Three dinosaurs. We thought liberals were all about “change”. Really? Then why is this plot more like Jurassic Park — reviving long-dead dinosaurs who are now going to devour us? GM is defunct, and stuffing it full of paper so that it appears to be standing changes nothing. We can only speculate what industries President Change will bail-out first: the United Typewriter manufacturers or the National Steam Engine guild. Read Can You Still See the USA in Your Chevrolet?:
General Motors now has a market valuation about a third of Bed, Bath And Beyond, and no one says your Swash 700 Elongated Biscuit Toilet Seat Bidet is too big to fail. GM has a market capitalization of just over two billion dollars. For purposes of comparison, Toyotaâ€™s market cap is one hundred billion and change (the change being bigger than the whole of GM). General Motors, like the other two geezers of the Old Three, is a vast retirement home with a small loss-making auto subsidiary. The UAW is the AARP in an Edsel: It has three times as many retirees and widows as â€œworkersâ€ (I use the term loosely). GM has 96,000 employees but provides health benefits to a million people.
How do you make that math add up? Not by selling cars: Honda and Nissan make a pre-tax operating profit per vehicle of around 1600 bucks; Ford, Chrysler and GM make a loss of between $500 and $1,500. Thatâ€™s to say, they lose money on every vehicle they sell. Like Henry Ford said, you can get it in any color as long as itâ€™s red.
Given how much the Old Three lose on every sale, if you really want to save these companies, close the dealerships. There’s some change we can hope for.