That’s absolutely not true. More people living in the past as far as Detroit is concerned. Every automobile manufacturer and supplier in Detroit and in the global automotive industry uses statistical quality control. Deming is no longer a prophet ignored in his own land. I know that because I worked for a tier 1 vendor that used statistical QC and had to supply that data to the automakers, both domestic and transplant.

Also, regarding Michigan, it’s a better run state than most. The people of California owe as much money as GM does, maybe more, and California has twice the foreclosure rate as Michigan. Most states have much bigger budget shortfalls than Michigan, which has had a balanced budget since 1963. California will be insolvent before GM and certainly before the state of Michigan.

(Full disclosure: I live in Michigan, was once a (non-voluntary) member of the UAW while putting myself through school building cars, in the early 70’s…and eventually an MA in Economics from NYU, the most Austrian Economics oriented program I could find).

The economics were clear then, even to an undergrad who had read the right books (outside of class)…it was only a matter of time until today’s situation…but only someone truly interested in (or capable of) long-term thinking, (thus leaving out both union leaders and auto execs) would know that the deals made then were ticking time-bombs that were economically similar to our wonderful Social Security system…

Anecdotal evidence: even then, in the 70’s, temporary layoffs were decided by union seniority…with the more senior workers WANTING to be laid off…why? SUB: Supplementary Unemployment Benefits. You’d get unemployement on the taxpayer’s dime, and the union would make up the difference so you’d get 95% of your take home pay. Layoff? Paid vacation is more like it…maybe today’s “jobs bank” is the same thing…

In any case: I hope for bankruptcy. Allowing for adjustments and true renegotiations, in justice, retirees first…and not a few billion of Fed money put into the sinkhole…until they run out of money again…and come back to the trough time and again…

Does anyone else out there remember when the US had a real steel industry? Is their a difference in the diagnosis, or prognosis?

DanO

Sears was the undisputed retail ruler for decades until a young upstart named Sam Walton came along with a better way, and bumped them off the top spot. The Big 3 could, should and had better learn a few lessons from Sears’ experience and change with the market, or be eliminated. If they fail to do so, then I say bye-bye and good riddance.

I think there are millions of people with the same thinking. I certainly will do my best to never give another cent to anyone affiliated with the UAW.

Nothing could be further from the truth. Michigan merely needs to drop its tax rates and become more business friendly. The problem will take care of itself in a few years. And the same holds true for Ohio and the other economically troubled blue states. They are paying the price for electing Democrats and “moderate” Republicans.

1) This is primarily an economic crises hitting the auto industry. Honda is set to lose over a billion dollars in 2008. Toyota and Honda both had sales decline of over 30% last month. Coupled that with the significant sales declines in Japan and it will not be long before Toyota and Honda are requesting a bailout from their government. I bet before June 2009.

2) If the Detroit 3 go down, the economic depression to hit Michigan will be very long lasting. Decades long.

3) I would not be surprised if Toyota rescues GM. The Japanese manufacturers have stated that if any of the Detroit 3 fail, it would be detrimental to their business.