
Don't Bailout U.S. Automakers. Untie Them. - gibsonf1
http://www.aynrand.org/site/MessageViewer?dlv_id=43241&em_id=46264.0
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ATB
_automakers must be liberated from CAFE fuel economy laws that arbitrarily
dictate what kind of cars they must sell, forcing them to sell millions of
small cars that have no chance of profitability given consumer preferences_

This is baffling. 'Consumer preferences' lead to lots of small cars being
bought every year, most of them just happen to be made by non-US companies.
The profit margin on smaller cars is smaller, as well (luxury cars have the
largest profit margin), but I don't believe that Toyota or Honda are losing
money on every Corolla or Civic sold. They also seem to be doing OK in meeting
fuel economy laws.

The real question is why US automakers don't make competitive small cars. One
answer is the cost of labor in the US, but the other answer is that US
automakers don't have a compelling _process_ in place that continuously
refines a small car until it does what the market wants. Look at the
aforementioned Civic, for instance. Its original form came on the market in
1973, and its current larger form in 1996. Even the 70s version had a high
build quality and was renowned for its reliability, but every subsequent
iteration has, arguably, been refined and worked on to make it more and more
palatable to the American market (the European Civics are different, FWIW).

Now look at US car makers. Which small US car has been marketed under the same
name since the early 70s and refined every few years, meeting market demand
and giving consumers what they want? US auto makers seem obsessed with re-
badging and re-marketing their cars every few years, often to cover up
memories of unsuccessful or embarrassing prior launches. The worst example is
perhaps the Ford Taurus, which sold bucketloads in the full-size sedan segment
in the 80s and 90s. So of course Ford took the Taurus out of their segment in
'04 and replaced it with a smaller AND a larger sedan (the Fusion and the
500). Imagine Honda discontinuing the Accord next year and replacing it with a
larger AND a smaller sedan (rather than making the Accord a bit larger, which
they did last year... and five years ago). To nobody's surprise, the 500
flopped and was hastily renamed back to 'Taurus' for the '09/'10 year (there
were some technical reasons, too).

 _The auto industry must also be liberated from the Wagner Act_

There are car production plants on US soil that make perfectly good cars,
using non-unionized American workers. The auto industry is already liberated
from the Wagner Act.

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inimino
"For example, however the industry shakes out, automakers must be liberated
from CAFE fuel economy laws that arbitrarily dictate what kind of cars they
must sell, forcing them to sell millions of small cars that have no chance of
profitability given consumer preferences."

Right, because clearly what's killing the big three is _not enough SUVs_.

