Re: American Capitalism is like American Automobiles

Rumpelstiltskin wrote:
On Fri, 12 Dec 2008 05:58:09 -0800, Islander <nospam@xxxxxxxxxxx>
wrote:

mg wrote:
On Dec 11, 8:13 pm, "Evelyn" <evelyn.r...@xxxxxxxxx> wrote:
"Islander" <nos...@xxxxxxxxxxx> wrote in message

news:qqCdnbIUEOndUNzUnZ2dnUVZ_jKdnZ2d@xxxxxxxxxxxxxxxxx



mg wrote:
On Dec 11, 6:32 pm, Islander <nos...@xxxxxxxxxxx> wrote:
Rita wrote:
On Thu, 11 Dec 2008 19:03:40 -0500, "Evelyn" <evelyn.r...@xxxxxxxxx>
wrote:
"Werner" <whetz...@xxxxxxx> wrote in message
news:f6202921-7ca6-4f45-a5bb-ec9b8ca9c504@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On Dec 11, 11:55 am, Rita <R...@xxxxxxxxxxx> wrote:
On Thu, 11 Dec 2008 08:45:57 -0800 (PST), mg <mgkel...@xxxxxxxxx>
wrote:
It occurs to me that our version of capitalism is a lot like our
automobiles. It requires a lot of tinkering to keep it running and
then when it has a major breakdown down it costs a bundle.
You mean it is not self regulating? Better convince some here who
believe it is. And thus believe the only thing to do about this
recession is nothing at all.
Bankruptcy is a form of self regulation, Rita. It stops waste of
resources. Subsidizing waste is not fixing it. Subsidies generally
give you more of the waste you subsidize. Examples of this abound.
*************
I agree with you Werner. But it seems that they were all too ready
to bail
out the banks, and now it is the auto mfrs. Who will be next in line
with
their hand out?
There is far more than the bailouts involved, Evelyn. The recession
preceded the bailouts. Consider all the Wall Street practices that
were allowed to go unchecked. Study up on derivatives. Consider why
the credit markets became frozen. Bailouts were not the topic I
addressed. I was talking about mg's point:
It occurs to me that our version of capitalism is a lot like our
automobiles. It requires a lot of tinkering to keep it running and
then when it has a major breakdown down it costs a bundle.
I'm in the process of changing my mind about the auto companies. While
I have been critical of their political lobbying and efforts to avoid
regulation by building SUVs on truck bodies so that they could avoid
meeting CAFE standards and safety standards, the plight of the workers
is made even worse by the financial crisis.
There is little harm in giving them a loan of $15B for a few months (and
Ford seems to be willing to stand on its own) while they attempt to get
their act together. I wish that the $15B could come out of the Economic
Recovery money, but it looks like that is not going to happen.
Needless to say, I will be looking very closely at what they come back
with in March!
One can only hope that this entire process will finally silence the
advocates of Adam Smith's silent hand. Nah, that is expecting too much.
I've always been in favor of the bailing out the auto companies
because the amount is relatively small (so far at least) and the
consequences of not bailing them out could be devastating to the
economy.
When it comes to the quality of their cars, though, I could tell some
stories; man, could I ever tell some stories, but then I imagine most
people on this group could tell similar stories.
Yes, I came from a Ford family and bought Fords that rusted out, crapped
out, let me down, but I stuck with them until I bought a Toyota Tercel in
1979. That little car got great mileage and ran for years with no
problems. I taught my kids how to drive in that little car and my wife
called it the Road Toad, but it wouldn't die. I finally gave it away to a
kid who needed a car. As far as I know it is still running.
We had a similar story with a 77 Honda.
And I have a similar story with a 1995 Camry.

I have a son-in-law, incidentally, who bought a 1996 Chev Impala. He's
had one problem after the other with it. One of his most expensive
problems has been with "Dex-Cool" a new type of antifreeze that GM
started using before they did their homework. GM actually lost a class-
action lawsuit on their gooey anti-freeze that cost customers
thousands of dollars in repair costs.
http://www.dexcoolsettlement.com/

It seems to me that there is an attitude in Detroit that they "know" what is best for the market. They oppose anything that is forced on them, such as the phaseout of fluorocarbons used in refrigeration. The result is a halfassed job of implementing a required change. Their hearts are simply not in it and they can blame the government for the failure. They have been doing the same thing on CAFE standards. Now they are claiming that SUVs were simply what the market said that it wanted - they were just responding to the market! BS! They found a way around CAFE by building "trucks" which were exempt. That is the arrogance that needs to change.

The Japanese, on the other hand, are constantly experimenting in the marketplace. They build highly flexible manufacturing lines that can adapt to the changes in the marketplace, whether those changes are customer preferences or government regulations. As a result, their mistakes (and they do make mistakes) are quickly detected and corrected. How many massive recalls have you seen in Japanese cars?

I'm seriously concerned that GM's approach on the Volt is going to suffer from a similar problem. Rather than use off-the-shelf lithium batteries, they are custom designing batteries for the Volt. The lithium battery market is now pretty far down the learning curve and has solved problems like the exploding laptops. With a new design, they are going to have to go down a new learning curve, hopefully without introducing new dangers to their customers. Several hundred pounds of lithium battery could produce a pretty big explosion!


IMV Custom-design is usually only for the purpose of retaining control over replacement parts, which means the customer will have to pay more for the
patented parts. That's why I'll never buy another Lexmark printer, and why I bought new printers lately I checked first to make sure I could get refills for $5 (inkjet) from printpal instead of patented $30 refills. If I buy another printer, it will be a laser printer, and I'll make the same check first.

I'd guess that cars would be a lot less expensive if there were a few standard sizes for things in them, rather than every model being unique. Q.V. the old Volkswagen.


Yes, that is a business strategy that seems pretty pervasive. The defense industry refined it to an amazing degree. You would be amazed at how many military systems contain parts that can only be purchased from the original contractor. It is called a "long logistics tail."

I consulted on a project some time ago where the spare parts for Minuteman missile guidance systems were getting to be in short supply. These parts, actually based on '60s era RTL chips, could no longer be purchased and the original contractor was bidding BIG bucks to supply additional spares. I'm sorry to report that they got the contract ($300M) because they were the only company that still knew what was in that box.
.

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