Wednesday, November 12, 2008

I wrote my Congress woman on the auto bailout

Dear Representative Woolsey,

I'm writing to urge you to continue your opposition to federal bailouts of private firms, this time in the case of the US auto industry.

While I recognize the desire to keep people employed, free money from the government can only postpone the inevitable, not promote the transformation required to make these firms truly globally competitive.

Yes, the tightening of the credit market has raised the cost of servicing their operating debt. But if the US auto makers were creating products people wanted at prices people were willing to pay, they wouldn't be in tough shape. If this were truly about only the global economy and global economic crisis, all global car manufacturers would be suffering. They're all capitalized similarly, they all compete in the major world markets. The US firms are faring worst because of their own incompetence.

Instead of innovating and adapting to shifts in global demand, they've continued to rely on cheap gas and sales of more profitable, massive vehicles in the US in order to turn a profit, all while fighting increases in federal fuel efficiency standards that would have compromised this approach. The smaller, fuel efficient cars they produce for European and Asian markets aren't sold here. The UAW has extorted above fair value wages, making the companies' products unable to profitably compete on price with those from companies whose employees' wages are more commensurate with their skill and economic value creation levels.

This institutionalized selfishness and refusal to adapt to a changing world and changing demand deserves to go under, or be dramatically reforged into something appropriate for the 21st century.

Our Bankruptcy laws and processes are adequate to this task.

Let's not subsidize failure and weakness. Please oppose all efforts to put these dinosaurs on life support.

I'm sure you'll consider both the desires of your constituency as well as the best interests of the nation when choosing a course of action on this issue.

Thank you for your service.


Ken is a verb
Your district, CA