On Friday, Toyota announced that they expected to be the world’s number one automaker in 2007.
General Motors has been dethroned, and it appears that, for the foreseeable future, they won’t regain former dominance, and Ford and Chrysler will also continue to founder.
Throw the U.S. government’s intrusive mitts into the equation, and we’ve got real problems.
Why am I pessimistic about the future of U.S. auto companies? Because Democrats, reinvigorated after winningÃ‚Â slim control of Congress, have pledged to “help” the U.S. auto industry recover. Look out, autoÃ‚Â industry — things are about to get way worse.
If you’re an auto worker in America, I’d suggest finding another line of work quickly –Ã‚Â a careerÃ‚Â in which you’re not subject to the consequences of horrible political decisions –Ã‚Â such as politics.
To a great extent, congressional Democrats (and Congress in general, for that matter)Ã‚Â and their petÃ‚Â lobbiesÃ‚Â are the reason U.S. automakers are in dire straits, and not the Mark Knopfler kind. Special interests, environmental activists, regulatory nightmares and union demands (hand-in-hand with corporate cave-in)Ã‚Â have turned once mighty “automakers” into struggling “health care providers,” and these thingsÃ‚Â are now in the drivers seat and areÃ‚Â steering companies over a cliff. Somewhere along the line, selling cars became a secondary concern of the U.S. auto industry.
Looking only at the issue of health care,Ã‚Â in 2004,Ã‚Â these benefits addedÃ‚Â from $1,100 to $1,500 to the cost of each of the 4.65 million vehicles GM sold. In ’05, GMÃ‚Â spent more on health care (about $5.6 billion) than it spent on advertising in ’04. Since then, it’s gotten even worse.
I appreciateÃ‚Â a companyÃ‚Â that is generous with benefits for their employees, if they can afford it, but unions who push forÃ‚Â benefits on this massive a scale,Ã‚Â and companies who give into them, are doing nothing but sawing off the same branch they’re sitting on. The only remaining question is how far the fall will be and how loud the splat.
The fall will beÃ‚Â farther and the splat louder now that Democrats in Congress have decided to “help.” The “help” in thisÃ‚Â instance will be in the strictÃ‚Â Kevorkian-esque definition of the word.
Here’s what Michigan Rep. John Dingell said yesterday: “If Toyota’s worldwide production surpasses General Motors’, it will simply provide further evidence of the need for the U.S. government to pursue policies that maintain and strengthen the U.S. industrial base.”
If you want a car that costs roughly as much as an oceanside mansion on Martha’s Vineyard, then yes, let’s put the government in charge. Dingall’s words are just another example of the time-honored “we’re from the government and we’re here to help you” cookie-cutter quote book.
ConsiderÃ‚Â the counterproductive mindset of Congress. For an example of this, we’ll use the words ofÃ‚Â California’s Barbara Boxer. Boxer is arguably the biggest slapstick moron ever to slip inside-the-beltway since Jerry Lewis performed for President Eisenhower. In other words, she’s a good baseline example.
Here’s what Boxer said about Toyota’s growth: “I have long said that fuel-efficient automobiles in America would be the ticket to larger and larger market share.”
Wrongo, Barb baby. The key to a larger market share is a non-nosey government, low taxes, in-check unions, and elimination of red tape and insane regs. This combined with a Congress and auto executives who realize that the free market, combined with keen observers of the trends ofÃ‚Â same,Ã‚Â will determine the ticket to a larger and larger market share.
Right now, Toyota has that winning ticket. Why? First and foremost because Toyota does notÃ‚Â let Barbara Boxer and John Dingell tell them how to run their business.
Let’s face it, most members of Congress couldn’t run a lemonade stand without screwing it up. They’d spill the stuff in the road, hit on passers-by,Ã‚Â pilfer the till and then impose a “pulp tax” on the neighbor kid’s stand to cover their losses.
The race to not only sell the most cars but also have the healthiest bottom line will be won by those who have the fewest bureaucraticÃ‚Â buffoons and moronic regulationsÃ‚Â either forced, or willingly accepted,Ã‚Â down their throat. Until U.S. automakers start selling bureaucratic buffoons and moronic regulations instead of cars, they’ll continue to lose their once great dominance.
Here’s a quick trivia question: If today’s Congressional DemocratsÃ‚Â were around in 1903 tellingÃ‚Â Henry Ford how toÃ‚Â run his auto business,Ã‚Â what would be the name of the horse you’d be riding today?
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