Detroit’s condition is not the kind of thing you want to rub your hands in bloggy schadenfreude over. Blue-collar layoffs have started turning into white-collar layoffs. And when they sell cars that do horrible things to the planet they’re just trying to give the American public what it wants.
But of course the American public is fickle and freaked out about gas, and so the SUVs and light trucks that used to account for 60% of GM’s sales in the USA aren’t selling like they used to. As a consequence, GM just posted its 3rd biggest quarterly loss in its history. The leasing of SUVs has taken the biggest hit, because nobody wants to buy the used SUVs anymore–they’re now selling at a quarter of their original value. It is tempting to resort to karma talk here.
Call me a socialist, but wouldn’t it be better for everyone if making catastrophically large ski-transport vehicles was against the rules, so everybody would just stick to the fuel-efficient cars they want whenever there’s an oil crisis? This is a pretty clear example of the free market not behaving like the benevolent god libertarians want it to be. More like a spoiled mercurial toddler or a crackhead.
August 2nd, 2008 at 11:47 am
One would expect GM to switch to hybrids completely after years of huge losses, but they dont do it. They just trying to hold on with layoffs, maybe a few factory closings etc.
I think they believe oil crisis is temporary and it will pass in a few years and they could continue selling bigger and more powerful trucks and SUVs with the most inefficient gas-guzzler/Earth-screwer engines!
August 2nd, 2008 at 1:47 pm
Keep in mind the Bush administration put a tax break on the largest SUVs, during the first term, which wasn’t altered until 2005:
http://www.bankrate.com/brm/itax/biz_tips/20030403a1.asp
That said, I think GM could have avoided this if congress had instead pushed higher CAFE standards and put tax breaks on fuel efficient or alternative fuel vehicles instead of massive SUVs. A socialized healthcare system would also help them be much more competitive with foreign manufacturers that cover employee and retiree healthcare with their taxes, rather than private insurance.
Had they done it themselves, it also might have saved them a lot of trouble. Sucks to be them… sucks worse to be working for them, or relying on their continued existence for your retirement benefits.
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