Make way for the American Trabant! All hail the Detroit version of the Zhiguli!
The Trabant was the smoking, polluting, coughing East German Communist version of the Volkswagon Beetle. The Zhiguli was a similar car manufactured in the Soviet Union. With the prospective bailout of Chrysler and GM–in the form of a government-subsidized merger of these two losers–we can expect the American Trabant to start limping off the production lines any day now.
One of the salient features of the Soviet collapse was its subsidies for ill-managed, horrifically run industrial organizations that developed expensive, inferior products. As Russian communism imploded, it became apparent that the act of propping up losers is a chump’s game, one which, if carried on long enough, leads to universal bankruptcy.
So with that example apparently lost on us, the US government is cranking up to put GM and Chrysler on life support. Once on it, no one will ever pull the plug.
It should be obvious that the men and women running these automobile companies are terminally incompetent. Here is what the Wall Street Journal has to say about their management of the industry:
In all this lies a tale of hubris, missed opportunities, disastrous decisions and flawed leadership of almost biblical proportions. In fact, for the last thirty years Detroit has gone astray, repented, gone astray and repented again in a cycle not unlike the Israelites in the Book of Exodus.
No one can list the number of times Rick Wagoner, GM’s CEO, has announced his company is turning over a new leaf. That leaf has turned brown and disintegrated. Before Wagoner, his predecessors, including the never-to-be-forgotten Roger Smith, did the same.
As for Chrysler, ten years ago it merged with Daimler-Benz–and much good that did. It would appear that the embedded incompetence in the Chrysler business bureaucracy was impervious even to the famed precision and competence of the Germans, who gave Chrysler away last year to Cerberus Capital Management, a huge private equity investment firm, whose prominent figures include George Bush’s former treasury secretary, John Snow, and Bush the First’s vice president, Dan Quayle.