Let Detroit Burn, or at least sizzle for a bit

Detroit’s issues appear to be largely unrelated to the current financial situation. The current financial meltdown has simply accelerated Detroit’s doom. Detroit still has a very impressive market share, it is just that it is slipping away. Three companies (GM, Ford, and Chrysler) have 50% of the market and they are collapsing? Their issues are poor management, not that no one is buying vehicles from Detroit. The pensions, health benefits, salaries, and the like are bleeding the companies dry. I’m not certain about all the specifics, but didn’t Detroit have issues being unable to innovate back in the ’70s when gas spiked – at that point foreign automakers really started to take a stronger hold in the market.

Anyways, other than that incoherent babble – one interesting thing I read in The Economist was that if people perceive that an auto manufacturer will fail, then that person simply will not buy from that manufacturer, since they fear that the warranty, support, service, and resale value are all in jeopardy. With this, I think we need to at least set up a bailout to back the car warranties (an FDIC for car warranties, if you will).

Oh, and if we do bail the big3 out – let’s take this opportunity to restructure the union contracts as well as enforce environmental guidelines.