TCS Daily


Franchise Follies

By James K. Glassman - May 18, 2009 12:00 AM

Imagine you own a business whose sales have fallen in a year by one-third to one-half. You might improve your products. Or find ways to make them for less. Or eliminate particular lines that consumers shun. But would you want to reduce the number of places where your products are sold?

That is what both Chrysler and General Motors are doing. Chrysler is terminating the franchise agreements of about one-fifth of its dealers. GM is telling a similar proportion that it intends not to renew their franchises when they expire — in most cases in October 2010.

Here is the justification, as explained in an Associated Press article:

"Both Chrysler and GM say they are cutting the number of dealers because they have too many outlets that are too close to each other, and the competition drives down prices. But as the ranks of dealers thin and competition decreases, that likely will mean higher prices for car and truck buyers."

Understand that the automakers don't own their own franchises. So is the solution for Chrysler and GM to make their product harder to find in an effort to boost retail prices? Chrysler and GM aren't the only automakers. If their prices rise, then they will lose even more sales to Toyota, Hyundai, and other manufacturers.

Since Chrysler and GM are essentially owned by the federal government, the logic is even more dreadful. Just for fun, let's agree with Chrysler and GM management and stipulate that reducing franchises will, in fact, raise prices longer than for a few minutes. Those prices will rise to the detriment of America's hard-pressed consumers, thanks to manipulation by the companies — and, worse, thanks to what appears to be collusion on the part of those companies (which find it easy to collude since they have the same owner in Washington, DC).

I find the whole thing pretty sleazy. First, the government rams through a bankruptcy plan for Chrysler that rides roughshod over legal protections for creditors. Next, the two government-controlled companies try to raise prices, not by raising demand but instead by reducing supply. And, finally, we will soon see a GM bankruptcy that could look even worse than the Chrysler one, with small bondholders crushed under the wheels of political expediency (to the benefit, at least briefly, of unions).

So here is an old-fashioned idea for Chrysler and GM: Make better cars for less. Stop manipulating the market. Get on with cutting high compensation costs and with building great cars. Or get out of the way.


This article first appeared on JamesKGlassman.com.
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116 Comments

Whose fault is it?
Chrysler does appear to be wrecking their own market. Not only is there no conceivable basis for thinking they can support prices by reducing the number of dealerships, the general panic surrounding this move has even brought prices of used Chrysler products down! It's like they're taking careful aim and shooting themselves in the foot multiple times.

I can't figure it out. But as usual, we should look to see who stands to gain in all this. If the answer's not yet clear there's often a player we haven't met, hidden in the shadows.

I don't quite see how Glassman thinks the government "owns" Chrysler though. Last I heard, it was the UAW who came out with the majority share (55%). The feds only own a measly 8%. Or have I missed something here?

NADA, the National Auto Dealers' Association, doesn't look like it's blaming Washington. They seem to be blaming the Chrysler brass.

The government's track record
When you look at the actual historic record, our government has not done too badly in restoring ailing mega-corporations to viability. And when they've had to buy them in to restructure them, they've normally been able to turn a small profit on the deal once they've made the repairs.

Take a look at this well drawn history:

http://www.washingtonmonthly.com/features/2009/0903.longman.html

Wrigley
Wrigley made his fortune one stick of gum at a time sold in as many stores as he could get to carry his product.

BHO is bought and paid for by UAW.

How will Chrysler make products people want to buy?
They will make products the government want them to sell.

Too simplistic
So that makes it easy? BHO equals UAW? They're just the same?

How does it benefit the UAW to shut down dealerships? Doesn't that just set them up to sell fewer Chrysler products?

For that matter, how does it benefit the government? Even though they only own eight percent, don't they hope to gain by it? Wouldn't they, for instance, be creating more unemployment?

But someone is gaining.. otherwise the decision wouldn't have been taken. I'd be curious as to who it was and how they gained.

The miracle of private industry
All by themselves, the entrepreneurial talent over at Chrysler has figured out how to make cars no one wants to buy. They needed no government help for that.

Impelled by the pure spirit of capitalism-- the desire to get rich-- they managed to make a bunch of poorly engineered, stylish looking cars that managed to be both small and fuel foolish. Most Americans voted with their dollars, telling Chrysler they wanted something better.

Something more like a Toyota.

UAW
Why did the UAW make so many outrageous demands which drove other manufacturers to right to work states?

I agree management did not have to agree to the demands, but they had to weight the costs of moving operations out of MI and dealing with the politicians that support unions.

How does Chavez gain by nationalizing industry? That is what BHO is doing. Who gains by such and act? Only those with government power gain.

Gov regs 41 mpg
Now the government will be forcing companies to manufacture MORE cars people don't want to buy.

The public speaks
I drive a Celica.. because it was cheap to buy and gets around 34 mpg. No American brand can do that, other than the hybrids.

I'm not alone either. Millions of Americans are looking for those kinds of cars. And if you've ever looked at the numbers, you find that Detroit's just not making them.

Go to a new car show. They don't even advertise mileage. And when you look at the fine print, you see that most of the crap they offer gets maybe 22 mpg.

No wonder they're in trouble. Some times you have to do things for someone's own good, when they're too dumb to think of it themselves.

Think about what kinds of cars people DO want to buy. Toyotas. Well engineered and fuel efficient. The opposite of Chrysler.

You sound like you're advocating government coercion
"Why did the UAW make so many outrageous demands which drove other manufacturers to right to work states?
"

Are you saying that they shouldn't try to act in their own self interest? How about capitalists? Should THEY get to act in their own self interest? Or is this a concept that's open to all?

For many years the government used its powers of coercion to stomp on the unions. Then during the Bush regime, Nancy Chao used the Dept. of Labor to again sell out the interests of working people to those of their employers.

What I'm asking is this: Which side of the scale do you think the government should put its thumb down on?

Both labor and management in the auto industry have had to rein in their ambitions, in light of marketplace realities. Both are thinking realistically about how to save their factories. And both are poised to work together more closely than they ever have in the past.

I think it's because the pie they were fighting over used to be bigger, and they all thought they should get a greater share. Now they know they'll be lucky to come out with even a tiny pie. And they're better off sharing out the crumbs on an equal basis.

"How does Chavez gain by nationalizing industry? That is what BHO is doing. Who gains by such and act?"

Excellent point. Before Chavez, the Venezuelan middle and upper classes were doing well, while the poor multiplied until a majority were below the poverty line.

Now that's been reversed. The fortunate may not be quite as rich but the poor are rapidly coming to live a better life. That's why Chavez has been winning all those elections, even though he's inclines to be bombastic and demagogic. He delivers the goods to those who need them the most.

And.. they VOTE.

track record
Nice of them to try to brag about that railway, but how would that compare to the $13 billion they blew subsidizing Amrtak since 1972?

They also claimed that is was critical to bail out the likes of Lohkheed and chrysler etc. But they in no way make the case that it was even necessary. There would have still been airoplanes without a bankrupt company making them, and cars without any Chrysler at all.

There were many other car companies in the past, so why wouldn't they have bailed out the Cord, Packard, Stanley Steamer, Studebaker, etc. too?

Just because a liberal rag tries to justify big government, doesn't mean it makes any more sense than any of their other lame rationalizations.

Great excuse
But it has never been true. The problem with Detriot was both price and image. They made good smaller cars that got better fuel mileage than the imports; but most were not as stylish and cost more. Also, touting little namby-pamby pregnant rollerskates didn't fit their tough guy, max horsepower image.

Because of the combination of the two, and the profit margins involved, detroit did not advertise their fuel efficient cars, just sports cars, luxury cars, pick ups, suvs and mini-vans.

Somehow, in spite of growing U.S. sales of toyota, nissan and honda, the "big three" never got the message that good looking, good handling and fuel efficient was cool.

"For many years the government used its powers of coercion to stomp on the unions. "
Without government coercion, unions could not force people to join them.

Have the food shortages been abated in Caracas? Can't imagine why farmers would want to sell food at profit.

The real problem, quality control
The USA won WWII by out producing its enemies. This was done with statistical process control.
After the war, Deming was sent to Japan to teach them SPC while American companies ignored it until 1980 when Ford made feeble attempt to practice real quality from the top down. They created the highly popular Taurus from that program.
Toyota practices JIT. They have no warehouses so every component of the car must arrive just in time. Any quality or production problems on any line must be fixed or the entire production stops. This engenders a workforce that really cares and is motivated to produce a quality product at low cost.
Quality design, engineering and production leads to quality products and satisfied customers. Something the USA companies have never seemed to learn.

Chaves following USSR example
"Indeed, at the beginning of March 2009, Chávez ordered military troops to seize control of rice processing mills in his latest attack on the country's private food sector. Chávez has accused producers of hoarding supplies and avoiding government imposed price caps and has warned that companies that do not comply with output demands could be permanently appropriated. Eleven companies, including Empresas Polar and Cargill have been targeted. Many producers claim that they are unable to make a profit while operating under price caps introduced some years ago, and resulting food shortages have led to numerous spats between the food sector and the government. These shortages, along with the high cost of living, are a major threat to the president's popularity and Chávez has become increasingly radical in his attempts to take control of the food industry. After a two-year-long nationalisation drive that has included energy, telecoms, steel and cement companies, Chávez now appears to be moving on to food production, one of the last strategic sectors of the economy still largely in private hands."

" The threat of state appropriation of leading producers is only likely to scare off interested investors further. Indeed, the latest episode with Chávez ordering military seizure of the rice processing mills owned by Empresas Polar and Cargill will only reinforce a trend to investment away from the country’s food and drink sector.
"


http://www.researchandmarkets.com/reportinfo.asp?rfm=rss&report_id=941975

It won't be long before Chavez will have to start buying food from free markets.

Supply and Demand?
The point Glassman missed is: reducing supply to raise demand. Thats what those automakers are doing. Seems perfectly logical according the law of supply and demand.

If it works, prices would go up because of lower supply and increasing demand.

I think the automakers are stupid to use a talking point that focuses on the benefit they can get from an increase in price for their products. For the reasons Glassman presents, and then some. They should have focused on the point that they're trying to raise demand and left price out of the conversation.

Poor management. And it ain't the government.

The government is running Chrysler and GM.
"Poor management. And it ain't the government."

Yes, it is the government.

How many Ford dealers are being forced out of business?

Gas Stations
I seem to recall that sometime in the last 30 years or so, the gasoline distributors decided to shut down any gas station that didn't meet a certain minimum volume.

This does sound similar. Perhaps the economic reasons are similar as well.

The only group that benefits are the unions.
At least in the short run. But then liberals were never any good at long term thinking.

not simplistic, realistic
This move doesn't benefit them in the long run.
On the other hand BHO and the unions actually seem to believ the simplistic rhetoric that they spew.

Imagine believing that in a non-monopolistic market that reducing the number of vehicles you sell, will increase prices over all.

I see roy still believes in fairy tales.
The unions have not been acting in their long term interests.

Ask a biologist, a parasite thrives best when it's host thrives. When a parasite kills it's host, it dies as well.

As to the myth that the govt held down the unions. There is no reality to that myth. But like the dozens of other myths that you fervently believe, no amount of real world data will shake your convictions.

Is pretty bad.
They spend billions to save a company that does not deserve saving. As a result, nobody learns the lessons that need to be learned.

The reason Chrysler is failing now, is because the govt bailed them out before.

Had Chrysler been allowed to fail, it's factories would have been bought out by other companies. COmpanies not burdened by the ruinous union contracts that inflict Chrysler.

Chryler makes and sells lots of cars.
It's problem is that it costs too much to make those cars.

Ah yes, the old Detroit is too stupid to make cars that people want argument
The automakers make the cars that they do because those are the ones that people are buying.

Detroit doesn't make many small cars because the profit margins are smaller on them, and with their union overhead, they can't make money on them.

speaking of missing the point
Chrysler and GM may have reduced the number of cars that they sell, but they have not reduced supply.

Not when there are half a dozen other auto makers willing and able (especially in a time when over all sales are soft) to step up and sell the cars that Chrysler and GM aren't selling.

They do not place the right cars on sale
When I went to by my last car, I drove the Charger with the Hemi, and the 300 with the hemi. But they told me that the hemi engine was a premium and that they would not come off the sticker price one cent.

Other Chrsylers they could knock off like 5 grand, but not a cent on these. Likewise went I look at GM and Ford cars even recently, the discounts and low finance rates were only on cars that sucked.

So I went over to the Infinity dealer and they were just as happy and pleased to give me $5000 off the sticker on a new Inifinity and the model I wanted. It wound up much cheaper than the 300 w the hemi and I am a happy customer.

So who is to blame for me buying a foreign car here? Why doesn't the big three offer deals on popular cars? I just assumed they do not need the business and are greedy.

And for me, I do not think we should bail them out, since they are not doing anything special for the average american except to try and force them to buy their crappy cars.






Rating the mid-to-compacts
Pauled, I've been buying cars as long as you have. And IMO Detroit has never made a good smaller car that got better mileage than the imports. Almost as good as, sure.

I've driven and enjoyed, in my weight class, the Ford Focus, the Chevy Cobalt (mileage not so hot) and the Pontiac Sunfire and G-6 (both a lot of fun). These cars beat the pants off the little Hyundai (kind of a tin can but still adequate for off-road work in the steep mountains). In that same company I like Isuzu's wagon a lot (forget the name).

But imports-turned-domestic like the Toyota have captured an increasing market share, because the public thinks they're better cars. While just as surely, Chryser products have lost out. Most car buyers agree with the auto mag road testers that their Cute Little Car line looks like a lot of fun to own-- but is poorly engineered, fuel inefficient and overpriced for what they are.

You do see them on the road a lot-- but not in sufficient numbers that their maker has stayed healthy. Maybe some of this has to do with internal accounting, I wouldn't know.

The same applies to the Saturn. The public was prepared to really like this one-- but the cars themselves were underwhelming.

BTW Pontiac makes a bitchin' sport coupe, the Solstice. Now that prices are presumably dropping, I'd be very tempted.

The numbers tell the story. Ford's holding its own while GM and Chrysler are losing ground and Toyota's gaining. I'll agree with your last comment:

"Somehow, in spite of growing U.S. sales of toyota, nissan and honda, the "big three" never got the message that good looking, good handling and fuel efficient was cool."

The numbers tell the story
Ford's holding its own for now. GM and Chrysler have been losing market share. And cars like Honda, Toyota and Nissan (no longer imports but domestics themselves) have been pulling ahead because more people like them enough to buy them.

I think in this instance, the marketplace has passed its judgment. Build a better car and someone will buy it.

Also "Detroit doesn't make many small cars because the profit margins are smaller on them, and with their union overhead, they can't make money on them."

That's what they say. But I think it might be their financial structure that's the problem, maybe too much debt. The Japanese manage to be able to take a decent profit making their cars in Tennessee. And nonunion workers there have very nearly the wages and benefits as union workers do up north. Look that up and see.

A useful point
"Ask a biologist, a parasite thrives best when it's host thrives. When a parasite kills it's host, it dies as well."

I like it. Let's look at the three stakeholders in the auto industry: shareholders, management and labor.

Of the three, the shareholders haven't been making a killing. And labor has even lost its share over the years. Meanwhile upper management has gobbled up ridiculous amounts of skim off the top. And done so while screwing up the long term plans for maintaining a profitable operation.

Two problems I've noticed right up front. The first is they sacrifice long-term viability for short-term profit (like everyone in the CEO class these days). The other thing is they distribute too much of their net profit in the form of dividends and upper-end salaries, and borrow to fund daily operations.

This is a ridiculously bad strategy. It's funny how someone can continue keeping his job doing this when he's paid in the millions per year. Back when I was a humble manager among the small fry, I wouldn't have lasted a year doing something like that. It's a failing strategy, and puts companies in a crisis every time there's a slight downturn in the financial markets.

As CA goes, so goes the nation?
Voters in CA soundly rejected higher taxes and capped politicians pay.

As the Ds continue to raise taxes and spend more, 2010 will be a bloodbath for them if CA is a leading indicator.

Not been my experience
Ford's escort and fiesta, GM's several forays into the compact/sub-compact line (geo metro anyone?) and Chrysler's colt are just a few of the vehicles that were inexpensive, solid, equal or greater mileage and ugly with a capital U. Still, they sold well enough in their market (first car, low end car buyers, eco-friendly car buyers) but the left-wingers were all into Japanese and European imports like VW Rabbits, Hondas, Fiats and Toyotas. Honestly, by the early 90s, these were far nicer cars for the money then their U.S. counterparts and many of the Big Three offerings were discontinued and replaced with higher end, more expensive and less efficient vehicles.

Personally I don't like 4-cyl. cars. It is due to personal experience with reliability issues in the 70s and 80s. I prefer the V-6 these days; 80% of the power of the V-8s and 80-90% of the mileage of most of the 4s. that is a very nice combination that works for me.

But I've owned everything from 426-Hemi powered Chargers to 3-cyl Geos. All had some positives and some negatives (I will never own another Mazda or Fiat, but they are the only two on that list). All of my most recent vehicles have been either Ford or Chrysler, though I do own a 22-year old Chevy S-10 Blazer. Ten years ago I did have a Subaru and I would buy another any time. This in spite of less than stellar gas mileage and being a bit underpowered; but my next one would have to have a manual transmission.

Have you driven a mid-sized, V-6 powered vehicle from the big three lately? The last three I've had got 34 MPG or better on the highway and 26-29 combined. I would compare that to a lot of vehicles made by anyone in the same class.

That doesn't make sense Mark
"Chrysler and GM may have reduced the number of cars that they sell, but they have not reduced supply."

So putting fewer products on the shelf is not a reduction in supply? Please explain yourself better Mark. It seems like you have a point, but its hard to tell what it is.

By closing dealerships, thats exactly what Chrysler and GM are doing is reducing supply. They're making it harder to get their products.

roy loves piling myth on top of fairy tale
Management has been making a killing?

I guess in roy's world, any manager who is paid, is overpaid.

roy would rather make up numbers than deal with the real world
It might be.
Maybe it's.

Face it roy, you will go to any lengths, invent reams of made up fantasy, to avoid laying the blame where it belongs.

On the unions.

bob works overtime to avoid the obvious
The supply of Chrysler and GM cars has been reduced.
But the supply of cars in general has not.
The price of cars is determined by the general supply, not the supply of one brand in particular.

It's really very simple. Anyone who has finished grade school economics should be able to understand it.

Ratings, continued
I think we're on the same page. ("Personally I don't like 4-cyl. cars. It is due to personal experience with reliability issues in the 70s and 80s. I prefer the V-6 these days; 80% of the power of the V-8s and 80-90% of the mileage of most of the 4s. that is a very nice combination that works for me.")

I dislike subcompacts like the Geo, Ford Escort and Fiesta. Not enough trunk space, passenger space or power. Plus they feel like little tin cans. They really belong on your lawn or the GoKart track. I've always driven a "full size" compact, like the old Honda Prelude (excellent vehicle).. the cars the rental agencies like to refer to as "intermediate".

And in that class I do enjoy driving a Focus. It's just kind of boring. The comparable Pontiacs are a lot cooler.

"Have you driven a mid-sized, V-6 powered vehicle from the big three lately? The last three I've had got 34 MPG or better on the highway and 26-29 combined."

That's a little better than my experience. I've driven a lot of Chevy Cavaliers. And in mostly open road conditions I find them getting a tolerable but not outstanding 29-30 mpg. The Cobalt's about the same.

In the next class up, one car I like VERY much is the Mazda X5 (a smallish wagon). Can't be beat for all around performance, economy and cargo space.

In the subluxury and luxury class it's going to be hard to beat the Lexus and Infiniti lines. I've never driven a Cadillac.. but I think the public has condemned it through slow sales volume. Overpriced? $30-36K gets you a really nice car. But I don't think it will get you a new Caddy.

If you want to pay $50 or $60 for a car, get a Jaguar. Taste the difference quality makes. Driving around, you feel like you're the finance minister for some small African country. :)

Read the newspapers
Chrysler is now in Chapter 11.

And what is bankruptcy anyway? Isn't that when the courts take over management, direct a company for its own good and that of its creditors, and lead it until it's out of the jam it's gotten itself into?

Please spell out for us how it is that one branch of government (the courts) is qualified to lead a company out of disaster, but another (the executive) isn't.

Good examples would be Fannie and Freddie. Left to run themselves, they got into trouble. Big trouble. And got the rest of us into that same pot of trouble.

What better course could the government have taken, other than to nationalize them?

Shedding their obligations
"Had Chrysler been allowed to fail, it's factories would have been bought out by other companies. COmpanies not burdened by the ruinous union contracts that inflict Chrysler."

Not quite ruinous. In fact Toyota plants in the US are paying nearly as much as the current union scale. And they're not complaining so they must be making a profit.

The only difference is in legacy costs. For a generation and more, the Detroit plants have been deferring a part of each employee's pay into their retirement fund. And more recently the fund has become unmanageable and inconvenient. So they enter Chapter 11 as a way of welshing on their promise, and shedding their obligation to complete payment for services performed.

It's capitalism in practise.. with the connivance of a complicit government, of course.

Bob's ignorance of economics
Bob, this is one of the most ridiculous statements you've ever said (and you've said a lot that have come close):

" reducing supply to raise demand. Thats what those automakers are doing. Seems perfectly logical according the law of supply and demand."

Cutting supply for products people always seek at the lowest price/best quality ratio possible does not increase demand for them. It suppresses it.

that wasn't capitaism in practice
If those big auto companies were closed union shops, enforced by government, then it wasn't capitalism because it wasn't a free market.

From another angle foreign competitors were kept out to a large extent because of the socalled 'voluntary' restrictions from years ago, which meant they only sent in the biger more expensive cars. Also, there were other non-tarif barriers like the so-called and phony 'safety' exclusions; as if cars deemed safe enough in europe, are not safe enough in the US.

OMG -- No wonder Bob can be so clueless at times
You don't even understand the basic law of supply and demand. Oh...and I know you will just HATE THIS but...Say's Law has proven (every time) how wrong you are:

"By closing dealerships, that's exactly what Chrysler and GM are doing is reducing supply. They're making it harder to get their products."

And how does that increase demand? People will just go to the the other dealers in their area instead.

I mean, as you noted their cars were already not as much in demand as other car makers to begin with. This stupid move will simply suppress what little demand for their cars still exists, at a time when they can ill afford it. Now, they are doing it for other reasons -- primarily to acknowledge the reality that demand has collapsed for their products so much that the existing dealership network is overkill. But this won't 'increase demand' for their cars. Not even their marketing swine have tried to claim that.

I don't see any guys on the freeway exits scalping Chrysler cars like they do concert tickets, do you?

So much for 'increasing demand'.

No wonder you voted for Obama.

Thanks from Zyndryl to all you non-California residents
I want to take this opportunity to thank all you suck, er...'non-California residents' who will soon be contributing to the Coming California Bailout.

You see, the Dems in California saw this coming and started EVEN BEFORE TUESDAY'S ELECTION to lobby Washington for a bailout. Just why do you think our RINO Governator was really visiting Obama in the White House 2,700 miles away on the day of the actual election?

There won't be any cuts, because the Dems will bail out California. New York too.

So, bend over and bring your own K-Y Jelly. It will be brutal. Esp for your kids as I am sure it will just be added to the debt.

So, I just want to thank you all before hand: Thanks for the 'fix'!

Zyndryl the California Conservative Who Does Appreciate Irony Even When It Also Sickens Him

European Volvo not safe enough for USA.
What a bunch of BS.
I know many expats who would fly to Sweden, buy a Volvo made to USA 'standards', drive around Europe and import that car as a used car instead of a new car for a better deal.
What 'free' market?

Congratulations Z
You got me big man, I was wrong. You better savor it grandly, its rare you get one over on someone else.

I was wrong, I have learned. You should try it yourself sometime.

"I was wrong, I have learned" I seriously doubt it.
Socialism is a religion.

That's capitalism as practised here
You wouldn't have the Big Three auto makers without big government. They've always been reliant on them.

After WW Two, Big Government de-funded light and heavy rail transportation, and put all that money into the interstate highway system. They got behind individual autos as an expression of our individualism and newfound wealth, leading to the concept of America On Wheels.

That's what made Detroit an automotive superpower. And without backing the unions to get a piece of that action, Detroit wouldn't have had nearly as many customers as they did. Cars would have remained a perquisite of the wealthy and merely well to do.

Industrial capitalism doesn't really perform that well when it doesn't have the resources of a strong central government behind it. Show me examples of a thriving capitalism where there is weak government.

There is one nonindustrial financial center, China's Hong Kong, that is apparently free from coercive government. They've kept their hands off HK so the freewheelers can flourish there, and make money for the parent company. But if anyone ever tried to contest Chinese hegemony, the gloves would come off in a heartbeat. It's only deceptively free.

Calling it 'capitalism' doesn't make it so. Words have meaing.
"That's what made Detroit an automotive superpower. And without backing the unions to get a piece of that action, Detroit wouldn't have had nearly as many customers as they did. Cars would have remained a perquisite of the wealthy and merely well to do."

That is BS. After the war and rationing demand for cars was at an all time high. And since all other manufacturing in the world was destroyed, unions could make demands on the car companies as they were the only game in the world and demand was high.


" Show me examples of a thriving capitalism where there is weak government."

Hong Kong thrived because it had a strong, LIMITED, honest government, doing what it was supposed to do, enforce contract laws for ALL, not just political favorites.

as practiced here
This is good that you admit now that it's not really capitalism, but just called that because to say anything like; socialist, dirigiste, command economy, planned economy, oligarchy, etc. would sound really bad and show it for what it is.

You said there would be no big three without govenrment, and I would maintain that no country even needs a big three. If people want cars, somebody will make them,like perhaps some of the dozens of other companies that did make them before, or Mercedes over 100 years ago in europe, or Honda that the stupid MITI in Japan didn't think should make them; or like the Tesla electric car being made now in CA.

That's really a lame justification for big government tyranny to say we need it to make cars.

Penny for your thoughts
"Hong Kong thrived because it had a strong, LIMITED, honest government, doing what it was supposed to do, enforce contract laws for ALL, not just political favorites."

Hong Kong's been under Communist control since 1999. Is it still the freest place on earth?

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