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Wednesday, December 17, 2008

Unfounded Fears

We continue to hear how vital it is to bail out the Big 3 in Detroit. A recent article by Thomas Sowell says we are simply postponing reality at taxpayer expense. Classic liberal policies in the rust belt have “helped kill the goose that lays the golden eggs.”

Without getting too deep into marketing, I’ll say I don’t like any of the products from the Big 3 or from Toyota. They are all good, all reliable, but their cars are like driving a soul-less refrigerator down the street. That means in economic uncertain times I will keep the fridge I’ve got and not get too excited when I have to replace it.

So there you have it. The auto companies are making boring products. High costs and the unions are hurting the Big 3. Companies like Toyota are a little better off because they are a little more efficient. But folks like me are holding off until they are certain they can pay for a new car.

We also hear that if the Big 3 fail, it will have a domino effect with suppliers going under as well. I don’t believe it. At least I see no reason to panic. All cars on the road now will need service and repairs. As long as people are enterprising and creative, they will find a way.

I’m a fan of classic old cars. Maybe it is because they were not boring. Those cars had soul. Check out the magazines Hemmings Classic Cars or Classic Automobile and you’ll see what I mean. One of the most interesting things to see are the ads. Nearly every brand of car has a list of suppliers producing reproduction parts or supplying NOS (new old stock). Model Ts and Model As? No problem. You can buy all the parts you need to restore a 57 Chev, or if you are in a hurry you can buy a complete reproduction. Think about it. A car can be 60 years old or more and you can still get parts. Somebody’s making money. There is a market. The current Hemmings features Nash Metropolitans. Only about 1,000 of these remain from the mid-50s but the owners have little problem getting critical parts.

To me the best thing that can happen to the Big 3 is bankruptcy, reorganization, jettisoning the old liberal policies and then getting down to the business of making some interesting cars. Maybe they should look back and learn something from their own golden age of car-making.

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