|Almost daily we hear the drumbeat out of Washington that we must do something about the U.S. auto industry. I confess that I am conflicted on this.|
Look, let's be honest. Big auto here is a dinosaur. They are slow to change, and like most institutions, resist it at every opportunity.
While Nissan, nee Datsun and Toyota were busy building market share in the gas starved 70's, Detroit was still making inferior gas guzzling cars. Those early Corollas, B210's, and Celicas were just better cars. Better mileage, better quality, and at a better price.
And it continues today. Does anyone really believe you can abuse an American car like those foreign models and it'll still run properly? I used to go almost 25,000 miles between oil changes on my 1986 Nissan truck. I sold it a few years back with over 280,000 miles on it. I doubt you could do that with any GM product.
But that is beside the point. The US auto industry needs help. If we sit back and do nothing, thousands of workers could lose their jobs. It is said that over 10% of the US work force is connected to the auto industry.
So here is my solution. Let's start with the 25 Billion issue. Face it Detroit, we're not just going to give it to you. Philosophically, we are against straight handouts to save failing businesses. But here is what we can do.
We should give the poorest 5 million US taxpaying families a car voucher for $20,000.00. That's right. Just give the money to the taxpayers. So they can buy a new car. But only a car.
Here is how it'll work. The voucher must be used to purchase a new American made car from either Ford, GM, Chrysler or their affiliates.
To encourage fuel conservation the car must get at least 30 MPG based on EPA estimates. There are many choices, but one you might choose is the one of those new smart cars [pictured here actual size] that can fit in your purse.
To qualify, the new owner(s) must also agree not to use the new car as collateral on a new loan. The objective here is to get money into the system, and stimulate the economy.
By targeting this at the poorest folks, we can be sure there will be a need and the money will make its way back into the system. Now if you do the math, that puts our cost at about 100 billion dollars. With the upcoming stimulus the Dems will be pushing for in January, will be spending that money anyway.
The bottom line is that whether we like it or not, we are gonna write the check. So since that is a given, let's get something out of it.
The beauty here is that the American people can vote on the quality of Detroit with their wallets. If GM, Ford, and Chrysler products are as good as the Big 3 say they are, they'll do okay. If not, they had their chance, and we will still have put a gigantic stimulus into the economy.
What are your thoughts?
[ps. enjoy the new look and check out the new links]