[truthguy]

Earlier this year I was behind a Ford with an extra-large bumper-sticker that proclaimed that it was built, owned and driven by Americans. My immediate thought was, “So was the Honda in the next lane...what’s your point?”

From my last post:
The Foreign Car Companies do not MANUFACTURE here. They do low tech final assembly. There is a gigantic difference between design, research and development, prototyping, etc and doing final assembly like the drones do in a US Toyota or Honda plant. Don't you see this. Have you ever worked for a high tech or a manufacturing company. Anyone who has can tell you the difference between Manufacturing and Final Assembly. All the technology and the profits go off shore. The know how is lost if we lose the Auto Companies. This has a profound influence on our economy and way of life. We could not have won WWII if not for the Manufacturing Prowesss that our auto companies had. We simple would not have had the know how, the tooling, and the type of people necessary. Now Slivertongue do you see my point.

[Mr. Silverback]

Now Slivertongue do you see my point.

Thank you for the gratuitous insult, it makes your point so much more compelling.

To answer your other question, I have worked in computer consulting, but not as a consultant; I was a recruiter who placed consultants and some of our clients were high tech manufacturers like Hamilton Sundstrand.

That said, my answer to you is not based on my time there, but on common sense. Maybe there's some Econ 201 in here, but mostly it's just seeing the forest and the trees. Sorry to put it that way, but that's the way it is.

There are three--and only three--things that are going to happen here:

1. Detroit will be bailed out, and the companies will be right back where they are now in short order. Maybe not today, maybe not tomorrow, but soon. Maybe before the end of the Obama administration. If you doubt me, see "Chrysler, bailout of."

2. Detroit will not be bailed out, the union will continue to refuse to deal with economic reality, and the companies will enter bankruptcy.

3. Detroit will not be bailed out, the union will get a grip on reality, and the companies will fumble, mumble and stumble but eventually make their way out of this mess.

Now, if these companies go bankrupt it's possible it could lead to liquidation, but I don't buy it. Remember how we were told that the Wall Street bailout was necessary to get frozen credit markets moving, or none of us would be able to buy cars or get home loans? Guess what? Paulson's going to use it to buy stock instead. Fool me once, shame on you and all that.

What is far, far more likely is that they'll work something out with their creditors if they go into bankruptcy, as has happened over and over again when large corps go bankrupt. But let's look at your scenario. What would have to happen for it to come to fruition?

1. Every investment group (either existing now or that could be formed to do the deal) ignores the chance to own all the great things these companies embody. None of them are interested in the trillions in potential profits these companies offer if they can get back on track.

2. The UAW refuses to budge even when it's clear the very reason for their existence is about to disappear.

3. Liquidation happens and the assets are only bought by companies that have no interest in designing, building or testing cars in the U.S., i.e., non-car companies or foreign car companies. Note that this would require that this wouuld require that the foreign car companies who bought the stuff to use it only for their own designs and flush all of Detroit's intellectual capital down the toilet.

4. Even though the United States has a shortage of engineers, all the guys and gals who make up the knowledge base of these companies move to Japan, Germany, Korea, Sweden and Italy.

To say that chain of events strikes me as unlikely is to understate.

The good news is that I have a new idea to save the car companies that you'll like very much. I'll ping you when I post it.