Posted on 01/07/2009 6:19:08 AM PST by Kaslin
With England's economy gasping in the mid 1970s due to a combination of nosebleed rates of taxation and a currency in freefall, the fortunes of many of its flagship companies similarly reflected the ailing health of a country in decline.
High tax rates and inflation bat a thousand when it comes to the disappearance of investors, and with Coventry-based carmaker Jaguar in major financial trouble, its executives went to the government for help.
Jaguar was effectively nationalized by the British government in 1975 thanks to skeptical credit markets, and it remained that way until Prime Minister Margaret Thatcher's privatization program freed it from government control nine years later.
Jaguar's story as a ward of the state looms large as a cautionary tale for future customers of GM and Chrysler, two formerly great U.S. automakers who've recently asked for and received government help.
While Jaguar's sleek styling never disappeared during its nationalized years, the quality of its cars surely did. For anyone who knew Jaguar owners during the '70s and early '80s, their comments were pretty much uniform: great look and great interior, but the car always needs repairs.
(Excerpt) Read more at ibdeditorials.com ...
“Why should the federal government help after hurricanes, tornadoes and other disasters?”
It shouldn’t.
“Also, every other country is assisting their manufacturing base to keep them viable until things turn around.”
So, “monkey see, monkey do” is good by you then?
“One more thing , that idiot, Shelby, failed to mention the massive tax breaks and abatement’s given to the foreign automakers. And since his pathetic state get almost $2 for every $1 they give to the federal government, I, in effect, “bailed out” those jobs. The hypocrisy is mind boggling.”
Wait, you’re just trolling. Right? Wow! Good one!
The parallels in Jaguar are quite apt. The British unions had increased the labor costs to a point where you could buy more car, a better car, from Germany than you could buy in a Jag. Finally Jag was in such a horrible financial state where no one other than a brain-dead US auto exec would touch them with a barge pole. So Ford goes and buys Jag, much to the snickers and amusement of everyone in the business world.
You should read up on what happened when Honda started production in the UK and they hired some former Jak and Rover workers. Honda had shipped over all these brand-new body panels. The workers uncrated them, put them next to the assembly line and then reached for their brass hammers. The Honda execs came unglued... the Brits didn’t understand why. They were used to body panels that had to be hand-hammered to fit, whereas the Honda execs and engineers knew their panels would fit the first time, every time.
The story of the UK auto industry is nothing more than a pre-history of the US auto industry. Unions, QC problems, idiotic execs who are being paid lavish wages for idiotic decisions...
Jag deserves to go under. So do the Big Three. And for the same reasons.
Manufacturing in the UK never had a chance to succeed on a world scale in the first place. The government sucked out something near 90 percent of profits so there was little chance for reinvestment and upgrading. Why else would Jaguar continue to produce an engine designed in 1947 right up till Ford bought the company ?
“Taking a small manufacture like Jaguar that had a maximum production of 80,000 units per year and comparing it to companies that produce 6 million per year.”
And your point is? The same principle can’t apply? That’s not as obvious as you think it is.
You missed the point, which is that government control did not result in viability for the company. Mid-70’s Jaguars have been recognized as among the worst cars ever built.
Jag of today makes a wonderful car.
The aluminium XJ8 is amazing, especially it’s V8, which is a Ford design. A commentator noted, the new engine is what should be in a Lincoln, but for the baggage of the UAW.
Hey BronxBoy,
This is a conservative site, we subscribe to the notion that government control and intrusion is, for the most part, unwarranted, unwanted, useless, and except for militiary issues, almost universally damaging to the interests of the individual liberty.
You, my friend, are on the wrong web-site if you believe your support of the bail-outs is going to go over well here.
The laws of economics apply no matter what size the company.
No, they don’t. A small company and a big company are completely different in terms of how they are run...and even economics.
I absolutely support the loans to the big three...as do many on this site. I believe the auto industry is absolutely important to this country-both in terms of economic prosperity and in terms of national security. Perhaps you think China should make our military stuff, I do no. By the by-not a bailout, but a loan.
Anyone who wants to see American business take a hit is not really conservative in my book. As for being here, My wife nyconse has been here nine years. I have been here 8...so who cares what you think. I have found that those who hate American business really should go to the dummie underground...they want socialism which is the end result of losing good manufacturing jobs...health care this year. I wonder what will be next?
American does not deserve to lose its auto industry...under any circumstance. We can’t afford to lose the jobs.
And just WHO was the "controlling partner" in the manufacturing of said Yugo?
FWIW, at least the Yugo would run in the rain. Jags and other British made automobiles, especially those with Lucas electronics, had a reputation of stalling at the sight of a damp spot in the road....
WRONG!
The only advantage a larger company would have over a smaller one is the ability to acquire lines of credit and a larger advertising budget.
A smaller company doesn't need a committee of "experts" to implement product changes, either....
The auto industry will not go away if the Detroit 3 fail. We’ve been over this. There are other smaller American companies that will get growth opportunity, plus all the Nip manufacturing will continue. Continuing to sat we’d “lose” the auto industry is lying. Don’t lie. If the Detroit 3 ceased tomorrow we’d still have an auto industry, and most of those people would find jobs in the companies that will expand to fill the demand hole.
Tell that to the UAW. THEY are killing the auto industry in the US....
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