Monday, December 01, 2008

At least the Germans understand

While US automakers continue to make cars that people will not be able or willing to buy, the Germans understand what they need to do amid rising inventories of unsold cars: Stop making cars.

GM, Ford, and Chrysler are spending their billions of soon to be announced taxpayer bailout dollars buying cars that will not be sold any time soon. In the meantime, overpaid union workers and inept and corrupt auto executives are going to be getting government sponsored checks just like AIG, Fannie Mae, Freddie Mac, JP Morgan, Goldman Sachs, et all.

Business is about maintaining cash flow for continued operations. The executives at the German companies probably did a financial analysis that said it is cheaper to eat the fixed property costs and sell down inventory than to waste cash on products that are not currently selling. It's such a simple business decision. This is in stark contrast to what the executives at the big 3 are doing: spending money flying back and forth to Washington D.C. to lobby for taxpayer money rather than running their businesses.

People resent businesses, especially big ones, because of stunts like this. Corruption needs to stop soon, although change from outside of Washington is unlikely with our new God, the almighty Obama.

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