Thursday, November 24, 2005

Fantasy Island: Corporate Edition

The symbiotic relationship between Republicans and their corpate masters has perhaps never been more fully displayed than in recent remarks from one of the reigning champions of corporate suicide bombing, Ford chariman Bill Ford.

Ford Motor Co. Chairman William C. Ford Jr. urged the government yesterday to help struggling U.S. automakers by expanding subsidies for companies that make components for hybrids and other fuel-efficient vehicles, as U.S. automakers race to close a widening technology gap with the Japanese.

In a speech at the National Press Club, Ford asked for more incentives, such as tax credits, to prod consumers to buy hybrids and other vehicles with fuel-saving technology. He also asked Congress for money to retrain workers, and to consider tax incentives to help manufacturers outfit old plants with new equipment. In the speech, Ford said a national strategy is needed to respond to the pressures of globalization, which he called the "economic challenge of our time."
Last month, Ford -- the nation's No. 2 automaker -- reported a $1.2 billion third-quarter loss in its North American division. Ford plans to detail a restructuring plan of "significant" plant closings and job cuts in January. Delphi Corp., a major auto parts supplier for Ford and GM, filed for bankruptcy protection last month.

Ford first called on the Bush administration to hold a summit on energy and automotive technology issues in October. Ford said the billions of dollars that U.S. automakers pay in health care and pension costs are unfairly weighing down the companies, making it difficult to compete.

Ford and other Detroit automakers have not asked the government to pick up those costs. Instead, Ford wants Congress to increase tax credits for research and development to support companies that make advanced technology for vehicles. Ford said the investment from Congress is needed to help build a U.S. supply base for parts for hybrid cars and trucks, especially hybrid batteries. He said the United States is trailing Japanese automakers in hybrids partly because the Japanese government offered subsidies a decade ago to help the industry grow.

In an interview following the speech, Ford said his company is not looking for a bailout from the federal government. "We're just looking for our government to help us," Ford said.

"We can compete with Toyota, but we can't compete with Japan," he said.

A spokeswoman for Toyota said the automaker developed its hybrid vehicles without Japan's help. She said the company's success was based on building products that consumers want to buy.

This nonsense really rebuts itself, but at the risk of stating the obvious:

1. Hybrids are currently so hot that Toyota is having trouble supplying all the Priuses (Prii?) Americans want to buy. But while Toyota was investing in the future, Ford was launching the dreadnought class Excursion (named the Ford "Exxon Valdez" by the Sierra Club.) Amercians are willing to pay substantial premiums to get hybrids when somebody else builds them. Why should we subsidize yours?

2. It isn't a "bailout," it is just a little "help." I'm sure your pollsters told you that distinction would hold water with someone, but was their focus group composed solely of UAW members? This sounds like classic Frank Luntz-speak to me.

3. "We can compete with Toyota, but we can't compete with Japan."

Earth to Ford:

Toyota Motor Corp. grabbed more U.S. retail market share than Ford Motor Co. in early November and it was less than one share point behind General Motors Corp., J.D. Power and Associates said on Friday.

A report from the industry tracking firm's closely watched Power Information Network said GM (Research) had the highest retail market share in the first 13 days of November at 18.8 percent.

However, retail share at the world's largest automaker was down 24 percent from the same period a year ago, and Toyota was running close behind with a retail share of 17.9 percent. Toyota, Japan's largest automaker, had a 15.4 percent U.S. retail market share a year earlier.

The report said Ford (Research), which has seen its retail sales decline 30 percent from the year-ago period, placed a distant third with a U.S. retail share of 15.3 percent.

Ford, 1990: 24% of U.S. market

Ford, 2004: 18%

Toyota, 1990: 7.6%

Toyota, 2004: 12.2%

No, you can't even compete with Toyota.

I feel sorry for the workers at Ford and GM, because Amercans can build quality cars that Americans want to buy -- as long they are working for Toyota, or Honda, or any of a number of foreign-based auto manufacturers less terminally mismanaged than our domestic dinosaurs.

The Republicans won't give a damn about these workers. But I'll wager that these small-goverment free marketeers will fall over themselves offering bailouts to both Ford and GM next year.


Blogger Dr. Bloor said...

Dad! What are you doing here? Er...I mean, good post. And Happy Thanksgiving.

6:21 AM  
Blogger Eric H said...

Historically, Bill Ford has leaned to the left, so although the Republicans are hardly free marketeers, you should keep some of your powder dry. Remember the last bailout of a major auto company? Chrysler, ca 1979? Who controlled Congress and the executive branch then?

Both sides do it, so the symbiotic relationship is between whoever controls the reigns and the political entrepreneurs.

Otherwise, you are right on the money about Toyota.

7:37 PM  

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