Monday, June 15, 2009

Watt's Thoughts - Government-run auto makers

I had understood that reorganization of the American automakers through bankruptcy, government loans and funding and reorganization would result from the change.

Specifically, we'd see cars built by Americans that were more in line with prices Americans could afford and be more fuel-efficient. And we'd see the companies dropping inefficient brands such as Dodge cars, Saturns, Saabs, etc., in order to compete more effectively.

Chrysler recently announced it was re-opening its first plant since closing all of them in bankruptcy. The cars they will be building (Dodge Vipers) are priced at $90,000 and get 22 mpg.

So much for closing inefficient brands, and building price-conscious cars. I cannot imagine very many Americans in 2009 being able to buy $90,000 cars. And so much for fuel efficiency -- Obama wants to go to 36mpg or higher soon. (As a side note, my 2001 Saturn gets 36-37 mpg.)

So Chrysler is building muscle cars as the first product of the "New Chrysler."

We will see how GM and Chrysler continue as new companies emerging from bankruptcy with ownership being primarily the US government and the UAW. I'm waiting to see what happens when the UAW demands higher wages from their employer, the UAW, for the autoworkers in a year or two.

Can you strike against yourself?

Comedians will have a field day.

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