Wednesday, May 6, 2009
My Next Car Will Be A Ford
And I've never owned a Ford in my life. In fact as a kid I was a Chevy guy. Ford always meant Fix Or Repair Daily. Not anymore.
In the midst of a tough economy, where the other 2 of the big three auto makers are taking tens of billions of taxpayer dollars to stay on life support, Ford is refitting an old plant in Michigan to build electric cars. How are they doing this?
Capitalism. Free markets.
Eight years ago Ford was in deep trouble. They were near bankruptcy. They sold off 23 billion dollars of assets and convinced their unionized workers that they would need to take wage and benefit cuts to keep the company alive. It worked. Now Ford is the only company to refuse bailout money. Sure, their sales were down 43% last month but it's by far the best of the worst.
This is how free markets work. Smart, hard workers and management take a realistic view of the current economy and their situation and make changes. Some survive. Some fail. In the Obama world we prop up stupid companies with fake money and reward ineptitude. And then, of course, they ask for more taxpayer money as is happening now, putting future generations in horrific debt.
Ask the shoe store owner down the street if it felt good laying off his niece to keep the doors open, or the gas station owner who will skip his pay a few weeks to see if he can keep a worker on, or the machine shop owner who has to tell his workers that there probably won't be bonuses this year. Each of them, because there have been 4 recessions since 1980, aren't happy about the current sacrifices but they know even without the Stimulus (and probably especially without the Stimulus) that hard work, smart thinking and sacrifice will help end the recession and they can climb the hill back to normalcy and maybe good times.
Just like Ford.
Nice take from Megan McArdle on the Chrysler bailout.