Wednesday, December 02, 2009

Cut Costs! Build it Overseas

My response to Taunter Media's answer to GM's woes:

First-time caller, long-time listener. Love your stuff.

If I may, I would like to respectfully disagree with a few of your suggstions/conclusions.

"A great CEO would build better cars for less money..."

Why should the target be to be cheaper? Almost all other brands, Honda, Toyota, BMW, Mercedes, et. al. cost *more* than US makes, yet led the US makes in sales.

Apple is making a booming business in a near depression selling MP3 players for $400 when you can get them everywhere else for nearly free.

Why 'cheaper'? Why not just 'better'?

"You would place all of your new facilities in the cheapest place possible..."

Sure, this kills the unions, but now leaves us with the question "Who exactly, will be buying these cars?" Without jobs, GM's (and the world's) largest market is bankrupt. There's no money to buy cars. How does shipping one of the country's largest employers overseas put purchasing money into the hands of the world's largest consumer?

Germany is *filthy* with unions, but seems to be doing better than most, even in this "downturn".

I believe these and other similar memes have led us to where we are today. "Make it cheaper!" "Move jobs to where it's cheaper!" "Cut labor costs at any cost" has done but one thing: make recipients of such "savings" richer and the consumer poorer. We're now seeing the very predictable end of that process.

Everyone thought that buying Chinese products at Wal-Mart "saved money". Now, we can afford to shop nowhere else.

Everyone is a huge fan of "Democracy", but for some reason the common belief is that only the rich "know how to spend money properly". The "power of the ballot box" is supposedly reserved to the plebe, but the power of money is always directed to the top.

Who would (and has 1945-1990) make for the better economy? A relatively small few who "know how to spend money best" or 300M prosperous "plebes" who are well-off and spend money often?

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