Bail or not? _____ (The $25,000,000,000 per year question)

Do Americans drive what they want or do they drive what American marketers make?

Ford Motor Company's market capitalization (just one of the Big 3- General Motors, Chrysler, and Ford) is only $6.3B, yet the company is allowed to create losses of $12.7B in 2007 (about $1900 per auto) and accrue a debt of $170B. In a normal capitalistic market, this could never happen. Making the wrong product mix is purported to be one of the many failures of an otherwise successful marketing machine. But in a socialized economy, huge government subsidies and incentives allow the impossible to happen over and over again.

Ford's MD&A in the 2007 10k lists a dozen reasons for poor performance, starting with excess capacity with one analysis discovering that global automobile production is only producing at 80% of capacity. The market saturation and other economic variables dramatically reduce prices.

The U.S. has a habbit of sustaining the Big 3 executives similar to socialist governments such as Russia, China, and France which also generally produce inferior vehicles. The difference is that Americans are led in fear and encourage the government subsidies to create the artificial economies for the vehicles and its workers.

Abuse of credit allowed the Great Depression to happen in the 1930's and is a culprit for today's economic downturn. Who would lend an entity $170B, when the company cannot even turn a profit? Why are creditors lending Ford money, when the failed CEO, Alan Mulally, is paying himself $21.7M? Why would the U.S. 'lend' this corrupt model another $25B?

This is just an example of one company and one executive, there are three companies with dozens of executives stealing billions of dollars of investments. UPI reports the Big 3 are losing up to $3B per month. The workers are no better off and the consumers are no better off. The investors have totally lost their money by mislabeling the risk of the blue-chip industries and the taxpayers see no results from the continued stimulus funding.

American corporations are not efficient. The average cost of each worker on an American car is $77/hr, while only $46/hr for leaner companies like Nissan, Toyota, and Honda. Are the foreign corporation auto workers paid less? In some cases, it's the same United Auto Workers (UAW) making the same wage assembling cars for the different companies, but the corporate overhead structure is entirely different.

Will a little stimulus create a turnaround? Toyota, the largest automobile producer in the world, has $100B in cash. Among the many lessons to be realized in American culture are just-in-time manufacturing leading to efficient made-to-order and reduced inventories, six sigma defect control, supply chain management, and cash-based investing. American companies have scofflawed this end-to-end solution since the 1970's, because they are subsidized (because they can)!

Still want to bank on better days by pulling out your credit card?

Just like the steel industries of the eighties, the auto industries over-commoditization has evolved beyond the current American model to produce profits. Sustaining American automakers is a sentimental act of an identity crisis; American pride needs to move on to the 'next' big thing. Further subsidies to automakers yield an unsustainable way of business where automakers pay dealerships to take unwanted inventories, grant 0% interest loans to high-risk consumers, create the appearance of sales, all to keep executives and shareholders wealthier.