Too Little Too Late. The Death of the Big Three.

The U.S. automotive industry has been a frequent subject in the news lately in regards to its request for a bailout from the U.S. taxpayers. It seems that we may be on the path to reject this request and I am of the opinion that decision is the right one.

My heart goes out to the families of people whose careers are vested into the economy of the big three, but I’ve come to the conclusion that we CANNOT bail out anymore industries. I’m actually very regretful that the country already has pledged to do this for the banking industry. Not just because of the mismanagement of those funds we will most certainly see, but mainly because of how much this act will stifle our nations ability to innovate and grow faster than the rest of the world.

In the 1970s my family decided to move away from what was then the Soviet Union and come to the United States. Among the MANY reasons they had for doing so, one of the major issues was with the system of government at that time and how it greatly suppressed innovation. If you took company A or company B, or worker A and worker B, each entity had the same mindset. If they were to fail or produce less, their counterparts would make up for it. If they were to produce more and bring some kind of superiority to the marketplace, the government would distribute it elsewhere. So what you have in that situation is essentially a psychological handicap on being better. If you know you’re not going to be rewarded for doing some well, efficiently, and smartly, then it is likely you WON’T do it.

It would be ignorant of me to say that the plan to bail out Detroit would be a step in the direction of communism, but what I can say comfortably is that taking that action will without question not make that industry a better one. By granting these companies a stay of execution we will be extending their poor business model and stopping other and possibly better companies from springing up and taking their place.

In the end we have to remember that the demand of vehicles will not change regardless of whether the bailout happens or not. There is a specific demand right now and too many producers of vehicles for that demand. Someone is going to have to either go away or find a way to make vehicles that are great enough to raise the desire for new automobiles. That increase in innovation and efficiency is ONLY going to happen when we wipe the slate clean and start over.

Again, I don’t mean to promote the loss of livelihood for such a large group of people. They are in an unfortunate situation and one that they were put in by a poorly managed global powerhouse. My hope is that the Teslas of the world grow fast enough in popularity so that those folks with automotive experience have a new and better place to provide for themselves and their family.