11.17.2008

The South is Detroit's automotive rival

Comment: an interesting perspective that I had not previously considered.

An emerging Southern view of the Detroit bailout

Excerpts:

The jet-black, $37,500 Borrego sports utility vehicle showed up in the governor’s Capitol parking spot last month, a gift to the state from the South Korean car maker - which is now building a $1.2 billion plant in west Georgia.

...

In its own way, the governor’s new ride may be as meaningful as the demolition of the Ford plant in Hapeville, or the abandonment of the General Motors plant in Doraville.

For behind the philosophical back-and-forth over government intervention, scheduled to begin Monday in the U.S. Senate, is a cut-throat, economic reality: the South has ambitions of becoming Detroit’s rival.

And a federal dollar that artificially props up manufacturing on the northern end of I-75 is a dollar that hinders the creation of new economic models downstream, some Southern politicians maintain.

Last week, Gov. Mark Sanford of South Carolina argued that the refusal of the federal government to bail out the Pittsburgh-based steel industry in the 1970s ultimately led to the establishment of new steel mills in the South. Which permitted the birth of a new facet of the auto industry - highly automated, mostly non-union, and foreign-owned.

“There wouldn’t be a BMW in South Carolina or a whole host of other auto industries scattered across the South, because we would have just kept them all in Detroit,” the Republican said.

Georgia’s Kia plant is scheduled to open next November, employing as many as 2,500 workers. The site is located within U.S. Rep. Lynn Westmoreland’s 3rd District. Westmoreland, like other House Republicans, voted against the $700 Wall Street bailout.

He’ll vote against a Detroit rescue as well - on the grounds that it would create a slanted field of play for the workers he’ll soon represent.

6 comments:

  1. Hi:

    I am in the automotive industry. The article is timely and accurate.

    The current bailout proposal for GM is now approaching $50 billion. Virtually all of which will go to the UAW for their lifetime pension and health care. A foolish concession the Big 3 made to the Unions and are now reaping the whirlwind over.

    IMO and sadly the bailout will be approved because the Dems have control and they want to appease the radical Union leadership.

    IMO, the only reasonable solution is for the BIG 3 to file for Chapter 11 bankruptcy protection, reorganize under court supervision and approval. This would give the manufacturers the tools and teeth to get the UAW under control.

    This is what United Airlines did and it as successful- painful process, but successful. It saved the company and the jobs if its employees.

    The BIG 3 should file and get it over with.


    LM

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  2. Hello, Lou!

    And welcome aboard. Sometimes I wonder if I'm the only one who actually reads this place. It's nice to see you here and to see bb chime in more often lately.

    I don't know you, but I've seen you on some other places. I would probably disagree with you about 100% on another topic (to remain nameless) on another board (to remain nameless), but that's ok. I'm sure you're a great guy overall.

    This story seems to change daily, and sometimes by the hour. I think they'll get bailed out for sure. I don't think it's a matter of if as much as a matter of to what degree. Here's the latest (as of today): http://finance.yahoo.com/news/Aid-prospects-darken-for-apf-13601070.html

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  3. JP, did you know that you have quite a history behind you, being that you're from Minnesota? Right now that state is in the news for the extremely, and yet to be determined winner of the Senate race between Coleman and Frankin. But you have a courageous Congressman from your state named Charles Lindbergh, father of the famous aviator. Jr. seems to have surpassed Sr. in history and most Americans have all but forgotten about Senior. In my humble opinion, Lindbergh was courageous and did the right thing by opposing the Federal Reserve Act of 1913. I have no idea, but my guess is that 90-something% of Americans fail to realize this and couldn't care less even if they did know. Bankers and money run the world essentially, in my opinion. I wonder what he would have thought of bailing out the Big 3?

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  4. Wow, check out some of Lindbergh's statements. This guy was pretty insightful! (again, in my opinion)

    (You can find this at Wikipedia, amongst perhaps other places)

    "This Act establishes the most gigantic trust on Earth. When the President signs this bill, the invisible government by the Monetary Power will be legalized, the people may not know it immediately but the day of reckoning is only a few years removed.... The worst legislative crime of the ages is perpetrated by this banking bill."

    "The Aldrich Plan is the Wall Street Plan. It means another panic, if necessary, to intimidate the people. Aldrich, paid by the government to represent the people, proposes a plan for the trusts instead." - The Aldrich Plan (History of central banking in the United States) was a forerunner to that which spawned the Federal Reserve.

    This Lindbergh guy could be alive today and be just as relevant, or even more so, than he was back then.

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