Friday, June 12, 2009

Modern Medicine: Horse and Buggy Delivery

Recently I got a bill for $11.47. A tiny bill for a medical bill. But nevertheless aggravating. Not the amount—the fact that it came at all. If you ever have surgery or execute an estate, you will find nickel and dime bills like that coming in months after the procedure or death.
If you sell a house, you can pay off the last utility bills in reasonable order. You know what to expect, and that’s what you get. If you take your car in for some serious repair, you get one bill. Even if the mechanic had to send the vehicle out for some work he couldn’t do himself—you get a single bill for the repair job.
You don’t, for instance, get a bill for the parts. Then a few weeks or days latera bill for the labor. Then, further down the road, a bill for the paint. And then a bill from the specialist who wielded the paint gun. Or a bill for rent from the person who owns the building. You get one bill.
Not for a medical repair job you don’t. You get bills from the doctor, bills from the hospital and a bill from the anesthetist. Then come the $50 and $75 bills from specialists you never heard of, never met, but you are assured actually entered your room, tut tutted and left—while charging for the nine years in medical school that informed their tut tutting. These bills can trickle in for months.
But you should feel good about them! A perpetual game goes on. The doctor, for instance, bills for $700. The insurance company pays him $425. He adjusts another $200 down and you get billed for a mysteriously arrived at $75 co-pay.
If you call to question this calculation (just to understand it), the physician’s book keeper is liable to wax righteously indignant that you, you lucky fellow, got a $200 adjustment off what the doctor’s customary fee is. You will come away without a clear answer. How dare you question it in the first place!?!
(The uninsured, due to an inspired fit of medical and economic insanity, get billed for the full $700. In the cases where the hospital and physician are forced to write the whole matter off due to indigency, they then tack the full loss onto the bills of insured patients—so the next procedure may cost you $750, less an adjustment, leaving a co-pay of, say, $86.10.)
The entire system becomes madly expensive—and much of its expense rises out of an inefficiency that would make the proprietor of any backwoods auto body shop blush. The brutal fact is that much of the economic (accounts and billing) side of medicine remains deeply mired in the Nineteenth Century.
The business side of medicine is run like a small general store back in the 1880s. Physicians retain the mentality of jealously independent sole proprietors or partnerships back in the days an entire store was the size of a modern grocery’s produce section.
A few of us are old enough to remember when you bought your bread and donuts at a bakery, you bought your meat at a butchers, you bought your vegetables at a produce stand, you went to the drug store for your medicines and you went to the five and ten for your notions.
Then somebody came up with the clever idea of combining much of that into what was called a “super market”. You could buy all of your edibles—and a fair amount of your toiletries—all under one roof. One bill. One check. That was it.
Then a man I knew personally had the clever idea of combining food, clothes, hardware, shoes, automotive supplies, lawn and garden plants and tools, toys, pharmacy and household goods all in the same store—the super store.
He had his problems. No American bank would loan money for such a crazy idea. So he sent his son back to Europe to raise the money there (rumor even had it that it was laundered Mafia cash), and the first super store opened on 28th Street in Grand Rapids, Michigan, in 1962.
Walmart saw these Meijers stores and tried to buy the chain. Fred said no. So Walmart hired away some executives to learn the knack and took the superstore idea nationwide. You need a hammer? You need lettuce? You need a lawn mower? A dress? Film? A TV? Have to change your oil? It’s all there under a single roof—one bill, one check. You can even buy tires and have them installed.
The medical community hasn’t figured out the benefits of this system yet. Why not the GP, the specialists, the anesthetist, the podiatrist, et cetera, et cetera, et cetera under the same “super market” roof? All with one central billing department—one bill, one check.
To say nothing of me not having to get back in my car and drive miles across town to first this specialist, then that medical supply store and then the next specialist a few miles further on! The Walmart and Meijers superstores have been able to bring the price for my food and toys way down with this kind of efficiency of scale—why not the physicians?
Want to start saving money on medical care? Force the MDs into the modern world. Let them share extremely expensive equipment—just like there is one lift truck in my super store that moves cases of soup, boxed TVs and packages of toilet paper.
Bring the hospital into the same medical superstore. As part of one to start with. Let them share the billing system with the physicians and medical supply stores. Let them share the expensive equipment. Then let me walk out with a single bill—and write a single check.
That’s so rational it defies argument. Why hasn’t it happened? Because docs are cussedly independent like old time store keepers. And there’s a bit of snobbery. What urologist wants to share a practice with a mere GP or podiatrist? Or, God forbid, what cardiologist would?
There’s only one way to force this kind of efficiency (I suspect it would have tremendous MEDICAL benefits as well!). You need a single payer system (read government) who could force this change simply by refusing to allow MDs to charge for the luxury of each one having his own little office with his own set of expensive toys. Nope. We (the payer) are only going to pay ONE bill per procedure. If you get left off, you don’t get paid.
I’ve known a lot of physicians in my life (having worked for the US Public Health Service among other places). I’ve liked many of them, respected several. But I can assure you the one thing that can surely move a physician either to tears or action is the thought of losing money.
They’ll team up—and eventually learn to appreciate the convenience and savings—for THEM.
And I won’t get any more bills for $11.47.

Thursday, June 11, 2009

We've Removed Consequences From The Curriculum

We do our kids no favors when we raise them to believe there are no limits, no restrictions and no boundaries. I came face to face with this fact a week ago when an anguished looking young man came into a room where I was substitute teaching.
He was looking for the regular teacher. When I told him she was out for the day, he looked sicker than when he came in. He mumbled something about seeing her later and stumbled back out of the room. When I saw that teacher later, I asked what was up.
“He just learned that he may not be graduating next Tuesday,” she told me. Of course by then the invitations had been sent, his parents may have gone as far as to reside the house (I’ve known parents who did this for an “Open House”) and all was in readiness. Except the graduate.
I know that school. They spent four years warning him. The warnings got very serious In his senior year. But life didn’t get real to him until the day he looked at his grades and realized the long fantasized ceremony and party weren’t going to happen.
Many times I’ve looked at a particular knot of students who spent an hour with unopened books, leaving their assignment sheets untouched at the end of the hour, wondering what they thought was going to happen. Suggest that they do some work during class and the answer is: lol. They do, they literally “laugh out loud”.
Teachers eventually get quite cynical. They comment very blandly on the third or even half the class that isn’t passing this or that course. No amount of bonus pay for the teacher is going to make the kid who came into my classroom care—until he realizes the party is off. No amount of penalties inflicted on teachers is going to make that kid care—until it’s too late.
It’s time we adults ask, “What on earth have we done to this generation?” If they met an angry lion, they’d try and pet it. If pain is a protective mechanism that keeps us from really hurting ourselves, then certain kinds of fear are equally protective. Many kids have none.
They don’t fear drugs. They don’t fear sexually transmitted diseases (that can render you sterile or even dead). They don’t respect the power of liquor. In some neighborhoods they have no fear of weapons. They have no fear of failure in school. They brag about police records.
We’ve raised them to express themselves, to “feel good” about themselves (no matter what shape they may actually be in), and to believe they are absolute masters of their own fate—no matter how badly they shoot themselves in the foot.
The rights of every citizen are posted on school house walls. I often look in vain for any mention of the duties and responsibilities. The most elementary forms of common sense seem to be off the curriculum for too large a number of students today. (Like the kid in the same suburban school whose pants caught on fire because he stuffed a smoldering joint in his pocket before entering class.)
I cannot help but wonder if the matter of the two American reporters detained by North Korean troops isn’t a bit more of the same. After all, these young women were also raised as part of what has become the “What, me worry?” generation.
Let alone pet a peevish lion, they went to poke a stick in his eye. If you are fool enough to do such a thing, do it from a safe distance. Or at least at a border post where Chinese troops are liable to take a dim view of an incursion by North Korean soldiers.
Could it be that Laura Ling and Euna Lee actually believed the stuff that is written on school house walls about empowerment and entitlement? That the rights of an American to go anywhere and do anything are sacrosanct? That impinging on these American entitlements is unthinkable to anyone?
Are these two more sick looking young people who have suddenly discovered there are situations in which you do not walk away with a diploma? Sometimes the party may be cancelled, no matter how much you have prepared for it? It is not written on the walls of any classroom I’ve been in that sometimes you aren’t entitled to an “Open House” just because …. It should be.
I’m making no book for the North Koreans. They are obviously playing dirty politics with these two young women. Some have called them a “Mafia nation”. They seem to be. Kidnapping is part of their normal diplomacy.
But this reality alone should have warned the young women. It wasn’t just any lion they were annoying –it was a very nasty lion, one that plays by no rules, one that has gone rogue time after time. They should have been especially careful around such a beast.
It is just possible that we may have done them the disservice in our schools of inadvertently teaching them they didn’t have to be careful—around any kind of beast or danger. They are, after all, fully entitled Americans, aren’t they?
They’ve just learned that there are markets where that kind of currency has no value. They are in a market where a human life—a human future—is merely a commodity to be traded for something that is wanted. I suspect neither young women ever dreamed that she could be reduced to the status of a lowly pawn to be traded for something else.
We did them no favor if we didn’t make this clear to them as students. I’m not saying that the victims are at fault—I’m just suggesting that, for their own safety, we should warn potential victims about the very real dangers—and consequences—out there.
If they choose to ignore reality, there really isn’t a lot we can do after the fact—unless you want to send another half million troops back to Asia.

Tuesday, June 9, 2009

The Silence of The Court

On the very narrow ground that the Court did not find that the opponents of the sale of Chrysler had met the “burden of proof” standard to merit a full hearing of the Supreme Court, the Court turned down the appeal made by the three pension plans in Indiana.
In other words, the Court has not said which way it would have ruled—or might rule in a GM case if someone does meet that standard. It takes no stand on the question of whether or not there might be a valid case for blocking such a sale or restructuring—only that this particular set of complainants did not make a strong enough case this weekend.
It has merely ducked the issue in what may have been a fit of political and economic wisdom. I take back nothing of what I wrote a few hours ago about the court’s absolute power. It merely chose not to exercise that power in this instance.
The power is no more limited or answerable than it was this morning. The fact remains, one member of the court did block the sale for 24 hours. The full court could well have chosen to intervene and block it either permanently or until the whole issue was moot.
Today’s action was a bit like a man showing you that he has indeed a dangerous weapon in his possession—but he chooses not to fire it, this time. I imagine that the Obama White House is breathing a lot easier tonight.
Chrysler may not survive a merger with Fiat. It nearly didn’t survive one with Daimler-Benz. But at least it has a fighting chance. The Court has allowed it to go on breathing for at least a bit longer

Presidents Propose--The Court Disposes

A few weeks ago I reminded you that in picking a replacement for a Supreme Court Justice (Souter, in this case) a president makes one of the most important political choices in his career. Obama has made his choice—Sotomayer—Congress will began the bitterly politicized process of confirming or denying on July 13.
The importance of what is happening was underscored this past weekend. A good part of President Obama’s “bailout and get America’s boat moving again” is predicated on his ability to salvage our auto industry with its masses of high paying jobs and its vast periphera of dealerships and part suppliers.
He and his minions had a deal all worked out for Chrysler. Everybody would take a hit; what was left would be sold to Fiat as a supposedly viable automobile manufacturer. All was ready to roll by June 15—when the Court said, “Not so fast”. And everything stood still.
This is a classic situation in which nine men, unelected, appointed for life, can step in and act with more power than the president and congress combined. They spoke on behalf of three pension funds in one state—Indiana.
The pension funds stood to lose about six million dollars—out of the billions and billions of losses and endangered funds involved in the Chrysler restructuring. A drop. But, they argued, the present Chrysler bailout created and forced by the administration’s carrot and stick use of the Congressionally approved bailout funds, was unfair to small investors and holders of Chrysler debt.
In short, the pension funds felt that they could get more of their money back by forcing Chrysler into total bankruptcy (Chapter seven) in which the company is dissolved and everything is sold at auction. So much for jobs. Instead of a few hundred car dealerships, possibly all current Chrysler dealerships down the tubes. What about Chrysler suppliers?
But the Indiana retirees would receive possibly fifty cents on the dollar instead of half that. (An understandable concern in this age of collapsing retirement funds and endangered pension plans.) So the funds cried foul and the Supreme Court chose to hear their plea.
In an assertion of raw Supreme Court Power, nine men tipped Obama’s carefully wrought restructuring plan on its head and sent everybody back to “Go” without collecting $200.
Now, the Court may choose to allow Obama’s plan to stand as is. It may declare it unfair and force a complete reworking—which could drive Fiat right out of the picture if the terms are less favorable. The point is: no one knows what it will do. It has the power to do anything.
There will be no appeal. Just as there was no appeal back in the 1930s when the infamous (or famous, depending on your political persuasion) Nine overturned facet after facet of Roosevelt’s New Deal. FDR finally became so outraged that he resorted to a desperate tactic.
He asked Congress to create six more seats on the Court which he could then fill with justices favorable to his legislation. Realizing that this was a serious threat, the Court quickly reversed itself and began ruling in favor of New Deal legislation. (The switch in time that saved nine.)
Historically Roosevelt is portrayed as having egg all over his face from this incident (Congress turned him down), but we still have Social Security and the Fair Labor Act today.
The point is that it took that kind of a drastic threat to force the Supreme Court to bend to the will of the elected officials of America—and the American people. Obama is not likely to try another “court packing scheme” no matter what the court does to his proposals.
The Court knows this. It is pretty much free to do as it pleases. Which leaves Obama, Congress and Chrysler (and Fiat) waiting in total uncertainty, an uncertainty no one thought of only a week ago.
And, as everyone is asking, what impact will a court action have on the even bigger General Motors restructuring. Also back to “Go”? When the Court is done, will we have nothing left as an auto industry but Ford? The answer lies in the hands and minds of the Court.
This is the sort of “hard case that can make bad law”. Thousands of concerned and potentially impoverished pensioners in Indiana may be benefitted, but what of millions who depend on the auto industry for income and tax base?
In the ancien’ regime (Europe before 1789), kings had this sort of arbitrary power. The continent was drenched in blood before they were forced to listen to the peoples’ representatives in Dumas, Reichstags, and Assemblies.
Perhaps it isn’t such a good idea to allow one branch (unelected) of government to wield such unrestricted power over the other two branches. It would take courage. In many people’s minds the Court holds a place of respect comparable to that held by Tsars, Kaisers and Kings. To challenge it will risk the disapproval of a large number of loyalists.
But perhaps it is time to think about it.

Saturday, June 6, 2009

Lessons From D-Day

By the time you read this, sixty-five years ago today, we had finally secured a tiny beachhead on the shores of Western Europe. We would be pinned down there for six more weeks before we could break out into central France.
The first thing Americans should realize about D-Day—and all of World War II—was that it was a joint effort. Our major contribution to the entire war was industrial. Not in the least to insult the gallant men and boys who fought and died, but it would be very fair to say that Rosie the Riveter did more to win that war for us than all the GIs in uniform.
Russians rode American tanks all the way to Berlin. They fired American weapons and ate American Spam. (They thought it was wonderful stuff.) They lost twenty million dead and held down most of the German army, but their heart’s blood flowed north in an endless line of American trucks from the southern coast of Iran.
Those truckers—by keeping Russia in the fight—did as much to win World War II as any military unit. As did the naval convoys around the coast of Norway, braving Arctic storms, German torpedoes and aerial bombs that also poured supplies into Russia.
British and French troops who fled the continent after Dunkirk, four years before D-Day, were immediately rearmed with American rifles and cannon. As Churchill put it, without the American supplies the British would have been forced to use empty beer bottles to repulse German invaders during the Blitz.
(After his marvelous speech, “we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills, we shall never surrender”, Churchill put his hand over the microphone and said, “We shall hit them over the head with beer bottles as they crawl ashore. We’ve nothing else to work with.”)
Even Tito relied on American supplies air dropped into Yugoslavia where the Serb partisans were engaged in desperate war against a huge German army augmented by Bosnian Waffen SS. American cargo planes regularly landed on empty fields in occupied France bringing in munitions for the underground resistance.
A huge fleet of American cargo planes flew guns, ammunition and supplies over the Burma mountains to keep the beleaguered Chinese in the war against Japan. Philippino guerillas got their supplies with stickers promising that “I shall return”.
We had begun preparing our fleet for World War ten years before D-Day. Long before war was declared a vast American naval umbrella covered most of the Atlantic, firing on German U-boats that tried to stop supplies from reaching England. (Hitler, not daring to shoot back, stuck strictly to the laws of neutrality —and we had a free pass until Pearl Harbor.)
(It was an American coast guard cutter on a “routine” mission near the English Channel that sighted the German battleship Bismarck and notified the British of its location so that they could sink it.)
Our factories won that war. A Japanese industrialist got hold of some pirated figures on American ship building in April, 1942—only five months after Pearl Harbor, before Corregidor surrendered in the Philippines—and he was so stunned at the scale of American production he immediately began planning for life after the war in a defeated Japan.
Rosie the Riveter should have been standing on the Normandy shore with President Obama. She must be in her eighties now, too. Has anybody made an effort to track the number of veterans who manned our factories, how many are still alive, how many die each year?
They made it possible to fight a very smart war with relatively few casualties and no damage at home. We paid other people to do most of the dying. The British lost millions; the Russians lost tens of millions, the Chinese had huge losses. We lost barely a third of a million.
As late as August, 1944—three months after D-Day—the British Empire had more men fighting the Axis than we did. England took her money and built new factories all over the Depression wracked United States because we were out of bombing range.
We dominated the planet with those British-built factories for decades after the war. No nation in recorded history has enjoyed such a preponderance of power as we did in the 1940s, ‘50s’ and ‘60s. That power, wealth and rank came out of World War II.
By contrast, Britain was bankrupt, unable to hang on to her empire. The French could only helplessly watch their Empire drift away. Holland lost her empire. The Russians were ruined (imagine the US with everything burned down east of the Mississippi), China was too weak to withstand the Communists, Belgium’s empire slid away—only America stood tall, powerful and rich.
That glorious American future all turned on D-Day. The men on the beaches—and the men and women who built their munitions—won a future for their nation no Roman Emperor or British King could ever have imagined.
D-Day was the hinge upon which the door of the future turned. It is fitting that the American president who faces the next door to the future was in Normandy on the Sixty-fifth anniversary of the last one.
He faces a world in which we must do our own bleeding and dying—increasingly alone and without reliable allies. Our industry is moving off-shore so rapidly we cannot count the losses. We couldn’t “do” another World War II.
Salute the old; look forward to the new. Understand what created the old; try to see what we can do wisely in the new—leaning on our comprehension of the past. For the first time in sixty-five years we actually NEED other people.
We do need a little help from our friends. We first may need to MAKE some friends. Buy them, flatter them, whatever it may require. D-Day might actually a very good moment for introspection. If we got to know ourselves, what we do well, what we don’t do well—this would be the best lesson we could learn from that glorious day so long ago.

D-Day: So Important, So Long Ago

Today was the longest day. Sixty-five years ago. It was supposed to be the fourth of June—and the Germans were ready for us. We tried again on the fifth—and the Germans were still ready. On the sixth they all stood down, the weather was too bad. We had better weather reports—we slipped in through a few short hours lull in the storm.
Rommel had even taken a vacation—he wasn’t near the beach. Hitler was napping—no one dared to wake him to get him to free up the panzers for a counterattack. The Russians were doing their bit by holding down two-thirds or more of the German Army, which they did for the whole war.
Even so it was a close thing. By late afternoon the Allied high command was seriously considering pulling all the troops off the beach and calling it a failure. Ike had a speech in his pocket in which he admitted to defeat and took all the blame.
We won through—and on to Paris, the Rhine, all the way to the Elbe and southeast as far as Prague. It was the last war we won (unless you count the invasion of Granada). Even it had its political detractors. Eisenhower was accused of being a communist stooge because he didn’t go all the way to Berlin.
Oh my. Ike was clever enough to realize that when you have two armies (Russian and American) rolling hell for leather straight at each other, shooting at anything that moves, it is very, very tricky to keep them from accidentally shooting each other to pieces.
So he and the Russian high command picked a nice big river for both armies to stop at. “When you see lots and lots of water, don’t shoot at ANYTHING on the other side.” That’s an order the dumbest private can understand.
It wasn’t a communist plot; it was a sane effort on both sides to keep World War III from breaking out before World War II was over. And it was a wonderful victory. It was followed in four months by an equally important surrender in the Pacific. We were ecstatic.
My daddy, my wife’s daddy and a few uncles and two of my older cousins were coming home! No more yellow stars on living room windows to tell the passerby some boy who lived here would not be back home forever more. The rows of white crosses would not continue to grow.
That Victory in Europe (VE Day) all started on the beaches of Normandy. Had the invasion failed, we would live in an unrecognizably different world. Would the Russians have driven all the way to Paris? Would the “Soviet Block” have included every country in NATO but Italy and Britain?
D-Day HAD to succeed. There’s an outside chance that failure might have led to some sort of negotiated peace with Germany—if only to keep the Russians out of western Europe. (The Germans had played that role for over a thousand years—it would have been nothing new to them.)
Then the Nazis might have stayed in power; the death camps might have gone on killing. Can you imagine NATO with Nazi Germany as a member? Had D-Day failed, it might possibly have happened. We owe a lot to the young English, Scotch, French, American, Polish, Canadian, and Northern Irish troops who bled and died to create the world we live in today.
We call it the “good war”, but to the boys who fought it, it was as terrifying, brutish and deadly as any other war. If you asked an American boy what he was fighting for he was liable to say, “A piece of mom’s apple pie.”
The men on the front were no more epic, noble or committed to a glorious cause (democracy, the four freedoms?) then front line troops in almost any war. It was a frightening, exhausting, dangerous job, and they did it well enough to win it. We owe them.
They had the awesome resources of American industry behind them. A storm came up about three weeks after D-Day. It destroyed so much American equipment that, as Churchill points out, had any other participant in World War II lost so much material in a single day, they would have forced to sue for peace immediately.
We didn’t miss a step. Our factories supplied the boys on D-Day, in Italy and the Philippines, the British, the Russians, the Free French, all of the underground operations, the Chinese and anyone else who had a rifle pointed at Japan or Germany. For the whole war.
When we broke out of the D-Day beach head in July, German officers watched in awe and envy as the masses of American bombers flew in support of unending quantities of American tanks, trucks and jeeps. They had never begun to have such resources. Not ever.
The boys who fought at D-Day are old men today. They and the other veterans of our last “good, victorious war” are dying at the rate of a thousand a day. In not long there will be as few of them as the tiny group of Civil War veterans I remember seeing as a boy.
The factories that won World War II are falling down, too. One of the biggest foundries in this area now has a retail mall sitting where it once stood. The railroad tracks in downtown Muskegon still run along the lakeshore where dozens of foundries stood, making engine blocks for tanks, and trucks. They are all gone.
(I sometimes wonder: if we ever again get into a war where huge amounts of trucks and tanks are needed, are we going to import them from Japan and China? Not to worry? Penske has bought up the distribution—NOT the manufacturing capabilities, they’ll go to someone else—chain for Saturn. Perhaps Renault will build them. In a war, no doubt France would be delighted to go on shipping us trucks and military vehicles. We hope.)
But for today, we can celebrate one of our last unambiguous victories. The old men and the young president gather before row upon row of white crosses. For many it may be their last salute. So salute them back—we owe them.

Wednesday, June 3, 2009

Still More This and That

Right after the Air France Airbus went down in the Atlantic on its way from Sao Paulo to Paris, several talking heads appeared on television to assure us that today’s aircraft simply cannot be shot down by turbulence or lightning strikes.
One of the experts opined that there was at least a 50% likelihood that a terrorist’s bomb had brought the plane down. It was SO unlikely that a storm could have done it. Of course, today we are told that a similar flight was threatened by an anonymous phone call in May. It might have been a bomb.
Or it might have been an all too human hubris. All the experts assured us that the Titanic wasn’t sinkable, either. What comes to my mind is some dialogue common to episode after episode of “Star Trek”.
The Enterprise would be under attack by Klingons, Romulans or some space/time anomaly. The order would go out, “Divert all power to the port shields”. And we would all wonder what might happen if somebody decided to shoot at the starboard side.
The Air France plane faced a massive, violently active storm. What if three or four major strikes hit one side—and the onboard computer reacted like the crew of Enterprise? Everything was momentarily diverted to the injured side. Then—perfect storm—three or four major hits came in on the other side.
I’ll venture no plane made could survive that. A fluke, no doubt, but a very credible fluke. A jolt with enough power to light up much of Manhattan hits an unprotected fuel tank—Amen.
Storms—like the Titanic’s iceberg—are irrational. They can step outside of computer models and do things we could never plan for or protect against. They can be huge—with power that doesn’t fit any of our contingency plans. Human ingenuity may NEVER come up with a final guarantee that something is made that cannot, ever fall prey to nature’s violence.
It is hubris to think we can. The best remedy for a storm is NOT TO FLY THROUGH IT. Even if this means turning around to Brazil. I know that costs money. But so does the liability for hundreds of dead passengers and crew members.
AUTOS: WHISTLING IN THE WIND?
Somehow there is the expectation that General Motors will come out of bankruptcy back at fighting weight and, like Sampson, it will smite all of its competitors—thus paying back the taxpayers the $50 or so billion it owes them.
Nice thought. What’s going to make the East and West coasts—which have long ago given up American cars for niftier Japanese and German cars—fall back in love with GM again? It may be a few decades too late even to try. Gen Y consumers apparently have no feelings for GM at all.
That’s the next market. Lose them and it’s like watching a dying church—where everybody inside has gray or white hair. Not a lot of future there. Another factor—I just bought gas for $1.95. It’s gone up fifty cents or more in a few weeks. That’s no way a plus for American car makers!
“BusinessWeek” brought something to my attention this week. Planetary auto sales right now are at about 55 million. World-wide auto production capacity is at 90 million. There is going to be some savage discounting and competition to start using that excess capacity!
General Motors is really not in very good shape to start wrestling in that kind of arena. It will begin the race, coming out of bankruptcy, owing—and having to make payments on—over $50 billion in debt to the government. That’s not just an albatross around the neck; that’s a five hundred pound albatross.
Those payments have to be made before a cent is paid in wages or a dime in raw materials and benefits. Let alone profits. Ouch.
There is no guarantee that GM, once out of bankruptcy will survive. Many businesses that emerge from the process don’t make it more than five years or so.
CHRYSLER/FIAT?
Now Chrysler will have all sorts of little Fiats to sell at its dealerships. And why should Americans like Fiats more than they did thirty years ago? I remember riding the circle around the Coliseum in Rome some decades ago. The cars all looked so incredibly tiny.
Then I saw what seemed to be a large vehicle. I looked again—it was a Volkswagen bug. Fiats just didn’t make it here. Furthermore, it doesn’t look like Fiat is going to win out on the bidding for Opel either. So it will just be Fiat and Chrysler—with a little help from Jeep.
Ouch. And they have their debt load, too.
Fiat apparently hasn’t made up its mind whether or not to keep the Chrysler brand on the road. What they seem to be buying is a chain of dealerships. That’s no vote of confidence.
Will the American auto industry go the way of television manufacturing, shoe making, the garment trade or, increasingly, computer manufacturing? Nothing’s impossible. Ford, anyone?