Thursday, May 14, 2009

564 Defunct U.S. Motor Vehicle Manufacturers

There's an interesting Wikipedia listing of the 564 "Defunct Motor Vehicle Manufacturers of the United States."

More than 500 American automobile manufacturers have failed, or were acquired, over the last 100 years for one reason or another, primarily due to the Schumpeterian forces of "creative destruction." As far I know, none of those 500 defunct auto manufacturers asked for, or was granted, government assistance, or received a government (aka taxpayer) bailout or loan. The now-defunct automakers (like Studebaker, see the 1953 Commander model pictured above) probably went through the bankruptcy and liquidation process like thousands of other firms that have not survived in hundreds of different industries over the last hundred years.

Q: Why should there now be an exception for GM, Ford or Chrysler to get a government/taxpayer bailout when none of the 564 defunct companies received similar taxpayer assistance?

17 Comments:

At 5/14/2009 5:34 PM, Blogger Jack McHugh said...

Still love that Avanti.

 
At 5/14/2009 6:01 PM, Anonymous Anonymous said...

because the unions donate to the democrats.

 
At 5/14/2009 7:23 PM, Blogger 1 said...

"Q: Why should there now be an exception for GM, Ford or Chrysler to get a government/taxpayer bailout when none of the 564 defunct companies received similar taxpayer assistance?"...

How many of those other now defunct auto companies had the heavy hand of federal government interference that cost us all more money than necessary for the last forty years?

 
At 5/14/2009 7:48 PM, Anonymous Mika said...

For starters, because they are major landmark American industries that employ thousands of our citizens and have made a major contribution to our GDP and balance of trade, and are our ONLY remaining auto manufactures. Major, world-player countries make their own cars.

 
At 5/14/2009 7:55 PM, Blogger Mayfield said...

Mica,

Why are you so eager to point a gun to my head, take my money, and then give it to an inefficient, ineffective, incompetent corporation?

Also consider that there are thousands of Americans working in the US making Hondas, Toyota, Kias, etc.

 
At 5/14/2009 8:14 PM, Blogger bobble said...

"Q: Why should there now be an exception for GM, Ford or Chrysler to get a government/taxpayer bailout . . "

i agree with you about bailing out the auto companies.

but, they have received chump change compared to the amounts handed over to banks and AIG, yet you seldom mention it. does this mean you think bailing out wall street is a good use of taxpayer money?

 
At 5/14/2009 8:21 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 5/14/2009 10:00 PM, Blogger Patrick said...

From my new favorite book:

"They refuse to recognize that production is not a private choice, but a public duty. They have no right to fail, no matter what conditions happen to come up. They've got to go on producing. It's a social imperative. A man's work is not a personal matter, it's a social matter."
-Eugene Lawson
from "Atlas Shrugged"

 
At 5/15/2009 9:02 AM, Blogger Marko said...

Because this is not a bailout of big car makers, but of big unions.

 
At 5/15/2009 1:32 PM, Blogger sethstorm said...

Why are you so eager to point a gun to my head, take my money, and then give it to an inefficient, ineffective, incompetent corporation?
Wall Street did that to us and we didn't object. Why should we object with Detroit?

Otherwise:

You're pointing a gun and forcing my options to be:

* a car that resembles a golfcart and has less performance per dollar than Detroit's cars

* an exotic car that is well over $60k and still suffers from performance per dollar issues.

While I might be able to find plenty of affordable behemoths now, they will eventually end up where 60's muscle is now - antiques. No Japanese brand, no Chinese junk, no Korean copy, no German engineering, or any other brand has been able to match Detroit in delivering US-style cars at US-style prices.

When those countries can make cars that are every bit Detroit in muscle and affordability, then they can talk about US workers building US cars. Germany and such have only come close, missing only in affordability.

Otherwise, they're just assembling foreign designs with US workers.

I never liked K-cars, but that's what our future will be if we take the automotive industry out of Detroit. Except this time, they'll be full of Chinese gadgets to distract us from a shoddily built/performing engine.

In short:
If you're a foreign automotive company, start learning how to make cars that are indistinguishable from their Big Three counter parts in price, performance, and size.

 
At 5/15/2009 1:47 PM, Blogger bobble said...

marko:"Because this is not a bailout of big car makers, but of big unions."

i get it. i already agreed the car makers should go BK.

but, you're apparently OK with $700 billion tax dollars [requested by repubs, btw] going to failed financiers. why is that?

 
At 5/16/2009 10:33 AM, Anonymous Mika said...

Bobble is right. Why no indignation about substantially larger gifts to wall street bankers and AIG - the ones who caused this mess - with no strings attached? Even floor sweepers at GM had to make wage concessions, but did anybody at AIG? At least manufacturers create something tangible(more than their own wealth) and employ large numbers of our citizens. Investment banks didn't build this country and create its middle class, the cornerstone of the country's success. The double standard is disgusting, but peoples' refusal to perceive and condemn that double standard is even more so. Clearly, we have here a prejudice.

 
At 5/17/2009 8:42 PM, Blogger Mayfield said...

I was opposed to the Wall Street bailouts as well. As the post was about Detroit, I did not think it necessary to discuss the Wall Street bailout.

Bailouts=Bad.

Capitalism is about profit and loss.

When the government subsidizes loss and nationalizes profits, we no longer have capitalism.

Why would the foreign makers want to copy Detroit?

I would choose a Tundra over a Z-71 or a F-150.

I would choose a Maxima over what ever Ford and GM have in that class.

I would choose an Accord or Civic as an entry level car over the American counterparts.

The only American car I would even consider buying is a Corvette.

However since GM got in bed with the government, I am now leaning towards a 370Z.

 
At 5/18/2009 11:00 AM, Blogger chartguy said...

sethstorm does not get it.

If Chrysler and GM made cars that people wanted, at a better price, they would not be failing. People are choosing other brands.

Ford screwed up about twenty years ago. They realized it ten years ago, and did what they had to do. They closed dealers that didn't make sense, they started designing cars that people wanted, and they built plants in places that the UAW didn't control (e.g., Brazil). That's why Ford is not asking for bailout bucks now.

The point is not what the problems with the automakers are. The point is that the market is deciding which automakers should survive. Government interfering with that process would be like keeping Neanderthal man alive, because evolution is too harsh. Cars won't get better if car makers are not allowed to fail.

 
At 5/18/2009 1:38 PM, Anonymous Alice Lillie said...

Companies come and companies go. In a free market the consuming public decides which companies survive and which die. That's how it should be. How well you do depends on how well you serve your customers.

But when the government steps in and penalizes success and rewards failure this only hurts everyone (except the power elite, of course) in the long run.

Our monetary policy is really at the heart of all the problems. See my blog at:

http://www.alicelillieandher.blogspot.com

 
At 5/18/2009 2:22 PM, Blogger Richard said...

"Major, world-player countries make their own cars."

Like the Trabant.

 
At 5/18/2009 10:59 PM, Anonymous Mika said...

"If Chrysler and GM made cars that people wanted, at a better price, they would not be failing."

That is a blatant and often repeated myth. Until the $4/gallon gas, the public only wanted SUV's and pickups and American automakers supplied them. Foreign companies then scurried to follow suit. Then, overnight, when gas went to that $4/gallon, the public claimed to want fuel efficient cars. Now that it's back to $2/gallon, they have since lost interest in the hybrids.

ALL auto manufacturers - both foreign and domestic - are experiencing plummeting sales because of the economy and a fickle buying public.

 

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