Privatizing the AUTOMAKERS to solve their dilemma…

Privatization has been touted as a cure to the inefficiency of government run institutions for many years now, because having a vested interest in the profits or losses of any program is key to the success of those programs.  Private schools, as the Grand Traverse Academy and others like it throughout the state and nation,  have operated on a smaller per pupil cost than public schools and produce better educated young minds.  And the Mackinac center has a range of articles documenting the successes of privatization as well.

So why not the Automakers?  <insert Record scratch here>

OK, perhaps I should be a little clearer…  Government operational control of the automakers should CEASE to achieve the desired result of a healthy manufacturing base.  Hmm still not getting through ..

Consider a simplified journey from concept to implementation as it relates to creating and running a business:

Stage 1. The finished product (in this case, a really cool car) is imagined.

Stage 2. The concept is shared with prospective investors, who determine if the risk is worth their stake.

Stage 3. The investors allocate a specific amount of working capital to proceed, and select a chief operating executive.

Stage 4. Based on the CEO’s best assessments, new hires are made, materials are purchased,  and the assembly environment is built.

Stage 5. The finished product rolls off the line, advertisments are made touting its superiority, and deals are made with consumers, based on their ability to buy, and the desirability of the product.

Stage 6. The business succeeds and makes a profit, or it fails and those who are participant on any level move on to other endeavors.

Business in a nutshell.  You wouldn’t get past stage 1with a “squirrel opener,” or “Wax steak knives,” as the obvious return on investment wouldn’t buy a snowball in Alaska. But we can all imagine right?  But an automobile, something tangible, and with real usefulness can certainly attract those who would lay out a few bucks of their own hard earned cash to make happen.

But there is a problem.  At some point as any business becomes large enough, it falls under government rules which hamstring the ability to craft tight margins and still remain viable in operational, and innovative terms.  The government through carefully developed legislation has maximised its influence in large business dealings and leaves little doubt that it has the last say.. even as a “silent partner.”

Then add to this, the destructive element of the UAW.  The inability for an employer to freely bargain with the individual elements within its environment is truly one of the major stumbling blocks any employer must face when doing business in this “free country” of ours.  The populist moral superiority of the “right” to collectively bargain somehow trumps the individual right in a way which must cause the flowers to wilt over our founders graves. Business, through a protection racket by Government, controlled by Union interests can do little other than accept risk and innovate.

The ultimate control of the automakers is the NLRB, which given a very modest prodding by the UAW feeling particularly “aggrieved” would assign the full force of government to “punish” them for electing to operate as a business should,  without regard to anything but making a profit for its owners. This is not to say a business should abuse its workers, but without the ability for instant decision making, ANY business large or small is prone to the inefficiencies in a way that should be the monopoly product of government.

The automakers have taken orders for too long, not from the stockholders, but from those who promote the abusive selfserving tentacles of a big government presence.  The automakers have not in the last 40 years been truly private, and in a more appropriate use of the term “coming home to roost” we see the chickens for what they are.

Tags: automakers, government, Privatizing, UAW