A simple plan for Detroit

http://bitgain.com/blog/permlink/12-a-simple-plan-for-detroit

by evaneykelen • 18 years ago

6 4 18 years ago

This is outrageously stupid.

First, the idea that the auto companies are going to stop producing cars in bankruptcy is false. Read up on Chapter 11 (http://en.wikipedia.org/wiki/Chapter_11).

Everything else is just plain silly (even in the bizzare world in which Detroit automakers do collapse). Hacker News deserves better than this.

mdasen• 18 years ago

I just want to point out some flaws:

1. Democrats will hate it. Because the unions will hate it. The unions get the average worker $65,000 per year plus benefits. They don't want to give that up because it's an awesome average wage and the benefits are fit for a king.

2. "I’m pretty sure the costs of paying for food, clothing and shelter are much lower than the proposed, but failed, 15 billion." Let's do a calculation. GM alone has 142,000 workers. A modest salary for a single person could be as low as $10,000. That's $1.42bn in the first year. Really, the salary has to be at least $30k. That's near poverty for a small family. Worse, these workers have been spending like they're making $65k, maybe $100k. You're pulling the rug out from under them. Anyway, at a minimum it's $4.3bn in the first year for GM alone.

3. It would create shortages. Prices would spike like the US has never seen before. GM sells about 4.5M vehicles a year to Americans. Toyota sells 2.3M. So, GM is selling about double the vehicles in the US as Toyota (so much for your theory of cars that don't sell well). No one could make up that number of vehicles should GM, Ford and Chrysler suddenly cease making cars. Prices of cars would be out of control. All of a sudden, you have a population that wants to buy 7M vehicles with only 2M for sale.

4. Most people can't engineer anything. An assembly-line worker will not be able to engineer something.

5. Car factories are designed to make cars, not solar panels in the same way that a screwdriver can't access the internet.

6. Engineering something takes a lot of time. To make a car, it might take the better part of a decade with a highly skilled team. Well, I'm sure that GM with its engineers and focus on the Volt has just been stalling. A team of 50 with no background in engineering would make an electric car faster, say in a century or two. What takes GM several years will be near impossible for these teams.

7. "Former administrative assistents [sic] role up their sleeves and do paint jobs. The catering lady designs a logo. And a senior assembly line worker finally seizes the opportunity to learn how to program the order picking robot." Even simple things like this take time to get good at. We don't want crap. An assistant painting will not be as good as what GM does now. An assembly line worker learning new things will take time and likely won't be as good as the person who does it now. Quality would be lower than what GM has now for a decade at least. People can't magically do any job.

8. Boot camps cost money. If this is to be a real program, we're talking a cost of at least $10,000 per employee and moving that adds another $1.4bn for GM alone.

9. The boot camp couldn't exist. Universities already do something. They don't just sit on their hands. You can't simply reallocate things because you think you have an interesting idea. Are you going to transport professors from the northeast to Michigan, Ohio, etc.? What about when they refuse? Force them? What about students at their schools? They get a year off? What you're talking about is moving capital (professors) from where they are most effective (universities) to a place that they are less effective. It's a loss!

Really, there isn't a single good idea in the proposal. I don't like to be so negative, but it's the truth. I'd say the big 3 probably directly employ 250,000 (GM we know employs about 150k and Chrysler and Ford definitely employ at least 100k combined so this figure is REALLY conservative). That means that, in the first year, it would cost the government $7.5bn in salaries alone assuming you could get people to take a pay cut over 50%. Your idea is off by many, many, many orders of magnitude.

Think of it this way. What's stopping you from creating solar panels? It isn't access to an automotive factory. What's stopping you from designing a car? Maybe lack of access to a factory prevents you from building it, but it doesn't prevent you from designing it. C'mon. Do it! Design that electric car! You're smarter than assembly-line workers. If assembly-line workers can do it, why can't you? And do it prompt, before Chevy gets the Volt out in 2010. If you want an electric car, one is coming. The only argument for your plan is if one of these 50 person teams can do it faster.

Well, I just got to the end, and I see that, of the workers you only want to save 1,500 jobs. Classy. Between GM, Chrysler, Ford and their dealerships, that's at least a million people now claiming unemployment. And while that might not show up as a bailout cost, it's a cost. Sorry, your plan costs well in excess of $30bn in the first year alone.

You say things like that in a couple of years some would be able to support growth. Let's say they all tripled in size in 3 years. Now they're employing a whopping 4,500 people. Really, most would probably just die.

This sounds like the thoughts of the new computer programmer: the problem is easy and the old code looks ugly so I can just redo this in a matter of months and it will be a million times better. In non-computer industries, the problem is even harder. Seriously, engineer a seatbelt. It's not complicated, but you're working on a piece that has been solved by someone else and it takes time to make sure it doesn't jam, adequately provides safety, etc. Cars can't work like computer programs. A kinda working car kills people.

What you're talking about is throwing away at least $100bn over the next few years in government funds and seeing the price of cars triple leading to uncontrollable inflation the likes of which the US has never seen with total economic loss in the $10-100T range. This would be one of the largest economic problems the world had ever seen.

Tichy• 18 years ago

Another idea: convert the city into a giant "grand theft auto" theme park. Some "Gotcha!" guns, plus the unused cars that are already there, would be the perfect setting.

anamax• 18 years ago

Welcome to "union rules" which are a big part of the point of the UAW (at least at the big 3 - Toyota-US has only one classification for assembly line folk - "production").

http://www.slate.com/blogs/blogs/kausfiles/archive/2008/12/1...

A simple plan for Detroit

Related Stories