Category Archives: Business

Bailout Rage

Arnold Kling vents:

De Rugy and the others also mention my other frustrations. First, that the Republican Party betrayed libertarians so badly on this issue. Second, that the media portrayed opponents of the bailout as unserious and ideological. Bernanke, Geithner, and Paulson were hailed as saviors, even though they could just have easily been portrayed as bumblers. The whole thing was portrayed as government having no choice but to come in and clean up the private sector’s mess, rather than an ill-conceived attempt to stop markets from adjusting to a mess that was created by a combination of market failure and government failure. Third, that even though much of the public instinctively and correctly opposed the bailout, it sailed through without costing Congressmen their seats.

The one upbeat commentator is Len Gilroy. He thinks that the high level of indebtedness of government will force politicians to scale back spending and to privatize. I’m sorry, but he comes off sounding like Mary Poppins on laughing gas.

As a commenter notes, the only hope is that a lot of non-libertarians are outraged, too. I hope it doesn’t end in riots, but I hope it ends.

You Know The Auto Biz Is In Dire Straits

…when Toyota is losing money:

Battered by falling demand from consumers around the world and a surging yen, Toyota and other Japanese automakers have been reducing earnings outlooks and cutting workers.

“The change that has hit the world economy is of a critical scale that comes once in a hundred years,” President Katsuaki Watanabe said at the company’s Nagoya office. The drop in vehicle sales over the last month was “far faster, wider and deeper than expected.”

Toyota forecast an operating loss of 150 billion yen ($1.66 billion) for the fiscal year ending March 2009. Toyota has never reported an operating loss since it began disclosing such figures in 1941. But it did have an operating loss in unofficial, internal calculations for the year ending March 1938 a year after the company was founded.

And they think that pouring billions down the Detroit rathole can save them in such an environment? Particularly when the union refused to give on work rules? Mickey Kaus has more, here and here.

What a disaster this administration has turned out to be at the end.

More Bad News For My Home Town

GM was planning to build a new plant in Flint to build engines for the Volt. But apparently those plans have been put on hold.

I’d be interested to understand more about the numbers, though:

General Motors is suspending work on the $370 million factory slated to build engines for the Chevrolet Volt, but says the plug-in hybrid will appear in showrooms by the end of 2010 as promised.

The decision comes as GM frantically slashes costs in a desperate bid to survive while the White House dithers on a bailout. GM and Chrysler have said they could be out of money by the end of the year, but Congress failed to approve $14 billion in short-term loans to the Big Three and the Bush administration appears to be in no hurry to act.

With cash dwindling fast, GM says it has no choice but to postpone work on the the factory in Flint, Michigan, where 300 people would build the 1.4-liter turbocharged engines slated for the Volt hybrid and Chevrolet Cruze compact.

So, they’re spending almost half a billion on a factory that employs only three hundred people? That sounds like pretty good productivity (though it’s not going to do a lot for Flint’s continuing economic decline). How many engines will it produce per annum?

And where does all that money go? Tooling, purchased from other places? How much does that investment in building the plant itself help the Flint economy? Not a lot, I’d imagine, other than the construction itself. I’m guessing that most of those hundreds of millions are going to automated equipment and robots shipped in from somewhere else. So while it’s not great news for the city to delay or lose it, it’s not like it was going to save it economically.

[Update a few minutes later]

Here’s the original announcement from last summer, in the Flint Journal. I was wondering if the plant was going in where the old AC plant had been demolished, but it looks like it is/was planned to go on Van Slyke, over by the airport, and next to the truck plant.

Ray LaHood?

That’s the latest rumor for SecDOT. I’m looking at his committee assignments from when he was in Congress, and see nothing to indicate any expertise or knowledge of transportation issues. The only relevance that the NYT points out is that he’s overseen pork transportation projects on the Appropriations Committee (my characterization, not theirs). And he’s a Republican. But he’s from Illinois. And he’s of Arabic (Christian) descent.

Is this just a token to show bipartisanship by the incoming administration? I have no idea what this implies (if anything) for space transportation regulation. I’d be willing to be that he’s never given it a moment’s thought, which can be both good and bad. It’s good in the sense that he won’t come in with any agenda, but he’ll have to be educated. I’d like to know if he has any natural tendencies when it comes to regulation in general.

[Thursday morning update]

Here’s more on LaHood. Apparently he does have some history in dealing with aviation/airport issues, but nothing about space or spaceports.