The Downside of Reliability

According to a JD Power study released this week, cars (all brands) that are reaching market in the United States are getting increasingly reliable (the number of major problems is declining). 

At first glance this is clearly good news for the consumer.  Reliability has been a major point of competitive struggle throughout the history of the auto industry, in fact it was a major factor that allowed the Japanese automakers to gain such a strong foothold in the US market in the 1970s and 80s. 

A clear downside of cars not breaking as often is the lack of consumer spending that will result as less people need to fix their vehicles.  In a similar contradiction to the realization problem, no individual wants their car to break, but it benefits the rest of society economically when any given individual is forced to spend money.

 In the current economic climate of uncertainty and low consumer confidence (ever since the collapse of 2008) discretionary spending cannot be counted on to lead recovery.  Something like a broken car on the other hand, it seems a good way to force people to spend, perhaps even to go further into debt....Debt spending got us into our current mess, can it not lead the way out? People need vehicles to get to their job interviews.....or drive to the unemployment office. The less people have their cars break, the less they will be forced to spend fixing them.  Maybe reliable cars will help to make consumers more confident to spend elsewhere?  But for now,  it seems recovery will not be lead by auto mechanics becoming wealthy. 

The entire tone of this post is meant to be somewhat sarcastic.  The bigger picture point here is that historically US consumer culture has been one of "consume and discard".  Just perhaps,  quality is starting to matter as much as novelty to Americans in the automotive industry?    

Losing Money In Europe

A disjointed post ending in a far different place than it starts:

I post this link only because of the second paragraph:
http://money.msn.com/top-stocks/post.aspx?post=ca98a2c2-ed7c-4e12-865c-11beea3ff00c

 Just as Europe undoubtedly felt the backlash from America's economic crisis, American companies are now feeling pain as a result of Europe's troubles. j

Two points:
1. If you are writing for MSN money why haven't you gotten the memo that global inter-connectivity is a consistent economic reality for the modern imperialist firm?   Is this really worth mentioning?

2. Regarding the 500 Million dollar loss, but Ford's domestic operating budget is 7 billion dollars.In Europe they sell about 1.5 million vehicles a year.  The average price is around $10 000 US, this means total revenue is about 1.5 billion?  Correct me if I missed a zero?  How does a company lose 1/3 of its total revenue?  I have an idea but I want to look for more numbers before I go nuts.  My guess would be more cannon fodder for the "workers and unions are killing business" right wing.  Historically the far right gains support concurrently with the left.  A bit of a late night stretch for my brain, but this narrative (if it appears) will be more evidence of a political polarization caused by the current western world recession (depression). I love speculation! 

Chrysler sales were up 40% for February: Who the F($* is buying these things?

http://www.freep.com/article/20120301/BUSINESS01/120301018/Chrysler-February-auto-sales?odyssey=tab|topnews|text|FRONTPAGE
The recovery is supposed to be mostly jobless, and mostly for the wealthy.  Rich people don't drive Chrysler vehicles.
Poor people don't either (they don't buy new cars at all). 

Only middle income, retirement age people buy these things right? 
Am I completely out of touch with a remaking of Chrysler's image, or have recent stock market gains been enough to pad the retirement accounts of people born in the 1950s so that they are comfortable trading in the 2002 Honda Accord? 

Now That's What I Call (An Increased Rate Of) Exploitation (Are You Fucking Kidding Me?)

Over that past week or so, all the news about General Motors (GM) has been about how they recorded a RECORD 8 billion dollars in net income for 2011, and hope to be over 10 billion for 2012. 

That is BILLION WITH A B ladies and gentlemen.

As good for GM and their shareholders (not their shareholders who lost everything three years ago of course) as this news is,  (Honestly, this is fantastic for some!)   GM is a symbol of the American heartland, an institution of American capitalism, receiver of one of the largest "Keynesian" (sorry J.M. Keynes, you will always be blamed for the digging holes and refilling them with government money thing)  bailouts in history,  employer of many of my family members past and present, the next major story in the news makes it clear that the revenue increase is nothing but the blood of GM workers. 

What to make of this?

This must mean that the recession is over right?  GM is making a shitload of money for investors as well as the American taxpayer (at least according to every major news outlet). 

Until we get to today's news...
Historically General Motors was a great company to be exploited by (comparatively in terms of standard of living.)  With nothing more than a high school deploma you could earn a decent living and suppport a family.   Part of supporting yourself and your family was being able to retire at a reasonable time (without having to take a job as a greater at Wall Mart to make ends meet).  Right after news breaks of record earnings, today we get this:

A destruction of the pension plan at GM. 
Of course the conservative New York Times frames it as a "change" not a destruction....

Will we see an increase in profits at GM?  Yes........Will it allow the US government to sell the rest of their GM shares at a higher price than otherwise would have been possible?  Yes... Is it just another example of the massive increase in the rate of exploitation in this country?  Of course.
 

GM Profits

Are enormous again.  Over 8 Billion dollars for 2011.
I wonder what has happened to their rate of exploitation at the point of production.  Wait no I don't...  It has gone through the roof.   Read between the lines of a statement like "shed billions of dollars of cost" in any bourgeois article like this one: 
http://online.wsj.com/article/SB10001424052970204136404577204982933314566.html

 What happens when S increases and V falls?  S/V increases dramatically.   If the American worker is willing to be exploited at higher and higher rates, giving up the benefits their predecessors obtained there just might be hope for the survival of productive capitalism in this country. 

Is that a good thing?  While that all depends....

Government Motors?

General Motors CEO Daniel Akerson was interviewed on NPR this week.
During the interview the term "Government Motors" was brought up as a term that Ackerson didn't "like".

This is not a new way to critically refer to GM.  See for example this article from The Economist last summer:  Government Motors no more

I found Ackerson's argument really interesting in that it parallels one that I often find myself making.  Ackerson was arguing that "Government Motors" and the negative connotations that come with such a term in American society (inefficient, bureaucratic etc.) are unfounded.  Sure the US government still owns about 25 percent of the common stock of General Motors, but ownership does not matter, to paraphrase Ackerson.  What is important is the relationships at the point of production that determine the directions a company is moving in.  Apparently GM is still a vibrantly innovative capitalist firm (I believe he used the words "leaders in technological development a few times).  Vibrant and innovative, even if the ownership structure is something that those preoccupied with ownership relations would call state capitalism.

It is good to know that the top echelon of management at GM understands that increasing the rate of exploitation in their capitalist production relations is still possible, regardless of the ownership structure.  Maybe there is hope for capitalist exploitation in the American Auto Industry.  Keep buying American! (or in the case of GM "assembled American"!)