I still can't reconcile the disconnect that Republicans and some Dems have about Gov't focusing on smarter technologies like hybrids and plug-ins which they somehow consider either hand-outs/socialist/ or my favorite, taking away your right to drive a Hummer. Then turn around and subsidize in an indirect manner via tax-cuts & write-downs for business large trucks and SUVs. That the SUV and other big trucks can fall under the lower CAFE standards only made it easier for people to not make the hard choice of supporting greener vehicles. GM played that hand to the hilt and now feel the pain.

seriously, f*ck detroit. they have had more than enough time to try and adapt their business to the modern world. instead, they have buried their heads in the sand, and lobbied for protection and tax breaks instead of pursuing better engineering. they wave the flag when it's convenient, while they build their cars in mexico and korea (and while toyota, honda, and nissan build their cars here). they reward their inept management with larger bonuses every time they screw up. if I wanted my dollars to support their ridiculous behavior, I would buy their cars. save my tax dollars for something of value, like a nice military jet or financial bailout.

this is america, where you're supposed to take your risk to gain your reward. they've tried repeatedly and failed. let them fail and let something new take their place.

So perkowitz, why not let the financial 'geniuses' get the same treatment?  They've failed several times in the last few decades (S&L debacle anyone?) yet keep getting bailed out.

With the quiet dexterity of a pickpocket, the Treasury is restructuring the American banking sector,

well, I wasn't that crazy about the financial bailout either. the bit about fighter jets and bailouts was an attempted joke. I've been somewhat willing, in the wake of the bailout and a million economics blog posts about how necessary it was, to consider that maybe I didn't understand why it was absolutely needed; but with the automakers, I'd question any such argument, even if anyone (other than the automakers themselves) were making it.

Is the Bush administration and the GOP going to completely abandon David Ricardo's theory of comparative advantage? It could be that foreign automakers (i.e., the Japanese and Koreans) simplly are better at marketing and manufacturing automobiles--including hybrids. (Strangely enough, they possess the ability to do it within our own country.)

"[A] report that its execs nixed a $2 billion overhaul of its SUV line "without a single dissenting vote" last May."

Last May, huh? I guess why they get paid the big bucks.

Bradford,

A little background on the SUV Phenomenon of the last 20 years.  It's more that managment bonehead moves.

The SUV Craze was driven by Labor Contracts, Governement Regulations and Dealer Greed, with everyone gaming the system, not just 'Detroit'.

First, the Automakers signed a labor agreement that prevented plant closures during the life of the contract.  Keeping these workers working was politically important, but it drove weaker product decision than otherwise would have been made.  If you have to keep people working and you can re-work a pickup truck relatively cheap to do it, the decision makes a little more sense.  Yes they could have negoitiated a contract that let them shut plants to build Hybrids in Japan, but think about the labor implications there.

Secondly, governement regulations are much easier to meet when you build trucks.  CAFE Requirements are less stringent, and the full frame and weight of the truck allow it to meet crash requirements with much less development time and expense.  Another requirment, and consumer request was the 3rd row seating.  With more Mom's carpooling, and increased seat belt usage, the family car needed more seat belts and 7-passenger SUV's fit the bill.  It didn't help that the nation was in the midst of a long economic expansion building homes and selling boats and mobile homes at record paces.  In addition, when building and re-tooling these plants, many state Governors pitched in with incentives and tax cuts.  Wasn't it Anne Richards in Texas who brought the truck down to Texas?

Lastly there was a significant amount of rationalization about the resale of these SUV's that ignored the reality of the market.  For many years trucks were 20-30% of the market.  As more buyers entered the market resale values increased, and repeat buyers started rolling into the dealers.  Dealers leaned on lending arms to keep 'Residuals' high, and used that as a sales tool to sell new trucks.  In addition to inflated prices, resale values, the lending companies started writing 7 year loans on a truck.  There were many people making money off these trucks.

Yes GM made mistakes in not standing up to the Union, failed to look for innovative 7-passenger vehicles and allowed a culture of greed to permeate their dealers, but a lot of people went along for this ride and were only to happy to look the other way.

Did anyone notice who quietly became the most valuable company in the entire world today, based on stock price?  Volkswagen, owner of Audi, Bentley, Bugatti, Lamborghini, and other brands displaced Exxon Mobile as the company with the greatest market capitalization.  articles.moneycentral.msn.com/.../market-dispatches-102808.aspx

Their diesel Passat and Jetta models are among the most fuel efficient vehicles in their respective classes, and are great drivers.  We have one of each and love them.  Winners win.  Sorry, Detroit.

Keir, Volkswagen makes some nice looking cars, but their quality is historically poor.  Isn't one of the arguments that Detroit's carmakers are "losers" that their qualify isn't high enough.  Why is Volkswagen a winner?

I'm curious why everyone accepts the cliche that Detroit doesn't make fuel efficient cars.  Chevrolet alone has 8 models averaging over 30 mpg.

The big three's main problem was not getting on the hybrid bandwagon quickly enough, allowing the Prius to become the generic gas/electric vehicle.

I understand that free market argument that we shouldn't subsidize specific industries, but it seems like the only one that causes outrage is autos.  For insrance, we subsidize farmers by huge amounts, which increases prices for lower income Americans and hurts third world farmers, yet no one complains about that.  

Yesterday’s transition briefing at the office of the president-elect in Washington offered a lot of teases