The auto industry in the United States is attempting to employ the same scare tactics used by Paulson to get Congress to approve a $700 billion bailout for banks on Friday October 3. Please remember that we were told huge measures were needed to prevent a stock market collapse. I wrote back then that the Paulson bailout plan was a stupid idea, the results sofar proof my point:
1. The S&P collapsed from 1114 on October 3 to 848 today, that is a drop of 24%
2. Bloomberg has filed a lawsuit against the Fed under the Freedom of Information Act to find out just how Paulson has used the money.
3. Not a single job was created with the money.
4. Fannie Mae has announced it may need another $100 billion.
Now US cities and the auto companies want a share of the cake.
A bailout plan for the US auto industry is as stupid as the October 3 bailout plan.
Why? Today, auto employment by USauto companies is insignifcant, it has been dropping massively since 2000. And employment of foreign owned companies doesn't cover a fraction of the job losses in the US. When you goto the sea port of New Jersey, you will see acres and acres of parking lots waiting for unmarked foreign ships to dock and disgorge millions of cars made overseas for foreign-owned corporations. Cars coming from South Korea, Japan and... Brazil !
Actually, Ford's most advance assembly line in the world is in Brazil. Check out the video, it will be an eye opening experience in auto manufacturing. The plant is based in Camaçari in the Northeastern state Bahia. Ford cannot build such a plant in the US because the UAW will not allow such supplier integration.
