The end of the federal Cash For Clunkers program also spells the end of a brief but tangible uptick in auto industry sales.
Bloomberg has the numbers, which are grim for both U.S. and foreign-flagged sellers in the American auto market:
GM's September deliveries tumbled 45 percent, while Toyota dropped 13 percent, both worse than analysts had estimated. Ford slid 5.1 percent, and Auburn Hills, Michigan-based Chrysler Group LLC plunged 42 percent.
Honda Motor Co. posted a 20 percent decline, and Nissan Motor Co., which like Honda is based in Tokyo, said sales fell 7.1 percent.
Hyundai Motor Co., South Korea's largest automaker, bucked the industry slide with a 27 percent increase.
Though it's nice to see that Ford—the only one of the big three that has not been the beneficiary of heroic federal life support efforts—kept its sales from dropping a precipitously as the others, I don't know that there's much to be made of that statistic. (I suspect you can't read much into month-to-month percentage changes, but please pipe up if you know something.)
The other day I used the failure of General Motors' deal to sell its Saturn subsidiary as an example of why your fury at the federal government's open-ended automotive bailouts should never fade. But I must award the palm in this category to the Wall Street Journal's former Detroit reporter Paul Ingrassia, who today digs up a great story of the UAW's role in eclipsing Saturn:
Saturn's chief UAW apostle was Donald Ephlin, the visionary head of the union's GM department who passed away in 2000. Ephlin strongly believed that Detroit's auto makers and the UAW had to change from confrontation to collaboration.
Thus the Saturn contract, built on the Memorandum of Understanding, eliminated most of the work rules that strictly limit the tasks UAW members can perform. Workers would be called "technicians" and get just 80% of standard UAW wages but would share in Saturn's profits, allowing them to earn more if Saturn succeeded. Most Saturn executives and managers would be assigned a UAW counterpart, and the two would share in key decisions.
The latter provision was overly idealistic, but certainly an improvement over constant and costly combat. Nonetheless, Saturn's labor innovations were attacked by UAW traditionalists, who coined the term "Ephlinism" to describe Saturn's heresies. Ephlin retired, on the defensive, in 1989. Mr. Smith retired a year later, his reputation besmirched by GM's chronic underperformance, just before Saturn built its first cars.
Ingrassia refers to but does not explore the roles of management in the Saturn debacle, but there is a wonderful story just in the fact that destroying Saturn was the one area where worker and boss were able to join hands: Saturn was understood to be a brand for women, so nobody was under any pressure to take it seriously. Where else but in the Detroit auto industry could that kind of male pathology still hold? If Google discovered an intensely enthusiastic market for a hypothetical GoogleGrrl product, would it starve that product line into submission? If scientists discovered a healthy market for a chain of Lady WalMart stores, would WalMart's Razorback leaders miss the opportunity? I'll bet you the Marine Corps takes women's concerns more seriously than GM/UAW does.
And here's one more reason not just to let General Motors die but to kill it actively: Cash For Clunkers is already being studied as an example of successful market intervention, measurably obtaining a Greater Good with a relatively small cash outlay. The evidence was there going in, and now the evidence is there going out: As soon as the government turned off the current, the corpse stopped twitching. But everybody in the lab saw the corpse twitch. So if GM survives, the history will read that while free market extremists objected to the Cash For Clunkers program, even they came around when they saw how successful it was at saving U.S. auto manufacturers.