Tuesday, January 24, 2006

Flint v. Ford

As yet another auto plant prepares to shut is doors, the mayor of Flint, Michigan has come up with a radical -- and possibly illegal -- plan: a city-run assembly plant
"We will (build) our own manufacturing plants that the city funds," [Mayor Donald Williamson] said. "We are going to specialize in nothing but truck accessories."
It's not clear if the city would be allowed to run a for-profit enterprise, and many have questioned the rationality of the plan.

I'd give odds at 1:100 that a plant operated by the government in Flint could generate a profit. They'll keep assembly lines running (and never automating) just to avoid the political fallout of laying people off. The downside would be that create accounting would probably make it look like a successful venture to the casual observer.

Meanwhile politicians would add increasing wages, headcount and benefits to their stump speeches with nary a look at the bottom line to see if it actually makes any sense. My gravest concern is not that government would nudge legitimate business out the door, but that government wouldn’t know when to just call it quits. The last thing that Michigan needs is another drain on its already fragile economy.

HatTip: KipEsquire

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