Disturbing Auto Industry #s
Posted November 18th, 2008 at 2:14pm in Enterprise and Free Markets 
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Lynne Kiesling highlights these daunting numbers from David Yermack’s WSJ piece:
• GM and Ford are two companies that made the most money-losing investments in the 1980s; between them they “destroyed $110 billion in capital” in the decade, according to an analysis from the careful and renowned economist Michael Jensen.
• Over the most recent decade, “the capital destruction by GM has been breathtaking,” $182 billion, and Yermack estimates that the aggregate capital investment in GM and Ford since 1980 has let to a net reduction in capital of $465 billion.
• This is what I find particularly disturbing: with that $465 billion, “GM and Ford could have closed their own facilities and acquired all of the shares of Honda, Toyota, Nissan, and Volkswagen.”
• “When a company makes money-losing investments, the cost falls upon all of society.” This observation means that we have already reduced our future economic well-being by $465 billion by his calculations, due to the persistence of these firms and their poor business decisions.
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One Response to “Disturbing Auto Industry #s”
TedN, St. Petersburg, FL on November 18th, 2008 at 2:14pm said:
Ford offers medical benefits to those who choose to undergo sex change operations including mental health counseling, hormone therapy, medical visits, and short-term disability after surgical procedures for employees who desire to change their sex (link below).
AFA announcement on Ford http://www.afa.net/emails/transform.asp?x=ford_122607&s=browser&y=2007&m=12