Report: Chrysler and Renault-Nissan end talks

The sad end to another great American icon - Thank You George Bush, Ronald Reagan, et al !!!!!!!

Oh please JMWR, this is Daimler's fault for ruining a profitable company.

JMWR,

Yes. They would have been so much better under a socialist regime. Your political leanings are obvious. Come back and let us know how you feel if Dear Leader Obama wins and after he increases ALL of our taxes and brings us tat much closer to the screaming socialist or communist successes like Cuba, Venezuela, USSR, etc. Socialized medicine. The government does so well with Medicare, Social Security, Medicaid, and every other entitlement, let's give them another to destroy. It has worked so well everywhere else it's been tried that everyone comes to the U.S. whenthey really need to be treated.

A generation of bad decisions by automaker management is coming home to roost. At the end of WWII, the US chose to privatize pensions and health care and corporate America chose to assume those obligations and offer them as benefits to employees who eventually became retirees. Europe and Japan chose to nationalize the same obligations, as have most of the developing economies.

For a long time these parallel systems operated to the benefit of businesses in their respective home markets. Globalization has changed that. Today the US automakers carry an enormous financial burden that the competition from around the world doesn't have. But they are not the first industry to face this issue, the US once had a robust steel and textile industry. Both are gone now replaced by imports and much smaller, lower paid domestic production.

The same thing is finally happening in the auto industry and cost of change will fall on the employees. Before anyone comments that the greedy unions deserve it, consider that the future auto worker may earn 50-70% less than and that worker will have less to pay for plumbers and other tradesman. Less money to pay taxes to support public schools and local government services. Less money to keep up their property, eventually depressing housing values. Less money to buy software, financial services and everything else, including all those products of the so called new economy.

There is a popular nostrum that a rising tide lifts all boats, that a growing economy eventually confers benefits to all participants. But the converse is true, that reduced purchasing power for a large segment of the population eventually flows up and effects greater numbers. The US economy stands at the precipice of a potentially harrowing deflationary period that can result in generalized stagnant and declining earnings, while commodity costs rise due to consumption beyond our borders.

Price drops can be good when they are like the decrease in the cost of things like technology, where the price drop increase the market size. But they can be extremely damaging when they generalize out to things like housing which diminishes individual wealth and reduces investment.

The economy sputtered for a dozen years during the Great Depression and the stagnant economy of the late 70's, early 80's lasted over 6. We maybe smarter now and can turn this mess around more quickly, but a strong vibrant industrial sector would sure help.