You know, as much as we've heard about the auto industry in the last few months, and their ailments, as well as endless ad nauseam fixes, there are a few things that *NOBODY* wants to talk about here, at least no one involved.

First off, tage a gander at CAFE regulations, or the Corporate Average Fuel Economy standards set by the EPA in the US. This is something which, of course, was instituted after the Oil Crisis in 1972. In theory, its a nice noble set of standards for regulating better fuel economy in the US.

Now, in spite of the fact that these standards are something of a joke (they haven't changed a bit since 1992, and have only been increased a grand whopping total of 9.5 MPG since they were instituted over 30 years ago), there are a few peculiarities in the enforcement of these which, I think, are specifically causing or have caused the problems the Big 3 face today, and, in fact, were specifically caused by Congress and the Clinton Administration.

Now, buried within these standards is a little rule called the Two Fleet Rule. Essentially, what it says is that the foriegn produced cars imported by a company to the US are a different "fleet" from the domestically produced cars. It goes further to say that, in fact, if a car company (by default the Big 3) want to be considered "domestic" producers that the cars they produce in the US are, in fact, the only ones that count for their inclusion in the CAFE regulations.

Now, this has some nasty side effects, the biggest being that, in order to be considered "domestic" car producers, the Big 3 were actually forced to manufacture all of their vehicles in the US, regardless of whether or not they could actually afford to sell said vehicles at a profit. In other words, this "2 Fleet Fule" was a very specific sop directly to the Auto Unions and forced the Big 3 to produce and sell their economy cars a loss for 2 decades. Not only that, but since they were actually losing money on a huge percentage of sales, they were forced to concentrate production on the most profitable lines, namely SUV's and Minivans. Which worked great, sort of, for a decade or so. Until the public decided that a) gas was too expensive to spend in a gas guzzling vehicle, and b) the enviroment matters.

So, a downturn in large vehicle sales causes a double whammy against the Big 3, in that they can't afford not to make them, and the fact that they still have to produce a significant amount of small vehicles to sell at a loss since they can't make a profit anyway. Not only that, but they can't make a profit on increased sales of economically viable vehicles as those were already selling at a loss...

Sucks to be them.

So we need to blame government, specifically the Democrats but I believe the measure had decent bi-partisan support, for this mess. By giving a few people job security, they've endangered the well being of an entire industry.

Oh, and these are the same people we're trusting to solve the mess...

What could possibly go wrong?

Bill

The problem with your assumption is that you obviously don't understand bottom line costs to company. Most small companies that I have worked with/for have very tight margins on their products. As this guy said "blue collar", lets assume its manufacturing or something similar.

A manufacturing company is unlikely to make 5% profit on sales. But lets be really generous and say they make 25%.

Lets assume there are 5 developers, and the only thing the company will pay for is the console. (This is patently untrue, but I'll get to that in a moment).

So, minimum outlay is $1000 dollars. Which means that the company has to recoup $4000 in sales just to cover the cost of the consoles.

This is a bottom line hit. Its a ridiculous use of money in a budget that could likely be spent in better places.

Not only that, but its likely that there will, at some point, be a productivity hit directly related to the consoles. I can't imagine a developer worth anything that can't in some way disable/scam the monitoring software. So if they slack off, their salary is also a bottom line hit to the company.

Of course you're next argument will be that they are likely working overtime and such, which is likely (although not certain) to be free, as they might be salaried. However, if others are working that overtime, and the overtime directly affects productivity, this is effectively time that benefits the company in product and revenue, which, again they must make by selling 4x the amount of product completely on top of what they already sell.

In other words extraneous hits to the budget can have a dramatic affect on profitability, with little or no demonstrable gain to the company.

And please don't throw out the strawman on this one: that the company shouldn't expect its employees to work free overtime. That may or may not be right or wrong, but if that's part of their job, its happening and arguing about the morality and ethics of such things won't change the reality on the ground.

And I won't even go into litigation costs if someone sues over the myriad number of issues this would raise in a company.

Bill