Wednesday, November 19, 2008

The Auto Industry Bailout

The bailout of the auto makers is a sham. The only thing that is being bailed out is the United Auto Workers Union. This union has literally destroyed the American owned auto companies. Their cost of labor averages $71 per hour. Compare that to the non-union shops that build cars here, Nissan, Honda, BMW, Toyota, Lexus, etc, whose cost for labor averages $44 per hour. Makes me wonder why the big three can't compete. Take it a step further, the union has bloated benefits and retirement packages that would've sunk those companies eventually even if the economy had stayed strong. Just for you curious folks, the cost of those packages adds literally $2000 to the price of a union made car.

The real question is why is our government even contemplating the bailout? The answer of course is the unions have bought and paid for more politicians than you can shake a stick at. Care to guess how much the UAW gave to Obama? They will get what they want but it will not fix the problem. The auto industry needs customers to buy their product. This bailout, sure as shit, will not do a thing to attract buyers. The end result of the bailout will be the big three continuing down the road to doom. They will not change their business model. They won't be able to curtail labor costs. They won't be able to lower production costs. They won't change their management people or style. The end result is that they will fail anyway. It will just take longer. The proof of this, you ask? Not a single non-union auto maker has asked for help. Guess why? They don't feel they need it.

As I think the government will be bailing out the big three no matter what the people want. I think said bailout should include the following;
1. Massive concessions from the unions so that their cost of labor is in line with the non-union shops. As well as their bloated retirement plans be brought into line with the rest of the industry.
2. Management must also make massive concessions. No more private jets at their beck and call and paid for by the company.
3. Comprehensive changes to marketing, design, and materials sourcing.
4. It should be structured as a loan not a freebie.

2 comments:

Right Winger said...

Well I'm glad to see we're agreeing on this one. I watched an interview with the CEO of Ford yesterday and when asked if he would accept $1 for his salary as Iococca did during Chryslers bailout he pretty much scoffed at the idea. Same as he did in front of the Senate. These bastards bring their private jets to washington to cry poverty. "I'm down to my last couple million". WAAAAAAAAAAAAAAA
Anyway, they're throwing all kinds of numbers out there too. On ABC they said in one of the manufacturing towns that for every 1 auto worker who loses their job, 8 people in the surrouding area will lose theirs. Now, think about that math for a second. Is it even possible?
I like my two GM products. I paid full price for them. I've had to pay to get them repaired. Why do I have to pay again with my tax dollars??

NEPAExpat said...

Auto industry is largest purchaser of media time. The networks are only looking out for their cash cow. Their bootlicking of Realtors and mortgage brokers during the real estate run-up is over now they can't pay the tribute.