Tuesday, December 02, 2008

Auto Industry Bailout

So, the Big 3 execs left their jets parked this time around. Big deal. They own the jets, why not use them?

Anyway, the execs will be presenting their case, again, for bailout money from the government. If it were up to me, I'd tell them we helped them once before and it didn't do any good, I tell them to look at the airline industry, I'd ask them why I should give out a loan to a failed business model, I'd tell them to go home and prepare for bankruptcy. I'd also tell them to call the UAW and tell them "Thanks for helping us be profitable" then tell them to stick their union in their ass.

Let's remember, we're talking about a for profit corporation here. A badly managed one, at that.

Anyway, there are a couple of good articles on the bailout. What the problem is, and what should be done about it. Both articles point to the incredibly high cost of labor. Thanks, mostly to the union.

They also state that bankruptcy wouldn't be a bad thing. In fact, it just might be what's needed. With a complete restructuring, the auto companies could put themselves in a position of better business and management.

Here's the first article.

Here's the second.

Fact is, foreign auto makers are not facing the same problems. Their cars are often considered better, many are less expensive, have better warrantees, hold their value better, and the companies are profitable. Why? There's a obvious difference between the american and foreign auto makers . . . labor costs. Until the Big 3 fixes that problem, no loan of any sort will help.

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