Sunday, November 16, 2008

Let the Big Three Go Into Bankruptcy THEN Bailout

The Big Three US automakers are asking for many billions from the American taxpayer. This is a logical outcome of the "give away the store" policies of the outgoing Bush Administration in response to the Crash of 2008. A few billion here, a few billion there, oh what the hell, a few hundred billion here and a few hundred billion there. Currently, the total "bailout" amount is in the $5 TRILLION range and climbing.

The truth is that adding those trillions in debt to the American economy is the worst thing that could be done and nothing that a really responsible government would do. Finally many in Congress are beginning to revolt against the greatest ripoff in human history. The plan to "bailout" GM, Ford, and Chrysler is going nowhere and that is good.

The problem that the Big Three automakers have is not just the current recession. The problem is that in times of plenty the Big Three caved into truly excessive demands from the United Autoworkers Union during multiple contract negotiations. The Big Three pay retirees and those on lay-off almost as much as they pay working members of the United Autoworkers. The pension and bloated health care costs to current and retired workers add many thousands of dollars to the cost of every car sold by Detroit. You have retired assembly line plant workers and current plant workers making near one hundred thousand per year levels in wages and benefits. It has gotten so bad that the Big Three are simply not competitive or profitable anymore.

American federal bankruptcy courts have broad authority to rewrite union contracts and pension arrangements. It is well past time to allow the Big Three to declare bankruptcy to clean out the deadwood that is chocking to death the most powerful industry in America. When the courts have restructured the overhead to a reasonable level, then and only then should Washington even consider any loans to the auto manufactures.

Please do not mistake this brief article as some anti-union tirade. I worked three summers in Whirlpool Corporation manufacturing plants when I was in my undergraduate years in my university days. I understand how necessary union protection is for many factory workers. I not only am not against unions, I am pro-union. But there are reasonable limits. In the case of the Big Three automakers the reasonable limits were crossed years ago and now, in the current recession, something has to be done to adjust the union contracts to save the millions of jobs at risk.

Stirling

2 comments:

gott_cha said...

As a 24 year Union Man,..I agree with you on this.

Any time good money is thrown at bad policies,..abuse increases.

I say let the Big 3 figure it out....Auto Manufacturers survived the great Depression and went on to supply the World with Autos....its time for a Big shakeup!

angryirishman said...

your comments about uaw bloat have a lot of merit. but don't forget that the main problem is that the big 3 having been making crappy vehicles for 50 years. I owned several, maintained them and they were crap. Just rented a 2007 malibu for a few days. supposedly the japan killer - even CR like it. it did drive fine HOWEVER it had a HUGE BUZZ from something rubbing deep into the front console area. it was not an alarm. it was just what one would expect from a crappy car. management decides what to built and what level of quality control. say what you want about toyota/honda - they do make appliance like cars. thanx. angry irishman