BAILING OUT AUTO COMPANIES

Hmm. First let’s look at the term bailing.  I beleive that refers to a situation where a boat is sinking and you use a bucket to try and keep throwing water out to slow down the process of inevitably sinking until you can be rescued. 

 I think we can all agree on that.  Now the key word is “inevitably”.  Does anyone really think the auto companies are not going to ultimately fail?  So the bottlom line is why waste money putting it off.?

So some people think the union having to make concessions is unfair.  That it is a failure of management.  Let’s look at that.  We have three large companies, all unionized, but all pursuing different strategies is product, marketing and technology.  All are going bankrupt, but Ford is going slower as they at least tried to reduce their costs.  Bottom line the one thing they have in common is onerous union agreements. 

 Let’s face it a UAW job is way cool.  You get laid off and put in a jobs bank where you can collect 95% of your pay for years.?  If you are working you enjoy salary and benefits double what your counterparts in the foreign plants have here in America.  Labor enjoys better health care and retirement than management.  Bottom line, unless all companies pay roughly the same the ones that pay too much go out of business.  Sorry that is the way it is.  Too bad government doesn’t seem to work that way! 

Unions are adversarial to business, not always but usually.  They view it as their job to get as much as possible for workers independent of whether it affects the company’s survival.  One would hope the relationship would be symbiotic not parasitic, but based on the history of the Airlines, it doesn’t look that way.  Similarly, the trucking industry is undergoing significant layoffs and restructuring as a result.  I promise you we will see YELLOW Freight announce significant reductions as well. 

 Not after that adjustment takes place then what.  What can we do to help demand? 

An obvious plan would be to outlaw old cars.  You know “when old cars are outlawed only outlaws will have old cars”.  They are not really worth much more than scrap value, they leak, pollute and the like.  With all the computerization, that can’t be maintained at reasonable cost anyway.  So let’s say 10 year old cars cannot be registered.  If it is a collector item, then SPECIAL (read expensive) registrations can be made available.

A side result, will be greater motivation to use mass transit.  Even better this will reduce class discrimination in America.  Everyone knows you get judged by your car.  Now everyone will be driving much newer and you will be unable to infer lower economic conditions on someone.  Won’t it be great.?

P.S.  As I read this over I realize the unions have effectively socialized the industry anyway, meaning all taxpayers are on the hook anyway, once we start this bailout process.  So instead of printing money, who not just offer a UAW job to anyone that wants it, you can go right in the jobs bank!  Now that would be stimulus!

P.P.S.  This just in.  Bush gives some money.  Demands Unions make concessions.  UAW  promptly announces thanks for keeping us getting paid, BUT we will wait for OBAMA.  All those millions we donated to democrats are sure to pay off!

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One Response to BAILING OUT AUTO COMPANIES

  1. Factory labor is a commodity, and any company should be free to let competing unions bid for the chance to provide the most cost effective product. Having a single source provider (one union) that overcharges for a product (labor) should be considered illegal price fixing, with penalties the same as any other extortion and racketeering.

    http://www.halfbakedlunatic.com/post/2008/11/21/Unions-I-really-hate-em.aspx

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