In capitalism, losers must be allowed to fail. Period. It would be wrong to bailout the auto companies because it is not the government's job to rescue companies that have failed because of flawed business models and a failure to innovate.
The unions are killing the Big 3. It's no wonder that Nissan, Toyota, and Honda aren't asking for a bailout. Their labour costs are almost half that of Chrysler, Ford, and GM. Because the UAW and CAW can't figure out that they're destroying their own livelihoods by perpetually begging for more "legacy" money, less accountability, and more inefficiency means they deserve to be thrown onto the street.
Unions should have learned the lessons of the steel industry, and other out-moded industries for that matter. It is no secret that union workers do the minimum rather than work to help the company be successful. Wal-Mart could not exist if it was unionized, there is no way that it could run the efficient, quality controlled, highly mechanized processes it does with union workers who were demanding half hour breaks every two hours.
Don't bail the car companies out. Chapter 11 will be their saving grace. It might force the CEO's to give up their luxury private jets which they had no problem flying to Washington on to testify before Congress too.
If Obama (or Harper for that matter) bails out the car companies, which it appears he wants to do, it will be a purely political move to cater to the unions who are fast becoming a relic of the 20th century. Hardly "change" or "hope" that was promised, seems like the old ways of the past.
November 19, 2008
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3 comments:
According to The Agenda ( TVO)the labour cost of an automobile is only 7% in fact the cost of pensions etc is about $1000 a car.
BULL. That's what the CAW claims. They also claim to care about profitability.
To reduce costs GM should consider bankruptcy. For those concerned about their retirements the Pension Benefit Guaranty Corporation (PBGC) protects the retirement incomes of nearly 44 million American workers including those at GM. Dumping the retirement cost is one way to reduce legacy costs. A bankruptcy would also give workers an incentive to take the buyouts that they have been offered. The two changes alone would save GM $24 billion a year..
1 \Who Killed GM? Will it rise again?
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