What is merry about American Taxpayers flushing another $ 14 billion down the “rabbit hole”.
$ 14 BILLION, it is getting easier and easier to talk about billions.
This time it is G.M. and Chrysler asking for money. How about a plan to use this money to save the auto manufacturers and make them competitive and profitable.
Where are the renegotiated Union perks.
The benefits which were initiated after WW II to lure workers into the facories, were necessary for recruiting a depleted work force.The shortages of labor made these inducements important for attracting the returning soldiers to the factories in Michigan.
There is no labor shortage now, and it hasn’t existed for 50 years, yet the grandfathered labor agreements have been enforced , making American manufacturers non competitive.
Detroits focus on heavy trucks and big gas guzzling cars was their way of staying profitable. Big was more expensive and allowed for the amortization of almost $ 3000 / vehicle from past labor benefits in addition to current labor costs.
With the run up in oil prices over the past few years, culminating in the obscene spike last Spring and Summer , the emphasis on smaller more fuel efficient cars has acccelerated.
Under current labor contracts, Detroit is noncompetitive in producing these more streamlined vehicles .
There is less place to hide the past entitlements.
Lets save our American Auto Manufacturers for America and from themselves.
I’m not quite sure where the facts are coming from, but I can’t really imagine the selling of trucks in recent years being more profitable than selling fuel efficient hybrids. Hybrids are actually pretty expensive, and I believe I could buy a gas guzzling suv for less money, depending on the brand of course. And come to think of it, I’m not quite sure that any Detroit manufacturer has a competitive hybrid or fuel efficient model anyway. I believe that’s part of the problem. They have not proven that they are moving forward with their technology. In all fairness, I have a Ford, and it has an awesome plugin for my ipod to hook up with my stereo, and that’s awesome. Oh, and I can change the station from my steering wheel. I don’t even have to move my hand over! But if that’s the best they’re offering, then it’s not competitive enough to compete with a car that gets 40 mpg. And it’s not pushing forward towards creating a car that gets 60 or 100 mpg.
As far as labor unions making companies non-competitive, I’ve got to say that I’m torn, and perhaps that’s because I work in an industry with no union. I think pensions are awesome if you’re getting them, but I can’t imagine the costs for the company paying those out. Health benefits are pretty important, since without them, many people probably couldn’t afford it. However, I think one of, if not THE biggest problem with the auto industry, as well as many other industries in America, is that they have outsourced their manufacturing to other countries. While it may make things cheaper to produce, it is that move that has taken jobs away from Americans more than probably anything. All of Michigan and pretty much any industrial city in the nation has been suffering for years because of this, decades before the current financial crisis. Living in upstate NY for several years, you see it wherever you go.
Lots of problems, lots of issues to point out. Got any solutions?
Letting the companies file chapter 11 bankrupcy in order to reorganize does not mean they go out of business.
They get the protetion from the courts against their creditors and gives them a chance to renegotiate with the labor unions and get rid of the bloated labor contracts and perks which have made US auto makers non competitive.