Posted by
Too Tall in Texas on Tuesday, December 16, 2008 8:15:15 AM
It seems that our President is still drinking from that "Liberals Only" water fountain again. I think he's just lost his marbles! So he's thinking about giving the automakers money from the TARP fund - illegally - to help tide them over 'til Mr. Obama can come in and nationalize them. Never mind the fact that the vast majority of THE PEOPLE don't want to do this. This once again proves to me that once a person gets to Das Capital they completely forget the REAL reason why they are there - TO SERVE AND REPRESENT THE PEOPLE.
I recently read an opinion piece from Investor's Business Daily and here's a bit of what was said: The bailout was killed in the Senate by the Republican block largely because the United Auto Workers (UAW) didn't want to give any further concessions. However, "gold plated union contracts are a big reason for U.S. automakers woes (though managerial incompetence at the Big 3 also played a role). The average Big 3 worker made $73.26 an hour in 2006; an average worker in a foreign transplant (Toyota, Honda, Volkswagon, etc. in the U.S.), $44.20." Graphs posted online shows just what this means for these companies' bottom line. In 2007, Toyota made nearly the same number of vehicles as GM (over 9 million). Toyota made almost $39 Billion, or over $1800 per car. Interestingly, GM LOST $39 Billion or over $4000 per car during the same period.
Where did all that money go? It paid for retirement funds for pensions and healthcare. It paid for workers' salaries whether or not they were actually working in the plant or laid off. It paid for corporate jets, and all the other perks for the executives. It paid for the union leaders salaries, and all the bureaucrats within the union. It even trickled down into large campaign donations to the Democratic Party's warchest.
The op-ed piece continues on what bankruptcy would mean to the Big 3.
"We don't want to see workers suffer or the auto industry disappear. But the fact is, under bankruptcy reorganization, they won't. The workers will still exist, as will their skills. Unprofitable plants that can't be turned around will close. A bankruptcy judge will sell unprofitable assets to those who can use them productively. We won't need a "car czar", or congressional oversight, or political micromanagement. And out of this process, a slimmer, more competitive and, yes, even profitable Big 3 can emerge if we let it - one that will be able to compete with foreign companies on our own soil." I couldn't agree more.
We don't need more government intervention. Let the market run its course. Suppliers will get paid, investors will get some of their money as well. So what if they go bankrupt? It would teach the automakers a lesson in economics. It would also teach the union to not get too greedy. The union can be a good thing, but they've got to be responsible and remember they are stakeholders in the companies' survival. Just because you want the sun and stars doesn't mean you can get the moon too.