Saturday, December 6, 2008

Auto Industry Bailout Will Only Prolong the Inevitable Bankruptcy of The Big 3

Congress and the White House appear to have reached a tentative deal to keep the Big 3 Auto makers afloat for at least a couple months -- that is, until Barack Obama assumes the Oval Office.

According to reports, approximately $15,000,000,000 will be dispersed to Ford, GM and Chrysler and this cash will be allocated from federal funds already set aside to help the companies produce more energy-efficient cars. This was President Bush's influence; one in which Speaker Pelosi and Congressional Democrats to do particularly support. (Liberals cannot afford to offend the radical, leftist environmentalists anymore than they can offend the unions.)

Pelosi said the House would consider legislation next week to provide "short-term and limited assistance" to the U.S. auto industry.

Limited and Short Term. Read: Will Not Fix The Problem.

These companies DO NOT deserve tax payer money. They should be bailed out by the MEMBERS OF CONGRESS THEMSELVES!

Liberal Politicians have benefited from Unions for decades. Placating union bosses has been a windfall campaign finance tactic for a number of members of Capitol Hill.

And it's NOT simply the economy, stupid.

Ron Gettelfinger, head of the United Auto Workers union, says employees are not to blame for Detroit's problems.

"It's not our fault that the economy is in the tank," he said.

Indeed, the economy has seen better times but Honda, Nissan and Toyota are not panhandling on the steps of the Capitol. Somehow, they are managing to build, sell and profit from selling cars in America.

The biggest reason these automakers are in trouble is simple: It costs the Big 3 an average of $30/Labor Hour (or 60%) MORE to produce a car than competitors like Nissan, Honda and Toyota who build cars in United States plants as well. At 40 hours per week, the average UAW member makes over $150,000 annually in benefits and compensation. Does anyone else think that's a bit much to screw some tires on a car?

What about the so-called "job banks" where laid-off UAW members can collect 95% of their income by doing nothing more than watch TV and drink coffee. The Big 3 will not discuss the exact details of these job banks, citing they are not public information.

The truth is clear. How many businesses in this country would succeed by paying 60% more than a competitor to produce a product? How many would succeed by paying people who don't produce a single asset?

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  1. Truth truth. This is stuff that Dems and Republicans can get behind. The American car companies didn't build the kind of cars Americans customers wanted. They lose. No buyouts!

  2. Totally agree. These bailouts are the antithesis of a free market economy. Let all these companies that have made poor business decisions fail - they can reorganize if they're deemed viable under US bankruptcy laws.