You really have to worry when big corporations go to the Government and ask to be put on welfare!
Last week, I did a blog entry looking at how General Motors was asking for a moratorium on crash testing. Now we have news reports that they are now begging Washington for $50 billion in loans to help them pay for new fuel economy standards.
The disgusting part about this because the US auto industry only has itself to blame with years of soaring salaries and the kind of mismanagement that had them focusing on trucks and SUVs when the market was screaming out for fuel efficient cars. And the foreign car makers are cleaning up, without any government Bailout.
Why is the US auto industry more deserving of a bailout than other industries, like for example textiles?
Because approximately 10% of US employees are employed in the auto industry or by its suppliers/dealers. Of this, the Big three and their suppliers employ more than 2.5 million people, amounting to nearly 2 percent of the nation’s work force. So by letting them going under or having to undertake massive cost cutting layoffs could result in a sharp spike in US unemployment and further depress consumer spending. It will virtually wipe out the Detroit economy.
have they figured out that they are paying the upper manage ment too much money first off. 2 million a year for a ceo what are they thinking. and they pay this so that the uaw gets 73.00 dollars and hour to build cars??????? they need to take lessons from toyota,nissan and honda. thwn to see that the uaw workers are not willing to match the other car companies at 43.00 dollars an hour. so you cut thier wages and the ceo and other managers wages and save $300,000 million a year or more. that takes no brains..
You Blew It on the Auto Maker’s Bailout
By Dr. Edwin Weaver
http://www.uniqueleaders.org
http://www.we-develop-leaders.com
December 2008
Well, President Bush has made the Auto Maker’s Bailout just about a done deal and he blew it! Tossing them money, even with a supposed ‘Car Czar’ over them, won’t help.
The auto workers will still be unemployed and the other industries connected to the auto industry will suffer and need to cut labor costs also. Once the Auto Makers have the money they will still cut US worker because they are the highest paid employees they have. The Auto Makers will still close US plants because they are the most costly to operate. After they are done destroying the economy, they will pocket the profits.
There was another option which was not used; an option which would have kept Americans working, an option which would have helped improve the economy, an option which would have lessened the length of the recession/depression. Judging the decisions which have been made, we will go into a depression and a deep one.
THE OTHER OPTION
Yes, we should bailout the economy, just to save the American people. However the way that the bailout is processed and the terms under which the money is given are the key to success.
The first thing that should have been done was an agreement by AUW to make concessions. What good does the contract do if you are unemployed and may never return to work? It shows the short sightedness of AUW.
AUW makes concessions to keep the people employed, though they will lose some of the pay and perhaps some of their benefits, they will have a pay check every week. Something is better than nothing.
Let’s look at the alternatives. If the AUW does not make concessions, the workers will lose their jobs. If the Auto companies go under all the salary increases the AUW have achieved and all the benefits they have garnered will be lost forever. Does it make sense to fight?
Make the concessions and if and when the auto companies recover, at that point get the concessions reversed. This would ensure the livelihood of the workers and their families.
Next on the agenda is the agreement with the Auto Makers so that no US plants close down. No US workers get axed. This may sound a bit protectionist, but if America does not protect America who will? This will also keep another half million employees OFF the unemployment rolls.
The Auto Makers must cut costs. Part of that will be cutting the salaries and benefits of their top executives who dropped the ball by allowing the industry get into this appalling condition. If the workers are going to make concession, the top must make them also and since it was their decision which caused the problems they will make a hefty cut. They take an indefinite salary cut or take the door, which ever they choose. If they hit the unemployment rolls it won’t make a dent in the budget.
They will not use any of the bailout money for themselves in any way, shape or form, like the Wall Street executives have been doing. See the article – AP study finds $1.6B went to bailed-out bank execs by FRANK BASS and RITA BEAMISH, Associated Press Writers Sun Dec 21, 6:33 pm ET. With the right regulators supervising the money and the cuts in costs, the industry should be able to make a come back.
Between the concessions by AUW and keeping the employees working the federal government will have one headache out of the way, though they will still have to monitor the operation until the auto companies are sound again. At least there will not be thousands upon thousands of auto workers without jobs, not to mention the employees at other companies linked to the industry. It also keeps income taxes coming in to help pay for the other rescue plans.
Next stop the housing industry. Obama’s plan to reconstruct the US starts with the reconstruction of the highways and buildings. Why here? The housing industry was hit first. The people who were working for the construction industry have used up their unemployment benefits and are getting hungry. They need to be the first put back to work. Since we will not swell the unemployment ranks with auto workers it will take some of the burden off the federal government.
The country will start to have the infrastructure repaired and modernized and the unemployment ranks will decrease. This will supply the needed moral boost for the people of the country and start the country back on the road to recovery.
With unemployment ranks decreasing the media will report an improvement. After two or three months of these reports the confidence will return to the population. With the people from the construction industry working again, after about three to four months they will have paid off some of their debts and start spending.
The media reports of lower unemployment and coupled with increased spending will energize the rest of the country to renew their efforts. within one year the recession will be a thing of the past and the country will benefit from a modernized infrastructure and the confidence of their citizen.
It is not quite that simple, but this is a brief overview of how to save the country from ruin; a ruin which our leaders keep compounding. At times it almost seems that they want the country to sink deeper or are they that inept and short sighted that they can not see the truth?
Leadership is a key ingredient in times of turmoil and hopefully our new President will not make the same mistakes as our last one.
correct me if I’m wrong but doesn’t 51 billion dollars divided up by 2.7 million workers= over 18 million dollars per worker? Aren’t we better off paying an average of 600 per week unemployment for 20 years per worker (624,000) than this?
Is this about the economy and or sound fiscal policy or about votes?
Car companies are expected to boosts their sales and are expected to create more fuel-efficient cars as well as some of the alternatives to fuel-powered cars in order to have any financial support. What to expect on the future? And it really matters a lot when it comes to meeting the marketing goals and its profit margins.