Auto Bailout Update
Quick update on the auto bailout.
First, I pointed out a while ago that Union’s will do anything to retain their considerable power. They’ve already flexed their muscle regarding the bailout by stating they they would make no wage or benefit concessions with the auto companies and they expect the government to step in to make sure that the American auto industry doesn’t crumble. Now they are showing their true colors. After some Southern Republicans sank an auto bailout bill in the house, UAW leaders accused these Senators of conspiring with the foreign auto makers to drive UAW wages down so that there would be no benefit to joining the union. The UAW knows that their time of controlling the auto industry and having enormous political power is ending, so they will do whatever is necessary to retain that power. Even if it means accusing members of Congress of conspiring with their competitors.
Personally, I think these Senators should be commended for saying enough is enough. I’ve made my thoughts on the bailout of the auto industry quite clear but I’ll reiterate them here. The American auto industry has been completely mismanaged for decades and they are going to die with or without our money. Don’t drag out their death by wasting our money; let them die now.
The truly sad part of this whole story is that the actions of these Senators will be all for naught in the end. The Bush administration has that they will make money available to the auto industry, possibly from the $700 billion bailout kitty.
The second thing I wanted to comment on is this announcement from GM. They are temporarily cutting production and jobs in order to adjust to declining demand for their cars.
I don’t what’s funnier – that it’s taken GM 20+ years to make a sensible business decision or the fact that this is all a temporary move. They are facing extinction and their answer is to temporarily cut production as opposed to permanently cutting capacity and costs.
Do they think that the American public will one day again clamor for poorly made American crap?
More on the Auto Bailout
Here’s a couple of follow-up pieces regarding the proposed bailout of the auto industry.
First, if you paid close attention to my first post regarding the the auto bailout, you will notice that I mentioned that the UAW was lobbying the Democrats to send an obscene amount of money to the auto makers to delay their inevitable demise.
Looks like I was correct. UAW president Ron Gettelfinger has stated the workers will not make any more concessions to help the slumping auto makers. Gettelfinger called for Congress to act quickly on a bailout plan for the auto industry.
Don’t you just love this? The UAW refuses to make concessions and then demands money from the government. Does it matter that a big reason the auto industry is failing is because unionized employees blackmail employers into paying far more in benefits and salary than they are worth? No. What matters is that unions retain their power. If Ford and GM go under, these unions and union leaders suddenly hold no power and they will not stand for that. So, instead of making concessions from their insane salary and benefits demands, they require that government give the industry money to keep it afloat. They trade the votes of the union membership for money in order to retain their power. Democrats are more than willing to play along since they are also seeking to retain power in the government.
Now to address another article I read regarding the auto industry bailout. I stated before that the Democrats were putting on a clinic on how to buy votes by pushing for an auto bailout. As it turns out, the current administration is guilty of this as well.
Bush is suggesting that the money used to bailout the auto industry come from loans that were approved in September (but not dispersed). He is suggesting that Congress accelerate the availability of these loans. Originally, these loans were earmarked for the purpose of helping auto makers build more fuel-efficient vehicles so that they could become more competitive in the global marketplace (even though they have failed to do this for decades spending their own money). Now these loans will be used to simple keep the companies from crapping out financially.
To sum up – Democrats want to send $25 billion from the financial bailout to the auto makers to secure their votes and Bush has upped the ante by allowing money that was originally set aside for the development of fuel efficient vehicles to be used to keep the auto makers from going under. Looks like the Republicans are going to secure a few votes for themselves in the next election.
Its bi-partisan vote-buying like this that has driven me to libertarianism. And the worst part is that they are buying votes with MY money.
Vote Buying 101
Senate Democrats are putting on a clinic in Washington on how to buy votes. They are pushing forward with plans to introduce legislation that would earmark a portion of the $700 billion bailout for the failing American auto companies.
So how is this vote buying? Simple. The auto makers employees are members of the UAW. The UAW is lobbying the Democrats to send money to the auto industry in exchange for votes. If the Democrats send money to the auto makers, the unions will strongly suggest (i.e. coerce) that their membership vote Democrat in the next election.
The Democrats don’t give a crap about whether the workers in Detroit and other auto factories across the country keep their jobs or not. They care only about seizing power and using that power to steal the American public’s money and spend it on more vote buying programs so that they can maintain power.
Now, I think it’s been evident from other posts that I’ve made, that I am against the bailout. But just the possibility of the auto makers being bailed out makes me madder than anything else. The auto makers have been failing for years – why should they be bailed out now (other than the aforementioned vote buying scam)?
Companies like AIG, Bank of America, etc. are being bailed out because they got caught up in the booming economy and made some incredibly risky decisions revolving around the expanding credit markets. Things suddenly went sour and they lost a ton of money. Don’t get me wrong, I still don’t think that’s an excuse to bail them out, but it makes more sense than the auto makers.
Auto makers – and let me be clear, I’m talking about GM and Ford – have a history of making poor decisions that long ago crippled them and begin their demise. They weren’t caught off guard by a slumping economy and suddenly found themselves in the tank. They’ve been in the crapper for a long time.
Why? Because they allowed their employees to unionize and control all their employee related costs. Because they failed to understand the American auto market and adapt quickly. Because they failed to make themselves more efficient when their competitors (Honda and Toyota) were revolutionizing the industry with how they assembled cars and changed production lines. Because they failed to control overhead by reducing the number of employees, factories and dealerships as the demand for their cars fell.
For all of these reasons, GM and Ford don’t deserve our money. All this $25 billion will do is delay the inevitable. GM and Ford are ill equipped to compete in the auto market in today’s economy because they have completely failed to change the way they do business. Even as they lay dying, they continue to crank out SUV’s, even though the American market is moving away from gas guzzling behemoths. They will crash and burn with or without our money.
This is another opportunity for us as Americans to use our purchasing power to make a statement to government and private industry that we are displeased with the bailout. Don’t buy Ford or GM products. Actually, I don’t really need to say that, as most people don’t buy them now.
Don’t let the Democrats get away with buying votes using your money. Contact your Senator and make him or her fully aware of your displeasure in what the Democrats are attempting to do. Make them aware that your vote cannot be bought and will be used to support another candidate should they support the Democrats in their bid to buy votes.
You have a voice America. Use it.