by Ian Buchanan

Created on: February 18, 2009

Here we are, February 18, 2009 and the cost to bail out the auto sector is now in the stratosphere; another fifty thousand workers are on the way out, and all indications are that Wagoner et al will be back for more. Despite governments in both the USA
and Canada
providing life support that is actually anti competitive, GM and Chrysler still moan that success ultimately depends on how well the consumer responds to their product offerings. After this gross assault on market forces, these people are still trying to blame someone else, not only for their abysmal past performance but for their potential failings in the future. If GM and Chrysler can't step forward with any confidence why should the national economies be held to ransom? Whatever the politicians do should be contingent upon the current heads of these two companies stepping aside: the fifty thousand should be augmented by at least two more.

What exacerbates the outrageousness of this situation is that Ford has chosen a much more responsible approach that doesn't have such a negative impact on the taxpayer. Continued bailouts are just too company specific when other foreign manufacturers that have manufacturing facilities in
North America, using North American workers are not included. The irony is that these companies are being punished because they are more productive than the Big Three, for two basic reasons: they produce better quality vehicles, and their payroll costs are not bloated because of fear of the major unions who have now milked the system dry. We're in the current situation because none of the companies has dared to take on the UAW, particularly in recent years when the storm clouds have been gathering.

What's galling is that two corporations have decided to force government to compound the mistakes it made by bailing out the banks. Rather than face the facts about their gross mismanagement they've arrogantly decided "me too, the greater good be damned". Why should this attitude be rewarded when other industries like aviation, and the service industry are left to cope with the massive cost increases they have seen in oil, coupled with the inevitable impact of the recession on hotels, food suppliers, all the lower profile business, and devastatingly for the average citizen. It would be interesting to ask any one of the fifty thousand how much more secure they feel knowing that their former employers have been bailed out.

The irony is also that the unions scream to have penalties against companies that have sent work offshore so that there can be more better paying jobs at home. It's not rocket science to understand that those jobs have gone because they were too expensive to maintain onshore, and one of the fundamental realities in the auto industry is that it can't survive with all the good paying jobs it already has. It's always easier to blame someone else than to look in the mirror.

Learn more about this author, Ian Buchanan.
Click here to send this author comments or questions.