The Bailout of General Motors
The majority of congressional Democrats enthusiastically support providing General Motors $25 billion in bailout money. This is in addition to the approved $25 billion in “136 loans” for alternative fuel research, already sitting on the table. Naturally their media cronies endorse the handout.
No surprises here. This is the same political party that is attempting to end the secret ballot in union elections by passing the Card Check bill. If the title fit the intent of the proposed legislation, it would be called the Employee Intimidation Act.
GM is headquartered in Michigan, a state mired in out-of-control spending, insufferable business taxes and dominated by Democratic hacks. Like California and Massachusetts, it’s sinking under the weight of its welfare mandates and bloated bureaucracy. This should also be placed in the political equation.
It would be outrageously naive to believe the Democrats care about the longevity of the Big Three. This exercise is aimed at protecting their staunch supporters, namely, the United Auto Workers (UAW) union. It’s a reciprocal agreement in the making. The Democrats are offering to subsidize the wages of union members with tax dollars, in return for the union’s support.
The bailout will only delay the inevitable. None of the Big Three can stay competitive when paying wages about 58% higher ($78/hour on average) than the US based, foreign owned, manufacturing plants in Alabama, Tennessee and South Carolina.
Want proof! Barney Frank and the other liberal slugs in Congress will turn this into class warfare. They will argue that if Congress bails out the white collars on Wall Street, the blue collars should receive equal treatment. This argument will confirm their motives for helping the Big Three, as blue collar stands for union.
GM’s management isn’t exactly stellar. If they cared about their company’s survival, they would have come to blows with the UAW years ago. The labor costs and union rules have restricted their options. They can’t turn on a dime. And for that matter, they can’t turn on $25 billion either.
The union anchor has kept them churning in smaller and smaller circles. They are now dead in the water. If they don’t cut the anchor chain, they will sink.
Many pundits criticize the marketing skills of GM. The most common refrain is that it doesn’t produce the vehicles that Americans want; although most agree that its quality standards are competitive.
It’s inconceivable that GM doesn’t have its finger on the American pulse. The pundits should look in another corner. It costs a lot of money to react quickly to market conditions. The unions, federal and state taxes and environmental restraints have drained GM of the capital reserves required to adapt to changing market forces.
It’s more reasonable to suspect that GM can’t plow through the maze of barriers and obligations erected by the unions and government. Anyone, who has read Jonathan Swift’s Gulliver’s Travels, can be sympathetic to GM’s plight. The Lilliputians have GM staked to the ground.
GM should break the bondage by reorganizing under Chapter 11 of the bankruptcy code. At the top of its agenda should be a trip to a southern state. The GM contingency would be greeted with dollar incentives, a favorable tax climate and millions of potential employees willing to work for $45/hour.
This move would signal Michigan and the UAW that the Big Three is in the game to win. That’s an attitude that Americans respect. These are the same Americans who are all too aware that handouts are for losers.
No surprises here. This is the same political party that is attempting to end the secret ballot in union elections by passing the Card Check bill. If the title fit the intent of the proposed legislation, it would be called the Employee Intimidation Act.
GM is headquartered in Michigan, a state mired in out-of-control spending, insufferable business taxes and dominated by Democratic hacks. Like California and Massachusetts, it’s sinking under the weight of its welfare mandates and bloated bureaucracy. This should also be placed in the political equation.
It would be outrageously naive to believe the Democrats care about the longevity of the Big Three. This exercise is aimed at protecting their staunch supporters, namely, the United Auto Workers (UAW) union. It’s a reciprocal agreement in the making. The Democrats are offering to subsidize the wages of union members with tax dollars, in return for the union’s support.
The bailout will only delay the inevitable. None of the Big Three can stay competitive when paying wages about 58% higher ($78/hour on average) than the US based, foreign owned, manufacturing plants in Alabama, Tennessee and South Carolina.
Want proof! Barney Frank and the other liberal slugs in Congress will turn this into class warfare. They will argue that if Congress bails out the white collars on Wall Street, the blue collars should receive equal treatment. This argument will confirm their motives for helping the Big Three, as blue collar stands for union.
GM’s management isn’t exactly stellar. If they cared about their company’s survival, they would have come to blows with the UAW years ago. The labor costs and union rules have restricted their options. They can’t turn on a dime. And for that matter, they can’t turn on $25 billion either.
The union anchor has kept them churning in smaller and smaller circles. They are now dead in the water. If they don’t cut the anchor chain, they will sink.
Many pundits criticize the marketing skills of GM. The most common refrain is that it doesn’t produce the vehicles that Americans want; although most agree that its quality standards are competitive.
It’s inconceivable that GM doesn’t have its finger on the American pulse. The pundits should look in another corner. It costs a lot of money to react quickly to market conditions. The unions, federal and state taxes and environmental restraints have drained GM of the capital reserves required to adapt to changing market forces.
It’s more reasonable to suspect that GM can’t plow through the maze of barriers and obligations erected by the unions and government. Anyone, who has read Jonathan Swift’s Gulliver’s Travels, can be sympathetic to GM’s plight. The Lilliputians have GM staked to the ground.
GM should break the bondage by reorganizing under Chapter 11 of the bankruptcy code. At the top of its agenda should be a trip to a southern state. The GM contingency would be greeted with dollar incentives, a favorable tax climate and millions of potential employees willing to work for $45/hour.
This move would signal Michigan and the UAW that the Big Three is in the game to win. That’s an attitude that Americans respect. These are the same Americans who are all too aware that handouts are for losers.
Labels: 136 loans, GM bailout, Michigan, UAW
posted by David at
6:39 AM
