I think we should have just let the Big 3 file bankruptcy and if their assets had to be sold off, so be it. I think realistically, foreign car makers would have been likely to by the factories and reopen them for their own brands. Many of the former employees would have been hired, most likely. Yeah, it would have killed the UAW, but is that such a bad thing?
Hi,
I wish that Chrysler and GM had both filed for bankruptcy also. Actually the chance of the assets being sold off are really slim. This is a perfect analogy to the airline industry. As long as the US carriers were regulated, the unions would negotiate a contract with one airline, the others would follow suit, they they would go to the government and file to increase fares.....and then again they would all do the same. I flew 40+ weeks a year in those times and the fares charged by all the airlines were the same, all the planes were half full, and they still had money left over to make a profit.
When the airlines were deregulated all hell broke loose. Non-union airlines paid less money, but actually more important, one certified A&P mechanic could perform several functions; whereas union shops would not allow that so it might take 3-4 mechanics to do the same thing. Well the non union (peoples express, Southwest) could operate cheaper, so they lowered their fares and garnered a huge market share. The union airlines, because of the union contracts, could no longer compete.
One by one, the union carriers filed bankruptcy. They then re-negotiated with the unions and most of them re-emerged from bankruptcy much leaner. The public benefited from much lower air fares and competition.
Basically the auto industry is the same thing. When GM, Ford and Chrysler had 99% of the US market, one would negotiate with the union and the other two would follow, then they would price their products accordingly and it would be a level playing field. Along came foreign competition, and lower wages and they had competition that had a huge competitive advantage. I understand a car coming out of Detroit has $2700 in cost for union wages, benefits and retirement benefits; whereas a Japanese car has only $700 per vehicle. That is why the foreign competition can make better quality vehicles and still price them cheaper, or at least low enough to gain a lot of market share.
Now if the damn government had not stepped in we would see the same thing happen to the auto makers as did the airlines. They would file for bankruptcy, they would then re-negotiate with the unions, they would come back much leaner and we would have better quality American made autos at less cost.
Instead, now the government bails out the automakers, screws the stockholders and bondholders and gives the union a huge disproportionate share of the common stock. BASICALLY NOW, THE INMATES WILL BE IN CHARGE OF THE ASYLUM. They will produce garbage, priced way too high, and the government will pass laws and regulations to force the American public to buy their garbage. All this is done of course for the perpuation of the democratic party pandering to the union vote.
I am going to resist buying any American car as long as I can. The workers, public and ownership would have been better off if the damn government had just let the inevitable take it's course. Unions cannot push wages so far out of proportion long and the cycle will correct it.
Gonna get worse before it gets better. Only good thing is if Chrysler goes away and then Ford and GM can pick up some of their market. Their is much to be said for one company going under so the remainder can survive.
regards,
5412
