The Auto Bailout

I never thought I'd see the day when you couldn't buy a Ford or GM model truck or car. Sadly, that day might be here sooner than we think and I'm not sure a bailout or bankruptcy will help. Unlike the $700 billion bailout that was supposed to go to buying troubled assets (and it didn't), this bailout should be considered more carefully. I'm glad it's taking longer to decide, it should.

Let's look at some of the facts as I know them to be:

the auto industry in America is run by the UAW whether we like it or not. That has to come to an end. The time for unions is over. Employees making $35 an hour with a GED is ridiculous. Workers getting paid 96% of there salaries after being laid off? Insane. Complete health care and retirement benefits paid for by the company with nothing contributed by the employees? Even more insane.

Now, they are not the only ones to blame. The companies have been relying on truck sales and making bigger and bigger ones for years now. They have been in fiscal trouble for years now. They have seen their market share drop from 47% 10 years ago to just 22% in the states today. Foreign manufacturers have been foreseeing the change in consumer behavior and adjusted (can anyone say Prius?). The Chevy Volt is mired in problems and still in early stages of production.

My initial reaction is to let them fail as all businesses poorly run should. However, the impact of a the failure of "the big 3" would be huge and felt across the country. Initial unemployment from the companies alone would only be the beginning. Instead, make them file for bankruptcy and give them the bailout. Make the UAW make major concessions or disband. Fire all the managers now employed (or put them in lower level jobs without the same responsibility) and provide a government oversight committee until the companies start becoming profitable. Before any money from a bailout can be used, the companies must have a concrete plan on how and where the money will be used and how they plan on becoming economically viable again.

The auto industry in America will never be the same again but maybe we can salvage some of the pride that we used to have in the cars Americans built.