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Standards for the bailout are a nice idea, but hitting those measurements doesn't mean people will buy the vehicles. Perhaps it would be better to give tax cre

Standards for the bailout are a nice idea, but hitting those measurements doesn't mean people will buy the vehicles. Perhaps it would be better to give tax credits to consumers who buy American-made vehicles. I maybe way off because I haven't done enough research, but I've always thought that the unions have indirectly caused much of Detroit's woes by not adapting with the expanding global marketplace. The Asian companies make their cars faster and cheaper than the US–even in their US-based factories. To me, that's clearly an efficiency/productivity issue. I read that in '06 GM lost $1,400 per vehicle and Ford lost $5,000 per vehicle. Also, benefits being paid to retired US auto workers add $1,500 to the cost of every vechicle. I'm all for retirement benefits, but c'mon ... these US companies are basically paying for the salaries of all their workers–plus the salaries of all their former workers. When you're selling cars and your profit margin is -10%, a bailout is not the right fix, IMO. Full disclosure: I drive a '97 Bronco :)

curiousgeorge 18y ago
I'm tired of the blame the unions meme. Honestly. If the cost of labor is too high invest in robots. The Japanese do it. Or stop building things at a loss, call it quits and go home. I know everyone loves Ron Paul on the Internets, but one cannot seriously argue in favor of market solutions to problems and somehow believe labor agreements reflected anything but a supply/demand equilibrium price between capital and labor when made. Collective bargaining secured lower labor costs up front in return for imposing obligations on companies to invest a certain amount of funds to cover worker benefits in the future. And yes... many companies have gutted their pension funds, or entered bankruptcy to foist their obligations onto the government. And others have deliberately underfunded plans to increase short-term profits and management payouts.. The anti-union bias in these comments is a right-wing talking point, and not a very good one unless people really believe that debt obligations on capital are somehow more sancrosanct than similar obligations made to labor. And frankly, when the senior management at General Motors starts spouting right-wing talking points I consider that prima facie evidence that the company is managed by a bunch of idiots: http://www.reuters.com/article/latestCrisis/idUSN22372976 http://www.reuters.com/article/latestCrisis/idUSN22372976 There is a cost to having major sectors of your economy run by a bunch of idiots. This is it. If there's a lesson relevant to this forum, it's to ask for your cash up front, and start your own business so your pension isn't in the hand of someone with short-term managerial incentives and the ability to screw you.
- callmeed 18y ago
  Honestly, I wasn't aware that there was a right-wing, "blame the unions" meme. Large corporations down to individuals file bankruptcy to shield themselves from debt obligations all the time ... so, if anything, labor is more sacrosanct. There's a reason car companies who want to sell to the US put their plants in Canada, Mexico, and Alabama (in the case of Hyundai) ... and it's not the weather. Again, I don't claim to be an expert on this, but you haven't done much to convince me that poor management is entirely to blame.

curiousgeorge 18y ago

I'm tired of the blame the unions meme. Honestly. If the cost of labor is too high invest in robots. The Japanese do it. Or stop building things at a loss, call it quits and go home. I know everyone loves Ron Paul on the Internets, but one cannot seriously argue in favor of market solutions to problems and somehow believe labor agreements reflected anything but a supply/demand equilibrium price between capital and labor when made. Collective bargaining secured lower labor costs up front in return for imposing obligations on companies to invest a certain amount of funds to cover worker benefits in the future. And yes... many companies have gutted their pension funds, or entered bankruptcy to foist their obligations onto the government. And others have deliberately underfunded plans to increase short-term profits and management payouts.. The anti-union bias in these comments is a right-wing talking point, and not a very good one unless people really believe that debt obligations on capital are somehow more sancrosanct than similar obligations made to labor. And frankly, when the senior management at General Motors starts spouting right-wing talking points I consider that prima facie evidence that the company is managed by a bunch of idiots: http://www.reuters.com/article/latestCrisis/idUSN22372976 http://www.reuters.com/article/latestCrisis/idUSN22372976 There is a cost to having major sectors of your economy run by a bunch of idiots. This is it. If there's a lesson relevant to this forum, it's to ask for your cash up front, and start your own business so your pension isn't in the hand of someone with short-term managerial incentives and the ability to screw you.

callmeed 18y ago
Honestly, I wasn't aware that there was a right-wing, "blame the unions" meme. Large corporations down to individuals file bankruptcy to shield themselves from debt obligations all the time ... so, if anything, labor is more sacrosanct. There's a reason car companies who want to sell to the US put their plants in Canada, Mexico, and Alabama (in the case of Hyundai) ... and it's not the weather. Again, I don't claim to be an expert on this, but you haven't done much to convince me that poor management is entirely to blame.