Anyone who believes federal money will be used to bailout companies needs to readjust their think cap. Bailout funds will merely rescue the United Autoworkers Union (UAW), in the short run and do nothing in the long run. That’s not a bailout, it’s a heist.
The “big three” could not make a profit when times were good, how could that possibly change now? They are completely enslaved by union labor contracts and government regulations.
Every vehicle has thousands added to the sticker price to pay for unbelievable retirement packages and benefits for past laborers. In short, the “big three” are led by savants who have willingly painted their companies into a corner. However, if we bail them out, the joke will be on us. The only thing worse than the failing car companies is a government bail-out.
I don’t want my government running the auto companies as a shareholder or through a “car czar.” If you believe the government can run anything better than the private sector — take a look at the post office ($5 billon per year in the red).
This is America, we do not nationalize companies. We provide an environment where efficient and effective companies thrive and grow. All others are allowed to fail and hopefully learn from their mistakes.
The auto companies are not privileged or different than any other business. The answer is Chapter 11 bankruptcy (no, it is not synonymous with “firing squad,” airlines have done it many times and survived).
This will allow time for the companies to restructure and renegotiate various contracts (like labor contracts), while protecting the companies from lawsuits and collections. This is the only way they can become viable for the future.
In case you didn’t notice, the UAW did not make any concessions to Congress while begging for your money. In bankruptcy, reason will prevail or the UAW will be unemployed. By the way, it could be painful. One or more of the car companies could go under (just like Studebaker did, and somehow we managed to survive).
Regardless, failed companies do not die and disappear. Their inventory, equipment and tooling will be purchased by other more efficient companies who will market better and cheaper cars.
This is not a function of government interference. It is not a function of Congressional mandates. It is a function of the free market, supply and demand dictating a quality product, made efficiently, unfettered by ridiculous labor contracts and government regulations. The big three are an unending train wreck and we need to tell Congress to quit throwing money at them.
These companies have been unwilling to make the tough decisions for decades, and giving them billions will simply prolong the inevitable. It is time for a Chapter 11 restructuring.