The Big Three Bailout Debacle
I'm no fan of General Motors, Ford or Chrysler, even though my uncle was a GM truck and Pontiac car dealer a few decades ago. I always thought that I'd never buy a foreign car or truck in my lifetime. That was until I realized Detroit wasn't serious about competing in the auto marketplace... at least until they realized they were almost bankrupt, and needed help from Washington to keep their companies going.
Management has had the vision of Stevie Wonder to keep up with foreign car companies, and rising gas prices. They remind me of someone you'd meet at a party who hears a joke, then laughs five minutes after the punch line. The UAW is equally as culpable - they've made unreasonable salary and benefit demands (which management usually capitulated to), and haven't been willing to budge on existing contracts - at least until the threat of bankruptcy and/or going out of business became a distinct possibility.
What's odd about this situation is the debates and delay from Congress, being concerned about $25-34 billion in loans or other assistance, which is a pittance compared to the $850 billion Wall Street bailout that sailed through Congress quickly back in September.
I'm glad to see Congressmen and Senators asking tough questions, and doing their due diligence. Democrats seem to be pushing hard for the bailout, Republicans appear to support the bankruptcy option. I agree with letting these firms fail, and going through bankruptcy proceedings.
If Chrysler had to go through bankruptcy back in Iacocca's day (and feel the consequences of their actions through the pain of restructuring), the Big Three might have paid more attention to their business, and not be in the shape they're in today.
Eventually, these big, dumb, slow companies will have to go out of business, be sold off in pieces, or restructured another way. Their current business model just isn't viable. These companies (or future spin-offs) will need to have non-union labor with reasonable salary and benefits packages, different and more forward-thinking management who can adjust and adapt to current and future trends in the auto business, and most of all: Building good-quality, reasonably-priced cars and trucks that Americans actually want to buy.
Out of our country's economic and financial problems, I hope this will be the catalyst of a new era of more competitive American business.
Management has had the vision of Stevie Wonder to keep up with foreign car companies, and rising gas prices. They remind me of someone you'd meet at a party who hears a joke, then laughs five minutes after the punch line. The UAW is equally as culpable - they've made unreasonable salary and benefit demands (which management usually capitulated to), and haven't been willing to budge on existing contracts - at least until the threat of bankruptcy and/or going out of business became a distinct possibility.
What's odd about this situation is the debates and delay from Congress, being concerned about $25-34 billion in loans or other assistance, which is a pittance compared to the $850 billion Wall Street bailout that sailed through Congress quickly back in September.
I'm glad to see Congressmen and Senators asking tough questions, and doing their due diligence. Democrats seem to be pushing hard for the bailout, Republicans appear to support the bankruptcy option. I agree with letting these firms fail, and going through bankruptcy proceedings.
If Chrysler had to go through bankruptcy back in Iacocca's day (and feel the consequences of their actions through the pain of restructuring), the Big Three might have paid more attention to their business, and not be in the shape they're in today.
Eventually, these big, dumb, slow companies will have to go out of business, be sold off in pieces, or restructured another way. Their current business model just isn't viable. These companies (or future spin-offs) will need to have non-union labor with reasonable salary and benefits packages, different and more forward-thinking management who can adjust and adapt to current and future trends in the auto business, and most of all: Building good-quality, reasonably-priced cars and trucks that Americans actually want to buy.
Out of our country's economic and financial problems, I hope this will be the catalyst of a new era of more competitive American business.
posted by Brian Ochsner | 6:51 PM
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