Monday, December 1, 2008

Big 3 Bailout?

International Automakers continue to flock to the South even as the Big 3 sit before Congress asking for Southern Lawmakers to prop up their unprofitable practices. Having seen how successful the banking CEO's were in their "urgent" demands for cash, GM, Ford, & Chrysler figured they could sell their lemon with tales of doom and gloom as well.

They are asking that the Workers of White Co give their tax dollars to maintain the exorbitant benefits and wages attained by the UAW. Consider this from the UAW:

The tentative agreement, reached at 3:05 a.m. Sept. 26[2007], delivers solid economic gains for active and retired members, despite repeated attempts by
GM to impose harsh takeaways
The agreement will deliver more than $13,000 in economic gains for a typical UAW member, including a $3,000 signing bonus, two 3 percent lump sums and a 4 percent lump sum.
GM has 252,000 Employees and the top 5 executives earn $7.68 Million alone. The 3 Automakers combine for 564,409 of the highest paid factory workers in the Nation. Two of them were recently on the news downplaying their salary, noting that they barely made more than $70,000 in their best year, before their additional benefits. There are college graduates and engineers making less money.

In the end, it is the American Consumer paying those salaries. Now they are asking the People of Petersburg to prop up those making twice as much as they are.

I am very much opposed to Politicians, Bureacrats, and Government dictating internal business practices unnecesarily, but before Lee Iacocca came begging for a Loan, he reduced his own salary to $1/year. When business asks for a loan, they must open the books, explain their plan for success, and demonstrate they know how to pay back that money. In a case like this, they must demonstrate that they've identified the means to cut back on costs.

The Big 3 still have not figured out the primary cause of their declining sales: products which cost twice as much without delivering greater quality. Before they can pay back the loans they're asking for, they have to return to profitability. Before they can make money, they must sell their cars for more than it costs to make them. They have continously asked us to pay more for their products, believing our loyalty to American business superceded our good financial sense.

The Big 3 are a story of personal greed at every level. They are like a rich uncle asking for a loan from a College Student working at McDonalds's to pay his own way through school.

If Congress wishes to create the Taxpayer Savings & Loan Corporation, Bad Debt Inc., then they need to be as discriminating as the Loan Officers of the Banks they bailed out. It was bad debt and rampant greed that got us into this mess. Changing the lien holder from private business to the US Taxpayer does not improve the situation.

General Motors Employees donated more than $232,000 to Political Campaigns in the 2008 election cycle. The GM Political Action Committee paid out more than $712,000 in political campaigns/donations, including to Representative Bart Gordan.

And the UAW PAC collected more than $8 Million and developed a war chest of $10 Million to influence our politicians: Again we find Representative Bart Gordon on their list.

Will the investment made by the CEO's and Unions of Detroit in our Congressman pay off in a vote to prop up the exorbinant wages that strangle our ability to buy the cars we want with the hard work of our autoworkers in Smyrna? Or will our Representative resist the urge to serve his Corporate Constituency in Detroit in favor of the Taxpayers of Tennessee?

I want the Big 3 to survive and thrive as much as anyone, but I realize that in order for that to happen, they must cut their wasteful spending and tighten their own belt before they ask us to take on more debt to cover theirs. I don't want Congress mandating the wages paid and the means of transportation of private business, but the market, i.e. the consumers, have told them they're charging too much.

But that credit card we gave Congress is burning a hole in their pocket and they have more in common with the Big 3, Bankers, and Jet Set CEO's and their spending beyond their means than they do with the average worker of Woodbury.

TNTaylor©2008, Tennessee Taylor, all rights reserved.

1 comment:

ABW Photography said...

thanks for the comment!