Our winner this week the large group of individuals (though seemingly not as large as the last time this concept won) who support the bailout of the auto industry. Don’t get us wrong, we love the auto industry, but their business model is antiquated and they’re being choked to death by the UAW.
Bankruptcy is the only answer here, and the only hope for the future of the US auto industry. If they don’t restructure, if they can’t reorganize and renegotiate their contracts, be they with the unions or their suppliers, we might as well set the $25 billion on fire because it won’t make a difference. More money won’t make back practices, bad marketing and bad deals good.
Union contracts should not be a suicide pact, but the UAW is using their influence with Democrats to pressure Congress to subsidize the failed business model rather than face the reality of concessions. They are doing a huge disservice to their membership by acting this way and their members will be the ones who suffer by losing their jobs.
There is also the added danger of the government getting involved in the running of a major US corporation. Democrats are calling for the “Big 3” to submit their plans for the money for approval before a vote will take place. This effectively would give the government the power to tell them how to structure and run their businesses. While few could do a worse job than those in charge currently, the concept of government directly controlling industry should worry every freedom loving individual (though they indirectly control most industry through regulations, this would direct control).
Democrats want this control because they are statists, the Republicans that are going along with this are simply morons.
The auto industry is failing, pouring good money after bad won’t change that. It isn’t their cash flow that has to change to make their business models work, it’s their business models that have to change in order to create some cash flow. Anyone who thinks Congress has the collective wisdom to run these companies in an effective way simply has no concept of history or economics. While government didn’t create the concepts of waste, fraud and abuse, they sure as hell have come as close to perfecting them as anyone ever has. Putting these people in charge of any industry would be like hiring John Wayne Gasey to be the entertainment at a kid’s birthday party. Not the smart play.
Ford, GM and Chrysler need to restructure, regroup and come up with a viable business plan, and the only way to do that is through the protections Chapter 11 afford them.
Anyone who supports this bailout, either elected officials or talking head pundits, you are a douchebag. And this week, you are THE douchebag. Congratulations.