Thank You, United Auto Workers Union
So Motortown Detroit is broke and we are all asked to chip in! Now, is that not precious? The inevitable end of the Ponzi scheme called UNIONS is here, we have reached the point of no return and are left with watching the three American carmakers file for bankruptcy. The arguments as to how those three American carmakers came to this point in time vary widely. It has been described as an upper management failure, been partly blamed on our current economic situation in this country and also a result of a poor business plan by General Motors, Ford and Chrysler.
To us here at this Consider Common Sense, the most amazing aspect of the discussions is the total failure to recognize and attribute this debacle on the ever upward spiraling demands by the union, the United Auto Workers (UAW) Union. We believe to know that this is a fact. When it comes to the opinions of the media and the Democrats across the country, they love the unions since they have represented a major voting block for the Democrats and it does not require repeating, the media is overwhelmingly liberal and is therefore willing to support Democrats wherever they can.
This crisis that has befallen the domestic auto industry has been in the making for a very long time and is not the result of some recent fiscal/financial crises, oh no, for people with some common sense and who observed the domestic auto industry the time has finally arrived and has now put the three car companies into a situation of irreconcilable troubles without major surgery. One of the strongest contributors to this point of no return is the competition our carmakers have gotten from foreign car companies who have production facilities in America. Toyota, Honda and BMW among others all build cars right here in the United States and they are doing it much cheaper than Detroit. Now you ask yourselves, why is that? The simple reason is that the foreign car companies are not unionized, their average hourly wage rate is about $45 compared to the $75/hourly rate of the domestic carmakers. Yet, the ‘foreigners’ are producing high quality cars with all the amenities the ‘local’ carmakers have, in fact, an argument could be made that the foreign cars are superior to Detroit’s when it comes to fuel efficiency, quality and styles.
And now, the CEO’s of the Big Three (GM, Ford and Chrysler) flew in their private jets to Washington and ask for a bail-out in the amount of 34 billion dollars. They stated the money would be needed immediately to ‘survive’ the current troubles, their cash reserves and credits being so low that it might mean bankruptcy filings if the money would not be made available to them. This all sounds pretty scary, who would ever thought of a time when major American companies such as General Motors and Ford could go belly-up? But apparently, the time has arrived and only loans and or bailouts by Congress remain as the only means of survival. At least that is what they tell us.
Considering the fact that the Big Three collectively spend about 7 billion dollars each months, we can easily see them coming back to Washington D.C. by April of next year and asking for another 25 or even 50 billion dollars to ‘survive’ and to avoid bankruptcy filings. This is utter nonsense in our opinion and will result in nothing more than increasing the Federal deficit unless some major corrections can be made to the production viability of the Big Three and without addressing the ‘labor’ portions of car manufacturing by major renegotiating of the existing union contracts in total, it is inevitable that the Big Three cannot survive. Details of these union contracts are described in an editorial, Gold-Plated Pacts, in the December 1, 2008 edition of the San Diego Union Tribune and one must wonder how the union membership can in good conscience demand to continue to adhere to the existing labor agreements.
But there is plenty of blame to lay at the feet of corporate management of the three carmakers, they are at a minimum guilty of major fiscal irresponsibility and we do not mean flying in private jets to Washington D.C., those kinds of expenses are negligible in the overall picture of their financial situation. What were they thinking when they gave in to union demands for higher wages and greater benefits. Could they not or did they not see where this upward spiraling Ponzi scheme would lead? Did nobody in upper management have the courage years ago and say: Enough is enough, if you (the union membership) cannot live with what we already have giving you, then we will face bankruptcy and you all will be out of work, period!
Instead the executives kept their fingers crossed, hoped for the best and continued the recklessness that has lead them to this point in time. It is amazing to see how multi billion dollar corporations are being run by such incompetent people. Of course, the same could be said of the union bosses who demanded more and more and more and did not spent a second on what it could mean in the future. We encourage everybody to dig into the union contracts to find out what the current benefit packages contain, it is truly mind boggling!
In the meantime, the Democrats in Congress find themselves in a dilemma, they want to keep the union workers happy (and to keep on voting Democrat in future elections) and they are pouncing on the Executives to re-write their business plans and so on. How dumb is that? The existing labor agreements are killing the carmakers especially in a time of economic turmoil and crisis and all the wishful thinking in the world does not change that reality. To us here at Common Sense Politics, there is only one reasonable solution to this problem: Filing for bankruptcy and starting over again with new labor agreements and lower executive paychecks and stock options! Only such drastic action can solve this problem, anything else just supports this recklessness and postpones the inevitable.
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