The $17.4 billion lifeline extended by Bush will not do much in the way of preventing the total collapse of these companies. The viability of the industry is in question and the reckless decisions by management over the course of many years cannot be turned around within a three month period. By March, these guys will have their hands out again, with no significant restructuring plan for retooling themselves. What will the incoming Obama regime do?
Obama has pressed the industry for major changes, including increasing fuel efficiency and reducing carbon emissions. He also wants the maximum number of jobs saved. But at what expense? The problems G.M., Chrysler and Ford face now have been building for decades.
“I do want to emphasize to the Big Three automakers and their executives that the American people’s patience is running out, and that they should seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable. And that means that they’re going to have to make some hard choices,” said Obama.
Clearly both the automakers and the union are unhappy with the conditions placed on this bridge loan to nowhere by the Bush Administration. Ron Gettelfinger, president of the United Auto Workers Union, expressed concern that too much of the burden for concessions is being placed on his folks; namely wage and benefit cuts. But much of the blame for the collapse of the industry is due to the oppressive tactics by the U.A.W. over the years in a time when the car companies have been seeing decreasing market share. Although there was a time when unions served a purpose due to abusive conditions in the workplace, they are now a detriment to both their members and the companies, employing strong arm techniques to extract exorbitant amounts of goodies that are only helping to kill the goose that lays the golden egg.
Obama is going to have to make some tough decisions in the next several weeks, some that the Bush Administration through this temporary lifeline avoided having to make. Are factories being closed and jobs being eliminated in proper numbers? Do the car companies need to use a surgical scalpel or a butcher knife? Are G.M. and Chrysler consolidating their product lines to make the leaner and meaner companies viable? And if not, will Obama have the cojones to call the loans and force the companies into a messy bankruptcy that may threaten to anger the unions that so vehemently supported him during the campaign?
Both G.M. and Chrysler chairmen expressed relief and an almost giddiness at receiving the good news about the bailout. Will they still be as happy come March 31, 2009?
This whole deal was a tremendous mistake. The automakers should have been allowed to fail, even if it meant initiating a domino effect that rippled through the manufacturing industry, with suppliers also falling on their swords. Sometimes the medicine one must take to cure an illness is tough to swallow. But that is what should have been done. The same applies to the financial institutions and mortgage companies.
But the fact remains that the government has become the nannies of our nation, refusing to allow failure of any sort. The founding fathers must be turning in their graves.
No matter to George W. Bush. He covered his rear end and exposed Obama's.
Business as usual in Washington.
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