Posted by
David Zublick on Sunday, December 21, 2008 4:18:33 PM
The bailout of Chrysler and General Motors was a simple case of
CYA for the Bush Administration. Bush did not want to go out with the collapse of the auto industry happening on his watch.
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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