Auto Salvage
US auto makers are in Washington begging for a handout. I hate to say this, but they need to be allowed to fail. If we bail out the auto industry, is Coca Cola next? Who is too big to fail? What about American Airlines? What about IBM? What about General Electric?
The problem with the auto industry, similar to airlines, is an enormous legacy cost of pensions and healthcare. What upsets me is that nobody is talking about this. The industry needs to do three things:
1) Force future workers to move to 401K programs instead of entitlement-based pensions.
2) Require all workers and retirees to pay for part of their healthcare, just like the rest of the country.
3) Wrestle control of their own companies back from the unions.
I was doing a little research this morning, and the three big auto makers pay more than $70 per employee hour while companies like Toyota and Honda are paying less than $50 per employee hour. This doesn’t seem sustainable to me. Why are they asking to spend my tax money on companies destined to fail?
I know that a lot of jobs are on the line, and allowing a company the size of GM to fail will be pure carnage. I just hope that the people making the decisions are smarter than me.
:( Unfortunately…if they fail, one of our larger accounts will fail (Sensata Technologies)...then we’ll start to fail…then our vendors…etc etc… :( It’s a no win situation really….I’m on the fence with it really, and it would be sad to see US automotive be all but forgotten someday soon.
I guess I’m biased…Brian worked for Chevy…Michigan is hit the hardest, and it’s in a poor state of affairs as it is.
I agree with you though..the industry needs to change.Posted by on 11/21 at 02:56 PMYou’re not the only one that feels this way. I’ve run across several blogs that share the same sentiment.
The U.S. automakers fell asleep at the wheel (pun intended) and let the Japanese step in with higher quality, better looking cars. Being “Made In America” doesn’t quite have the same sentiment as it once did.
Once again, they’ve failed to lead the charge in the next generation of auto’s, being the Hybrids and continue to trail other’s in that category.
They’re victims of their inability to research and develop, adjust to changing trends, establish themselves as innovators and instill trust in the minds of Americans.
People don’t think quality when they think about buying an American branded vehicle.
I didn’t agree with the bailout to begin with and I don’t think it should be spent in this way.
Posted by Sam on 11/22 at 05:31 PM
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