How the Auto Unions Wrecked the Industry
Aided and abetted by spineless acquiescent-minded management, the UAW has driven Chrysler and General Motors to bankruptcy. Overly generous pay scales, restrictive work rules and unconstrained health care benefits make it impossible to compete with the Japanese in the present market situation.
Before the advent of the Japanese, the giveaways to the unions didn't bother the big three; they controlled the market and just passed the additional costs on to the American car-buying public.
The Japanese arrived, took over a major share of the car market and left a portion of the gas-guzzling pickup trucks and SUVs to Detroit. That was OK until gas hit $4 a gallon. The public rebelled and stopped buying.
Detroit cannot compete in the small fuel-efficient car market. They learned their lesson on quality but never got union-driven labor costs in line. In this economic downturn, Detroit is unable to survive.
The Obama economic team will dictate the outcome of the upcoming bankruptcy. Stockholders of General Motors and the private owners of Chrysler will get essentially zilch; secured bondholders will be forced to take pennies on the dollar.
The winners will be the UAW, which will become majority owners of both companies, and Fiat of Italy, which gets a substantial share of Chrysler.
With the UAW now the owners, you can bet that Obama and his team will not allow failure. They will pump our money into the companies, force them to make so-called green autos we don't want and then give incentives for buying the cars so they can compete with the Japanese.
The American taxpayer will subsidize the new companies.
So long, Chrysler and General Motors, hello Gettelfinger Motors 1 and 2. The UAW gets the gelt, and the American taxpayer foots the bills.
Jack C. McVey
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