Auto Bailout Fails!

Well, I read a bunch of articles regarding the failure of the bailout in the Senate and it all boils down to this: at a time when all Americans in the nation are making  sacrifices and tightening theirs belts the UAW says “ Not Us “! In other words they expect everyone else to suffer to the exclusion of their union.

Well, we all know where this is headed. The old hunters saying comes to mind immediately, ” a bird in the hand is worth two in the bush“.  Rather than take a slight pay cut and keep the industry above water they are willing to see the whole industry sink.

The only life line left at this moment is the White House, yes the Bush administration has not closed shop yet.  The Bush administration is against helping them and rightfully so ( odd I should say that ) because if they go that route then the auto industry would get a loan with few if any requirements.

Currently U.S. non-union workers of  foreign automakers  make about $3 to $4 less an hour than U.S. union automakers and they seem content.  The UAW has not said a word so far.

So, there it is! The whole bailout is falling apart because the UAW does not want to make any sacrifices.  They expect every body else to sacrifice except them.

I could see the picture now. The Big Three go under and U.S. based foreign car makers fill the vacuum. I kind of feel sorry for the union workers seeing how their union shafted them and in this economy. I guess there are going to be a lot of unemployed union automakers.

In the words of Keith Fitz-Gerald, Investment Director Money Morning.:

Demand for cars won’t fall off because the Big Three go under anymore than folks would stop buying beer if Annheuser-Busch Cos. Inc. (the maker of Budweiser that’s now Annheuser-Busch InBev NV) were to collapse and disappear.
What’s far more likely to happen is that Japan’s Honda Motor Co. (ADR: HMC) and Toyota Motor Co. (ADR: TM), India’s Tata Motors Ltd. (ADR: TTM), Germany’s Daimler AG (DAI) and Bayerische Motoren Werke AGChery Automobile Co. Ltd. and Geely Automobile Holdings Ltd., and other companies from around the world will happily fill the void .

Just to put some perspective on the matter the average auto worker gets about $28.00 an hour.  A 40 hour week works out to $1,120.00.

The Big Three Need a Shakeout, Not a Bailout

I must direct the people to this in depth article regarding The Big Three by By Keith Fitz-Gerald Investment Director Money Morning. It points out something very important and that is this:

In their rush to portray their industry as an economic linchpin and supplier of key future technologies – not to mention as a “victim” of the worst financial crisis since The Great Depression – the U.S. automakers are forgetting that their failure will not bring about a total destruction of demand. History is literally littered with failed companies. Demand for cars won’t fall off because the Big Three go under anymore than folks would stop buying beer if Annheuser-Busch Cos. Inc. (the maker of Budweiser that’s now Annheuser-Busch InBev NV) were to collapse and disappear.

That is a very important point. So what! The big three go under. As Fitz-Gerald put it:

What’s far more likely to happen is that Japan’s Honda Motor Co. (ADR: HMC) and Toyota Motor Co. (ADR: TM), India’s Tata Motors Ltd. (ADR: TTM), Germany’s Daimler AG (DAI) and Bayerische Motoren Werke AGChery Automobile Co. Ltd. and Geely Automobile Holdings Ltd., and other companies from around the world will happily fill the void .

Maybe this is exactly what we need, companies that will provide cheaper, more fuel efficient/ alternate fuel cars. I feel that American industries have lost their way by following the concept of planned obsolescence whereby a product is made to last just so many years then has to be replaced. What happened to that Pride in Product that used to exist in the old days when products were made to last, really last! Just recently one of my relatives told me that her washing machine had finally given up the ghost! She loved that machine and it lasted her over 23 years! That’s quality! She now regrets the fact that she has to buy a modern model that she says will probably never last as long as her now defunct machine.

I think that is the thing that the Big Three should concentrate on, making a product that last, that is cheaper than what they are currently making, that is fuel efficient or uses alternate fuel, and of course getting rid of those CEO bonuses! I don’t know the exact figures but with what the companies are paying in CEO bonuses they could open several additional small plants.

You can read Keith Fitz-Gerald’s article Here.

Dems delay auto bailout vote, seek plan from Big 3

The rescue plan has collapsed and Congress has put its foot down! Now the Big Three have to come up with some sort of restructuring plan. Maybe Congress is taking a lesson from the British who also went through a similar situation with their Auto Industry. Click Here for their story.  Maybe Congress is hearing the word of the people. If you were to take the collective Pulse of the people right now it would probably be off the charts and from what I have seen in the many forums on the internet discussing this issue the one word that describes their feeling would be PISSED! About the only ones who are for the plan are the auto workers, obviously.

Like I had said before they keep pitching the D word like some threat not fully realizing that we are headed there anyway you put it. This economic meltdown has spread across the world like some gargantuan cancer and there does not seem to be a stop to it. You have only to traverse the internet and check out all verified and confirmed reports and you will see the signs all around. This is no longer just an American issue, it is a World issue. Right now China is on the verge of having Job Riots and their  $585 billion economic stimulus package won’t kick in until 2009! Click Here for that story.

The question now is what  are the Big Three going to do? They sure as hell don’t have the sympathy of the people, even less with all of their extravagances.  The Big Three CEO’s aren’t going to suffer, no doubt they have tons of money squirreled away in some plush accounts.  So what’s to happen to their employees, the auto workers? What about their union? What are they planning at this moment? Knowing unions as I do they no doubt are looking for ways to cut Their losses!
Well check out the story Here.