Sunday, November 16, 2008
Detroit is an Addict
The Big Three carmakers are like the cousin who is on the juice--comes to you for a loan, telling you he's in treatment. Give him the loan and you know he's going to buy more junk. I repeat--bankruptcy is better than bailout for the American people. If nothing else, it will reset wage rates that had spun out of control over the years at the point of a UAW wielded gun.
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"COLUMBUS, Ohio - Even as Detroit's Big Three teeter on collapse, United Auto Workers President Ron Gettelfinger said Saturday that the problem is not the union's contract..."
How much has the UAW invested over the years in the automakers? They have pension funds that I would guess are invested in the market. After 50 or 60 years, one would think they would have collected enough to purchase huge chunks of the automakers.
Or were investments in mob-run casinos more to their liking?
I wonder if secretly maybe, there are those in power in the Big 3 who don't want the bailout, and want to declare bankruptcy and jettison stifling union contracts, etc?
I think what they want is to scare the Congress into bailing them out. Most realize that if they go the bankruptcy route, management is going to get a pink slip.
The more I look at the issue...the more I think bankruptcy is a 4-star answer. The unions will absolutely disagree...and congress may be upset about the media coverage over this episode....but you basically clear the current contract and establish the fact that you hand "X" amount of money to the worker to do his own health care requirements...whatever plan he wants...and then no more. Nothing after retirement...just like the majority of us who live in America who count on medicare. We might suddenly find that most American cars cost ten percent less...and we might quickly move in to buy the better deals.
Ripley--just took a look at your blog--fantastic site. Thanks for looking in over here.
I would like to inject a counter point somewhere but many of your latest entries have been spot on. Sorry.
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