The Big Three American Auto Companies

Lets start this blog by giving my view on the auto bailout

The bailout of the big three American auto companies is a catch 22 situation. Here are three companies ran by a bunch of over paid executives who have no real business insight. They have not been able to respond or adapt to the market trends fast enough, partly because of there own arrogance, partly because of the business size, and partly because of the Union. Yes the union is a big part of this. Here again is a bunch of over paid people who care only about there own greed. They do not want to reduce their income, do not want to change their job, but whine if they loose there job because nobodies buying the product. Why, knowing this, should I as a tax payer support these bloated companies which are ran by these greedy, self centered people who can not change and adapt to market needs. We did not bailout the lumber industry, who in the last couple of years has lost 60,000 jobs. This loss of jobs have devastated many of the one industry towns that grew up around these lumber mills and logging camps. What did the lumber industry do? it adapted and has learned to operate leaner then they ever have. It may be time that some of these old western auto companies also learn how to run lean.

On the other side of the catch 22 is all of the jobs that are supported by the Auto industry. There are many parts suppliers who will be affected by any changes in the industry. Again is this bad? maybe not, these companies also need to improve there production processes. But it could lead to hundreds of thousands of layoffs. This would greatly hurt the economy more then what is happening now.

So what is the answer to this delema. My solution is that we should provide loans to these companies that have to be paid back in 10 years. We need to add many conditions on these loans. all employees, executives, managers and union, need to cut there wages by 30% to 40%. They need to close the unprofitable product lines and develop more low emission vehicles. They also need to reduce the size of management reducing the redundancy and overlap.

This is my point of view on the Auto industry bailout