This whole big three Detroit auto company bail-out is really beginning to piss me off. Ford, GM, and Chrysler pay, on average, $78 per hour for labor to manufacture cars, compared to $48 for Toyota, here in the United States. This figure includes pension and health benefits for current retirees, as well as the future costs of retirement benefits for current workers.
A reorganization of these companies makes absolutely no sense unless this $78 figure is reduced to approximate the $48 figure. Otherwise, Detroit is simply not competitive. The only way this can be done is to reduce the benefits of existing retirees and the current and future benefits of existing workers. These health and retirement benefits, it is relevant to add, are vastly superior to what the vast majority of Americans receive, excluding members of Congress.
Will the Democrat-controlled Congress and White House put together a deal that reduces these benefits, even slightly? Of course not. They are not going to cross the United Auto Workers, one of their main campaign contributors. So the $78 figure will not be brought down to the $48 figure. There will be no real, effective, reorganization. The bail-out money will disappear into a black hole.
Those of us who have had our 401K retirement benefits reduced by 50%, 60%, 80%, or more, will be committing our tax dollars, and our grandchildrens’ income and assets, to finance the retirement and health benefits of former and current Detroit auto workers. Why? Because the Democratic Party is beholden to the labor unions.
I understand the reasons for wanting to rescue the indigenous American automobile industry from the current financial meltdown and the mistakes of the past. Millions of jobs are at stake. I have friends who depend for their livelihood on the big three auto companies. But if the root causes of Detroit’s bankrupt condition are not addressed, then the inevitable collapse is only being postponed, at great current and future expense.
I am in favor of a government bail-out of some kind for the American automobile industry, but only if they are rehabbed sufficiently so as to become competitive with Toyota and Nissan and Honda and Hyundai and Volkswagen and Mercedes. If they are not competitive, then the whole exercise is a very expensive waste of time.
In the long run, it will only hurt the U.S. economy, which is to say the economic well-being of the citizens of the United States, including the residents of Michigan.