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The U.S. Auto Industry’s Fate December 14, 2008

Posted by emuleman in Thoughts.
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Just when you think the $14- billion dollar bailout for the big three U.S. Auto workers was ready and approved we hear that the bill got shot down in the Senate.  This was after the bailout for the big three was approved by the House.  It seems it all came down to a dispute over United Auto Workers (U.A.W.) not being willing to make any kind of wage concessions to its workers.  Senate members said without a concession the bill would not provide enough money to put the big three back on their feet.  They wanted the U.A.W. to accept a lower pay and benefits package similar to what employees make at U.S. factories where Japanese cars are produced. The union refused.

Now I will tell you that I am not a big fan of unions.  I think the time for them has come and gone.  Many years ago they were needed to help the average worker who was being taken advantage of, being paid poorly, and most of the time doing dangerous jobs with no safety regulations.  They helped this county establish basic worker rights, and they helped raise the standards that all workers deserve a fair wage, and a safe work environment.  Unfortunately the unions are now doing the exact opposite, they are destroying the very jobs they once swore they were protecting.

It is apparent to everyone that this country is now in the mist of a recession, and it seems that we have not yet hit the “bottom” according to many experts.  If is very disheartening to hear daily about companies that have been around for decades going out of business, or laying thousands of employees off due to slow sales.  For the average American this has been a time to re-evaluate our spending habits, and make necessary adjustments.  We have been very fortunate to have had several years of growth and prosperity in this country, and we have become use to a certain lifestyle that relies on spending more than we earn, and putting our excess spending on credit.  We have been buying things on impulse that we really don’t need or require or more importantly cannot afford.  We simply feel we are entitled and charge these things on credit.

I think this current recession we are in is because we all forgot that you cannot live past your means.  You cannot purchase a home you cannot afford, or continue to charge things on credit that you cannot pay for.

Maybe this recession is actually a good thing.  It is forcing our whole country to re-evaluate our spending habits, and realize that we have much to be grateful for.  Our family, friends and health are more important that things we can purchase.  I have become much more aware of my personal spending habits, and like most Americans had to make adjustments and cuts now since I am not making the same amount of income I did a few years ago due to this economy.  That is also true with most businesses as well, so some are laying people off, some are making the necessary adjustments that are needed to survive.  As I already said this is a good thing since it is making us all much more efficient and less wasteful.

This brings me back to the original topic, the big three auto makers  Ford, GM, and Chrysler.  I can only image the impact it would have on the economy if one or more of them would go out of business.  We are talking about millions of American workers who either work directly or indirectly for the Auto companies.  This would only bring our already fragile economy only deeper into a depression that might be hard to recover from.  That is why I support a bailout or rescue plan to help them now, when they are on the verge of bankruptcy.

I also believe if the U.S. Government is to help the Auto Industry they need to reassure us that they will make the necessary adjustment to ensure they will survive.  This includes making concessions to make sure they can remain competitive in this world market.  They also need to restructure their business to make a product that consumers want, and can sell at a competitive price.

This will be impossible if the U.A.W. sticks to the contracts and is not willing to budge.  I guess they figure it would be better for the companies to actually go out of business rather than reduce the salaries of the workers? Would they actually prefer that every union worker’s job is eliminated due to the companies going out of business than adjust the wages now to ensure they will survive and be competitive in this world market?  Why should they be exempt from making adjustments like every other person or business that is trying to survive right now?

The lack of support by the UAW is extremely unfortunate. I know many people who are hoping that the automakers are forced into bankruptcy. They are hoping that a bankruptcy judge throws out the union contract and forces on the Union, wages and work rules which will allow the automakers to be more competitive.

The U.A.W. must change its position. The union must partner with the automakers to become more competitive… for the good of the union members, the automakers, consumers and all Americans.  If they don’t they are only guaranteeing that the big three will eventually go out of business.  This would make the unions responsible for destroying million of jobs that they are suppose to be protecting.  They need to also re-evaluate their spending habits, and make the necessary adjustment.

This of course is my opinion, and I would like to know what you think.  Please answer the following poll question, and feel free to add any additional comments below.

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Comments»

1. Jesse Goodin - December 14, 2008

Just wanted to say HI. I found your blog a few days ago on Technorati and have been reading it over the past few days.


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