If the Big Three automakers follow the instructions of House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, they will unveil on Tuesday “credible” plans that “result in a viable industry.”
But there is actually little chance of the Big Three presenting Congress with any “credible” plans. A reborn Detroit requires a radical, harsh restructuring for which neither Detroit nor Washington really has the appetite.
The fevered rhetoric of the past few months has been all about protecting workers and resurrecting the American car industry.
But the sad reality of creating a viable industry is all about firing workers and shutting down excess capacity.
Speaking of executive salaries, will somebody PLEASE explain why top-ranking CEOs can’t seem to live on $250,000 per year including perks? If Japanese CEOs can live on that, why can’t ours? Give me and my wife that much, and I’ll show you how well we can live!
The important thing to remember is how pay is based on merit! You know how these “high achievers” tell the peons that all the time. We see how the “merit” pay system works — right out the door of their failed companies.
It really is all about class and who “counts” as wholly verified by these bail outs which started with those in fact least deserving!
Yep! Remember when Chrysler was bailed out the last time? Didn’t learn much, did they?
But why do we bail out AIG and Citicorp and not Detroit? At least Detroit makes a tangible product. Citicorp merely sucks the life force of the American public.
Remember too that Detroit competes with foreign car companies — and those companies have NO HEALTH COSTS because their countries already provide health care to all citizens. This is an enormous disadvantage to Detroit and all persons doing business in the US.
No, Little Cabbage, foreign carmakers are employing American workers, lots of them, today, and they have health insurance benefits. And foreigners pay for their health care through their taxes, which are very high. There is no free lunch. The foreign car makers have better-engineered cars in many cases, and better-managed manufacturing processes, and the largest difference is that their manufacturing facilities in the U.S. are not weighted down by albatross union contracts from decades gone by.
Katherine hits the nail on the head. Many (most?) of the “foreign” cars are built here by firms with little or no “legacy” costs of retired workers because the firms didn’t start to really grow until the 1980s, and when they did they hired in right-to-work states with little UAW presence. Wages are lower, though similar, but benefit costs are FAR less than the Big 3. Now, once the Big 3 offload many of their retire costs to the new UAW-sponsored entity in 2010 things should improve. If they can make it that far.
Andrew717, many analysts think GM won’t make it to the end of 2008, much less to 2010. Chapter 11 would allow it to begin solving its problems.
That’s why I added in my caveat. I’m among those who think GM won’t make it to 2010 without assistance.
Neither do I.