I'm currently up in Ann Arbor, MI and get all the Detroit radio stations. I just found out this morning that the Senate shot down the
AutoMakers bailout package. They wanted ~$14 billion.
I'm actually torn on this issue. On the one hand, there are around 350,000 people employed by the Big 3 in Detroit, and another 600,000 that work for suppliers providing materials solely and directly to the Big 3. If GM and Chrysler go bankrupt, mostly likely all these people are out of jobs. As much as I like to think that these companies will come through this, and I believe they will, I also know I'm not buying a car from a company that is bankrupt. Who knows what kind of warranty or service you'll get. So essentially, estimates range that anywhere from 500,000 to 3 million jobs could be lost in 2009 if the
AutoBailout doesn't occur.
On the other hand, I'm also a strong believer in our capitalistic, free-market economy. If anyone ever wanted to see evolution, they should only have to look at our corporations in America, where if you are a bad performer or your niche is no longer viable, you die out. Part of me says that Toyota and Honda, Nissan and Hyundai are the newly evolved car companies, and the old behemoths have simply been replaced. If they can't compete with these other companies, sorry.
I will say, however, that if Congress was OK with passing a $700 billion bailout of the financial institutions, with virtually no strings attached and no plan on how to disburse the money, what's another $15 billion for the car makers? They at least have a plan. I know, the auto industry has been bailed out before. But Lee
Iacocca was required to pay back the loan the government gave him (through he tried to get out of it). Does anyone think that
Citigroup will be paying back their loan? I sure as shit don't expect it to happen.
Congress wanted the UAW to take a big wage reduction. I'm solidly anti-union and for the following reason - if GM, Chrysler and their suppliers go under, all those blue-collar line workers will be out of work and pretty much unable to find other types of employment. Because they are a union, they won't be
allowed to find other types of work. They fill a single niche, and apparently either can't or won't try to exist outside of it.
And now, when asked to take a wage reduction, they declined. Think of it this way: if someone told me that I could keep my job, the only job I'm capable of doing other than fast-food and janitorial services, but I had to reduce my pay from $75,000 to $60,000, I as an individual would do it. But since I'm in a union, I have to go along with the group and so we all get screwed. How long does anyone thing the UAW will last when one-third or more of its members stop paying fees and start collecting unemployment benefits from the UAW? At least there will be one less union in the world.
To be honest, I'm quite surprised Congress didn't enact the bailout. Both the
Lameduck and the President-elect wanted it to happen, but enough other people didn't. I think if GM and Chrysler go down, and it's still not certain to happen, Detroit is going to be an even worse city to live in than it already is. Wow, is that even possible?