On the auto industry bail out
I don’t think they have immediate plans to change their model, which is a model of failure. I think a lot of it will be life support. I believe their best option would be some type of Chapter 11 bankruptcy … These leaders have been failures and they need to go.
Really? I was gonna go with unsustainable labor costs.
Update: Union busting? In this case, I think unions are culpable. Paying more than 2.5 times the national average hourly wage for low-skilled labor is simply an unsustainable and uncompetitive cost structure.
November 19th, 2008 at 10:56 am
I think it is both. They have poor leadership which does not react to the market and you have unions that get unreasonable pay and benefits for their work.
IF we bail them out I think the top guys need to go (without golden parachutes) and the unions need to be broken or at least wages cut back to a reasonable level for the job done. Too bad the Dems are in the Unions pocket so that will never happen. . . So push for bankruptcy over bail out is my vote.
I have been in a wire plant run by these unions to do a demo of my companies product. The unions were over paid, under worked, and protected the guy sleeping on the job. Manager told me if he reported him they would file a grievance against him. . . ya that is a workable business model
November 19th, 2008 at 11:21 am
Yeah, but Chapter 11 bankruptcy would allow the big 3 to bust the union, wouldn’t it?
November 19th, 2008 at 12:44 pm
Hey, the union has only done to Detroit what Congress is doing to the taxpayer.
Where’s a vampire slayer when you need one?
November 19th, 2008 at 1:30 pm
Not necessarily. It’s the part where they’re paying 2.5 times the national average hourly wage for low-skilled labor that’s doing nothing better than the national average worker.
November 19th, 2008 at 5:15 pm
The big 3 have awful management, crappy auto designs, poor business models, and have been coasting on the backs of old people and “patriotism” to keep them afloat.
Sink those ships! Someone will come along and fill the void.
It is exactly the same as a local restaurant. It fails, people find substitutes or a new entrant comes to fill the market. Autos are just on a grander scale.
They need to fail and fail spectacularly. I want to be able to see business schools around the world showcase how inept these managers are/were. Couldn’t handle market change, or demographic change, or environmental consciousness, or human capital, or trends, or anything. They completely failed! Their Hubris led to the downfall of the mighty. Unions had a part in it too but still it mainly lies with management past and present.
Japanese companies have excellent management in contrast. They pay attention and even when they fail, they course correct. Nissan is a great example.
November 20th, 2008 at 2:50 am
what about bailing out the companies – but using their assets to lower barriers to entry in the automotive industry ,by changing industry structure ? this would enable more startups to compete , increase innovation , do alot to reduce global warming , and since america is the best country in the world in building startups , it might enable america to have the best automotive industry in the world .
while not without risks , currently there are no low risk options to this crisis.
maybe worth a try ??