Friday, December 5, 2008
DOES THE AUTO INDUSTRY NEED A BREAK?
The government needs to do something, but I don't think a blank check is the answer. The White House and the Treasury Secretary have made it quite clear they're not dipping into the 700-billion dollar bail out piggy bank. Democrats in Congress want the President to do that, because they can't get the votes in Congress to authorize the spending.
The big three automakers were in Washington again trying to convince Congress that unless they get billions of dollars in loans, they're going to go belly up and perhaps as early as the first of the new year. The CEO's told Congress they'd work for a dollar a year....what through December?! They promised to begin production of more hybrid and electric vehicles and they pledged the support of the autoworkers union, which will do its part to reduce costs.
Sounds like a good start, but more needs to be done. It's time for General Motors, Chrysler and Ford to begin eliminating product lines. Think small. Build what there is a demand for. Before they start slashing assembly line jobs, start making cuts at the top. Strip off the white collar fat. Oh, and contrary to the urban myth that the average autoworker makes about $70.00 an hour, associations representing both the union and the automakers says it's more like $28.00 an hour or about $60,000 a year. Doesn't sound over the top to me. Invest in new technologies that allow for more efficient vehicle production, perhaps at the expense of some workers. And before Uncle Sam hands these guys big fat blank checks, they should have a month by month game plan on how they plan to streamline and use your hard earned tax dollars to retool.
For years, the auto industry has fattened the wallets of its corporate executives, plundered money for extravagances and lacked ingenuity in planning for a greener, more fuel efficient future. The President needs to stand firm, because if he doesn't bailing out the American auto industry will open a flood gate of new requests from every imaginable industry looking for a government handout.