I’ve been listening to the Congressional hearings in regards to financial assistance, these congressmen just don’t get it. The auto industry is a victim of the failure of the financial industry that basically drove the economy into the toilet.
The comment keeps being made that they don’t want to through good money after bad, well guess what, if the auto industry fails that $700 billion to $1 trillion that you handed over to the financial industry, will be totally wasted. Then there is the fact that the money given to the financial sector was handed out with-out very little oversight. The $34 billion being asked for is a loan, not a hand-out, they are the only industry with any track record of paying the government back.
The auto industry is not in trouble because of their products or their pay structure, they are in trouble because their funds have been wiped out because of the stock market, there is very little credit and next to no leasing for customers. Even if there was financing available to customers, they are too afraid to make a large purchase like a car or home.
The failure of the auto industry or large scale closing and lay-offs in the sector will only depend the entire crisis. Auto workers make good money, people who make good money spend it, when they spend it it drives the whole economy.
This idea that the auto industry is failing because of miss management is just silly, until gas rose to $4.50 a gallon, which no one foresaw, they were selling what the customer wanted and that was large cars, trucks and SUV’s. No one knew about the mess that financial industry was creating, which basically stole between 30-40% of the stock market.
There is another thing everyone commends the transplants as to their lower operating costs, in such things as wages. The truth is they are all immature and have do not have the other cost that the Big 3 have, such as pensions and health insurance for an aging work force. They all received Well guess what, ask why the transplants are here to begin with. They were established to head off protective legislation. If the Big 3 fail there is nothing to make the transplants stay, they will most likely pack up the tents and do what the rest of the manufacturing industries have done move off shore to the cheap labour markets.
So I really can’t believe that there is even a question about providing them a loan, not a bail-out, which they will pay back.
Another question did I miss something, what is the plan for the financial industry to pay back the $700 billion to $1 trillion? (Is that the sound of crickets I hear)
People bought cars before, the need for vehicles hasn’t gone away, they will buy them in the future. The question is will there be any domestic automotive manufactures left when they go to buy one?
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