Economic Scene - Figure Skews Debate of a Bailout for Detroit - NYTimes.com
This is an excellent summary of the real labor costs in the Big Three American auto companies in the U.S. (I assume the wage, benefit and pension numbers are only for American workers, although the piece doesn't specifically state that.). I recommend you read it.
I believe it's in our best interest not to let the Big Three fail because the ripple affect in the manufacturing sector supporting the Big Three is huge. Nevertheless, management, labor and politicians must accept the fact that the cost structure must change dramatically and quickly, otherwise even with loans now and no major surgery, they will surely fail later.
What we have here is yet another failure by Congress to be able do the right thing. Will a more Democrat controlled Congress with a Democrat President fare better? Time will tell.
Meanwhile, we will have run up a trillion dollar deficit this year alone. This is the real 800# gorilla lurking in the corner and our democracy's future is far less secure because of it.
1 comment:
The open question is how best to let them fail, I think. If we were to give them a gift of the billions asked for and the business model doesn't change, then we should be saving our funds for the predictable event of having them come back to the well for more money. I'm of the mind that the best course of action is to use the bankruptcy mechanisms work their magic - force change, and if it means one or more companies don't survive in their current form, we're better off letting that happen than allow the taxpayers to be bled dry. If we're interested in just propping up the car makers temporarily, then a large fleet purchase (in effect, a direct subsidy) would be better.
One has to wonder - what's the average wage in VT, as compared to this $73 number mentioned?
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