Car makers

I like everyone else read about Washington asking the GM CEO to take a hike, which he did.  In doing so the government also proclaimed that Chrysler and GM have not done enough to restructure their companies to merit the government reaching once again into it’s already depleted and overly indebted pockets to prop these businesses up once again.  I have read many comments both pro and con for these moves.  No matter which way Obama goes he is going to catch heat. 

If he just continues to freely throw money at two businesses that aren’t making the changes needed to recover he just will find himself with two more AIG’s.  People are outraged that over $150 million in bonuses were paid out of government bail out money to reward executives responsible for almost destroying the American financial system.  Blindly propping up the automakers regardless of what they are doing behind the scenes would be equally outrageous.  As a potential Camaro buyer of course I am pulling hard for GM to pull out of this nosedive and reestablish itself as a viable company. 

I think all of this talk about the dire financial situation the automakers are in does nothing but make the snowball of problems for them grow larger.  If a person is in the market for a new car and is about to spend enough money that could have paid for a house 30 years ago, they want to buy it from a company that they know will be around in the years to come.  The talk that GM possibly going bankrupt, even if it does not mean the actual demise of the company in reality is enough to scare many buyers away and into other brands.

To me the bottom line is this.  To criticize the government for applying pressure to Chrylser and GM to make sweeping changes just is hypocritical, especially considering how we all feel about AIG.  If GM didn’t want the government calling the shots then they should have not taken tax payer money.  However now that they have accepted billions and are asking for billions more, it certainly can not be expected to be no strings attached.

Sadly, the root of the majority of US automaker problems is the UAW, plain and simple. The massive labor costs and sloppy workmanship that the domestic car companies have had to accept as a cost of business for the past 3 decades is the biggest culprit in this crisis.