The U.S. automotive industry is about to fall off a steep cliff. They are asking for bailout money. Yet, here’s the posturing taking place:
- The United Autoworker’s Union (UAW) is saying they will make no concessions as the problem is with the economy, not with anything related to the UAW. Right!
- Rick Wagoner, the Chairman of GM, says he isn’t willing to take money if there are any conditions associated with the receipt of bailout funds. Sure!
Earth to auto industry–earth to auto industry:
- The UAW will make significant concessions. If they don’t, they’ll force the auto makers into bankruptcy which will eliminate all union contracts immediately. How would they like that?
- The management of these companies will accept conditions–they can’t risk “standing on principle” and letting their companies go down the tubes.
No one is happy about the idea of bailing out the U.S. auto makers. If it weren’t for the larger impact on the economy, it probably would be a reasonable idea to let them die. They’ve adopted the wrong strategy and are horribly positioned for the current economic climate.
The incoming Democratic President and the Democratic Congress are going to have to “do this right.” We can’t simply throw good money after bad.
And, finally, the auto industry management and UAW are going to need to come to terms with the notion that they lack little bargaining power at this juncture. Fundamental change has to occur and occur as a condition of bailout funding.
What do you think? Democrat Dave