Saturday, November 8, 2008

The Future of U.S. Auto-Makers...

I'll be frank with readers... I do not like to see these companies whithering on the vine, and asking the government for more monies to restructure. We've all heard the stories of plant shenanigans and workers milking the Big Three dry... But I have not heard of those stories for years! I would officially lay the fault of this one at the feet of management. These companies are failing... Now what? Pragmatic thinking is essential. One might ask... when did it become the job of government to ensure the success or failure of these institutions? Are these institutions too big to fail? Is it necessary for these companies to fail? I am curious to see how the Barack Administration will handle this one. Union support was a key element to his victory... The Bush Administration thus far has balked at further "Bailout" monies, as those are reserved for the financial and housing crisis. Please share your comments and ideas!!!

Pros of Bankruptcy=No Bailout Money
A. They need major... major restructuring...
B. Benefit obligations have impacted the possibility of these companies ever becoming profitable.
C. The Unions are becoming leaner...and meaner... getting rid of the dead weight... yet there are a lot of safe-guards protecting those who would have been fired from any other job!
D. There would be an option to sell of profitable divisions...
E. Certain parts will always be part of our National Defense structure... i.e. jeeps...hummers...
F. Allow the companies to rise from the ashes like a Phoenix

Cons of Bankruptcy=Bailout Money
A. Failing means the loss of anywhere between 1-3 million jobs.
B. Workers will lose benefits...
C. Stock and bond holders will take a bath!
D. Will more than likely have a ripple effect through the markets and economy... secondary suppliers... steel industry... etc.
E. Allow foreign competition to become more embedded into the U.S. market...
F. Human cost of workers... families... etc.
G. Effect on municipalities tax revenues...
H. Good paying jobs in the economy will be reduced if not eliminated.

Sources Referenced

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