Now it seems that the Big Three U.S. automakers need a bailout. Excuse me, another bailout. They are apparently burning through cash like a drunken sailor on a three-day liberty pass and they urgently need our cash to continue on their binge. Imagine that! Can someone please tell me when any of the three turned a profit? Also, when any of them had an increase in sales without giving away any profit they may have? The short answer is that it has been a long time.
Never fear, Obamaman will come to the rescue! He has been bending over for the unions throughout his short political career so now that he is king they should get all the money they want, right? Not so fast, Bucko. Apparently someone told George Bush that his term doesn't end until January 20th so the Anointed One will have to wait until then to save his buddies. This could be a tricky timing issue as they may not be able to last that long! Alas, what shall they do?!!!!
Well, they may go bankrupt like thousands of businesses do everyday, resulting in layoffs, reorganizations, and renegotiation of union contracts. They could do this voluntarily or involuntarily by defaulting on some of the billions of dollars of debt they owe. Regardless, if they are not blowing smoke about the sense of urgency they face this may be the end of the Big Three as we know them.
Let's say, for arguments sake, we throw another $50 billion at them. What will that do besides buy them another six to nine months? Will their monthly obligations for pensions and healthcare benefits go away? NO! Will their cars become competitive in the marketplace? Not in that short of time. Will the economy suddenly turn around and demand for new vehicles recover to pre-recession levels? Not likely. So then they will come back for another $50 billion, and then another, another and.... You get my point.
So the economic news can get much worse. The failure of one will probably lead to the failure of all three and the loss of a buttload of jobs. I don't wish for it, it won't be pretty, but may be what needs to happen is to weed out the non-competitive units and replace them with the companies that the public prefers.
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3 comments:
Wait, wait...who signed the first bailout?
:)
I say let 'em sink. I'm with Andrew Sullivan, who says that the billions of dollars would be better spent giving loans to new start-up business and retraining laid-off workers in the areas most affected.
You mean that bill rushed through by the Democrats? I know who did it. Bush and his other Tri-lateral Commission buddies, that's who!
Party affiliation doesn't seem to play a role in this fiasco. I am pissed at all of them!
I am of the opinion that the Republican Party needs to be recaptured by the conservatives to have any chance of survival. How they perform over the next 2 years will tell.
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