Back in August I wrote about the self inflicted wound of high fuel prices and I blamed the American Auto Industry for their short sighted course of manufacturing gas guzzling SUV's and causing demand to increase.
( http://us2insanmarcos.newsvine.com/_news/2008/08/19/1762841-the-self-inflicted-wound-of-high-fuel-prices ) Now it's time to start playing taps as the American Auto Industry pays the ultimate price for 35 years of bad decisions.
Do we stand idly by and allow the great American worker lose their jobs in Detroit? Or, do we invest taxpayer dollars into reviving an aging,creaky, mis-managed industry that may or may not survive? The short answer: It depends.
The Auto Industry needs to prove they are worthy of our investment. Additionally the UAW needs to prove they are worthy of our trust. How many of us in the "real world" continue to collect full pay when we are laid off? That's what happens in the Auto Industry thanks in part to bad management and greedy Unions. Unions need to justify their existence and by extorting concessions from automakers when they are vulnerable to foreign competition they did just that. After benefits are taken into account, job banks and legacy retirement systems are all added up, the average UAW worker makes twice what the average non-union Toyota employee makes. The difference? The Toyota employee will have a job next year. Toyota is smartly managed and their engineers produce quality products that people actually want to buy. Detroit was blind to the long term needs of their customers and they have been leaving them in droves for higher quality, less costly products produced over seas.
Can the American Auto Industry turn around and build quality products that people want? That remains to be seen,. The current economy may just be the death knell for the industry. Detroit was able to hide its flaws behind many years of cheap fuel and a growing economy. Now that times are tough, only the strong will survive. Call it "Industrial Darwinism."
If the UAW doesn't concede many of the burdensome contracts, and management doesn't recognize the error of their ways, I say let the big three fail. (Or the big two, as Ford seems to be on better financial ground that GM and Chrysler) Let them file bankruptcy and reorganize. It will force the UAW to reconsider their overly burdensome demands, and it will force management to wake up and redirect their organizations in the right direction. The impact on the economy will be severe in the short term, but in the long term it will be for the best. Bankruptcy will allow the industry a clean start at getting back into the game. Trying to keep them on life support while they are burdened with legacy contracts, outdated equipment, short sighted management and poorly designed vehicles just doesn't make sense.