Enough With the Bailouts

I think the sooner the Government stops messing with things, the sooner the market will work and things will get back on track. When you tinker with it, you basically set time bombs for later. Here’s a good article:

Ten Reasons Why the Auto Bailout Is a Bad Idea

2. A government handout would allow the Big Three to avoid necessary cost cutting. Because of a strong union, the average GM employee received $70 an hour in combined pay and benefits last year. And it’s not just line workers who are making too much. GM chief executive Richard Wagoner garnered about $24 million a year in 2006 and 2007, while leading his company toward oblivion.

3. Bankruptcy isn’t all bad. It doesn’t mean liquidation. It means taking the painful steps the companies have been unwilling to contemplate to date.

4. Taxpayer money won’t change the fact that many foreign cars are made better than their U.S. counterparts. Kelley Blue Book announced its top 10 brands for resale value this week, and not one of the Big Three was on the list. Chryslers, for example, keep only 24.2 percent of their sticker price on average after five years. By contrast, Hondas retain 44.5 percent of their value.

8. Bailing out the auto industry would only encourage other sectors to beg for government handouts.

The bankruptcy idea isn’t bad. We can’t reward or support the way theses companies have been ran. They just keep doing the same thing over and over and expect a different result.

In my opinion, the unions are the problem. The best selling cars in China are Buicks, believe it or not. Guess what? It’s affordable there and they don’t have to deal with unions like we do here. Unions did have their time and place a long time ago but now there are laws which cover worker safety so they now just are putting American made cars over a reasonable cost.

Recently, GM cars have been good and the same with Chrysler. I still won’t buy a Ford unless I needed a truck. I’ve had the best luck with Honda and something like 3 out of every 5 are made here in the US.

So enough bailouts. Don’t call me unsympathetic either. A bailout, again, is just a time bomb that will explode later when they need another round of money in 6 months. Figure it out now so we can get things moving again.

-T

Update:

Honda doesn’t need a bailout:

No need for bailout, say diners near thriving car plant

The car industry in their neighborhood is doing well — the Honda engine plant in Anna, Ohio, sits amid lots crowded with employee vehicles, ringed by carefully trimmed trees and endless farm fields beyond. It recently underwent a $75 million, 135,000-square-foot expansion.

See?

-T