Many analysts say the U.S. auto industry already is dead. So why would Pelosi & Gang want to bailout an industry that is deader-than-a-doornail and which cannot be revived?
Maybe the last line of this piece explains it.
Excerpt (link follows):
As Car Industry Fails, Detroit Class Warfare Loses It Power
[snip]
The earliest permanent disruption of the balance between labor and the auto companies began after the 1970s as VW and some of the Japanese companies used oil prices to get a foothold in the US market. Despite the tremendous financial success of the auto firms during most of the 1990s and 2000 to 2004, Japanese brands picked up a larger piece of the vehicles sold in the American market. GM’s (GM) profits peaked in 1999 and 2000 at over nearly $17 billion each year.
One of the effects of rising sales for firms like Toyota (TM) is the strikes against US companies tended to do greater and greater damage as consumers could buy good cars from a pool beyond those made by The Big Three. Labor unrest actually had the potential of pushing customer out of the circle of “buying American” if the strikes were long enough to significantly vehicle cut supply.
The American car companies have been overrun by two savage events, both of which largely happened after their latest contracts with the UAW in 2007. The first was the sharp rise in gasoline costs which, coupled with a collapse in the housing market, undercut car sales for The Big Three to a large extent because of their dependence on pick-ups and SUVs . The problem of fuel-efficiency threw huge numbers of sales to Japanese manufacturers who tended to build smaller cars. Just as gas prices began to come down, the credit crisis made getting auto loans much more difficult
The last round of negotiations between the car companies and UAW were tense because auto executives wanted payroll cuts to offset rising employee benefit costs, especially those for retired workers. The car companies were prepared to put tens of billions of dollars into accounts run by the unions to pay future labor benefits. The union agreed to sacrifice jobs. It was an admission on the part of the UAW that its leverage was limited by the damage the US auto industry had sustained from 2005 on.
The UAW made a bad deal. But, it would be hard to imagine how iy could have made a better one. Fuel costs and a recession turned both labor and management into losers. The fury between the two sides, which even showed itself in last year’s negotiations as the UAW threatened several strikes, has lost all of its power. The union will be lucky to get what the car companies owe it for its new benefits fund.
http://www.247wallst.com/2008/10/as-car-industry.html
Should we really bailout Big Three automakers with $73.20 per hour labor compared to Toyota’s $48.00 per hour labor compared to $31.59 per hour for all other goods-producing labor in the U.S.?
[snip]
The chart above shows average hourly compensation for the Big Three ($73.20) and Toyota (TM) ($48.00), compared to average hourly compensation for Management and Professional Workers ($47.57), Manufacturing/Goods Producing ($31.59) and all workers ($28.48), data available here.
Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM (GM), Ford (F) and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?
Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda (HMC) and Volkswagen (VLKAY.PK) take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.
And that's exactly where any "bail out" would go. Screw them. Let the union pay their members benefits out of union dues -as they should have been all along instead of bilking the auto company- instead of sinking billions into political activism.