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Romney: “Let Detroit go bankrupt”
Earlier this week, former Massachusetts Gov. Mitt Romney weighed in with his reasons why the government should not bail out the big three automakers:
If General Motors, Ford and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye. It won’t go overnight, but its demise will be virtually guaranteed.
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses. Detroit needs a turnaround, not a check.
But what kind of turnaround? Romney offers his prescription for Detroit’s automakers here. What do you make of his suggestions?
back to top53 Comments to “Romney: “Let Detroit go bankrupt””
I suggest that Romney’s key messages:
1) new management
2) new labor agreements
are indeed foundational to all who are trying to manage the car industry situation (rather than those who want to bandage it over) BUT I suggest that one needs a bit of care here.
At present there is no loan money available. As such a traditional chapter 11 would have a reasonable probablility of slipping into chapter 7 and dissolution. Dissolution has a numnber of serious deleterious impacts to our economy (we can discuss if you like).
If we do not provide money then the car companies will probably disappear.
If we simply provide money than Romeny makes a plausible argument that the car companies will disappear.
What would seem ot be required here is some very tough love:
1) management goes
2) labor agreements are gracefully restructured
- an ungraceful restructuring ricochets with additional costs to the government
3) dealership agreements need to be restructured
4) strategy needs to be realigned not with a focus on short term profits but on long term viability with full consideration of an increasingly rare supply of petroleum
5) then money needs to be applied
The realisitic options seem to be:
a) a pre-packaged bankruptcy
b) government receivership (there are possibly some creative options here)
c) loans with tough conditions
At present it appears that the Republicans in congress and the bush administration want none of these options. As such one must hope that the car makers can hang on until the new administration arrives in January.
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So lets try the following perhaps non-traditional idea.
At this point the market cap for GM is about $1.2B.
Consider the possiblity of:
- government issues loans in the amount of perhaps $7B in return for an amount of stock equal to the presents shares +1 (50+% ownership)
At this point the government would be in the position to dictate corrective actions. This is not too far removed from the government response to AIG.
And I believe this would require no enabling legislation if the funding comes from the $700B bailout bill
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And I suspect that the approach in post 2 is consistent with Romney’s suggestion:
“In a managed bankruptcy, the federal government would propel newly competitive and viable automakers, rather than seal their fate with a bailout check.”
The trick of course is what is meant by a newly competitive and viable automaker?
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An informative series of comments, Musing. I would be curious to hear more of what you consider a graceful restructuring of labor agreements, as opposed to the ungraceful version.
It seems to me that the elephant in the living room here is not current employee pay and benefits but retiree pensions and especially retiree healthcare. If the Big 3 are not to totally reneg on these agreements, trust funds of truly shocking size will need to be created to fund these commitments after any bankruptcy dissolution of the companies.
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Bankruptcy would be the best solution. So dont expect the govt to mandate it.
I noticed the big auto execs flew in to DC aboard private jets then promptly stuck out the tin cup begging for your money and mine.
But again here’s what should happen but probably wont:
Executive pay tied to performance of the company and not permitted to be more than 3 times, 4 times the base hourly wage of the assemblors. Assembly line employees pay? Bring it more in line with whatever the Smyrna, Tenn Nissan plant’s hourly wage is.
Will this hurt? You betcha! Arent we long overdue for a reality check in the Motor city? Unquestionably so.
Odd that Romney (son of Michigan Gov and winner of Michigan primary) would be so fearless in his prognostications
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Who would be the overseer, Musing? Who is big enough/strong enough/not beholden enough to be able to pull off such a task?
And how did Iaccoca (spelling?) do it? He had government help, as I recall.
Thanks for some interesting ideas.
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Money for Detroit must be tied to major overhaul of all employees’ compensation/benefits. The union-mandated pension and retiremt fund coupled with the hefty exec paychecks have been and will be a double whammy Congress must address head on.
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Romney shows why he should have been the Republican candidate for president in 2008.
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rr post 4,
I agree that it is the retiree benefits which are probably most critical and problematic.
Amusingly an ungraceful resolution results in transferring much of these costs to the Federal government anyway. An interesting effort at encouraging moral hazard since the car company’s management negotiated these agrements.
My sense is that transition to the UAW as presently defined in the agreements combined with ensuring that the automobile company’s honor the bulk of their obligations is the smooth way out. If the automobile companies regain viability, then there is cash flow to provide flexibility here.
You are right that there will be cahllenges at the UAW end. But consider, now the UAW members would be negotiating with other UAW members for resolution. I sense that this is more likely to achieve a plausibly consensus solution than an externally imposed solution.
And do remember that since the forward looking contract terms for new employees is apparenlty modestly close to the non-unionized shops, this problem is in the end self-limiting.
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I have to agree with Romney.
Everyone agrees however, that the auto industry needs a total restructuring. Everyone but the UAW that is.
I say let the slimy unions, and their grasping greedy members go break rocks.
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sawgunner post 5,
I suggest your management compensation controls is a necessary but not sufficient requirement. If we control management compensation but do not construct a competitive automobile industry we will have failed.
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Michells posr 6,
AIG is presently effectviely under government control. this wold seem to be the default barring outside forces bieng brought to bear.
This of course introduces the challenge I identified in my post 3.
Iacocca was, I thought, brought in from outside Chrysler (he came from Ford, I believe). Arguably this is the existence proof for requiring the introduction of new management.
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MIM post 10,
perhaps everyone except:
1) the UAW
2) the senior management at the car companies
3) the dealerships
4) the politicians in states with large auto company presence
5) the U.S. public which still at times has trouble comprehending the future of energy
6) the oil companies who make large profits of of car companies
I could perhaps continue.
What becomes clear is that this is an endemic problem which is going to require flxibility throughout our country for success.
Of course if we aren’t flexible, then we will pay the pain anyway, it just wont be as controlled or managed!
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The quote at the headline of this thread is a WSJ headline quote that Romney did not select.
What Gov. Romney is asking for is ACTUAL “change” and not just a mindless political campaign mantra for “change.” If we just pour bad money after good, that will mitigate against essential change.
Real change is tough-minded and often painful and Romney is right to ask the car companies to make serious changes to survive. Just getting loans and money is not real change.
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If I had my preference it would be for a government controlled receivership rather than a true bankruptcy.
A government controlled receviership would provide the option of:
1) providing a clear path for transitional funding from the government
2) provide an opportunity to provide a quasi-independet recevier who would simultaneously be ultimately responsible to the government/electorate AND yet could be structured to provide a reasonable amount of operational autonomy
3) the connection to the government would, I suggest, provide a mechanism which would provide potential leverage in managing difficult contractural issues
My two cents. There are no really good solutions, so I snense we are looking for the least bad solutions.
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The difficulty with bankruptcy at this point in time — and so, the need for an emergency loan — is that GM evidently has little confidence that it could maintain its operations.
It is this prospect of liquidation, of GM’s stopping all operations, that is so terrifying. The economic ripples go far beyond the immediate union work force (MIM #10, sorry, this attitude relies more on a past than a present reality). The impact for a number of communities will be dire should this occur. And in that event, the federal government is left holding the bag for costs that will be far in excess of the bailout.
Finally, about pension costs. Two aspects should be noted: first, that the pension model (fixed benefit) derives from an earlier era. This cost structure exists for the domestic manufacturers in part because of their age. The new foreign factories of the south have different, more modern pension systems in place. Even more significant, the internationals have lower pension costs because of their relative youth. (And on this point, I am far less sympathetic with Romney: these pensioners busted their tail so he and his family could enjoy the privileges that they do. Now he wants to have them give up their rights, but he and his clan keep theirs?)
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Speaking of sympathy, I have none whatsoever for the UAW members, the CEO’s of the Manufacturers. They and their ilk are why I couldn’t make any money doing warranty work when I was a mechanic. I was too busy subsidizing their high pay and bennies, while I struggled along working on commission making most weeks, less than 40 hours (I think I made over 40 hours less times than I can count on one hand) at less than $15/hour while these crooks make around $90/hour doing mindless repetitive tasks. Meanwhile I’m expected to know the information in a couple truckloads of manuals and fix intermittent computer problems the first time every time – and get paid peanuts to do it.
I say let ‘em rot.
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I’ll be … if I feel a bit sorry for ‘em. Let ‘em fail. Don’t reward them for failure. They … sure didn’t reward me for fixing their screwups.
We’re going to pay for it one way or another. I say don’t bail ‘em out and extend the pain.
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If Detroit gets a bailout using my money, I get a free vehicle of my choice.
Just like I get a personal credit bailout from VISA and MasterCard if the credit card industry gets a bail…. Oh wait. They did; I didn’t.
Oh well.
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Hopefully GM and Ford will be smart and file for bankruptcy by the end of the week to protect their cash. The longer they postpone this the less cash they will have to work their way out of bankruptcy.
Chrysler as a private company and the smallest should just be liquidated in bankruptcy proceedings and the owners and debt holders take their losses.
Once GM and Ford are in bankruptcy, then the all of the union agreements, dealer agreements and supplier agreements are null and void. Since there is not credit available to anyone and the credit market is completely frozen again, the US government would have to step in and supply the required reorganization money for a company where Ford and GM were forced merge and only 3 lines of teh current 11 would be left adn the US government would own 80% of the new company.
The lines, one car, one pickup truck and one luxury line could be Chevy cars, Ford pickups and Cadillac would work but a mixture of Ford Fusion as example would be fine but it would be called a Chevy and the like size car at GM would have to be eliminated. The entire senior management of both companies would be fired as would 2/3 rds of all the workers. You would have to figure that up and down the supply chain that the industry reliant job level of 1.5 million would end up at around 500,000 when the dust settles and 1 million would lose their jobs. The dealers would sort themselves out in bankruptcy since at least 75% of them would fail and good riddance.
Excess plants worldwide would be sold if possible to Toyota, Honda and Nissan. Foreign plants are especially valuable in Emerging Markets. The criminal unions would be eliminated and never ever allowed to form again and wages would be pegged initially at 15% below the wages currently paid at non union foreign plants in the south. This would ensure that the remaining US car company would have a level playing field since they are 15% less efficient than Japanese car manufacturers in the south today.
Once the company emerges from bankruptcy then the US government can sell it to the Chinese government for a profit.
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MIM, no one stopped you from trying to organize the workers who did your work. The idea that anyone on the line doing endless tasks were getting $90.00/hour, is ludicrous. Please take into account how that average is obatained. I heard the same thing used against my husband and his fellow workers. What the papers reported and what he earned at his mining company was no where near each other.
The workers gave up things to get their pension benefits. I have many friends who ended up losing most of everything they worked for for 40 some years. They negotiated in good faith. They did their job. They gave up the immediate wages for those benefits. I fault the unions for not insisting that money was put away to be able to pay them.
Unions are not perfect. Unfortunately, when some companies exploit their workers, they become necessary. They have their own problems. They would also wane if companies treated their people in a just and right manner–something called for over and over again in the bible, BTW.
Don’t take out your bitterness on the people who just did their jobs. BTW, I doubt they are all as stupid and unskilled as you make out. You may be amazed at some of the skills needed.
Whether the government should bail out the companies is a big subject and I don’t know the answer, but to suggest that the workers are a bunch of lazy people with their hands out is just down right wrong.
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Musing would prefer that the auto companies be placed in government receivership in place of bankruptcy. This would merely add another failed category to the federal government balance sheet that, according to the GAO. already has unfunded liabilities of 53 $trillion for Social Security, Medicare, and Medicaid.
When the slow moving train wreck of these entitlements takes place beginning about 2015 the present economic meltdown will look like a party. Obama doesn’t understand this, as he apparently intends to go through with a government health-care program that will significantly add liabilities to the balance sheet.
I should say that both the auto companies and the government needs to face up to hard economic realities. The most solid plan to do this comes from Paul Ryan, ranking member of the House Budget Committee, whose Roadmap for the Future: A Plan to Solve America’s Long-Term Economic and Fiscal Crisis.
In a Wisconsin District that went for Obama 53% to 46%, Ryan, a Republican, won 64% to 35%.
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Excuse me, the link above is Here.
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The stockholders get shafted in a bankruptcy. The bondholders will, I believe, get first priority and then the other, mostly smaller business creditors would squabble over the bones.
We should never have allowed these companies to get into the position where the retired employees’ pensions and health care benefits are in jeopardy. Those folks have worked for, and earned those benefits and arranged their lives accordingly. For the most part, they do not have the youth or the skills or the resources to make up for the ruination of their “golden years”.
I think they should be entitled to the most protection.
Instead, the big lenders and other businesses, get priority.
I think that’s wrong.
And I love llama bashing “criminal unions” when the CEO of Ford, making $20 million per year, and having driven his company off a cliff, doesn’t see why he should even consider a pay cut. That’s a lot of pension and health benefits for some folks who are going to need them.
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KI,
First you say that I should have organized the workers, then you turn right around and fault the unions for the problems. How is it a solution to create more problems by creating more unions?
I have no use for unions. I firmly believe that it’s their fault that the auto manufacturers are in trouble. I fault unions and their members for essentially hamstringing the Auto Manufacturers.
While they had their bennies and straight time pay at much higher rates than I ever made (Ok- so maybe those guys made more like $30-$40/hr), I was also trying to provide for a family of four with no insurance and no vacation pay, on a “per job” basis, or commission, which you would know as “flat rate” at less than $15/hr (and sometimes considerably less than). Again, I rarely ever made over 40 hours. I probably averaged around 30. You ever tried to provide for a family of four always right below the poverty line? So tell me again how I should feel sorry for them? I’m sorry, I just can’t manage it. I got the shaft for 14 years, and I’m not anywhere close to wanting to bail these folks out.
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Peter Leavitt post 22,
you are correct, the U.S. is facing a very large unfunded liability of the order of $50T or so for Social Security, Medicare, and Medicaid.
The liability for the auto industry would, however, appear to be in the tens of billions, not trillions AND a weakened economy only makes addressing the SS/MC/MA issue less tractable.
My sense is then that we need to segment these problems and look at them individually to consider how best to preferably make the effort a positive payback and at worst minimize the negative payback to our society.
We need to address out overall healthcare system to get a strong handle on Medicare and Medicaid in particular, and while health care is a contributing issue in the automakers difficulties, it does not appear to be the first order effect.
Social Security I suggest is perhaps not nearly as large an issue as it at first seesm BUT a great deal depends on our social and economic situation moving forward.
If the economy is booming and we need all the workers we can get, then people will work longer and Social Security’s challenges are reduced. If the economy decays, then people will retire earlier (willingly or not) and Social Security challenges get worse.
So it would seem that the plausibly reasonable approach is to focus on the auto indisutry and its ancillary compoonents at this time and construct the solution which optimizes both the near term and long term benefit to our society.
It is not clear to me that a chapter 7 bankruptcy leading to liquidation meets our overall interests. It is not clear to me that chapter 11 is feasible without major government intervention.
If one agrees, then the quesition on the table would seem to be comparing a government driven receivership with a government guarenteed or supported bankruptcy. And it would seem that such an objective comparison can be made independent of ideological preferences.
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arcadia post 25,
the stockholders are already going to get shafted no matter what happens. Stockholder equity is now effectively zero.
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MIM post 25,
actually the management always owns the problems of management of the company. If they are having trouble with unions costing too much, then it was encumbant on them to structure themselves in such a way as to minimize this difficulty. Indeed recently they made such efforts, but it was presumably too little too late.
In any event, mangement failure (and bankruptcy is by definition a management failure) is always the responsiblity of management.
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“…actually the management always owns the problems of management of the company.”
Well then, let them manage it. I don’t feel the need.
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Executive pay tied to performance of the company and not permitted to be more than 3 times, 4 times the base hourly wage of the assemblors.
But.. But.. But…
The free market determines labour rates. This is pointed out all the time with respect to why athletes and CEO’s make multi-million dollar salaries.
What are you? Some kind of a …
…
…
…
Socialist??
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Leave it to the Green whack job Nancy Pelosi to save the day for Mother Earth. After it was announced that the Senate had compromised to take the previously approved green $25 Billion the auto companies were to receive from energy department and use it as a bribe to no where except to tide the auto companies over until the Marxist Obama Horde took over congress and the unions could extract hundreds of billions more in election kickbacks from their bought and paid for Marxist officials, Nancy, never known as pencil (much less the sharpest pencil in the box), said it won’t fly in the house because that money was for Mother Earth and not to save the Unions. They would have to wait until Jan 20th or so to get their hands on the promised kickback niow that Nacy adn Paulson have shot the Unions down on the technicalities of the laws passed for these massive Marxist slush funds
The stock market immediately fell, now down 200 points, on the brilliant, if insane, move of the left’s smartest woman – not known to be a complete lesbian.
Expect GM to file bankruptcy before the end of the week if they have any sense and want to preserve the cash they have.
You got to love green Marxists, even really smart non lesbian women ones like Nancy Pelosi, more than regular ones
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Non-flippantly, Romney’s ideas seem very sensible to me.
There is blame enough to go around, and just throwing money at the problem only prolongs it.
Bite the bullet, and deal with the needed restructurings now.
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This is about what I expected from Romney. He is after all a fabulously wealthy Republican. Unlike the auto workers in Detroit or Dearborne, Romeny will never have to worry about how he’s going to feed his family or put gas in the car. If all three auto manufacturers go under and puts tens of thousands of families into poverty, that won’t affect Romney one bit. He’ll be living out his life in luxury thanks to the money that his dad made off the “worker bees” at AMC.
It’s easy to sit there and hand out tough prescriptions to others when it is no skin off your back. Notice how casually Romney treats the retirees, as if cutting off their pensions and health care coverage is of no import.
Of course the Republicans rushed to help their buddies on Wall Street and the insurance industry, because that affected them personally. But when it comes to helping the companies that provide a living for the working people, the Republican response has been typical: “Screw ‘em!”.
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MIM post 29,
except of course now they are admitting that they failed to manage it properly.
And we are back to some variation of the Romney suggestion of a government managed reorganization.
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llama post 31,
actually I think a better wording is to assist Detroit in making automobiles which would be competitive in the future given the increasing issues with petroleum.
I sense that Republican want to preseve the bailout trough for only the financial indistry.
A look at the bill suggests that it can in principle be used to buy any assets.
Sounds to me like the Republicans are being obstructionist.
It doesn’t matter much: if this congress doesn’t act, the Republicans will be blamed and it will pass in the next congress.
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ANLIR post 33,
my sense is Romney doesn’t want a traditional bankruptcy which would potentially put the retired workers at risk (the car companies have not finished paying thier commitments to the UAW fund) and possibly saddle the Federal government with the pensions.
The issue seesm to be how the government will structure their oversight of the restructuring, not will the government oversee this restructuring. And with the pension guarentee fund at risk, ensuring the UAW pensions are stable is in the best interests of the government and the public.
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I had a Dodge Caravan. It had a plastic transmission which I replaced every 30,000 miles.
Now I have a Toyota 4Runner with 230,000. It has all original parts. The oil never turns black and is always full.
When will Detroit build anything worth buying? How long will we reward incompetence?
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Xion points to a significant problem, if not exactly the one noted: Detroit has a terrible brand problem, largely self-inflicted.
That said, recent measurements of quality suggest that some of Detroit’s products indeed can match performance of many other marques. (E.g. US News and World Report puts the 2008 Malibu as competitive with its Japanese rivals. Progress as been made). So as with anyone who has mammothly screwed up, Detroit must do well even when people do not believe it. We are long past the days of the Pinto, the Vega (ooooh, that oil burner) the Fiero and the rust.
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“Indeed recently they made such efforts, but it was presumably too little too late.”
Their efforts were pitiful, and have been for a while. They’ve known there was trouble for quite some time. It doesn’t take a rocket scientist to calculate how many cars per capita there are, and figure out that the market has been over-saturated for a long long time. If you ignore the warnings long enough, eventually the big dog will bite you. They’ve had too many dealerships, too many facilities that they cannot close down by state law, and gee, I wonder how that happened? You don’t suppose the Unions had anything to do with that do ya? Maybe? Perhaps?
So my opinion, once again, is don’t ask me to bail their butts out, when they didn’t help me on iota when I had trouble, and in fact they stood on my head (and many others) and held me under – they brought all this crap on themselves. Go cry to someone who cares.
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“We are long past the days of the Pinto, the Vega (ooooh, that oil burner) the Fiero and the rust.”
And the GM diesel which single handedly killed the domestic diesel market for years and years, and the leaky Cadillac 4.1 liter, for which sole reason they invented those radiator sealant pellets, the Citation and Cavalier, and… I could go on and on…
They made Pure-D Junk for a long time, and their reputation suffers for it even to this day – even though they’ve improved significantly in the last 10-15 years. The Japanese cleaned their clocks for ‘em. If I had my druthers, I’d own a Toyota, Honda, or Nissan. I have had two Camry’s and loved both of them. I have had a Honda Civic and even though it’s a really high mileage car, it keeps on going.
I finally broke down and bought a 1982 Ford Ranger- because the price was right. The only thing I don’t like about it is the poor fuel mileage. You’d think that a V6 would get better mileage than a V8.. but it’s about the same 14.5- 15.5 mpg in town driving.
But the Toyota trucks don’t seem to be any better these days. All the manufacturers are probably kicking themselves for not making some economy cars now….
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Sorry… that’s a 2002 Ford Ranger…
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I keep hearing how much better American cars are. However, I travel a lot and the rental cars I drive are mostly American. Every single one of them is a major disappointment compared to my Toyotas which are all over 10 years old and going strong.
For example, I rented a Buick which deliberately ignores me. When I turn the lights on, they come on eventually. When I turn them off, they go off eventually. I can’t see the speedometer through the steering wheel. It is uncomfortable. It shakes when it accelerates. I can’t figure out how to set the temperature. The door clangs when I shut it.
I think, who would ever buy such a piece of junk? And now they want me to pay them for failure? Let the market do the talking.
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Harley-Davidson was a failing brand back in the 70’s, until the workers bought it out, and then it turned around.
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MIM But the Toyota trucks don’t seem to be any better these days.
My Toyota truck still gets 22 mpg, which is exactly the same mileage it got 230,000 miles ago. Do any American V6’s come close?
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MIM, Actually, we had a family of five when we were below the poverty line for awhile. None of that is easy. I’m just wondering why you fault the union for that problem when that is exactly why unions were created?
I did not say the unions caused the problem. I said they have problems of their own. I have seen horrible management and times when the union were not their own best friend.
Interestingly, I just came from a meeting on our insurance which we get from the company my husband worked for. The union fought for better coverage than we had before. Someone from the pension fund needed to explain what was going on. BTW, the workers took some cuts on things they could have gotten, so that the spouses of workers who have died would get cheaper rates on their insurance. The atmosphere in the room was not one of trust, clearly. Why would that be? Perhaps because of all the times the company has lied to the workers?
I remember one time when my husband got off work in the early morning after a midnight shift. He had just asked one of the management people about the possiblity of lay-offs and was assured there would be none. Imagine his surprise when he got home and found me with the morning newspaper stating the his mine was laying off, including him. I could tell you numerous stories of people taken advantage of in ways you would never dream of. These stories are handed down over and over. They are the reason some are reluctant to get rid of the right to unionize.
I’m sorry life was tough for you. We could probably trade some good stories. God warns us against bitterness and wishing evil for others. That is my point. I hate to see my tax money going for all these bailouts too. God says not to favor the rich or the poor. Our government seems to have a hard time to hold to that.
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Xion,
With that many miles on it, I doubt you have one of the newer Toyotas with a V6. And you may be driving farther distance than I, which wouldn’t be hard, as I am only a couple miles from work. So the thing never gets highway miles, unless I go visit Chas, then I get around 19 mpg.
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“I’m just wondering why you fault the union for that problem when that is exactly why unions were created?”
I fault the union, because they were the ones sucking the manufacturer dry. I figured that was one reason the dealerships couldn’t get paid for warranty work. Indirectly, that affected me. One of the biggest reasons that the manufacturers are having trouble right now is that the Unions have hamstrung them.
It’s kinda like bleeding a cow to death at the same time you’re trying to milk it for all it’s worth. When the cow bleeds to death, then do you blame the cow when the milk dries up?
I take your admonition to heart. I have been feeling bad about venting. You are right – I shouldn’t hold on to this bitterness. My typical reaction is to attack anything that hurts me, as a defense against the hurt. I would do better to acknowledge the hurt first, but it’s an ingrained habit at this point. I’ve been hurt so many times in the auto business, that it was a tremendous relief to leave it behind.
I really don’t wish evil upon individuals who have worked hard all their life, and are suddenly bereft of what was promised them. At the same time, I don’t feel that I should be made responsible for other’s wrongdoing or irresponsibility.
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I understand your hurt. I guess I have seen too often the other side. The side of company mismanagement and bad treatment of workers who mostly want some dignity and trust in the work place.
I also question whether or not we should be made responsible for those things. Unfortunately, that has been true for many, many years. How to reverse it now?
I’m glad there is a God who is just and who will bring a final justice when he returns. He will also punish evil. I’m glad he is also merciful. There will be many who be surprised when their end comes and they find that God is not impressed with their money or status.
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I hear you MIM on not being made responsible for some one else’s irresponsibility, though sometimes we do take charge. I’m thinking of the way that we’ve gone down the alley to clean out the trash next to the neighbor’s garage. Some basic direct action keeps the area a lot cleaner (and safer)– the sad aspect here is that the cost of catastrophic failure (i.e. liquidation) would far exceed the cost of the bailout. Prudence sometimes recommends actions we wouldn’t otherwise consider.
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MIM post 39,
so it would appear that you are agreein that management did not address the issues surrounding union workers early enough or seriously enough, which I believe was my point.
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Musing,
I fault both the management of the manufacturers, the unions, and their members.
If the unions hadn’t been so greedy, and the CEO’s of the manufacturers hadn’t been so spineless (and greedy), or even if the union members had been reasonable (after all they do vote) in their demands, perhaps the manufacturers wouldn’t be on the ropes right now.
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MIM post 51,
what, you are not a strict accountability person?
I suggest that historically the U.S. auto industry has had a history of greediness which goes back at least as far as the post world war II dismantling of public transportation in LA.
Under these conditions, and in the social context of the post WW II fifties, union sharing in the largess would appear to have been the norm.
The management runs the company.
The management is responsible for looking towards the future.
The management makes the labor agreements.
And, as evidenced by Saturn, management has control of the organizational structures.
And in the end, management owns the business impact of bad planning and managing.
Having said that, the operable question is how do we minimize damage to the U.S. economy. The above discussion is only useful in so far as it justifies replacing the management of the auto industry.
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A computer company I worked for switched from pension plan to 401(k) around 1980. Hasn’t the auto industry?
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