Taxpayers to support UAW contract - Auto Bail-out

Here we are 1 month later, the Democrat lead congress could not push through a bail-out (loan) package for the auto makers. The Politics at play is pathetic. Republicans say that the Congress is trying to push this through using fear, to support their constituency to retain votes. The Democrats are attempting to minimize the UAW impact on the big 3 by saying that even if they worked for free, the company would still go bankrupt.

Some facts as I see it.

The significant difference between the Big 3 and foreign automakers is the fully burdened hourly rate. For example - GM and Toyota have the same amount of revenue on a similar number of cars, but Toyota makes profit and GM makes a loss. The fully burdened hourly rate (not the pay rate) for the big three is around $75/hr and the Toyota's, Hondas, Nissans are running in the low $40's/hr. On a pay rate basis, they are likely similar. However, the workrules and the job banks and the obstacles the union places on the big 3, cause the profits to be lower - actually a loss.

In addition, look at all strong union industries, and union regions, and you'll see weakness over the past 20 years, while nonunion industries and regions of the country have flourished.

Does anyone believe that the Management at the big 3 feel the Union is a good thing for their business? Have you heard any of them state that the union is a burden, something that one would expect to be the first thing addressed - but not a peep - why? - because they are asking a Democrat controlled congress for money, and the Union heavily supports democrat over republican.

People need to voice their opinions - do you want your tax money going to support job banks, and pensions that we can't have ourselves?

If you are worried about the millions of jobs affected if the big 3 go into bankruptcy - here is the logic I'm following.

Pro bail-out folks say that 1 in 10 jobs are related to the auto industry, and that bankruptcy will cost all of those jobs - makes no logical sense.

For the US to lose those millions of jobs, the big 3 would have to completely fail and close. Restructuring would mean some layoffs, maybe 20%. For all of the supply chain jobs to disappear, the big 3 would have to completely close. If they restructured, and laid off 20%, likely the suppliers, who not only supply the big 3 but also have other customers would survive. Those that are mismanaged, with too much weight into the big 3 as customers would fail, as it should be, no diversification is a big risk. Consolidation would occur, improved profits would be seen by all.

It is pure fear mongering. Don't let the rhetoric sway you. Think logically about the info - the companies have to be competitive to survive. Supporting the excessive union costs with taxpayer money will not allow their success, so we are throwing good money after bad. Look forward to hearing your thoughts.