Flutterby™! : American automakers are leaches

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American automakers are leaches

2008-09-26 19:38:13.300739+00 by Dan Lyke 1 comments

Speaking of lack of moral hazard: Automakers just got $25 billion in loans, and are expected to ask for another $25 billion next year (More, more), even adjusted for inflation this is like 6 times the much debated bailout of Chrysler back in 1980.

I realize that the argument here is that if we let these companies fail we'll have huge swaths of the Midwest out of work, but isn't this the same basic issue as welfare: We want to make sure the kids don't suffer, but in doing so we have to provide a free ride to parents who didn't make wise choices? Except in this case it's that we want to make sure the workers don't suffer, but in doing so we have to provide limos and vacation houses in Vail to the execs.

[ related topics: Children and growing up Ethics Work, productivity and environment Automobiles Economics ]

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#Comment Re: made: 2008-09-26 19:52:29.670796+00 by: JT

I dated a girl in vegas who's dad was retired from GM. They all had lifetime benefits through the union, he retired at 100% salary after 25 years, and made more when he retired 20 years ago than I do on a really great year now. I don't think so much that it's midwest workers that we should worry about, but having large number of people who aren't even working but still getting paid. If you really want to save auto makers a ton of money, let them reduce salaries, pensions, and benefits to a more reasonable amount... and let them lay people off when there's no work for them to do.

I can't blame the union for this one... I'd think it was the fault of the manufacturers for letting the unions get to far in this particular case. Unions have done some great things in the past for getting people benefits and a good wage... and some pretty outlandish extremes as well. I think UAW sways on the side of outlandish.