Friday, November 7, 2008
Survival of the fittest?
I categorically reject the concept of survival of the fittest as it applies to the false theory of biological evolution but, as it applies to economics, I'm a believer. There is now talk of the gubment bailing out General Motors, Ford, Chrysler, etc. General Motors et al. dug their own graves by being beholden to the unions, paying exorbitant wages, and paying unthinkable pensions to retired auto workers. According to the Washington Post "In the past two years, GM has put almost $30 billion into its pension funds and a trust to cover its OPEB obligations. Yet these accounts are still a combined $54 billion underwater." All this driving (Ha!) deeper into debt while reducing quality (think cheep plastic lug nut covers) to keep their heads above water. I understand the need for adequate pensions and adequate pay but I think something got out of control here. I think the root cause here is our ever increasing entitlement society and with the party of entitlements knocking on the door of the white house we will have more of the same on a national scale. I just can't wait! Survival of the fittest? Let the dinosaurs die.
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2 comments:
I tend to put more blame for GM's financial woes at the feet of the unions rather than GM itself. GM probably had little else it could do when the idiots walked off the job untill their union demands were met except maybe fire them all and start over again. Nothing infuriates me more than seeing GM finally making headway on building good vehicles and then the self absorbed idiots walk off the job again for a month or two. Do they not realize that they will have nothing when the company goes under?
As far as bailouts (loans) go, one aspect that is not looked at much is the effect that the constantly changing governmental demands and regulations have on automakers. It is in this respect that I feel that maybe the government actually OWES the carmakers a bailout or two. Think of what it is like as every year they are told that they must meet yet another crash standard. This adds weight and year after year, the cars get heavier. Then the government comes along and says they now require a corporate average fuel economy of 4o MPG. So now you have government-mandated over weight cars that are the antithesis of fuel efficient cars that have to be made fuel efficient. A while back the gov't mandated that a certain percentage of cars sold in the U.S. MUST be electric. How much money did auto makers spend on these unachievable vehicles before the Gov't said "oops, just kidding"
Don't even get me started on emissions standards!
My solution? Wait untill the global economy takes its toll on Honda and Toyota plants in the U.S. and they close down. Then GM fires all union workers and hires all the non-union workers from the closed Japanese plants! After declaring bankruptcy and getting out of previous union obligations of course!
Well said roosterpoo, your hired!
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