Monday, January 5, 2009

A current topic of interest of mine is the bailout of the "Big 3" auto manufacturers.

Just before the eclipse of 2008, the Big 3 U.S. auto manufacturers came to Washington, hands out, to ask the federal government for BIG money to tithe them over while they were trying to figure out if they could make it through the next few years. They flew to Washington to ask for this money - because they ARE SOOOO CASH STRAPPED- in their own respective private jets.

Now we're just going to go on a mathematical tangent here for a couple'a minutes because I am distracted by the beggars arriving on their own respective private jets (owned by each respective auto manufacturer corporate).

Okay here we go:
One jet - USED we're talking a minumum of $1,000,000 for a USED 4 passenger jet to $16,000,000 for something new and relatively nice but not too posh. A pilot runs around $100,000 a year, most jets have 2 of these. A hangar runs around $3-4K/month and maintenance teams can be up to $15K for every 40 hours of flight. Avgas is averaging around $3.50/gallon and these planes gotta have around 200-400 gallon tanks (if not bigger!) Just those simple figures mean that to maintain these jets that only the elite of their respective companies get to use the corporations are probably spending up to a million dollars to maintain the jets... Now if you were going to beg for a handout, wouldn't you go looking your raggediest or most thrifty to not look TOO RIDICULOUS?

So they went a begging and they got some interesting responses - one of which was that they had to give some plans and figures on how they were going to use the money loaned to them to become profitable again and how and what kind of timetable they were going to pay the loan back... Well this offended the auto executives!

C'mon people, when you go to the SBA (Small Business Administration) for a loan, they don't just cut you a check. Guess what- they want a business plan, they want to know how your business is going to work and succeed to pay the SBA loan back. Just because you think you can build flying saucers isn't exactly a guarantee of guvment checks to finance your personal pipe dream...

Sooo... if you go to Washington, on your private jet, and ask the government to bail your BIG business out- why be miffed that they send you home until you come back with a business plan that shows how/when you will pay back that investment. Private equity and investment houses would ask no less themselves, why is it different when that "investor" is the American people/Government.

Now, I DO AGREE that the most wasteful people with a checkbook are congressional politicians, and most especially Democrats as well.

Also, another pet peeve - the unions! When their constituents' jobs are all on the edge of the axe, that auto unions are unwilling to bend on the compensation, benefits and ridiculous retirement that are sucking the auto manufacturers dry. Just grandfather out the benies for the workers there for more than 15 or 20 years and move on. Make the workers partners and alienate the unions, give the workers bonuses on lowering costs to production and lowering rejection and assembly line mistakes that lead to costly recalls.

We already have more than half a million new unemployment claims last month, so what's a couple more thousand auto workers to add to that right?

Wrong, we really want to save the industry- we don't want to hand that huge sector over to foreign auto manufacturers without a fight BUT we need to do it intelligently with the American ingenuity that has sustained us for over 235 years.

Some of those auto manufacturers create the very strategic vehicles needed for our infrastructure, our security and military, so there is a national security aspect to it in that you don't want a foreign investment to buy into it either and have access to the patents and technology that makes us innovatively superior to other nations. It leaves us in a conundrum...

I guarantee that guys like my old Marine Corps buddies Arthur and Lewis who sell those cars aren't getting those union benefits and its ridiculous that non-college educated relatively low skilled jobs, that are predominantly supplemented by robotic labor on assembly lines, get paid that much and get those much benefits while the rest of non-union, blue and white collar, and working class America cannot relate to them and we pay our co-pays too! These people make more than 60% of our teachers and have better retirement than they who prepare our children for their futures!

Auto Unions can be a cancer on further expansion and advancement of the current American auto industry... Prove to me they aren't potentially a malignant cancer and that they have a use to us now in 2009. Do not give me 1892 Industrial Revolution health and welfare issues and examples... I challenge any of you to tell me why in 2009 with comprehensive labor reform and federal and state labor laws and protections for workers, that we need labor unions... Unions drive up the price of goods manufactured to pay for the ridiculous concessions that they require for their members. Are there some good unions, yes I grant that there are, but I am not addressing anything other than specifically auto industry unions in this essay. The bailout of these Big 3 and their re-structure for future growth and competitiveness has to address unions.

Another thing it has to address is timetables and development of new technology for fuel efficiency and fuel independence for vehicles and alternative fuel vehicles specifically that are AFFORDABLE to common Americans.

Now, Ford went home, they now say they don't need the money, they'll go it alone without it.

Congress also has to do its share. the time of the free meal ticket for foreign nations to import into the U.S. at will with little to no tariff and taxation is over. When our own auto manufacturers cannot be competitive abroad because their competitor markets ration the number and type of vehicles that they can export to competitor nations. You want free trade and you want a favored nation status for trading with America - open your markets and have parity with our industry...

This story isn't over- it's only just begun...

1 comment:

  1. This reminds me of "The Jerk" when the rich Texas airplane owner came to Navin begging him for cash because the leather seats in his Cesna were cracked.

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