Fun with Bailouts

That title was meant more in an ironic sense...

So anyway, in brief bailut news:

The Big 3 (Ford, Chrysler, and GM) are still petitioning the g-man for a large sum of money to help get their businesses back on track. There is a problem with their proposed business models, however. Namely, it assumes people will buy their cars. As sales trends have shown over the past decade or so, people don't. They buy "imports". I quote imports because more of my Honda was built in the good ol' US of A than any car offered by the Big 3 (at least at the time of my purchase). More than 70% of my car was built and manufactured here. It has US-built parts and was assembled in a US factory. When I was shopping big 3, I was lucky to find a US-built percentage greater than 50%. It's sad, all things considered. 

I've been accused of being heartless by certain people who are supporting this idiotic bailout plan, but if you stop to think about it for a moment, these three companies have had years to fix themselves. I mean this at both the companies' execs and the overpaid union workers who are employed by them. The money-mongering executives rode on the SUV wave and failed miserably to put any money back into R&D to invest in a future where gas wasn't $0.99 a gallon. Gas prices have been trending upwards for at least 8 years, but instead on noticing, the car companies sat on their haunches while the import companies innovated and innovated again. 

The bloated and overpowered Union of Automotive Workers is also to blame though. The car companies have to pay exorbitantly to employ anybody because of the outrageous demands of the inflated union. I read somewhere that GM pay an average of $2400 per car above the cost of the employees' salaries for benefits and other union fees. I won't vouch for the validity of that particular statistic, but if it's true, it's outrageous. Unions have gone past their prime and should have faded out a long time ago. 

Nevermind the domestic vs. import dispute. People aren't buying cars at all. What part of that does a bailout fix? None. When (if) the economy stabilizes, we're still left with a trend of declining big 3 car sales. The collapse of the big 3 is completely inevitable, so I say let 'em burn.

Yet, Congress is still at it. Here's the draft of the bill proposing the bailout as posted by CNN today. Barack Obama, our oh so wonderful President-elect has said that he supports the bailout as well... so long as fuel economy improves. 

Anyway, I'm done ranting. Down with bailout proposals! They won't help anything (and they haven't yet, but more on that in another blog).