Scott,
Perhaps we would be better served if everyone ignored the political implications of an auto industry bailout and focused on a long-term fix. The American car companies are not going to be viable unless they deal with their legacy cost structures. If federal funds are injected into Chrysler, Ford and General Motors without addressing the cost structure issue, it only delays the eventual bankruptcy filings. A possible compromise might be to let them file for bankruptcy, which would allow them to radically restructure their finances, and have the government provide the DIP (Debtor-in-Possession) financing. Would that be palatable to the unions? I doubt it.
The following was posted by Bill ob the PfP thread:
Should We Really Bail Out $73.20 Per Hour Labor?
CARPE DIEM
The chart above shows average hourly compensation (additional data source here) for the Big Three ($73.20) and Toyota ($48.00), compared to average hourly compensation for Management and Professional Workers ($47.57), Manufacturing/Goods Producing ($31.59) and all workers ($28.48), data available here.
Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM, Ford and Chrysler) that compensate their workers 52.5% more than the market (assuming Toyota wages and benefits are market), 54% more than management and professional workers, 132% more than the average manufacturing wage, and 157% more than the average compensation of all American workers?
Maybe the country would be better off in the long run if we let the Big Three fail, and in the process break the UAW labor monopoly, and then let Toyota, Honda and Volkswagen take over the U.S. auto industry, and restore realistic, competitive, market wages to the industry. It might be the best long-run solution.
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