Stop the MADNESS...

Enough is enough! We need to end all of this "bailout" activity currently taking place in the U.S. economy. Lately, GM and Ford have stepped up to the welfare window for their handout , and it is not looking good. Did I miss the class in Business Management that taught, "grow your company big enough and the government won't let you fail."

Let's take a walk into history for a moment and look at what happened in the late 70's and 80's with US automakers. Prior to the mid-70's, bread and butter (non-luxury/daily driver) import vehicles were a rare occurrence for the average automobile owner here in the US. Early on, the American auto industry revolved around the idea of "planned obsolescence". Basically, they built cars that required maintenance, repairs, and eventually become obsolete and need to be totally replaced. We had a great model for perpetual repeat business on our hands. When imports such as Honda, and Nissan came into the picture, Americans began demanding longer lasting more fuel efficient vehicles that were readily available in foreign markets. As a result, demand for domestic vehicles began to decline and U.S. automaker profits began to dip. Did the government step in and to help out then? No! Instead, the realities of free market competition took place, and US automakers figured out how to re-acquire their market share by building better cars that lasted longer (Today, GM has a 100,000 mile warranty on their vehicles) . We need to do the same today.

GM, Ford, and Chrysler make good vehicles, but I think the labor unions have really undermined the natural competitive edge that is inherent with domestic autos. Rather than placing the blame on corporate executives, perhaps we should point the finger at labor unions for pushing wages, salaries, benefits, and pensions to unsustainable levels in this highly competitive worldwide industry. Let's face it, the Japanese do it so well because their costs are less.

The 'Big 3' need to be revamped, not bailed out. Why delay the inevitable by giving GM a government loan to continue doing business as usual? Adjustments need to be made, so let's let it happen automatically through layoffs, reorganization, and innovation. Also, let it be sooner rather than later.

There is no doubt that the fallout of a bankrupt GM or Ford would result in massive layoffs (estimated to be 1/5th of the U.S. work force), but Americans work best under pressure. I have full faith in the American worker to seek new opportunities to earn a living in the wake of an industry collapse. If the US automotive industry collapses, the government's only role should be to stay out of the way, and ensure that the barriers to entry into other free market industries are kept to a minimum. When the Steel industry collapsed here in the US (also caused by powerful labor unions), those people found new career opportunities elsewhere. My father was part of the steel bust here in Pittsburgh, PA (the Steel capital of the world in the 1970's). No he is not still collecting unemployment 30 years later. Instead, he started his own business within months of being laid off and went from unemployment to providing jobs for himself and for others. Don't spread the wealth, spread the opportunity!


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