Tuesday, April 28, 2009

Foxes in the Henhouse, Again

United Auto Workers to Own 55% of Chrysler

Chrysler should be forced to file for bankruptcy. A new deal, pun intended, to keep Chrysler afloat involves not only merger with Fiat, but majority ownership of the carmaker by the United Autoworkers (UAW).

Consider, only for a moment, what a merger with Fiat might entail. Fiat was forced to withdraw from the U.S. market in the early 1980's because it could not build cars that anyone in America wanted to buy. It has not reentered the market. Aside from massive Italian government subsidization of Fiat over the years, what has changed?

Now, consider that two of the problems U.S. carmakers have endured for decades, and which are part of the current unprofitability of U.S. carmakers, are the high costs of labor and legacy costs (such as retirement and health care benefits for former employees) that add thousands of dollars to the cost of each automobile made by U.S. carmakers. The only party that has been largely unaccountable in the purported rescue of the U.S. automakers has been the UAW, which does not seem to believe that it needs to make concessions on the cost of labor and on legacy costs, nor has the Second Carter Administration (SCA) been pressing the UAW on these issues.

Don't get me wrong. I am not against workers earning a decent wage and having decent health and retirement benefits. However, if an ailing company is to survive, everyone involved has to make concessions to restore profitability. Previously, it was thought to be suicidal to refuse concessions and force a business into closure. Earning a bit less was thought to be better than having no job at all.

Enter Big Government Solution (BGS) to the problem. Instead of insisting that a business be run like a business and either cut costs to restore profitability or file bankruptcy, the SCA gives a little less than half of Chrysler away to foreigners and the other half to the Bolsheviks (the UAW). Reading between the lines, the government does not want Chrysler to file bankruptcy and hurt its Bolshevik Cash Cow (BCC), the UAW. So, the SCA's BGS is to aid Chrysler only if it is controlled by the BCC, the UAW. The foxes are not only in the henhouse, but have been given the deed.

I am a small business owner and from this day forward will never buy a Chrysler product of any kind.

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