WSJ: Better to "set the money on fire" than give it to GM to reinforce future losses
- Thread starter wilburbear
- Start date
I am supportive of a bail out of the auto industry. However the format needed is not a continuation as is mainly being considered.
The Detroit Big 3 should go into bankruptcy with an offer from government beforehand to provide liquidity loans to all 3, post-bankruptcy. There is a lot of historical debris in their accounts and in the accounting by the 3 to date, which needs to be cleared away as a needed outcome of such bankruptcy proceedings. Existing shareholders should be allowed to join in post-bankruptcy recapitalisation through private and/or government owners providing new cash.
The Detroit Big 3 should go into bankruptcy with an offer from government beforehand to provide liquidity loans to all 3, post-bankruptcy. There is a lot of historical debris in their accounts and in the accounting by the 3 to date, which needs to be cleared away as a needed outcome of such bankruptcy proceedings. Existing shareholders should be allowed to join in post-bankruptcy recapitalisation through private and/or government owners providing new cash.
No offense to your dad (I'm sure he worked his tail off for many years for Ford), but that says a lot right there about how the UAW has strangled the automakers (and weak management let them do it).
One of Henry Ford's forward-thinking innovations was to make sure his workers were paid well enough so they afford the products they were producing (the Model T). Not only was he producing a product, but he also was helping create a customer base which could afford his product.
I doubt seriously that Heny Ford ever would have been successful if he paid his workers so much that they could afford to buy imports that cost twice as much as the products they were producing themselves.
Your Henry Ford story aside, (which is a good one by the way, many good stories from that great man), this only partly true.
Look, let's be honest. Why won't the CEOs, major shareholders & execs simply go up to UAW and say "Listen guys, it's very simple. Either you make compromises or we go BK".
Because that UAW mentality comes from the top and trickles down. At all levels, GM & Ford are run like crap, funds are being misused and embezzled. The execs love the taxpayer money, so they keep the charade going instead of facing the problem head on.
Take these shitty companies BK. All the editorials claiming irrepairable damage are pure bullsh*t. Within months, you'll see new companies established ready to take their place. Or even the Japanese car makers expanding their operations.
I agree absolutely with what you say.
However, the UAW won't give in to threats of BK because they believe they have their sugar daddies in congress, since they're big contributors to the controlling Dems.
The ironic twist to all this goes back some 50 yrs. ago. The japanese automakers back in the 50's embraced the work of Williams Deming and other American industrial quality management gurus.
Ford and other US automakers paid little attention to their work and so it continued for a very long time. In the meantime the Japanese went on to develop and master just-in-time inventory and continuous improvement management techniques.
Deming is today considered the father of quality management. And the Japanese automakers became...you know the rest of the story.
Ford and other US automakers paid little attention to their work and so it continued for a very long time. In the meantime the Japanese went on to develop and master just-in-time inventory and continuous improvement management techniques.
Deming is today considered the father of quality management. And the Japanese automakers became...you know the rest of the story.