by Jack Lee
It’s your money…you need to speak up!
Once again government is being called on to give taxpayer money to private industry in the name of saving the economy.
Nancy Pelosi and Barack Obama both strongly support a bailout for GM. My knee jerk response was on their side. I thought, we can’t let GM fail! We can’t risk 1.5 million people suddenly out of work… that would be a nightmare! And who will build our tanks and guns if we have another major war?
A closer look says something else entirely. GM will be forced to file bankruptcy without the bailout money, but they will continue to operate just like PG&E and a number of airlines have done in past years. The greatest impact will be on the unions, like the UAW. A bailout protects the unions, their labor contracts and lavish retirement plans that has been slowly sapping the life blood out of GM.
Democrats are beholding to unions. Union money and union voters have helped elect Democrat candidates. Unions have made a great financial investment in the Democratic Party and as a result of this undue influence, unions in essence own the Democratic Party. Is it any wonder that Nancy Pelosi or Barack Obama would support a bailout plan that benefits unions? But, what about George Bush, doesn’t he support a bailout plan too? Yes, and a month ago Democrats were calling him our dumbest president ever. But, lets be clear Bush has not absolutely resolved a bailout is the only way to go, so hold that thought.
If GM doesn’t get a bailout, and files bankruptcy, the court takes over to re-negotiate all contractual obligations (that means all forms of debt are up for re-negotiation!!!). In a year or two, GM re-emerges from bankruptcy with a new business model, one that is more competitive, like Toyota or Honda that have been kicking Detroit’s rear end for years. The Big 3 were powerless to halt this thanks in part to the auto worker unions. This is the heavy yoke that companies like Honda and Toyota don’t have and in a highly competitive market place this can make a tremendous difference to the bottom line.
Of course it’s possible that GM will re-emerge somewhat smaller too. Some models or brand names may be dropped. Some assets may be sold off to competitors or simply diversted. Some small mergers may be made, some layoffs will be permanent. But, on the whole it would be a stronger, more viable company, once its freed from the heavy union yoke that has been slowly dragging them down.
Restructuring GM also means re-negotiative these overly lucrative CEO and executive salaries to a more realistic parity with the working class, something I think is long over due! Executive salaries have multiplied many times that of the hourly wage earners over the last 30 years and yet therir performance has not. This defies the laws of economics. Our US executive salaries have out paced world-wide executive salaries which should reinforce my arguement. All you to do to see the injustice of their salaries to look at companies that have failed while execs received bonuses and then walk away with their booty into retirement! Stockholders, the Board of Directors and government have all failed to insure the safety of corporate assets from being pillaged by the greedy corrupt who have proven time and gain they will lie, cheat and steal to insure their ill gotten gains. Any bankruptcy re-negotion will not be worth the effort unless this problem at the top is part of the new business model.
Because this is your money, your future debt and quite possibly future tax increases do you want to go with a GM bailout? Your opinion please.