I Agree With Bush (OMG, Did I Say That !)

The Big Three American automakers (GM, Chrysler, Ford) have made bad decisions one after another for the last few years, and now they find themselves in financial trouble. It's not as if they were doing their best and just got caught by a bad economy. While foreign carmakers looked at the future and began to alter the cars they were offering to fit that future, the American automakers cast their lot with ever bigger gas-guzzlers as though the supply of cheap oil was endless.

Now that they are in trouble, they want the American government and people to bail them out with billions of dollars. They don't deserve it because they created the mess they're now in, but sadly if we allow them to go under as they deserve, it would affect many thousands of workers and suppliers. These workers and suppliers are not responsible for the mess and shouldn't have to suffer. In addition, if the workers lose their jobs and the suppliers go out of business, our fragile economy will be seriously damaged.

Something must be done -- but what? Congressional Democrats want to create an additional $25 billion to give to the car companies, possibly out of the already approved $700 billion bailout package for saving our financial institutions. Bush is opposed to this. He points to a previously approved $25 billion to help automakers create more fuel-efficient and alternative fuel cars, and wants to loosen the rules on that money and let the car companies use it to save themselves.

Frankly, though it gags me to say it, I have to agree with Bush on this matter. Why create an additional $25 billion debt for taxpayers, when the first $25 billion is still waiting to be used. I know that money was to help them transition to autos that use less or no gasoline. But they are going to have to do that anyway if they are to survive, and if they don't survive why waste an additional $25 billion on them?

As for tapping into the $700 billion bailout, we are going to need every penny of that to try to fix the credit crises (and it might not be enough anyway). It would be a bad precedent to start handing this money out to failing companies having nothing to do with the credit crises.

It bothers me to be agreeing with The Worst President Ever, but I guess even a broken clock is right a couple of times a day.

Chrysler Unions Not As Compliant As GM's

A couple of weeks ago the United Auto Worker's (UAW) union members working for General Motors (GM) OK'd a new contract. That contract allowed GM to dump it's responsibility for retiree benefits onto the union, allowed it to close several plants and reduced wages for some non-skilled workers.

At the time, I was mystified as to why the union members approved such a poor contract. Evidently, many Chrysler workers don't understand that either. Seeing the GM workers fall into line so easily, Chrysler tried to pass off the same kind of contract on its workers. They got the national UAW office to agree, but the workers aren't going along so easily this time.

So far, only the local in Kenosha (Wisconsin) has approved the contract. Five other locals have rejected the contract -- Detroit (Michigan), St. Louis (Missouri), Newark (Delaware), Fenton (Missouri) and Twinsburg (Ohio). A majority of the Chrysler workers nationwide must approve the contract for it to take effect. Otherwise, negotiations must continue.

Many locals have not yet reported, and the contract could yet be approved. But it certainly looks right now as if it will probably be defeated. It doesn't look like these workers want the same contract GM workers agreed to.

If negotiations are to continue, it might be good for Chrysler's workers to demand new union negotiators. They agreed to a bad contract with GM, and have recommended the same bad contract to Chrysler's workers.

Is The Turnaround By American Automakers Real?

Much has been made on the news the last few days about how Ford and General Motors actually turned a decent profit in the last quarter. Of course, officials at the two companies would like for us to believe they have solved their problems, and are on the road back to dominance.

But the truth is that these profits were made on the backs of the workers. The executives have not turned the companies around. They are not now making better and more dependable cars that people want more than foreign imports. They have simply fired tens of thousands of American workers, and that will not sustain their profits in the future.

The truth is that these companies are losing more market-share every day. A couple of months ago, Toyota passed GM and became the leader in car sales worldwide (and they didn't have to fire thousands of workers to do it).

Even worse, for the first time in the history of the auto industry, the market-share of U.S. automakers has fallen below 50% IN THE UNITED STATES! Foreign cars now have a larger share of the market than American cars in our own country. Instead of driving forward, U.S. automakers are still pedaling backwards.

In July, GM, Ford and Chrysler (which will soon be American-owned again) only had a 49.5% share of the U.S. market. This figure includes U.S. owned foreign brands such as Saab, Volvo, Land Rover and Jaguar. If you exclude these cars, the market-share falls to 48.1%.

Don't let them fool you. American automakers are still in a lot of trouble. They need to start producing cars that excite the public -- cars that are dependable, fuel-efficient and attractive, or they'll be driven out of the business. It may already be too late to turn things around and regain the trust of the consumer.

The next few years will tell the story. They must innovate or perish.