Auto Industry Woes Sort of Self-Inflicted

GM and Ford recently announced that they had multi-billion dollar losses. First of all, let me say that I am not surprised. GM, the largest auto maker in the world, had the biggest losses, to the tune of $3 billion; Ford was around $1.5 Billion. Chrysler is also in a bit of trouble. They are all asking the U.S. and Canadian governments for money to help them get through the economic downturn. Collectively, they are seeking between $25-70 Billion from the U.S. government alone.

Here is my problem with all of this. They are a private business for one thing. If they can't make a go of it, then maybe they need to look at cost-cutting measures and re-structuring. If one looks at the salaries of their top executives, one would notice that each of them is paid multi-million dollar salaries, plus bonuses. If the governments agree to pay these companies any money, I sure hope they stipulate that these huge salaries get slashed.

The other problem with the auto industry are the unions, such as the CAW. They are causing the costs of producing automobiles to increase at a ridiculous rate. If the car companies were smart, they would get rid of a huge number of unionized workers and save a pile of money. Unions are the main reason why so many companies are in trouble. They can't afford to pay union members the huge dollars that they demand. Why does a guy building a car need to make $95 per hour to drop in a windshield? They have to cut salaries and get rid of the unions. Plain and simple.

If they do some restructuring and make necessary cuts, then maybe they can start making affordable vehicles again. I don't know too many people who can pay $60,000 for a truck. That's ludicrous.

In a way I don't believe that the government should be helping out private industry like this. I don't believe they should be helping the banks either, who have posted record profits for the past number of years; but that's another topic for another day.

The government can be helping out in other ways, such as broader tax cuts and putting money back in people's pockets, not by throwing money around like it's going out of style. Hmm, I guess it almost is as the world economy weakens.