Big Three May Soon Become The Big One
December 12th, 2008 Posted in Economy
After listening to the unions response to the failed bailout, you’d think that they would be in the mood to face the obvious… but now we’ve seen that they really haven’t got the collective brains to understand the dire nature of their situation, or even an appreciation of how they got themselves into this situation.
The Big Three haven’t managed to create a car North America wants for a long time – and the result is that even with billions, they haven’t got a plan to change their approach.
The only solution is bankruptcy, and a new deal with the unions that reflects current realities.
Otherwise they’ll become the Big One.
December 12th, 2008 at 11:15 am
If the American and Canadian public no longer want to buy the cars produced by the Big 3, isn’t that the final judgment on them..???
The CAW is blaming the credit crunch on the problem .. claiming that the lack of credit is stopping people from buying Big 3 cars. If that’s the problem, then the governments should be pouring money into the credit market and not the Big 2 manufacturers.
Let the market decide .. but I think the Big 3 have priced their products out of the market and are asking governments to subsidize their production and profits. No way Jose …!!!!
December 12th, 2008 at 11:21 am
Pretty funny putting the AZTEK as your poster child for what is wrong with the Broke 3. It truly is the 21st century Pacer and a symbol for the NA auto industry.
December 12th, 2008 at 11:56 am
I’m not sure I totally agree with you. I’ve received alot of emails lately on how the CAW works. Wages for the big 3 are in the 70-75 $/hr range. Toyota’s are in the 45-50 $/hr range. Benefits for CAW workers are un-believable. If you get layed off (yes, loose your job) your severence package includes an hourly rate of 32 $/hr for life. If any of that is actually true, which I SUSPECT it is (I don’t know for sure) the big 3 seem to be held hostage by the CAW.
I’ve compared the price of a loaded Chev truck to a loaded Toyota truck and they’re very close in price and value. It’s starting to look to me like Toyota is just making more $ per unit. Does anyone know if Toyota is unionized?
I watched an interview on FOX news with Donald Trump where he did alot of talking but his main message was the big 3 shouldn’t be afraid of the B word…Bankrupsy, they would bounce back bigger and stronger.
December 12th, 2008 at 12:37 pm
The Honda and Toyota plants in Ontario are non-union.
A recent report showed that Toyota made ~$700 per car manufactured in North America , while at the same time GM lost about ~$800 per car … but according the the CAW mouthpiece today who was screaming that PM Harper must IMMEDIATELY save the auto industry … the union is not to blame for any of the Big 3 problems !
I have a question to the CAW … if you continue down the same road refusing to accept some of the cost reductions , and GM goes into bankruptcy … what happens to the GM pensions ?
Somehow I think a more conciliatory approach by the unions might endear the politicians to kick in some bridge financing , but given the virtually every union , including the CAW back the Coalition , PM Harper has a tough sell giving money to a poorly managed auto industry with an intransigent CAW union.
December 12th, 2008 at 1:36 pm
If the Harper was a legitimate, small-c fiscal conservative he would rely only on the market place and the bankruptcy process to restructure the auto sector rather than producing a deficit by wasting tax dollars.
A genuine fiscal conservative would acknowledge that the government must not reward bad decisions, made by incompetent executives who require a change in mentality, by providing auto companies with a bridge loan to nowhere. These same uncompetitive companies would be back with their hands out in six months for even higher subsidies, and will be forced into bankruptcy within a year anyway; thus the government would only be subsidizing failure.
An authentic fiscal conservative would apprehend that a change in the mentality of the executives in the union suites is mandatory if these companies ever expect to become competitive. Tough love is essential to make the union executives appreciate that auto workers’ wages, benefits and legacy costs must be restructured to make them comparative to non-union auto workers. These union executives must recognize that these companies must be in a position where they can compete with non-union auto producers, and that the most appropriate formula to achieve this is through bankruptcy.
If our Prime Minister was a indisputable small-c fiscal conservative he would, under no circumstance, tolerate the country to return to a deficit position. A small-c conservative would cut the $230 billion budget by eradicating ineffectual programs, government assets and worthless crown corporations. He would then use the funds gained to lower the payroll tax which would put dollars into the hands of people who would immediately spend it.
December 12th, 2008 at 1:48 pm
Each of the big 3 had similar unit sales last year as the year before…which were similar unit numbers to Toyota and other manufacturers like Mazda, Honda, and Nissan…
So what’s the big 3 got that’s costing them soooo much that Japanese manufacturers who build there and in North America don’t have…
What it amounts to is the same thing that we have in one of our national political parties… No Damn Plan and a belief that Unions come first over jobs and company stability…
Here’s a though unions if you want to survive…cut the dues requirements by 50% and allow the big 3 to cut the salary’s by the same matching amount to show no net reduction to the employees…
Say there are 100k auto workers in the North American Job market for ease of numbers and you cut the union dues by say 100 bucks a paycheck…that’s 260 million a year out of the overhead… that’s money that’s not taxed as it simply doesn’t exist in the channel anymore and although revinue within the gov’t chain of employer tax would go down the employee’s net income would go up and they’d have more disposable income…which they’d spend back into the economy…
It aint rocket science…it’s simple math.
December 12th, 2008 at 1:52 pm
Machiavelli … If Harper tried to do anything remotely close to what you’re suggesting in a minority parliment he’d be out on his ass in a heart beat and with a little thinking I think you already realize that…
He as to deal with the cards Canadians gave him to play with and that means accommodating the snakes as they plot to pull down the rightly elect gov’t
December 12th, 2008 at 4:46 pm
There is an interesting poll at ctv right now.
Poll Result
What do you think of the govt’s auto bailout proposal?
It’s not enough 132 votes (10 %)
That should do it 373 votes (29 %)
Not necessary 798 votes (61 %)
Total Votes: 1303