Some thoughts on the automotive bailouts

A neighbor of mine has a "No More Bailouts" sticker on her car.

Between that sticker and the news that Chrysler has declared bankruptcy and stopped offering auto loans, I began thinking about the tea parties and the animosity about the car company bailouts.

Since they were first brought up, I have been torn on the automotive bailout plans. Living where I do, I have seen the financial impact of the auto industry leaving.

I have said before that I don't care who is to blame, too many people will be hurt by letting GM go bankrupt. The CEOs and upper management who screwed the proverbial pooch will not be punished by letting the auto industry die. They will take their golden parachutes and land in a cushy job in another industry.

Look at Carly Fiorina. She was the CEO of Hewlett-Packard and after a controversial merger with rival Compaq which didn't deliver promised profits, she was forced out of the company. With $21 million of walk around money. She later served as an economic adviser to Republican presidential candidate John McCain. Fiorina is now a member of the Board of Trustees for the Massachusetts Institute of Technology and is considering a Senate run.

When the auto bailout was passed, I remarked:

Even though I don't think the new $787 billion stimulus bill is the best possible package, it is signed now so hopefully it can do some good for the many who are out of jobs...or are facing future unemployment.

And I stand by that. The workers have been getting screwed for years by incompetent management. Now that stand to lose their jobs, their paychecks, and possibly their homes because of the same idiotic mismanagement. That would be punishing the wrong people.

Many in Washington have been blaming the unions for the downfall of the automotive industry...and it is bullshit.

People have decried the unions for giving workers too much at the expense of the company. That is amazingly untrue. Unionized workers don't make the hundredfold increase of wages and benefits that many people seem to believe.

If carried out as planned, by 2010--the final year of this existing contract--total compensation for the average UAW worker would actually be less than total compensation for the average non-unionized worker at a transplant factory.

The following was written in 2007:

Nevertheless, in the past year GM has rebounded with $207 billion in revenue while paying $10.2 million a year to its CEO alone.

$10.2 million...and the unions are the problem?

In a perfect world, I like the plan put forth by Socialist Party USA:

The Socialist Party rejects the bailout of the automobile industry, giving billions of dollars in subsidies to corporate executives that have already demonstrated their abysmal incompetence. Instead, we need an integrated transportation program that will shift people out of cars and into mass transit. The billions in subsidies should be turned into investments in a publicly owned enterprise that would take over the factories that currently produce cars and would prioritize the production of buses, subway cars and trains for government entities. Such an enterprise would be controlled by autoworkers in conjunction with elected representatives of the communities in which these factories are located.

Socialist Party USA also remarked:

In the 1940s, the UAW led the union movement by winning full health care benefits from auto industry employers. Today, that incentive to join a union is quickly evaporating as employers roll back decades of struggle. The Socialist Party USA joins UAW workers to demand that GM honor its commitment to provide complete health care insurance at no cost to its employees and retirees. We also call for the labor movement to join us in demanding universal socialized health care for all.

Those benefits? They might be disappearing if the automotive companies go into bankruptcy. Chrysler is already dealing with that potential problem.

The UAW, Chrysler and the Treasury have reached a tentative agreement to partially protect union members' pension and retiree health-care benefits under bankruptcy, said these people. The deal needs to be ratified by union members and courts.

Note: partially protect union members' pension and retiree health-care benefits. The benefits they have been working their asses off to earn are disappearing.

I wish the government would be more amenable to taking the course that the Socialist Party USA suggests. If the companies were controlled by autoworkers in conjunction with elected representatives of the communities there would be far less idiotic decisions being made. And there certainly wouldn't be any $10.2 million paychecks to individuals.

But even though the Republican National Committee wants to rename the Democratic Party the "Democrat Socialist Party" the truth is that Obama is not a socialist nor is the Democratic Party socialist at all.

Saul Anuzis, former chairman of the Michigan Republican Party, even admitted that attempting to label Obama a Socialist didn't really work...which is why the GOP made a move to labeling him a fascist.

Lest people immediately discount the plan put forth by the Socialist Party USA simply because they are Socialists, many regular citizens have defended Socialism. I even recently wrote a few thoughts on Socialism. It isn't inherently evil, nor should the above plan be tossed aside merely because of the group suggesting it.

Unfortunately, the dreaded S-word still carries a negative connotation for many people (who ironically probably couldn't define what Socialism really is anyway) so there is pretty much no chance that the government would accept and utilize this plan.

As such, I remain torn on the auto bailouts. I don't want workers punished for the mismanagement of the idiots in charge...but I also don't really agree with the bailout plans either. All I know is that I don't want thousands of people out of jobs and looking at losing their houses while the idiots responsible simply move on to another company with no repercussions to themselves or their bank accounts. Like Carly Fiorina.