Wednesday, November 19, 2008

The Great Bailout

I heard on NPR that GM has over 7,000 dealers throughout the US and Toyota has 1,500.

So Toyota is able to take marketshare from GM with less than 25% of it's distribution channel?

The discussion also mentioned that the auto dealers association lobbied state lawmakers to make it virtually impossible to renegotiate the contracts once they were in place.

They UAW also has a Jobs Bank where more than 12,000 are paid to do nothing. Jobs bank programs -- 12,000 paid not to work

Should we hand an industry that simply does not understand how to compete more money to burn? Of course not ... let the market work its course. Those that can compete and whose theory of business is sound will survive, others should perish.

1 comment:

Terron said...

Is the right less reluctant to bail out the auto industry because the auto industry will move to make more energy efficient cars. I bet they would not have an issue passing the bailout if GM could continue to produce V8 Trucks and SUVs at the same old rate. I think you let the market correct itself but I don't think that concept anticipated an entire industry failing. I also think that high gas prices are also to blame for GM issues. They also made poor choices by sinking all of the money into one egg (SUV and Trucks). I guess this is just a brain dump with no support or objection of the bailout. I guess I would vote to bail out the industry with serious provisions starting with renegotiating all union contracts. If you pass Universal Health care it helps Auto industry because they spend a lot cash on retire health care.