The economy is mess at this point. We are in the midst of a recession that most likely will become deeper no matter how much of our money the power brokers in Washington throw at it. It does look as if the politicians in Washington are in the process of a takeover of our economy and liberals will get their wish of managing the free enterprise system in our country and a majority of the taxpayers are letting them get away with it.

 

The auto industry is the latest to get in line for the corporate welfare package being advertised in Washington. They say that they will be forced into bankruptcy soon in 2009 without the money. That very well may be true but a welfare check courtesy of the taxpayer is not going to fix the fundamental problems within the auto industry, nor will CEO residing in the White House, such as Jennifer Granholm.

 

The auto industry was stung in the 70's when there was an oil embargo. The Japanese were able to begin their dominance in the automotive world because they could manufacture a fuel efficient car with excellent quality and they could be profitable at it. The big 3 have never been able to do this. There are many reasons for it. The american automotive companies have not figured out a way to efficiently use their capacity. Toyota can take an assembly line that is currently building Tundra's and if the marketplace moves demand from trucks to cars they can switch that same line over to build Prius's within 30 days. It would take GM eighteen months and a significant investment to do this. If Toyota has a bottleneck in their assembly line they can move workers to area's where demand is the greatest to remove the bottleneck. At GM union rules would prohibit this. Toyota automotive workers are paid $43 per hour in total compensation and at GM their workers are paid $73 per hour in total compensation.

 

The answer for GM, Ford and Chrysler is not a government loan, government ownership of their business or Jennifer Granholm reforming their business. These companies need to make a bold commitment to realizing that they no longer run the auto industry and must make fundamental changes to their business to compete within the industry. There are many documented best practices from Japanese companies that they can emulate to improve their flexibility and more efficiently use their capacity. Executive management also needs to voluntarily reduce their own wage packages, benefit packages and fringe benefits to meet the urgency of their financial situation. Union leaders must also realize that they will need to take concessions in the Cadillac labor agreements they have so they can save autoworker jobs and align themselves with what global competition is creating. If the Big 3 along with the UAW can commit to these fundamental changes and deliver a bold new plan they will definately improve their ability to survive. If they can't and just stay with begging for taxpayer money they will not survive. It is that simple.Without fundamental changes in attitude the bailout package that I am sure they will receive from Congress will only postpone their demise.