Friday, November 28, 2008

TFP Column - The Big Three Bailout

While the Toledo Free Press Website is back up and functioning, my column from last week no longer appears in the online edition (maybe they are getting wiser about the burden that they are willing to place on their readership). At any rate, I have had numerous requests (OK, a couple from family members) to permit those of you outside of the circulation area of the TFP to see one of my more venomous rants. I hope that it gets you as stirred up as I am about this.  

Following a series of disturbing clues, I was finally able to decipher the secret message in the “DiVinci Code” from the latest puzzle of the current bailout program(s). It came as Congress, currently in lame duck session (a strangely appropriate term considering), and in the midst of its seemingly non-stop effort to throw good money after bad, was trying to decide whether they should funnel additional bailout money into the auto industry. Surprisingly enough, they couldn’t. 

Make no mistake; the auto industry is going through tough times. Consumer cash and the credit to finance major purchases is in short supply and the brief but abrupt rise in gasoline prices has forced consumers to reconsider their purchasing decisions. Not surprisingly as a consequence, sales of cars are down. 

These bleak financial conditions are further exacerbated for automakers GM, Ford, and Chrysler because of their poor decision to manufacture big cars, SUV's, and big pickup trucks; vehicles which fit neither the current consumer’s fuel efficiency requirements, nor their depleted budgets, but do have a higher profit margin for manufacturers. 

Do not fear for our intrepid US auto manufacturers however, as the Federal government had already decided to make $25 billion available to the US auto industry to retool itself in order to meet the CAFÉ standards (Corporate Average Fuel Economy) that these car makers claim is one of their biggest problem. Not content with this piddling amount however, they came to beg for another $25 billion (and probably more later); saying without it that they might not survive, and that 2.6 million jobs may disappear. (Can you say doomsday threat?) 

This additional money is not for additional retooling however, to build manufacturing plants utilizing the latest in labor-saving technology (something mostly forbidden to them in the US by current labor contracts), or even to provide them with capital for the massive change to their business plans that's undoubtedly required for their survival. Amazingly, the bulk of this money appears to be needed to cover the pension and medical funds of union workers, current and retired. After much debate and negotiation however, the vote on their bailout has been delayed this week to provide the automakers time and opportunity to provide something that looks like a business plan. 

Their plight will then be taken up after Thanksgiving in Senate committee review, and relief undoubtedly provided in some form using part of the original $25 billion in special session. They will then get to make their case for even more cash with the new Congress next year. Let’s be clear however, about the fact that this bailout has little to do with the continued operation of these US automakers (as opposed to all of the other automakers in the world currently operating manufacturing plants in the US and employing non-union US workers in those plants)

This bailout is little more than a quid pro quo by a bunch of politicians attempting to prop up the unsupportable pension and medical plan of unions who have supported them through yet another election cycle. Worse, it’s a poorly hidden attempt to tell taxpayers that they should willingly hand over this cash knowing that it will undoubtedly raise taxes, increasing the odds that they will have to look forward to retiring on little more than the pittance provided by what is an all but bankrupt Social Security System and hope to survive on whatever level of medical care is capable of being doled out by a Medicare / Medicaid Program already strained past the breaking point. 

They should do this so that union auto workers can sleep safer at night, knowing that they will have bullied the elected representatives of those taxpayers into supporting what for them will be a much more comfortable level of retirement and better grade of medical care (you know, like Congress gets), negotiated at almost the point of a gun with their former employers and now ultimately funded at the expense of their fellow citizens. Based on this new found revelation, the secret message of the puzzle is obvious for all but the most gullible to decipher. It reads that "The Big Three really means: U A W”. 

 

2 comments:

Hooda Thunkit said...

Tim,


Shhhhhhhhhh!

They're on to you being on to them, watch your back my friend, watch your back...

Tim Higgins said...

HT,

I fear you're right, hence the TFP decision not to put it back on the site. Fortunately these days, my employer permits me only infrequent visits to Toledo, and none of those last long. I do find myself looking over my should a lot these days though.