Are bailouts of industries a good thing? Probably not, generally speaking. On the other hand, when in a financial crisis like the one facing America, they may be necessary. I find it peculiar that the financial “industry” (they manufacture or produce no goods; only facilitate production by others) could relatively easily obtain a $700 billion bailout but the auto industry has difficulty getting a dime. Note that should GM and Chrysler fail, it will have devastating impacts across the economy due to not only the umemployment of the car maker’s personnel but also collateral damage to all the companies that provide goods and services to the car makers.
Republicans in the Senate insist that the UAW give up wages and benefits that exceed the non-union labor costs at other car makers in America. This is nuts. Labor costs do make them less competitive with other companies. They were able to get over that handicap until now through the revenues they received from selling big SUVs, trucks, etc. Why can’t they do so now? Consumers are unable or at least worried about buying cars because of the financial crisis. Sure the car makers should have went with less expensive, more fuel efficient vehicles a long time of go. But if buyers didn’t want those oversized gax guzzlers, GM and the others wouldn’t have been able to sell them. Now that the buyers are unemployed, the price of gas jumped through the roof, and financing is tough, people are not buying cars. Not only that, but the car dealers can’t get inventory financing due to the financial crisis. The bottom line: the financial crisis is more of a factor in the car maker’s situation than the labor costs or their own management decisions–unlike the financial industry, Wall Street and the banks. It was the risky, greedy, management decisions of the latter that prompted the crisis and the need for a bailout. With unclean hands, they get relief but the car makers don’t?! Unbleepingbelievable!