Money is not medicine

The idea that an infusion of money into the auto industry will cure its ills is not in my medical research dictionary. America is having a hard choice in deciding on a bailout of the ailing enterprize. When we look at the wild excesses of both the management and workers we find little sympathy for the predicament they have created for themselves but the entire nation.

According to television commentator Charles Gibson the industry produces a car that costs more than competing companies abroad. In fact, an American car costs about $1500 more, which can be attributed to high worker wages and benefits and excessive executive salaraies.

The average worker gets $73 dollars an hour, which adds up to more than $150,000 a year, plus a hefty retirement package and other benefits. Workers who are laid off get 95% of their wages while on an extended vacation. In a sweeping concession, the union has agreed to defer amounts paid into the retirement fund until a later date when the industry gets back on its feet. Frankly I can see no cure with a bailout with taxpayers' money. The temporary relief provided by taxpayers does not get at the heart of the problem. The real problem if the excessive costs of a product that does not compete with other cars on the market.

This can be attributed to greed and poor management. It is unfortunate that so many other businesses are linked to the auto industry. They and all of us are hostages to the massive buildup of the big three over generations. The fair and honest cure for those involved  will require extreme sacrifice, but a complete reorganization will place the auto workers back into competition with others on a more stable footing. We live in a capitalistic society which requires that we produce more at less cost than competitors. There is no magic pill that will cure the mindset of the auto moguls. They need a brakeout instead of a bailout. It will hurt us all, but it is a bitter choice we must make if the industry is to survive.