Chrysler files for bankruptcy, about time?

This is probably the best news for Chrysler and long overdue. Propping a failed car company with taxpayer funding is utter nonsense and the Obama administration has wasted time and energy “fueling” GM and Ford. By filing for Chapter 11, Chrysler might have an opportunity to restructure and drop some of the dependencies that lead to the bankruptcy in the first place. The details are unclear as of now, but if Chrysler plans to exist and proceed further then it needs to completely shed itself of it”s union obligations. As of now, the United Auto Workers are holding Chrysler by the proverbial balls and until that hold is released then Chrysler or GM/Ford for that matter will squirm in place and howl in pain.

Unions got their teeth and power during the Great Depression armed with legislation stemming from FDR’s policies. Unions use strong arm tactics to leverage their demands and siphon profits out of the company’s coffers. Worse still, domestic companies in the United States under union control turn to international labor to fulfill their needs. We often hear about the evil US companies outsourcing their jobs to places like China, India, Mexico, etc – but why do you suppose that is? In order to escape the union clutches and their never ending appetite for retirement benefit, American companies turn to cheaper labor to get things done.

One argument for unions is that they are perfectly legal and provide the opportunity for people to organize – a protected right. However what many do not realize is that American unions operate similarly to organized crime outfits, but more powerful because they have union friendly legislation giving them certain rights. Specifically the right to demand union exclusivity within a certain locale. For instance if I start the RkD Car Company and UAW moves into my neighborhood demanding union membership from my employees the following things happen.

1) My employees will be pressured strongly to join and those that do not will experience intimidation.
2) I can’t call another auto union to provide competition and assuming one existed, UAW could actually sue me because they have a right to my company.

What once started as a mechanism to ensure equality and battle unfortunate byproducts of a thriving economy – like child labor, has quickly turned into a gigantic tumor within America. Some of the stories during the formation and power grabs of unions in America are so crazy, they border on the brink of fantasy.

Congress debates the auto bailout.

Today congress met to discuss whether or not to bailout the auto industry or rather the Big 3. As mentioned in a previous post, the BIG 3 are controlled by the UAW and they are running the show in Michigan. Specifically their wages and benefits twice exceed that of the competitors.

However what I find most shocking is the very essence of discussing a non-existent issue. While I can understand the job loss and suffering that will inevitably occur with the collapse of these three companies, since when is unemployment or saving of ANY industry the responsibility of taxpayers? In fact, calling this an auto bailout is somewhat of an injustice, because only three companies are facing bankruptcy, while plenty of companies in America that manufacture automobiles and not facing such dire straits.

Therefore the claim that the UAW president made alleging that the economy has forced the three companies to declare bankruptcy does not hold water, otherwise we would expect every auto company to follow suit.

Cclaims that the financial companies received a bailout and therefore other industries are entitled, are now somewhat expected. One of the dangers that the initial bailout posed was to set a dangerous precedent whereby large companies can threaten the government with economic devastation. Still, one cannot ignore the ludicrous nature of comparing sub-par automobiles to an entire banking system. Whereas the latter fails and the entire country could potentially seize up in an economic avalanche, the former is but a nuisance and primarily effects employees of the failing corporations.

While I am pleased to see some conservative Republicans point out that this bailout will be akin to flushing money down the toilet, the notion that Obama’s white house will appeal to the union workers and approve the bailout – is sickening.

On this blog I intend to monitor Obama’s policies and actions very closely, there will be a separate page of his failures and accomplishments. If he facilitates this bailout, then we as Americans should hold this egregious act again him for being profoundly un-American and pandering to his constituency.

Republicans defending Americans from the auto industry.

While I have many complaints that I have issued toward the Republican party, right now they are showing a certain amount of leadership that should be noted. The Big 3 (GM, Ford, Chrysler) are asking for 25 Billion dollars in bailout money. They are accusing the economy of destroying their business and furthermore threatening the country with devastation if they are allowed to fail.

The truth is that the big 3 are destined to fail, they have created this situation themselves and it has nothing to do with the economy. The economy merely exposed their rotten infrastructure. Look at this:

A blogger named Mark Perry wrote the following:

“Total compensation per hour for the big-three car makers is $73.20. That’s a 52 percent differential from Toyota’s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the over sized UAW-driven pay package
for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.”

UAW(United Auto Workers) is a labor union whose only purpose is to leverage better pensions, payments and benefits for their employees. The UAW systematically destroyed the big 3. As you can see other companies are doing just fine, making cars and selling them with reasonable salaries – like Toyota USA for example. However the Big 3 pay out $73/hour!!!!

This comes out to 108,000k a year! Average US income is 45k/year. This is absolutely absurd and if the Democrats get their wish(who are in bed with the labor unions), they will be bailing out the UAW not the auto industry. As an American you should write to your congressman and demand that no money be given out to these people. This is a blurb from CNN.

WASHINGTON (CNN) — A standoff between congressional Democrats and resident Bush continued to brew Wednesday, as lawmakers pressed a skeptical administration to help ailing U.S. automakers.Congressional Democrats want the Treasury Department to offer the troubled automakers loans from an unspecified portion of the $700 billion bailout package originally passed to help the financial industry, which is reeling from the global credit crisis. The White House and congressional Republicans have not signed on to support such a move, however.

Disagreement over how to help automakers could result in a confrontation between congressional Democrats and the Bush administration just as Bush is preparing to leave office.

President-elect Barack Obama also voiced support for government aid to the automakers during his meeting with Bush on Monday. The controversy could pull him into the center of the political fray even before he formally takes the reins.

If Obama gets his way, the American tax payer will be writing a paycheck to the UAW encouraging and continuing their despicable behavior.