More Auto Relief thoughts

I have watched and read a fair amount of coverage related to the loans being given to the Big Three US Auto companies. I have been bothered a fair amount because the reporting and opinions leave a fair amount to be desired – and I am being very nice leaving it there.

The first item is the work bench where a UAW member who is laid off gets 95% of their pay during that time. First, they will get subpay from their employer after they receive unemployment benefits from the government. In other words, the auto company will make up the difference between unemployment to get to that 95%. They are giving a complete 95%. On that same topic, current hires to the Big 3 auto companies will not enjoy that benefit and only 10000 benefit from that number now. That number will tail off as those UAW members retire.

Another number that will tail off in time will be the amount the Big Three Companies will give out in pensions as retirees pass away. For some time (probably ten years) new employees are not eligible for pensions and have been maintaining their retirements through 401K plans. The money going toward pensions in twenty years will be significantly less than it is now. I bring this all up to show the changes that many people are demanding have been well in place for quite some time.

For all the talk of the UAW having to renegotiate their contract even though they have made countless concessions, I think what has not been requested and should be is a COMPLETE list of costs to making a car. I have actually looked for this and asked around and the consensus – nothing exists. If you can find one, I would be very intrigued to look at it. The point I am getting to here is I don’t know how you can ask for more concessions when it is not even known what other opportunities a company has to cut costs. Keep in mind that despite supposed costs in making a Toyota or Honda being lower than US Auto companies, they are losing money and halting production as well here in the US. That makes another set of arguments from the pundits almost null in void.

The Big Three Auto companies have as a while cut down their employees drastically in the last fifteen to twenty years. Much of the analysis has simply ignored it and put out blatant opinions showing the lack of understanding with an industry that has made strides. They are being asked to com

OF course the last thing that gets my ire is the belief that more than anything all types of effort needs to go into hybrid and electric cars. This is all happening while I drive around and the American consumer still likes driving their SUV. Government has a great belief the consumer wants fuel efficient vehicles and before too long it will be the only legit viable option. Is oil going away? Is there a tremendous shortage right now? Is it real expensive? Outside some outlandish speculation that took place this summer with oil futures, prices have been relatively stable and right in the range of consumer pocketbooks whether they drive small economy size cars or something that resembles a fashionable Winnebago.

I have more points that should be made but I will save them for another time like measuring the geographical impact of letting the Big Three going bankrupt.