Auto Industry

There is a large amount of speculation about what is going to happen with the American Auto industries big three. The question is, whether or not to give them $25 Billion dollars in government funds in order to survive the next year. What happens after that? The big three supposedly has a game plan to turn into money making companies by cutting health care and retirement costs while also introducing new automobiles that people will actually want to buy.

I'm not going to bash the big 3 anymore than they've already been bashed. If you need some fodder, watch Roger and me and listen to the White Stripes. But what I will do is speculate on what is going to happen.

Currently, the Republicans are standing firm on not supporting a relief plan for the big 3 and by the time they lose their spots in the House and Senate, the big 3 will already be screwed. So in order to make a relief plan that the republicans would support and GW would sign, they'll need more concessions from the auto industry and specifically from the United Auto Workers (UAW). Republicans have never, ever been know as pro-union and would do well with their deep pocketed supporters if they were able to stick it to one of the most powerful unions in the US right before they lose all power in legislative and executive branches.

I imagine that the republicans will ask for the 2010 UAW concessions earlier than originally planned, so the employee's health care benefits and retiree benefits will take a hit one year prior to what was originally planned.

The UAW is not a halo angel, but this situation reflects a greater problem in the US economy. The individual employee and/or union is responsible for providing health care and retiree benefits. Because of that, those companies who do provide it have become uncompetitive in the global economy. You don't think so? Take a drive across Alabama. There are thriving auto plants all across the state, but none of them are American owned. Hyundai, Mercedes and Honda all have plants there. But what separates them from the big 3 is that they don't provide union wages or benefits.

You may think, 'well, it works for them, so why not for the big 3'. If the big 3 doesn't provide health care for its employees, they won't get health care. If Honda doesn't provide health care for its employee in Japan, they are still going to get health care. Their government provides it. Germany? Yep. Korea? They get it too.

Now you right wingers will say 'but our health care system is the best in the world because of competition'. How good is the best health care in the world if you don't have access to it?

So our auto industry is on life support and it's only a matter of time before they get a bail out. But just look at how they'll change along with the work force.