Wednesday, June 3, 2009

Union Made. Union Proud.

Before there were auto industry bailouts, there was...DODGE AIRES!

GM is now bankrupt. In the 1950s, it employed over 500,000 people and enjoyed a roughly 50% market share. Now it's bust. The reason for this is plain from these figures: GM employs 92,000 workers and supports 500,000 retirees. It is what Mark Steyn calls a vast retirement community that makes cars on the side.

It is the trade unions that brought GM to it's knees. The New York Times reports Don Skidmore, president of UAW Local 735, saying, "I was angry at first, then I cried, then I got angry again." Did he really expect that GM could continue as a viable company with powerful unions forcing such suicidal business conditions on it in a competitive world economy? No, he and his union pals were not thinking past their bellies.

An even larger issue is that these unions dominate the party that is now running the country and restructuring the economy.

In a democracy, you get what you ask for.
David Brooks in "The Quagmire Ahead" gets right to the point in his summary of the evils that will flow from this move. GM execs now have no incentive to improve the company. The government will not let it fail. The way ahead is now conflict avoidance with the unions and the government. In addition, we will soon see what effect the subsidization of one company by the government has on its competitors in the industry. Speaking of the government, despite what the President said about being a "hands off" owner of the company, Democrats are already lining up with with political plans for what they want to do with the company. Building so-called "green" cars that perhaps nobody wants to buy is just one of them.


Roundhead said...

yes, not only did the trade unions force GM into the mess it's in right now - they get to own a significant chunk of it, post-bankruptcy!

surely, one day soon, the term `General Motors' will be a term denoting `everything that was wrong with union-dominated corporate capitalism in the second half of the twentieth century...'

or something like that.

Herry said...

Yes i agree with you