The Automakers Should Be Forced Into Bankruptcy

The automakers should all be forced into bankruptcy. There I said it.

Someone mentioned to me earlier today that if GM were forced into bankruptcy today the immediate impact would be an unemplyment rate of 9.5%. To me, this does not seem too high a price given that we would be able to fix the auto industry as a result.

Every 10 years or so, the CEOs of all the US automakers go to Congress w hat in hand and ask for billions of dollars w no strings attached. And Congress gives it to them. This is ridiculous.

Here is what I think they should do:

• force all 3 US automakers into bankruptcy
• force them to combine to make 1 automaker
• cut capacity by 50%
• provide funding to the company under the above conditions
• fire all executives and replace them - these guys have proven they are not capable of running their companies
• provide additional benefits to all displaced workers for a period of 4 years so they can go back to school, pay the bills, relocate etc.
• nullify all contracts that dont makes sense in bankruptcy including union contracts that overpay workers for what they do.
• create the most fuel efficient fleet in the country.
• develop alternative fuel sources and these sources must be a certain proportion of all vehicles produced.

The average assembly line worker at a US auto plant makes $65/hr. The average assembly line worker at a Honda/Toyota auto plant in the US makes $25/hr. This ridiculous situation is the direct result of unions that insist on too much pay/benefits at the expense of the employer. Dont get me wrong, I think unions are useful but in this case they brought about their own demise and they should get what they deserve.

This is the only way to fix the problem. Let me know what you think.