Let's hope that the auto bailout has failed for good. The fact that U.S. auto companies (more specifically, employees) weren't willing to reach parity with the wages of their Japanese competitors by 2009 was outrageous. For this stalwart, it is a relief that this bailout did not pass, and I find the markets' negative reaction to the result very short sighted. (This of course presupposes that the U.S. and world markets' drop was indeed a reaction to the auto bailout news, as financial media ascribe. Nevertheless, assuming that markets did fall in reaction to the news, then their reaction is very misguided.)
Rewarding and sustaining value-destroying companies is not good for markets, whatever the apparent near term jobs loss. Overpaid workers for companies which lose money are not value creating for an economy. Reallocating workers into positions which earn a profit for their companies is.
One crucial point widely ignored in all the talk of U.S. auto industry collapse is that in the current situation we're actually just talking about the collapse of the current major US auto companies, in their current form, and not necessarily the industry.
Here's a shocker - Might the demise of the old actually leave room for the new? We might actually have new, leaner, efficient U.S. auto companies emerge out of all of this, whether as restructured companies based on the old or perhaps even (and this would be very exciting) brand new companies. It was a pretty crowded space for a new U.S. automaker to appear previously, especially with the fear of getting snagged by onerous employee contracts.
What if a new company could pick and choose the assets it wanted from the old dying companies, and employ the best U.S. autoworkers available with a salary system far less parasitic than the current UAW backed system?
There is definitely room for at least one major U.S. home-branded automaker in the American popular psyche. Just marry a truly American branding with efficient operations, good design, and strong marketing, and then perhaps you have a business. If the U.S. can make iPods, semiconductors, and passenger jets, there's no reason why cars competitive vs. the Japanese are some sort of insurmountable task. Or maybe in the end, U.S. companies have better businesses to pursue than auto manufacturing. This no one can predict for sure.
But I see no reason why the bankruptcy of the current U.S. automakers' corporate entities spells the demise of the U.S. auto industry. And in fact, it could actually spur a renaissance in U.S. auto leadership once the field for U.S. branded cars gets less crowded - provided automaking is a profitable worthwhile business on par with other opportunities for US investment. From this perspective, I feel then the failure of the auto bailout is actually positive, rather than negative, for the U.S. economy, and in turn U.S. and global markets.
