ussmex

Bust-Up, Not Bailout

Looks like a hornets nest is getting stirred. Suddenly auto industry workers are weighing in, and rather testily in most cases. Especially the engineers. The engineers are proud that they're creating cars as complex as the space shuttle. Here's a question: Why do we need cars as complex as the space shuttle? China and India don't. And who says economies of scale prevent us from spinning off brands? Can you not think of a single way that might work? What's your solution? Now that you're approaching the government trough your thinking had better become a little more nimble, or you'll see what real anger looks like. Mr. Retired Automovtive Engineer needs to keep in mind that his career was sustained by the advance of easy credit, not brilliant market innovation. Hello! People understand the need for your fat pension about as much as they understand the need for bonuses at AIG.

Should We Really Bail Out the Big Three Automakers with $73.20 Per Hour Labor?

The reason we can't switch CEO pay to $500K a year, Jeff from PA, is that most of the people with enough talent to be CEO's would leave their posts immediately and start companies that don't limit their pay. You cannot impose an artificial limit on market value without creating waste. The reason GM and Ford are teetering on the precipice is because they've been incredibly wasteful on both ends. Leadership has produced vehicles that are out of favor with the consumer (while continuing to collect excellent pay), and the auto workers have used their collective influence to inflate their wages beyond their market value.

Nobody begrudges a working man a living wage, but we don't live in a world of wishes. The market eventually asserts itself. Most of the readers of Seeking Alpha understand this, and for this reason they are against inflating the money supply to prop up the salaries of the American auto industry.