Big Three Bailout?

Big Three Bailout?

General Motors, Ford Motor and Chrysler are whining to the Treasury Department. It’s no fair! Banks, financial services companies, stock brokers, and insurance companies got bailouts. They  want bailouts, too!

Sure, Detroit’s big Three were bleeding money before the credit crisis. Having bludgeoned Congress into deferring decent fuel economy standards, they couldn’t give away their SUV gas-guzzlers when fuel costs skyrocketed. Unsold inventory and the credit crunch reduced the number of retail car dealers. The same can be said for credit furniture stores and credit jewelers; will they get bailouts?

GMAC Financial Services and Ford Motor Credit are already getting part of the Federal commercial paper bailout.

The Big Three are saddled with “legacy expenses” of older union contracts that new U.S. factories of Asian and European competitors don’t share, but new UAW contracts go into effect in a few months, with new hires getting lower wages and fewer benefits.

Do U.S. auto makers want Federal money so they can re-tool and create more jobs? No. They will need money to fund employee buyouts and severance packages for all the American workers they will lay off when they merge and downsize. Isn’t that a great way to spend tax dollars.

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com.

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