To sum it up:
"In short, Detroit and the public have little to fear from a bankruptcy filing, but much to fear from the corrupt bargain that is emerging among incumbent management, the UAW and Capitol Hill to spend our money to avoid their reality check."
All of these blowhards who support the status quo of an automotive "bailout" need to be unceremoniously tossed out on the street.
Don Boudreaux has more:
"Chances are excellent that some (probably scaled-down) versions of GM, Ford and Chrysler -- perhaps merged together or with another auto producer -- would be viable if restructured. The Big Three, after all, still together supply nearly one-half of all new automobiles sold and leased in the United States. It's highly unlikely that none of the productive capacity in these firms would be competitive with the likes of Toyota and Hyundai.
The trouble is that now any productive efficiencies that the Big Three possess are masked by these firms' huge debt obligations.
So, far from solving this problem, any 'bridge loans' from Uncle Sam to the Big Three will only delay the inevitable need to restructure. Bailout money would force taxpayers to foot the bill for Detroit's irresponsible past promises while it protects these firms from having to do the hard work of correcting this real source of their unprofitability. (Of course, bailout money would also protect overpaid and over-pensioned UAW members from having their pay and pensions scaled back to reasonable levels.)
With the symptoms of this serious ailment socialized for however long the bailout funds last -- that is, with nothing done to cure the ailment -- GM, Ford and Chrysler will be no better able to operate profitably after they run through the bailout funds than they're able to do now."
No comments:
Post a Comment