Auto Industry Bailout

Posted: November 20, 2008 in economy, soap box, vehicles

No introduction here.  Just a statement.  THE FEDERAL GOVERNMENT SHOULD NOT BAIL OUT THE AUTO INDUSTRY.  When you look at the facts and figures, it’s simply obvious. 

Ever wonder what an average auto worker in an American made car factory makes?  And I’m not talking about the suit and tie guys…I’m talking about the ones standing on the line, bolting on the door or putting on a wheel?  The average base pay STARTS at about $25 – $28 per hour, and ranges up to around $40 – $50 per hour based on your job and tenure.  This is a STARTING salary of $52,000 to $58,000 per year.  Now, when you include health care benefits, pension benefits, retirement benefits, etc…those pay rates actually increase to around $65.00 – $75.00 an hour per worker.  But, let’s just focus now on the actual paycheck.  This means that someone with no college education (not a given, but likely), performing a job in an automated production line, earns more per year than most teachers, social workers, many nurses, and a slew of other professional workers who earned college educations in their field of work. 

And this is to pay people to build the cars that are consistently the lowest rated and most overvalued cars in our market.  The average pay per worker for Toyota and Honda in their American factories is closer to $45-$50 per worker (vs $65 – $75 for the Big 3), yet they produce a higher quality vehicle with a greater overall value and lower cost to own.  And this is not based just on perception.  The perception over time has been conceived and grown based on facts.  Look at any April edition of Consumer Reports over the last decade.  Read Motor Trend, Car and Driver, Automobile.  Look at their Top 10 lists, their best used car value lists, the winners of most of their vehicle comparison tests.  It’s not exclusively foreign, but it’s certainly mostly foreign cars that dominate these ratings and lists. 

Therefore, why would we simply “bail out” the Big 3?  If a middle-class school system consistently got low national scores, had a terrible graduation rate, and was always way over budget, would the state simply give them more money to make it all better?  No, they’d be expected to restructure, make new hires, reorganize their curriculum, have better oversight, and so forth.  If a hospital had terrible ethics complaints, lost millions of dollars each year, had the highest death rate in it’s region, and was not up to sanity codes….bail out?  Nope.  If a restaurant chain made poor food, overpaid it’s workers, provided slow service, and was generally unclean…bail out?  Absolutely not. 

Then, of course, these businesses (and most businesses) are not governed and choke-holded by decades old, out of date, money grubbing Unions who care nothing for the health of the business, but only for the bottom line pay of it’s members.  I don’t understand it.  If GM came out right now and completely broke it’s Union contract and told them to go to hell….do they really think they’d simply lose all their workers and not be able to produce vehicles anymore?  Would there not be a mile-long line of people ready to come in and get paid $20.00 an hour for a job that a union guy made $35.00 an hour doing?  Come on!!  I thought we lived in a free-market society?  If GM went under, and 4,000,000 GM cars per year were all of a sudden not being sent to dealers across the country….people would buy other brands instead, and those brands sales would increase, which would demand an increase in productions from their factories, which would require more workers, and possibly more facilities.  I know that oversimplified and I’m no economics expert, but there’s gotta be a better answer than a bail out. 

Because personally, if part of my tax dollar is being given to help secure jobs for $60,000 a year auto line workers, I’m going to be pretty ticked off.

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Comments
  1. greg says:

    Dude,

    I had no opinion on this matter until reading this… now I’m gonna be pissed off when they get their bailout!

    I saw today that the 3 CEOs who went to ask for handouts all traveled by private jet. How funny is that?

  2. Jason says:

    True dat. Yeah, that nice little private jet fact was not lost on the congressional committee either. There were some pretty heated exchanges from what I heard. Good. Put it to em.

  3. Michael says:

    I’m also against the bailout. Not cool at all. Watch the documentary Who Killed The Electric Car and it will really tick you off. Off topic, I always thought Sony should make cars…. they would be, if I may use your vocabulary, ‘phat.’

  4. Jason says:

    I did see The Electric Car movie you speak of, about 6 months ago. Loved it (the car was so cool, I remember it) and hated it (because it got squashed and swept under the rug). I don’t understand why the new hype on upcoming electric cars is so special…they already did this a decade ago, Ford, GM, Honda. They all did. And it worked.

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