GM doesn’t have enough money to go through the year. Chrysler is for all intents and purposes a dead man walking. Ford has enough, but if the other two go out, then who knows?
In following the talk about the bailout I hear a lot more resentment in this case than I did with the financiers. Even though they’re asking for far less money. Now part of this is because folks are rightly feeling they got fleeced with the financier bailout. So perhaps if GM got to Congress first we’d be talking about financier failure.
But I don’t think so.
People “know” much more about making cars than they do about making financial “products” (placed in quotes because this is a linguistic wave of hands…exotic mortgages aren’t “products” they are SERVICES). So when Paulson says he wants money without strings and without oversight, on some level people think that there is a level of knowledge required to handle the financial industry that they (and most they know) simply do not have.
The auto industry on the other hand? Everyone “knows” how cars are made and how the line works.
And with this “knowledge” comes resentment of unionized blue-collar workers who are protected from competition even though they are lazy and shiftless. Working 1 real hour for every 8 they put in. And making more money because of the union than the market can carry. When the GOP seizes this opportunity to in effect gut the UAW, people are with it.
Let the market work.
Make the workers compete for their value.
Bring their salaries down.
This knowledge is intimate. Everyone knows someone who works for the auto industry. And we’ve all pretty much had the assembly line ethos poured into our heads for the last fifty years. But this knowledge is deeply tainted. Looking at the current situation salaries have already been cut. Union workers are taking buyouts and are then replaced by workers who are paid less and don’t have benefits. The foreign automakers have significant state subsidies that pad their profits significantly. Now this last component is important, because the automotive companies could’ve had the same deal had they pushed for national health insurance. In fact if they pushed for it NOW they wouldn’t be in the straits they are.
(On top of that, speaking as someone with blue-collar experience, those jobs are some of the hardest in the country.)
Our intimate “knowledge” here leads us to a set of naturally regressive conclusions. In effect GM is being treated like welfare recipients are treated. And I have to admit I was happy that the auto execs were raked over the coals for flying (in separate jets no less) into D.C. But just like folks “knowledge” about welfare and poverty, our “knowledge” about the auto industry is tainted. The end result is that our attitudes about the automotive industry are driven by some of the same regressive forces that drive our attitudes about welfare.