Finally President Jo Jo The Idiot Boy got Hank Paulson to unscrew the TARP wallet to the tune of $17.4 Billion in loans to GM and Chrysler. Not a gift, but loans that the two have to pay back, unlike the Bailout The Base payday for Wall Street, which is a straight-up cash grab for anyone Hank knows.
Meanwhile, in Canada, our Provincial and Federal governments are warming up the photocopier for the Canadian side of the Auto Bailout Game. Proportionally we should be running off about $1.7 Billion extra in Canadian Tire money for the Big Three up here, but the number being tossed around is closer to $3 Billion from the Ontario government and the Feds.
This morning, Chrysler and to a lesser extent, GM announced the are shutting down all their plants in North America until approximately the end of January, give or take. It isn’t a particularly nice Christmas gift for the workers, but at least it isn’t an indefinite layoff notice. Christmas will be very modest in a lot of towns this year as the suppliers also feel the ripple of the plant shutdowns.
Now the hard work begins. GM and Chrysler have to regroove their entire business model in order to survive. The problem is that it takes nearly two years for any auto manufacturer to bring a new product into production, even in a mad-panic full-court-press of design, engineering marketing and sales.
Therefore the regrooving simply cannot take place on the product side to see any immediate results: It has to happen on the management side, which will not happen. The workers, the ones who actually assemble the components are going to take what could best be described as as a back alley beat-down, on both sides of the border.
Expect the UAW and the CAW to be painted as greedy left-leaning, near-Communist unions, intent on stealing from the taxpayers and hamstringing the poor, innocent auto makers from trying to fix their businesses.
When you hear those kind of sound bites, take a moment and consider this: The CAW and the UAW don’t design the cars and trucks that the Big(ish) Three have foisted off on the buying public for the last 20 years.
The unions don’t set the reliability or quality standards of the products. The unions don’t control the predatory pricing. The unions don’t have a say in how car financing is set up. The unions don’t decide that you can’t get airbags unless you buy the deluxe version. The unions don’t offshore components and jobs to the third-world where environmental controls are None, or Less than None.
Accountants decide how well, or how badly, a vehicle is made, as accountants are the ones that say it will take 11 seconds to hang a door assembly, not the 40 seconds it actually takes. Management makes the decisions on options, quality, financing, equipment, colours and the rest of it. The CAW and the UAW are the people who take the decisions and delusions made by the the people who have the private jets and try to make a car or truck out of it.
Now, who is going to pay the most for this bailout? It isn’t the guys with the private jets, or the accountants. It’s going to be the person on the assembly line who is gong to take the biggest hit: Oshawa, Brantford, St. Thomas, Oakville and Windsor are all going to hurt. At least it won’t hurt as much as it could have.
RoadDave 