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Pay no attention to the people behind the curtain

Wednesday, November 19, 2008

Chapter 11 -- Not a Good Idea

By Keith R. Schmitz

The right wing seems to be getting way too much pleasure over the prospect of letting the automakers sink into Chapter 11 to "punish" the gall of the UAW in demanding things like good wages, health care, etc.

As if the workers are responsible for the troubles visited upon the house of Ford, GM and Chrysler. Not like it was inept, quarter by quarter focused management led to this or anything. You know, just like the same reasoning that argued the poor and minorities brought our financial system to its knees because they got access to mortgages.

But like all things wonderful in the minds of conservative, there are problems with that perspective. Why would a bailout be better?

1) The process of bankruptcy is rather distracting on a management that had a hard enough time paying attention to just running these companies in the first place.

2) Having had a client that went bankrupt and having lived that dream, I don't think that vendors that faithfully provided goods and services to the automakers should suffer, seeing pennies on the dollar or even nothing instead of payments on their invoices.

3) If handled properly, a bankruptcy should be a chance or a company to reorganize, come to Jesus and come out of this better than before. But what evidence do we have that the current management would be capable of that. Like none. What we will see will be the butcher shop spectacle of wholesale layoffs to protect bloated and undeserved executive compensation like we did in the airline industry. We will see unemployment figures leap, dragging us further into recession because of course a consumer economy depends upon consumers. The former though seems to never bother our conservative friends.

4) The bailout affords us opportunities to make the auto industry do what it should have done in the first place. From the inside of their little protective cocoon the Big Three leadership saw the world in their vision. Left to their own their instincts, they could do no different.

Now US having major ownership, reality could intrude.

Something the Bush administration couldn't do we could do now, which is provide so many strings for this money the automakers would resemble marionettes. And why not. They have already played Pinocchio.

I can just hear the Greek chorus -- "Government can't do anything right."

Some governments. There is every indication this new group will be looking to hire the best and brightest, not the connected and the corrupted as we saw over the past eight years.

Yes, the UAW will have to offer up concessions, but to put blame for the jalopy known as the US auto industry on the shoulders of the workers indicates a lack of perception. Didn't Detroit management after all negotiate these contracts? This was the Bush administration where workers usually didn't stand a chance.

This is not a time for old thinking. It is a time for bold thinking.

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