Facing the Real Problems with American Car Makers

James Joyner, this morning:

President Obama says he’ll help GM and Chrysler but they’ll have to agree to some “pretty drastic changes.”

“We will provide them some help,” Obama said. “I know that it is not popular to provide help to auto workers — or to auto companies. But my job is to measure the costs of allowing these auto companies just to collapse versus us figuring out — can they come up with a viable plan?”  He added: “If they’re not willing to make the changes and the restructurings that are necessary, then I’m not willing to have taxpayer money chase after bad money.”

[…]

“Everybody is going to have to give a little bit — shareholders, workers, creditors, suppliers, dealers — everybody is going to have to recognize that the current model, economic model, of the U.S. auto industry is unsustainable,” Obama said.

Says James;

Obama’s absolutely right that, if the federal taxpayer is going to bail out these companies, then the government has a right to insist on major restructuring. He’s wrong, though, and Kroes is right on how to get there.

While the government employs some really smart people with substantial knowledge of economic matters, it has no specialized expertise in how to run an automobile company.

Look, James, let’s not kid ourselves into thinking he’s interested in running a car company, much less three. He’s trying to save the Unions. First off, are we really to take from this, that the government that within a month has opened the American people up to a debtload that is bigger than all the debt incurred from the time of President Washington to President Bush, will have a clue how to keep a car company afloat?

Secondly, the best of the “major restructuring” plans would have been bankruptcy. It’s what should have been allowed to happen. Among other things, it would have allowed the companies to shed the Unions, which are the only thing, really, that can be changed. The car companies would have returned to viability in a heartbeat, had that been allowed to happen. It will not be allowed. Do not forget that the Democrats are tied at the purse strings to the unions.

Government interference in the car business also helps make car companies unviable, (How long can they continue to be forced into making “green” small cars that nobody’s buying, and penalized financially for building cars people WILL buy, and be expected to survive the financial burden?) … but apparently there’s no stopping that. So it’s down to fixing what can be fixed and eliminating the unions seems the most viable course. They may be viable with the unions or the government but not both. Unless and until the unions are removed, America car conmpanies will never be viable.

But that will never be allowed to happen, particularly with the Democrats in power. Face it, the bailout of car companies was never about saving the car companies, it was about bailing out the unions. Absent the unions, the car companies would have been allowed to go bankrupt without any discussion on the topic.

So, we’ll continue pouring good money after bad on this, because nobody wants to face the real problems…. government and unions.