The Problem Is Entitlement
Warning: The following could be considered a rant. Those of you who read this blog for the dry, thoughtful, “just the facts” tone of my posts may want to look away.
I try not to take sides in the ongoing debate between labor and management. I do this for a number of reasons, but the big one is this: I don’t like to see people getting screwed over. If unions are bleeding a company dry, they’re the problem, not the solution. If management isn’t paying a living wage, then I support the union struggle. Granted, I’m conservative and pro-business and I’ve personally had to face off against strikers when I was working security, but I’m not ideologically opposed to people getting what they deserve. There’s give and take and people deserve their fair share as long as there’s enough shares to go around.
My problem with the auto bail out (on top of my problems with bail outs in general) is that the companies are not financially viable – and they’re not viable for a reason. Everyone who has anything to do with them has a sense of entitlement. The news is making a big hubbub over the CEOs using private jets to get to Washington. The CEOs barely batted an eye when congress asked them why. The simple truth of the matter is, they feel like they deserve it. GM’s CEO was given over $15 million dollars in compensation in 2007, when the company lost $2.7 billion. Their vice chairman made over $9 million.
The United Auto Worker’s Union is no better. Last year, after a brief strike, GM was forced to sign a four year contact to pay $30 billion in health care costs to retired union workers for unrelated illnesses, hire an additional 3,000 workers, and maintain production levels at 16 plants regardless of what market forces dictate. GM’s employee benefits fund is currently estimated at $170 billion, and the company is reduced to going to Capital Hill and begging congress for a loan.
And if that weren’t enough, the big three are still not producing cars that people can actually get excited about. They don’t have a Prius. They don’t have a Scion tC. They don’t have a Civic. What they do have is gas guzzling SUVs and those killer 10-wheeled 2 ton trucks that wouldn’t see off road driving if their owner’s lives depended on it.
You can’t point a finger at any one part of these companies and say, “well, there’s your problem.” The problem is an arrogant sense of self-entitlement. The CEOs run these companies like government institutions. They completely ignore the fact that they’re part of a competitive market and just do whatever the hell they want to, regardless of cost or options. The UAW keeps drinking like well will never run dry. And congress, God help us, is going along with it.
Run away unions plus insolvent companies plus government bail outs equals communism. The government, if it decides to throw more money at the problem, is literally taking money from the tax payers and giving it to people who are over paid to do a job that doesn’t need to be done at a company that shouldn’t be in business in the first place.
If the government wants to get involved, here’s what I think they should do: Buy a piece of the big three. Not stock. Not loans. Actual factories. Retool them to be of value to society, fire off all the spoiled brats that work there, and sell them to an enterprising widget manufacturer. The auto manufacturers get their money, the unions get their comeuppance, and we don’t have to deal with incompetent management again. The government, I’m sure, will waste a ridiculous amount of money on the transaction, but at least we’d be done with it.
If we just give them more money, we’ll be right back to where we started. In a year, maybe two, maybe five, they’ll be back again, asking for another bail out. If we’re going to bring pain upon ourselves, we might as well make it a pain that doesn’t come back.
Tagged with: 2008 Bail Out, Auto Manufacturers, Bail Outs, Ecconomy, Rant, UAW
Excellent post, there’s nothing wrong with ranting whatsoever, especially when you’re right.
I’ve been on both sides of the union fence, I’ve been a union worker and I’ve been management having to deal with unions and I have to say, from someone who strongly favors a free market, unions suck from either side of the fence. From the worker’s perspective, you never really make enough additional money to offset all the concessions and money you have to pay the union and from the management perspective, bad employees are protected from being properly terminated or disciplined, I had to run everything past the union reps to do virtually anything whatsoever, they were really running the show and they knew it.
Seriously, if the government is going to give money to these morons, the first thing they need to do is see that the CEO, CFO and COOs are all terminated off the bat, these are the people ultimately responsible for the failures at these companies, why should they get to stay on when they already ruined the viability of the company? No parachutes, golden, platinum or any other color either, they walk away with the clothes on their backs and the contents of their bank accounts, nothing more, I don’t care what their contracts say. If they don’t like it… don’t ask for money from the government, just go out of business. Second, have independent auditors go over these companies with a fine-tooth comb, any improprieties, any illegal behaviors, any funny accounting needs to be dealt with in the harshest legal means possible. Put the crooks away. Finally, we bust the UAW whether they like it or not. The Big Three pays, when you figure in all compensation, $73 an hour. Toyota, for their U.S. plants, pays $48 an hour. It’s no wonder GM can’t make a profitable small car to save their lives, they have a ridiculous amount of labor overhead.
The time has come to actually solve these problems, we cannot just throw $25 billion to Detroit every couple of months and not insist that the problems be solved immediately and decisively. We all know what the problems are, it’s time to remove the option not to solve them from the people who, as you very rightly say, feel entitled to their huge slice of the pie.