To save face it looks like the Federal Government will be bailing out General Motors, Ford and Chrysler with some caveats. They will tell the taxpayers that these are loans to the automakers and are to be used for alternative energy initiatives and bringing new propulsion systems to automobiles. The money is said to be earmarked for research and development investment and hybrids, electric cars, hydrogen cell and natural gas run vehicles, although the deal is not completed yet.
However, no matter what you call it is still a bailout and the taxpayers are still on the hook for these monies. In the 1970s Charles Deming was criticized as General Motors was on a collision course. Deming took his knowledge to the Japanese automakers. If you’ll recall Datsun, Honda and Toyota took most of Ford and General Motors market share, as the US automakers failed to listen to their customers and continued building vehicles that broke down a lot, used too much gas and cost too much.
Apparently, the US automakers didn’t learn anything in the 1970s and even after the new millennium kept building large vehicles, SUVs and light trucks, gas guzzlers. As the price of fuel went up fewer people could afford to drive these types of cars and their resale value plummeted. Chrysler Acceptance Corp., Ford Motor Credit, and GMAC were caught with lease trade-ins that were not even worth close to their book value at the time of trade in.
But why did all this happen? Because the US automakers did not learn from their mistakes and because of this the Democrats wish to bail out the auto industry, which turned their back on the customer and the desires of those that buy their vehicles in the free market. Further, unions made demand upon the US automakers that were unlivable and unsustainable. In one quarter General Motors lost $15 billion, the worst loss in US corporate history at the time.
Still, the unions are so strong and have supported Democrats so much so that House Speaker Nancy Pelosi is meeting with GM, Ford, and Chrysler along with the union representatives at the UAW to structure a bailout package. Part of the stipulation will be that the money is used to create green and environmentally friendly vehicles of the future. So all those blue-collar union jobs will now be Green collar careers, something the US automakers should have done 10 years ago.
The US automakers have sat on alternative energy technologies for years. Ford had canceled their electric cars, GM was slow to make good on their promises for hybrids and the Chevy Volt will not be out for 2-3 more years. The US automakers do not need any more money for Green or alternative energy innovation monies or R&D expenditures, they have all the technology they need already.
They just refuse to retool and couldn’t because the UAW was too busy looking out for their own self-interest rather than helping the company move into the next generation of fuel-efficient vehicles. Why is the UAW going green now? Because they see the huge amount of government money flowing to alternative energy projects and they know if the automakers can get a good chunk of that money that the unions will be able to siphon that money off and keep it for themselves.