I listened to the President this morning, and I was dismayed by his remarks how in normal circumstances he believed chapter 11 bankruptcy was the right course of action, but these times are different. I disagree; in a market based economy all circumstances are normal.
Running a viable business is difficult at best but these car makers were on a path of self destruction long before any financial “crisis” became clear. They are running unsustainable labor and production costs compared to their competitors here in the US. Toyota, Honda, KIA all have factories here in the US. Volks Wagon is building a plant in Chattanooga TN, and these companies have been watching the markets carefully and adjusting accordingly.
For example, Toyota shut down their plants for 7 weeks during the summer to offset overproduction. Employees did not receive 95% of their wages and benefits, they had to make due or take unemployment insurance which is about 30% of their regular wage. And have you noticed any whining coming from the car companies or their employees in the Southern US? That’s why companies are moving there; a productive and grateful labor force.
There is one depressing news conference after another coming out of Washington. These politicians are clearly incompetent to do the right thing so the best course is to reduce their role and get out of the way of the markets. Just say no; like Ford has; for now…
True knowledge of American history is necessary to insure the future of the America we love… This is an important time in our country's history. We must be wise and measured as we choose our leaders going forward.
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