Auto bailout dead for 2008; who's to blame?
With the United Auto Workers refusing to accept Senate Republicans' drastic take-it-or-leave it Hobson's choice on rapidly cutting union benefit overhead, an automakers' bailout for 2008 is as dead as a Fred Thompson presidential campaign.
First, there are advantages. Yes, advantages, and I'm assuming that GM isn't so bad off it can't make it a couple more weeks, especially since part of this time includes normal holiday plant shutdowns.
The next Congress won't enough GOP Senators to block any bill it doesn't like, including stripping out state environmental standards (California CO2), beating down employees, etc. And, Obama can have the bill waiting for his signature, and appoint his own czar.
That said, passing a decent bailout this year would have been preferable.
So, looking beyond last night to the big picture:
Who's to blame?
• Well, per the story, one problem is the Big Three have been in business longer in the U.S. than have the Japanese Big Three. They've got more pension overhead because they've got more retirees per current employees.
There's no "blame" there, of course, but there is a reminder that we may be comparing apples and oranges at times.
• Beyond that, as I've already said about two dozen times on my blog, the Big Three, and above all, the General, have plenty of blame to shoulder in different ways.
And, the United Auto Workers has its fair share.
Not counting enabling Michigan politicians, I would slice the blame within the industry as roughly 2/3 management and 1/3 unions. Besides BOTH being anti-environmentalist, the UAW knew enough of what was up, and wrong, on the management side. And, there is one other reason, detailed below, to fault the UAW to some degree. Within management, I'd give 2/3 of that blame to General Motors.
Per previous posts on this issue, I've noted that GM ignored early in-house minivan designs and hybrids research back in the '70s, as prime mismanagement examples; even today, its Allison division is a leader in making hybrid buses, but it still doesn't have a full-hybrid car.
I've also blogged on how UAW President Douglas Fraser invited the Japanese Big Three here in the late 1970s, but never made an effort to unionize their plants, despite having had advance contacts with the Japanese equivalent of the UAW and despite Honda's first plant being in Ohio, not the South, for example.
Both management and the UAW have plenty of blame on the "green" side, along with those enabling politicians. (Can somebody park a Suburban on John Dingell's front lawn?)
In short, a lot of these problems are a lot older, and more festering, than problems in the financial sector. Whether they are fixable without a structured bankruptcy (and how that would even be done on a privately-held Chrysler is a question itself) is an open question.
Finally, two wrongs don't make a right.
Rather than using the argument about how Crazy Uncle Henry Paulson's been so lenient with his investment banking A-list buddies, the argument should be flipped - the incoming Congress has the opportunity to be just as tough with the financial sector as with the Big Three. (I'll have a post up with more of these thoughts this afternoon.)
On, and especially given that normal assembly plant holiday shutdowns are just around the corner, Krugman (before he tried to qualify his words) is right -- GM should die.
First, there are advantages. Yes, advantages, and I'm assuming that GM isn't so bad off it can't make it a couple more weeks, especially since part of this time includes normal holiday plant shutdowns.
The next Congress won't enough GOP Senators to block any bill it doesn't like, including stripping out state environmental standards (California CO2), beating down employees, etc. And, Obama can have the bill waiting for his signature, and appoint his own czar.
That said, passing a decent bailout this year would have been preferable.
So, looking beyond last night to the big picture:
Who's to blame?
• Well, per the story, one problem is the Big Three have been in business longer in the U.S. than have the Japanese Big Three. They've got more pension overhead because they've got more retirees per current employees.
There's no "blame" there, of course, but there is a reminder that we may be comparing apples and oranges at times.
• Beyond that, as I've already said about two dozen times on my blog, the Big Three, and above all, the General, have plenty of blame to shoulder in different ways.
And, the United Auto Workers has its fair share.
Not counting enabling Michigan politicians, I would slice the blame within the industry as roughly 2/3 management and 1/3 unions. Besides BOTH being anti-environmentalist, the UAW knew enough of what was up, and wrong, on the management side. And, there is one other reason, detailed below, to fault the UAW to some degree. Within management, I'd give 2/3 of that blame to General Motors.
Per previous posts on this issue, I've noted that GM ignored early in-house minivan designs and hybrids research back in the '70s, as prime mismanagement examples; even today, its Allison division is a leader in making hybrid buses, but it still doesn't have a full-hybrid car.
I've also blogged on how UAW President Douglas Fraser invited the Japanese Big Three here in the late 1970s, but never made an effort to unionize their plants, despite having had advance contacts with the Japanese equivalent of the UAW and despite Honda's first plant being in Ohio, not the South, for example.
Both management and the UAW have plenty of blame on the "green" side, along with those enabling politicians. (Can somebody park a Suburban on John Dingell's front lawn?)
In short, a lot of these problems are a lot older, and more festering, than problems in the financial sector. Whether they are fixable without a structured bankruptcy (and how that would even be done on a privately-held Chrysler is a question itself) is an open question.
Finally, two wrongs don't make a right.
Rather than using the argument about how Crazy Uncle Henry Paulson's been so lenient with his investment banking A-list buddies, the argument should be flipped - the incoming Congress has the opportunity to be just as tough with the financial sector as with the Big Three. (I'll have a post up with more of these thoughts this afternoon.)
On, and especially given that normal assembly plant holiday shutdowns are just around the corner, Krugman (before he tried to qualify his words) is right -- GM should die.
