Say Anything Blog

What the heck it’s not Byron’s money anyway.

While Sen. Byron Dorgan, D-N.D., strongly favors federal aid to the Big Three U.S. automakers, the other two members of the state’s congressional delegation are in a wait-and-see mode.

“This is about jobs — 350,000 direct, probably as much as 3-to-5 million jobs in total, reflecting that industry,” he said

So there it is.  Byron Dorgan has sold out the North Dakota taxpayer all to help the UAW Union guys that have wrecked their industry.  Once again we find out that our congressional delegation is more concerned about out of state special interests than he is about North Dakota. 

I’ve read that the market capitalization of the “big three” is around 7 Billion dollars. Congress has already approved giving them 25 Billion to produce more fuel efficient cars.  (Something they should do with operations).  Now Byron and his buddies want to bail them out with another 25 Billion Dollars.  What kind of idiot invests $50 Billion in an industry worth 7 Billion?  (Byron Dorgan).

Some say that the problem is that Detroit is making crappy vehicles that no one wants.  I disagree.  While that was once true, I think they are making good vehicles now.  The problem is that the United Auto Workers has driven the company to this point.  It costs the automakers $73.20 in payroll related expenses for every hour worked by a UAW worker.  That’s more than twice what the average industrial worker makes in this country.  Foreign named makers in the country pay about 40% less than that as well, not to mention what the cost of labor is for an import.

Clearly expenses are out of line.  Any kind of bailout that doesn’t address that is bound to be worse than a failure. 

But you say that the workers had a deal.  Someone owes them that money.  That’s true.  But the American public isn’t who owns the money, it’s the car manufacturers themselves.  And guess what, they’re all but broke. 

The UAW has driven their golden geese to death.  The workers that supported (and benefited from) the union efforts to do this are every bit as responsible as the CEO’s or owners of the company.

So yeah, the workers are owed the money but not beyond the company’s ability to pay.  The owners agreed to pay these pay packages so the UAW claims ought to come before any equity rights.

I am one that thinks that a “big three” bankruptcy is a less than optimal solution.  However bailing out the owners, managers and unions of those that screwed up the situation would be much worse.  I would say that we could probably guess what they’d get out of bankruptcy (either chapters 7 or 11) and include that as a condition of any kind of bailout.