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nostalgia1 year ago

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The US car companies need to file for bankrupcy
Maybe then they will get new management and can stop the legacy costs which are between $3000-$4000/vehicle
They will never be able to compete if they don't get their legacy costs down to a reasonable level

Look at the foreign auto makers that are manufacturibg in the US. Those companies have labor compensation packages of $40 to $50 an hour per American worker. GM is stuck with legacy costs that leave it paying $70 an hour
It doesn't matter how much money the government throws at the car companies, the figures aren't going to change

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  beavith11 year ago
  
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  the problem is that the legacy costs are retired employees and their health plan.
  
  if they go bankrupt, all that retirement liability falls on the Pension Gaurantee Benefit Trust, which is taxpayer guaranteed.
  
  we just ship the liability from one aspect of the taxpayer to another.
  
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    nostalgia1 year ago
    
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    That's true BUT some of the money from the current bailout will be going to pay for those legacy costs - pension and medical benefits
    Nothing will change and the companies will continue to be in trouble from those very costs
    As long as the companies are on the hook for these legacy costs, they are never going to be profitable or competitive
    How many bailouts of the auto industry are you willing to finance with no changes made in the root of the problem?
    How many other companies offer the pension and medical benefits to retirees that the car companies do?
    The car companies are going to go the way of the steel industry - out of business if some radical changes aren't made
    When was the last time one of the car companies was profitable?
    
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