Bobby: That Detroit News article about UAW workers going BK & overextending on credit cards was really telling. Their main problem, they allege, is the decline of overtime hours, suddenly putting a crimp on their spending. Their income falls from tripple-didget levels and suddenly they can’t afford their second home or cabin at the lake, their toys, etc. Amazing!
The root of the problem for both these workers and their company and their union is “short-termism” the tendency to look only at the short run. Instant gratification, ignoring long-term costs, pretending agile foreign car companies won’t eat their lunch, thinking American consumers will always be loyal to your crappy product, buying on credit, etc., etc.
If our domestic car companies are bailed out by our feckless congress, the companies, their union, and the workers will avoid facing the behaviors that have brought them to this point. As a result, they will be back for more within months as the bleeding continues. They will become a permanent drain on the government. And the taxpayers supporting these UAW workers will include some people making $20 – $25 per hour living and spending responsibly.
Ford and GM going bankrupt would be far less disruptive and damaging than it is being portrayed. The companies could void and rewrite all contracts, pensions, labor agreements, etc. that they have recklessly taken on. Retirees would be taken care of by the Feds under current law protecting BK pension plans. All the current factories, work force, distribution channels etc. would be bought out, reorganized, sold where appropriate, and run by the likes of Toyota, Honda, Mazda, etc. and run efficiently & profitably.
As a nation of consumers, taxpayers, and workers, we would gain in the long run. Short run? Lots of pain and necessary disruption, and especially attitude adjustment. The question is whether now, with elections behind us, we are ready to think about the long term or stay stuck with short term expediency that only dooms us.
