America has lost automobile companies in the past, so the first question I would ask now is why shouldn't we expect that we will have a change in the automobile companies in the future? Just like global warming alarmists - they assume that the current conditions are the best, and any 'change' will be catastrophic. Perhaps we should remind all of them that their trust in President-elect Barack Obama was that 'change' would be for the good!
But the biggest problem in their editorial is the lack of FACTS - or, rather, the blatant disregard of them in order to support their premise.
"The American auto industry has doubtless made many mistakes in the past, but in recent years has done an admirable job getting its act together. General Motors' current cash flow woes come as a result of no fault of its own. America's once-proud corporation is a victim of the Wall Street panic and the crippling credit crunch, which means consumers cannot get loans to buy vehicles."
As I've previously reported, GM has lost $57 billion since 2005. Ford has lost $24.5 billion since 2006.
Note the dates? There was no credit crunch in 2005 or 2006 nor for most of 2007. So how can the current cash flow woes of GM be 'no fault of its own'? The Blade editorial does not explain this, presumably because addressing these facts would not allow them to place the blame on someone other than the auto companies themselves. And if their problems are not their fault, they don't have to do anything to solve them.
And then there is the double standard.
In 2006, The Blade went through its own financial struggles (though rumors persist that they are still in difficulties). Their solution was to insist on cuts in wages, benefits and even employees. They publicly stated at the time that companies, in order to survive, have to make a profit and that their employee costs have to be such that a profit is possible.
They were right. But while they made such decisions for their own operations, they don't seem to expect that other companies will make similar tough decisions - at least, not when the government can save them from the difficulty of doing so.
So why the double standard? Why is The Blade so keen on giving our tax dollars to the automobile industry instead of insisting that the automakers renegotiate their union contracts as The Blade did?
It's certainly puzzling - and I don't have the answer, but I can speculate.
I think it has to do with politics - imagine that!
The Blade 'loves' the President-elect, so if Obama thinks something must be done, they are highly likely to agree.
Obama and the Democrats are tied so closely to the unions, especially the UAW, that they are falling all over themselves to preserve both those jobs and the pensions. One of the options being considered is this:
"Help Detroit carmakers with health and pension obligations. Under the most controversial idea being floated, the firms would get $25 billion to help pay the rising costs associated with 780,000 retired autoworkers and their families. The United Auto Workers is pushing this idea. The generous health and pension provisions that the UAW won when Detroit was flush are now a big part of what makes them uncompetitive against foreign rivals who don't give their workers such expensive benefits."
So here are the facts:
* The auto makers have been suffering losses since 2005. While their existing financial situation may have been compounded by the credit crunch, it only hastened the inevitable.
* Generous health and pension provisions for their UAW members are a major component of their costs, which make them uncompetitive.
* While some are calling for less remuneration to executives, no one is calling for major revisions to their union contracts, which would have an immediate impact on their bottom line.
But The Blade seems to think that Obama will save us all.
"President Bush should take the lead of President-elect Barack Obama and speed immediate emergency legislation that will enable General Motors, and Ford and Chrysler as well, to survive, at least until a coherent strategy can be agreed upon for our nation's automotive future.
Waiting till the new administration takes over on Jan. 20 would be too late,..."
Um...since when was it anyone's responsibility - other than the car makers - to develop a 'coherent strategy' for their future? I don't seem to recall anywhere in the Constitution where 'saving specific companies' is listed as part of the duties of the federal government.
I could go through this editorial line by line and provide a comprehensive, logical and factual rebuttal, but when their entire premise - that this problem is not because of decisions made by the automakers, themselves - is wrong, their conclusions are also wrong.
That's why fact matter. If you ignore critical facts when facing an issue, you will inevitably end up with 'solutions' that don't actually solve the problem - and, in some cases, make things even worse.
So here's a question: what would be so bad about a 'Big 2'?