Here's an interesting idea about how the arranged auto bailout might long term save GM and the UAW from both themselves and each other. It was an idea that sort of crossed my mind when they announced that the UAW would be taking quite a bit of GM and a majority of Chrysler stock. By giving the union and therefore the workers, an ownership stake in the company, they'll have a more vested interest in the long term competitiveness and viability of the company.
Now welded to the companies they are dependent upon for survival, they'll be forced to make decisions as owners and executives now if they want to protect their workers and even the Union itself. I think it might actually hold some promise in helping the company become more competitive long term.
Whether any meaningful and effective change comes from this new arrangement remains to be be seen. Nevertheless, as the author notes, the irony in the workers owning production would definitely have Marx rolling in his grave. I'm not sure this is quite what he had in mind.
Which Side Are You On?: How the UAW's New Ownership Stake Will Defang The Union, by Daniel Gross
Anyways, I thought it was interesting reading.
And now, for a rambling rant:
I'm growing increasingly concerned about all the taxpayer money being poured into GM and Chrysler. While I think that this may be necessary, given current economic conditions, I'm concerned this may never end. The Obama administration hasn't firmly stated that these are the last bailout dollars he's willing to give to the companies, just that they don't anticipate doling out any more cash to Detroit.
The other thing that concerns me is all the cash being doled out to companies that aren't viable and haven't shown any sort of plan to change their ways to become viable. Despite collapsing, I don't see Chrysler or GM doing anything radically different to change things around.
If the federal government is going to be the new financier, they need to start thinking like an investor, which means putting capital and money where it could be most useful. If we want to save the auto industry in America shouldn't we be using this money more wisely? Ford, which completed its restructuring and has turned itself around quality wise and sales wise is the only company in Detroit that's worthy of taxpayer dollars (and is probably the only car I'd consider buying if I was in the states right now).
I find it despicable in some ways that GM may ultimately benefit from the epic cluster they created, whereas a better company like Ford may get put at a competitive disadvantage by not having access to all the cheap government capital.
And why keep pumping money into dull, old companies at all when there are new startups begging for capital to get off the ground? If the government is the new investor, shouldn't the government also consider sexy new startups like Bright Automotive and Tesla Motors just as much as dinosaurs like GM and Chrysler? After watching the slow motion train wrecks of GM and Chrysler over the last 15 years, would Tesla really be all that much riskier an investment?
Then again, Tesla doesn't have a huge lobbying arm in Washington, or hundreds of thousands of workers and suppliers in dozens of congressional districts (to say nothing of the UAW's political clout). Its kind of unfortunate how many of these political decisions pretty much get made before they're even presented.
And for folks interested in the future of the American Auto Industry: