Thursday, November 20, 2008

Big Three Bailout

How important do you need to be to get help? One after another we have watched little factories close their doors and lay off workers. They can not make a profit and they go out of business. Fifty or sixty workers here, a hundred there, and how many jobs does it take to be important? If the company is poorly run should someone bail them out by throwing good money after bad? No amount of money can help if they are not profitable.
The size of the company and the number of jobs involved should not make a difference. The big three auto makers or an investment bank it should not matter. If they can’t make it maybe they need to change the way they do business.



The following is from the column, Other People's Money, written by CNET's Declan McCullagh. For CBS News.

"One of the best reasons why Detroit automakers should not receive a bailout can be found in a General Motors "Jobs Bank" program that, bizarrely, pays employees not to work. A beneficiary of that program was someone named Jerry Mellon, who worked for GM until his division merged with another in 2000 and he was no longer needed. Except for a brief period in 2001, Mellon received his full salary for not working, which reached $64,500 a year by 2006. Include benefits, and the annual cost to GM exceeds $100,000. To earn his pay, Mellon was given the formidable task of showing up in a windowless shed, sitting at a table, and doing nothing for eight hours a day for six years, according to a profile in the Wall Street Journal. Jobs Bank employees have the option of attending classes teaching such important manufacturing skills as dealing blackjack and poker. Mellon spent part of his time reading Reader's Digest, learning how to play Trivial Pursuit, napping on a makeshift bed of chairs pushed together, or simply staring at the wall for hours at a time. During those six years, Toyota surpassed GM as the world's largest car manufacturer, thanks to innovations like the fuel-sipping Prius. Nissan developed the GT-R, a technological marvel with a 0 to 60 time of 3.2 seconds and a lower sticker price than the Corvette ZR1. Honda kept its focus on smaller cars such as the Civic and Accord, and saw its sales continue to increase this summer while GM, Ford, and Chrysler have slid. The United Auto Workers union and Detroit executives concocted the Jobs Bank idea in the early 1980s. Now these same economic whizzes are lobbying for handouts in the form of your tax dollars."



I know these companies represent hundreds of thousands of workers and that their loss would have a devastating effect on the economy. I just don’t feel right about using our tax dollars to help them out. The underlying problems are still there and must be fixed. They should change the way they do business before they come asking for tax dollars to fix their problems.

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