Auto Industry

Senator Harry Reid D-NV released a statement recently stating that “Republicans Have No Interest in Keeping Domestic Auto Industry Alive and Saving Millions of American Jobs” (Thursday, Dec 11, 2008)

Partisan is one thing, but no thinking individual, no matter their political persuasion, would believe this a true statement.  It is time for this childish, politics as usual, behavior, especially by the leader of the U. S. Senate, to stop.  THAT would be change to believe in.

Republicans are just as concerned as Democrats about jobs, manufacturing and the economy.  It serves no good purpose to make these type statements – rather drives people apart when we need to work together.

I came of age watching the Steel industry go through similar diastrous collapse.  The industry moved further and further from global competitiveness due to unrealistic labor agreements (which both management and union leadership BOTH signed) around both compensation and work rules. Later, overbearing environmental regulation which did too much too fast, added insult to injury.  It has never fully recovered.  The UMWA (mineworkeres) and the USWA (steelworkers) are a shell of their former stature.  I believe valuable lessons can be learned from that experience.

The question now is how soon the UAW will resemble other formerly powerful unions in American history or if they will find a way to retrench and rebuild.

No one in Washington nor Congress came to the rescue of the steel industry.  While it is different, there IS a steel industry in the U. S. today.  Another example is the railroads.  In this case, the federal government intervened heavily, resulting in ConRail (freight) and AmTrak (passenger) lines.  To this day AmTrak continues to be a drain on the U. S. Treasury ANNUALLY, having NEVER shown a profit and constantly coming back to Congress for more money.

It is time to realize that bankruptcy courts/law have developed over centuries to handle just these type of situations and that politicians need to let them work – whether it is in financial markets or any other economic sector.

It is not pleasant, but it is reality.  Perhaps Labor and Management can both learn this lesson.  You certainly don’t find it in MBA programs!

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