Expect the Return of the Auto Bailout Soon

More Layoffs and a Wage Freeze at General Motors





It shouldn't be long before we start hearing about the automotive bailouts again. Once Congress finishes spending absurd amounts of money on the stimulus package that tanked Wall Street. Once they get this deal worked out in committee, they will turn their attention to other areas.



And U.S. automakers should be back in DC, hats in hand for more cash, since they didn't get all they wanted last time.

In the coming months, thousands of auto workers may find themselves out of a
job. Officials at General Motors have announced plans to cut 10,000 salaried
positions, 3,400 of which will be in the United States. In addition, the remaining salaried workforce will be subject to a decrease in pay. The move comes as CEO Rick Wagoner pledges to meet stringent new fuel economy standards, and brings his company into compliance with government restructuring mandates. Officials won't say how, or if Indiana's GM workforce will be affected. The changes will be effective May 1st, 2009.

I expect we will hear a lot more discussion on this in coming weeks. I posed a question related to this topic on a discussion board a couple of times in the last year.


The question was simple: "Is today the day the American automotive industry dies?"

I had some really amazing answers. I am going to publish them over the next few days.


From a VP of Technology:

For once I must say I take offense to the question!

I am a Michigan native and I still live in Michigan. From your education, I
can see you might also be a Michigan native. For the last few years I have
watched my state, my friends, and neighbors succumb to a horrible local economy.
I watched my fellow thirtysomethings deal with a bureaucratic nightmare brought
on by earlier generations. I have watch friends lose jobs, their retirement
funds, as well as their homes.

Although I personally know the automotive industry is riddled with issues,
the industry is the heart of my state. I have met numerous people who work hard
at the big three, who take pride in their jobs, and who deserve a better. These
are smart, educated people, who truly want to make great vehicles that are
competitive and loved by those who drive them.

It is the corporate culture that lacks merit, the bureaucracy that clogs
productivity and profitability.

I truly hope the UAW and the big three can move forward. The big three
need it, their employees need it, as does the entire state of Michigan! I am
thinking positive and hoping for a break through and a brighter future.

From a college professor:

I hoped my mother would die, and I hope the American auto industry does,
too.

I loved my mother, but she had reached the point that she was "not
herself." It wasn't godawful yet; she could talk fine and seemed pretty
coherent, but the last time we were together she didn't know me for quite a
while; before that, for maybe a year, she had begun to speak of my father (dead
some ten years then) as though he was fishing and generally happy, but didn't
want to live in a retirement home with her. I hoped she would die in her sleep
before she sensed, too often, that she wasn't herself anymore. Sadly, but for
the best, that's just how it happened.

The American auto industry was a colossus bestriding the world when I was a
boy, and I loved to see what the new models would be like and what wonders they
would present next. I loved to argue with friends and cousins over which were
"the best." But they aren't themselves anymore. I hope they will die in this bad
downturn; no one dast blame these men, these executives and union leaders and
technicians and marketers, if they are washed away in the tidal wave of failures
and job losses that is sweeping across the developed world. They all can remain
asleep, as they have been for quite a while now, and never wake up again, not as
the Big Three (much less Packard and Hudson and Studebaker...). I'm sure there
subsists, in their enormous human and physical capital existence, the makings of
some potentially vigorous industry for the 21st century, an industry that can
take shape once the American automobile industry is laid to rest in bankruptcy
court and their bodies release their components back into the economy that
birthed them.

Many more interesting perspectives to come!

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