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The Official Blog of National Taxpayers Union

A Closer Look at the Big Three Auto Makers

Posted by Christy Paavola - November 13, 2008

As lawmakers contemplate giving more taxpayers' money to the Big Three auto makers, Michelle Malkin received an interesting letter from an auto industry worker that highlights some of the reasons these unionized companies are in need of a bailout. The letter states:

Their business practices are not a tax payer problem, but a terrible management problem. It was a noble idea for the Federal Government to lend them $25 billion to help. It is now known 4 X’s that amount will not cure the root cause of the problem, but only buy them 4 X’s the amount of time.

When a cancer is identified inside a person, it is immediately removed if possible. The Big 3 has a cancer that needs to be removed. It doesn’t take a rocket scientist to understand why they cannot compete profitability. They have parity on supply costs, materials, and energy with Honda and Toyota. So why can’t they compete? It is clearly the cost of labor.


Thoughts?   Add Comment -


Dominic Rupprecht said on Nov 13 2008 at 12:02pm
I obviously agree that the cost of labor is a problem, but I think another reason Honda and Toyota are doing better than the big 3 is lack of market responsiveness/innovation. People don't want to take out a mortgage to fill up their gas tank and they want to "be green." In that kind of environment a business model based entirely on trucks and SUV's is insane.