Friday, December 19, 2008

Auto Rescue: Think OUTSIDE of the BOX! (what is the question!)

This will discuss the US (and international) Automobile industry.
Before we discuss answers, we need to answer some Questions!

Warning:

I believe that we are asking conflicting (and also the wrong) questions about the current Auto industry Crisis.



Question 1:


Why are we bailing out the Automobile Industry?
Answer 1: Because we want the US Automobile Industry to be Healthy and self supporting?

Answer 2: Because we want the manufacturing capacity of our country to remain intact.

Answer 3: Because we want the manufacturing capacity of the country to remain intact AND we want the Detroit companies to RETRAIN their workers into GREEN and Productive new industries.

Answer 4: Because we want to throw money at a dying industry, so that their employees can then get unemployment.


Situational Analysis
Answer 1: If we are giving money to Detroit to be self-supporting, are we presuming that the economy AND (new) Car Sales will return to normal (soon?).

If SO, I predict we will QUICKLY be wasting OUR MONEY, as neither of these will happen shortly. I believe that:
Factors that have not yet been addressed are:
  1. How many Employees/Workers will need to be put out of work if we have NO pickup in auto sales?
  2. Executive Salaries & Bonuses: Will the companies limit compensation to 20 times the minimum paid employee in their company? See Example 1 below:
  3. Will the new industry be GREEN, or merely selling the same old (fuel inefficient) cars?
  4. How many cuts of current jobs will be needed to sustain a new, greener, poorer (DEPRESSION) economy.
Answer 4:

Putting big dollars into supporting the Detroit 3, without regards to how many workers and plants they will need to cut, is like mopping the deck on the Titanic. Nice, but the end outcome will NOT be affected by the work/money put into the effort.

If the recovery plans currently under development by the Detroit 3 presume that car sales will pick up soon, the big three will be going right into forced bankruptcy.

Answer 2: Great goal, bad implementation. Giving this bailout money to Detroit will NOT Keep the country's MANUFACTURING CAPACITY available... The Presumed (UNSTATED) goal of the current bailout, is to make the COMPANIES financially Strong, and NOT to keep the workers employed.

Answer 3:
The question we NEED to be asking and sharing in the country now is:
a) do we want to keep the JOBS in the auto industry?
or
b) do we want to keep the Detroit 3 in Business, or
c) BOTH?

I believe that answer C ) Both is the correct answer. However, we cannot keep Detroit in business (presuming that the current economic situation doesnt change for at least 2 years) UNLESS we (the people/Government):

  1. Ensure that it is clear that SOME funds are being given to RETAIN and RETRAIN workers.
  2. Ensure that the companies do NOT use the funds for bonuses, incentives, or other unnecessary spending.
  3. Use a (cattle) Prod, to PUSH (Shove) the companies from being AUTOMOBILE companies to being TRANSPORTATION companies.
  4. Guarantee to the auto companies that in return for dropping 80% of their dealers AND product lines, The Government will offer New Mass Transit and GREEN transportation jobs for their workers.


Mark Brown

Example 1: Say a cleaning person at GM makes $20,000 per year (approximately $10.50 per hour) Will Rick Waggonneer agree to take NO MORE(total compensation) then $438,000 in compensation per year? Total Compensation, current and delayed, NOT just salary!!!

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