Let Them Die

GM said it needs another $16.6-billion in government loans, while Chrysler wants an additional $2-billion. Even if they get the money, the two companies between them will slash another 50,000 jobs and close several more plants.(link)

Two thing come to mind right off the bat:
1. Let them die.
2. I'm never going to buy GM or Chrysler.

Is that harsh? Yepperoo. But I doubt many other Canucks are going to be drawing different conclusions at this point.

I've been laid off. I know it's not a great feeling. Though I appreciate in every way that when a company is loosing money sometimes that means tough decisions need to be made.

To be frank that's the way the cookie crumbles. The automotive jobs in the big three are not profitable with such high labor rates.

Unions expected they could get something for nothing: high paying jobs, with high benefits and low hours yet somehow they believed it would have no effect on the industry's bottom line.

I've always argued that the only way the big three could operate under this scenario was to change their market. In Europe, the automotive industry is highly unionized yet there are some notable success stories like BMW. How is BMW doing better than GM? They focus on low volume markets such as a luxury vehicles that are higher priced.

That's the key if you want to work lower hours for higher prices. You need a market that has low volume with high margings.

I think that was what GM was attempting to do with it's move into the Hummer's and probably also the big push in the big 3 for SUV production. The only problem with those markets is they dried up as soon as gas prices went berzerk. If you add in that in all probably the luxury vehicle market is probably overcrowded to begin with it still doesn't spell "profitable."

So they're left with this conundrum: the Unions don't care about the bottom line, you can't change your market, but you're still loosing money.

It's time to let them die.  It's harsh.  It's unpleasant.  It's the truth.