Auto Bailout

I'm giving this current economic situation a name. I'm calling it "The Great Correction." If you think about it that's exactly what it is. This country has been run into the ground by greed and mismanagement and now we're having to correct things. When things are thriving, business is good and everybody's making money you can get away with mismanagement and reckless business practices. However, when times get tight it seems that only the lean survive.

GM, Ford and Chrysler are not lean. They have allowed Unions and poor management to put them in a dire financial pit. Now, they've hopped their individual private jets to fly to Washington to ask the taxpayers to bail them out.

A few things seem ironic about this.

a. While it's been noted on every major news source, I'd be remised not to question the use of private jets to fly East and beg for money. Flying to Washington on private jets goes further to show how rediculously clueless these fat cats are. They've overseen the downfall of three of America's greatest companies, yet they show their disconnect when they arrogantly fly in on private jets!?

b. You have mismanaged your company, you have built less than competitive cars, your operating cost are astronomical and not competitive so your margins are thiner than say....Toyota or Honda (both of whom are building vehicles in the States and by all appearances are doing just fine.); therefore, consumers looked elsewhere when it was time to buy a new car. Since they(we) didn't buy your cars and you didn't adapt fast enough to changing market trends you've now come back to us, the taxpayers, many of whom walked away from your products, to ask for money anyway. Sorry fellas, you should thought about that when you were designing and building your cars. You should've thought about the threating storm that was brewing with each UAW renegotiation. Well, the storm's here. You got greedy, you got fat and you were the only ones who didn't see the brewing problems. You did this to yourselves, you didn't adapt and now your situation is dire.

I'm not heartless....I am concerned about the negative economic effects that the collapse of the big three will have on our economy. The trickle down effects are enormous. However, is a band-aid really the answer? This is Capitalism! If you don't adapt to market trends you don't survive. It's simple economics and is something that even myself, with nothing more than an undergraduate degree in economics, could have easily told you.

This is part of "The Great Correction." Companies like GM, Ford and Chrysler need reform. They don't need a bailout so that they can continue to try and be competitive in a market that has passed by their methods. They should take a page out of the books of the Airline Industry. Not long ago many of the big Airline companies filed for bankruptcy in an effort to merely survive and to protect themselves from credit collectors. This gave them the opportunity to completely overhall their operations and emerge leaner and profitable. While the economic implications may be painful, this is exactly what the big three should be forced to do. From the standpoint of running and efficient and effective business model they're a joke. Trust me, I know from firsthand experience that business school professors love to use the GM-UAW relationship as a great example of how not to run a business.

The time has come for "The Great Correction." It might hurt but it's necessary and it's part of Capitalism. Eventually greed will be penalized even in a Capitalist society.