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94 comments on DrumBeat: March 1, 2007

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TechGuy on March 1, 2007 - 4:50pm Permalink | Subthread | Parent | Comments top

>It seems like the old dogs in Congress can't learn new tricks. They still believe higher fuel mileage standards will hurt the auto industry. They can't see that the failure to raise mileage standards is the reason US manufacturers are in such pain now.

The reason why US auto makers are in trouble is because of their huge entitlement programs. They are forced to generate high margin vehicles in order to stay afloat. While it would not be difficult to produce smaller, fuel efficient vehicles, they would face a lot of compitition from foreign auto makers which can sell vehicles for a much lower margin. US automakers need to support workers that retired in the 1960s, that are still collecting their pensions. On the other side, foriegn makers have relativity few pensioneers. If US makers tried to complete with foriegn makers they would quickly go bankrupt. As it is, they are barely staying afloat.

I suspect that in the not too distant future, US auto makers will dump thier pension programs on the PGCC at the dis-pleasure of retired auto workers.

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kgmqt on March 1, 2007 - 5:51pm Permalink | Subthread | Parent | Comments top

This is the same problem with the airline industry. In a lot of ways both of these markets would be better served if some of the existing players did go bankrupt, and just closed down. This would allow for the other companies to buy up the resources (plants, planes, etc) without the pension plans. If there are mergers you get all of the pensions along with the resources.

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ggg71 on March 1, 2007 - 5:56pm Permalink | Subthread | Parent | Comments top

While what you say is very true, you villanize the pension plan. There's nothing inherently wrong with pension plans - they just have to be properly funded along the way. You can't let the corporations continue to underfund their obligations.

Congress needs to step in and protect people's pensions. As it is, anyone who retired in the 60's (best case they are what 90+ years old?) has gotten their shirts handed to them in terms of inflation.

Garth

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sf on March 1, 2007 - 5:54pm Permalink | Subthread | Parent | Comments top

It would help if we imposed a tariff on imported cars equal to the health care subsidy provided by their government.

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vtpeaknik on March 1, 2007 - 6:06pm Permalink | Subthread | Parent | Comments top

It would help if the USA had a national health care system like all other major industrialized countries. Even the former head of GM-Canada said that the national healthcare was good for business - until he was moved back to a US job. They reap what they sow. As for the pensions, the unions should have demanded proper funding rather than empty promises. I guess the "growth" religion entraps all classes.

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cheapseats on March 1, 2007 - 6:55pm Permalink | Subthread | Parent | Comments top

Basic health care insurance provided by the gov't as one option for US citizens would bring down a major cost to US corporations and level the playing field. The cost would be great, but what is the cummulative cost we've already incurred due to lost jobs that won't ever come back. US workers and corporations can compete if the game is fair.

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karlnick on March 2, 2007 - 6:19am Permalink | Subthread | Parent | Comments top

If there goverement subsidy health care they probably pay it in taxes instead.

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94 comments on DrumBeat: March 1, 2007

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