I need a new Cadillac. It wonít cost much because I own the company. General Motors. That is. Oh yes, I own it. Or will shortly. Nancy Pelosi, Speaker of the House of Representatives told me she is going to buy it for me. And you too.
She is going to have the government ďloanĒ the auto industry 50 Billion (thatís a B) dollar because she thinks they are going to fail, go out of business, go belly up. Wait a cotton-pickiní minute. It is not possible for a company as big as GM to fail, is it? Of course that same line of reasoning applied to Merrill Lynch, but they went under and were bought by Bank of America. It happened so quickly that the workers didnít miss a stroke.
It seems that GM management hasnít been as smart as Toyota, Hyundai and all those other Asian car manufacturers. Plus management made sweetheart deals with the union for the workers back in the 60ís not thinking ahead. Now they are in over their head.
If GM and Ford go belly up what will happen to all those nice union workers? Right. Gone. Laid off. Getting unemployment checks. Thatís all.
Can Ford and GM be saved? Yes, but it will be painful for those who work there, but they will have a job.
It is more than likely that the factories will be open and producing again in less than 30 days. Maybe some Eastern company will buy out all the equipment and start the production lines again. Probably. The unions wonít like it, but folks got to eat.
When bankruptcy is filed all contracts are null and void. That includes all those union agreements. No more health insurance, no more pension plan, no more expensive Starbucks coffee. Such screaming you never heard. There will be picketing, demonstrations and a few violent acts against the standing assets (really dumb).
Is this a good idea? The country has a choice. Let Congress give the auto industry our money to an outmoded industry that will continue to lose our taxpayer money every year or get competitive with Toyota, etc. so the Detroit cars can be sold profitably again.
It is not an even bet that Congress will give away our money to the unions. The unions give big donations to help reelect those bums who are spending our money (not theirs).
Even if I own the company my Cadillac is going to cost more because of old and continuing inefficiencies of the management. The unions did what they were supposed to. They got more than they should from auto management. It is time to start over.
There wonít be any American well-managed auto companies if voters allow Congress to sell out the taxpayers with another stupid bail scheme.
Shucks! Looks like I wonít get that new Cadillac.
Al Thomasí book, ďIf It Doesnít Go Up, Donít Buy It!Ē has helped thousands of make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com
Discover why heís the man Wall Street does not want you to know. Copyright 2008. All rights reserved.