Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Obama Administration holds GM, Chrysler accountable

Posted by sanityinjection on March 30, 2009

I’ve been giving the Administration a hard time in some of my recent posts, so it’s only fair to give them credit for doing something right. Remember the big automakers bailout – which I was against – where they gave GM and Chrysler a certain amount of time to submit restructuring plans, qualify for additional federal money, and avoid bankruptcy?

Well, the time limit is up, and surprise surprise, the plans submitted by both companies suck. (Makes sense, when you consider they were put together by the same numb-nuts that got them where they are today.) To their great credit, the Administration not only recognized that they suck, but has said so publicly.  As AP puts it: “President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever.”

Lawdy, can I get a Amen? Amen!

As a result, GM’s CEO has been forced to resign. Chrysler has been told it must strike a partnership deal with Fiat in order to survive.

Meanwhile, at the end of the AP story, we get a little more info about why the automakers haven’t been able to right their ships:

“Under the terms of a loan agreement reached during the last administration, GM and Chrysler are pushing the United Auto Workers to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care. They also want labor costs from the union to be competitive with Japanese automakers with U.S. operations.

Little progress has been made between the companies and the union.”

Clearly, the UAW would rather see GM and Chrysler go under than give up any of its benefits. Their reasoning? Someone will buy up the assets and rehire their workers – and they have a cushy fund full of GM and Chrysler’s money to tide them over until that happens.

So the question is: If the workers who will lose their jobs aren’t concerned about GM and Chrysler going bankrupt – why should we be? Kudos to the Administration for playing hardball on this one, I hope they keep it up, despite what must be considerable political pressure coming from the motor industry states – states which were critical to Barack Obama’s election.


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