The Big Three automakers went to Capitol Hill yesterday looking for a taxpayer supported bailout of their companies. They are seeking up to $25 billion collectively, with GM asking for between $10 billion to $12 billion; Ford $7 billion to $8 billion; and $7 billion for Chrysler. They claim that the money will allow them to retool and become more competitive.
UAW President Ron Gettelfinger blames the economy and is a staunch supporter of the bailout. He doesn't believe the rank and file should have their benefits cut in order to reduce labor and benefit costs and make the companies more viable.
So here's an idea. If the unions and the companies believe so much in their plans going forward, why not borrow money from the pension funds? The GM pension fund alone has a funded status of $9 billion dollars and assets ot $104 billion. Based on their requests, that should be enough to keep the company running. It also aligns the interests of the employees with the fate of the company.
The US car company business model is broken. The public long ago voted on this by driving Detroit's market share steadily down. Now it remains to be seen if the management and employees can get together to save their companies. If not, why should they expect the public to do it for them?
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