Fannie Mae and Freddie Mac
Goldman Sachs
Morgan Stanley
American International Group
Boscovs
And many others. Today Citigroup has been added to the list.
I'm dismayed that some of my conservative friends are blaming the unions for the collapse of Detroit. Did the unions cause the collapse of the big financial companies? I know a few people that work for CitiBank and not one of them belong to a union and they are hourly employees.
I haven't read a liberal or conservative blogger or talked to a Republican or Democratic voter that agrees with what is going on but we keep hearing the same mantra that Margaret Thatcher was famous for when I lived in England, "There is no alternative."
I can't get my arms around what has happened in the last month and I'm an Economics major. As a rule I don't like it when the government goes into panic pass mode because they usually get it wrong, think the Patriot Act or the MCA.
As a minimum we should expect some accountability from these companies such as the firing the top management of these not now going concerns and limits on any future compensation for their successors. The auto execs showed how tone deaf they are to the mood of the country by flying into Washington on private jets with while asking for a hand out. This past week's exchange between Congressman Paul Kanjorski and GM CEO Rick Wagoner shows how arrogant and out of touch these guys are. Kanjo asked Wagoner a simple question that he couldn't answer.
"How Much money do you need until March 30th?" And he couldn't give a straight answer.
Auto CEOs Tell Congress Why They Need $25b
We all know what caused the problems in banking and fannie and Freddie. Just think of a program started by Carter and enhanced by Clinton. Add a total lack of oversight by Dodd and Frank and voila, meltdown.
ReplyDeleteI wrote about the auto industry because that is the biz I am in. I even sent you a video of Ford's new plant in Brazil. Of course the UAW isn't solely to blame. Piss poor management, lack of innovation, and frankly, building cars people just don't want.
That said, I doubt the best management in the world could've predicted the meteoric rise in gas prices that eliminated the demand for what was the Big 3's best selling models. What they should've seen and taken care of long ago was the bloated pension and benefits package they pay the union workers. They should've seen that paying management gigantic bonuses regardless of how well or bad the company was performing.
I'll ask you here, the same question I asked you on my blog; Why is it that Nissan, Honda, Toyota, Lexus, Acura, Mercedes, and BMW (all have suffered 30% or greater losses in sales volume) have not rant to DC for a bailout? I am sure that their avg cost of labor being $44/hour vs Big 3's $71/hour has nothing to do with it. I am sure that the $1500-2000 that is added to the price of every single unit the Big 3 makes to cover the union benefits and pension plan hasn't made them less competitive.
The Big 3 shareholders should demand that every employee from the president down to the broom pusher should take a 405 paycut and all bonuses to management cancelled until a return to profitability.