With bankruptcy hanging over the big 3 automakers, they feel many people are shying away from buying a new car. Yeah, we should be hesitant to buy new cars until they can make more fuel efficient vehicles. If there were better options available (electric, hybrids, alternative fuel), people would be purchasing.
In a BusinessWeek story, they talk about the union suspending their program called JOBS bank. This program paid workers a large percentage of their salary while they were not working. The union has also agreed to delay payment to their health-car program.
In a USA Today story, they spell out 5 critical issues to address the bailout:
- Overpaid workers - the UAW is taking much of the public blame for the automakers’ woes.
- Overpaid executives - members of Congress have argued that the CEOs haven’t made enough personal sacrifice to justify the bailout they seek.
- Green cars - U.S. automakers focused on more profitable SUVs and trucks at the expense of developing more cars and fuel-efficient technologies.
- Too many dealers - the Detroit 3 have too many stores for their market share.
- Bias in Congress - politicians from Southern states have been very critical.
All of this is reactionary management based on a very bad economy. Unfortunately, the management executives should have been more proactive in addressing these issues. They were happy with big profits on SUV’s and now they can not give them away. Should congress approve a bailout? I don’t think they deserve it, but what are the ramifications of letting any one or all three fail?
To address our problems, we need aggressive, proactive solutions. I believe Passenger Energy could make a difference today, not in 2-3 years.