First, there was Fannie Mae and Freddie Mac receiving help from the federal government. Then Lehman Brothers was allowed to go belly up, before AIG received some $85 billion dollars in their own financial bailout. Not long after that, the $700 billion bailout package was passed by Congress, after being touted as a necessary evil to prevent the complete collapse of the financial markets and to free up credit. I am sure most people in our country realized that something had to be done, but a lot of us are still not convinced the $700 billion bailout was a good thing. At any rate, I have a question for Congress and the President. When will the bailouts cease?

Last week, General Motors and Ford Motor Company released a couple of very dismal earnings reports for the last quarter. GM reported it lost $2.5 billion in the last quarter alone and is wanting help from the government. Speaker of the House, Nancy Pelosi agrees.

Her request for legislation came less than a week after General Motors Corp. (GM) and Ford Motor Co. (F) posted bleak third-quarter earnings reports. GM, the nation’s largest automaker, posted a $2.5 billion quarterly loss Friday and warned that it may run out of money by the end of the year without government aid.

“We’re in a situation where there’s a great unknown about what will happen,” said Sen. Debbie Stabenow, D-Mich. “And a great concern that at least one of the companies will find themselves in a situation where they cannot make it until January 20,” when President-elect Obama is inaugurated.

Here we go again with this “gotta do it right now” business. Didn’t we hear the same thing when Congress was debating the first bailout package? I realize the automotive industry is a vital source of jobs for a lot of Americans and it would not be good to see those jobs lost. However, this problem begs the question; just how many different industries does the government bailout before it says enough is enough? It’s not as if Congress hasn’t already tried to help the automotive industry.

In September, a plan was approved to provide $25 billion to the automotive companies.

Congress approved legislation in late September to provide $25 billion in loans to domestic automakers and suppliers to upgrade factories to build more fuel-efficient vehicles. But the funding has stalled and supporters of the industry say it will not be sufficient to help the companies with their immediate financial problems.

Executives with GM, Ford and Chrysler LLC and the president of the United Auto Workers union pressed Pelosi and Senate Majority Leader Harry Reid, D-Nev., to provide an immediate $25 billion loan to keep the companies operating and a separate $25 billion to help cover future health care obligations for retirees and their dependents.

One of the problems with the automotive industry is how the unions have negotiated labor contracts to require the automotive companies to pay healthcare costs, not only for current workers, but also for retirees. This not meant to be callous or to open an entirely different can of worms, but explain to me why any company should be required to pay healthcare for their employees. Shouldn’t that be the responsibility of the employee?

This is not meant to be a slam to labor unions or automotive workers. I realize how important it is to have healthcare in this day and age, but can we not see how this scenario has driven the automotive companies to the brink of complete collapse? Were it not for these companies having to pay healthcare costs for their workers, retirees and dependents, they very possibly would have enough cash reserves to weather economic storms, such as the one we are in at the moment.

During the campaign for President, Barack Obama touted his healthcare plan and how it would provide coverage for all Americans. What his plan would do is require businesses to provide healthcare for their employees or pay a penalty for not doing so. Just think of what that is going to do to the businesses in our country. Not only will they have labor unions negotiating contracts to have them provide healthcare, but the government will be sticking an extra monkey on their back as well. With the cost of doing business high in the first place, let me know how that works out after four years.

At some point, don’t we have to stop and ask ourselves if it is worth driving companies like General Motors, Ford Motor Company, and Chrysler out of business, just to get free healthcare? Doing that sounds like a plan for colossal failure to me.

That’s my take!

Larry

Tags: $700 Billion, AIG, Automotive Industry, Bailout, Barack Obama, Chrysler, Congress, Fannie Mae, Ford Motor Company, Freddie Mac, General Motors, Harry Reid, Healthcare, Labor Union, Lehman Brothers, Nancy Pelois, President

This entry was posted on Wednesday, November 12th, 2008 at 6:03 am and is filed under News/Politics. You can follow any responses to this entry through the RSS 2.0 feed.