The American Auto Industry

The burning economic issue du jour seems to be the financial disaster that is the American auto industry.  Yesterday GM announced horrible results and basically admitted that without an infusion of government funds they will go under.  Ford is in about the same position.  President-elect Obama talked about the issue in his news conference.  For my part, before the government put in one red cent to help the auto makers these companies must get give-back concessions from the United Auto Workers.  Overly generous pension and health care payments to retired UAW workers have strangled the U.S. auto makers and is the major reason they are not fully competitive with foreign makers.  At this point the government should only give them a cash infusion if these concessions are obtained and if they start developing more fuel efficeint vehicles.  I doubt the UAW will be reasonable however, and so I am not optimistic about why aiding the auto makers now is nothing but anthorer band-aid on a very sorry situation.

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