Auto-industry spokespeople, testifying before Congress this week, said the industry critically needs its own bailout or drastic downsizing and job losses are imminent.
The Detroit auto industry has many critics and it faces many criticisms for its failure to adapt to the demands of doing business in 2008 and beyond. For better or worse, the auto industry is hampered by (or its employees are enhanced by) union contracts that guarantee full pensions and medical insurance to most retirees.
The auto industry is hampered by this country's lack of national health care, something that does not affect auto industry giants like Toyota, Honda and Volkswagen.
Detroit also caused its own problems in ways that have little to do with unions and health insurance. The nation's auto industry has failed to adapt to changing consumer demands and is now reaping the negative benefits.
The industry consistently lags behind its competitors in terms of quality, innovations and gas mileage. Detroit could have been a leader in the industry, but instead it lags far behind the cars being offered by foreign automakers.
And Detroit automakers have been bailed out in the past and failed to make any necessary changes to how they do business.
But does that mean the industry should be hung out to dry for bad business practices? We are bailing out financial and banking service businesses for basically the same thing: bad business practices. Why does one sector of the economy deserve help while another one does not?
Despite the good salaries and excellent benefits paid to auto industry workers, their golden parachutes pale in comparison to those offered in the financial sector.
It's easy to dismiss Detroit as unworthy of a bailout and it is true -- they don't really deserve to be helped. They had the chance to adapt and blew it. But it's hard to reconcile federal help of the country's financial giants with letting Detroit swing in the breeze.
LAL
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