GM, Chrysler, Ford...Let Them Die

It continues to amaze me that "The Big Three" North American automakers (Ford, Chrysler, GM) continue to exist. I come from a family that has members that are fiercely loyal to at least two of the big three. My Dad, despite being Asian like me, has staunchly refused to buy an "import" car, despite all credible car reviewers and independent industry watchers who have unanimously concluded that as a whole, Asian and European car makers simply make better cars from a design, reliability and value retention perspective. Yet my Dad will only buy GM, for reasons he has not divulged to me, and my uncle has always bought Ford. I don't know why. Perhaps they have fallen for the old perception in the 50s, 60s and 70s, and to an extent, 80s, where anything Asian, particularly Japanese, was considered junk. Now, I am not here to argue the plausibility of that position, only to state that it is a safe assumption, based on sales and discriminate professional car reviewers, that import cars arek by and large, much more desirable these days and are considered better built.

So I shake my head at the latest meanderings of the big three CEOs who have decided to head over to Washington this week to meet with congress and beg for financial intervention from the U.S. government. Of course, they didn't help their case by all flying in in their individual private jets. Perhaps we all know where the real problem lies now.

Personally, I don't think that the U.S. government should give these car makers a cent. Then again, I am now wondering whether the financial bailout should have happened. There is something that is not right with me about rewarding bad decisions. And let's face it, with these car companies, there are a lot of bad decisions being made. I mean, I live close to Oshawa, Ontario, which has a huge GM plant. I am, for reasons I will not discuss here, aware of what goes on there, and frankly, GM is symptomatic of a company that has not moved into the 21st century. Then again, so is Ford and Chrysler. I mean, when the Asians and Europeans are making hybrids, and generally smaller and more fuel efficient cars, the big three release V8 engine-based cars and offer us the Magnum and Charger. With recently high gas prices (they have fallen very recently but that's beside the point), did these big three have any foresight in what they were engineering?

The big point of concern in letting GM, Chrysler, and Ford die off is that it will have a personal impact. Millions of jobs will be lost. But is that any different than any other industry? I work in the IT industry and the current push is for the old "doing more with less". And yes, it ultimately means less people, though most companies won't have the balls to actually admit that. Jobs are being offshored for cost savings, and locally, layoffs are happening left, right and center, and roles are being either consolidated, or eliminated altogether. This is all in the spirit of remaining competitive in the global economy. I've seen coworkers who have been let go and have not found a job that pays them what they made at our company. Thing is, in IT, things can be done cheaper all the time. And as the workforce ages, there is a certain amount of young blood that is needed to be injected. This year along, I have seen some pretty senior people get let go. Their replacements (if there was one) was a younger person. That is the way things are going now.

Workers in the big three are generally being overpaid. Part of that is due to being in a unionized environment (something I don't believe the Japanese car makers are involved in - at least not in Canada). I mean, I know for a fact that at GM, there are people who have been there for 30 years, whose sole job is to put one little part in another part on an assembly line. And they make $105,000 Cdn. doing it. Did they think that they would be getting this easy money forever? Thankfully reality is catching up to these companies. But it's not just that - these CEOs are making $20-30 million a year (I think the GM one is, anyway). So they complain about being almost being bankrupt and having to potentially lay off people (at the bottom of the company hierarchy), yet these fat cats who have made dumb-ass decisions continue to draw disgustingly high and wholly undeserved salaries on the backs of their overpaid underlings. And you wonder why these companies are in trouble.

I say let GM, Chrysler and Ford die. Yes, people will lose jobs and the whole economy will go into the crapper a lot worse than it is now, but these companies will not stay dead, but will resurface and be rebranded to something better and more efficient. That is simply how the world of business works these days. There is no such thing as corporate status quo anymore. Companies continue to constantly change and evolve and if they don't (like the big three), then well...you see what happens...