Perception: All Detroit needs is deep restructuring and federal bailout money for long-term viability.
Reality: Wrong. Detroit needs what America sorely needs — a Congress with the leadership chutzpah to devise and implement industrial and energy policies that will help to keep native manufacturing industries alive. Detroit’s problem isn’t poor products or lack of products. It’s a national government still wedded to the debilitating siren song of cheap gasoline. It’s a nationally collapsed financial system. And it’s governmental hypocrisy — our willingness to pour tax dollars into foreign enterprises, most of them not unionized, while griping about doing the same for homegrown, unionized manufacturers largely responsible for building America’s middle class.
@Robert
Let yourself being heared on a broader scale – why not?
Anything to lose?
Barely
So lets try something positive in common to gripe the ailing belt by bare hand e.g. keyboard and actually try to mend the damned stuff – not only to moan.
I propose you set up a petition to be signed by TTAC visitors and send (you in bulk or each individual) to the Obama transition team either direct to Steven Chu
or at least to someone in charge at http://change.gov/
How about that?
Poor ol’ Warren Brown, made a bit of chump of himself in the rest of the article, including (paraphrasing) that it’s Barack Obama that should get HIS head out of the sand on the state of the Bigish3. He’s just all mixed up in his perceptions of the problem!
Otherwise, it reads like a GM PR “talking points”, or should that be, excuse list.
It’s a national government still wedded to the debilitating siren song of cheap gasoline.
Brown is certainly right on that point. But he doesn’t know the correct usage of “chutzpah”
Here’s an idea: If Bush & company are going to spend $14 billion of taxpayers’ money on the auto companies, why not let taxpayers get something back from it? Take the $14 billion and say “The first 2 million people to buy a fuel efficient (maybe 25 mpg city, 30 mpg highway) car from the Big 2.8 gets $7000.” They could time-limit it to between now and January 31st or February 15th. They would also probably want to limit it to one car per person, and do a few other anti-fraud provisions.
I’m not a fan of bailing out the automakers, but if we insist on doing it, at least get some fig-leaf of public good out of it. Doing it this way would move the auto mix somewhat toward higher gas mileage vehicles, reducing dependence on the likes of Venezuela, Russia, and Iran. It would do the most good for the companies people actually want to buy cars from.
If they wanted to be sneaky they could actually start to solve some of the big 2.8’s problem with an oversupply of dealers through this. Restrict the program to x number of dealers per company (supposedly to make administration easier). That leaves the other dealers competing at a $7000 disadvantage for a month and a half in a slow economy. I’m guessing there will be a lot fewer dealers in a couple of months.
Problems: (1)This has absolutely got to be a one-shot limited time deal or else you’re going to start a trade war with other car-producing countries. Those countries would probably accept a one-shot because one way or another the Detroit-built cars piling up on lots are going to get blown out. (2) This would to some extent be cannibalizing sales for the rest of the year. (3) The cars sold would be low-margin vehicles. They would generate cash flow but not much if any profitability.
It would only be buying time. The Detroit 3 could get the backlog off the lots, but then they would have to actually restructure if they’re going to survive.
Again, I don’t think this is a good idea, just less bad than plain old giving the Detroit 3 the money.
Robert,
Other than the phrase “Detroit’s problem isn’t poor products or lack of products.”, what’s wrong with that paragraph?
The unfortunate truth is that this country hasn’t had any kind of industrial policy since the 1950s. We have legislation like CAFE that disadvantages native industries in favor of foreign owned companies. And now so-called free market conservatives like Bob Corker want foreign entities to establish wage standards for American industries.
It’s clear, comparing bailouts of Detroit vs Wall Street, that the financial industry calls the tune in Washington. Putting aside product planning mistakes and other bean-counter driven errors, many of Detroit’s problems, including overly generous labor contracts, are the result of Wall Street’s (and all those American’s who own stock and 401Ks) emphasis on quarterly, short term, profits. It’s hard to take the long view when you’re getting hammered not just for losing money but for not making enough money that quarter.
Sometimes even making money isn’t good enough for Wall Street. I remember once when Kodak announced that while revenue was down, profits were up, and their stock went down. I may know very little about business, but it seems to me that a company that wrings higher profits out of lower revenues is being managed well.
BTW, I’ve come to the conclusion that the entire bailout soap opera drama has been incredibly damaging to GM in particular and the domestics in general. It’s created a forum for the propagation of all sorts of Detroit bashing, urban legends and deliberate misinformation, making the domestics’ reputation in the marketplace even worse.
At this point, I’m not sure that filing for Ch. 11 could possibly do any more damage to GM than the last couple of months of this saga has done. Other than the demand for an immediate cram down of UAW wages (which is just window dressing, Gettlefinger was correct when he said that the UAW could work for free and it wouldn’t help in the short term – after all the cost differential is due to legacy costs, not hourly wages), Corker’s deal wasn’t a terrible idea, Ch. 11, in all but name. Still, I’d rather have a bankruptcy judge making decisions than politicians with their own special interests micro managing GM’s turnaround.
Ronnie,
Like Mr. Brown, you are relentless. But that doesn’t make Brown, or you, or Detroit’s apologists right.
“The unfortunate truth is that this country hasn’t had any kind of industrial policy since the 1950s. We have legislation like CAFE that disadvantages native industries in favor of foreign owned companies.”
Is it me, or is “industrial policy” code for legislative protectionism? Whether or not other countries have a domestic-favoring rules and regulations is another debate. But whining that American automakers aren’t competing on a “level playing field” globally is, ultimately, weak sauce.
We’re not talking about a global meltdown (although, of course, we could). We’re talking about a North American black hole. Regardless of foreign “bias” against imports, both Ford and GM were making money on their foreign ops until recently, pouring it into NA to prop-up their failing American business. (BTW: Can we see the books now?)
By the same token, foreign-owned automakers haven’t been propping-up their American subsidiaries with profits sources abroad. They’ve been making money in the U.S., while Chrysler, Ford and GM were driving into bankruptcy.
In short, American “industrial policy” is what it was and is, even if it was and isn’t. All automakers operating here have had to conform to the same rules and regulations. Period.
Crying about CAFE is, of course, ridiculous. The American automakers shamelessly manipulated the federal fuel economy legislation to allow them to continue building high-profit SUVs– a genre in which they specialized. If they had not wasted their lobbying juice on perverting the law’s intent, they would have been in far better shape today. Hell, they might even have survived without running to Uncle Sam.
[Note: I have argued against CAFE since the site began. But again, it is what it is. To claim that CAFE regs are the source of Detroit’s troubles now, when the D2.8 were happy to bank– sorry, squander SUV profits before, is intellectually insulting.]
“And now so-called free market conservatives like Bob Corker want foreign entities to establish wage standards for American industries.”
What is with you and “foreign entities?” IMHO, xenophobia is the last defense of a scoundrel. You make it sound like there’s a Japanese conspiracy to take over the United States. They are simply doing what Ford and GM are doing abroad: trying to make money.
Anyway, as I’ve pointed-out here many times, America’s domestic automakers set the [high, union-negotiated] floor for the wages in the automotive industry. If the UAW-controlled D2.8 costs were to disappear, wages would fall. As would new car prices.
Like it or not, that’s how the free-market works. Over-ride it at your/our peril.
“It’s clear, comparing bailouts of Detroit vs Wall Street, that the financial industry calls the tune in Washington.”
Sure, blame the Jews. No seriously, the idea that there is this cabal of financiers whose unbridled greed has FORCED Detroit to fuck-up their entire business is dangerous nonsense. There are plenty of world-class American companies who are able to think, plan and execute a long-term survival strategy for growth and profit.
Kodak? You’re using Kodak as an example? Kodak is a victim of Wall Street? I call BS. And irony. The CEO who drove THAT company into the dirt is the lead on GM’s Board of Directors.
“BTW, I’ve come to the conclusion that the entire bailout soap opera drama has been incredibly damaging to GM in particular and the domestics in general. It’s created a forum for the propagation of all sorts of Detroit bashing, urban legends and deliberate misinformation, making the domestics’ reputation in the marketplace even worse.”
They made their bed. Now they’re lying in it. I mean, where’s the outrage and Rick Wagoner, Cerberus and Bill Ford? Why be angry at Congress for not providing what KixStart rightly identifies as charity, instead of the people who reduced these once-proud companies to abjecdt poverty?
“Still, I’d rather have a bankruptcy judge making decisions than politicians with their own special interests micro managing GM’s turnaround.”
Agreed.
@ Robert Farago:
Amen to that essay, in every respect.
Please don’t link to the third page of the source article next time.
Is it me, or is “industrial policy” code for legislative protectionism?
It’s you, at least as far as what I meant. Though I do believe that some industries, like machine tools, are so vital to our defense needs that it might make sense providing them some level of government support – or at least more than they get as part of the defense supply chain. Those industries are exceptions to the rule, or at least the rules as how this free-market guy sees them.
I’d rather see our government pressure other countries on the issue of free trade rather than prop up non-essential uncompetitive businesses. I don’t mind Toyota selling cars here (though I do mind them mucking about in our political system by playing off the anti-union South against the political power of American industries and labor). I do mind that the Japanese government keeps US rice growers out of their domestic market.
While pundits, economists and financiers have talked about moving to a service economy or an information economy, the fact is that we’ve never had a national discussion on the need for a manufacturing base. I’d much rather see some kind of tax relief for US based businesses than protectionist tariffs. I don’t see a tax policy that favors US businesses as opposed to our current policy that favors foreign owned entities as a bad thing. Instead, we take money from people in Michigan and Illinois and send it to Alabama where it becomes fungible with other state level funding and is used for incentives for foreign owned companies.
Here’s an interesting question: Would big Dick, Shelby support the kind of incentives given to Mercedes et al to be given to GM in order to open up a GM facility in Alabama and compete with Mercedes et al?
By the same token, foreign-owned automakers haven’t been propping-up their American subsidiaries with profits sources abroad. They’ve been making money in the U.S., while Chrysler, Ford and GM were driving into bankruptcy.
In the case of Japan, their American and other offshore to Japan subsidiaries have been propping up the parent companies whose JDM revenues have been pretty flat. Suzuki-Maruti makes more money in India than the parent company does in Japan.
What is with you and “foreign entities?” IMHO, xenophobia is the last defense of a scoundrel. You make it sound like there’s a Japanese conspiracy to take over the United States. They are simply doing what Ford and GM are doing abroad: trying to make money.
Robert, does calling someone a xenophobic scoundrel break the no-flaming rule?
As for conspiracies, I don’t think there’s any question that gaining political power in the US vis a vis the Big 3 and the UAW was a major factor in siting transplant operations in the South. I’m not the first to raise this issue. They certainly have big Dick, Shelby in their pocket. That political power is seen both at the legislative level (RE: last week’s Senate vote) and at the grassroots level seen with comments here and elsewhere about “supporting American workers” employed by the transplants.
Sure, blame the Jews. No seriously, the idea that there is this cabal of financiers whose unbridled greed has FORCED Detroit to fuck-up their entire business is dangerous nonsense. There are plenty of world-class American companies who are able to think, plan and execute a long-term survival strategy for growth and profit.
Robert, I know it was a joke, and I like jokes in poor taste better than most, but in light of some of the Jew-hating comments I’ve seen online vis-a-vis Wall Street (and more recently the arrest of Maddoff) I suspect that the worst and stupidest of those online may think you’re being serious, disclaimers notwithstanding.
I’m not the only person who’s expressed concerns over investors’ shortsighted emphasis on short term profitability. As long as GM was making money (and they were very, very profitable when they were turning a profit) they could absorb the costs of the bloated UAW contract and investors didn’t mind. Do you think their stock would have gone up or down had they announced that they were going to favor long term growth over the next quarter’s earning report?
Kodak? You’re using Kodak as an example? Kodak is a victim of Wall Street? I call BS. And irony. The CEO who drove THAT company into the dirt is the lead on GM’s Board of Directors.
I wasn’t using Kodak as a general example but rather a specific example about how Wall Street reacts to quarterly reports from more than 10 years ago. Perhaps I should have made some disclaimers about Kodak’s poor performance in general and been clearer that it was a specific example. My bad. Yes, Kodak has been mismanaged, but in the specific example I cited, they were hammered unfairly by the investment community.
I know that your rebbetzin Ms. Reis thinks Kodak is stupid for getting into digital photography, but I’m not sure what she’d rather have them do now that photographic film is akin to buggy whips.
The more established a business is, the harder it is to reinvent itself. I’m sure that Steve Jobs had some resistance within the company (unless drinking the koolaid is a job requirement to work at or be on the BOD of Apple) to his move into personal electronics.
Robert, so you expect 435 Representatives and 100 Senators selected by a glorified popularity contest to make a better industrial and energy policies than markets? Market competition is messy and chaotic with winners and losers, but it allocates resources and sets prices better than an elite team of intelligent well-meaning public servants could. Making matters worse, concentrated power attracts slimy politicians, not enlightened saints.
I don’t think an honest, impartial observer can say Detroit doesn’t have problems with significant parts of their product lines. Hard to imagine any consumer being heartbroken if Chrysler quit manufacturing every FWD passenger car in their lineup tomorrow, for example.
Doesn’t cost me anything if Tennessee or Alabama decide to use tax money FROM THEIR STATE to help build a competing Southern auto industry. What I do get are new American made products to choose from. Helping American workers in the South without helping fund the UAW is a big plus for many consumers.
Look, regardless of why the big 3 are in this mess, you people need to understand what this so called bailout is, because it’s actually a loan, not a bailout. Furthermore, the government stands to make money off of these loans to these companies, making this a FAR better proposition then giving away the $700 bil. to Wall St. The way these loans work is that the government basically cosigns for the big 3 so that banks will lend them money at a low rate, and cover their asses if they miss a payment. In return for getting them a low rate, and covering them, they companies have to pay the government a fee. I don’t know what it is, but when Chrysler was bailed out in the 80’s, the government made $660 million, not too shabby, especially when you take into account all the people who got to keep their jobs.
it’s actually a loan, not a bailout
They aren’t going to pay us back. There will be no profits that could be used to pay us back. So no, it really isn’t a loan.
But it’s also wrong to call it a bailout. A bailout would imply that the money will fix them, but it won’t, they will fail, anyway.
Let’s be honest with ourselves — it’s a grant. Not a loan that will be repaid and not a bailout that will succeed, but a grant, free money that we will never see again.
We’re just trying to keep the plane aloft for awhile longer, in the hopes that it crashes into an empty field, instead of in the middle of a city full of people. The money is meant to minimize the damage, not to prevent the crash.
“and cover their asses if they miss a payment”
And that pretty much says it all. Why would a near insolvent company have money to make loan payments when they were already having trouble without those payments? Do you think it’s going to turn around that quick, if it turns around at all?
I think this is, as others have said, an effort to make the crash less painful and everybody involved knows it despite their public statements.
(Although I have no idea what the uaw and GM management think, if anything.)
“Still, I’d rather have a bankruptcy judge making decisions than politicians with their own special interests micro managing GM’s turnaround.”
Very well said. This whole spectacle of the carmakers’ CEOs and their corporate jets shows how well politics works in business. First the CEOs show up in their corporate jets. They get ripped for doing that. Then they drive back from Detroit to Washington in their own cars and get a much better hearing. Reminds me of stories I used to hear of when people supplicating the king had to crawl up to the throne on their bellies. Pure politics.
Bankruptcy court has its own problems. Lawyers circle like sharks with blood in the water. Fortunes are made feeding off the wounded company. But the results can be good. GM is in pretty good shape compared to a lot of companies who have come out of Chapter 11 alive. The gap between revenues and expenses is not large. Get rid of their debt and trim their expenses and you can make a viable company. The bankruptcy process might well work.
Not this circus in Washington. In my opinion, the chances of that succeeding are minimal.
Vettefan427, where did you hear that this was going to be a private loan guaranteed by the government? I heard that it was to be a direct loan of government funds, at 5% for the first five years.
Pch101 called it. If this “loan” is made, forget about it ever being repaid. The chance of that happening is about the same as me winning the lottery. When I haven’t even bought a lottery ticket.
@ pch101
We’re just trying to keep the plane aloft for awhile longer, in the hopes that it crashes into an empty field, instead of in the middle of a city full of people. The money is meant to minimize the damage, not to prevent the crash.
Thanks, great analogy; it gave me a moment of clarity.
Ronnie Schreiber :
December 14th, 2008 at 1:00 pm
And now so-called free market conservatives like Bob Corker want foreign entities to establish wage standards for American industries.
You are utterly wrong on this one.
This is the consequence of a free market. The emploees can seek to ask for high wages, as the UAW did. If in such case the wages and other benefits destroy the company, as it makes the products too expensive – this is their choice. Just do not ask for the taxpayer to bail them out. The UAW has been on strike repeatedly to refuse any major concessions. They decided it was more important for them to win in the short term – not much different from the Analysts looking for the next quarterly report. Now they have lost.
Why should the D3 and the UAW now have any right to a bailout? They have lost a fair game in the free market. If they want the bailout, they need to be compared to the one who won – the market dictates it. And to this it comes: the american taxpayer, by refusing to buy cars from the D3 has made the decision: the UAW is too expensive. Take it or leave it – wages from the south will be an example. The UAW will have to face it or join GM in extinction.
ROBERT: if I was a Rep- Senator voting against the bailout, I would now be screaming against Bush for not following the democratic Senates decision and using the TARP funds out of their designation. I do not see anything in the internet. No information on this side??
it’s a grant. Not a loan that will be repaid and not a bailout that will succeed, but a grant, free money that we will never see again.
Exactly.
More welfare to keep entitled union officials rolling in luxury. Not a single job would be saved.
Ultimately preventing their bankruptcy will cause MORE job losses all together, they can not be saved but a futile attempt will cause losses elsewhere.
They need to look up “triage”.
TireGuy: One thing you can pretty much take to the bank is that whatever decisions Bush makes will be the most damaging route possible for the Republican party. So he makes the Republican Senators walk the plank on the bailout, getting pro-bailout people angry at the Republican party, then he apparently goes ahead and does the bailout anyway, getting anti-bailout people angry with the Republican party. Oh, and he also gives the next administration political cover to keep the Detroit 2.8 and the UAW afloat for another couple of years at a cost approaching $100 million. Way to build the party, guy. I’m not a Republican myself, but if I was I would be counting down the days until Bush leaves office.
@Ben: you mean $100 billion I’m sure.
(Remember the movie The Rock (Connery and Cage)? The disgruntled Marines tried to extort $100 million from the government. Man, those were the days…)
Doesn’t cost me anything if Tennessee or Alabama decide to use tax money FROM THEIR STATE to help build a competing Southern auto industry. What I do get are new American made products to choose from. Helping American workers in the South without helping fund the UAW is a big plus for many consumers.
Ah, but there’s the rub. The tax money didn’t come from their state, it came from Michigan and the industrial Midwest, the west coast, and the Northeast. Those areas all get less than a dollar in federal spending for every tax dollar they pay. The states in the South and Southwest (except for NC and GA which pretty much break even, and Texas that gets 90 cents on the dollar) all get a net gain from federal tax dollars.
Over $800 million from Michigan, Ohio, Indiana, Illinois and Wisconsin since 1980. Add CA, NY, NJ, CT, and MA with their large federal tax bills and we’re talking about trillions of dollars of wealth transferred to the South and Southwest.
When the feds spend money in a state, they do it both directly on projects and indirectly, paying federal employees, federal contractors, and paying for military bases and personnel. If I’m not mistaken there is also federal revenue sharing with the states, money from the feds that goes straight into the state’s general fund. The direct spending on projects and revenue sharing frees up moneys that can be used for, let’s say, giving Nissan a $197 million dollar incentive to move their NA hq to Tennessee. A portion of the indirect spending also ends up in state coffers because of income, sales and business taxes.
So what’s happening is that taxpayers in Michigan have subsidized those plants in Tennessee and Alabama, plants that compete with our own industries.
Let me ask you. If GM said that they were going to shut down a plant in Michigan and build a new one in Alabama, do you think big Dick, Shelby would work as hard for that one as he did for the Mercedes plant (that’s now offering buyouts to its workers and will go on hiatus for half of January)?
You think your comments about “Helping American workers in the South” aren’t the result of a deliberate strategy by Japanese and other foreign automakers to gain political power in this country?
Bankruptcy court has its own problems. Lawyers circle like sharks with blood in the water. Fortunes are made feeding off the wounded company. But the results can be good. GM is in pretty good shape compared to a lot of companies who have come out of Chapter 11 alive. The gap between revenues and expenses is not large. Get rid of their debt and trim their expenses and you can make a viable company. The bankruptcy process might well work.
Not this circus in Washington. In my opinion, the chances of that succeeding are minimal.
My next door neighbor’s a fairly low level bean counter in the auto industry. He described, as others have, Sen. Corker’s plan as a bankruptcy in all but name. It wasn’t a bad plan, though I’m troubled about the Senate mandated wage cram down by the end of ’09 for reasons I’ve stated already. The truth is that the wage cram down was all but symbolic, and not really a significant enough cost reducer to make GM competitive. I suppose cramming down a union’s wages these days is easier politically than telling GM to reduce retiree pensions and health benefits. In this regard, the AARP is a greater factor than the UAW. According to OpenSecrets.org, The automotive industry ranks 33rd in terms of contributions to Congress. The Senior Citizen lobby is ranked #1.
Ah, but there’s the rub. The tax money didn’t come from their state, it came from Michigan and the industrial Midwest, the west coast, and the Northeast. Those areas all get less than a dollar in federal spending for every tax dollar they pay.
Either you haven’t analyzed the data, or you are following the time-worn tactic of continuously misrepresenting half a fact, in the hope that the uniformed will accept it as the whole truth.
(Hey, “A” for effort. That tactic has worked for millenia. On some part of the populace anyway.)
Problem is this. Even a rudimentary examination of the data will show that most of that huge distributional disparity is made up of Social Security and health care mechanisms for the retired. Not big payoffs for transplant corps.
If you keep throwing out this red herring, I’ll keep calling you on it.
Don’t get me wrong. The money and retirees *do* make a contribution to those local economies. But claiming that somehow the rust-belt is supporting southern states via tax redistribution is just plain disingenuous.
Yes, I did mean $100 billion. Thanks.
TireGuy,
I pretty much agree with much of what you said, but you didn’t really respond to my point. It seems to me to be a violation of free market principles for the government to tell people how much they can make.
I’m not a huge fan of minimum wage laws. I’m certainly not a fan of “living wage” or “comparable wage” laws. So the idea of maximum wage laws rubs me the wrong way, regardless of Detroit’s need to restructure.
Robert this is a fantastic post.
Problem is this. Even a rudimentary examination of the data will show that most of that huge distributional disparity is made up of Social Security and health care mechanisms for the retired. Not big payoffs for transplant corps.
If you keep throwing out this red herring, I’ll keep calling you on it.
I’m not saying they smell but your retirees are red herrings themselves. If the discrepancy is retirees, one would assume that Florida and Arizona would have particularly high returns on tax dollars. For 1981-2005, Florida averaged $1.05 in federal spending per tax dollar and Arizona $1.17. By comparison Alabama averaged $1.40. I’m not a statistician, and there are exceptions like Texas and Tennessee, but nearly all the southern transplant facilities are in states that did better than Florida and Arizona. It would be interesting to see what has a greater correlation to return on federal tax dollars, the number of retirees or the presence of foreign owned auto plants.
I’d be happy to look over any data you might link to. I haven’t been able to find any breakdowns in terms of retiree benefits, infrastructure, contractors defense and otherwise, military bases, etc. From what I’ve read, defense spending is a factor. California has gone from a net gain to a net loss as defense plants have moved to the South. Tank production was moved out of Michigan (not to the South, but it still reduced federal spending). Defense bases are also a factor, with bases in the North more likely to have been closed under Clinton than in the South. True, there are good reasons for having military bases, particularly naval facilities, in warm weather regions, but I know of two Air Force SAC bases and an Army base that were closed in Michigan and they keep threatening to close the only remaining large military facility in the state, Selfridge ANG base. TACOM, what used to be the US Army Tank Command in Warren, is a shell of its former self.
Other government spending by executive branch agencies and on GS employees, all 1.8 million of them, sucks up plenty of cash. In this case, the big winners are Wash. DC, VA and MD., though Alabama, Texas and Florida, with ties to NASA, do okay as well.
Earmarks may also be a factor as they often pay for things that otherwise would come out of the state’s general fund freeing up money for business incentives. Mississippi gave Toyota and Nissan each about $300 million to build plants there. In 2008 Mississippi got $282 million more than Michigan in earmarks. That’s almost enough to build a transplant facility.
Like I said, I’d be happy to look at the data and if I’m wrong I’ll admit it, but either way a lot of money has been taken out of the Midwest and a lot of money has found its way to the South.
Ronnie Schreiber :
December 14th, 2008 at 9:50 pm
TireGuy,
I pretty much agree with much of what you said, but you didn’t really respond to my point. It seems to me to be a violation of free market principles for the government to tell people how much they can make.
I’m not a huge fan of minimum wage laws. I’m certainly not a fan of “living wage” or “comparable wage” laws. So the idea of maximum wage laws rubs me the wrong way, regardless of Detroit’s need to restructure.
It is also a violation of free market principles for the D3 to go to the government together with the UAW to ask for a bailout. If the point is about free market, then there is a very clear answer: no penny for the D3, let them go bankrupt.
BUT: if the UAW and the D3 believes there is any reason for a bailout, then there must be consequences. And this includes the UAW and the automotive workers who with their overpay very much contributed to the situation of the D3.