Sunday, May 3, 2009

GM & Chrysler

The Auto Bailout Is Going Off Yhe Road:

Robert Reich makes a fair point.  If the public is footing the bill for the auto bailouts, why should we accept all the layoffs.  However, while fair, it misses the practicality of the situaiton.  Both GM's and Chrysler's costs are just too high.  The argument can be made that they are selling too many types, the wrong types, etc.  The reality is that jobs are going to have to be cut if GM and/or Chrysler are to be saved.  If a business doesn't have the revenue comming in, and it doesn't have a realistic plan to get cash comming in fast (a long term investor of some kind - not Uncle Sam), it has no choice but to cut its cost - for GM and Chrysler that means closing facilities, cutting expenses, and reductions in the work force.  Sorry Dr. Reich.

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