The real issue here is the unions. Leaving aside for the moment, the issue of the companies falling, which most Democrats won’t mind much… after all corporate America is something to be diminished… the bailout is both caused by union excess, and to reinforce it.
I don’t see things quite this way and to understand why you’ve got to consider the different responsibilities that unions and corporate officers have.
The responsibility of the unions is to secure the best possible deal for their members. If they’re successful in doing that, why fault them?
The responsibility of corporate officers is to maximize shareholder value. They have manifestly not done that.
In my view union officials have done their jobs while managers haven’t done theirs.
For example, take a look at Stephen Bainbridge’s cataloguing of the problems at General Motors:
- An incredibly inefficient bureaucracy.
- An excessive number of brands.
- Over-reliance on larger vehicles.
- An antiquated distribution system.
- Punishing union contracts.
- Massive pension and health costs for retired workers.
These are primarily the result of bad management not evil unions. Management elected to knuckle under to union demands. They could have refused but the costs of doing that were more than they chose to bear and, as a consequence, management has taken in enormous compensation. It turns out to have been a poor decision.
Consequently, in my view the blame for the problems that our domestic car companies have belongs to
- Corporate management
In that order.