But seriously, the American auto industry has been having problems for some time. Unfortunately, boomer pensions are the #1 problem with auto company profitability, just like they will soon be a major problem for the federal budget.

It’s unfortunate, but the auto companies must continue to make money to stay in business so hard choices must be made, either in the form of reducing benefits to pensioners or reducing benefits to current employees or repealing government standards as ExiledIndependent suggests.

The government sets a bad precedent by continually running deficits and then throwing up its hands when faced with calls to correct the problem. The auto companies are finding that throwing up their hands to their problems, rather than solving them, eventually leads to bankruptcy. I wish there was a real compromise available where the auto companies could have a clear path to profitability, but without that continuing to prop up failed business models with government money reeks of communism and is actually unfair to other failing businesses which are not high profile enough to receive the same treatment.

I think this is why so many Americans are resistant right now–there is no clear plan to turn the businesses around. And the plan that might work long term–that would enable them to be profitable–would be met with amazing partisan resistance from both sides. This is because CAFE requirements need to be repealed (companies should be allowed to make products that they can sell for a profit; if the government wants a certain kind of car, then they can take some of the billions and start AmCar), compensation models have to be drastically changed ($30.00 an hour for repetitive manual labor? Seriously? And the bennies? And the executive compensation?), fair trade practices with other nations would need to be established, and there would need to be government oversight of how the money is spent.

That’s what it would take to turn these companies around, to truly make them viable in a 21st century economy. I (and apparently, most Americans) don’t want to see any money sent their way until we see changes (from the govt. as well as the automakers and the unions) that result in a new business model.