Wednesday, December 3, 2008

Alms for the poor, Alms for the poor


At the moment every manufacturer and financial organization is going cap in hand to their respective governments asking for a handout. Just some greenbacks to keep the wolves from the door.

What criteria should we use when dispensing this emergency funding?

I'm thinking really of the big North American auto manufacturers who are crying out for help. If they don't get the funds they ask for, the earth will collapse upon itself and we will lose all civilization as we know it. But why should we give money if you are making a product that consumers don't want? Why should we give you money when your workers all have sweet heart packages in regards to pay and pensions? An article in a magazine recently stated that over $1500 is added on to the cost of North American cars just so the companies can cover the workers sweet heart deals. By way of a contrast - Asian cars have simply about $350 added into the cost of the car to cover wages , pensions etc...

So you're building large gas guzzling behemoths in an age of high oil prices, for a consumer who is focusing on quality of product and overall fuel economy. You're over paying your workers to the point where they are hurting your company. Is it entirely possible that the people running these companies don't have a clue how to run a business? And if they can't run a business - which their current situation clearly indicates, why would we give them more money?

I know that there are lots of other businesses and industries that rely on the auto manufacturers to survive, but that is no reason to bail them out. If the product they are selling is substandard to the competition, and not focusing on consumers needs why bail them out? Economic Darwinism - survival of the fittest.

If the North American companies go down - there will be some tough times true, but we will come out the other side stronger and more stable, because the resulting business will have good management and good products. They have been forced to adapt to survive. There is a reason we don't see any dinosaurs around. North America car manufactures need to change their way of doing business or they will go the way of the Triceratops.