American car manufacturers would LOVE to produce and sell fewer vehicles, but they cannot. You see, their workers have these really sweet UAW-negotiated contracts that require workers to be paid EVEN WHEN THEY ARE NOT WORKING. When sales are slow, and manufacturers would naturally like to cut back on production, they can't because their largest cost - labor - does not go down when they shut down their plants. So rather than pay a few thousand employees to sit home and drink beer, they continue to run their proiduction lines, flooding the market with a glut of vehicles which they all but force dealers to take. Then they have to offer ridiculous incentives to move those vehicles off of dealers' lots.
Add to that the staggering pension and medical benefit load that GM and Ford must pay to their retirees - $5.6 BILLION in 2005 for GM alone.
Carmakers Offer Car InsuranceInteresting idea I read in today's Oakland Press editorial section; www.theoaklandpress.com By David Kniffen 1-31-06 Carmakers Should Offer Low-Cost Insurance General Motors, Ford and...
No company can survive with economic forces like these in play. Either Detroit will succeed in a SERIOUS renegotiation of the next contract, or the American car makers wil go bankrupt (or, more likely, be sold to Toyota or Honda or BMW). -- What the heck, I'll play too. - Dave
