UAW kills Auto bailout.

At this point the auto bailout appears to be on life support. According to AP, "A $14 billion emergency bailout for U.S. automakers has collapsed in the Senate after the United Auto Workers refused to accede to Republican demands for swift wage cuts." Senator Harry Reid failed to win cloture on a 52-35 vote.

The AP report provides basic information as to wage rates and total labour costs for General Motors versus Toyota factories in the USA. Average wages paid are relatively similar: about $30 per hour for both. However, medical and retirement costs for GM far exceed that of Toyota, pushing total average hourly labour costs to $69 for GM versus only $48 for Toyota. According to CNN Money, the Center for Automotive Research reports that GM's labour cost actually is $78.21 per hour. This would suggest a $30 per hour labour cost disparity for the Big 3 versus Toyota and other non-UAW auto manufacturers.

Questions for the Big 3, Democrats and the UAW: How can the Big 3 compete unless the UAW agrees to a reduction of their total labour costs are reduced to the level near that of American workers in Toyota and other non-unionized auto plants? Would any bailout funds do anything more than extend the agony of inevitable bankruptcy of companies that are fundamentally uncompetitive?

GM's North American operations lost $1.06 billion during 4th quarter 2007, long before the economic downturn. The evidence indicates a desperate need to change the entire operations of the Big 3. Until the UAW and its allies in the Democratic Party accept that reality, the Big 3 cannot be saved. Any funds provided the Big 3 would not be a bailout but simply a subsidy to support the UAW's out of line benefit package.