Michael Barone has a very good article in National Review Online about the proposed bailout of the big three auto companies. The collapse of these companies helps no one, but they were in trouble before the economy began its decline. The problem for the Detriot automakers in the contracts they have made with the UAW (United Auto Workers). The Philadelphia Inquirer has an online article today detailing some of the differences between how Detroit automakers have run their companies and how Toyota runs its American based factories. According to the article--
"Toyota, on the other hand, having gone to school on the problems looming for American auto companies as it set up U.S. operations, has fewer than a thousand retirees. Even when that number balloons into the thousands over the next decade, the company's liabilities for its retirees will remain right where they are today: at zero. That's because Toyota has put the responsibility for funding their retirements on the shoulders of the employees themselves, through individual investment accounts to which the company contributes."
The article in the Inquirer also points out that the excessive costs of union benefits made it financially impossible to do the retooling that the big three auto companies needed to remain competitive. The high demands of the unions over the years may be what puts to companies into backruptcy (Chapter 11 would actually be a good idea) or forces the American taxpayer to bail them out (which would be an ongoing situation).
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