Wednesday, November 19, 2008

My Plan for Auto Industry

Hoy presented his take on auto industry yesterday and I feel it is only fair that the Silicon Valley slant also be applied to problem.

The main beneficiary of the Big 3 automakers current product line is OPEC. So let Saudi Arabia buy them out. They would be following HP's model of producing printers at break-even (waffles accounting) while selling the ink for the profits.

When I was in college (1980-1984) a few of my friends managed to get "union jobs" in steel mills and auto manufacturing in rust belt. They generally got paid $17/hour, 1.5x over 40 and 2.5x for Sunday hours. They would work 70 hour weeks until they hit 490 total hours because at 500 hours they got benefits. I know unions have made some concessions since then but I have to believe Big 3 have fatally flawed managment/union relationship that no amount of bailout money can truly fix.

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