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>From:         "John Crowley, Jr."
<[log in to unmask]>
>Subject:      Re: hybrids and more hybrids
>
> I disagree with you.  The inept leadership at the
companies are
> responsible for their poor performances - not the
government.  And
> taxes are not an answer - in part, because it's a
regressive tax that
> can impact most on those with middle and lower
incomes.

I did say incompetence was a factor but government is
a big cause.

Pro union legislation like the Wagner Act (1935) etc.
gave unions extortive power over management. They
pretend they are negotiating but management has to
agree to strike demands or they go broke.

One issue at GM and Ford is pension liability. Unions
were pushing for more and more generous pensions and
younger retirement ages. Management had reservations,
so government fixed it, in the 70's the PBGC (Pension
Benefit Guaranty Corporation) was created. This
severely underfunded entity exists to guarantee
private retirement pensions.

So the unions extort overly generous pensions,
management agrees because the pensions are guaranteed.
Everybody is happy... except the stockholder and the
taxpayer who is presumably on the hook to cover  PBGC
liabilities upon default.

Another issue at GM and Ford is out of control health
care costs. They should not even be providing health
care coverage to workers. (third party benefits will
always increase costs) But government had a better
idea. During WWII government "encouraged" companies to
begin providing health care coverage. Then during the
70's government decided to "fix" things and created
HMO's. Gee costs are out of control and quality has
suffered. Wonder what the next "fix" will be.
Steve





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