In regards to my comment about over expansion being a cause for this situation, this also takes into account the operating costs through internal expansion. I should have been more clear about that. Unions are notorious for cuttings profits - this is a near certainty since higher wages and benefits are paid for by driving up prices or cutting profit margins. If wages exceed what is required to keep workers competent by too much, the net result is either lower profit for the company through a direct reduction in margins or through reduced volume.

Despite this reality, given the product lines that the US auto industry was rolling out all these years, even getting rid of the unions would not have guaranteed a fix. The manufacturers just fell too far behind the competition. There is discussion regarding matching the operating costs of overseas auto makers. It must be noted that a good deal of these foreign manufactures produce their American inventory in the coastal US.

Now that the product lines are increasing in quality, at this moment, a reduction in operating cost would be greatly beneficial. As such, greater cooperation between the unions and management would help greatly.. even if the terms were just temporary. We saw this in the airline industry not too long ago, and it had a significant positive impact on the health of the industry.

These auto companies have the framework to make out alive.. but they have an internal nightmare to fix. A bailout would just be a band-aid for an industry that needs stitches.. perhaps even an amputation.

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