It will be important to recognize organized labor as a stakeholder and ideally partner with management and investors. However, we must be careful to not turn back the pages of time and regress to excessively high labor costs with limited productivity and innovation. Costs must be correlated with value added in the context of global competitiveness. Linking labor rates and costs to any artificially determined, perhaps outdated standards, will not ensure maximum value and full economic stimulus, nor will it maximize the benefits to the largest number of potentially involved workers.

The principles and methods of interest-based negotiations and decision making among stakeholders offers much potential for balancing respective interests and ensuring the maximum advantage for all. The resulting shared discovery and learning, stronger relationships, and superior outcomes have the potential of creating synergy that provides lasting benefits from the economic stimulus spending, which we owe to future generations, as they will likely be repaying the debt.

http://www.today.ucla.edu/portal/ut/the-detroit-bailout-part-2-87264.aspx

It reiterates the basic point. The auto industry is not selling enough cars. Although the revised bailout plan involves some incentives for private purchases of cars, what is needed is direct purchases by the feds of vehicles for use by public agencies.

“Daniel J.B. Mitchell // Feb 16, 2009 at 5:00 pm

The best option for the auto industry is for the govt. to buy its products. The problem for the industry is that it is losing money because it is not selling enough cars. GM makes a hybrid bus, although you have to work carefully through its webpage to find that out. The feds should order such buses and give them to transit districts. Ford makes the chassis for school buses. Order school buses and give them to school districts. Chrysler, and really all three companies, make the vans that are converted to airport-type vans used for specialized transit districts. Order them and give them to municipal airports and transit districts. All three firms make cars that can be used as police vehicles. Buy cars and give them to police departments. At least there will be something tangible to show for the federal money. Right now, the industry will simply burn up the cash from the loans and be back for more – or end up in bankruptcy court anyway. The market CAP for the industry (assuming a reasonable amount for the non-traded Chrysler) is under $10 billion, i.e., less than the loan. Put another way, Congress could have bought the industry for less than it is lending it. If is fine to demand plans for efficient cars that will save the whales, etc. The industry will promise anything at this point. But it can’t deliver on such promises unless it can be sustained through the already-severe recession. Only federal orders of new vehicles can sustain the “Big-3.” Loans are money down the drain. A less blunt statement of all of this is at:

http://www.today.ucla.edu/portal/ut/after-its-bailout-how-to-make-78373.aspx

“Allan Schmid // Dec 26, 2008 at 9:51 am

Great insights. The only thing I would add is a connection between achieving these objectives and ending the wars in Iraq and Afghanistan. Unless we redirect these wasted resources, we can’t solve other problems.”