VOLuntarilyConservative

As I watched the various cable news outlets at 3 A.M. this morning, trying to catch up on the events of the day in a dumbed-down format, it seemed that everyone was panicking about the announcement from General Motors that the struggling automotive company plans to cut 25,000 jobs by 2008. This news should shock no one who has kept up with the automotive industry over the past decade. Two factors have led to this stage (I won't call it an effort to save GM, because I'm not sure that the cuts will do that or will be soon enough), one covered by the media and one that seems obvious but taboo to mention.

First, GM is paying for its short-term fix of investing heavily in SUV production when it was in a downward spiral over a decade ago. Instead of revamping its car line, GM hyped and developed new SUVs, which have a higher profitability margin than cars. With SUV sales sliding, GM has virtually no market share in the car market to fall back on. In the short-term, GM's move worked, but, like most short-term fixes, the long-term consequences could mean bankruptcy. Mainstream media has picked up on this cause, mostly because GM has admitted to it.

Second, and probably more crucial because it reaches to other industries, labor unions are killing GM. The same thing can be said about the airline industry (Delta's CEO Gerald Grinstein was before Congress yesterday, following the lead of United and US Airways, because the companies cannot afford to cover their pension obligations). I am going to opine more at a later time about how labor unions are going to be the albatross around the neck of the U.S. economy, but at this time my concern is about how few voices are blaming the obvious culprits. Unions once had a place in American life by protecting the coal miners of Appalachia and in ultra-dangerous factories of the early Twentieth Century. I don't see the purpose now except to pay-up the ladder so that the fat-cat national leaders can remain in their position of prestige, power, and wealth. As I said, more on this later when time allows, but I am certainly disappointed that more isn't being made about the real problem here that reaches across industry and could cause our economy considerable damage in the future.