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      12-10-2008, 05:44 PM   #12
ptack
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What is very interesting is the silence from Toyota, Honda, Nissan and BMW over the bailout question. They have major manufacturing operations in the US and so their cost basis is easier to compare to Detroit's than completely foreign companies. Strictly in terms of hourly labor costs, the differences aren't that great. In terms of legacy costs though, forget it. The 800lb gorrilla that is crushing Detroit are the legacy costs from years of stupidity, years of making decision about pensions, benefits, healthcare, debt, dealers, brands, models, etc, that kept deferring the ultimate costs to 'tomorrow'. The other autimotive companies don't have these background costs at anything approaching the scale of the Detroit dinosaurs. The only way out will be to cut those costs, either by bankrupcy or pseudo bankrupcy (if Congress makes that possible). The UAW and executive pay is utter chicken scratch compared to those issues. Unfortunately, that may be all that the politicians talk about or act on.

Sadly, the whole episode may be a precursor to what may happen to the US for many of the same reasons - one day you can't live off your fat and the bills come due.
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