Next week, General Motors is expected to file bankruptcy protection, a move that appeared to be inevitable but has to be done after it has failed to come up with the appropriate solutions to the on-going problems that beset the company. Of course, it was not a welcome news for the United Auto Workers union whose thousands of members are expected to be out of job for a long while. Until the sad fate of the auto companies are resolved in due course, a large number of auto workers and their families will be like floating in the clouds of doubts. In fact, those auto dealers who were unexpectedly closed due to these unfolding events could only heave in disgust considering that thousands of workers would be out of work, adding to the already double digit unemployment rate in the country's labor markets.
What happened to GM and Chrysler was unexpected. This only goes to show that American automakers are really in a quandary as to what to do in order to break the spell that now hounds their markets, particularly in America. Surprisingly, many Americans have somewhat changed their ways in so far as lifestyle is concerned. Why? Instead of patronizing American cars for transport convenience, they have opted to prefer Japanese-made cars, which to their mind is much cheaper and more economical in terms of gas consumption, especially with the introduction in the domestic market of the hybrid lines, which could run to as much as 40 miles per galloon.
Another factor that perhaps made the American automakers groan at the present economic recession is the way in which GM and Chrysler employees and executives draw their exorbitant salaries and bonuses. Even at this economic recession, workers at these American automakers receive hourly wages that are much higher than their counterparts at the Japanese auto companies across the United States. A retired resident from Michigan claimed that it was the really the huge bonuses of GM and Chrysler executives that killed the auto companies. How true is this, I really don't know. But reports would support the above allegation when President Obama himself questioned the excessive bonuses that the American auto executives were getting.
President Obama's speech this morning, attended by his economic team in the background, appeared to be filled with frankness and remorse. But he never faltered in his belief that Chrysler can rise up to the challenges once more, especially with its merger with Italy's automaker Fiat. With the merger, some 30,000 employees were saved from the hatchet block and so their families in the midst of the economic storm that aggravated foreclosures in the housing market.
Notably, President Obama had called on the American people to help the American automakers by patronizing cars that have been the symbols of the American auto industry for many decades now. According to him, they cannot always depend on the American tax dollars to survive in the stiff competition going on among car makers. I just hope that the president's call will not turn on deaf ears considering the economic problems that now hit most families across the country. Worse is that its tailing effects have been felt across the globe, particularly those in the developing countries.
But it is not the end of the world for both GM and Chrysler. In fact, the former is considering a plan to produce compact cars that are much cheaper and in great demand for millions of ordinary American consumers. Perhaps, this is their way of keep up with its tough competitors whose hybrid cars have wowed millions of customers who may have been tired of shelling out so much for gasoline expenses.