How can we get around the Big Three?

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Big Three

I think the Big Three auto companies are taking Michigan hostage just like what the banks did to the federal government. I wished I were the governor so that I can have the political courage to stop funding to the auto companies and just encourage new entrepreneurship initiatives to enterprises that work, because the Big Three had dominated the Michigan economy so much that there will simply be more potential unemployment in Michigan. We need more diversified employment to survive through the inevitable forces of globalization, don't we?

A few questions to ponder, as prompted by Stinkypuppy:

1) is it really GM's responsibility to provide employment alternatives during economically lean years when GM must lay off workers? Why or why not?
2) would corporate taxation of profits be a sufficient method for GM to meet this particular or any other social responsibility? If not, what would be?
3) what should the government's role be to prevent/mitigate situations like this?

To (1): I would say YES. And Chrysler and Ford should also take such responsibilities. I cannot imagine almost all of Flint going bust when GM just laid off its staff in its company town. It's absurd! Ditto for Metro Detroit, with a few suburbs of significance such as Highland Park and Auburn Hills.

To (2): Corporate taxation is NOT enough. Minimum wages will not even do. (In fact, this will distort the market system further) And even 'profit transfers' from the Big Three to the people are not even enough. The most effective solution in my own opinion is increased support to related sectors that are working or will work. I thought of a few: Development of environmentally-friendly vehicles, development of green energy, biotechnology and new environmentally-friendly machinery developments. I think we have to assess the multiplier effect the Big Three and the automotive industry brings before deciding on the severity of action need to be taken.

To (3), I think the government should increase education funding and reduce corporate payouts (unless they are directed to effective industries)... I need more help on this, in addition to (1) and (2).

Ideally, rather than bailing out the auto industry, the federal government should have put the money into education and retraining programs for the auto workers, whose skills are becoming somewhat antiquated. The executives at GM have shown themselves unable to adapt to changes in the market, and they shouldn't be propped up for this. The main reason GM and Chrysler were bailed out is because it's quicker, easier, and more politically expedient in the short term than complicated training programs that may take months or years to see the benefits of a more skilled, diversified workforce and economy.

What killed the big 3 is gross incompetence and stupidity at the executive and UAW level. The people in Michigan got so used to having 4-5 generations of family members working in that industry that they just could not and would not see things any other way. We had it so good for so long that only a very few people could see that things needed to change but were never allowed to bring about that change.

What? 4 generations in the auto industry? This is really sad to hear. We may just need to wait.