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Richard Cochrane is trained in chemistry and metallurgy but is far more interested and practiced as a political and fund raising consultant, writer and amateur historian. He grew up in a Navy family and with his two younger brothers carried on its 500+ year tradition of naval service to Great Britain and the USA then enjoyed a career with one of the largest advertising and public relations agencies working with numerous Fortune 500 companies and many of America's premier educational institutions. He maintains friendships and acquaintanceships around the world. He lives in Santa Barbara, California.

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Stark Facts Behind Big-3 Bailout Loan Deal

December 1st, 2008 • Richard Cochrane
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Pension, health care obligation and work rules have ruined General Motors"Foreign" car makers in the U. S. build and sell more cars with half as many workers costing half as much money per hour to do so.

As America’s ‘Big 3’ auto industry executives are driving into Washington D.C. having learned not to fly there in $40 million jets, this week, some taxpayers are wondering why America's "other" car makers — the foreign car makers with U.S. factories, aren't seeking salvation from the government.

There are 12 ‘transplanted’ automotive producers, included BMW, Toyota, and Kia located in the American Midwest and South producing 54% of the cars that Americans buy.

They are actually gaining U.S. market share, and prospering amidst the overall sales slump that has all but flattened Detroit’s so-called Big 3.

The international automakers employ some 113,000 Americans, compared to 239,000 at U.S.-owned car makers, and several times that number indirectly – over 110% more workers to build fewer cars.

The foreign car makers, to be sure, will be damaged if Detroit implodes mostly because they share many suppliers with GM and Chrysler and Ford.

Protectionists — including former U.S. Rep. David Bonior (D-Mich.) has Barack Obama's ear, and is part of his economic transition team, as is Michigan Gov. Jennifer Granhold (D) — who may seek to punish the Japanese and German and Korean companies for their success here.

But, in fact propping up the Big 3 who can only produce and sell 46% of cars Americans buy will drag down the others and hurt their American employees

According to the Center for Automotive Research (CAR), the causes of the financial problems at the Big Three are quite well-known.

Take-home pay for automotive workers, in general, is $28.42 in the U.S. factories, about the same as the $26 per hour at Toyota. But healthcare benefits push the overall costs of doing business much higher, making hourly wages at Detroit cost $73.21, much more than the $44.20 hourly average for those foreign companies here.

Is it any wonder Detroit can only scratch out a living, making $1500 per car, with costs that high?

Columnist Patrick Buchanan decries the "free-trade fanaticism" that may lead to the "final internment" of the American auto industry. He cites a poll by Peter Hart that indicates that 55 percent of Americans favor federal loans to save the auto industry. Buchannan does not mention the Rasmussen poll that shows even a larger percentage who opposes the bailout-loan idea.

"If the GOP blocks these loans, and the industry dies, the Republican Party can forget about Ohio, Michigan and the industrial Midwest forever plus, he says Reagan Democrats will never come back to the GOP.

So there will be a bailout-loan package but whether $25, $50 or even $100 billion can save the Big 3 given the numbers described remains questionable.

Edited from Moneynews.com., Wall Street Journal, Center for Automotive Resarch with amendments and additions.

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