GM and Chrysler: Welcome to reality

Well the good new is both Chrysler and GM look like they've done enough restructuring to avoid bankruptcy. The bad news is thousands more auto workers face the loss of their jobs. GM has publicly stated that another 21, 000 jobs will be eliminated in the U.S. and the Canadian workforce will be reduced from over 10, 000 to approximately 4400 employees! Without a doubt we all feel sympathy for those employees and their families that are about to lose their livelihood, as well as those who have already been put out of work by this recession. However, GM and Chrysler have been operating in an unrealistic bubble for years. For this reason it is difficult to feel for the executives and upper management of these companies.

Yes the unions continued to drive salaries higher year after year, but that's what they're there for - to get the best possible deal for their members. That's it. They do not exist to ensure the profitability of the company. Sure they may spout rhetoric from time to time about the need for the company and workers to compromise. This is just talk. They exist for one purpose and one purpose only - to drive up salaries and benefits. You can't really fault them for this. GM and Chrysler should take full responsibility for not protecting there own interests in the face of an ongoing union onslaught.

During negotiations it is rare that there is not a winner. Each party has a responsibility to it's stakeholders to obtain the best deal possible. For years the big three have failed to do this. As a result, they have been overtaken by their competitors such as Honda and Toyota. These companies recognized the need to offer fair compensation to their employees while still maintaining a profitable bottom line. Such practise have enabled these companies to survive and prosper at the expense of the big three. GM and Chrysler have existed for years as though normal business rules did not apply to them - now they are paying the price. This market correction may be painful, but it is necessary for the long term survival of the industry in North America.