GM must DIE !

This ties back to my fist post. Infact everything related to this recession ties back to my first post about how necessary the recession is to the health of the economy.

Companies world wide are giving themselves an enema to clean themselves out by laying off the least productive workers. Least productive being relative to how much work is produced vs how much is being paid. I discussed in my first post how laying off workers and hiring cheaper strengthens the dollar. These layoff's amount to employee swaps to bring down labor cost.

The problem with GM is that it has a bad case of constipation. It can not fire costly union workers and rehire cheaper labor because of its union contracts. It is a complete economic abnormality for GM to be paying $70 an hour to assembly workers. At best, assembly workers should be getting $25 to $30 per hour. If they want to make more, they need to go to college and get professional degrees. The cost of these overpaid assembly workers is passed down and results in highly overpriced cars at their various classes.

There is no other solution. GM must file for bankruptcy reorganization and start over with its labor contracts. I can assure you there is no way I am going to buy a GM car knowing how overpaid its workers are. I have to assume their cars are overpriced too without even looking at them.

Let us compare GM to Citigroup. Citigroup is indeed worth saving. They are not unionized so its workers get what they are worth. You have tellers making $10 an hour and finance managers making $300 an hour. If productivity falls they can fire employees at a fingers snap. Citigroup has indeed fired tens of thousands of employees at all levels and returned a profit in the first quarter of 2009. I expect no less from GM.