The proposed bailout for U.S. automakers is about protecting big labor as much as big business. Both have problems competing and fight vigorously against reforms.

But no bailout can fix the problems facing Detroit. Only reorganization through bankruptcy lets them shed the heavy built-in costs that hold them back, because foreign-based competition isn't about to let up.

While Detroit's Big Three automakers were in Washington asking for $25 billion (or more) from taxpayers, Honda was opening a new auto assembly plant. In Indiana, USA. There they plan to build 200,000 more cars a year using American workers. They and other foreign automakers already employ 100,000 Americans working in domestic plants.

So, why can they succeed while domestic automakers go running to Washington for handouts? In major part because both labor and management are trapped by their insistence on preserving inflated salaries and outmoded systems, rather than making quality cars at a competitive price.

That's why even if Congress doesn't give money to them now, the Big Three are likely to show up again with their hands out in January, when a new president and more-liberal majorities in Congress will take over. Telling them "no" just once isn't enough.

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Preserving very high-paying union jobs is highly political. Labor unions spent about half a billion dollars in the 2008 elections, and the auto bailout is part of the return they'd like on their investment.

In other times, the United Auto Workers and other unions might be negotiating already with General Motors, Ford and Chrysler to make concessions that would save more jobs – and management might be reducing its own perks and benefits.

As noted by The Heritage Foundation's James Sherk, "The typical UAW worker at the Big Three earned between $71 and $76 an hour in 2006. This amount is triple the earnings of the typical worker in the private sector and $25 to $30 an hour more than American workers at Japanese auto plants. The average unionized worker at the Big Three earns over $130,000 a year in wages and benefits."

That's why corporate executives aren't the only ones who must be willing to cut back.

Comments JP Morgan auto analyst Himanshu Patel, "The union's argument is they have given up (concessions) on wages, but effectively, they haven't. Nearly 100 percent of the work force is still at core wages." In essence, the concessions have been to allow the companies to hire new workers for less, which is meaningless when they already have too many employees.

Someone who both worked for the union and later for GM management, Lori Roman, let loose on both groups in a recent article, writing, "The UAW takes the hard-earned money of the best workers and spends it defending the worst workers while tying up the industry with thousands of pages of work rules that make it impossible to be competitive. Meanwhile, spineless management often makes short-sighted decisions to satisfy the union and maximize immediate benefits over long-term sustainability."

Nor does she cut any slack to the politicians who offer to throw taxpayer money at the problems:

"Sending the government to bail out the auto industry or any industry at this time is like sending an arsonist to put out a fire. The government is partially to blame for this situation. They forced lenders to make bad loans, which resulted in a credit crunch that made it difficult to sell cars. And Democrats in Congress blocked domestic oil production, which drove up gas prices and sent wealth and jobs overseas. And to add more fuel to the fire, over the years they have created arbitrary fuel efficiency standards that do not match market demand."

Had they not witnessed the other major bailouts this year, Detroit's management and workers might already have gotten serious about putting their house in order. But so long as they can put off tough decisions, they will. After all, they've learned that lesson from Washington, too.

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