The president-elect and the speaker of the house are on record saying we must bail out GM. Why? First, they know they can’t do otherwise and keep the labor unions on their side. It’s political payback. Plain and simple. Your money means nothing. If both of them don’t realize GM will still fail, shame on them and woe to us. Since they both do know, shame on them and woe to us.
But, they are big thinkers. They know GM will fail and the government will own GM. This will allow them to control the kinds of cars GM makes. If you think GM is poorly managed now, just wait until the government takes control. How do the other car companies in the U.S. compete with the Federal government? Easy. How does UPS and Fed Ex compete with the U.S. Post Office? No problem. The post office leads in number of employees shot and killed by other employees, but that’s their only distinction. Of course, they lead in money lost over the past 100 years. Lead everyone except Amtrak.
So that’s the big plan. Dump a few billion into GM to appease the labor unions. The government takes over when GM fails. They keep the unions and all their cost. The government decides what kinds of cars GM makes. Al Gore will be CEO. The public doesn’t buy the cars. The government puts big tax incentives on the cars GM makes but not the cars the public is buying. This puts the surviving car companies in financial trouble. After 8 years and billions of dollars in losses, the new administration re-privatizes GM.
The new buyers who bought GM for a penny on the dollar, turn it around and make money. No unions, without 8 brands, and with cars the public likes produced at a cost comparable with the other non-union car companies. Cost to the public over 8 years to bail out GM $200 billion.
No one remembers who made the decision to bail out GM in the first place.
Giving the Big 3 another $25b is a total waist of tax payer money and will only prolong their eventual failure. What concerns me even more is who is next and where does it stop? We can’t continue to bail out these failing companies. We need to let capitalism work and if they can’t compete for what ever reason, let them fail, because if we continue bailing out these companies, we’ll end up with hundreds or thousands of companies on the government payroll with no customers who want the products or services they produce.
We need to pull the plug on all of the bail outs and let them either file chapter 11 and reorganize or go out of business. End of Story…
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