Too big to fail. Remember all the things that have been to big to fail in the past few months. GM and Chrysler, since all their jobs and all the supplier jobs added up to several million jobs. So, we simply threw a few billion of our dollars at them to keep them afloat. Those billions bought some time, but they are still going to file bankruptcy, something they could have done months ago. GM is closing plants for nine weeks this summer. Chrysler says they may close most plants as part of the bankruptcy proceedings.
Does anyone ever ask, why did we spend billions to delay the inevitable? Who would? The media, give me a break, criticize Obama, never happen. The “other party”. What other party, the comatose party? Who in that party could get air time to ask the question?
So Fiat will fix Chrysler. Remember when Fiat meant “fix it again Tony” in this country. The cars were pathetic. What does Fiat get out of this? Dealerships in America? A few brands. A pipeline to your tax dollars? Bingo, that’s what they get. Using the UAW, the union who caused all the problems and now continues to own Washington, will keep the cash flowing. Fiat cars, which never sold here will not sell again. Even though they may be the cars Washington wants you to buy. Chrysler cars won’t sell either. Ultimately, Chrysler and Fiat will both be gone, but not before our government wastes billions more, because “they’re too big to fail”.
Suppliers who have remained loyal to Chrysler will also file bankruptcy since they will not be paid for their accounts receivable, or will get pennies on the dollar. Hundreds of Chrysler dealers, successful business people who are pillars in their communities will fail. Their employees will be out of work. The tax dollars the government was counting on from the dealers who make more than $250m a year will not be paid. The government budget shortfall will grow.
Fiat will find negotiating with the UAW is a lost cause. When they can no longer tap the well in Washington for cash, they will pull out. At that time, Washington will be faced with the same decision they faced months ago, let it go, or continue to bail it out. It will be the GM choice, have the government own most of Chrysler in partnership with the UAW.
Regardless of what happens in Washington, the consumer is still king in this country. As yet, they can’t force consumers to buy specific things. Tax incentives will be tried. This will grossly unfair to the successful car companies, but who cares? It’s the same as bailing out your neighbor who can’t pay the mortgage. The “no one said life is fair”, at least in this country anymore.
If I had to pick between Chrysler making it and GM making it, I would pick Chrysler. At least they have a car company trying to run Chrysler, not the government and the UAW, like GM will have.
But, it isn’t going to work. There will be the inevitable bloodbath. No company, no workers, fewer parts suppliers in America, no dealers and a huge new unemployment problem. Plus, the banks who invested in Chrysler left holding another bag. And, billions of your tax dollars gone with another bad idea from Washington.
And, so it goes, as our government tries to throw money at failed causes. Without even attacking the root causes of the problem because there is political risk with that. In the US auto business, it’s the UAW that must be fixed. In the educational system, it’s the NEA that must be fixed. Both own the politicians, so no fixing gets done. It’s shameful.
