Has GM taught the govt a lesson?

  • Thread starter Thread starter perflexed
  • Start date Start date
P

perflexed

Guest
GM is closing ALL of its US plants because of Govt pressure to control costs. They can't pay back the first payment on the loan. What good did it do to loan them money? Why should they be given more money if they close ALL US operations for 3-5 months? Sometimes you have to let a big company fail so a profitable one can rise from the ashes.
 
Ask Bush he gave them the initial loan. (without strings attached)


Dec 19 2008

"GM (GM, Fortune 500) will get $9.4 billion from the first allocation of federal loan money, while Chrysler would get the other $4 billion."

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush added.

just a near history lesson, it is not all "evil" Obama.
 
GM has taught all of us a lesson.

Not to bail out failed companies that pay their execs bloated salaries and bonuses while whining about needing money.

GM got too big for its britches, and didn't learn how to manufacture automobiles that people want to buy.

The stockholders should have voted out the entire executive staff, including the CEO, the board of directors, and various presidents and vice presidents (there are dozens) of this-and-that.

Rewarding failure produces more failure.

The UAW didn't help either, pricing their own membership out of the market by their incessant demands for more, more, always more.

(Just like the government and taxes!)

Ford has managed so far to keep from feeding at the trough of bailout money, like the rest of the hogs.

Perhaps Ford has more competent business practices, and more competent executives.
 
methinks the government has sent a strong message to corporations.
and that message is "WE WILL OWN YOU".
 
Apparently not.
The rise of unbridled capitalism is what led to this in the first place. The government should be pushing for an overhaul of the system, not distributing bailouts which go into CEO's pockets.
Total, no-holds-barred capitalism is as bad as total, authoritarian communism. GM collapsed because it couldn't make itself profitable - because it couldn't adapt to the twenty-first century. Sure, it was a big giant in the industry. But giants have slow reflexes.
Instead of encouraging a few multi-billion corporations, the government can, and must, help a thousand small-scale companies. Which it is NOT doing.
And as for your argument about letting a big company fail, I agree.
However, what happens to all those people working there? How do they rise from the ashes?

In closing, a thought on the crisis:
The world came out of the Great Depression because of the Second World War. What about the Second Depression?
What if some government takes it into it's head that the only way to kick-start the economy is to start a war?
Scary thought.
 
Agreed. Companies still hold real assets that are sold off at reduced prices when they fail. It hurts for a time but it is all part of the cycle. Companies rise and fall just like everything else.

Recession is part of the cycle. Farmers in the delta don't like floods because of the crop losses but the side effect is they get a deposit of fertile silt for the next go around. Just part of it.
 
The Obama government is only interested in having the government run everything. He is a socialist. I am wondering if GM execs learned a lesson. Don't get in bed with government should be it's motto.
 
Back
Top