Government involvement in the American auto companies has resulted in not only the demise of the companies involved, but also many billions of dollars in taxpayer-funded “bailouts”. While President Obama touts increased jobs at every turn, his actions in throwing money at the troubled auto companies (with the claim that bailout was absolutely required to keep them from going bankrupt) has resulted in the worst of both worlds – not only have billions in national debt been incurred, but the companies are still going bankrupt! With Obama’s administration taking controlling interest and orchestrating the bankruptcy, the unions of course incur a less severe impact.
Meanwhile, part of the bankruptcy actions involve canceling hundreds of franchises to independently owned automobile dealerships, even many that are viable, profitable businesses! As a result, thousands of jobs (mostly non-union, of course) will be lost. How is this called job creation by any stretch of the imagination?
And now we’re left with GM being controlled by the Obama administration (who know absolutely nothing about managing any company) and they are proceeding to even define the cars that must be produced… never mind the questionable market demand for these products.
It would have been far better to “keep” the many billions of tax dollars in the first place and simply let our free enterprise system work the way it is most effective. Capitalism quickly punishes the companies that become poorly managed, and the more healthy, robust companies emerge to survive. But the Liberals just can’t keep their fingers out of business operations, and look at what we’ve ended up with!
Don Lloyd
Boulder
Good points, all. The American auto industry has been on a collision course with failure for over 30 years. This ‘bailout’ has nothing whatsoever to do with ‘job creation’, and everything to do with ‘job protection’, mainly of the UAW, as you say. (Witness the UAW getting a bigger slice of the pie than secured creditors.)
This whole ‘we will not reward failure (except when we do!)’ bailout has been a farce from the beginning. Throwing billions at the companies that brought us to this point was the exact wrong thing to do. In order to get this economy moving again, and quickly, we needed to get the money into the hands of the people who absolutely must spend it to survive, not the companies that will put it in the bank and sit on it. We’ll end up with companies making cars that no one can or will buy. If this economy were a race horse, the government is shoving hay in the wrong end.
Automobile dealerships have had their purchased franchises taken away from them without compensation and their franchises given to other dealers at no cost.
A dealer in my area has an inventory with a financed balance of $3 million as well as $300K in parts. He and his family now face bankruptcy as they can neither sell their inventory nor perform warranty service––not to mention pay for a multimillion dollar loan that they took out to pay for the recent remodeling done at the insistence of the car manufacturer.
Our government has mandated that the (government-owned) automobile companies build cars that will get high mileage, but ignored that this will likely compromise safety. My car was purchased with the thought that my grandchildren would be riding in it––a safe ride was priority and gas mileage secondary.
We are losing America piece by piece. Now our country’s quality of medical care is about to be eroded as well. To paraphrase President Ronald Reagan, “Government is not the answer. Government is the problem.”