An injection of $3 billion in equity to support a GM acquisition of Chrysler would be roughly equivalent to the current, depressed value of the top U.S. automaker.How long will it be until we face the fact that some companies must be allowed to fail? It is one thing to attempt to stabilize the economic system by ensuring liquidity. It is another to prop up a manufacturing company with a proven history of incompetence. If we keep up these knee-jerk bailouts, we're going to suddenly find ourselves living in a socialist nation where the government sets the amount of our paychecks and decides who to hire and fire.
It would also give U.S. taxpayers a large stake in the turnaround of a struggling auto industry that employs over 350,000 American workers and is credited with supporting employment for another 4.5 million in related fields...
In addition to its equity stake, the U.S. government is also being asked to provide support for the GM-Chrysler merger by taking over some $3 billion in pension obligations under the terms of a proposal now before the government for review, the first source said.
29 Ekim 2008 Çarşamba
Inspired by Banking Bailout, GM Says "Nationalize Us Too!"
Is there no one out there capable of thinking long-term anymore? It was bad enough that the Republican Party lead the charge to nationalize banking by buying equity stakes in the largest banks in the country. Now, GM and Chrysler are asking for the Federal government to buy a stake so that the two companies can successfully merge.
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I totally agree with you. We are currently operating as if we can't let any company fail or the whole economy will come crumbling down. If that is true, then our government is even more inept than we think. If necessary, let Chrysler fail and then let the other automakers buy up the pieces that have value. Economies change, and our manufacturing sector may need to shift away from automobile production and to production of something else.
YanıtlaSilGeorge Will on Sunday made the comment that there are 2 auto industries in the US, the one in the north making Fords, Chevys and Dodges and the one in the south making Hondas and Toyotas. The major difference between the two is that the one in the north has contracts with the UAW and the one in the south doesn't. This is causing the one in the north to have significantly higher costs in developing their vehicles, not to mention that their vehicles largely aren't selling.
YanıtlaSilIt seems that what Chrysler and GM need is to refine their business not take on a bunch of capital from the Capital. They're killing themselves by maintaining contracts that are restrictive of progress.
I also agree with everything said by Nomad and Crchair.
We are getting closer to the Marx definition of communism. We just need to have the revolution and hopefully it is only a political one. The revolution will be against the bourgeoisie whose power comes from employment, education, and wealth. The people want to see the Wall Street bankers strung up to a tree.
YanıtlaSilhttp://nomedals.blogspot.com
PS. GM is doing much better than Ford. And ford is doing much better than Chrysler.
YanıtlaSil