I have written quite a bit about our economy and the failing auto industry. This Sunday I have been reading articles about how our government (Obama) “forced” bankruptcy on GM and Chrysler.
I have to point out that I called for bankruptcy quite some time ago as the only rational “capitalist” thing to do. I am not the only one who saw bankruptcy coming, many saw it as inevitable so why the big uproar now?
Obama appointed an “auto task force” that was to study the situation and make recommendations. These were not stupid people (Steve Rattner) so of course they would see the inevitable right away even though GM and Chrysler were saying we can stay out of bankruptcy.
Obama was in a predicament here. On the one hand, the American people did not want a bailout of the auto companies because all the people could see was a greedy union, greedy, spoiled workers and a greedy, incompetent management that would not change things when things needed to be changed.
On the other hand, Democrats wanted to preserve jobs (votes) and unions (money & votes) so what is a president to do.
He gave the auto companies some money but told them to build a sustainable business model quickly or go into bankruptcy with his financial help, and build a sustainable, business model after getting out of bankruptcy. In this way, he placated both sides.
The difference with Chrysler is that Obama forced a sale / merger to / with FIAT and that maybe problematic in the long run basically because no one knows how stable Fiat is BUT I don’t think Chrysler could have done the bankruptcy thing on its own, they may have needed to be liquidated which would be a real shame.
Some are complaining that the unions have made concessions and that bankruptcy was avoidable. I say, no way. Everyone involved with the auto companies knew what needed to be done yet they refused to do it. Now that they are forced they are griping that they would have done it – bullshit – no more playing around; its crunch time!
Note: I have warned in the past that I am a little leery of our government getting a little too involved in the business world. Sure Obama keeps promising he will be out as soon as possible so I hope he keeps his promise and let the business system return to normal.
I have to point out that I called for bankruptcy quite some time ago as the only rational “capitalist” thing to do. I am not the only one who saw bankruptcy coming, many saw it as inevitable so why the big uproar now?
Obama appointed an “auto task force” that was to study the situation and make recommendations. These were not stupid people (Steve Rattner) so of course they would see the inevitable right away even though GM and Chrysler were saying we can stay out of bankruptcy.
Obama was in a predicament here. On the one hand, the American people did not want a bailout of the auto companies because all the people could see was a greedy union, greedy, spoiled workers and a greedy, incompetent management that would not change things when things needed to be changed.
On the other hand, Democrats wanted to preserve jobs (votes) and unions (money & votes) so what is a president to do.
He gave the auto companies some money but told them to build a sustainable business model quickly or go into bankruptcy with his financial help, and build a sustainable, business model after getting out of bankruptcy. In this way, he placated both sides.
The difference with Chrysler is that Obama forced a sale / merger to / with FIAT and that maybe problematic in the long run basically because no one knows how stable Fiat is BUT I don’t think Chrysler could have done the bankruptcy thing on its own, they may have needed to be liquidated which would be a real shame.
Some are complaining that the unions have made concessions and that bankruptcy was avoidable. I say, no way. Everyone involved with the auto companies knew what needed to be done yet they refused to do it. Now that they are forced they are griping that they would have done it – bullshit – no more playing around; its crunch time!
Note: I have warned in the past that I am a little leery of our government getting a little too involved in the business world. Sure Obama keeps promising he will be out as soon as possible so I hope he keeps his promise and let the business system return to normal.
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