Mon 1 Jun 2009
If GM files bankruptcy as expected today, Ford will be the only U.S. carmaker left standing. This is not to say Chrysler or GM will cease to exist. They may both likely survive bankruptcy, or the shotgun marriage (in the case of Chrysler and Fiat), however Ford is the lone US automaker escape the current economic crisis relatively unscathed.
There is continuing debate on how much the Government should’ve been involved if at all with the bailing out the automakers. Would it have been better that both Chrysler and GM collapsed on their own six months ago? It’s always impossible to say. Personally, I prefer an ordered transition to abrupt change as the economic impact is likely more favorable in an ordered transition.
I’m not, however, particularly estatic at the notion of the Government owning 60% of GM after bankruptcy for any great length of time. I’ve been supportive of bailouts (bank and auto) because I believe that Government has a role to ensure a smooth economic recovery. I’m less supportive of the auto bailout both because a single manufacturing industry (even one as large as the Auto industry) has a smaller impact on the econmic system than widespread bank failures.
The Government has entered a tricky position in having takenownership responsbility of what were private companies. Only a quick return to private ownership can be ruled a success. The worst possible outcome would be one such as Amtrak in which the Government effectively nationalized the passenger rail system. That is not what I or anybody else should want. I hope for the best and fear for the worst.
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June 8th, 2009 at 7:12 pm
The GM bankruptcy was expected. Hopefully Chapter 11 will give GM the time to revamp their company.
June 27th, 2009 at 9:56 pm
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