As if the nightmare that is the government’s involvement in General Motors wasn’t already bad enough, it looks like it’s about to get worse. As GM gets closer and closer to filing for bankruptcy, the talk seems to be centered around keeping the venerable auto giant afloat with help from Uncle Sam…to the tune of an additional $30-50 billion dollars. That is on top of the $20 billion tax payer dollars already given to the auto giant.
Of course, it’s not like there isn’t an investment being made, right?
You see, the government will own 70% of GM, truly earning it the name of Government Motors. Then you top this with the 20% of the company that the United Auto Workers will get, while bond holders are stuck with a miserable 10% despite the risk they personally put into the company in the first place. Canada also get’s a nice little slice as well. Really…who needs shareholders anyways?
Here’s the thing though. We’re about to give GM an additional $30-50 billion of our tax dollars, but what in the world happened to the $20 billion we’ve already flushed down the toilet that is General Motors’ finances? Obviously, that didn’t do a damn thing for them, so why should we funnel more of our money on something that neither Congress nor the President have any Constitutional authority to do?
It’s important to understand what would happen if GM died a glorious death. The individual companies that make up GM, brands like Chevy and Saturn, would be sold off to cover GM’s debts and would be made by someone else. Instead of a highly centralized power structure in the auto industry made up primarily of three companies, you have have a more agile industry constantly having to deal with multiple competitors trying to muscle their way into each other’s market share.
President Obama would get his green vehicles as gas prices increase, which would cause an increase in demand for more fuel efficient vehicles. Consumers get what they want by having prices driven down due to competition, and even the UAW could get what it wants. Multiple employers means competition for the best people after all, which means increased wages and benefits. Really, everyone wins.
Now, that’s not to say there wouldn’t be rough times first. The market has been dominated by the Big Three for so long that it would take a period of adjustment that would, quite frankly, suck for a while. But on the other side of that is a golden realm full of hope and promise for a wonderful new tomorrow. A tomorrow where people work hard and are rewarded, where the auto industry’s newfound competition drives them to create new and better vehicles. A new tomorrow where things are as the White House actually wants them.
It’s just a shame the President won’t actually let that happen, ain’t it?
