GM chief Rick Wagoner (no pun intended) and Chrysler and Ford Chiefs during the grilling by Congress in December 2008.
In early December 08, in an earlier blog, I mentioned that the US Government should 'bite the bullet' and let the inefficient car companies fail - ie. go bankrupt. Sure there will be major food chain implications but just early this week, President Obama said that the changes in GM were not fast and widespread enough to warrant another bailout funds so was prepared to let them go bankrupt but support the warranties and parts of those cars from the Feredal budget. Its about time I say.
In a free capitalistic market,companies which do not make money over the long run will run in into cashflow problems and ultimately wind up or have to fail or go bankrupt.To bail out these inefficient companies will be tantamount or equal to keeping already brain dead people on life support - a very costly exercise. Of course,human life and companies are totally different entities.
The fallout will no doubt affect the cities where GM,Chrysler and Ford
all locate their factories all over the world where tens of thousands will be affected directly and perhaps millions indirectly will be affected.
Early this week, Richard Wagoner the CEO was forced to resign and given a nice severance package of US$ 20 million.Will the ordinary folk on production line at GM get something after 10,15 20 or even 25 years at GM ? I wouldn't bet on it.
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