Bailing out the automobile industry would be bad use of public money. And if Detroit’s carmakers are bailed out, Europe’s will be next in line.
On a combined basis, GM and Ford have posted total net losses of $30 billion through the first nine months of 2008. Washington is planning to bail out Detroit with $25 billion. If the generous Chapter 11 is not good enough, politicians would do the tax payer a great favour letting car firms fail. No marketplace is static, the adaptive and innovative companies ought to prevail and be rewarded for their efforts, we should not concern ourselves with foolish and antiquated corporations that long for the good old days. GM alone has cut its US payroll by 45.8 % since 2000. Bail outs will have nothing to do with the long term success of the US auto industry. Yet, it sets a terrible standard where the federal government takes money out of the successful parts of the economy and puts it in unsuccessful areas.
The last thing we need is to subsidize cars. To discuss the automakers’ bailout and to send a message to politicians around the world in opposition to public money being used in poorly run businesses we have set up a Facebook Group. Please help to make this group grow by joining at http://www.facebook.com/group.php?gid=93579435261
A dismantling of Detroit’s large three automakers could accelerate the move to mobility independant from fossil energy. In other words, does the automakers’ bailout slow the change we are hoping for?