The taxpayers in the United States is spending $30bn to become what President Obama called a ‘reluctant shareholder’. While thousands of workers loose their job, putting more financial burden on the public finances of the US. But is this a prudent investment into the future?
Other car manufacturers and many other businesses have to survive this recession without government funding, they may very well feel hard done by today. But more than this I believe we weaken our capitalistic system every-time we prop one of these badly run giants up for the sake of keeping unemployment low. In fact we weaken companies who could have survived by themselves or even make them fail. This unfair advantage for GM may come to cost the US government more than only money.
Many small, eco-friendly and innovative businesses will be damaged by this development. Part of their tax-dollars will have helped GM to compete with them for market-share.
GM’s management has failed over decades to recognize the obvious trends in the car industry and is now inflicting more damage on this industry by being allowed to survive. –ST