The Auto Bailout Is Going Off the Road

[Crewleader]

Robert Reich


Thursday, April 30, 2009
The Auto Bailout Is Going Off the Road

GM just announced it was laying of 21,000 more of its workers, as a means of assurring the Treasury Department the company is worthy of more bailout money. A Treasury official was quoted as saying approvingly that the goal is a "slimmed-down" GM.

What? Having General Motors or Chrysler cut tens of thousands of jobs in order to be eligible for a government bailout reminds me of "saving" Vietnam by bombing it to smithereens. Aren't we giving these companies billions of taxpayer dollars to save jobs? If not, we're just transferring money from taxpayers to GM and Chrysler bondholders and shareholders.

I agree with those who say the United States needs an auto industry. But there's no point spending tens of billions of taxpayer dollars for an auto industry that's a tiny fragment of what it was before. We could achieve that objective by doing nothing.

http://robertreich.blogspot.com/2009/04/auto-bailout-is-going-off-road.html?

[The_Casual_Observer]

1. A classic case of the whole thing going out of control & losing

sight of the original goal to save jobs & manufacturing. It's now about increasing stockholder wealth.

[Yupster]

8. Seems like GM stockholders are screwed

either way.

If they go bankrupt, current shareholders are wiped out.

If the bondholders agree to the proposal GM has made them, current shareholders are wiped out.

Either way, GM stockholders are screwed.

[Double T]

2. wealthy shareholders must be preserved at everyone else's expense.

THINK jobless recovery like the WH, Do Nothing Congress and criminally corrupt wall street do.

[madrchsod]

3. it`s called losing the house in 2010.....

another clinton presidency. if the wars are not finished and the economy has recovered then obama will be a one term president.

[pokercat999]

6. If the wars are not finished and the economy doesn't

show some kind of improvement for the middle-class and poor then Mr. Obama should be a one term President. Regardless of his personality, his beautiful family, his intelligence, honesty and integrity he STILL has to do the job! Or if this was the corporate world we've give him a huge bonus a new jet, bigger better offices and make him President for Life.

[dkf]

4. What are they supposed to do?

Keep employing people who are building cars that aren't selling?

GM wasn't making money on its cars for ages, but was making money on financing. Now that the financial industry is a mess, so is GM.

[Jack Bone]

5. GMAC is conrtolled by Cerberus, the same private investment..

firm that used to own Chrysler. They also still own Chrysler Financial.

http://money.cnn.com/2009/05/01/news/companies/cerberus.chrysler.fortune/index.htm?section=magazines_fortune

[European Socialist]

7. Lee Iacoca saved Chrysler 30 years ago by massive...

shrinkage. The U.S. auto industry has been going out of business for the past 35 years. Good post.