GM Bankruptcy Possible; Due
November 07, 2008
General Motors announced today that they did not have enough money to continue to operate the company through the end of the year a day after meeting with members of the House of Representatives in Washington.
While GM is an iconic American brand and is a large U.S. employer, keeping this and other failing companies on life support via government cash infusions is simply delaying the inevitable and contributing to the continuation of a slumping economy.
GM and other American car companies have repeatedly been on the brink of financial ruin only to have government bailout packages waiting to save them from, what their position can only be attributed to, poor management. GM and other car companies are failing because of poor decisions made by executives of the companies and because they produce products that people are not willing to buy.
Imagine living at the North Pole and opening up a flip-flop store and having the government writing you checks every year in order to keep your store open. This is the equivalent of what is happening in Detroit almost annually.
If GM and other car manufacturers are unable or unwilling to produce vehicles that consumers are willing to purchase, they rightfully should be out of business. If the same companies want to provide financing to high-risk customers who are now unable to repay their loans, they, again, deserve to be out of business.
While the economic situation in the U.S. and around the world is bleak at the moment, there are plenty of other automobile companies facing the same issues but they aren't on the verge of going under since they produce vehicles that fill consumer demand and are more stringent in the lending practices as well as have, apparently, saved for the proverbial rainy day.
Industries of various stripes in the U.S. have become weak and mismanaged, all the while confident that they will have easy access to government money when their poor decisions catch up with them. Let's save taxpayer money and teach the American auto industry a lesson most of us are familiar with but they seem to have missed: actions have consequences; make good decisions.
Would a GM collapse hurt the economy further? Absolutely. Would it put a large number of people out of work. Yes. But while the pain of GM's bankruptcy would be great, it would not be a long-term disaster as other companies would move to fill the vacuum, and would enable our economy to move forward without being dragged down with the weight of a company teetering on the verge of failure. This of course would also teach companies across all industries that they need to better manage their businesses lest they, too, find themselves bankrupt, and would stem the flow of taxpayer dollars to undeserved bailouts, which SOME DAY will need to be repaid most likely through higher taxes.
Contact your elected officials today and ask them to cut off the life support and open-ended unlimited funding that has found its way from our pockets to the bottomless pits of the auto industry. Our national debt is around $11 trillion and we can't afford it anymore.