It appears that GM is finally in it’s last death throes. I’m not nearly as happy about this as I used to be. Not to be smug, however, I should point out that I predicted this over a year ago. Not that it was particularly difficult to predict, GMs products are some 10 to 30 years behind the times, and as soon as the home market realised, it was bound to go bust. Any bailout now, will only lead to bankrupty being postponed for however long the government money lasts. Competition at work, let’s face it, your product sucks, you should fold quietly.
Granted, GMs products are still more medieval than modern, frankly it’s a wonder they survived this long, but the reason my animosity has lessened is that Opel will be going down with GM because it is a subsidiary. This means german jobs lost and a worsening of the European economy. The German government is currently considering a bailout (yes, ANOTHER bailout, will it never end) for Opel but I don’t see how such a measure would benefit anyone but the American parent company.
The other issue here is the excessive use of bailouts. It’s ridiculous, heck I’d even go so far as to say it’s scandalous. Investors made good bank for many many years with these companies who posted consistent profits and sent them on to investors. Now that the proverbial fan has been soiled, noone wants to take responsiblity.
I say let them go bankrupt, let the investors find their shares to be worthless – that’s the way of a market economy. Bailing out big business and by extension the people who profited by virtue of partial ownership, is tantamount to leaving behind free market altogether. What we are approaching is rather a no-fault market. This means that if it goes well you get to pocket a wad of cash, and if it doesn’t – heck the government will cover you losses, meaning every Tom, Dick and Harry will be picking up YOUR tab.
Sometimes I wonder how share holders sleep at night. Then I wonder how CEOs sleep at night. Finally I fall asleep wondering how policy makers are allowing this to go on without getting assassinated yet. In the morning I am usually crudely reminded that it is allowed to go on, because the very people the flawed system benefit, are the ones that already have money. The rich get richer. It’s depressing really, but at least we know where from and why the armed revolution will come.
Disclaimer: I believe in a free market system with certain checks and balances – it’s just not what is in place, like it or not. What we have is government sponsored profiteering for the wealthy. In a certain sense, we haven’t moved an inch since nations used to sponsor pirates to prey on others in colonial times. The circumstances have changed, the tactics have not.