Does it make sense to bail out GM and others?

12 11 2008

Cadillac CTS Coupe

Cadillac CTS Coupe

Does it make sense to bail out GM and others? On the one hand, they are starting to have a lot of good products, so they might have future. On the other hand, they are mired in UAW contracts which make it difficult to be competitive.

Because of the UAW, Obama will probably bail them out. But it might be just money thrown away, and they will be asking for more handouts again in a few years.

Maybe bankruptcy would be better. Then whatever would remain of the Big Three would be more competitive.

Total worker compensation per hour in auto industry

Total worker compensation per hour in auto and other industries

Here are some interesting posts about the financial problems of the Big Three:

Here is what happened to British Car companies after the British Government bailed them out.

British Leyland Shares -- Valueless

British Leyland Shares -- Valueless

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One response

12 11 2008
lizzygram

No, it doesn’t. It doesn’t make sense that we bailed out anyone of them. They should have let everything fall flat and start over. Yes, we would be in some bad times but not anything like what we are going to see in the near future…..

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