Detroit Auto Industry gets $17.4 Billion Bailout
As expected, U.S. President Bush approved the much celebrated auto bailout plan amounting to a whopping $17.4 billion, a move that drew cheers from the big three (Chrysler, General Motors, and Ford) and jeers from the union workers. This move has provided a new lease on life for the embaffled U.S. auto car industry but the real test starts once they get these loan bailouts which are expected to prolong their corporate existence for the time being.
Promises were made but it remains to be seen how it will all fit in. As we know, the auto industry is not the only one in the air of uncertainty. Prior to that, it was the banks, some of which have closed down. So what could possibly be next? Real Estate? Technology? Anyone among them can be next in line that would need financial bailouts as well.
So what were the specifics of the auto bailout? Here it is:
Under terms of the loans, the government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry. Bush said the companies’ workers should agree to wage and work rules that are competitive with foreign automakers by the end of next year.
A good deal or not? We surely haven’t heard the last of this one!
This is not a good deal.
Why are we even letting our government bail out businesses? To save the economy; jobs! If we bail out businesses that are going to lay off their workers anyway, then the only people being bailed out are executives and major shareholders.
All of these bailouts have been scamming current taxpayers into rescuing big time investors. And how are those robber barons showing their gratitude? They are hoarding the bailout money. That money is not going to regular workers in those companies. That money is not being used to rescue the economy. The general public has been conned again.
Only bailout companies that promise to keep their employees on the payroll until they pay back the money.
Besides, we are supposed to have a free market economy. If a business is too large to fail then it is too large for a free market. That should be obvious.