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Originally Posted by WongBob
Is anyone picking up what I'm putting down? WE gave them the money to bail them out... now WE are going to pay their debt to US off.
Does anyone else see what I'm seeing?!?!
Dont get me wrong... I own nothing but GM products because, well, they are simply the best, but they are double dipping hard on this.
I would also like to personally thank the engineers at Toyota for assisting GM in paying back this loan by making more than a few defective cars.
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I understand what you are saying and that point was griped about the most when the loans / stock purchases were approved. I personnally had a very big problem with it. It is very shady if not done correctly (the potential is there to defraud the taxpayer and will most likely happen); but it can be done fairly as long as the government sells the stock for what it paid plus what the money would have brought with interest. Anything less is equal to taxpayers subsidizing GM, a private company. As some others have noted, the taxpayer could actually benefit, but I think it is highly unlikely in this case.
Quote:
Originally Posted by The_Blur
GM's success shows that the risks posed by bailing out a large company can be a positive thing when that company actually turns around the way it does business. GM is a sleeker, better company, and the products coming out of the new GM are impressive and profitable.
You're completely correct to point out that this was a dangerous decision. It was dangerous to bail out a company, and it would have also been dangerous to just let all of those employees—GM employees, supplier employees—lose their jobs. Keep in mind that multiple manufacturers use some suppliers. If a large percentage of their business goes away, other manufacturers could be affected by the same company going bankrupt, causing a much larger wave of layoffs.
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The loss of jobs and layoffs would have been temporary or short term. If there is a demand for a certain number of cars, the demand does not change because a company went out of business. What would have happened is the other car company sales would have increased, causing them to need to expand and hire. Who would they have hired? Most likely the same people who got layed off because they have the experience and would not need as much investment / training. Sure, it would have taken time for the markets to adjust, but adjust they would have. Ford probably would have been the ultimate winner (in the long run). Would there have been a price for the adjustment? Sure. Catastrophe? No.
All that being said. I'm glad GM is still around. I just wish they would have been more honest about their intentions. Everyone knew they would file bankruptcy AFTER receiving bailout money intended to keep them afloat until they "could turn things around". Bankruptcy was inevitable and they knew it.