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Originally Posted by Indy2010
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.
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.
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I'm glad we can agree that GM is still here. I don't think we can agree on the consequences, though. The loss of American jobs with the liquidation of Chrysler and GM would have led to more jobs overseas where the competition's products are made. From a completely egalitarian standpoint, you're right. Somewhere in the world, the jobs will come back. Let's remember that the competition isn't all made in America, and what incentive is there to make anything in America if two of the three American automakers that did so no longer do anything? The Asian and European brands can make their cars with cheap labor and ship them. The people who have to buy American will buy Ford, but we know that the US market for cars is heavily imported, so very few customers actually prioritize buying American. In order to compete, even Ford would have had to import its products, costing more American jobs.
I'll add that the "temporary" losses of other industries have become fairly permanent. When Wall Street took a turn for the worst 15 September 2008, the layoffs began. I graduated 3 months later and have yet to find employment in my field of study, which ironically enough includes working for the government. Temporary layoffs have become the vocabulary for permanent or long-term unemployment.