The Obama campaign raves about how it “saved the auto industry” — that is, the government’s bailout mainly of General Motors — and so preserved millions of jobs.
But if it was such a success, why is the bailout losing so much money — and why do current GM managers want nothing to do with Washington as they try to save the company?
The answer: They know that with the lefties in the Obama administration breathing down their necks, their chances of ever restoring GM to its past glory are anywhere from slim to none. Of course, it’s hard to feel sorry for GM’s management, which news reports and my own sources say has been prodding the administration to sell off its remaining 26.5 percent stake in the company. GM’s bosses invited Uncle Sam in — tough luck for them that he doesn’t want to leave.
For way too long, the Big Three — GM, Ford and Chrysler — kept on cutting generous wage and benefit deals with their unionized workforce as if it was still the 1950s and ’60s, when foreign competition didn’t exist. By 2009, that heyday was long, long past — and the Great Recession brought their highly flawed business model crashing down. The $17 billion in loans from the Bush administration in its waning days wasn’t enough. GM and Chrysler came hat in hand to the President Obama for a little more hope and change.
An easy solution would have been to let the companies reorganize under Chapter 11 of the bankruptcy code. They’d have had a good chance to survive; plenty of other companies have restructured under bankruptcy protection and emerged later as viable businesses. American Airlines is doing it right now, and without major disruptions in service, or mass layoffs.
(Excerpt) Read more at nypost.com ...
