Let ’em rot…

This isn’t a very popular sentiment right now, but it’s one that I
have no doubt is the correct one – the US auto industry does not
deserve to be bailed out.

GM says today that without $4 billion in immediate loans from the
government it will be forced into bankruptcy. While I understand all
too well that the auto industry is a big web and that bankruptcy of GM
will lead to a lot of economic pain for many, many associated
businesses and communities, it is beyond ludicrous to claim that this
has happened for any reason other than one very simple one – GM makes
lousy cars.

Two things have propped GM up in the past 20 years:

1) a very successful European division that makes pretty good cars

2) their ability to successfully milk the SUV and massive truck trend
in the US for all it was worth

GM deserves credit for making reasonably good choices in engineering
and design of the cars they’ve sold in the European market. They
deserve to rot for throwing all their eggs into a basket no sane
person could logically support with their over-reliance on massive
SUV’s and trucks in the US market. Today one of their statements
about their planned restructuring to stave off failure is that they
plan to shutter their HUMMER division. Well duh. They should have
slammed the doors on that division when gas prices started to rise
above $2.50 per gallon. A halfwit could have guessed that HUMMER’s
would fall out of fashion once driving one got outrageously expensive,
and while gas prices have fallen considerably in the past month or
two, that’s largely due to reduced demand as a result of the economic
downturn and not any resurrection of the supply of oil in the world.

GM should also be told to lie in the bed they’ve made themselves
because propping them up effectively penalizes Ford for managing their
house in much better order. Folks this IS capitalism in action.
Capitalism is a boom/bust system. Right now we’re in the bust cycle.
Pain is something you simply have to deal with once you buy into the
system as a whole. Some businesses are going to fail. Some will
succeed. Frankly, it’s a bit immoral of our government to say that if
you’re a big enough fish we’ll rescue you. Will there be bailout
packages for all the small businesses that are inevitably going to
fail over the next few months because their business plans were
fatally flawed?

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