FT.com / Companies / Automobiles - Chrysler teeters on brink of bankruptcy.
More human agony.
But also more indication that the future is going to be very different.
And thyat we'll need the State to get us through the transition.
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One thing to keep in mind is that by having the Government throw Billions in aid to this corporation and GM, they risk pushing the other car makers into troubled waters as they need to compete against these competitors who no longer are acting based on actual expenses.
Take GM which is offering a 100,000 ‘bumper-to-bumper’ warranty. The President of the US announced to the whole country that GM warranties will be guaranteed by the US Government (at least for cars sold in the US). None of the other manufacturers offer this, but certainly will be pressured to do so. Just that they will have to foot the bill for it.
GM’s $15 Billion in aid comes out to $50 per American / $200 for a family of four.
One issue here is that the corporations did not change with the times, partly resisting automation as agreed with the Union. This is unfortunate, as the economy can better absorb a steady stream of laid-off workers over time, instead of getting many dumped into the system, and at the worst moment.
Bad businesses should go bankrupt. Keeping bad companies half-alive is not fair to their competitors or their employees either.