The Chrysler and GM bankruptcies and reorganizations already demonstrated that political reasons, instead of economic (and perhaps rule of law) reasons were the basis for many of the decisions. I can't see any other reason for the government giving so much to the labor unions and so little the debt holders, who have priority in a typical bankruptcy proceeding.
Previously, I didn't have much hope for Chrysler and GM surviving, given that the companies were failing during relatively good economic times. Now that the government has significant ownership in both companies, I expect Chrysler and GM will become zombie companies, run by political priorities, e.g. producing green cars no one wants to buy, and a drain on the taxpayer's money.
For more on New Beginnings, check back every Sunday for a new segment.
This is not financial advice. Please consult a professional advisor.
Copyright © 2009 Achievement Catalyst, LLC
Subscribe to My Wealth Builder
1 comment:
You're right about the "cars no one wants to buy", but part of that is just stigma associated with the brands and brand saturation. Now that GM shed a few brands, hopefully it can focus on a core product, not one copied 4 times (although they're still doing it across Chevy, Buick, Cadillac and sometimes GMC).
Ford def has a leg up because they've been successful in their European offerings and are finally bringing them over here (and not in a sub-brand offering like GM did with Opel/Saturn). But only time will tell for all of the brands. Chrysler needs to hurry up with the Fiat 500 though!
Post a Comment