To Bail Them Out…Or Not
It has been reported that General Motors and Chrysler require $10 billion to bail them out of the current financial crisis. Yes, that’s billion with a “B”! If assistance is not forthcoming more plants will close and thousands of employees will be laid off. What are governments to do?
If a bail out does not occur closings and layoffs become a certainty. Will our government be able to carry the additional burden of the newly unemployed? I imagine that employment benefits would be stretched beyond capacity. Tax bases would all but shrivel up and blow away. We all know that tax dollars, paid by large corporations, support municipalities and their social programs. The domino effect could be devastating.
What if we do bail them out with $10 billion? Is it enough? Who will determine how that money gets allocated? How and when would this bail out be distributed? Who would get how much? The questions are endless.
The government has a shaky track record when it comes to financially supporting the automotive industry. Recently, the Ontario government pledged millions of dollars to General Motors to prevent plant closures and improve product development. The plants are reducing shifts and the layoffs continue. Automotive manufacturers claim that they did not anticipate the severity of the economic downturn. I find such statements astounding and utterly offensive.
These corporations have economic analysts on staff that forecast the viability of market conditions years in advance. Recently, a former government bank official revealed that they, and their counterparts around the world, feared that an economic downturn was on the horizon. They knew that five years ago. In other words, they saw it coming. Now, I can only assume that concerns of such magnitude were relayed to industries, like the automotive business. It would have been the prudent thing to do. So, what happened?
Generally, it is human nature to ignore warnings when things are rolling along so well. For example, the Great Depression, World War Two, Pearl Harbour, the 70’s Energy Crisis, and most other major events in history. Warnings were issued and ignored. So, I find it difficult to believe that no one was warned about this economic downturn. It, too, was ignored.
Greed is a very powerful emotion and can become addictive. Many leaders succumb to its advances. Money and power are the by-products of greed. As we have witnessed recently, some CEOs have been earning obscene salaries and benefits by operating sinking ships. In reality, who eventually pays for all this? You and me, the average taxpaying consumer.
So, whether a $10 billion bail out happens, or not, one thing is a certainty…the average Canadian and American will carry the burden.
Don O’Connor is a freelance writer with experience in the automotive industry. He also speaks about Customer Service Strategies, Employee Engagement and Social Media. Email Mr. O’Connor at maritimes84@rogers.com.
If a bail out does not occur closings and layoffs become a certainty. Will our government be able to carry the additional burden of the newly unemployed? I imagine that employment benefits would be stretched beyond capacity. Tax bases would all but shrivel up and blow away. We all know that tax dollars, paid by large corporations, support municipalities and their social programs. The domino effect could be devastating.
What if we do bail them out with $10 billion? Is it enough? Who will determine how that money gets allocated? How and when would this bail out be distributed? Who would get how much? The questions are endless.
The government has a shaky track record when it comes to financially supporting the automotive industry. Recently, the Ontario government pledged millions of dollars to General Motors to prevent plant closures and improve product development. The plants are reducing shifts and the layoffs continue. Automotive manufacturers claim that they did not anticipate the severity of the economic downturn. I find such statements astounding and utterly offensive.
These corporations have economic analysts on staff that forecast the viability of market conditions years in advance. Recently, a former government bank official revealed that they, and their counterparts around the world, feared that an economic downturn was on the horizon. They knew that five years ago. In other words, they saw it coming. Now, I can only assume that concerns of such magnitude were relayed to industries, like the automotive business. It would have been the prudent thing to do. So, what happened?
Generally, it is human nature to ignore warnings when things are rolling along so well. For example, the Great Depression, World War Two, Pearl Harbour, the 70’s Energy Crisis, and most other major events in history. Warnings were issued and ignored. So, I find it difficult to believe that no one was warned about this economic downturn. It, too, was ignored.
Greed is a very powerful emotion and can become addictive. Many leaders succumb to its advances. Money and power are the by-products of greed. As we have witnessed recently, some CEOs have been earning obscene salaries and benefits by operating sinking ships. In reality, who eventually pays for all this? You and me, the average taxpaying consumer.
So, whether a $10 billion bail out happens, or not, one thing is a certainty…the average Canadian and American will carry the burden.
Don O’Connor is a freelance writer with experience in the automotive industry. He also speaks about Customer Service Strategies, Employee Engagement and Social Media. Email Mr. O’Connor at maritimes84@rogers.com.
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