Posts Tagged ‘bankruptcy’

Don’t bailout the Big 3 beggars

November 19, 2008

Let the Big 3 beggars (GM, Ford, and Chrysler) go bankrupt. These companies have been mismanaged for years and can’t compete against foreign manufacturers which make superior products.

The role of the government should not be a panacea for failing big business with one exception: banks. Credit is the life blood of the economy, and the government would stand to lose more by not bailing out the banks because of FDIC insurance.

All hope is not is not lost with corporate bankruptcy for manufacturers. Major companies often survive after filing Chapter 11. It’s the shareholders, pension plan beneficiaries, and creditors who stand to lose the most. Some say the Big 3 won’t survive if the government doesn’t bail them out. I say a bailout would be like keeping someone in comotose on life support knowing the chances of freeing him to a normal life is next to nil.