Interesting insight into GM's slide into oblivion from Investors Business Daily:
GM Layoffs: A Tragedy Caused By Embracing Government Subsidies, Not Markets
General Motors' decision to close four U.S. plants and lay off 14,700 workers, 15% of its domestic workforce, is an economic tragedy. And it might have been avoided if GM had listened to the market, rather than the Obama administration.
During and after the financial crisis, GM decided to do the government's bidding in exchange for billions in subsidies. At one point, the federal government owned more than 60% of its shares, costing it more than $50 billion. By the time it sold the shares in 2013, U.S. taxpayers had an $11.2 billion loss.
How's that working out for GM now? Not very well.
GM's CEO Mary Barra, who took over the company in early 2014, reshaped the company's offerings to please the Obama White House's leftist auto czars, as did her predecessor. Barra has bet the company's future on electric cars and other less-popular offerings, instead of what people want.
Much more at the site - the author takes an honest look at electric coal burning automobiles and why they simply are not selling except for those who want to virtue signal. The article also mentions this:
Gov't Failure
It never works as expected. It can't. The government, despite delusions to the contrary, can't possibly know what people want and need. Yet, a perpetual leftist dream remains an economy run and funded by government "experts."
We see that in the Obama administration's decision to subsidize GM during the financial crisis by investing tens of billions of taxpayer dollars in its stock and propping up money-losing operations. By ignoring the supply-and-demand signals of the marketplace, it only made GM's problems worse.
More specifically, it led to GM committing itself to the unprofitable electric car market, one of President Obama's pet projects. At one point, Obama even vowed to buy a Chevy Volt when he left office. He didn't.
A good read and a cautionary tale for those who advocate big centralized government.
Leave a comment