Essay On GM Bailouts

The year 2009 was a very difficult time for everyone across the world. The stock market was in the tank; and thousands of workers were, or were going to be laid off. Massive movers of the international economy including: General Electric, AIG, Citibank, Chrysler, and many others were on the verge of collapse. Governments around the world had to decide; should they save these ailing corporations or not. Although many countries including the United States, and Canada decided to fold their cards and toss billions of dollars at the problem, history has proven that this in never a good idea in the long run. The bailouts of GM, and Chrysler are case studies that will be studied in universities and high schools for years to come. Cynics

It is a company that is able to innovate and create products that suit the market. This is what the government should be promoting; the government should not be rewarding the inaction of GM, and Chrysler to respond to market conditions. As stated earlier, these companies will only come back asking for more. However, this doesn’t just apply to the auto industry; the agriculture, technology, and energy sectors also get a substantial amount of subsidies from the government. This has come in the form of a grants, government contracts favoring one group of companies over another, or a combination of both. An example is the TTC’s decision to procure streetcars with 25% Canadian content (Bow). As many people in Toronto know this has not gone well at all. Not only is Bombardier skimping on the quality of the streetcars (Kalinowski), they are also falling far behind on delivery schedule (Pagliaro). As of November 26, 2015 the TTC has 11 of the new streetcars operation, however according to the original TTC delivery schedule 79 are supposed to be on the street by the end of the year (TTC). Unless Bombardier can churn out 68 streetcars in a little over a month this is a clear and concise example of why governments shouldn’t be subsidising