The very likely next victim of this economic crisis is U.S. automaker, General Motors. President Elect Barack Obama stated that a collapse of the U.S. Auto industry would be “a disaster” and others seem to agree. The short term effects are easy to see. Increased Unemployment and a substantial decrease in GDP brought on by the collapse of the U.S. Automobile Industry. But the question is, would it really be that big of a disaster in the long run?
According to GM Executive Robert Lutz in 2004, Hybrid vehicles make no sense economically or environmentally. It wasn't until 2005 when he changed his mind to say that “It would be foolish at a time like this not to be focusing heavily on all kinds of hybrids." In 2008, By this time, the Toyota Prius had already been released for 8 years. It is safe to assume that GM completely dropped the ball, and failed to adapt to changing market demands. In nature, when organisms fall to adapt, they become extinct. This is the exact fate GM deserves for not staying on top of its game.
If GM goes down, it would allow other, smaller car companies who could possibly have the next step in Hybrid, hydrogen cell, or ethanol based cars to make their way into the car industry without automobile giants looming crushing all the competition, and spending millions lobbying our government for their own benefit. Our long term U.S. automobile industry could once again be a global leader in providing the world with the most efficient, price competitive cars.
Imagine the United States federal government decides the help out General Motors this fiscal quarter. What would change? Would Americans and the rest of the world start buying GM cars all of the sudden? No. What would make General Motors competitive again? A tax-payer sponsored crutch? That money would be better used to apply the bandages to the individuals who make up our society, not the corporations. Corporations will be replaced over time, individuals who lose everything can’t be replaced.
If Obama were to hand over a nice fat check to GM, temporarily rescuing them, who would be next? Who decides which industries deserve the life raft? Who deserves who drowns? I understood the financial market needing an immediate bandage, because the ramifications of a credit freeze meant that NO industry could function, and many individuals would be prevented from getting the loans which drive this country. But would the same dire ramifications affect the entire United States the same way?
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