Wednesday, February 18, 2009

When businesses talk socialism

From an article on the NYTimes.com about the automakers increasing the amount they're requesting by $14 Billion:

"But if the federal government balks at the automakers’ requests, that would mean the two companies probably would have no choice but to file for bankruptcy protection, because they are losing hundreds of millions of dollars each month.

And the car companies said on Tuesday that the cost of a bankruptcy reorganization, with the government providing financing to help it through that process, would be far greater than their latest loan requests. Without such help, the companies would have to liquidate, creating staggering new job losses."

It makes my ears stand up when business managers start making arguments against/for a decision citing social reasons. The automakers here are making appeals in favour of govt help citing "greater costs" in a bankruptcy proceeding, where the "cost" refers to jobs lost! Since when have businesses evaluated decisions based on jobs lost/created? The argument these buggers should have been making should have been about which operation will make them profitable faster and the little I know of the US Auto unions and their huge benefits, job cuts seem to be just the antidote that is required.

Instead, the automakers are trying to put pressure on the govt, through the general public which hears these "arguments".  The only reason I can think of is that in the immediate future, it is easier for the executives to deal with the govt than it would be to go through the bankruptcy proceedings. With Uncle Sam playing Father Christmas, what else is to be expected but everyone asking for alms without which they would collapse.

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