GM Wants A $10 Billion Bailout
 Wednesday, November 19th, 2008  by Connie T.

Over $700 billion in taxpayer dollars have been allocated as bailout money for banks and financial institutions with U.S. dealings. Additionally, JPMorgan Chase was extended $30 billion in credit for losses in their Bear Stearns investment. The insurance company AIG was given $85 billion by the Federal Reserve Bank of New York. Naturally, there are other companies that want a piece of the "stimulus" action: but you might not have predicted that one of them would be the world's largest automaker.

Yes, the world's largest auto manufacturer, General Motors, is asking the federal government for money. GM, Ford, and Chrysler are asking for their very own bailout to the tune of $25 billion in emergency loans, to be split up by the Big Three.

Ford Motor Co.'s Chief Executive Alan Mulally has asked for $7-8 billion, Chrysler LLC Exec Robert Nardelli for $7 billion, and GM's Chief Executive Rick Wagoner for $10-12 billion.

In 12 months - from October 2007 to October 2008 - GM's sales in the United States have dropped 45%. Yet the company has only been slashing production 12-25%. In October, GM North America produced 318,000 vehicles and sold only 33,735. Meaning they're making over 7 vehicles per minute, and over 284,000 more vehicles than they need.

Besides the concern of an unbalanced supply and demand, let's be honest: GM employees are pretty darn lucky. If you don't have a spouse, relative, or very close friend already working for GM, you may find it hard getting your foot in the door. That's not much of a surprise, as in a country where the federal minimum wage is $6.55 per hour, GM North America salaried employees make an average wage and benefits totaling $78.21 per hour; new hires receive $26.65 per hour for wages and benefits. They are also semi-cushioned by union protection.

Former Republican presidential candidate Mitt Romney wrote an article for the New York Times published today, entitled "Let Detroit Go Bankrupt." The basic premise of the article was that the City of Detroit - very dependent on the American automotive industry and themselves asking for a $10 billion bailout for employment, transit, and foreclosure costs - needs to restructure itself instead of bandaging itself. "Detroit needs a turnaround, not a check," Romney wrote.

I can't even begin to come up with a solution for GM: after all, not many of us can readily relate to a company that has risen to profits higher than any other automaker in the world. But I know that obtaining a check from the consumers that already can't afford to buy their product isn't the answer. Would it be such a terrible thing if these modern-day empires, whose colors, brands, jingles, and power are household knowledge to all, were actually forced to fend for themselves? If the little inventors with big ideas (especially, hopefully, in green technology this time) actually had a chance out there? I mean, isn't this a democracy, after all? Or is it all just a farce to fuel capitalism?

In an ABC poll, 67% of people voted that the government should let the auto industry go bankrupt (vs. "offer bailout"). Then again, 93% of Americans disagreed with the bank bailout, and that went through.

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