GM Has the U.S. Government on the Hook
Published in Financial Times - Deutschland
(Germany) on 18 February 2009
by Heimo Fischer (link to
original)
The United States government feeds General Motors and Chrysler billions of dollars to keep them afloat. In doing so, the U.S. has fallen into the subsidy trap and the way out of it has already been blocked.
The government has already loaned $13 billion dollars to beleaguered General Motors alone. Now the company is asking for $17 billion more to avoid bankruptcy. The government will have to come up with that as well. General Motors CEO Rick Wagoner made that clear in the most drastic way when he said that allowing GM to go bankrupt would be more expensive, costing the treasury $100 billion. The money already loaned to GM would be rolled up in the bankruptcy proceedings and would also be lost.
Squander billions of dollars and end up not saving the company or workers’ jobs? That would be too difficult to explain to the taxpayers and Wagoner knows it. He’ll keep asking the government for more and more and the government will keep paying up.
The government has already loaned $13 billion dollars to beleaguered General Motors alone. Now the company is asking for $17 billion more to avoid bankruptcy. The government will have to come up with that as well. General Motors CEO Rick Wagoner made that clear in the most drastic way when he said that allowing GM to go bankrupt would be more expensive, costing the treasury $100 billion. The money already loaned to GM would be rolled up in the bankruptcy proceedings and would also be lost.
Squander billions of dollars and end up not saving the company or workers’ jobs? That would be too difficult to explain to the taxpayers and Wagoner knows it. He’ll keep asking the government for more and more and the government will keep paying up.
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