November 18, 2008

GM + Chrysler = Safe From Extinction


A couple of weeks ago, I was talking with one of my friends who works at GM about the merger talk that was getting some news, that would turn the Big Three of Detroit's automakers into the Big Two.

I asked my friend why either company would be interested in obtaining more debt, more failing business models, or more failed product lines. My friend couldn't figure it out, either.

But, I realized something today. What have businesses learned in the last few months with this financial crisis? The keys to financial success have nothing to do with fiscal responsibility or developing marketable products. The key to financial longevity is being "too big for America to let fail."

8 comments:

Tim said...

Whatever happened to capitalism? It used to be that bad companies went the way of the dinosaurs while good companies stuck around and prospered. Now I guess that your business can literally circle the drain and the government will swoop in with the plunger and rescue it.

Sabai said...

is this tim finn, btw?

Tim said...

yes it is... give Sean Carter a finder's fee for bringing me on

Sabai said...

congrats on the marriage, tim!

apparently, capitalism has negative consequences that affect those of us on the sidelines, and we must be protected from them, at the expense of benefiting from the spoils.

sean said...

two words: moral hazard

Matt J said...

I read that 2.6 million jobs go away if the big 3 go under. ~2% of the US workforce. Michigan falls into the great lakes. I made that last bit up.

So can someone tell me why we bailed out banks before bailing out the big 3?

Matt J said...

Oh yeah, and I'll take the finder's fee.

Sabai said...

matt, because if we didn't bail out the banks immediately, we'd all have lost our jobs.

silly.

and the big 3 wouldn't actually disappear if we didn't do anything, they'd just shrink down to a profitable size. so, all 2.6 million people wouldn't automatically lose their gigs.