Government Subsidized Layoffs

Looks like GM and Chrysler are back looking for another government hand-out. I had serious reservations the first time around and I am flat against the idea based on what I am seeing this time.

If you ask me, the government should bail out a company only when allowing that company to fail according to the free market laws would result in an abnormal hit to the overall economy or if the reason the company needs a bailout was beyond that company's control. As I stated in a prior blog entry, bailing out the airlines after 9/11 would be an example.

Even in those circumstances I think there should be a significant number of strings attached to discourage companies from taking excessive risks and then running to Uncle Sam for help.

So now GM and Chrysler are back for more corporate welfare. In keeping with Congress's request the last time around, both corporations presented their business plans along with the request. This is where I have a gripe.

All told both plans call for the closing of several plants, layoffs on the order of 80,000 people, cuts to wages for those that survive, and cuts to pensions for those that are retired. I fail to see how this is an incentive for me to give you money. How is this business model any different from what these companies have been doing for decades.

The government should give money in order to save jobs, not to encourage the business to cut them. If we give these companies billions of dollars based on this plan, the government will be giving their stamp of approval on more unemployment.

If you need billions of dollars so you can start laying off people, then I say your company is too far gone anyway and you should just file for bankruptcy protection.

The only way I am on board with either company getting a dime is if they agree to no layoffs until every penny is paid back AND they do not touch any benefits for the retired or those within 10 years of retiring.