Buying into GM a Huge Waste

The government’s plan to buy a significant percentage of a dying auto maker strikes me as a most irresponsible and idiotic gesture. GM has been proved, in the fierce arena of the Free Market, to be a loser—an arrogant loser who made cars people didn’t want and dumped workers to enhance profits. Their end has been long predicted, and many analysts already speculate that the money our government has so wantonly promised is only a brief stay to GM’s ultimate demise.

In the final analysis the government made a decision to bail out this fallen Goliath because of all the people who would be crushed beneath its weight. But the billions they tossed after the broken business model, in an attempt to resurrect this giant, would have been better directed retooling the car dependent economies of Southern Ontario.

Prime Minister Harper said: “I wish there were an alternative but the alternative to what we're doing today would be vastly more costly and more risky.” Perhaps, but this is a situation that calls for a bit of risk and some creative thinking. The problem with the government’s stance on this matter is that it is based expedience and political necessity neither of which will serve the interests of GM or Canada in the long run.

We are betting a very scary chunk of our future on the hope that GM will be able to restructure itself after decades of indolence. The government is confident that the cobwebs be cleared from the boardroom, inefficiencies fine-tuned out of the designs and malaise swept from the factory floor. But before such things come to pass, if they do at all, the government’s mandate may well have expired, and we’ll still be paying for this grand experiment in social capitalism.

What this decision exposes to me is the knee-jerk instincts of governments who’s primary objective is to keep winning elections. Mr. Harper said the decision to pay GM’s ransom was “regrettable but necessary.” I say a leader with real vision would say: “We are very sorry to the families and communities who depend on this industry, but it is now as dead as the dinosaurs. We will spend $6 billion (plus another $3.5 from your provincial coffers) to develop new industries. While GM spins its wheels down south trying to become more “environmental” we will fund solutions that are not wasteful exercises in want over need…” or some thing to that effect.

GM has contributed greatly to our spendthrift North American lifestyles. It created vehicles with shelf-lives in order to ensure new orders. It created demand for fuel guzzling behemoths even as “energy security” was becoming more of an issue for its national government. I hate to say it, but it deserves to die. It should be sold off to the sharks and the uneatable parts should be recycled into something that will serve the national interest to a greater extent than the gas-sucking, break-down buggies so cleverly marketed by the magnates in Michigan.