Detroit Darwinism – Let GM Die

GM announced today they are eliminating their High Performance Vehicle Operations (the equivalent of Ford’s SVT division). Automotive News reports that GM will re-deploy the units engineers to high-priority programs such as hybrid and fuel efficient vehicle development (shouldn’t they have done that about 7 years ago?). This move comes as part of GM’s revised plan to the US Treasury. The Plan is prompted by GM’s realization they will run out of cash come March without another handout from the US Government. GM is requesting another $9 Billion dollars on top of the $13.4 Billion it received last year under the Bush Administration’s Detroit bailout. GM is also asking for another $7.5 Billion line of credit in case things get worse. Which they will.

Also reported as part of GM’s plan would be nearly 50,000 in layoffs, closing of 5 manufacturing and assembly plants in the next three years, and eliminating the Saturn division.

Here is FordMuscle’s view:
There’s an old saying, “Everyone is a capitalist on the way up and a socialist on the way down.” While GM’s circumstances are tragic, we need to let capitalism take its course. Propping up GM hurts the competitors who aren’t asking for handouts. It makes the playing field un-level. Ford is the fittest, and when resources are scarce, the fittest shall survive and the weak potentially go extinct. Ford stands to increase its market share dramatically if GM (and Chrysler) were allowed to fail. By doing so Ford would be able to make more cars, hire more workers, and be a better competitor in the global automotive market. The US is better off with one strong company rather than three weak, government supported entities. No democratic government should pump $30 Billion of taxpayer money into a single company, let alone one that is otherwise destined to fail. It is a horrible investment of gigantic proportion. Look at it this way, the government could distribute $1 Million to
30,000 small and entrepreneurial businesses – sort of a Treasury backed Venture Capital effort -and just about be guaranteed of an economic turn around.