The next economic bailout to be on the plate of our government appears to be GM, Ford and Chysler. All 3 companies are facing daunting challenges and the reality is that all three of them could feasibly go out of business. Because these are iconic American companies and because they are deemed "too big to fail" it is expected that the government will offer low cost loans or even infuse these companies with capital in exchange for preferred stock. So should the government bailout these companies. In a word, no.
The challenges that the auto companies face cannot be addressed by simply infusing them with capital and I believe that the current economic model they must follow cannot survive. Consider the roadblocks they face:
1) Our country has the second highest corporate tax rate in the industrialized world. This makes it very difficult to conduct business in America as they face stiff competition from foreign manufacturers who do not face this obstacle. The simple fact is that not only does Japan and Germany make desirable cars, but Korea has also entered the fray.
2) The regulations regarding fuel standards that our companies face are well intentioned, but it also leads to producing a fleet of cars that the American consumer has decided that they do not desire.
3) The legacy costs faced by the automakers are crippling. In a competitive industry it is hard to match the research and development of the competition if your retired workers account for a higher cost than their existing employees.
I believe that these companies will not be able to overcome these challenges and an infusion of capital will only delay the inevitable. It is time to let these companies go and perhaps a new automaker can rise up in our country.
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Looting The American Dream: Prevent the bail out of Chrysler and GMAC
If you are opposed to the Government's bailout of Cerberus Capital Management, the owner of GMAC and Chrysler please join our petition.
Cerberus Capital Management the multi-billion dollar vulture hedge fund has made billions of dollars for it's owner Steve Feinberg and the hedge fund's wealthy investors by taking advantage of other companies going bankrupt. Now that Cerberus is faced with massive losses they want help from the US Taxpayer.
It is ironic that Cerberus Capital Management's founder Steve Feinberg, well known for his ruthless and cutthroat style of vulture investing is now looking for the US Taxpayer to bail him out. Cerberus Capital Management has made billions of dollars by wiping out share holders, pensions, laying off employees and liquidating companies without a second thought. Steve Feinberg is known throughout Wall Street and the investment community as one of the meanest, vindictive and ruthless investors in the world. He has benefited personally over the years by taking advantage of others who had fallen on hard times.
He is known to have always extracted maximum pain when following his "Loan to Own" investment thesis. For more information on Cerberus Capital Management follow this link: http://en.wikipedia.org/wiki/Cerberus_Capital_Management .
For more information on Steve Feinberg follow this link: http://en.wikipedia.org/wiki/Steve_Feinberg .
Join us in out fight against bailing out one of the richest men in America, Steve Feinberg, his losing investment in Chrysler and GMAC and the multi-millionaire investors in Cerberus Capital Management.
If this makes you as angry click here and sign the petition to fight this.
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