GM Gets Its Fix
General Motors (NYSE: GM) and Chrysler were relieved to find out that even though most Americans are opposed to helping them, and Congress isn’t far behind, they still have a friend in the Oval Office. The two companies will get a Christmas present of $13.4 billion.
But aside from asking for funds, GM and Chrysler seem to have no idea of what to do. They’ve resorted to hanging around the federal reserves for handouts. Apparently their “Enabler-in-Chief” still wants to keep them hooked on poor performance and poor innovation.
Although, in a surprising example of governmental restraint, GM and Chrysler have until March 31 to show they are viable. It’s like mom and dad requiring that they get jobs or be kicked out of the house. Perhaps they should look to their brother, Ford Motor Co. (NYSE: F), which said it might not need assistance.
The question is, how is this money doing anything more than prolonging the inevitable?
It must be some solace to more than 700,000 autoworkers to know they have more job security than hundreds of thousands of other employees laid off in the past few months. But it could ultimately doom them.
The difference is that after layoffs at Bank of America (NYSE: BAC), Citigroup (NYSE: C), Genworth Financial (NYSE: GNW) and JP Morgan Chase (NYSE: JPM), these companies will be healthier and hiring again. If only the automakers would do the same. It’s a bitter pill and perhaps they should swallow it.
Companies mentioned in this article: GM, F, BAC, C, GNW and JPM.
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