Do the Auto's Live of Die?

Written by: Andy Watkins
Editor - BusinessDetroit.com


The big question all over the media world wide is do we help save the automotive industry for a complete meltdown. Many say it worked for Chrysler years ago and that's where I would like to start my debate on this topic. Many years ago the U.S. government decided to give Chrysler a 1.5 billion dollar loan in which it got paid back and it seemed that it saved the company and industry from a huge loss...or did it? What if the U.S. government turned down the loan offer to Chrysler years ago and it closed it's doors. That would mean many indivduals would have lost their jobs, homes, business that were connected to that auto giant. Now that we placed bandaid on the situation back then my belief it has caused an even great problem today. Letting Chysler fail years ago and allowing the free market to work the way it should would have possibly saved the current automotive industry from it's complete failure.

Basically, the free market suggests that if you run your business correctly with a quality product and a fair market price you should be able to keep operating as long as the bad running companies go out of business. Why you ask?...well it's very simple...if the bad companies are saved then the market share for everyone shrinks and the great companies ove time get hurt even though they are doing everything right...they are limited on growth and then they implode due to the lack of new revenues because the bad companies have turned things around slightly and retained partial market share causing pain on the companies that should have taken all the left overs.

So now we (Detroit and Michigan tax payers) are begging congress to re-think the loan idea and save General Motors. Well this writer thinks that is a terrible idea and the free market really needs to work the way it is suppose too. So U.S. Government get out of the way on this one and let the chips fall as they are suppose to fall.