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	<title>Dose of Clarity &#187; bankruptcy</title>
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	<description>Logic and common sense</description>
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		<title>A Government work program</title>
		<link>http://doseofclarity.com/politics/a-government-work-program/</link>
		<comments>http://doseofclarity.com/politics/a-government-work-program/#comments</comments>
		<pubDate>Wed, 03 Jun 2009 19:22:25 +0000</pubDate>
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				<category><![CDATA[Politics]]></category>
		<category><![CDATA[bankruptcy]]></category>
		<category><![CDATA[general motors]]></category>
		<category><![CDATA[government]]></category>
		<category><![CDATA[government motors]]></category>
		<category><![CDATA[work program]]></category>

		<guid isPermaLink="false">http://doseofclarity.com/?p=442</guid>
		<description><![CDATA[How do you create a multi billion dollar taxpayer-funded Government work program?  Well, you begin with taking General Motors into a pre-packaged bankruptcy and come out with 60% ownership for the Government after sinking in a total of $50 billion (possibly higher), then give 17.5% ownership to the Union, offer 12% to the Canadian [...]]]></description>
			<content:encoded><![CDATA[<p>How do you create a multi billion dollar taxpayer-funded Government work program?  Well, you begin with taking General Motors into a pre-packaged bankruptcy and come out with 60% ownership for the Government after sinking in a total of $50 billion (possibly higher), then give 17.5% ownership to the Union, offer 12% to the Canadian Government for their cooperation and investment, and finally provide a crammed down 10% piece to the bondholders with some possible warrants in the future to get the deal done.  You then operate the company knowing that the Government is the majority owner, lender, regulator, and primary administrator of the new business, and possibly its number one customer.  Combine that with the fact that there is no exit strategy planned for the Government’s withdrawal from the company therefore effectively resulting in another annexation of private industry that increases the Administration’s power and control of the economy.  Sound familiar?</p>
<p>To progress this picture a bit more, you consider that profits will not matter to this new organization because theoretically they can always worry about that at some other time if the company becomes viable.  Producing <span id="more-442"></span>cars that customers want will be so passé, it will be about moving them from the bigger, more profitable cars and trucks that are demanded to the smaller, more fuel efficient and less profitable cars that the Government wants us to have.  Also, when it comes to making decisions between the profitability of the company and Union interests, we all know how that one will go.  This model of operation will all but guarantee that profits will be a secondary consideration at best, thus the Government ends up with a white elephant that stays on life support in order to justify the Administration’s involvement of taxpayer money and to keep their hands on the levers of control.  It will be the gift that keeps on giving for years to come because the concept of profitability has been discounted as greediness instead of an effective tool that focuses the company on efficient operations.</p>
<p>To put the final touches on this picture is to then ask will customers visit the remaining showrooms and buy these cars produced by bureaucrats.  That remains to be seen, but if they refuse, it is of no consequence because as stated previously there will be no requirement for profits, plus they can always get more taxpayer money to prop it up if needed.  It is estimated that there will be about 40k jobs left in America for GM after the restructuring which equates to well over $1 million per job if these numbers are accurate and do not increase.  This sounds a bit expensive for something that garners only about 20% of our citizens’ approval, yet here we are as disgusted owners anyway.  The question that keeps being asked is “how will the Government run General Motors?”  The most likely answer is “into the ground,” but what difference will that make?  The important thing is that the Government maintains control and provides a work program for their supportive Union members courtesy of the taxpayers. </p>
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