Bail out G.M. workers, let the company go bankrupt

General Motors is begging for a bailout, and Barack Obama and his transition team are asking the Bush administration and Congress to supply it. Tom Friedman says any such move should be accompanied by lots of conditions, including throwing out the execs and making the company produce climate-friendly cars.

Here's another idea: Let the company go bankrupt, and use the money instead to give all 266,000 worldwide employees a one-year severance pay package. Assuming that the average pay is about $50,000 per year (probably an overestimate on the international scale), this would come to about $13 billion, much less than the minimum $25 billion the company and Obama are asking for.

Once the government has taken G.M.'s facilities into receivership, it can sell them cheap to investors willing to start a new automobile company dedicated to making fuel efficient, environmentally friendly cars.

I'm serious.

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Jeff Meredith said…
I hate to sound like a neocon here, but the government wouldn't know what to do here to turn it around ... and neither does GM's leadership.

Saying that the government should sell the facilities is like saying the government should sell Amtrak ... the problem is no one wants it (except for the Northeast Corridor).

One year's pay will not matter. Their employees will just be looking for work in a year and most will not find jobs equal to what they had.

At the same time, simply giving GM money and taking an equity stake doesn't seem like it would work. They'll just come around asking for another bailout in a year.

So I'm inclined to say, "Let GM fail and help the workers in the way that we would help any other worker." Why should GM's employees be any different? Lots of companies lay people off and fade to dust, but we don't talk about giving their people one year's salary. It would be unfair to treat GM any differently.
Michael Balter said…
Interesting points here, any other comments? A no win situation no matter what we do, it would seem.