Monday, May 04, 2009

You Now Own a Failing Automaker

Thanks to our federal government, you now own a part of Chrysler. Or you will once all the paperwork is completed.

Our federal government is helping bail out the beleaguered auto manufacturing giant by purchasing stock in the company. This is all part of their restructuring deal, which also includes a partnership with European automaker Fiat.

Unlike many shareholders, you’ll probably never have a chance to sit in Lee Iacocca’s chair. Iacocca was the business phenomenon that turned Chrysler around from potential bankruptcy in the 1980’s, by introducing the mini-van, the “K” car, and later the innovative forward seating format of the j-class of automobile.

I always thought Capitalism meant – to take a page out of Darwin – was a battle of the strongest. Strong leaders won out over the weak, big fish eats little fish; big company eats little company, and so on.

Not so in the modern era of Communistic-like government buy-outs of big companies like Chrysler, and possibly General Motors, and maybe even Ford.
Am I the only one here that sees the potential conflicts of interest here? What happens if and when – as usually is the case – the big unions representing the employees of these big North American automakers goes on strike, and holds out until the government is forced into the negotiations, by way of a government appointed mediator?

It isn’t uncommon for provincial or federal government mediators to be called into these negotiations, to act as a neutral middleperson between the union and management.

But WAIT – now that the government owns part of the company, they have a stake on the management side of the coin. How then, will anything be resolved?
Under a Communistic economy, there were no unions, there were no freedoms whatsoever. You do what you are told, or you and your family would disappear.

There were rumours about what became of those that dared to speak out against the ruling Communistic governments of the former Soviet Union – and none of them involved basking in the sun on a sandy beach under a blue sky.

Is that going to happen here, now, in Capitalistic Canada?

Probably not, we’ve evolved too much as a society to go back to the fear-driven society of the USSR. However, our government is in quite the pickle, should they have to intervene during a union negotiation.

Or worse, what happens when the interests of big business don’t quite mesh with those of our government?

Publicly funded governments have no business in big business. In this blog I’ve always said it is tragic when anyone loses their job because their company goes belly up. But that is the nature of a free market Capitalistic society.

Anything else is just wrong for our country, wrong for our government, and wrong for our society as a whole.

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