Irving Progressive

...it would be good for people to read this cautionary tale about how government bail-outs sometimes just do not work. The British government poured billions of dollars into trying to keep British Leyland afloat in tne 1970's and 1980's. With hindsight, the money was largely wasted. Here is one snipped of this cautionary tale:

For Garel Rhys, head of the Center for Automotive Industry Research at Cardiff University in Wales, the trajectory of General Motors is reminiscent of British Leyland not only because of the former’s decision to seek aid to avert bankruptcy, but also for its slow, seemingly inexorable loss of market share. “Both had a history of being the biggest in their market but couldn’t adapt as they lost sales,” he said. “They couldn’t get customers back.”

The key criterion for agreeing to aid for GM, Chrysler (and possibly Ford) is not whether the companies need the money desperately (they do) but whether they can be re-structured to spend the money wisely on newer, more reliable and fuel-efficient vehicles. With hindsight, the Carter administration decision to exempt light trucks from fuel efficiency regulations in the 1970's will be shown to have been one of the worst decisions of that administration, since it gave the U.S. car companies the excuse they needed to avoid investing in newer more fuel-efficient engines, drivetrains and vehicles. Why do that when you can pump out SUVs and pickups using older technologies and make a fat profit?
The comments of Michael Edwardes, who was for a while the CEO of British Leyland, also ring true:

If Washington does go ahead and help Detroit, Mr. Edwardes said, it is crucial that the government overhaul the management of the Big Three. “Throwing money at them isn’t enough,” he said. “They need money and they need new management. They need both, not one or the other.”