Britain Bailed Out Its Automakers Once . . . They No Longer Exist
Posted by Bill Dupray
on Nov 13 2008 Filed under Politics.
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This automaker bailout trick has been tried before, in Britain, and it failed. I am willing to bet that just before the takeover by Parliament, there were statements that sounded a lot like this .
“Next week, during the lame-duck session of Congress, we are determined to pass legislation that will save the jobs of millions of workers [read - union bailout] whose livelihoods are on the line,” the majority leader, Harry Reid of Nevada, said in a statement.
This is despite the fact that GM is already toast, or at least headed for the toaster. But that doesn’t matter, let’s piss away another $20, 40, 80 billion to prop it up for another 6 months . . . so that Toyota can buy them.
Reid and Pelosi have urged the Bush administration to help the major automakers, especially General Motors, which is fast depleting its cash reserves and seems to be hurtling toward bankruptcy. GM shares, pummeled for weeks, fell an additional 13 percent on Tuesday to $2.92, its lowest point since 1943. GM on Monday warned shareholders that it might not be able to continue as a “going concern.”
John Derbyshire at The Corner has seen this before in his native England, and it didn’t end well.
I’m getting a really bad case of déjà vu. . . .
It’s all a bit too creepily similar to the travails of the British auto industry in the 1960s. That ended with nationalization, which was of course a horrible failure, the debris eventually being sold off to Chinese and Indian firms.
He sites this sad little tale from Wikipedia.
British Leyland was a vehicle manufacturing company formed in the United Kingdom in 1968 as British Leyland Motor Corporation Ltd (BLMC). It was partly nationalised in 1975 with the government creating a new holding company called British Leyland Ltd which became BL Ltd (later BL plc) in 1978. It incorporated much of the British owned motor vehicle industry, and held 40% of the UK car market, with roots going back to 1895.
Despite containing profitable marques such as Jaguar, Rover and Land Rover, as well as the best selling Mini, British Leyland had a troubled history. In 1986 it was renamed as the Rover Group, later to become MG Rover Group, which went bankrupt in 2005, bringing an end to mass car production by British owned manufacturers – with MG becoming part of Chinese Nanjing Automobile.
Jaguar and Land-Rover (Land-Rover previously owned by BMW) were sold in March 2008 by Ford to TATA Motors of India, who also bought the three brand names: Daimler, Lanchester, and Rover – the intellectual property rights for which had been bought by Shanghai, Nanjing bought MG brand.
Governments are unable to do anything efficiently, and sure as hell cannot run a competitive business in the free market. If we allow the government to “bail” them out, a euphemism for government ownership and takeover, rather than let them reorganize and purge the union contracts under the bankruptcy laws, the American auto industry will be no more.
Just ask the Brits.
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