Zywicki Comments on GM Bailout Cited in Chicago Tribune
Professor Todd Zywicki's Wall Street Journal comments on the government's General Motors bailout were cited in a Chicago Tribune article written by Steve Chapman, a member of the Tribune's editorial board.
Zywicki's Wall Street Journal article cited was co-written with James Sherk of the Heritage Foundation. In it the authors point out that "GM still has higher labor costs ($56 a hour) than any of its competitors" -- something that would have been altered in a normal bankruptcy.
Obama's Auto Industry Fairy Tale, Chicago Tribune, September 13, 2012. By Steve Chapman.
"Saving two companies is not the same thing as saving the U.S. auto industry, which includes a host of other corporations that make cars here. Not only did the others get nothing; they were penalized for prospering. Having kept labor costs down and quality high, companies such as Toyota, Subaru, and Honda lost many of the usual benefits of their achievement. Sales and profits they should have reaped, they didn't.
"All the administration proved is that if you pump enough federal helium into a sinking business, you can keep it aloft for a while. By the administration's own estimate, taxpayers will lose $25 billion on the deal."