To anyone who’s been paying attention General Motors’ bankruptcy comes as no no surprise, but the repercussions are still a mystery. Cato’s Daniel Ikenson brings up a very salient point — now that the government is the de facto owner of GM what’s going to happen to Ford.
Of the big three Ford has remained in a fairly strong position in a very weak industry. Most importantly it hasn’t been forced to take federal bailout money. Ikenson wonders if the fed may not put a thumb on the scales a little to help its latest property, namely GM, out a bit.
From Cato Today:
General Motors on Monday filed for bankruptcy protection, even after $19.4 billion in federal bailout money. Cato scholar Daniel Ikenson has long suggested bankruptcy as the best course for GM, and now worriesabout Ford’s future: “The government has a 60 percent stake in GM. Who’s going to want to own Ford stock—and therefore, will Ford be able to raise capital—when the U.S. government has an incentive to tip the balance in GM’s favor wherever it can?”
– Full statement from Ikenson
– “An Overdue Reckoning in the Auto Sector,” by Daniel Ikenson
– “Don’t Bail Out the Big Three,” by Daniel Ikenson
– “GM’s Last Capitalist Act: Filing for Bankruptcy Protection,” by Daniel Ikenson