Article Source: http://www.cbc.ca/money/moneytalks/2008/11/michael_hlinka_1.html
SUMMARY
This article talks about how 'The Big Three' automakers - General Motors, Ford, and Chrysler are facing a financial crisis so intense that may mark an end to their existence in the industry.
With the underestimated loss in the last quarter of the fiscal period, and the alarming insufficient amount in the retirement and health care benefits funding, GM may raise the speech in bankruptcy sometimes next year unless if help comes... which is generally recognized as governmental aid.
To the author of this article, greed and self-interest are the roots of its own disasters. The author claimed that government intervention might work, but if the receivers do not appreciate this, as many do not, then the cycle will make a comeback in the near future. That is, it is estimated that U.S. automakers make at least $77 per hour...why not consider a voluntary cut to keep the company that pays them going?!?!
Because bankruptcy isn’t inevitable ... it’s only inevitable if GM’s stakeholders continue to be greedy and shortsighted.
CONNECTION
The current topic that we are on is called - The Role of Government in a Market Economy, and this article could be related to the Chapter's topic very well, because it covers a bit of everything. That includes the 'invisible hand' that Adam Smith mentioned, how people are guided by their own self-interest and do things that maximize their own satisfaction. And all the possible shortcomings of the Free-Market system - Market Imperfections, where information may no be as detailed and accurate as they should be, and may have led to the downfall of 'The Big Three'. Competition, where the Asian automakers, Toyota and Honda, are giving them a hard time. And of course, the Third-Party Effects, where in this case, is a negative impact on the autoworkers, because it means a cut in their pay cheques, but may be a positive one on the companies, because it may aid in their survival in the market...
REFLECTIONS
Reading this article makes me think of the relationship between teenagers and their parents. You ask me how is that so, well here it is: (Generalizing) teenagers are rebels who seek for independence and freedom. And when things are going smooth and well, they ask for no help, and just arrogantly continue on what they are doing. But they often do not realize the consequences of their short-sightedness. And when something bad happens, some of them turn into weaklings and ask for help from their parents. That is exactly like how 'The Big Three' are acting right now. Where self greed and interest has ruined their own career and now they are asking help from the government (parents) to aid them with money that they've never thought of having a problem of.
SUMMARY
This article talks about how 'The Big Three' automakers - General Motors, Ford, and Chrysler are facing a financial crisis so intense that may mark an end to their existence in the industry.
With the underestimated loss in the last quarter of the fiscal period, and the alarming insufficient amount in the retirement and health care benefits funding, GM may raise the speech in bankruptcy sometimes next year unless if help comes... which is generally recognized as governmental aid.
To the author of this article, greed and self-interest are the roots of its own disasters. The author claimed that government intervention might work, but if the receivers do not appreciate this, as many do not, then the cycle will make a comeback in the near future. That is, it is estimated that U.S. automakers make at least $77 per hour...why not consider a voluntary cut to keep the company that pays them going?!?!
Because bankruptcy isn’t inevitable ... it’s only inevitable if GM’s stakeholders continue to be greedy and shortsighted.
CONNECTION
The current topic that we are on is called - The Role of Government in a Market Economy, and this article could be related to the Chapter's topic very well, because it covers a bit of everything. That includes the 'invisible hand' that Adam Smith mentioned, how people are guided by their own self-interest and do things that maximize their own satisfaction. And all the possible shortcomings of the Free-Market system - Market Imperfections, where information may no be as detailed and accurate as they should be, and may have led to the downfall of 'The Big Three'. Competition, where the Asian automakers, Toyota and Honda, are giving them a hard time. And of course, the Third-Party Effects, where in this case, is a negative impact on the autoworkers, because it means a cut in their pay cheques, but may be a positive one on the companies, because it may aid in their survival in the market...
REFLECTIONS
Reading this article makes me think of the relationship between teenagers and their parents. You ask me how is that so, well here it is: (Generalizing) teenagers are rebels who seek for independence and freedom. And when things are going smooth and well, they ask for no help, and just arrogantly continue on what they are doing. But they often do not realize the consequences of their short-sightedness. And when something bad happens, some of them turn into weaklings and ask for help from their parents. That is exactly like how 'The Big Three' are acting right now. Where self greed and interest has ruined their own career and now they are asking help from the government (parents) to aid them with money that they've never thought of having a problem of.
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