Chrysler consummated its merger with Fiat today. The U.S. Supreme Court refused to block the deal and as quick as a judge's gavel can hit the bench, the deal was finalized. Many Chrysler dealers in the metro area, including Medved and Phil Long, have seen a long standing business relationship terminated. Some have other automobile brands to fall back on but for others the future is uncertain.
Many GM dealers in the state face the same uncertainty. The financial struggles of Chrysler and GM have been well documented. The companies were unable to sustain themselves in the competitive automobile market and the financial strains of the recession proved to be the final straw. The governments intervention resulted in only the inevitable bankruptcy and cost the taxpayers billions of dollars. It also gave government a monetary interest in private business.
The government's involvement in their bankruptcy gives cause for concern with regards to the future of private business. Businesses have risen and fallen in a natural cycle since the inception of our country. This is often a painful process. But it is also a continuing process. Old businesses that can no longer compete are replaced by newer and more innovative ones. This helps to propel the market forward and helps create a dynamic and growing market. The introduction of the federal government in the form of stockholder in private business has the potential to create an biased market. The government, through its regulatory and legislative powers and its purchasing power, has the ability to greatly influence winners and losers in the market. No longer will a business be simply marketing against its competitor, but it will also now be competing against the government. If that is not a skewed playing field, I don't know what is.
I want government oversight in the market, but I want that oversight invisible. I do not want government dictating the terms of the market, nor do I want them micro-managing the market.
The Chrysler and GM dealers who have now lost their franchise relationships with these former great companies will suffer the real world consequences of this intervention. Unfortunately, they will not be the only ones.
Comments
Michael,
Another outstanding column. I heartily concur with your feelings about governmental interference and influence in the private business sector. In general, I don't believe any business is "too big to fail." If it is, i.e. AIG, a lack of oversight is to blame...a place where government does serve a purpose.
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