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Local Car Dealerships More Important Than GM Corporation  

General Motors will receive government financing, a bridge loan, from taxpayer’s monies. Amazingly enough their market cap right now is only 3-billion dollars and yet they need about 75 billion to survive, but if you were in a small business with a $30,000 total net worth do you really think you could get the SBA or any bank on this planet to loan your company $1.5 million dollars? No, but it’s the same ratio, see the problem.

Worse, even with this first installment of some 13-17 billion, the company will not be able to stay in business, they still need much more. They owe their vendors billions of dollars, now they owe the US Taxpayer and the US government, oh and the unions all that and more.

Further, I am not sure how much you are into local economies, sales tax revenues, city services and budget shortfalls, but for an FYI and this is important to Projects in your community too. When care dealerships go out of business that hurts local tax revenues something terrible. And those dealerships are much more viable businesses than GM itself, they can always switch brands.

Every time a Car Dealership sells a car about $300 to $600 goes to the city as part of the city’s share of the sales tax revenues. The rest goes to the state. If a car dealership in a community goes out of business it’s a triple whammy.

 

First, loss of jobs, usually well over 100.

Second, Car Dealerships support the community, you know like little league advertising on the ball fields, donations to non-profits and such

Third, the sales tax hit to the city for lost revenues that could have gone to city services, like police DARE Programs, soccer fields, arts, literacy programs, funding of nonprofits, parks, graffiti removal, etc.

 

It is very hard to replace that level of tax revenue and pick up all those jobs. Worse, small non-profits are hurt too and it’s a double whammy at the bottom of the business cycle. Volunteers can make it happen using “people power” as people can volunteer to be a coach, help someone learn to read, volunteer to help kids as mentors, work as neighborhood watch, trash control at parks, or a number of things.

So, when it comes right down to it, we do not need corporate welfare for a huge Corporation that is so inefficient and unresponsive to consumer demand, we’d be much better off to focus our efforts more locally in the communities than to bail-out GM. Let them go under, the free-market will respond with strength as excess capacity leaves the industry. Think on this, say no to unions.

 

 

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