GM Bailout Summary

1231 Words3 Pages
bulb-icon

Recommended: Arguments for and against ethics in business

In the early 2000s, the United States government was faced with a dilemma, should General Motors (GM), the second largest, US based, global-automotive company, that employed millions, be bailed out? The dismantling of the organization would have a great impact on the economy. Some of the events that led to this bail out were the results of ethical egoism from the corporation. The Democratic Congress - GM Bailout, was an act of utilitarianism—a lot was at stake and could have had a negative long-term impact on the economy. The bailout package presented by the government would allow the corporation to restructure and save face with the public while reestablishing themselves in the industry. This paper will also, apply the ABCDs of ethical-decision …show more content…

Considering the Utilitarianism theory, the government is right to use the government, i.e., taxpayers’ money to receive money as a private corporation. Under Former President Barack Obama, the Democratic Congress, acted for the greatest good. The government has a responsibility to the people and should be held liable for the decline of the economy. If the company had filed for Chapter 11, it would have been a national catastrophe. The bailout resulted in stabilizing the automobile industry and saved jobs. The GM employees who were not union members would have lost their jobs (Maynard, 2009). The employees that remained would have immediate pay cuts, jobs would have been cut, and offices closed (Maynard, 2009). Because of this decision none of this occurred and the pensions and retiree health care benefits were protected (Maynard, 2009). This decision benefited all the stakeholders. Yes, the Michigan tax payers, were affect greatly by this occurrence, but if it had not taken place, the nation would have …show more content…

(2012, April 25). The Facts And The Figures Of The GM Bailout: Part 1. [Web]. Retrieved January 6, 2018 from http://gmauthority.com/blog/2012/04/gm-bailout-numbers/
Maynard, Micheline, Lieber, Ron, and Siegel Bernard, Tara. (2009, June 1). A Primer on the G.M. Bankruptcy. [Web]. Retrieved January 6, 2018 from http://www.nytimes.com/2009/06/02/business/02primer.html
Silke Carty, Sharon. (n.d.). 7 reasons GM is headed to bankruptcy. [Web]. Retrieved January 6, 2018 from http://abcnews.go.com/Business/story?id=7721675&page=1
Welch, D. (2009). GM Files for Bankruptcy. Businessweek Online, 13.
Welch, Suzy. (2008, November 18). GM: The Case Against a Bailout. [Web]. Retrieved January 6, 2018 from https://www.bloomberg.com/news/articles/2008-11-17/gm-the-case-against-a-bailout
Hollander, C., & Tankersley, J. (2012). Lessons From the Auto Bailout. National Journal, Rauch J. Rescue GM? It depends on which one. National Journal [serial online]. 2008:13. Available from: Opposing Viewpoints in Context, Ipswich, MA. Accessed January 6, 2018.
Zeigarnik, D. (2008, September). To Bailout of Not to Bailout?: THAT IS THE QUESTION. New Presence: The Prague Journal of Central European Affairs. p.

Show More
Related

  • Failed Company Paper: Champion Enterprise

    1682 Words  | 4 Pages

    Duggan, Daniel. “Champion Enterprises Inc. files Chapter 11 bankruptcy.” Crain’s Detroit Business, November 16, 2009.

    Read More

  • The Economy’s Auto Bailout

    1087 Words  | 3 Pages

    Roth, Carol. "US Auto Bailouts Weren't a Success." CNBC 10 Dec. 2013: n. pag. Print.

    Read More

  • The Financial Evolution of Dollar General Corporation

    929 Words  | 2 Pages

    On April 4, 2008 Goldman, Sachs & Co. submitted a prepared prospectus for Dollar General Corporation. According to the prospectus, Dollar General is the largest discount retailer in the United States by number of stores. They serve a broad customer base and majority of products are priced at $10 or less and approximately 30% of products are price at $1 or less. They believe that their combination of value and convenience is what has kept them ahead of their competitors since opening in 1955. Dollar General has had substantial growth in recent years, growing their number of stores from 5,540 as of February 1, 2002 to 8,229 as of February 2, 2007. This growth encouraged Richard Dreiling,

    Read More

  • Truman Capote's In Cold Blood

    1584 Words  | 4 Pages

    What is the difference between a.. Detroit: Gale, 2001. http://www.gale.com/gale/. Literature Resources from Gale, Inc. Web. The Web. The Web.

    Read More

  • Analysis Of Jpmorgan Chase, Bailouts, And Ethics

    601 Words  | 2 Pages

    Jake Clawson Ethical Communication Assignment 2/13/2014. JPMorgan Chase, Bailouts, and Ethics “Too big to fail” is a theory that suggests some financial institutions are so large and so powerful that their failure would be disastrous to the local and global economy, and therefore must be assisted by the government when struggles arise. Supporters of this idea argue that there are some institutions that are so important that they should be the recipients of beneficial financial and economic policies from government. On the other hand, opponents express that one of the main problems that may arise is moral hazard, where a firm that receives gains from these advantageous policies will seek to profit by it, purposely taking positions that are high-risk, high-return, because they are able to leverage these risks based on their given policy. Critics see the theory as counter-productive, and that banks and financial institutions should be left to fail if their risk management is not effective.

    Read More

  • MCI Case Analysis

    1816 Words  | 4 Pages

    What is the difference between a.. What should MCI do now? BIBLIOGRAPHY Author not named (2002), Assessing a Firm's Future Financial Health, Harvard Business School Publishing. Stein, J. (1992)

    Read More

  • The Devil and Tom Walker by William Irving

    1631 Words  | 4 Pages

    Detroit: Gale, 1997. http://www.gale.com/gale/. Literature Resource Center -. Web. The Web. The Web. 23 Apr. 2014.

    Read More

  • Great Depression vs. The Great Recession

    1439 Words  | 3 Pages

    Mulligan, Casey B. "Who Lost Work During the Great Recession?" Economix Who Lost Work During the Great Recession Comments. New York Times, 07 Sept. 2011. Web. 11 Mar. 2014.

    Read More

  • Analysis Of The NASW Code Of Ethics

    700 Words  | 2 Pages

    Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the

    Read More

  • Native American Culture Essay

    743 Words  | 2 Pages

    p.

    Read More

  • Stress in College: What Causes it and How to Combat it

    2522 Words  | 6 Pages

    New York Times, p. 1. http://www.nytimes.com/2009/09/09/business/economy/09leonhardt.html?_r=1 Lipman, Marc. A. A. Personal Interview. March 21, 2010. Marano, Hara E. (2004).

    Read More

  • Four Major Market Structures

    1239 Words  | 3 Pages

    Schaefer, S. (2013). Detroit files biggest municipal bankruptcy on record. Forbes Magazine, Retrieved from http://eds.b.ebscohost.com.proxy-library.ashford.edu/eds/detail? vid=2&sid=b6189574-03df-4c57-b7ad-a175dc56aebf@sessionmgr113&hid=102 &bdata=JnNpdGU9ZWRzLWxpdmU=

    Read More

  • The Characteristics Of Moral And Ethical Reasoning In Business Ethics

    1085 Words  | 3 Pages

    In the business world there are many fundamental aspects and situations that can lead to several issues. In order to find an optimal and professional solution, business decision makers need to apply moral and ethical standards. And it is at that moment in which business ethics perform its role. Business ethics, which is in charge of examine how companies and individuals should act in business situations, is very essential in order to reach a common agreement and to work within the laws of business and solve an arisen dilemma. Working of the hand of ethical business companies, employees, investors, directors, and even individual officers can be beneficiated and obtain most favorable outcomes.

    Read More

  • Analysis of the Movie, The Insider

    1442 Words  | 3 Pages

    It seems obvious that large corporations have a tendency to ignore the negative effects of their actions in favor of profit. This example, although sensationalized, still says to me that with power comes responsibility. It affirmed my belief that a corporation’s goal cannot be just to provide profit to shareholders, but there must also be an element of social responsibility.

    Read More

  • Views on Corporate Social Responsibility

    1003 Words  | 3 Pages

    When the problem became serious two main views formed: the “narrow” view and the “broader” view, based on different ideas. The “narrow” view is based on the proposition that corporations have no social responsibility and they have only one main purpose, to make a profit (Friedman, 1970). So corporations should remain socially independent and all conflicts must be solved through the individual responsibility concept. On the contrary the “broader” view states that corporations have social obligations as all existing participants of market, persons and entities are tied together and are mutually dependent. So corporations cannot ignore some serious events or problems, which take place, and must help society, as profit is not their single purpose.

    Read More

More about GM Bailout Summary

Open Document