Automotive Bailout:
The three major firms in the United States automotive industry asked the government for a bailout worth $34 billion in December 2008 in order to avoid bankruptcy. These companies asked for the bailout from government because their demise could result in approximately 3 million layoffs within a year, a measure that could plunge the American economy further into economic recession. These three major firms in the American automotive industry are General Motors, Ford, and Chrysler. The bailout of General Motors and Chrysler was to provide operating cash for both companies and to avail auto loans for car buyers. However, many people in the United States opposed the automotive bailout arguing that these American automakers brought the near-bankruptcy on themselves. They argued that these automakers inflicted the bankruptcy on themselves through failure to retool an energy-efficient era, which resulted in lessening their competitiveness in the global market.
Specifics about Automotive Bailout:
In addition to the bailout of Ford Motor Company, the bailout of General Motors and Chrysler totaled approximately $34 billion in government loans. These companies promised to accelerate development of energy-efficient car and consolidate operations. As part of the agreements, General Motors promised to streamline the number of brands they manufacture. These firms also won agreements from the UAW union to help them delay contributions to a health trust fund for retirees and lessen the payments made to laid-off workers (Amadeo, par, 5).
In the bailout, General Motors obtained $6 billion through GMAC that became a bank holding firm. The company requested for $18 billion in loans with which $4 billion was required to avoid bankruptcy before the end of that year. As part of this agreement, General Motors promised to provide the government with warrants for common stock, preferred stock, and to repay the governmental loan in 2012, when it expects to break even again. Furthermore, the company agreed the union health-care benefits would be...
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When such biases enter into the decision-making process, they eliminate some potential courses of action. Related to bias is the illusion of validity. The biased parties envision an outcome that they would like to see and work backwards to justify their chosen course of action. That course of action may not lead to the outcome at all, but biases leave to the view that it does. Therefore, bias guides us
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Political leaders in charge of this decision will not take into consideration only the effects that a possible bailout might have on the automakers. They will take into consideration the macroeconomic effects and challenges that are expected to emerge in case the bailout is approved. The symbolic frame probably has the least importance regarding this subject. In case the bailout will not be approved, the cultural or symbolic aspects related
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