Monday, June 08, 2009

Amtrak and GM

Many proponents of the creation of Amtrak in 1971 insisted that Amtrak would be self sustaining in a few years and that government involvement in the enterprise would be temporary. Critics thought that public interest in rail transportation would dwindle to the point that Amtrak would be dismantled. Neither scenario came true. Instead, public support and use of passenger rail was significant but not great enough to sustain the enterprise without government funding.

What has this got to do with GM? Simply that if GM doesn't pick up and become very competitive right off the bat and free itself of government ownership it's likely to befall Amtrak's fate as one of the living dead corporations. As it stands its more like a government institution than a car company. It has 90,000 employees and pays a million people various benefits. The manufactoring is a tiny commerical branch of a giant welfare institution. It's no wonder the government took it under its wing.