Effectiveness of the Government Bailout Loan for General Motors Corporation

American car companies were having a hard time staying afloat during the recession and needed to regroup in order to stay afloat. If something didn't change, all three car companies could well be in danger of closing their doors forever. There are three major car companies in the United States. General Motors (GM), Chrysler (Dodge, Chrysler, Plymouth, Jeep) and Ford Motor Company. Ford was the only company that didn't ask for a government bailout loan. Chrysler and General Motors did take a bailout loan to help get their companies back on their feet. A lot of changes had to be made to the companies though if they were to ever see a turn around.

The biggest question remains is whether or not the bailout loans were effective or not. It remains to be seen. What we do know is that Chrysler and General Motors both had to close some of their plants leaving hundreds of people without jobs. That, in turn had a trickle down affect on the surrounding businesses who relied on the plant workers for a huge portion of their business. For instance, restaurants were no longer getting the lunch crowd from the automobile plants, which had locked their doors forever. The impact was large scale and the economy took a turn for the worse unlike most Americans have seen in their lifetimes. What was once a booming economy turned into a horrible mess.

GM (General Motors Corporation) has recently announced that they have paid off their loan five years early. That is the bailout loan. They also created a commercial stating that everyone falls down. It then thanks the American people for helping them back up. It is very admirable to make a commercial for the entire world to see. In fact, it even gives us a little hope that things are beginning to look up in the car industry for the United States carmaker. Many Americans are gun shy when it comes to the economy though. Will the enthusiasm of General Motors Corporation be enough to help boost the economy? General Motors has even been offering a return policy on its cars. That is a first the American history for car makers. It has always been the norm that once you purchase the car, it is yours, no returns. It is difficult to determine where the minds of many Americans are. There are still a lot of people losing their homes in the aftermath of the destroyed economy. Homes remain difficult to sell, even when the asking price is often below the actual market value. Jobs are starting to get a little easier to find, but we are still having a difficult time with healthcare costs.

The only problem with the loan payback is that it isn't really paid back according to several reports. It took money from one part of the loan and paid back another part of the loan. It can be a bit confusing if you only listen to one side of the story. Is that bad news? Not necessarily. General Motors may be going about it the wrong way. They are misleading us a bit with their commercials, but technically, the loan is paid off. The idea that the loans are paid off may help boost American economy though. It gives hope to those who don't bother to check out how GM paid off the loan from the government. GM is still struggling to get business. It would pay the American consumer to try the products and help get the company back on its feet. General Motors, along with the other American car companies have been forced to take a good hard look at their business practices and the types of cars that they assemble. Everyone deserves a second chance and it can boost the job market as well as the economy.

If the United States car makers can get back on their feet with a new plan that will bring more efficient cars along with a strong product, the economy will begin to gain a great deal of ground. It will take a lot of work to get there, but it can be done. With a positive outlook, Americans may just see the light of day where finances are concerned and we can move forward to a booming economy again. It is wise to consider what has happened to us in the past so that we remember what got us in the situation that we were in when the recession brought us to our knees. Caution should always be used where our finances are concerned. Remembering the past can help us make wiser decisions in the future. As we move forward and see some good news begin to surface about the economy, enjoy the turn around and spend. Spend cautiously though. It didn't pay off when we decided to go hog wild with our spending.