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US government shows the way with GM bailout

The US government, together with its Canadian counterpart, are putting up $30 billion to save the stricken car manufacturer General Motors. When you compare this to the UK government and its unwillingness to invest significant funding into the UK industry they could not be further apart. Quite why the UK government has taken such a negative stance when compared to the US authorities is unclear but the UK car manufacturing industry is again under pressure and significant job losses are expected.

While the General Motors deal has taken some time to negotiate and will ultimately see many shareholders lose their whole investment, it does appear to be the only way to guarantee the future of the business. We are talking about a company which is central to the US economy and one which has been around for over 100 years. Quite how the government and the unions will work together for the good of the company, and what investment criteria and route they will take remains to be seen. On the plus side, the operation will be on a sounder financial footing when it is released from bankruptcy protection.

Whether the UK government follow suit in due course remains to be seen.

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