As of this morning:
- Circuit City has declared bankruptcy,
- DHL is abandoning its shipping and ground services in the United States and , hence 9500 jobs,
- and General Motors has been significantly downgraded as analysts predict GM will not have the minimum required cash flows of $11 billion in the first quarter 2009.
Talks are spreading about a potential bailout for the major automakers, as Ford's position is deteriorating as well. This would not be the first time for these automakers to call on the government, nor will it be the last with current business strategies and projected financial performance. So what do we do? Do we bail them out and if so, for how how long?
I hope that no one disagrees that these three companies qualify as big business. In the same manner, I don't think anyone would descibe the automakers' struggle as news. Would you give an inefficient business a handout? Remember, there are many jobs at stake which turns heads in Washington.
A viable solution could be a tax cut across the board. In effect, this would free up cash for many firms, large and small. Perhaps some big business will use this cash effectively and remain in business. Others will fail. This option puts responsibility on the business to be productive as to the taxpayer-funded counterproductive behavior.