Finally the other shoe dropped today and GM filed for bankruptcy. The question as this whole process has gone on is why our elected officials have even bothered rescue these obviously poorly managed auto manufacturers from a mess of their own making. It’s not like nobody saw this coming. This has been 10 plus years of repeated failures that has led to this point.

The “Big 3″ North American automakers failed to adapt to the changing consumer landscape and are now paying the price. For years they rested on their laurels, not heeding the calls for economical, fuel efficient cars. Instead every year we’d see new, bigger SUVs, retro muscle cars and an endless parade of trucks rolling off the lines in Detroit. The biggest issue GM, Chrysler and Ford ran into was they nearly exclusively targeted baby boomers who grew up in an era where there wasn’t a large amount of foreign competition. Myself I’ve grown up in an era where many of the foreign automakers came into their own as viable options to the North American car buyer. Japanese and Korean cars are no longer punchlines. As GM, Chrysler and Ford continued to court the brand loyalty of our parents, Toyota, Honda, Hyundai and Volkswagen built their bonds with Generation X and Y.

Now the question I pose is, why are we propping up companies like GM and Chrysler who clearly have flawed business plans and failed as companies? Now, you, the North American taxpayer are made to pay for their sins. To me this just goes contrary to everything capitalism and the free market stand for. The North American economy has been built on the fact consumers vote with their wallets. It’s economic Darwinism, survival of the fittest. Clearly the public has spoken in the last few years, as Toyota took over the mantle of biggest selling automaker and brands like Honda, Hyundai and Kia keep making gains on the “Big 3″.

While I understand that letting a company like GM go belly up would be massively bad for the economy, luckily the free market is self correcting. It creates new opportunities for other companies to fill in the gaps. To us Canadians would it matter if GM left and Hyundai, VW or Subaru setup shop in their place? Every automaker in Canada is “foreign” to us, what do we care if they’re based out of Detroit or Germany? Wouldn’t $50 billion be better spent providing stimulus to companies positioned to move green technologies forward instead of paying to keep corporate dinosaurs in business? I was once part of a large company purge, though obviously on a much smaller scale. Half of the workforce at my company was axed, yet in the wake of it all numerous new companies sprung up and have begun to thrive. Sometimes companies just get too big and bloated for their own good. GM and Chrysler have way too many legacy costs to be viable anymore. Let them die and let the free market correct itself instead of flushing more taxpayer money down the toilet.