• Jun 8th 2009 at 10:29AM
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The far right wing of the American political spectrum has begun channeling its displeasure over the federal government's involvement in the restructuring of General Motors into calls for a boycott of the company's products. Reportedly spearheaded by right wing pundits and radio show hosts, the boycott would be a response to the U.S. government taking a 60% stake in GM in exchange for forgiving most of the tens of billions of dollars loaned to the company over the last six months.
The original premise of loaning money to GM (and Chrysler) was certainly open to plenty of healthy debate. But the money was given and now the task has turned to how to best proceed in order for the automaker to recover and the U.S. Treasury to get the best return on its investment. In order for that treasury-held stock to ever regain its value, GM needs to sell vehicles and lots of them.

Therefore, a successful boycott of GM products could have the adverse effect of driving the company into liquidation. This would eliminate any hope of getting reimbursed for the tens of billions in loans that the government has given GM. All that taxpayer money may never be recovered anyway, but it makes sense to at least walk the path that has a chance of success. Fortunately for GM, such boycotts are rarely successful, as Ford learned when it easily weathered a boycott by the American Family Association over its marketing in gay-centric media outlets.

[Source: The Detroit Bureau]

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