Increasingly, I am hearing industry groups and provincial politicians call for additional federal assistance for firms to get through the pandemic + oil price war. They often cite the precedent of the bailouts of GM & Chrysler in 2008/09. 1/n

Listening to them makes me think that they don’t remember what we actually did back then. Here is a quick reminder: 2/n

First we provided GM & Chrysler with interim loans to save them from default while we looked at their restructuring plans. Their plans were rejected a couple of times before they were approved - each time we told them we were looking for bigger cuts and more cost savings. 3/n

Then we put them through an accelerated bankruptcy. Shareholders were completely wiped out. Bond holders got pennies on the dollar. We provided more loans, putting taxpayers ahead of all other creditors. We also took a small amount of equity. 4/n

Next we replaced the senior management of both companies and put our own reps on their boards. Both firms were under strict government supervision that severely limited management pay and other perks and required them get our approval for all major decisions. 5/n

The companies hated it and worked as hard as they could over the next 5 years to pay us back and get us out of their business. That is exactly what we hoped for. Federal gov’t assistance should be a last resort - to be used only when all other options have been exhausted. 6/n

Provincial politicians and CEOs should think long and hard before they turn over control of their companies to Ottawa - and to protect taxpayers, that change of control is what must happen. 7/n

Federal governments have quite different objectives than private companies or provinces. Your firms may survive the experience of federal assistance and they may not. But for sure, they will never be the same. N/n