GM Bailout Ethics: Kidder's Decision-Making Framework
This paper applies Kidder's ethical checkpoints to analyze the U.S. government's decision to bail out General Motors using public funds, resulting in an $11.2 billion loss. Working through the identification of relevant facts, moral issues, potential for harm, moral agents, trilemma options, and right-versus-wrong tests, the paper examines whether the use of taxpayer money to rescue a private company was ethically defensible. Resolution principles drawn from Kant's Categorical Imperative and Mill's Principle of Utility are applied, ultimately concluding that, despite surface appearances of impropriety, the government's decision was ethically justified given its intent and the aggregate happiness it promoted.
- Identification of the Relevant Facts: GM bailout facts and $11.2B government loss
- Identification of the Moral Issue and Potential for Harm: Taxpayer money used without public benefit
- Determination of Moral Agents and Trilemma Options: Government agents and alternative bailout approaches
- Test for Right-versus-Wrong Issues: Legal, intuition, publicity, and moral exemplar tests
- Application of Resolution Principles: Kantian and Utilitarian justifications for the bailout
- The Decision and Reflection: Ethical conclusion and reflective summary
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What makes this paper effective
- The paper systematically works through each of Kidder's ethical checkpoints in order, giving the analysis a clear, scaffolded structure that is easy to follow and evaluate.
- It applies two contrasting ethical theories — Kant's Categorical Imperative and Mill's Utilitarianism — to reach a convergent conclusion, demonstrating that the ethical judgment holds across multiple frameworks.
- The right-versus-right dilemma section is especially strong, presenting four distinct paradigm pairings (Truth vs. Loyalty, Individual vs. Community, Short-term vs. Long-term, Justice vs. Mercy) that show nuanced moral reasoning rather than a simple binary judgment.
Key academic technique demonstrated
The paper demonstrates multi-framework ethical reasoning: rather than committing to a single moral theory, it tests a real-world business decision against both deontological (Kantian) and consequentialist (Utilitarian) standards. This technique is standard in applied business ethics courses and shows that a conclusion gains credibility when it survives scrutiny from philosophically distinct perspectives.
Structure breakdown
The paper follows Kidder's nine-step ethical decision-making model as its organizing spine. Each step is treated as a labeled section, moving from fact-gathering through harm analysis, agent identification, option generation, right-versus-wrong testing, and finally application of philosophical resolution principles before stating and reflecting on the decision. This format is well suited to case-study assignments in business ethics courses at the undergraduate level.
Identification of the Relevant Facts
This case examination considers the bailout of General Motors by the U.S. government in 2014. It is based on a report published by Reuters on April 30, 2014, titled "U.S. Government Says It Lost $11.2 Billion on GM Bailout." The report reveals that the U.S. government lost $11.2 billion when it bailed out General Motors Co. — a loss realized when the government sold its shares in GM in December of the prior year. More than $50 billion in public money was used to rescue GM from the brink of bankruptcy in 2009 ("U.S. government says it lost $11.2 billion on GM bailout," 2016). The central issue is that the government used public money to bail out a private company.
Identification of the Moral Issue and Potential for Harm
The moral issue in this case is that the U.S. government not only lost money, but the money it lost belonged to the taxpayers of the country. The government collected those funds with an implicit promise to spend them in ways that benefit the people from whom they were collected. Instead, the government used the money to provide relief to a private company. It can therefore be concluded that this spending of public money did not serve any greater good for the people who contributed it.
This situation represents an unfair use of public money and inequitable treatment of the general population. It is also a case of inappropriate resource allocation, in which funds intended for public development were directed toward the benefit of a private entity. The government's decision in this instance reflects a clear lack of concern for its social responsibility and the common good.
Determination of Moral Agents and Trilemma Options
In this case, the moral agents are clearly the government as a whole and the specific individuals who made the decision to bail out the private company using public money.
There was, however, a third way. Rather than spending public money directly on the bailout, the government could have employed alternative measures — such as tax relief or other indirect forms of assistance — to help the company avoid bankruptcy. The government could also have taken steps to facilitate private investment in GM instead of committing taxpayer funds.
Test for Right-versus-Wrong Issues
The legal test: The government's action was entirely legal. It was within its legal authority to bail out General Motors Co.
The intuition test: This type of action by the government is not unprecedented and has occurred on earlier occasions. Nevertheless, it conflicts with the moral principle that public money should be used solely for public benefit.
The publicity test: As a taxpaying individual, one would likely feel cheated and deceived upon learning of this use of public funds.
The moral exemplar test: Had individuals of higher moral standing been involved in the decision-making process, the government might have chosen a third path — one that did not rely on public money to rescue a private company.
The following right-versus-right dilemma paradigms further illuminate the ethical complexity of this decision:
Truth vs. Loyalty: While the incident is factually transparent, it reveals that the government was not fully loyal to its commitment to serving the people — a commitment every elected government undertakes upon assuming office.
Individual vs. Community: This is a clear case in which an individual entity (General Motors) benefited at the expense of the broader community.
Short-term vs. Long-term: The decision ultimately proved beneficial in the long term for GM and for the thousands of workers who depend on the company for their livelihoods. However, the same funds could have served broader public interests in the short term.
Justice vs. Mercy: The government's action can also be understood as an act of mercy toward the thousands of employees and their families, rather than an act of strict fairness to taxpayers.
References
Liszka, J. (1999). Moral competence. Upper Saddle River, NJ: Prentice Hall.
Shafer-Landau, R. (2007). Ethical theory. Malden, MA: Blackwell.
U.S. government says it lost $11.2 billion on GM bailout. (2016). Reuters. Retrieved May 15, 2016, from http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA3T0MR20140430
West, H. (2006). The Blackwell guide to Mill's Utilitarianism. Malden, MA: Blackwell.
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