The US government is on the verge of taking a controlling interest in one of the world's biggest carmakers. General Motors' filing for bankruptcy protection begins a legal process at the end of which, if all goes to plan, Americans will own 60 per cent of the iconic firm. For a country that has long taken pride in being the bastion of capitalism and creative destruction, whereby failing companies are allowed to fail instead of being rescued, the effective nationalisation of the car giant underlines the dire state of the world's largest economy. The Obama administration has been pouring tens of billions of dollars into bailing out failed financial institutions, but this has been generally expedient for the sake of global economic health. The government's taking of stakes in GM and Chrysler is less a matter of necessity than politicking. US President Barack Obama has pledged to do his utmost to save jobs threatened by the global economic crisis. GM is one of the biggest employers in the US and its collapse would significantly add to the bulging jobless rate. GM's standing in the American psyche is immeasurable. Founded 101 years ago, it ruled the roost in the vehicle industry for half a century with brands like Cadillac, Chevrolet and Pontiac. Its lived-up-to promise of making 'a car for every purse and purpose' meant it had 54 per cent of market share during its peak in the 1950s. The quote, 'What's good for General Motors is good for the country', tells all about the influence of its managers; that it at one time employed more than half a million workers in the US alone explains why it was such a powerful lobbying force in Washington. Those days are long gone. GM's market share in the US is now just 19 per cent and it is years since it has turned a profit. Its decline is an indictment of both corporate America and the country's political system. Americans have since the 1980s been increasingly buying fuel-efficient Japanese cars. But GM and other US carmakers failed to face up to the challenge of foreign competition. Demands forced on GM by unions have lumbered it with what is, in effect, care for 500,000 pensioners and manufacturing plants that churn out vehicles no-one wants. Medical bills for its workers are crushing, thanks in part to the US government's refusal to put in place a properly working health care system. Never before has the US government had a stake in the industrial sector. The US$50 billion it will put into the firm will be used for a reorganisation that will cut debt by half and slash labour costs. At least 21,000 jobs will be lost. The objective is to return GM to profitability as quickly as possible. Whether such an aim is possible is quite another matter. The global car industry has been hard hit by the financial downturn; Japanese firms have been posting losses for the first time in decades. Legislation that will give tax breaks of US$7,500 to consumers who buy GM's new electric car, the Chevy Volt, will not guarantee a superior vehicle to those of mostly Japanese rivals. Free market thinking that has served the world so well for so long has been carelessly trampled on. The Obama administration has pledged that professionals will run GM. At no time can government officials be allowed to micro-manage the firm. Nor should GM have advantages over other carmakers. It is regrettable that such a situation has arisen; it is important that politicians keep their hands off the steering wheel. For his sake and that of taxpayers, Mr Obama should divest the government's stake in the company as soon as it is again sound.