Posted on 04/25/2009 11:40:53 PM PDT by bruinbirdman
Bankrupt or not, the automaker will keep running, but as a shrunken, depressed company. Don't wonder about General Motors; its future is set. With or without a bankruptcy proceeding, the company will struggle on. But there will be no quick return to greatness or even a return to mediocrity.
The government will continue to support GM for the next three years and eight months. The decisions will be made in the White House and will be political. Five midwestern states will be decisive in the next presidential election, and they might be hard to carry if the party in power doesn't save some Rust Belt jobs. But after the next election GM will be largely on its own.
GM's vehicles are improving, but that really doesn't make much difference. The product improvement is too little and too late. GM's market share is dropping every month with the bankruptcy talk: It went from 19% in January to 18.4% in February and 18.1% in March. My guess is 13% by December. GM may be outsold by Toyota ( TM) and even Ford before the year is over.
The problems are just too great for this management--and, to be fair, maybe any management--to overcome. There are many: buyers' fears about the company's future; the lack of dealer credit; the weakness of finance arm GMAC, which was severely damaged by subprime mortgages; the bondholder debt; the rush of new vehicles by richer foreign companies from Japan, Germany and Korea; and the collapse of the overseas empire in Europe. Management stumbles from crisis to crisis, bowing to whatever thought comes from Washington, whether sensible or foolish.
Some of Washington's thoughts are downright silly. No such bankruptcy will ever be "surgical," as reports have suggested. Delphi ( DPHI.PK) GM's parts supplier
(Excerpt) Read more at forbes.com ...
Jerry Flint and Forbes are really starting to suck. It must be because Forbes has one of Obama closest backers in John Rogers writing a column in Forbes. Rogers mutual funds lost 50% last year thanks to his pal and zero public aka Business confidence in his pal.
This article by Flint sucks because he never mentions the UAW. The UAW is what killed GM.
Its all about the UAW... why don't these writers start putting some truth into their articles.
By the way, if you FReepers want to be a 'reporter' you can try joining your local examiner.com
Here’s a real boot on the ground point.
GM. Government Motors? What Constitutional power is the government using to invest the taxpayer in GM, its unions, and its pension funds?
The original tea parties weren’t about the Tea TAX. They were about the Tea ACT. Which was basically a government bailout effort for the East India Tea Company.
For a modern parallel, it probably wouldn’t work to throw a bunch of Chevies off the levy (sorry, Don — I couldn’t resist). But a little directed public outrage and consumer action in the form of boycott (yes, totally end business with the failed automaker) might help push it into the bankruptcy that the government would allow, if it followed the Constitution, and didn’t worry about union campaign contributions.
Chicken/Egg. The UAW sucked blood because management left the vein open. Why? Because it served their purpose at the time. Management could have/should have fought the union harder over the years. But they didn't. Why? Well that brings us to the unsung villain you really never hear about; the U.S. Government. And I'm not talking about the bailouts. I mean the decades and decades of endless Byzantine legislation, regulation, corruption and collusion. Collusion with whom? Why labor of course. Those three had a seamless and seemingly endless three way scam going on. It was the perfect crime. Well, almost perfect. The money, as it was bound to do, finally ran out. But not all parasites are created equal. White collar management is being fired in droves. Factories are being shuttered and line workers will be tossed out on their asses. And government? They'll wipe the blood from their mouth and stagger way from the corpse. Still plenty of fresh meat out there.
“. As for the uaw contact: No matter what you hear about sacrifices, the union won’t give back anything real. Democratic Administrations just don’t pick the pockets of their union supporters.”
If you’re interested in what killed the U.S. auto industry I suggest reading the book, The Reckoning by David Halberstam.
Although somewwhat dated now, I think the insights are quite helpful.
I agree with the previous comments. The UAW is what killed GM. Even with the company going under, the union refused to budge, and with good reason. Liberal politicians are very, very big union supporters. I’m sure the UAW knew that the Democrats would (and will continue to) take money from every other working citizen in the country to pay for the bloated salaries, wages and benefits of GM employees. The only way to salvage a company that has a terrible business model like GM is to let them swim or drown. The void will be picked up by other auto manufacturers that are more responsible and don’t let the union destroy the company in a self indulgent manner. Unions can be good if kept small and under control, but the UAW is way out of control and demands more and more no matter how much it damages the company.
GM failed because it is a group with historical poor communication. Poor amongst the Union, management, engineers, dealers and customers. Toyota has one labor classification, worker. It has five management layers. It is internally quality driven regardless of the competition. And, it listens very very carefully.
GM, and others have been primarily profit extracting organizations first and foremost. Cars are way down the list.
Not GM is a tax extracting organization. Just as Democrats have used personal welfare to buy citizens, it now buys corporations.
Republicans, like Mitt Romney, McCain, both Bush’s should be up in arms about GM selling, being forced to sell, the government buying and the whole corporate/government political fascism. Not a peep. The GOP loves big government. LOVE IT.
You, me, the rest of us can just STFU and pay up. Hows being a modern day serf feel?
What killed GM is that over the years it had become a three-headed behemoth (labor, management and government) that effectively functioned like a public utility. Its labor got great compensation and working conditions, its management got a lot of "free" business from government in the form of government contracts, and government got the political support it needed from unions. A business could run like this in perpetuity, but not when it has to deal with competitors.
Mr. Flint is spot on about holding MI in the Dem Camp, IMHO it is ripe for the taking in 2012, look at the money the Bamster has funneled via Porkulus to MI, to to keep us from becoming Cuba. While 2 penny Jenny, is trying to bring film crews here and windmills or any other drivel that is boob-bait-for-bubbas. One of my gnomes and I have been saying for a while Mulally (Ford's CEO, and I hear water cooler talk, he is starting to get noticed) on the GOP Ticket might carry MI. After seeing Thaddeus McCotter recently @ a tea party speech, Palin/McCotter would take MI now that McCain isn't their to sabotage her MI efforts.
No matter how much money is funnelled in, they still have to move cars off the lot to consumers, and that just ain’t gonna happen. I think GM is into a final death spiral, Obama notwithstanding.
They better not mess with the Corvette.
They better not mess with the Corvette.
Or the Z-71’s
Roger that. We are going to have a Photo shoot at the Indy track on Tuesday for the Classic-American Magazine published in the UK. The Deputy Editor in flying in on Monday and GM is letting him drive down to Indy from Detroit with a new ZR1 for the shoot. Our Club will funish all the Vettes from C1 though C6, I had to brag some sorry
The collusion between the libs and the UAW is so great that the unions won’t back down and the libs won’t let the unions die because the company dies. Their solution, make everyone else pay for the excesses of the union workers and keep the company alive. The libs are beholden to the unions that donate massive amounts of money to the DNC. In effect, the libs are forcing all citizens to support their party by using tax dollars to keep a company alive that is strangled by the union that feeds the Democrat party. Let the company die, let the UAW die, and let the libs find a legitimate source of revenue.
The same thing is happening with ACORN and the libs. An obvious fraudulant Democrat organization that is supported by everyone’s tax dollars. The libs have pushed billions of dollars toward this criminal group that benefits Democrats only. The Democrat party have become experts on how to force the public to pay for their political contributions....via unions, ACORN, etc.
I loved your response. It’s a threesome that needs to disband in my opinion. Even though the company gets perks out of it, too, it obviously still winds up collapsing in the end. The rest of society should not have to pay for the gains of union employees, the Democrats, and a business that can’t make responsible executive decisions. Of course we should pay for it if we want to buy their cars, but with a model like that the price is too high and they can’t compete. They deserve to fail and let the void be filled by more responsible players that aren’t polluted by political involvement...or greedy unions.
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