Think displacement, folks. If GM fails, it will not be the end of the auto industry. It will not drive our nation into a depression. It will eliminate an over-bloated whale of a company that has made poor, wreckless selfish choices as a leader of an industry in the United States and provide MORE opportunity to the companies who have made the decisions that have lead them to thus far, stay competitive... what will happen as a result? those companies who before had to sell hybrids for 23 and 25 thousand dollars would now be able to offer them at a mere fraction of that price. If congress gives anybody money it should be in the form of tax breaks to companies like Smart, Toyota and Honda for taking the early initiative to provide more aggressively fuel efficient car. no brainer. Even the banks don't trust you, GM. We all know why.
GM - There was a point where you had a choice. You, as the leading auto manufacturer in the US should have recognized the energy crisis and dependency our nation has on foreign oil... then you could have done the right thing and focused on providing consumers with aggressively efficient cars, and investing on marketing for such vehicles, instead of the road you decided to take: Make bigger and bigger trucks that can run over those stupid puny little hybrids. Nobody needs to drive themselves to work in an oversized Sports Utility Vehicle, yet you convinced the majority of this country that they did.
Moreover, the government is not a bank, nor should the manufacturing industry treat it as one. Banks DO exist even POST Sept 2008, and if you can't get money from them, there's a darn good reason why not.
Thursday, November 20, 2008
NO BAIL OUT
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21 comments:
I have a hard time choking down this whole bailout thing, mainly because I can't get over the fact that we've been wholly and thoroughly fucked by a Republican-driven blind faith in free marketplace where all sorts of asshole can come up with new, rule-changing gambles and call them viable investment vehicles. These banks got caught with their pants down and are ducking behind their 5 monitors displaying large downward angled lines.
As much as I want to see Rick Wagoner wallow in his own vomit outside a homeless shelter sucking blistered cock for crack, I fear the repercussions on small towns that have one sole labor source tied to a supplier or factory... But I'm fairly certain that they're as inevitably fucked as the rest of the economy. There's going to be fairly substantial job loss without a bailout, and while Wagoner "suffers substantial losses" sitting on his yacht, families are going to struggle and file unemployment and those small towns will deal with a missing tax base.
I'd be willing to stomach a bailout for them, though, and their pensions that have already suffered from creative accounting. GM can die a long hard death, in which no one gets what they deserve, but in these towns recession is going to become depression no matter who's sitting at the Treasury Department.
You're absolutely right, there is no question that allowing GM to go down the tubes would cause many hard working families to struggle... but look at who they were working for... in 2008... LONG past we knew we were in an energy crisis... check GMC has more hybrid models available than Toyota... problem is.. they're not MAKING them, and where they are is a complete mockery of anything even resembling fuel efficiency in the first place. This is like lucky strike selling smokers a cigar with a filter.
The government can not afford to bail out GM as an entire entity. It's BS. The justification is terribly weak with one exception: the chevy volt.
What if...
Congress requires GM shift resources internally to double or triple the R&D and production team dedicated to the Chevy Volt. Require that the Volt be released by July 2009, or the gov't charges GMC 29.9% APR, on any loan given. All interest goes to former GMC workers let go since Jan 2009. Require that the volt's plug-in technology be fasttracked to EVERY LAST BEAST ON WHEELS GM decides to release as a 2010 model, and then we'll talk bail out. until then, reflect on your mistakes.
speaking of cars if you happen to have a photo of when my first car geo got so neatly tucked under your first car civic by some drunk asshat who hit and ran yet left his steaming giro on the passenger seat, I'd love to have.
Anyway... Going back on topic... honestly I believe I was too forgiving of both Smart, Toyota AND Honda... Why haven't these three progressed their hybrid technology further than they have? Smart is a new player in the American market, and their fuel efficiency in the 40 mpg range is impressive... but where is the hybrid model? with that body and the insight's technology there is no reason car buyers should be kept from being able to buy a car that easily achieves 80 mpg on the freeway. I can hit 60 mpg in the insight even while going well over the speed limit. Has ANYBODY considered capacitors? I'm just a graphics designer... but really.. i did science projects in 6th grade too. I'm still a bit unimpressed with Honda's proposed offerings of the cr-z and new insight models, neither of which will be able to achieve the gas mileage of the original 1999 honda insight.... which I have to say isn't that far off from the earlier civic models besides a smaller aluminum body and a battery for acceleration assistance. Honda: Drop NiMH for Lithium batteries and allow a plug in mail in rebate upgrade offer to all customers at the BARE minimum. and to both Toyota and Honda, please for the love of God, stop marketing hybrids as specialty cars, and start marketing hybrids as today's car.
So to underscore my feelings (yes I could fill an entire blog with them)...It's been obvious to me since I obtained a license to drive 16 years ago that a car be measured by it's efficiency. There is absolutely no reason why any car manufacturer should be rewarded for neglecting to offer consumers with fuel efficient cars when fuel efficient cars are what are in demand.
Anywhoo.. back to workin on music! I'm remaking a few old songs - lost soul, deliverance and a few others... I'm replacing old 8 bit samples with programs from the nord lead 2x, waldorf and orchestral samples on the akai z8 sampler i bought from my bro last xmas.. i've put a lot of work into that thing! I basically built velocity-sensitive programs and multis out of the entire sample library I've created since I started composing in 96! It's been quite a trip going through everything, let me tell you!! :)
"For GM, we're looking at a fairly substantial increase in volume," he said. Within a few years, according to Fedeva, GM should be producing about 300,000 hybrids annually."
300,000 hybrids in annual production in "a few years"??? Seriously. If I were working for this company in April 2008 I'd be either waking Fedeva up to the world myself or writing my resignation letter.
...and about that drunk driver... i guess it was a gyro he left on his passenger seat, not to be confused with a steaming benefits check, or aforementioned "giro"... whoops! :)
isn't it 'gas guzzler'? 8'}
Lordy Lordy Lordy...
Have you even looked at how many families will be effected if they are forced to close their doors? GM employees an excess of 335,000 people. Then there would be the spin off with other companies that rely on GM. Also, what will happen to the people that have retired from GM? What will happen to their pension? So, totalling up the present employees, the spin off companies and the people on pension, we would be looking at a least one million households being effected.
The government needs to show some compassion and assit GM.
"Have you even looked at how many families will be effected if they are forced to close their doors? "
If GM, the country's leading auto manufacturer is forced to close it's doors, it won't be due to a lack of compassion from the government, It would be due to poor bull headed decisions made time and time again by GM's management and it's employees. No company should be REWARDED by the GOVERNMENT for sleeping under a rock of the market they _were_ leading.
This undermines and defeats the fundamental principles of a free market. is supposed to WORK. If you make poor decisions, you fail, and those who made better decisions take your place. The government is not a bank.
Do you realize the precedent a proposed (yet failing) GM bailout would set??? What's next? Bail out McDonalds because people have wised up a bit and don't come in droves to buy their horrible excuse for food any more??
Consumers wised up and stopped buying GM's products for a reason... they didn't SUPPLY what we DEMANDED. I don't envy families who have worked for GM, but you are lying through your teeth if you say you didn't see this coming for GM.. It didn't have to be like this... I mean..
To GM i say the same thing I say to the person asking for change on the street:
"Change comes from within."
Just because GM doesn't produce the type of vehicle that you feel is the best for the planet, does not justify putting millions out of work.
I am not suggesting that GM or any other company deserves a free ride, but something can be worked out.
Try showing some compassion, it is good for the soul
Stat,
Since I know you're better at problem solving than you are debating current events why don't you provide for the world your compassionate yet business-minded solution for GM's issues?
"I say to the person asking for change on the street:
"Change comes from within.""
I can't believe you say that to people asking for help. How mean. Unless, of course, you're handing them your spare change while you say it. Then that would be cool, because you would be Being The Change while preaching it.
People begging on the street are not the same as GM. And everyone at this point should be looking into fuel alternatives for everything that requires power. Not just Gas Guzzler Pushers.
As always in forming an opinion on this sort of thing, I acknowledge my natural reaction (they made poor choices; rewarding them seems idiotic], and then look for a reputable source to tell me more of the story.
From the Economist:
"Bailing out Detroit would be a bad use of public money. It would be bad in principle, because it would be an open invitation to companies everywhere to apply for aid to survive the recession. Banks qualify for help because the entire economy depends upon their services. They are vulnerable to sudden collapses in confidence that can spread to other banks that are perfectly solvent. A good car company does not face the same threat. And although Detroit employs a network of suppliers, which would suffer if production shuts down, nothing would sap a recovery and job-creating enterprise like locking up badly used resources in poorly performing companies.
... [GM is actually doing very well abroad, selling in China, Russia, Brazil, India] ...
But is that justification for a bail-out? Not at all. The United States created Chapter 11 precisely to help companies that need protection from their creditors while they restructure their liabilities and winnow out the good business from the bad. If the North American businesses of GM and Ford filed for Chapter 11, their activities elsewhere would be largely unaffected. Even in North America, their businesses could continue to make vehicles as they shed costs and renegotiated contracts.
The carmakers retort that being in Chapter 11 will poison their business. Buying a new car is a long-term gamble on there being dealers, spare parts and a thriving second-hand market for your vehicle. Drivers overwhelmingly tell surveys that they would not take the risk when Mercedes and Toyota make perfectly good alternatives. But $50 billion is a lot to stake on a hunch. A wiser bet is that whatever consumers say today, the stigma of being in Chapter 11 would fade, obscured by price cuts, advertising and most of all news that the car companies were tackling their remaining problems. Remember that, in many ways, Chapter 11 is more stable and predictable than depending upon the government.
That is an unpopular message. It is almost certain to be ignored by Congress, which is itching to “save jobs” and to counter the public-relations disaster of bailing out Wall Street. If the state is determined to keep the industry out of Chapter 11, it should set up a special fund and demand preferred equity to deter shareholders in other industries from asking for money. But it would still do better to let the car firms fail. "
http://www.economist.com/opinion/displaystory.cfm?story_id=12601932 (still freely available on 11/29)
While I don't in heart support the bank bailouts, I've done my best to understand why having mobile money right now is needed. It does need massive, massive oversight, and if I ran things, the CEOs would stop their millionaire lifestyles, rescinding bonuses and mowing their own damn 10-acre lawns with a push-mower. With the automakers, they will break and falter for a bit, but I still believe in American innovation and ingenuity, and if a new rack of engineers take the helm, we'll get everyone back to work in short order making machines we can be proud of.
"I can't believe you say that to people asking for help. How mean. "
Actually, D, I can tell you from the reaction I've gotten 90% of the time since I started saying this to bums (since the times I was in high school going to wax trax! with my hard earned lawn mowing cash to buy a record).. these words you quoted are worth FAR more than the hot dog i buy them when i CAN afford to "spare some change".
Additionally, Stat, I completely endorse your proposal to inspire compassion. In EVERY WHICH WAY imaginable... I simply do not think GM, Ford and Chrysler should be privy to a Government bail out over ANY of the MULTITUDES of other hard working family owned American businesses that actually HAVE filed bankruptcy over the past (more than) several years, not to mention those who are struggling now.
"nothing would sap a recovery and job-creating enterprise like locking up badly used resources in poorly performing companies."
HELLO!!!!! thank you Jen for posting this.
"What if...
Congress requires GM shift resources internally to double or triple the R&D and production team dedicated to the Chevy Volt. Require that the Volt be released by July 2009, or the gov't charges GMC 29.9% APR, on any loan given. All interest goes to former GMC workers let go since Jan 2009. Require that the volt's plug-in technology be fasttracked to EVERY LAST BEAST ON WHEELS GM decides to release as a 2010 model, and then we'll talk bail out. until then, reflect on your mistakes. "
Come on... challenge this.... or for F sake endorse it.
jen-
I really appreciate your post. you provided a lot of additional insight I didn't anticipate from my original post.
"With the automakers, they will break and falter for a bit, but I still believe in American innovation and ingenuity, and if a new rack of engineers take the helm, we'll get everyone back to work in short order making machines we can be proud of."
AMEN.
I don't think this should be a partisan issue at all. This is an American issue. As informed Americans, the auto industry must engineer a new model-T which ELIMINATES dependence on foreign oil while inspiring pride in american innovation.
I would hold a completely different perspective altogether had the big three (Ford, GMC and Chrysler) done something to INSPIRE the industry they LEAD. What if Wagoner showed up in the latest volt concept?? , What if Alan Mulally had driven up in a 120 MPG Ford Explorer?? Where was Robert Nardelli in the latest EV his failing company has been promising??
Oh yeah... they showed up to Washington in personal jets, like squatters hitting the streets in a business suit. How fitting....
What was it Robert Nardelli of Chrysler said?
Straight from the failing automakers mouth:
"We have a social responsibility to our consumers to deliver environmentally friendly, fuel-efficient, advanced electric vehicles, and our intention is to meet that responsibility quickly and more broadly than any other automobile manufacturer," says Bob Nardelli, chairman and CEO of the struggling automaker. "The introduction of the Chrysler, Jeep and Dodge electric vehicles provides a glimpse of the very near future and demonstrates that we are serious and well along in the development of bringing electric vehicles to market.".
Unless you can provide an alternative to the government requiring internal restructuring to push these obviously necessary technologies to an affordable market, please spare me and the rest of us by continuing to push your savings and investments to offshore bank accounts. The irony in your so called "patriotism" is enough to make me vomit my toes.
!@!@()(#&*(&$^&@*
Who would buy a vehicle from a company that has filed chapter 11. Bad Bad idea.
I know $25 billion sounds like an outlandish amount of money, but did you realise we are spending $341 million per day to fund the Iraq war.
We need to help out our own. I doubt GM needs $25 billion, they likely shot high hoping to get something like $15 or $18 billion.
Here are a few ideas off the top of my head:
General Motors dealers in the United States delivered 308,817 vehicles in August. What if the government was to impose a tax per vehicle sold (paid by GM)of 1% or 2% of the value of the vehicle and had GM remit this tax every 90 days.
Also, there needs to be some restuctering within the upper management. Right now the CEO is earning in excess of $15M per year (I believe). The salaries need to be reviewed. Management will have to choose to resign, take an early retirement, or take a %50 wage decrease.
If a repayment plan is to work, the unions will have to be on board. Meaning, they will have to agree to a wage freeze for at least 5 years, and further agree not to strike in that time frame. They will also have to agree to (only) a cost of living wage once the 5 years is up.
Anyways, there are a lot of things they can do, but those are some of my ideas.
One thing I know for sure is, Warren Buffett just invested $500M in GM stocks, so he knows somehow GM is going to pull out of this. Maybe we should all follow suit.
Stat,
Thank you for your contributions to the discussion.
I get discouraged when coming together to find a solution isn't a natural reaction but am encouraged to read you talking solutions.
and "I know $25 billion sounds like an outlandish amount of money..."
Yes, indeed.. it does. but as of today they're coming back asking for more, except this time they're arriving in the kinds of cars I think they should be making more of... at least they're thinking about it. gotta give them some credit.
"but did you realise we are spending $341 million per day to fund the Iraq war."
I realize the US is spending somewhere around 12 billion a year (still a pocketful)... but I don't see the point you're trying to make.. unless you're trying to show why the government CAN'T afford to rain down $34 billion dollars to Ford, GM and Chrysler...
Oh and add another to the talley: Wall Street and Main Dtreet bail outs. ca-ching.
uhm.. little question.. where is this bail out money coming from? Have you considered it? I can think of one proposed tax plan which you staunchly opposed in August 2008 which was a LOT cheaper than a THIRTY FOUR BILLION DOLLAR GOVERNMENT BAIL OUT.
Stat, I agree with you on the necessary restructuring of these three failing companies.. The problem is I just don't think they've been forthcoming about the poor negligent decisions they made that which were fueled by appeasing the oil industry (why rock the boat).. I don't trust that their collective heads are in the right places. Furthermore, if the big three are going to be restructured, managers/ceos replaced etc, any restructuring would reach so deeply into their core foundation that in the long run we might end up wondering why we didn't just invest in NEW companies offering NEW technologies in the first place.. that's usually a less costly route for change. Innovation can be delivered quickly when it isn't kept from the market by the same business owners promising to deliver it. Read up on electric cars, hybrid cars and the Oil Industry... Did you know the first hybrid car was the 1930 Rauch&Lang Gasoline/Electric sedan... built by General Electric and Rauch/Lang? It was kept from reaching the consumer for the same reason GM's electric car in the 90s was pulled from the market: fear of drowning out the booming oil industry. Guess what... that frame of mind is as old as the innovative technologies our grandfathers could have been driving.
Hmm.. I've got something...
Why doesn't the OIL industry with all their record annual profits during America's darkest economic times bail out GM, Ford and Chrysler??
Isn't it funny that in the end it is all about oil.. This is all about oil-dependency. The big three automakers could have been making plug in cars long ago.. Hybrids are not a new concept by any stretch. Read what a 40-year Chrysler employee recently had to say...
Since when is it American to put a shackle of foreign dependence on your most needed resource?
If America is able to power it's nation with adaptive ingenuity and resources from within it's own borders, I can assure you America's economy will make a sharp turn for the better.
The economy sucks. The company I work for just laid off a handful of very skilled people today and they are not the only people going home tonight without a job. We're seeing reminders of this everywhere. One thing is for sure... We are all in for some VERY VERY dark times if we decide to turn off our brains and let someone else do the thinking and the talking. We are all are in this together and it is up to all of us to talk honestly about these issues and seek out answers that best benefits everybody.
NYTimes Op-Ed on an electric car system that's actually being implemented
Remember my calling for GM to "fast track the volt's technology to every beast on wheels they make"??
Seems Chrysler is prioritizing this now... THIS is competition, the way it's supposed to work when the clamp comes down on all of us.
"Instead of making one, or just a few, electric-only models, Chrysler will sell the same models in both gasoline-powered and electric-powered versions. This low-cost, high-variety electric-vehicle strategy will play a big part in any comeback plan Chrysler may present in hopes of getting government rescue funding."
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