Save the Motherland: Buy GM!

The trouble with preserving a prehistoric, poorly run, and unprofitable private corporation

(Page 2 of 2)

So in other words, we are exactly where we would have been had the government allowed the company to go bankrupt months ago (well, the same place sans state ownership). And for those who believe that affixing the word "new" in front of "GM" makes a difference, I've got a Yugo Cabrio for you to buy.

If a car made in this country is worthwhile, efficient, comfortable, and safe, Americans will buy it. But the very presence of a nationalized GM undermines a truly competitive car market. Honda and Toyota, which have taken no taxpayer funding, no doubt will find it immensely problematic to compete against a company that can print money and take losses in perpetuity.

Or, I should say, we will be taking losses in perpetuity.

David Harsanyi is a columnist at The Denver Post and the author of Nanny State. Visit his Web site at www.DavidHarsanyi.com.

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  • Russ 2000||

    If Obama has no interest in running GM, then he should SELL the fucking thing. Until then, he IS running GM whether he has interest in doing so or not; he has no choice.

    I mean, I have no interest in paying taxes, but I have no choice other than moving out of the country.

  • ||

    " take losses in perpetuity"? I begin to doubt it. California, the bellwether of US social trends, has finally come face to face with the fact that it cannot spend money it hasn't got. Even the ability to print money cannot insulate from economic reality forever. Can you say
    " Weimar Republic", boys and girls?

  • DADIODADDY||

    Sing along with me boys & girls..."Have you driven a Ford lately?"

  • JB||

    Obama can go fist himself with Government Motors.

    I will never buy a vehicle from GM or Chrysler.

  • ||

    I will never buy a vehicle from GM or Chrysler.

    At the risk of sounding like a Ditthead, I am not, DITTO.

  • ||

    Ditthead = Dittohead

    Must use preview!!!!

  • Spartacus||

    Will GM be run as profitably and efficiently as Amtrak? Will GM be paid not to produce, like the agricultural sector? Will it feed into an economic bubble like Fannie Mae and Freddie Mac? Will it boast the negligible oversight and waste of the so-called "stimulus" package? Will it feature the fiscal irresponsibility of Social Security? Or will we see the runaway costs of Medicaid?

    So many options.


    I'm gonna go with (E) All of the above.
    OK, maybe not the "feed into an economic bubble" part. But the rest of it, yeah.

  • ||

    I just bought a Toyota Sienna. My wife, the salesman, the manager, and my two-year-old daughter laughed and laughed at the idea of us buying a GM or Chrysler.

    What was interesting is that they would say nothing at all negative about the Honda Odyssey, even when I suggested that the Sienna was a somewhat more comfortable ride. Probably some Japanese plot.

  • Geotpf||

    Obama is not really trying to save (or run) GM or Chrysler. He is merely trying to delay their total collapse until after the economy has at least partially recovered overall. If GM and Chrysler and all their suppliers and all their dealers were to collapse at the same time, the economy would go into complete meltdown. Even Bush realized this-remember, Bush was the one who started down the path of government control of GM and Chrysler, not Obama.

    Obama can't say this publicly, of course, or he won't be able to do so. But Obama's not stupid enough to think that Chrysler and GM will survive as strong going concerns. I'll bet, in the end, Chrysler goes completely or almost completely POOF, and a small GM struggles along for a decade or two before disappearing.

    One of the flaws of a more pure capalitistic system is that the lows are much lower than one where the state steps in to act as a circuit breaker, as in this case. One could also argue that the highs are also higher, though.

  • ||

    Honda and Toyota, which have taken no taxpayer funding, no doubt will find it immensely problematic to compete against a company that can print money and take losses in perpetuity.

    I think they will manage to compete just fine against a company with 90% ownership by governments and the UAW.

    It's hard to "compete" if no one is interested in buying your cars.

  • ||

    Even Bush realized this

    This has gotta be the punchline to innumerable jokes -- Bush "realized" all sorts of things that just ain't so.

    remember, Bush was the one who started down the path of government control of GM and Chrysler, not Obama.

    Bush was also the one who got us into Iraq -- you know the country that Obama isn't getting us out of?

    "Bush did it, so it must be OK" is SO not playing at this website.

    a small GM struggles along for a decade or two before disappearing ...

    One of the flaws of a more pure capalitistic system is that the lows are much lower than one where the state steps in to act as a circuit breaker, as in this case. One could also argue that the highs are also higher, though.


    I'd say there are few lows lower than a state-run car company sucking tens if not hundreds of billions of dollars out of the productive sector of the economy and flushing it down the terlit of a company that even you admit is gonna die in the end.

    But thanks for playing!

  • Paul||

    1. If it moves, tax it.
    2. If it keeps moving, regulate it.
    3. If it stops moving, subsidize it.

    We're now at #3.

  • Paul||

    He is merely trying to delay their total collapse until after the economy has at least partially recovered overall.

    So what he's doing then, is prolonging the recession. Excellent strategy.

  • ||

    I think they will manage to compete just fine against a company with 90% ownership by governments and the UAW.

    If that's all they had to compete against, sure. But now that the State's thumb is on the scales, expect GM's competitors to have to fight off hordes of regulations, gov't-backed unionization, etc. etc.

    I hadn't planned to trade in my pickup for another few years, but now the game is to get a new vehicle before Obama's interference in the auto market metastasizes over to Nissan, etc.

    One could also argue that the highs are also higher, though.

    Bubbles and crashes are no way to run an economy.

  • Paul||

    One of the flaws of a more pure capalitistic system is that the lows are much lower than one where the state steps in to act as a circuit breaker, as in this case. One could also argue that the highs are also higher, though.

    Right, so as Capitalism attempts to weed out its dead weight (read GM), Obama takes money out of the productive sectors of the economy, and puts it in the negative productive side of the economy. Afterall, the only money the government can take is from the productive. If it isn't productive, or in negative production, it doesn't have any money to take.

    This is brilliant! Boo capitalism! Yay social safety net!

  • ||

    Even Marx praised capitalism through the roof, with, of course, certain reservations that made it necessary (in his mind) to move on to, eventually, the post-scarcity world of sweet, blissful communism.

    Show me an economic system that has done more to improve the general human condition more than the fre(er) market, coupled with a liberal government. Regulation creates friction that slows down the wheels of progress, but we can withstand a certain amount of that. What we can't withstand is the death of the rule of law, out-and-out nationalization or partial nationalization of industry, increased regulation, or breaking the bank on crazily overbroad or unrealistic programs (welfare and otherwise).

  • Geotpf||

    Ok, imagine a libertarian paradise with no TARP. Thousands of banks just failed, plus two car companies, plus all the suppliers and dealers to the cars companies that failed, plus every company that needed a loan to survive. Unemployment is now 20%, 25%.

    That is, looking at the overall health of the nation, how would not using the TARP have fix things?

    I don't see a libertarian solution to the recession here. Of course the government running the banks and car companies is bad. But it's the least worst choice.

    Maybe intervening like this makes the recession longer (maybe not). But it certainly makes it less deep.

    Doing nothing, as libertarians wanted, would have been a complete disaster. The second Great Depression would have occurred. We barely missed it, and it's because of stuff like the TARP and the stimulous package.

  • ||

    Doing nothing, as libertarians wanted, would have been a complete disaster. The second Great Depression would have occurred. We barely missed it, and it's because of stuff like the TARP and the stimulous package.

    Ben Bernanke- is that you?

  • DADIODADDY||

    Geotpf = patient zero for OBS (Obama Beatification Syndrome)

  • Corvair||

    Doing nothing, as libertarians wanted, would have been a complete disaster. The second Great Depression would have occurred. We barely missed it, and it's because of stuff like the TARP and the stimulous package.


    We'll have to consider ourselves lucky if we only suffer a lost decade...

  • Bill||

    "Doing nothing, as libertarians wanted, would have been a complete disaster. The second Great Depression would have occurred. We barely missed it, and it's because of stuff like the TARP and the stimulous package."

    Show your work.

  • ||

    Obama is not really trying to save (or run) GM or Chrysler. He is merely trying to delay their total collapse until after the economy has at least partially recovered overall. If GM and Chrysler and all their suppliers and all their dealers were to collapse at the same time, the economy would go into complete meltdown. Even Bush realized this-remember, Bush was the one who started down the path of government control of GM and Chrysler, not Obama.

    1) Bullshit. The economy will not go into "complete meltdown" (OMG, we'll starve after eating our pets!) if GM and Chrylser disappear tomorrow. I have a theory that people who want a new car will buy them from other manufacturers that would, y'know, increase production.

    2) "Even Bush did it" is not a real strong talking point.

  • Paul||

    Ok, imagine a libertarian paradise with no TARP.

    Uhhuhuhuh. Uhhuhuhhuh. Imagine a liberal paradise, with TARP. Oh wait, TARP is the liberal paradise. Except of course, it doesn't go far enough. Cue Paul Krugman for his regular segment on NPR talking about how Obama's bailout plan is way too small.

    Thousands of banks just failed, plus two car companies, plus all the suppliers and dealers to the cars companies that failed, plus every company that needed a loan to survive. Unemployment is now 20%, 25%.

    So you say. Oh, right, to get all snug in your argument, we have to start by assuming that sans TARP, these things would happen. Try again. You have two plays left. Choose wisely.

    That is, looking at the overall health of the nation, how would not using the TARP have fix things?

    Try this:

    All of these firms go through orderly bankruptcy. Oh wait, there is no such thing as "uncontrolled bankrtuptcy". Scratch those Obama talking points. Bankruptcy IS and orderly process by definition. During this process, companies are restructured. Secured bondholders get payed back, allowing them to not have to go into bankruptcy themselves thus saving thousands of ancillary jobs in other sectors simply because Obama "stands behind Chrysler, their employees and their communities". See how that works? It's even possible that we'll see some new, smaller car companies which will be targets for those old parts-suppliers. But no, it's better we have to behemoth car companies which are "too big to fail" instead of half a dozen or a dozen smaller, faster, better car companies. But this is TARP (A.S.S.R.A.P.E.) world.

    GM (to use an example) saves the brands and segments of its corporation that are profitable or potentially profitable, axes everything that even smells like failure instead being able to hang on to a few stinkers because they have government guarantees (see where this is going?. A large number of smaller parts suppliers go out of business, and the stronger ones merge together creating a new segment and possible new entry points into the markets for existing on-road GM vehicles (of which there are many). And the improved competition might even force some of those suppliers to make better window regulators for the post 2006 Jeep liberty (as an example).

    The stong banks buy the weaker banks (now that the government won't be there to stop them in the Name of Tarp(tm)). And the currently productive members of the economy are able to shore up their market positions, and the negative productive companies keep from dragging the rest of the strong economy down.

    But it certainly makes it less deep.

    Honestly? I'd rather have a deeper, shorter recession. But still, assumptions all around.

  • ||

    Can I please sell my stock in this POS and invest it in something else?

    Please?

    What, you say I'm only allowed to do that if the majority of ALL AMERICANS also agree to do that, in a national election once every four years?

    What the fuck kind of investment strategy is that? isn't that kind of what Enron did to it's employee's 401(k) plans that were invested in company stock? Lock them in while the price collapsed?

  • Paul||

    2) "Even Bush did it" is not a real strong talking point.

    Especially when you've come to a non Bush-supporting forum. Try that shit over at littlegreenfootballs, or freerepublic.com. Not here, sonny.

  • ||

    Can I please sell my stock in this POS and invest it in something else?

    Not 'til Gettelfinger dumps the UAW's shares.

  • ||

    Wait a second. Thousands of banks would have failed? What, there was some kind of explosive chemical coating that would have exploded only when in bank vaults?

    The scope of the failure in the financial sector has been seriously overblown. It's no joke, and it would've deepened the scheduled recession without (or with) government intervention, but a very large majority of banks were not unduly affected by the problems that hit Citigroup, Countrywide, etc. What would've happened and what should've happened is that medium-sized and more sanely operated larger banks (like Wells) would've stepped in to pick up the pieces of the failed operations. End of story. Just like happens in most other industries.

  • ||

    A question for the board -

    When the government takes bids on supplying the tens of thousands of automobiles over the next few years, what do you think Ford's chances will be?

    Does anyone think they'll be rewarded for not sucking at the public teat.

  • ||

    It's the non-falsifiable shit that the media let Obama get away with in the same frikin way about "saving or creating" 3 million jobs. Great, the only way to falsify that is if everyone in the country lost their jobs down to the last 2,999,999 people still working for the government were left employed.

    If it wasn't for the stimulus package the SUN WOULD HAVE EXPLODED!!! Thank GOD for the government. Bullshit.

  • Fascitis Necrotizante||

    Well Bladedoc, I don't see any tigers around here, do you?

  • Paul||

    It's the non-falsifiable shit that the media let Obama get away with in the same frikin way about "saving or creating" 3 million jobs.

    the way I see it is this:

    Since Obama made those statements, jobs have been lost. Therefore, Obama is failing to "create or save" 3,000,000 jobs. He made the rules, too bad they're not workin' out for him.

  • Naga Sadow||

    There are roughly 9,000 banking institutions. How many took TARP money? Maybe 50?

  • ||

    . . .and how many needed the TARP money? Ten?

  • Naga Sadow||

    Was it even ten?

  • Paul||

    There are roughly 9,000 banking institutions. How many took TARP money? Maybe 50?

    And not only that, according to the Fed, not all of the TARP recipients needed it but were required to take it... as by Fed design.

  • Invisible Finger||

    more sanely operated larger banks (like Wells)

    WTF?

    Wells is a ticking time bomb after picking up the toxic shit of Golden West via Wachovia. There is NOTHING sane about Wells-Fargo's 2007-and-beyond operations.

  • Mike Laursen||

    ... taxpayers are impelled to preserve this prehistoric, poorly run, unprofitable private corporation.

    And it's in our long-term interest to do everything we can to make sure that Government Motors is an undeniable failure.

  • ||

    Wells didn't make all the mistakes made by its competitors in the subprime arena, despite being a leading originator of subprime loans. I don't think it's a ticking time bomb, though Golden West was a mistake.

    Beats Washington Mutual, anyway.

  • T||

    And it's in our long-term interest to do everything we can to make sure that Government Motors is an undeniable failure.

    Well, not quite everything. I'm loath to advocate burning down dealerships and factories. But anything short of that works for me.

    Sigh. No new Camaro SS for me. I guess I'll be getting the Nissan Titan after all.

  • ||

    The problem is that the government is getting involved now that GM is actually starting to build a halfway decent product. Granted, their reputation sucks and they aren't the best run company in the world, but GM was starting to turn their product around (pick up a Car & Driver before you go talkin cars). Now that Obama and his cronies have their fangs in GM, any progress that we were seeing is now basically doomed to languish on the drawing board.

    Instead of letting the free market take care of it, Obama is letting his own "brilliant" ideas (that he just happens to share with Bush and McCain who both supported bailouts and the like) and going to ruin things. If General Motors hadn't become Government Motors, GM would have been able to produce what they want. If they fail, Ford and Honda would pick up the slack. If they succeed, we would see the "trim and streamlined" new GM that the government claims it can make. But when has the words trim and steamlined ever gone in the same sentence as government?

  • ||

    Lexus has been running ads recently (I see them on CNBC) touting a "Drivin' is FUN" theme with some guy doing tire-smoking donuts.

    What are the chances Govt Mtrs will be pushing their hotrods in a similar fashion?

  • Mike Laursen||

    Ok, imagine a libertarian paradise with no TARP. Thousands of banks just failed, plus two car companies, plus all the suppliers and dealers to the cars companies that failed, plus every company that needed a loan to survive. Unemployment is now 20%, 25%.

    A little unfair of you to start your Wayback Machine scenario mid-wreckage. What about we rewind to the point where the government started using the Fed and Freddie and Fanny to pump up the housing bubble, and rerun the simulator with those inputs turned off?

  • Creech||

    Good rejoinder, Mike. Yeah, let's give the Libertarians 1% of the vote for 35 years,while we totally screw up the economy, and then challenge them to create a libertarian paradise, with no pain, overnight. Then, we will nitpick the results and claim they failed.

  • Bill||

    "Doing nothing, as libertarians wanted, would have been a complete disaster. The second Great Depression would have occurred. We barely missed it, and it's because of stuff like the TARP and the stimulous package."

    Remember-when government intervention doesn't work like they said it would, things would always have been worse without it. Always. I shall now ponder the mystery of Barack Obama divinity.

  • Paul||

    Instead of letting the free market take care of it, Obama is letting his own "brilliant" ideas

    Read: "hybridize" the entire GM fleet?

    and then challenge them to create a libertarian paradise, with no pain, overnight. Then, we will nitpick the results and claim they failed.

    whelp, we've had conservative paradise and liberal paradise redux, ad nauseum and we know how that turned out. I'd be willing to take a shot at it.

    Oh, and to be honest, there'd be pain. Lots of pain. The pained squeals of tens of thousands of make-work government employees would be heard 'round the world. Public sector unions (if they're even allowed to exist, and yes, that includes you, UAW, public sector union #1) would have to negotiate their pay-raises and contracts directly with the voters. No more vote-buying between entrenched politicians and lifetime appointed, career officials. You want a raise, you gotta ask me, directly for it.

    Barack "A marriage is between a man and a woman" Obama is going to get nitpicked until the end. That's how this shit works. This is an adult game, for the big boys. If it's too much for him to handle, with all due respect, stick to the side-streets.

  • ||

    I'd like to see a hybrid gas/coal car.

  • SCOTT||

    I was looking for blogs on GM and ran across this mess. Opinions with no facts and a group which obviously has posters of Rush Limbaugh above thier beds. I bet everyone here was following dot com's in the 90's and thought packaging bad paper to show profitibility was a great idea during this decade. How many of you recieved a bonus for helping your business tank! Get real. If you don't want to buy a GM product, don't buy it. If you have not tried it and made a fair comparison to the imports, shame on you. I have, and in many cases, they are simply better. Don't do your homework, though, I am sure your friends will do it for you (and get an F).

  • ||

    One of the flaws of a more pure capalitistic system....

    How would you know? We haven't been close to a pure capitalistic system since well before 1913.

  • Rice Bingham||

    ProLib,

    Wells has a metric assload of Alt A's & option ARM's on it's portfolio.

    It's a ticking timebomb.

  • ||

    The US Government:

    Now with Gen-u-wine Geee Emmm Parts!!

  • ||

    Rice Bingham,

    And lots of California real estate, too. I know. It also has a lot of higher quality assets. I say they ride this out.

    Incidentally, the real winner in all of this--government-compelled acquisitions aside--is probably Chase. It's got problems, too, but it's the one big player that doesn't seem likely to implode.

  • waldo||

    GM should have failed 100% Flat out. Screw the workers, Screw the consumers. Let it crumble totally. That way 100 smaller companies that aren't owned by rich idiots can pop up, hire MORE workers *since they wont all be getting paid a union whopping $50+ an hour to let a machine do their job* and produce vehicles that are fuel efficient, instead of more and more SUV's that "It's efficient, it gets 20 mpg!!"

    Bull, my 2001 ford taurus that has TONS of problems gets over 20 mpg, its 7 years OLD technology, and when it came out it was still CRAP technology.

    grrr we are being ripped off because we dont want to let a few thousand overpaid people suffer, and isntead force every taxpayer to suffer.

  • ||

    Gee, SCOTT, I had a similar experience. I was looking through comments on blogs about GM and ran across your muddle brained missive.

  • Paul||

    If you don't want to buy a GM product, don't buy it. If you have not tried it and made a fair comparison to the imports, shame on you.

    Worst car I ever owned: Buick.
    Second worst car I ever owned: Cadillac
    Third worst car I ever owned: Pontiac.

    Best car I ever owned: toyota
    Second best car I ever owned: Datsun (now Nissan)

    Any more stupid assertions?

  • Paul||

    If you don't want to buy a GM product, don't buy it.

    Oh shit, how'd I ever get past this one without commenting.

    Isn't that the fucking problem, Scott? We didn't buy GM products, and off went GM and the UAW, skipping, hand-in-hand to the federal government, demanding that the country buy GM products. Obama, ever so eager to please, just forced me to buy 60% of every GM car idling on the assembly line.

    So in summation:

    I DO OWN A FUCKING GM CAR. MY SEVEN YEAR OLD DAUGHTER OWNS A GM CAR! HER CHILDREN WILL PROBABLY OWN A FUCKING GM CAR TOO!

    But I guaranfuckingtee there will never be one sitting in our driveway. Ever. EVER!

  • JB||

    As Jim Cramer said, "look for the union label and sell."

  • ||

    Opinions with no facts...a group which obviously has posters of Rush Limbaugh above thier beds.

    Heh heh, this is funny in the context of SCOTT's rant.

  • Justen||

    "lows are lower and highs are higher in purer capitalism" HAH.

    Care to submit evidence of a laissez-faire capitalist nation? No? Didn't think so. The closest we ever had was the United States before the industrial revolution, and it was characterized by relatively stable growth and opportunity for nearly a century. After that, we started in with the interventions, the protectionism, then the fiat currency, then more intervention and regulation, and despite what pundits claim we have not seen a net reduction in regulation anywhere since. It is true that there is evidence to support the idea that total control of the economy breeds stability; it made for a very stable downward plunge into poverty for every country that tried it to date.

    Oh - and before you start talking about Western Europe's model, make sure you familiarize yourself with the economic instability of the past decade-or-more in France, Germany, and other smaller states.

    Our economy is growing more and more unstable as time goes on, oscillating wildly as different groups of regulators get in and interfere in different ways; the giant blood-sucking tick that is the modern U.S. government might be distributing the blood more-or less evenly to its favorite spawn for now, but the flow is drying up and the host is dying.

  • ||

    If General Motors hadn't become Government Motors, GM would have been able to produce what they want.

    Err. no. GM was destroyed in part because the CAFE standards required it to produce small cars that it couldn't make money on.

    If GM had been able to produce what it wanted, it would probably have been marginally profitable all these years, and still viable.

  • Jennifer||

    A couple weeks ago, my boyfriend's car was in the shop and he was given a "loaner" to drive -- a new Chevy Cobalt. It looked nice but drove like hell, and I said "No wonder GM's going into bankruptcy, if they make cars like this."

    We only drove it for a couple of days, but: whenever we went more than about 30 mph everything on the dashboard started rattling, and when we turned on the windshield wipers after it started raining, the wiper blades were apparently hung wrong so that they made this HORRIBLE shudder-inducing noise against the glass, like a lower-frequency version of dragging your fingernails against a blackboard.

    Also, while we could move the seats forward or backward, to get closer or further from the steering wheel, being able to adjust the angle of the back of the seat was apparently an "optional" feature our loaner didn't have, so the seats were, say, one or two degrees off from what would be a comfortable angle for leaning back.

    On the upside, it was painted a very pretty shade of blue.

  • FreddieFeelGood||

    Just as long as GM stays in business long enough for me to get a new Camaro.

    Seriously, GM has been running on the same business model for far too long. In the 50s and 60s, there was very little competition. The 80s brought much foreign competition from Europe, Japan and now even S. Korea. For whatever reason, GM did not alter their business plan. Now, in a last ditch effort, with billions of government dollars, they "think" they can do it now? The only way I think GM can survive, is if, the government eases the CAFE and emission standards on GM cars. Oh, and of course, takes over their pension system for 40cents on the dollar.

  • FreddieFeelGood||

    Ahh, f**k it. Sell it all to Roger Penske, and whoever else wants it!

  • Scarpe Nike Italia||

    is good

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