Corporate Welfare

All You Zombies

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John Berlau on the ejection of GM chief Rick Wagoner:

zombie

The ouster of General Motors CEO Rick Wagoner by the Obama administration isn't the first time in recent history that the government has forced out a CEO. That first happened in September when Bush administration Treasury Secretary Henry Paulson forced out American International Group CEO Robert Willumstad in favor of Paulson's friend Edward Liddy.

The lesson from AIG is that replacing a CEO is no panacea. There is no love lost for the poor management of Rick Wagoner. He is the one who went to the government, hat in hand—and when the government is paying the piper, it can call the tune. But replacing him won't solve GM's long-term problems of too many brands and too large a workforce. And it is increasingly clear that the bailout itself is an impediment to effective restructuring.

The prospect of an ever-increasing supply of tax dollars is leading parties with auto industry contracts—unions, bondholders, dealers and others—to play a game of chicken. No one wants to renegotiate a contract when they think the government will come in with more money to cover the losses….

To say that consumers would be discouraged from buying a car from a company in bankruptcy misses the point. Consumers would be more likely to buy a car from a company restructured by a bankruptcy court, as they buy tickets from once-bankrupt airlines, than [to buy] vehicles from zombie companies dependent on the next government bailout. This delay likely hurts "satellite" companies like auto parts makers more than a bankruptcy would.

NEXT: Burt Blumert, R.I.P.

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  1. Nacht der Untoten?

  2. Yo, that zombie pic just got bigger.

  3. If I had my way, Hank Paulson would be the first to meet the Chainsaw of Justice…

  4. Yo, that zombie pic just got bigger.

    The picture didn’t get bigger. The zombie got closer.

  5. Yesterday, I ran across an article in the Detroit News (maybe) about the crazy incentives GM and Chrysler are using to get vehicles out the door. This is what zombie companies do. They make it so *nobody* can make money.

    It’s like the government is punishing Ford for getting out in front of this deal early, and not coming to Washington with their tin cup.

    Bankruptcy! Cut capacity; fuck General Motors.

    ps- fuck Rick Wagoner.

  6. I thought Rick Wagoner parted his hair on the other side.

  7. The picture didn’t get bigger. The zombie got closer.

    So much for getting any sleep tonight. Thanks, Jesse…

  8. But replacing him won’t solve GM’s long-term problems of too many brands and too large a workforce.

    Neither of those are long term problems at all. Though current market forces may push for a reduction of both. The protection money Detroit kicks back to organizes labor is GM’s biggest obstacle to long term solvency.

  9. And it is increasingly clear that the bailout itself is an impediment to effective restructuring.

    Um. That’s the point. Unrestrained capitalism, you know.

  10. “Th’s what happens to any that messes wit’ the Union!”

    Ok, so it wasn’t going to be long before Il Duce started to replace CEOs from those companies that subscribed to the new incarnation of the fascistic N.R.A. (National Recovery Act). They sold their souls to the Devil, they will be damned for it.

  11. Jesse, after Land of the Dead, I think it’s probably more accurate to put up a picture of Romero himself to represent a zombie.

  12. The picture didn’t get bigger. The zombie got closer.

    Fuck!

  13. $97.4 billion. That’s the total you get when adding up the initial $25.4 billion that automakers were promised to help retool their plants to build more fuel efficient cars; the $25.5 billion that auto suppliers have banded together to seek from the Feds and the $39 billion in loans that General Motors and Chrysler have requested from the feds to stave off a worst case scenario.

    Of that $97.4 billion, a total of $24.9 billion has already been paid out to General Motors, GMAC, Chrysler and Chrysler Financial. If the entire amount were paid out, every American would then have contributed $874 to the auto rescue/bailout.

    Is anybody foolish enough to believe this is the end of it?

    Ford is getting screwed here. They would likely have picked up half of GMs market share loss if GM had been forced into bankruptcy last year.

  14. Ahh that pic, Dawn of the Dead is one of my favorite zombies. I work within walking distance of the mall from the movie (Monroeville Mall) The mall IS a zombie mall, stores closing left and right, and all the customers have that dead look in their eyes.

    HEAD FOR THE HILLS!

  15. And- the people who say GM was profitable just a few years ago hardly ever mention the fact that GM wasn’t actually making money by building and selling vehicles; those profits came from GMAC and Ditech.
    Don’t hold your breath waiting for Ditech to ride to the rescue.

  16. The out of focus guy in the background of that photo, that’s Gabe Kaplan, man!

  17. I just recently watched LOTD, and I gotta say, I kept thinking of that main guy as Nick Gillespie. Maybe it was the leather bomber jacket

  18. Actually, the guy in the picture kind of looks like Lou Reed.

    Only healthier.

  19. The out of focus guy in the background of that photo, that’s Gabe Kaplan, man!

    “Signed, Epstein’s zombie mother”

  20. The out of focus guy in the background of that photo, that’s Gabe Kaplan, man!

    Nah. Sean Penn from The Falcon and the Snowman.

  21. Are they unionized zombies? Is that redundant?

  22. Title reference? I thought it was the Hooters song.

  23. “All You Zombies”

    Nice reference in the title. Maybe a little obscure.

  24. JW: upon further squinting I’ve decided it Eric Bloom of BOC, right around Agents of Fortune.

    The woman on the left is clearly Lee Grant

  25. Or maybe I’m wrong. I’m with P Brooks. I was assuming it was a Hooters reference as well.

  26. The Heinlein story came out in 1958.

  27. Lisa, I’d like to buy your rock.

  28. Nah, that’s Gino Vannelli on the right.

  29. Epi, was the latest Romero movie as big a pile of shit as I suspect? I can’t even remember its name. Blair Witch of the Dead or something.

  30. The greatest white afro belonged to Boston drummer Sib Hashian.

  31. I was aiming for a Heinlein reference, but I figured some folks would think of the song instead.

  32. Next on the agenda: Golem companies.
    This is probably what will happen to Obama’s “green energy” agenda. A lot of government created “public-private” companies designing a lot of inefficient, poorly designed technology. Cause it’ll be designed to provide as many jobs as possible, not to actually, ya know, work, and compete in the marketplace. They’ll be just as zombified as GM, since they’ll be no more capable of generating a profit, and hence will be endlessly dependent on government subsidies. But instead of being dead companies back from the grave, they’ll be artificial constructs.

  33. Next on the agenda: Golem companies.

    If we scraped off the “G” in “GM” would the company finally die?

  34. No one understands you like I do, Jesse.

    We could, like totally be best friends if you’d drop that silly restraining order.

  35. Rick Wagoner should be frog prepped and run out of town on a rail.

  36. So, we’ve pledged over $90BB to save two companies with a market cap of, what, $8BB?

    Jeebus. If Soros or Gates or one of those guys really wanted to perform a public service, they’d just put out a tender offer, buy the companies, slam the doors shut, and put them into dissolution. As an act of charity to the nation as a whole. They could even put the proceeds of any hard assets sold into a trust for the legacy obligations owed to the poor widdle union members.

    By my count, the multiplier on that would be over 10X.

  37. I was never a serious Heinlein fan. Starship Troopers was probably the only thing of his I read. It’s the only one I distinctly remember.

    (I was a PKD guy.)

    Obligatory S T movie reference:

    I will never again be able to walk out of a movie theater and exclaim, “That was the worst fucking movie *ever made*!”

    Why?
    Because I have seen Starship Troopers.

  38. Rick Wagoner should be frog prepped and run out of town on a rail.

    Yes — by the free market. Not by the Fix-Or-Repair-Daily Administration.

    And now the Hopey One has declared that the federal government will cover GM and Chrysler warranties. Dear Frith, what have we come to!

  39. If we scraped off the “G” in “GM” would the company finally die?

    Don’t you still need to drop it in a volcano?

  40. I also like how our Genius-In-Chief today issued a veiled threat to GM and Chrysler by saying that bankruptcy would be a good way to force the companies to restructure. Geez, why didn’t someone think of this earlier?

  41. Kolohe,

    It’s always volcanoes with you. On you on the tourism board or something?

  42. “That was the worst fucking movie *ever made*!”

    Starship Troopers is not even the worst movie made by Paul Verhoeven.

    And it’s not even the worse movie with “Starship Troopers” in the title. (although those were never in the theater)

  43. P Brooks,

    I dug them both, although my PKD collection far out-strips my Heinlein at this point.

  44. me type pretty one day

  45. Epi, was the latest Romero movie as big a pile of shit as I suspect? I can’t even remember its name. Blair Witch of the Dead or something.

    I don’t know, I’m too afraid to see it and lose all respect for a formerly great filmmaker. Bruiser was tough enough to get past.

  46. Don’t forget- he gave a nice shout-out to Fiat’s “cutting edge” technology.

    Although, having said that, I would rather have a New! Improved! Fiat 500 than a Prius Smugmobile.

    [Fiat owns Ferrari, but we’re unlikely to see carbon brakes or paddle shifters on the next-gen Wagoneer.]

  47. “He” in my prior post referring to the Presidential Suit, and not Philip K Dick or George Romero.

  48. you on the tourism board or something?

    Nah just had the more common reference to Gollum on the brain. Saw something on TV yesterday (on PBS, natch) that had a bit on this guy who may be the ultimate hard core libertarian. Absolutely no public services for him*.

    *except I think he thinks (and is probably right) that in the event of a rapid change in circumstances, the USGS or USCG will probably send a helo to pluck him out.

  49. Speaking of Starship Troopers; here’s a query for you literary historians out there: was Heinlein in the French Foreign Legion?

    I always wondered if that was where the notion of citizenship-through-military-service came from.

  50. No, Heinlein was never in the Foreign Legion.

  51. P Brooks,

    No, he graduated Annapolis in 1929 and served in the US Navy until 1934 when he was discharged for medical reasons.

    Technically, it is not service for citizenship in the book, but rather service for franchise. Only ex-service members could vote; everyone was still a citizen.

    The military service for francise idea is based around Heinlein’s belief that military service is the highest form of altruism and that a willingness to die for people you don’t know is the best way to prove you are fit to lead them. It’s not quite the military fascism that Verhoeven makes it out to be, but it is based on some very romanticized notions of the military.

    The best thing to remember about the black-and-white morality of Starship Troopers is that it was written as a children’s novel, part of his juvenile line, but the publisher recoiled in horror and it was published as an adult novel.

  52. everyone was still a citizen.

    Just to nitpick, he uses the term ‘citizen’ as someone with the franchise, and ‘civilian’ for everyone else. I can’t remember if everyone paid taxes – I think they did but they were very low.

    He was also very specific that he was begging the question on how his system worked with one of Col DuBois’s answers in the Moral Philosophy class, something to the effect “Why is this a good system? It works”.

  53. And the other thing to note on the morality of Starship Troopers is that he was deliberately and forthrightly begging other questions with keeping the POV on Rico, and Rico saying stuff like, “I have no idea how to make the decisions required of a Sky Marshall”.

  54. Kolohe,

    You’re right. I forgot the exact semantics he used. And a lot of the fans of the book tend to glide right past the fact that the government is the result of a military coup. It’s not like everyone just surrendered franchise to the wise military.

  55. A fun reading exercise is to read in a row:

    Starship Toopers
    Bill, The Galactic Hero by Harry Harrison
    The Forever War by Joe Haldeman
    Armor by Jon Steakley
    Old Man’s War by John Scalzi

    Novel, Satirical reaction, Pacifistic reply by a Vietnam Vet, Recasting to include more action, Modern update with less moralizing

    It’s good for your brain.

  56. Never a big fan of Heinlein, though I did like The Moon is a Harsh Mistress. He seemed like a militaristic version of Assimov. Blech.

  57. Bradbury and P.K. Dick were the best sci-fi writers of our century. Easily I dare say. OK, the guy who wrote Solaris was pretty damn good too. And of course if you (like I) count Alan Moore, then you have a fourth.

  58. Obviously, The Moon is a Harsh Mistress is one of my favorite books.

  59. Stephen R Donaldson is not too shabby.

    I just completed the 16th novel in the Discworld series, but I’m not sure SciFi really describe Terry Pratchet’s work.

  60. This is now Obama’s baby and he has pretty much drowned the child already.

    The government will guarantee the warranty? LOL, now only true fools will buy GM cars.

    “I’m Barak Obama, I’m from the government, and I’m here to shit the bed.”

  61. Technically, it is not service for citizenship in the book, but rather service for franchise. Only ex-service members could vote; everyone was still a citizen

    He also didn’t restrict it to military service. People just had to volunteer for service for two years, they might be fighting, they might be hospital orderlies. They were also free to bail out at any time, even just before a drop into combat, although it would cost them their eligibility for the franchise.

    -jcr

  62. Bill, The Galactic Hero by Harry Harrison

    Hilarious book, and send up of bureaucratic incompetence. The replacement arm 😉

    MNG,

    Bradbury and P.K. Dick were the best sci-fi writers of our century. Easily I dare say.

    Easily, you dare say?

    Read Joanna Russ, Gene Wolf, Damon Knight, Brian Aldis, Cordwainer Smith, Keith Roberts, and many more, before you start working up a list of greatest science fiction writers. Those you have picked out are just the more generally well known.

    PKD was far from perfect. He could often be trite and then again very brilliant, often within just a chapter or two. Too uneven to be considered the best on my list.

  63. My own list of authors that I consider solid does bring up a point of its own. The heyday of most of those authors listed was in the 70’s. I was a nine year old kid reading Knight’s Orbit series of short story collections when I first encountered them. I guess they left an impression (Edward Bryant, that is definitely another one to consider).

    It is not like I didn’t absorb the various movements in science-fiction over the 80’s to the 00s, cyberpunk, humanist, it baffles me that Lucuis Shepard did not make a bigger impact than he did with Life During Wartime and with his short stories.

    Much of the current output, very generally speaking seems too sterile in an Academic sort of way that Modern Jazz is too sterile. Spider Robinson is the epitome of the type of writer I despise, almost purely reflecting current trends in academic thought without adding a human pulse or creative spark. An enforcer of the mold and not a breaker.

    The little I have read of Egan is pretty good, though. He may reflect this complaint, but seems to keep his identity intact.

    * I really don’t like ‘greatest list’. Once a certain degree of mastery is achieved than qualitative comparisons fall to the side.

  64. I tossed that question out, and then left. Thanks for the answers. That French Foreign Legion parallel jumped out at me, and I always wondered if Heinlein had been in.

    —-

    I tossed out an allusion to Bill the Galactic Hero not long ago, and I was very disappointed when nobody took the bait. The original book was great; the rest of them sucked.

  65. So, from the thread title should we conclude that the real cover-up about Obama’s birth is that he was his own mother?

  66. Spider Robinson is the epitome of the type of writer I despise, almost purely reflecting current trends in academic thought without adding a human pulse or creative spark. An enforcer of the mold and not a breaker

    And the archetype of this epitome was Variable Star.

  67. One thing the gubmint should do to help GM is pay off all the car loans held by GMAC.

  68. alan,

    A lot of the vitality in SF is coming out of Great Britain right now. Give Iain Banks, Neal Asher, Alistair Reynolds, Charles Stross, and Robert Morgan a whirl. If you’ve never tried any of them, mail me off-board and I can point you to some of my favorites.

    Egan early works are pretty good, but the latter novels kind of disappear up their own ass.

  69. hi,
    everybody, take your time and a little bit.bvcnvnfxh

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