GM Must Die 18 comments
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No, I don't make this statement lightly. This is a great US company, it employs tens of thousands of people, it buys parts and raw materials from companies which probably will go bankrupt too if GM fails. I even think that it's a good idea to help US auto makers.
But I'm absolutely against helping GM in its current form. Any help to this particular company should come with one condition: current management has to go, common stock is canceled and all current contract with UAW are voided. Sorry, commercial companies should not exist to support employees. That would be Soviet model. Companies exist to make profit. GM has to be restructured to make it profitable. There are possibly several different ways to accomplish that. One extreme is to declare bankruptcy and government help would go to accept pension liabilities and guarantee loans which the financial arm of GM took. Or maybe the government can also cover early retirement of some workers. The government can even throw big money to buy out most of the employees and pay for plant closure. Anything will be cheaper than giving money to Wagoner. He has to go.
Full disclosure: At the time of publication author did not have any positions in GM or any other auto company. Positions can change any time.
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This article has 18 comments:
Why should the government accept pension liabilities
created by GM & UAW ? Liabilities means taxpayers money
going to waste. Banks don't have that.
What do you mean by "throw big money to buy out most of the
employees." ? It should be just like any normal bankruptcy.
Nobody buys out any of the Lehman employees.
Why should my tax dollars go to pay for someone else's retirement? I don't even have a pension plan and struggle enough to save for my own retirement through my own contributions (employer doesn't contribute anything).
Between gub'mint workers, teachers, AIG, and now GM workers, I should be able to claim about 100 dependents on my 1040 next April.
You say the right thing then you waiver on your own idea. GM must die and all of those pensions and whatever is underfunded will have to go with it. The unions can help their members to sue and provide relief with the funds they have been receiving from the membership all these years.
Times change and GM did not change. Who do you blame this on? The government, the public who will have to fund this travesty.
Forget it! Put the blame where it belongs. Stop the charity. Eat the bitter pill and start to get the healing process going.
This is not the responsibiity of the taxpayers.
That is it. No compromise, no negotiations, go file for bankrupcy and then sell the bits of the company and see what can happen. What ever it is will be better than now.
.
If consumers are not buying cars (see latest sales declines) how is a bailout going to increase sales?
Without increased sales the unemployment rate in the auto industry are the everyday white collar/bluse collar workers going get laid off anyway?
So how will the bailout help the auto-industry to restructure? This is not like the Chrysler bailout. It involves the whole US auto industry not just one Company.
So the US Auto Industry is going to shrink like it or not. So how can government best help in realigning the workforce that is no longer needed?
In my graduate Economics course the first and most impotant lesson we were taught is TINSTAAFL. "Three Is No Such Thing As A Free Lunch".
Much of the argument I have heard is pure hype and not backed up by data. The US auto industry has been in decline and while the medicine is harsh maybe it is time to restructure.
If GM goes under, I think that is the worst that could happen. Yes, GM needs desperately to be restructured, the unions need to go away, and time must be used to mend this company. like others, I believe if GM goes under the competition will raise prices, out tax dollars will be paying for all the unemployment and pensions, and all the other companies that rely on GM will go belly up as well. No, I don't like the idea of the government sticking their fingers in private and public companies. I would really like to see the government shrink actually but I doubt that will happen soon. So, let's help GM with some stiff stipulations; 1) Restructure management 2) No more unions and 3) I would rather my tax dollars go to aid this company than to a bunch of unemployed ex-employees.
Thank you for taking the time to read and I am always looking for information on these topics.
I have a six year old American made car (Ford.) 87,000 miles on it and its already been in the shop several times. Never had that kind of problem with my Nissan pickup. Will I be able to get replacement parts for my American car if they close? Will the companies that make parts be able to keep supplies up on the old models? Are there enough cars on the road currently to keep the car parts businesses in business making parts for older models? Of course there are! There is still a market for them!
I don't have plans on buying a new car for several years, and when I do it will be the most advanced all-electric that I can afford, so unless the Big 3 can pull that out of their hat, I am not one of those who will decide NOT to buy because they went into bankruptcy. They've already lost a repeat customer.
The bigger fear for GM regarding bankruptcy is that there are no financial backers available to them if they go that route.Without federal help, the only real bankruptcy route open to them is liquidation.GM is the Lehman Brothers of the Big 3.
Jason
You overlooked to mention that Japan had been buying dollars to prop up our dollars so that we could artifically afford Civics and Corollas. Japan probably will reduce buying dollars as it consolidates the control of American car market toward 80 or even 90% up from 50% now. Our dollars will start sinking and we will pay more for gasoline as OPEC will demand more dollars to reflect stronger yens and even Euros and British pounds. Our American capitalists are running away from our own issues whenever we see mirages of better solutions from overseas that will prove to be mirages neverthelessly. Yet our capitalists will not own up to their repeatable mistakes of the past as we will continue our pursuits of politically expedient escapades from the howlings of our American voters...
We need to keep the American auto manufacturers in business. In order to do that, we have to get rid of the unions.
Or else we will all be stuck with foreign cars that cost $2300 just to change the spark plugs.
I know, I had a mitsubishi Eclipse The quote from the dealer for the 60,000 mile tuneup was $2300 for 6 sparkplugs and an air cleaner. I traded it in that day on F-250.
You're absolutely right. Shared leadership here means shared failure. They should get a dime of money from anyone until all the GM executive management and union "leaders" are gone.
On Nov 17 09:24 AM IXLR8 wrote:
> If the CEO should go, so should the head of the UAW and its entire
> leadership (?) team.
>
> .