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Government Taking Over GM

This is such a bad idea.

A new name for Detroit’s weakened auto giant GM is making the rounds, sometimes with irony, sometimes with dread, suggested by the deepest Washington industrial intervention in a half-century. The Obama administration is planting itself at the wheel of General Motors with a major ownership stake — and all that goes with it for the U.S. taxpayer.

The company appeared closer than ever to filing for bankruptcy protection on Wednesday after its bondholders turned their backs on a federally ordered offer to swap their debt for GM stock. If GM does file, the governments of the United States and Canada could end up with as much as 70 percent of a reconstituted GM when the court dust settles — with the biggest share by far held by the U.S. Treasury.

For a moment, set aside the fact that this is a fascist act and consider the practical implications.  Now, when GM needs to close a plant, the politicians who represent the district where that plant resides will be on the phone with the President.  If GM wants to outsource some jobs overseas (as we have seen in Wisconsin), the politicians will be able to squash the move.  If the union doesn’t like a contract, it can contribute heavily to the politicians to sway their votes. 

In other words, GM will not be making decisions based on the market and what it needs to do to compete.  It will be making decisions based on the contradictory parochial interests of hundreds of politicians. 

Worse, what if sales plummet?  Will more tax dollars be used to entice people to buy GM cars?  Will the government mandate that people buy a GM car? 

What the hell is our government doing running a car company?

I will never buy a GM car.

Posted by Owen at 2155 hrs
Economy + Politics + Politics - General

1. My last 4 vehicles have been GM products. I was very happy with the first 3 (all trucks or SUVs), but the last one made sure that I would consider another manufacturer.

   The behavior of GM and the government have made my decision quite firm: no more GM products for me. Which is a shame, because I detest Ford brakes and Chryslers are off the list, too. I may have to buy an import, which I haven’t done for 20 years.

   Posted by .(JavaScript must be enabled to view this email address) on May 27, 2009 at 2325 hrs
   
   
   

2. I will never buy a GM car. 

   Ah - you won’t have to buy it.  The government will issue you one.

   ‘course they’ll take it out in taxes for that fiscal year.

   What - you want the people working for GM to suffer?  Drive your Government Motors car with pride, Owen.

   Posted by Brian Dunbar on May 27, 2009 at 2337 hrs
   
   
   

3. This is just so wrong on so many levels. Barry has never even run a lemonade stand much less a multi-billion dollar company.

   Posted by .(JavaScript must be enabled to view this email address) on May 27, 2009 at 2358 hrs
   
   
   

4. This is just a preview of coming attractions.  The government will subsidize GM cars to drive prices lower.  Enough sheeple will buy them to force Chrysler and Ford to accept government “protection”.  Further, the government will get its’ hands so deeply into energy that any not banned (coal, oil, NG and nuclear I expect to be banned or severely curtailed under this administration) will be government owned and/or directed.

   We continue to choose to give more and more of our lives over to the government….should any of this surprise us?  It’s been going on since the Great Depression.

   Posted by Steve on May 28, 2009 at 0456 hrs
   
   
   

5. That is the biggest worry, that GM can run for crap, and sell their cars cheap, and we’ll just pick up the losses.  That being said, they’ll have to get the prices down to free before I buy a “G"M car.  Have to replace the 3 GM cars in my drive.

   Posted by .(JavaScript must be enabled to view this email address) on May 28, 2009 at 0817 hrs
   
   
   

6. GM will not be making decisions based on the market and what it needs to do to compete.

   The truth is that under stupid-@$$ “global warming is a crock of sh*t” Bob Lutz, GM has committed harakiri precisely by not making market-based decisions and not doing what it needed to do to compete.

   GM’s workers would know better.  Oops, socialism.

   Posted by .(JavaScript must be enabled to view this email address) on May 28, 2009 at 0836 hrs
   
   
   

7. I am tempted to say, “I am so glad to be driving a Toyota”.
   But first a reality check -
   To what extent is Toyota, or Nissan, or any other ‘import’ built in the US, subsidized by the mfg’s home country government??

   Posted by .(JavaScript must be enabled to view this email address) on May 28, 2009 at 1014 hrs
   
   
   

8. To what extent is Toyota, or Nissan, or any other ‘import’ built in the US, subsidized by the mfg’s home country government??

   Didn’t find that yet (I remember trying to awhile back), but here is something about local/state government subsidies for foreign-owned plants in the U.S.  Don’t know how reliable the source is, but:

   http://www.reliableplant.com/Article.aspx?articleid=14907

   Subsidies include:

   •      Honda, Marysville, Ohio, 1980, $27 million*

   •      Nissan, Smyrna, Tenn., 1980, $233 million**

   •      Toyota, Georgetown, Ky., 1985, $147 million

   •      Honda, Anna, Ohio, 1985, $27 million*

   •      Subaru, Lafayette, Ind., 1986, $94 million

   •      Honda, East Liberty, Ohio, 1987, $27 million*

   •      BMW, Spartanburg, S.C., 1992, $150 million

   •      Mercedes-Benz, Vance, Ala., 1993, $258 million

   •      Toyota, Princeton, Ind., 1995, $30 million

   •      Nissan, Decherd, Tenn., 1995, $200 million**

   •      Toyota, Buffalo, W.Va., 1996, more than $15 million

   •      Honda, Lincoln, Ala., 1999, $248 million

   •      Nissan, Canton, Miss., 2000, $295 million

   •      Toyota, Huntsville, Ala., 2001, $30 million

   •      Hyundai, Montgomery, Ala., 2002, $252 million

   •      Toyota, San Antonio, Texas, 2003, $133 million

   •      Kia, West Point, Ga., 2006, $400 million

   •      Honda, Greensburg, Ind., 2006, $141 million

   •      Toyota, Blue Springs, Miss., 2007, $300 million

   •      Volkswagen, Chattanooga, Tenn., 2008, $577 million

   Total: more than $3.58 billion

   Posted by .(JavaScript must be enabled to view this email address) on May 28, 2009 at 1041 hrs
   
   
   

9. mht - not sayin’ its right, but the list above indicates less than $128M per year over 28 years that was largely decided by, and contributed from, the local state and communities.  A lot closer to the people paying the bills.  These actually created many thousands of jobs for those same states/communities.

   As opposed to the somewhere in between $17 and $50 Billion to GM and Chrysler in just the past 6 months to have them lay off several thousands and screw their bond holders (like the Indiana pension funds).  All by the most distant of the government bodies - the Feds…

   Apples and Palm Trees, baby.

   I proudly drive a Toyota built in Princeton, IN.  My next vehicle will most likely be the same.

   Posted by .(JavaScript must be enabled to view this email address) on May 28, 2009 at 1119 hrs
   
   
   

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