Thursday, November 13, 2008

GM Bailout Rant

Ugh, here we go again. We've already been asked to bail out greedy Wall Street who made bad loans for the sake of money and wound up loosing their shirts only to have us the taxpayer buy them all silk ones. Now GM wants a piece of the pie and with a Democrat president to be and the heads of both houses of congress calling for it, I expect it will happen. I try to look at the facts and can't fathom one single idea of why this would be a good thing to do.

1. GM has been bleeding for years, even when the economy was going well. Why? They got into the habit of deciding what we the Joe Driver wanted instead of letting us tell them what we wanted. It caught up with them. Don't forget the unions. They busted balls with their strikes until now GM can't afford to pay them or their pensions or their health benefits. While the first thing may or could change, the second thing isn't. GM has stated that they are loosing over $2 billion A MONTH and that figure is expected to increase after the first of the year. How many billion do you have to give a company bleeding billions of dollars every month to save them? Our government's solution so far is about $25 billion devided between the big three. That comes to a little over $8 billion for GM's share or just until mid-March when things are supposed to be worse for them they they are now.

2. Yes, giving billions of dollars to GM right now will help the very union that helped bleed GM dry live to see another day and possibly another strike so that they can stick the company for more money. Is that what we really want? When the starting salary for a new hire is $29 per hour and when the average experienced union line worker makes twice what an non-automotive industry engineer other highly degreed individual, something is not right. Union wages have been artificially inflated for years and now that an economic recession has come home to roost, they are paying the piper.

3. Yes the union members trickle down their wages to others. Since when does building your economy around three failing companies make good sense? Obviously the American public has spoken by saying they would rather by cars from other companies than GM. Why don't we invest money in companies of our future instead of dinosaurs of our past?

Evidently the currant occupant soon to be evicted it against this and I say more power to him. If he wants to try and redeem himself a marginal amount from being the absolute worst president, he needs to stand up and veto any bailout legislation for GM. But we all know what is going to happen because this will be another bi-partisan load of crap meaning that everyone in government and big business wins and every taxpayer gets screwed. Bush will hold out for free trade with Columbia and sign both pieces of legislation. Government wins again, we lose.

13 comments:

R. Sherman said...

Of course, it's all about the votes. Let's appease the far left environmentalists by making it more difficult and costly to drive while propping up auto companies when the results of those policies begin to hit home in order to hold on to Labor support.

Must stop now as my blood temperature is starting to red line.

Ed Abbey said...

R. Sherman - My blood temperature did hit the red line and ended up with a rant on GM.

Tossing Pebbles in the Stream said...

It seems turning to the government for help should not be the first choice. Have they tried to find private investors with deep pockets, Have Executives agreed to take a large pay cut, say 30%. Have the unions agreed to take pay cuts, say 20%. Is there a very specific business plan toward ending the bleeding of capital. Then and only then the government might be asked to help in exchange for shares in the company.

Ed Abbey said...

TPITS - Private investors are bleeding as everyone does in a recession, excutives seem never to take pay cuts, unions certainly don't take pay cuts and nobody has the stomach to do what would be required to save something like GM, namely cut it down to half and get rid of about 75% of it's lineup of cars. The only one gullable enough to hand over the money seems to be us because we can't protest enough for our representatives in Congress to hear us. I'm fed up with our government's method of dealing with our economy and I doubt the next occupant is going to make it any better.

A Monthly Contributor to GMAC said...

I disagree with part of your first point, Ed. They did listen to Joe Driver and Joe Driver wanted large trucks (bought with or without an employee discount) and more choices in vehicles.

It seems with the past few years of the older employees retiring or taking buyouts, the passing on of the retirees health care to the union and the hiring of much cheaper employees would have helped somehow. It seems that maybe this continual money issue is due to the upper level..and the lineup of cars. Something like Saturn could probably be cut and do well on its own but really, would we be missing something important if Pontiac just disappeared? I don't think so.

Sidenote: Ford employees get a discount on purchasing Nissan vehicles. When I found this out, the whole debate of us vs them, "Drive American and Support Our Jobs" is just b.s. I think I need a bumper sticker that points this out. :-)

Ed Abbey said...

GMAC - Okay, perhaps I'll concede that point and amend it to say that they haven't been listening to what I want which is a fuel efficient quality made car instead of gas guzzling rattle traps.

I think the biggest thing GM needs to do is trim down their line of cars. I can think of a half dozen vehicled off the top of my head that they simply change the badge name and a few pieces of trim and call it a totally different name.

I wouldn't miss any GM produced vehicle myself no matter what the name. I drive Hondas and Toyotas mostly which are made in the midwest. I think I read where almost a third of GM's plants are in Mexico. Driving America certainly ain't what it used to be.

A Monthly Contributor to GMAC said...

Don't you find it rather amusing when I quit being a smart a$$ and show off my somewhat large brain? :-)

Ed Abbey said...

GMAC - Too bad you posted anonymously so no one else knows the size of your brain.

A Monthly Contributor to GMAC said...

I prefer to surprise people.

Ron said...

The whole idea of "bailing out" is pretty silly, in my opinion. I agree, they are just putting a little bandaid on a terminally ill patient, at our expense. If these big fat corporations gave a hoot about saving their companies, they have other options - albeit drastic - to salvage the parts that are functional besides taking a bailout.

GM (and many big American-run companies, it seems) have run themselves into the ground in their ignorance and arrogance. Times don't stay good forever (or bad forever, for that matter). But who cares in a culture of taking whatever one can and jumping ship when it runs aground? Whatever happened to doing quality work for reasonable compensation? Desiring to produce the best possible value for your customer because they are your neighbor?

I don't think we'll come out of this as quite the superpower we went into it as. I would be very surprised if other countries did not feel a real need to decouple from us over the next few years.

Ron

Murf said...

I was talking about this entry to Big A this morning and he had an interesting alternative viewpoint about your first part. I'm hoping that he will share that in a blog today.

Ed Abbey said...

Ron - I think us coming out less of a superpower will be good four our egos.

Murf - I'll have to surf over there.

Beau said...

Just seems like postponing the inevitable, and I share your rant. Why on earth could they not balance their production lines with vehicles that could compete against the higher mileage choices of the Japanese automakers? Poor management, vision, planning... and its been going on for almost 40 years. Finally, that may change, but I still think a bailout will only lead to them coming back and asking for more.