By on February 18, 2012

Days after Republican Presidential candidate Mitt Romney penned an op-ed in the Detroit News over his thoughts on the bailout, UAW President Bob King is firing back.

In a statement released to the media, King said that

 “He’s trying to rewrite history and attack President Obama and the UAW for successfully saving the auto industry. He is misleading voters about the president’s bold and decisive rescue of the auto industry and about sacrifices made by workers. But voters deserve the truth.”

Romney is hardly the only Republican candidate who has come out against the bailout; 2008 nominee John McCain spoke out publicly against it, and Rick Santorum, a candidate in this year’s race, has also come out against it, but placed the blame largely with President George W. Bush. Nevertheless, Michigan Governor Rick Snyder endorsed Romney this past Thursday.

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85 Comments on “UAW: Romney Trying To “Rewrite History” Over Bailout...”

  • avatar

    I agree with Jack. If you oppose the bailout, you’re a moron.

    • 0 avatar

      I think it’s moronic to refer to someone who disagrees with you as a “moron.”

      • 0 avatar

        I think it’s moronic for people who can’t get their facts straight to be so quick to form opinions.

        Romney’s piece was riddled with inaccuracies. It’s one thing to disagree based upon the facts, but if one has to lie and omit relevant facts in order to support his case, then his case probably isn’t very good.

    • 0 avatar

      i gotta take back my agreement with that article, should’ve rolled the dice and letem’ fail. the ‘bailout’ has been a joke, and doesn’t represent capitalism at all. jobs would’ve been lost, yes, but jobs would’ve been created in the wake of the damage as the space created by the failed companies would’ve been filled.

      • 0 avatar

        We don’t know that because it’s all a what-if. Academics may argue it and come to their own conclusions, but we don’t really know.

        It’s possible that one of big three would have died and the other two would have come out stronger. It’s possible that all three failed and failed so hard they dragged down every other sector in the economy.

  • avatar

    The concept of government bailouts doesn’t sit well with most Americans (myself included) – and for good reason – nobody likes corporate welfare. However, with the right judgement and execution, they can be in the national interest as it clearly was the case with the auto rescue. It would be foolish for us as a country to led rigid ideology get in the way of pragmatic action.

    • 0 avatar

      I’m ok with the bailout for national interest reasons even though it goes against what I believe. My trouble is how the UAW and other corporate cronies received ownership of the new company – the taxpayers should have gotten ownership.

      • 0 avatar

        “the taxpayers should have gotten ownership”

        That did happen.

        “My trouble is how the UAW and other corporate cronies received ownership of the new company”

        The union VEBA was a creditor in the original bankruptcy. As is the case with the bondholders, the VEBA took stock instead of cash. Would you have preferred that the government wrote them a check?

        You might want to learn some basic facts about what happened before forming an opinion. It’s pretty obvious that you don’t understand it.

      • 0 avatar

        “My trouble is how the UAW and other corporate cronies received ownership of the new company…”

        I’m even more troubled by the fact that we’re sharing the wealth the very minute that profits start rolling in.

        Various parties to the automotive meltdown – including labor, management and investors – skimmed off profits for years, all the while knowing that the house of cards was built on a shaky foundation. Now, instead of retaining earnings or investing them in development, they’re giving everyone a slice of the pie. The problem is, what happens when there’s no more pies to slice?

        People do this with their personal finances, as well. I’m no sterling example of thrift, but there are days when I have to hold onto the occasional financial windfall, and rest easier knowing that it’s there for the proverbial rainy day. But that probably makes too much sense for many to comprehend…

      • 0 avatar

        The bankruptcy of GM was handled unusually. It set a bad precedent. Incentives to invest in auto industry winners are fewer. But politically, putting GM down like a rabid dog, while proper and right in principle, was not possible. That said, it could have been executed better. Letting Chrysler live hurt GM (and Ford).

        The same consequence / incentive play was part of the banking / housing fiasco. The current market there is still quite a mess.

      • 0 avatar

        Pch101: “It’s pretty obvious that you don’t understand it.”

        If you’re going to be insulting, at least do it with some wit.

      • 0 avatar
        doctor olds

        @rentonben- As a matter of fact, taxpayers did get 2/3 ownership of the new company, in the case of GM.

      • 0 avatar

        Dr Olds – I understand what you’re saying – the government controls GM and has 2/3 ownership, but I’m increasingly think that the interest of out government are not the interests of us taxpayers. The government will use ownership for its benefit and not ours. I hope to be proven wrong.

    • 0 avatar

      Well if I’m a rigid ideologue for standing in the way of all and sundries pragmatic schemes, using funds that are a veiled confiscation, then so be it.

      • 0 avatar

        Ideology gives us things like freedom of speech, which allows us to express our opinions on a site like this. If we took a purely pragmatic approach, we’d be far more efficient, and just have someone tell us exactly what we should think and feel about our automotive choices. No thanks.

        The examples of what it’s like when governments (and people) do the easy, practical thing instead of what’s actually right are unfortunately too well known. And the far-reaching consequences of that approach are usually worse. Take the Soviet Union’s pragmatic approach to handling political dissidents. Labor camps and summary executions are far more pragmatic than discussion and tolerance for dissent.

        I’ll take idealism 10 times out of 10. Bad decisions in the marketplace are supposed to have bad consequences. Period. Think I’ll buy another Nissan, next time around, and GM and Chrysler can pound sand.

  • avatar
    coach bryant

    my problem with the bailouts is the entity that caused the problem wound up profiting from the “solution”: the uaw.

    uaw pension schemes sank gm. period.

    the “company” is now crowing about record profits, (when are they gonna finish paying back the money??) they’re handing out cash to union members after telling salaried non-union members to forget their pensions and bonuses. now tell me who’s running the show.

    “According to Bloomberg News, the White House requested that Honda, Kia, Mercedes-Benz, Toyota and others bring their most fuel-efficient vehicles to last month’s (washington) auto show for the president to see, and to make representatives available to answer questions.
    With two days notice, the members of the Association of Global Automakers scrambled to be ready. But when he got to the show, the president acted as if they weren’t there.”

    “Honda, Kia, Mercedes-Benz, Toyota and others”

    translation: non-union manufacturers.

    (no no, that’s not the sun rising, it’s the chevy volt. yeah, that’s the ticket)

    • 0 avatar
      Robert Schwartz

      Those who know something about corporate reorganizations recognized that the bailout/reorganization of GM and Chrysler was a politicized process with only a tenuous relationship to normal Chapter 11s.

      The UAW was given far more value than it would have received on the merits and was able to preserve its contracts, which should have been the first things to go.

      Further, no exploration of a break-up or sale of either company was had. Chrysler was surely worth more in pieces (Jeep, Dodge Trucks, and minivans) than it was as a whole company.

      Finally, the Government gave away things it should not have given, such as GM’s tax loss carry forward.

      Even if you accept the idea that the Federal Government should have done something in the situation, you must concede that the process stank.

      • 0 avatar

        Of course it was politicized, since the DIP lender was the UST. The NOLs were odd given the 363 rules, but a judge reviewed it thoroughly and many lawyers did some good arguing it seems. As you know, the mgmt and DIP lender hold the rights to the initial plan and the creditors have the opportunity to be heard by the judge. There wasn’t anyone close to offering the funding of the UST at that time and without a DIP lender, there can be no managed Ch.11 where breakup CIMs are evaluated and auctions done. It may look smelly without the benefit of the pressures and environment during the time that those decisions took place, but the politicizing was more on behalf of dealers and a bit of unions by Congress. If you recall, there were many attacks on the UST for not being significantly more political in their calculations. They gave Chrysler to FIAT for pete’s sake. The bondholders got stakes in GM and MLC liquidations. Given the DIP lender’s conditions and the panicked desire to exit Ch.11 as soon as possible, please tell me who was willing to step up and buy the pieces for more than the whole and who was willing to provide the DIP to buy the time for that to an orderly process that didn’t lead to downward spirals?

        Could things have been done better in retrospect? Sure. But saying that the process stank is like questioning Captain Sully for not finding an empty stretch of land to land on rather than the Hudson. They did a pretty good job, which is rare for the govt. Let’s move on.

    • 0 avatar
      doctor olds

      @coach bryant- I agree with your assessment as to the UAW’s role in sinking GM. As a matter of fact, they almost sank the whole U.S. industry. I also agree with your observation that Obama skewed the restructuring to benefit the union, while being silent on their role in the problem.
      On the other hand, the new company is doing very well, and the union did accept reduced compensation in exchange for profit sharing.

      • 0 avatar

        “I agree with your assessment as to the UAW’s role in sinking GM.”

        The union didn’t force you to design and engineer lousy cars that nobody wanted. You did that willingly because you thought that you knew better.

        You still refuse to admit that Toyota and Honda designed and built better cars than you did. If there is a legacy cost that Detroit had to pay, it was the hubris that came from your refusal to admit that you and your brethren were outclassed by overseas talent.

      • 0 avatar
        doctor olds

        @pch101- The union did impose unsustainable costs on all three US makers, who were in similar financial straits. Take a look at the relative size of GM Ford & Chrysler through the decades, and you will also see the entire domestic sector declines fairly evenly.

        What presumption on top of such profound ignorance.You clearly have no understanding of what I or anyone inside GM knows about product quality or competitors.

        You are just echoing what other sideline chatterers who think they know something, have said.

        With Cars nobody wants, how do you explain the fact that more consumers, by far, continue to choose GM cars than any other maker? There lead over second place Ford jumped substantially last year. Your opinion is not borne out by reality.

      • 0 avatar

        This bears repeating:

        You still refuse to admit that Toyota and Honda designed and built better cars than you did. If there is a legacy cost that Detroit had to pay, it was the hubris that came from your refusal to admit that you and your brethren were outclassed by overseas talent.

        The domestics used to have something over 90% market share. Now, they have about half. Remove rental cars from the equation, and they now hold a minority of US retail market share.

        That came from making cars that a lot of people didn’t want. If 90% of the population wanted that dreck, then they would have continued to buy it. But once that they were provided with more appealing options, then fewer of them wanted what Detroit had to offer. Had you offered something more compelling, the market share would have been yours to keep.

      • 0 avatar
        doctor olds

        @PCH101- For some reason the term presumptuous twit comes to mind.

        It would only take you a tiny bit of logic to realize we can’t keep the other guys from making good cars. The mere entry of competent players reduces share of those already in the business. It really is very simple arithmetic and there are very very many more players now than when the domestics held 90%.

        btw- I have never said that Toyota and Honda don’t build some very good cars. They deserve a lot of credit for forcing all makers to get better. Neither have I said GM products have always been good looking or of necessary quality. Those are ideas you attribute to me with ZERO knowledge of the truth.
        All I have tried to do is bring real data and facts to the discussion.
        And GM is #1 in the world and growing! Shows how much you know!

      • 0 avatar

        “It would only take you a tiny bit of logic to realize we can’t keep the other guys from making good cars.”

        You made crappy cars.

        GM filed bankruptcy because the company stuck its head in the sand and refused to admit that GM made crappy cars.

        I realize that your ego and hubris keep you from seeing this. But it is that very ego and hubris that caused the company to fail.

        The bankruptcy was the fault of people like you, who should have done something but failed to act. Since you want someone to blame, you’re in luck — look in the mirror.

      • 0 avatar
        doctor olds

        @PCH101- You evidently have psychic powers to judge someone you never met and whose background and experience you can only guess at. Now if only that power could be harnessed for good…

      • 0 avatar

        All this, and you still won’t admit that Honda and Toyota made better cars than GM did.

        Curing an addiction begins with admitting the problem. In this case, GM was addicted to failure and hubris, so the cure begins by admitting the failure.

        The Civic was better than the Cavalier. Just admit it.

        The Camry was better than the Pontiac G6. Just admit it.

        The Honda Fit was better than the Aveo. Just admit it.

        The list can get much longer. Just begin with three, and you’ll be on the road to recovery.

      • 0 avatar
        doctor olds

        @pch101- I don’t agree with every example on your list, but I do agree that Toyota & Honda at one time built MUCH higher quality products than GM or any other company. I don’t know what me writing this does for you, but I want to stop your begging.

        Today, the vehicles at the top of the quality list change among makers with regularity. There is no longer a huge gap between the Americans, the Japanese and the Koreans. The Euro brands lag.

        There is no doubt that GM has suffered from quality problems and bland to ugly styling. That is no longer the case. My opinion is not self aggrandizement. I don’t take personal credit for the improvements, nor am I responsible for the failures. I simply have had the vantage point to see reality in a close up way that most commenters can only imagine.

        My point about the union power sinking them is simple. Even with volume declines associated with market share losses in the face of fierce global competition, the company could not cut labor costs. The JOBS bank cost nearly $1Billion a year to pay people for whom there was no longer any work. In addition, UAW retiree health care alone cost GM $7B/year, a cost the non-U.S. brands did not have to bear. That meant GM had to net $8B before breaking even with those costs.

        Unlike sideline chatterers, I have a clear understanding of the impact of the financial strains on product development budgets.

        There is plenty of blame to go around, but the 800# gorilla really was the labor costs.

      • 0 avatar

        “I don’t agree with every example on your list”

        Then we’re off to a bad start.

        “I do agree that Toyota & Honda at one time built MUCH higher quality products than GM or any other company.”

        It seems that you wish to claim that the gap is ancient history.

        It isn’t. GMNA still generally does not make class leading products. Although the aesthetics have improved over the last couple of years, reliability is, in many cases, still inferior to the best of its mainstream rivals, while they have lacked the intangibles that help the Germans to dominate the luxury categories.

        The union didn’t cause the cars to lack styling or to be less reliable. The union didn’t cause GM to miss that Mercedes and BMW had redefined the requirements of the luxury segments. Those failures were the fault of bad design, low grade parts and an ineffective adaptation of lean production.

        These were management failures, through and through. The UAW built what you told them to build. When Toyota told them to build Corollas, they did just fine, in a plant that was one of the worst in the country when GM was in charge of it.

      • 0 avatar
        doctor olds

        @pch101- The union’s role was to bleed all three US makers dry. Check Ford’s debt to help you understand.

        Since you have no understanding of vehicle product development, you can not connect the dots. No money for PD, product lags, consumers make other choices, there is even less money for PD.
        In this way, the union did have a hand in influencing product actions as well.

        Regardless of what you think, GMNA made $7B last year and gained market share equivalent to half of an Acura, Infiniti, or Audi at the same time. The region is poised to make a lot more money this year.

        GM’s product weakness may not be ancient history, but the empirical results indicate that it is history. GM commands higher prices, sells more and makes a lot of money doing it. Reality just does not square with your opinions.

      • 0 avatar

        “The union’s role was to bleed all three US makers dry.”

        That’s a hollow cliche that means absolutely nothing.

        The US automakers made lousy cars. This caused them lose market share and pricing power. As they lost pricing power, it became more difficult to get sufficient revenue to cover their costs. This was especially bad for GM, because it had multiple retail channels that were competing against each other and that began to fight over ever smaller pieces of pie.

        The irony is that you want to present yourself as having insider “expertise”, when it is that very “expertise” that caused the company to fail. You did it to your own business, yet you won’t take responsibility for it.

        The union made the lousy cars that you told them to build. They played no role in designing the cars that the market didn’t want. Again, when Toyota gave them a Corolla to build, it proved to be a perfectly good Corolla that was just as reliable as its Japanese-assembled counterpart, and it was built in a plant that was notoriously bad when GM was running it.

        Your continual denial only proves my point. GM needed to be fixed by the government because all of these fantastic “insiders” were the obstacle that kept them from being fixed in the first place. You weren’t part of the solution, you were part of the problem — your refusal to take responsibility for what you did is the essence of what caused the failure in the first place. It’s akin to the alcoholic who blames everyone else but himself for his world crashing down around him, when it is own addiction and his failure to remedy it that is the root of the problem.

      • 0 avatar
        doctor olds

        What you write about has some validity, as far as it goes, but that is only about 1 inch deep and 1/2 inch wide, as you might expect from an outsider looking in.

        I will try to make it simple.
        Absent UAW power:

        GM could have imported small cars from low cost producers rather than being forced to maintain loss making production here. (Ford and Chrysler had the same burdens.)
        GM could have laid off workers who were no longer needed- instead they were forced to burn almost $1B/year on Jobs bank- folks with no work in the foreseeable future. They even had to pay the rest 95% of their wages, even if they were laid off due to a strike in a key plant.
        GM could have controlled the skyrocketing costs of 30 & out UAW retirees full health coverage- a cost of $7B/year not borne by the off shore competition or even their very young transplant operations.

        The UAW role in sinking GM was imposition of unsustainable costs that depleted all three U.S. companies over many years. It is the hidden hand behind why the three were running the plants and discounting to sell, and lacking adequate funds for product development, a viscious downward spiral resulted.

        GM built, as you say, crappy cars, which accentuated their market share loss, but that could have been handled if the company had control of labor costs, particularly entitlements. For reference- GM UAW retiree health care costs alone totalled $105B over the 5 years leading to bankruptcy, far more than the cumulative losses, include the market collapse years.

        Yes, the UAW is the 800# gorilla. And
        Yes there is plenty of blame to go around.

      • 0 avatar

        “GM could have imported small cars from low cost producers rather than being forced to maintain loss making production here.”

        GM’s strategy was to design cars around regional tastes. That meant making cars in North America for Americans.

        In any case, when GM did reach across the water, it ended up with Saabs, Isuzus and the Korean Pontiac Lemans. Or in the alternative, it built a North American version of the Opel Kadett, i.e. the Chevette. Boy, that turned out well, didn’t it?

        “The UAW role in sinking GM was imposition of unsustainable costs”

        When GM lost pricing power, **all** of the costs became unsustainable. You repeatedly miss why GM lost pricing power — because it built lousy cars, which harmed their reputation, which caused them to reduce price.

        “GM built, as you say, crappy cars, which accentuated their market share loss, but that could have been handled if the company had control of labor costs, particularly entitlements.”

        No, the way to deal with the crappy car problem is to stop building crappy cars. Whether the workers make $30 per hour or $30 per day doesn’t change the appeal or lack thereof of the products that they make.

        The Vega would have sucked, no matter how much they paid people to build it. The Cavalier was inferior to the Civic, regardless of the wages of those who assembled it. There were people in Detroit who believed that those products were competitive, but they were wrong.

      • 0 avatar
        doctor olds

        @pch101-You ought to separate your ideas about good product from business realities. I notice you asserting things of which you have no understanding, such as your assessment of the costs and advantages of selling off Opel. You just don’t know what you don’t know, and seem disinterested or unwilling to learn.
        You presume to know GM’s manufacturing location policies and the basis for them, apparently because some journalist told you. Americans do not want small cars. No one sells very many of them here, at one point Aveo was the best seller in its segment, and no one makes much if any money on them here, even the imports from low cost producers. These are facts, not opinion.
        All of the “Detroit 3” wanted to import small cars, to comply with CAFE, but the UAW influence on congress led to separate Import/Domestic CAFE averaging such that American carmakers, uniquely, have been forced to build small losers(financially at least) and push them out the door here so they could sell profitable larger vehicles. “America for North American tastes”, that idea went out the window with the draconian impact of CAFE, which could be condensed to: Congress banned all of GM’s profitable big cars, forced them to completely reengineer their fleets at costs in the many $billions to comply with regulations, dispite the reality that Americans had little interest, other than a brief spike during the oil embargo. Look at the market share of trucks. They had never been more than 15-20% of the market until CAFE, when they quickly rose to over half the market. Americans still turn their backs on highly efficient vehicles. Until the next gas spike, at least.

        I claim no superhuman expertise, but I do understand and know a lot of the numbers. I know what I am talking about because I haved been paying very close attention for many decades. I had the rare opportunity to be part of a skyrocketing car division as it rose to unparalleled success and also watched it slide into oblivion. I understand customer satisfaction and how GM stumbled in more ways than most. The story is complex, has huge interplay between politics, government bureaucracy and union power, itself the result of government intervention in the industry during the FDR era. I tend to dislike unions, but will even go so far as to applaude UAW leader Rob Gettlefinger for finally coming to the table and establishing a reasonable contract before the near death experienc. Ford’s financial success today is a result of the breakthrough contract of 2007, as is most of GM’s and Chrysler’s.
        Sure, GM leadership made mistakes, but that is a only one, and not the dominant component of the of the issue. Union power, adversarial goverment policy, global competition are all components. And, in case you have not been paying attention, American manufacturing firms have been under great pressure for decades.

      • 0 avatar

        “You presume to know GM’s manufacturing location policies and the basis for them, apparently because some journalist told you”

        Alfred Sloan was a journalist? Funny, I had no idea. Here, I was belaboring under the impression that he was the chairman of General Motors, but thanks for correcting me.

        “Americans do not want small cars.”

        Well, that certainly explains how the Honda Civic and Toyota Corolla have consistently been top selling passenger cars in the US market. Again, thanks for that fantastic insider knowledge of yours for correcting my mistake.

        “American carmakers, uniquely, have been forced to build small losers(financially at least) and push them out the door here so they could sell profitable larger vehicles.”

        Again, that certainly explains how Toyota and Honda lost gobs of money on their US operations as they steadily took market share away from Detroit. Oh, wait a minute…

        “All of the “Detroit 3″ wanted to import small cars, to comply with CAFE”

        And again, GM is to be praised for having such fantastic success with the Korean-built Pontiac Lemans. Really turned things around, didn’t it?

        “Ford’s financial success today is a result of the breakthrough contract of 2007”

        Ford has improved quality considerably.

        You really don’t get it. All of this “insider” wisdom of yours is exactly what caused GM to fail in the first place. The fixation on costs, at the expense of the customer, is what destroyed GM’s pricing power.

        I’m glad that you post this stuff, because it shows how deeply ingrained these failed ideas were within GM’s culture. You obviously have no idea how ironic your comments are; you do a much better job of proving my points for me than I ever could on my own.

      • 0 avatar
        doctor olds

        “Alfred Sloan was a journalist? Funny, I had no idea. Here, I was belaboring under the impression that he was the chairman of General Motors, but thanks for correcting me.”
        You are welcome. I am surprised you are old enough to have known Sloan. He has been dead for 46 years and has not been chairman of GM since the ‘50’s. You may want to update your knowledge bank. Admit it. You only know what you read

        “Well, that certainly explains how the Honda Civic and Toyota Corolla have consistently been top selling passenger cars in the US market. Again, thanks for that fantastic insider knowledge of yours for correcting my mistake.”

        You are welcome. It is nice to see you willing to learn!
        Small cars account for a small fraction of U.S. sales, and an even smaller share of sales dollars. Look it up, inform yourself. Think rather than emote. Besides, try to focus, we are talking about an earlier time frame: The intro of CAFÉ, in the 70’s. You may note that trucks still account for over half the market today. Now how many sales do high efficiency vehicles generate?

        “Again, that certainly explains how Toyota and Honda lost gobs of money on their US operations as they steadily took market share away from Detroit. Oh, wait a minute…
        Yes, you should wait a minute. They do not build their high mileage cars here, they import most of them. Toyota and Honda initially just imported what they were already selling at home. For years they built up CAFE credits that allowed them to import larger, less efficient vehicles. That is where they make their money and have had the most growth. They continue to import lower efficiency vehicles and small, high efficiency vehicles to balance them for CAFE. They produce the mid range here. Only GM produces a car in Sonic’s class in the U.S. Every other entry is imported today.
        These are facts you can look up, if you choose to inform yourself.
        “Ford has improved quality considerably.”
        So what? Fords command substantially lower transaction prices than GM vehicles in North America. Ford still lost market share in NA last year while GM gained “half an Acura” and was very profitable. GM is just getting started, btw.

        “You really don’t get it. All of this “insider” wisdom of yours is exactly what caused GM to fail in the first place. The fixation on costs, at the expense of the customer, is what destroyed GM’s pricing power.”
        Another parrot of what some journalist wrote. Fixation on costs is necessary all the time in any successful business. Go ask someone who knows, if you know anyone. I pointed out that financial stresses constrained product development money, not that all cost is bad, but cost control is always necessary. Perhaps a business course might help you understand.

        You presume to much of which you are clearly ignorant. For example, you have never met me and yet have determined that I and my attitude are to blame for GM’s downfall. You don’t even know my role or assignments in the company, yet you feel free to make judgments. You assume you are knowledgeable of GM management decisions, while displaying profound ignorance of the truth.
        I am relating facts that surround a profoundly more complex issue than you are willing/interested/capable of understanding in your zeal to condemn GM leadership and satisfy you simplistic thinkging. I make no apology for focusing on the systemic issues that impacted all three automakers. I have never held GM leadership blameless, but point out other issues at play.

        GM builds great products these days. They are finding success in the market. The simple proof is that the new company made more operating profit than ever in old GM’s history, Chevrolet had its highest volume year ever and GM is #1 in the world by nearly a million over second place VW and almost 4 million over 5th place Ford. The company generated $9.2B operating profit along the way. It really does not matter what you think, the numbers tell the truth, a different story. I do appreciate the thought exercises!

      • 0 avatar

        “I am surprised you are old enough to have known Sloan.”

        Sloan created the regional production and branding orientation that the company has generally maintained long after he left. I would hope that you would know this, since you worked there, but apparently you need an outsider to educate you about your former employer.

        “Small cars account for a small fraction of U.S. sales, and an even smaller share of sales dollars.”

        Small cars have been profitable for Toyota and Honda. More importantly, they were the gateway to building brand loyalty among young buyers, which helped to pop the bubble in Detroit’s market share. Again, maybe you should learn something about auto industry demand, instead of just endlessly regurgitating the talking points of a failed General Motors. (If you are going to just recycle someone else’s rhetoric, try to pick a winner next time.)

        “Yes, you should wait a minute. They do not build their high mileage cars here, they import most of them.”

        Er, their US top sellers are all built in North America. Again, maybe you need to learn something about the auto industry, rather than just rehashing inaccurate GM talking points.

        “Fixation on costs is necessary all the time in any successful business.”

        That’s complete nonsense.

        Again, you and your company failed. You have nothing to teach me about success in your industry, except to provide cautionary tales about what not to do.

        If it was not for the US government and the automotive task force, GM would have been liquidated. Gone. History. GM is here today because outsiders came in and restructured the old GM of which you were a part. Your ways didn’t work; that’s why they were tossed out onto the rubbish heap, where they belong.

      • 0 avatar
        doctor olds

        @PCH101- You can’t refute one fact so you change the topic, think you are clever and make an ignorant response. I wrote that the foreign based brands import their high efficiency vehicles, so you changed the topic to high volume sellers, typical response of a know nothing Sideline chatterer.
        The difference between us is that you actually are reciting rhetoric, repeating ideas someone else gave you, while I lived inside the beast for 40 years, participated in very, very many meetings to plan and track performance. I have the data on my side, and you can not refute any of it.

      • 0 avatar

        “You can’t refute one fact so you change the topic”

        I’ve addressed the topic specifically:

        -GM made inferior cars compared to the competition. It failed for that reason.

        -Small cars are profitable, despite your claims to the contrary. The most costly alternative is for a mainstream automaker to ignore the small car market, since it is a path to future sales.

        -GM has never had a strategy based upon importing large numbers of vehicles. That’s a fantasy that you’ve concocted out of thin air.

        -GM’s fixation on cost destroyed the company, since it came at the expense of brand equity.

        Again, we have nothing to learn from the failures who destroyed General Motors. Just as I wouldn’t take leadership lessons from Mussolini, I’m surely not going to take business lessons from a bunch of incompetents who destroyed what was once the world’s largest corporation. You can teach us how not to run a business, but otherwise, you ought to take lessons from someone else who knows better instead of pretending that you’re in a position to lecture anyone.

      • 0 avatar
        doctor olds

        “-GM made inferior cars compared to the competition.”
        True,the cars were not good enough, and that contributed to market share and brand equity erosion.
        “ …It failed for that reason.”
        You may note that IBM once held a huge share of its business sector, but still survives despite the entry of many competitors and decades of market share decline. It is a factor, but just one of several for GM. The financial crisis of October ’08 is the direct cause. The collapse was abrupt and deep and caused even Toyota to lose money for the year due to only 2 ½ months exposure to the US collapse. Toyota went on to lose much more than GM in ’09 Q1 as a result. Look it up. Inform yourself. Try to open your mind to learn, as hard as it may be for you.
        “Small cars are profitable, despite your claims to the contrary.”
        You imagine this to be true, with no knowledge whatsoever. I specifically recall a time when GM was losing an average of $1,600/car on the 1.6M volume of the Small Car Group, an annual loss of $2.6B, courtesy of the UAW and CAFE. This is real versus the thought games you so smugly play.
        “The most costly alternative is for a mainstream automaker to ignore the small car market, since it is a path to future sales.”
        “Most costly.” is pure conjecture with no data behind it. It has philosophical validity but is pure opinion since, to reiterate, you have no knowledge or understanding of real data.
        “-GM has never had a strategy based upon importing large numbers of vehicles. That’s a fantasy that you’ve concocted out of thin air.
        Where were you in the ‘60’s and ‘70s? I was with one of the most successful car divisions in history and actually know what was going on then and through the decades since then. I was aware and involved when the debates occurred relative to separate CAFE fleet averages and truly understand the burden it placed, uniquely on the American companies.
        “-GM’s fixation on cost destroyed the company, since it came at the expense of brand equity.
        Simplistic analysis, presumes emotional drivers for business decisions, ignorant of real world facts and conditions.

        Your presumptuous, yet startlingly ignorant perspective is fascinating. I present real world data, and you present opinion, clearly derived from journalists and the blogosphere.Book learning versus the school of hard knocks.

        Believe me, you do have a lot to learn, but fortunately, your opinions are quite irrelevant for any real world purpose.
        A wise man understands how much he does not know. You do not possess that capability.

      • 0 avatar

        “You may note that IBM once held a huge share of its business sector, but still survives despite the entry of many competitors and decades of market share decline”

        I suppose that I could, but that has nothing to do with this subject.

        “I specifically recall a time when GM was losing an average of $1,600/car on the 1.6M volume of the Small Car Group”

        Again, these examples of yours help to illustrate how bad your analysis is, and how your thought processes have been crippled by your time at General Motors.

        We all know that GM sucked at building small cars. We know that GM lost money on them. Nobody is arguing with you about that — GM was incompetent and failed to make money on its dreck.

        However, GM’s superior competitors — the ones that you refuse to learn from — did profit from smaller cars at the same time. They profited from them because those competing cars were superior, and could be retailed at higher volumes and at higher prices.

        You want to pretend that “brand equity” is some sort of emotional disorder, but that is the factor that allowed Toyota to sell a Corolla in higher volumes and at higher prices, and that would depreciate less, than an identical Geo Prizm. (And you will notice that while Toyota and its Corolla both still exist, not the same can be said of either the Geo brand or the Prizm nameplate.) Brand equity creates profits, and GM squandered what it had of it.

        The problem wasn’t with small cars. The problem was with GM’s incompetence. This is astoundingly obvious, but even after all of those years of GM failure, you still can’t learn from them. You blame the segment, instead of blaming yourselves for failing to profit from it.

      • 0 avatar
        doctor olds

        @PCH101- Try to learn. IBM is a large industrial company that once held a huge share of its market. It has lost a great share of that market and did not fail as a result. They did not have a union powerful enough to prevent them from controlling costs.
        GM, likewise, had a large market share that eroded over time, but, since they could not control labor costs despite less volume over time, they were too weak to sustain the ’08 market collapse. Since it is all a thought excercise. The point of the IBM compare is that lost market share does not automatically result in financial failure, despite your simple minded assertion.
        With regard to profit on small cars, you are completely wrong in you belief that they are profit generators and have absolutely no idea how much, if any money any carmaker is making or losing on thm.

        If you have data, bring it. Otherwise you demonstrate only an ability to sit on the sidelines and chatter, repeating the same line again and again with no understanding of the Truth.

        As for your claim that GM is incompetent. The world proves you wrong. They remain the most popular cars of any maker in the world, by far. And every one of the vehicles that comprise that clear success were developed by the organization you imabine to be so incompetent.

        What was it, 3 weeks you spent as an intern in some tiny corner of GM somewhere that makes you think yourself an expert?

      • 0 avatar

        “As for your claim that GM is incompetent. The world proves you wrong.”

        Maybe you don’t read the newspapers, but I thought that GM’s bankruptcy was well publicized.

        The company that employed you went out of business. What’s left of it is called Motors Liquidation Company, and true to its name, it is being liquidated.

        Thanks to the United States government, there is a new company called General Motors to take the old one’s place. That new company didn’t employ you. Yours failed. Congratulations — you undoubtedly contributed to that failure, and that’s the legacy that you’ll be able to look back upon.

        The fact that you’d try to brag about it or claim some sort of superiority about it is disconcerting, though. Again, you don’t have anything to teach us about how to run a successful auto maker, since the one that you worked for crashed and burned.

      • 0 avatar
        doctor olds

        @pch101- Same people, different company name, and the unrivalled sales success is assuredly the result of products and systems in place before the bankruptcy. Even a dim wit should realize it takes several years from concept to production.

        Yes, the world proves you wrong, and will continue to do so.

        Simple minds favor simple explanations. This may be a bit too complex for you.

  • avatar

    This topic always seems to bring out the worst in the B&B. My feelings on the bailouts aside (I thought the auto bailout was more appropriate than the Wall St. bailout, but neither were ideal) I think the story here is Romney. I have a feeling that if McCain had won the election, Romney isn’t campaigning for the 2012 GOP nomination and that editorial isn’t written. Now that the editorial was out there and most (if not all) evidence indicates that the auto bailouts and controlled (i.e. preferential) bankruptcies had their intended effect, Romney has painted himself into a corner.

    There is no way Romney can admit to being wrong about the bailoiputs because 1) to do so would be to admit to being wrong about one of the fundamental elements of his Presidential viability; this business acumen, 2) the concept of Government intervention into private business is contrary to his free market capitalism philosophy (except when it come to the financial industry that helps fund his venture capital firm, but I digress.) and 3) admitting that Obama (and by extension, George W. Bush, since the auto bailouts were all but done at the end of his second term) was right is political suicide in the climate of the 2012 GOP nomination process.

    I’ve watched several recent interviews of Romney and his surrogates. When this topic comes up you can just tell that they know they are on the wrong side of history but can’t admit to it.

    • 0 avatar

      That only makes sense if you think that the “intended effect” of the bailouts was to “save the American auto industry” or some other such nonsense. And that, of course, only makes sense if you belong to the UAW, or leech off their members.

      • 0 avatar

        There were plenty of non-union jobs saved by the bailouts as well. I’m not a UAW fan, or a fan of unions in general. I don’t see how letting the automaker die out of spite would have been the right move.

      • 0 avatar

        You don’t seem to realize that “bankruptcy” doesn’t imply “liquidation”.

        The right move, most likely, would have been to let GM and Chrysler go bankrupt (which would, despite your implication, still have been “controlled” bankruptcies), fully renegotiate their contracts with everyone, especially the UAW, then step in afterwards with loan and pension guarantees to ensure credit.

        Nice try, though, trying to smear a distaste for crony capitalism as “spite”.

      • 0 avatar

        I realize that a bankruptcy does not equal a liquidation. It is generally accepted by those without an axe to grind that in order for a Chapter 11 to work GM would have had to come up with financing for the reorganization. With no private funding available in late 2008, thanks to the economic meltdown, a “normal” Chapter 11 would have become a Chapter 7 liquidation, with the company being closed down and it’s assets sold.

        If saying the bailouts only make sense if “you belong to the UAW or leech off of one of its members.” doesn’t indicate a certain level of spite for the union as a reason to oppose the bailout, then I don’t know what spite is. Just like I don’t know that “crony capitalism” is little more than a bitter, bitter dog whistle from people who lost the argument.

      • 0 avatar

        For future reference, one of the hallmarks of a strong argument is being able to support your case without resorting to denigrating your opposition. If all you can do is yell about axes to grind and dog whistles…that doesn’t leave you with much of a leg to stand on, now, does it?

        Go ask “I won” how well that’s working out for him.

    • 0 avatar
      Steven Lang

      Jimal, your last post has just been awarded the, “Unofficial TTAC Post Of The week.”

      Very well said.

      • 0 avatar
        doctor olds

        I am pleased to agree with awarding Jimal “post of the week”.
        I also think it is fair to criticize the crony capitalism that resulted in the UAW getting much better treatment than other stake holders.

      • 0 avatar

        If that is the post of the week we need to bring Robert Farago back, and fast.

        The more you like government intervention in the economy, the more you like the bailouts. It is a matter of ideology; there is not a right or wrong answer. That is why we have elections, and the majority will decide how we will proceed.

      • 0 avatar

        @Toad, it is just that kind of ideological rigidity that has topics like contraception back on the table as a part of the political discourse.

        As a rule I don’t like as little government control over things as possible while still maintaining a civil society. Unfortunately sometimes you have to hold your nose and choose pragmatism over ideology. I think Type57SC’s “Sully” analogy is relevant.

        @doctor olds. I think it is fair, keeping in mind that the government may have needed to sweeten the pot in order to get the UAW on board. While I still blame the financial meltdown for forcing GM and Chrysler into bankruptcy, the UAW shares a good amount of the blame for weakening those companies to the point where they couldn’t survive the meltdown without intervention.

      • 0 avatar

        No, contraception’s back on the table because it’s an election year and the economy’s still in the crapper. You don’t actually think we’d be hearing all this nonsense if unemployment was below 8%, do you?

      • 0 avatar

        Jimal, your second sentence contains a double negative (“…I don’t like as little government control as possible…”).

        Freudian slip?

  • avatar

    Romney probably just has sour grapes because Bain Capital couldn’t get in on the action, and leverage some kind of GM buyout with other people’s money, screw other GM creditors and pee-on workers and walk away with untold personal millions upon millions…aka vulture capitalism, his “business specialty”.

  • avatar
    George B

    The problem is GM and Chrysler bypassed the normal process of chapter 11 bankruptcy restructuring. From the outside, this appears to have been done to enhance the position of the UAW relative to other interests at the expense of muddying up the law regarding who gets paid first if a manufacturer goes bankrupt.

    One cleaner alternative would be for the federal government to take over retirement expenses for some of the retirees while backstopping loans to fund bankruptcy restructuring. It’s still a bailout, but it would have kept the government a step removed from the car business.

  • avatar

    No one knows with 100% certainty what the outcome would have been with a ( normal ) GM bankruptcy.

    • 0 avatar

      Not with 100% certainty, but I’m confident that a “normal” bankruptcy would have resulted in a liquidation of Chrysler (definitely) and GM (probably). There are few companies with the resources to do anything but break up and dispose of a company the size of GM in the best of times. Coming on the heels of the Wall St. meltdown, I put the chances of either company surviving without the government getting involved at about zero. Whether they should have survived is a topic for much debate, but the loss of one, the other or both would have been cataclysmic.

      I also have yet to hear from one entity that was willing to takeover either GM or Chrysler through a bankruptcy but was prevented from doing so by the government.

      • 0 avatar
        doctor olds

        @Jimal- +1! Anybody wanna buy a good used assembly plant?
        Inside the industry it was well known that commercial credit was gone, courtesy of the financial crisis. The credit freeze also collapsed the car market dragging Toyota, world’s most profitable carmaker at the time, to its first global loss in 57 years. That is particularly significant since it was due to just the last 2 1/2 months of ’08 in the U.S.! Toyota went on to lose even more than GM in Q1 of ’09. No surprise these facts were little reported with the anti-GM bias in media.

        There was no where to go except government for the kinds of sums necessary to weather that storm.

    • 0 avatar

      Darn good point. Whatever the outcome, there would still be enough cars manufactured by someone to satisfy the american demand.

      Maybe pieces would have been bought by other car companies …. and production would continue. There probably would have been a faster right-sizing of production capacity to demand … is it even happening anymore?

      UAW or salary pensions and other benefits would probably be gone though, including those for people already retired. That’s a tough one.

  • avatar

    The biggest car producer in the world per capita is Slovakia.
    For example, if you are a engineer in the car company, a house in good, educated part of the city in Slovakia cost 300 000 dollars. A house in similar part of the city in Canada cost 1000 000 dollars. It is 3 times more.
    (in Vancouver maybe 5 times more)
    So the engineer needs 3 times less money in Slovakia for house. He needs much lower salary.
    The quality of Skoda cars from Czech Republic has better rating in some years than quality of Volkswagens built in Germany.
    So you cannot compete with much cheaper workers from Slovakia and Czech Republic. When Chinese learn to make cars, there will be very little future
    for car production in North America.
    Romney is right, stop bail out, when there is very little future.

    • 0 avatar

      Not so convincing. Aside from the fact that labor costs is just one factor in the calculation, I have heard that kind of argument in Germany too often, and it proved to be wrong.
      About ten years ago there was much rage about the stubborn Germans who refused to drop their ancient industries like mechanical & automotive engineering. They were called outdated, backward-looking, missing the transition to a service economy, etc.
      Although countries like Liechtenstein or Luxemburg definitely do well without heavy industries I doubt that this is a model for countries like the US. There, you will need a mix. You can’t base economies in larger countries on “service” alone.

  • avatar

    Everybody here that hates unions, raise your right hand. Everybody here that likes German cars, raise your left hand. If you have both hands in the air, smack yourself in the head until you grasp the concept that unions are not the reason that lousy cars are built.

    Every time I read the comments about the bailout/Detroit/UAW on this site I can feel my IQ dropping.

  • avatar

    Germany make cars in Slovakia, Czech Republic and other countries, France make cars in Slovakia. The best SUV on US roads Volkswagen Touareg, Audi Q7, Porsche Cayenne are made in Slovakia.
    1. You cannot have Obama health care and compete with Slovakia, where health care is maybe 10 times cheaper than in the USA.
    2. You should forget Chryslers and GM and you should concentrate on what you are good at-making Fords.

  • avatar

    Put me in the group that is opposed in theory but resigned to the necessity in this case. Among other problems the the Pension guarantee fund could not have handed the huge burden of absorbing the GM pensions even noting the reduced amount given.

    However also put me in the group the is concerned about the way the bankruptcy was handled.

    Finally put me in the group that’s indifferent to what either King or Romney say. You wouldn’t expect either of them to say anything different given their positions.

    Probably the only one in that Venn diagr

  • avatar

    The real problem with the bailouts are GM and the UAW… Many people hate GM and the UAW.. Hate.

    The bailouts just give these folks an easy way to vent.

    I havent found the same negative feelings for Chrysler or Ford in my travels, but GM and the UAW evoke hate from many people for their actions over the last 50 years.

    • 0 avatar

      I think for a lot of people, myself included, GM and the UAW embody everything that went wrong the the US economy in the 1970’s. GM was a huge, old, monolithic corporation that put our lousy products, treated it’s customers poorly, and was arrogant enough not to care. The cars were built by actively hostile employees who treated their jobs, employer, and the product they built with disdain. The plants were mismanaged sewers of controlled anarchy with everybody overpaid, nobody accountable, and shoddy products rolling off the line.

      As a result, many of us paid very good money for very bad cars. If you were not happy about that, tough.

      Ford and Chrysler genuinely seemed to try to clean up their acts from the 1980’s on, and that has earned them some goodwill. Plus Ford managed to stay out of bankruptcy, and when Chrysler went BK competent outside management was brought in to clean house and improve the product.

      GM is still the same people doing the same things in the same place. The only difference is the shareholders were (deservedly) wiped out as well as all the secured creditors (very unusual), the UAW was basically given a big chunk of the company, and most management got to keep their jobs. The taxpayers, 80+% of whom don’t buy GM products (based on GM market share), have sunk billions into keeping afloat a company and a culture that we really don’t like.

      So the bailouts do give folks and easy way to vent. But the venting is justified.

  • avatar
    Andy D

    Y’ know, I ‘m not a huge fan of Barry O, but compared to the Punch and Judy shenanigans of the GOP contenders, he is starting to look like the lesser of 4 evils. The bailout of Detroit cars, kept middle class households going and not winding up in Romney’s welfare safety net. The bailout of Wall St. just rewarded the greed heads who caused the whole mess. This was a result of Dubyah’s terms in office. He left the mess for Barry.

    • 0 avatar

      I think you got the part of Obama getting re-elected right on the money. I don’t want to sound political because I have no great love for either Republicans or Democrats. I have been both at one time or another during my lifetime. That’s why I became an Independent. I saw the light.

      But whatever it is the GOP is trying to do with its current candidates for the nomination, it isn’t working because no majority will form behind whichever candidate the GOP is going to nominate for the presidency to run against Obama.

      We’re going to see record numbers of eligible voters staying home on election day because they have no choice they want to vote for and they are certainly not going to vote for Obama.

      Obama has this re-election thing sewed up. We can all look forward to four more years of Obama and his ultra-left liberal socialist welfare policies, not to mention more EVs and Solyndra projects.

      Oh, and even deeper in debt if the Democrats win both houses of Congress again. I feel QE3 coming on and the government paying the mortgages for those who can’t afford to make the payments on their mortgages.

      Those of us not on welfare have to simply work around Obama like we have been doing the past three years. Prepare yourselves!

      • 0 avatar

        “We can all look forward to four more years of Obama and his ultra-left liberal socialist welfare policies”

        I don’t think you know what “ultra-left liberal socialist welfare policies” are. As someone who actually *IS* an ultra-left liberal socialist welfare-supporter, the American Democratic party is pretty much milquetoast neoliberalist.

        Call me when they start talking about single-payer healthcare or tax rates on par with past known socialists like Eisenhower, Nixon or Reagan.

      • 0 avatar

        Uhm, the biggest contributor to the national debt has been the Cheney, er Bush administration, by cutting taxes for the wealthy, giving Big Pharma a handout in the Medicare drug program (where Medicare is precluded from negotiating with the pharamceutical companies for lower prices) and starting TWO wars with no means to pay for them.

        Bush kept the costs of the 2 wars “OFF the books” – and weren’t included as part of the national debt during his administration.

        A big reason for the increase in the national debt under Obama is b/c he put the costs of the 2 wars back “on the books.”

        As for Solyndra, it wasn’t the best move, but the govt. was trying to help US clean energy companies, just as govts. in Europe are doing.

        But the thing is, so is the PRC, and they are pumping in a lot more $$ subsidizing their clean energy industry so it has become really hard for Western companies to compete on price.

        China is doing this b/c they see this industry sector as being very important to China leaving the cheap, mass production economy behind and for China becoming a high tech/energy power (not to mention, a industry they can dominate by heavily subsidizing at the onset to drive out competitors).

        Also, the $$ lost on Solyndra pales in comparison to the $$ lost in the “cost plus” contracts the US govt. gave to contractors in Iraq – where BILLIONS had been spent on shoddy or unfinished infrastructure projects.

        The biggest reasons for the increase in national debt –

        1. tax cut for the wealthy (which just killed the budget)

        2. TARP bailout (which Bush initiated) – privatized profits but tax-payer funded coverage of losses (now that’s socialism)

        3. 2 unfunded wars

        4. unfunded Medicare drug program

      • 0 avatar

        And speaking of “socialism”, the most socialist state in the country is Alaska.

        Each resident gets a check from the state govt. as part of their share of the proceeds from the oil companies that do business in Alaska (btw, why are they the only ones to benefit since it was the US taxpayers that funded the purchase of Alaska from Russia).

        Furthermore, more Federal $$ is spent per capita on Alaskans than residents of any other state.

        Funny how Palin accuses Obama of being a “socialist” when she was the gov. of the most socialist state in the country.

      • 0 avatar

        “We can all look forward to four more years of Obama and his ultra-left liberal socialist welfare policies”

        It is vacuous comments like this that illustrate why the term “socialist” needs to become part of TTAC’s spam blocker. For the amount of verbiage in the post, very little is being said.

      • 0 avatar

        I guess they just show celebrity weddings and funerals on the media of choice for Obama’s sheep. Nancy Pelosi wasn’t a Republican or Independent last time I checked, but I saw her own vile mouth spew the BS about putting people on food stamps being a great form of economic stimulus. I guess the left spent so much time lying to themselves during the last Bush administration that they forgot what real forms of welfare are. Cost plus contracts don’t hurt the US economy as much as sabotaging real sources of energy in favor of scams run by Obama contributors, no matter what the manipulated dollar figures say. Ironically, if Obama does get the boot it will be because his energy policies are coming home to roost and many of his hope and changers won’t like freezing to death this winter.

      • 0 avatar

        CJinSD, Obama won’t get the boot. He has no competition in any of the GOP candidates because no majority will vote for any one of them.

        The Dems will turn out en masse and the Republicans will mostly fall in line with their nominee, but the all important Independents will stay home or vote for some obscure, last minute, candidate (ala Perot or Nader).

    • 0 avatar

      Barry has had almost four years, this is all his mess now. The GM/Chrysler bailout was designed, as many other of his policies, to kick the can down the road a bit more, buy Union votes, and to a lesser extent keep the Detroit tri-state area from completely imploding into a true anarchist scenario. While I do agree with maintaining social stability in greater Detroit, it was factors internal to GM which allow it to fail in the first place. While these factors are still in play, GM will inevitably fail again someday. But by the time this occurs its somebody else problem, so why should he care? If Barry gets elected its game over for the United States as we know it. In the past three years this man’s administration has failed so often in foreign policy alone it makes me wonder how he is still in office:

      Egypt: Due to the Arab spring, the Egyptian people begin to demand the overthrow of their admittedly despotic president, who happened to be a long time stanch ally of the West. Administration response, do nothing. The end result is a country which almost fell into total Islamic rule, if not for the seizure of power by a clique of generals funded primarily by 1.3 billion in military aid. The State Department sold out Mubarak and planned to rely on the military to control the country while we bankroll them. Trouble is, what happens when the people rise up against the Military Junta and can’t be stopped? What happens when the Egyptian people demand their army attack the Israelis? The Israelis already had quite enough to deal with and now their secure southern flank is at risk.
      Will we see 1973 all over again, now with the Israelis as an undeclared nuclear power? The administration dropped the ball on this one.

      Iran: In 2009 for the first time in 30 years the Iranian people began to protest their government, begging for US help via satellite TV. Administration response, do nothing. Thus losing a golden opportunity to topple the Ayatollahs from within, BEFORE they actually acquire a nuclear weapon. Nice one Barry.

      Russia: The administration cow towed to newly resurgent Russia with the latest SALT treaty, pulling the ABM shield out of Czech Rep/Poland, which not only wastes years of military funding, it basically gives the finger to the former Soviet Bloc allies… they will think twice before getting into bed with us again. By the by, the Russians are slowly building up their military and nuclear deterrent while Barry disarms ours: Incidentally Iran, Egypt, Libya, and now Syria are all current or former Soviet client states. More and more Barry seems to conveniently go against US interests and play to Moscow’s.

      These are just foreign policy disasters, not to mention anything domestic. Anyone but Obama 2012.

  • avatar

    The whole storm of the bailout was a real eye opener for some of my friends and family inside of MI. They saw the bank bailouts like most people: Wall St. vs. Main St. Us versus them. When it came time for GM and Chrysler to belly up, people around here made it seem like it was an easy sell: Wall Street was about wealthy banksters using calculus to make money out of thin air, while GM and Chrysler meant middle class jobs in America. They were honestly surprised by the narrative that formed. It was the successful transplant states in the south vs. the failed rust belt states. The flexible, adaptable non-union shops vs. the union shops saddled with complicated UAW rules and invincible workers that received lavish pay and benefits far above what most people could expect. That really took the steam out of the “middle class” argument. Finally, it was people on the coasts who didn’t want to support the domestics by buying their products vs. MI and other states who didn’t diversify their economy as well as others. They were going to pay one way or another. People here that were so connected to the auto industry didn’t realize just how much enmity (at the worst) and indifference (at best) people around the country held for us. When it came to the auto bailouts, we were the them, and we weren’t used to that.

    I wonder what percentage of the population will never buy from “Government Motors” or “Fiatsler” ever again.

    Politically, this was a stupid move. The stance is what I expected, but the timing was questionable. The mood around here in MI during the bailout was embarrassment with a twist of resentment. Since then, it’s more optimistic, but not without a ton of rancor. I made a comment then that anybody that didn’t vote for the bailout of the auto companies or came out against it could forget getting any electoral votes from Michigan for a generation. THAT’S how much they meant to the state. I don’t think Mitt “The Inevitable” Romney can afford to give up a swing state so easily.

    • 0 avatar

      Any kind of bail out to anyone is wrong in our form of government. And it doesn’t matter if Bush did it, or Obama: it was wrong!

      It isn’t as though we don’t have any other auto manufacturers producing inside America if GM and Chrysler ceased to exist. We did just fine when other, now defunct, American auto manufacturers died. They weren’t even missed.

      In other countries, Japan, Germany, France, et al, their government is an integral part of the financial make-up of their auto manufacturers and other publicly traded corporations. But not so in the US. Imagine Opel without the German and Belgique government intervention, or Toyota without the Japanese government backing. It’s part of their national financial infrastructure.

      But GM can’t fail. The UAW can’t fail. The taxpayers have seen to that. GM doesn’t even have to make a profit. And if they do make a profit, the money won’t go back to the tax payers who bailed them out. The money will be paid out in bonuses to the UAW. The same UAW that collectively bargained GM and Chrysler into bankruptcy to begin with. The UAW is ROTFL about this situation. They got it made!

      People who believe in that system will gladly choose to buy GM products again and again. Others not so much.

      OTOH, buying from Fiatsler is like buying from Toyota or Honda or Nissan, etc. Chrysler is now a subdivision of a foreign-owned company that, like Toyota, Honda, Nissan etc, makes cars in America for Americans by providing jobs to Americans in America. People should support that as much as they support Toyota, Honda, Nissan, etc. I expect Fiatsler to make huge sales gains. GM not so much.

      • 0 avatar

        Funny how there hasn’t been a PEEP out of Romney about the bailouts for the megabanks and Wall St.

        As for the bailouts, I’d much rather have the bailouts done for the auto industry (which is vital for the manufacturing sector and rhe economy; this is the reason why China, Brazil and Russia are doing everything they can do to protect their auto industries) than for megabanks and Wall St., and yeah, sure, both of them could have been handled better, esp. for the financial sector.

        Either Romney is being disingenuous ot he is totally misguided if he thinks that if the govt. had not stepped in, that GM and Chrysler could have been saved.

        Bankruptcy w/o the govt. stepping in would have meant the end for GM and Chrysler; at the time, due to the malfeasance of Wall St. and the megabanks, the economy had tanked and the credit market had completely froze – and this would have sent the US over the cliff, turning the Great Recession into another Great Depression.

        Ford was lucky that they put up all of their assets as collateral and borrowed as much as they could before the credit market froze or else they would have been in the exact same situation as GM and Chrysler.

        Even then, if the auto market hadn’t somewhat recovered, Ford was about a year from going bankrupt as well.

        And Ford Credit got bailed out and Ford got $5 billion in essentially no interest govt. loans towards increasing fuel efficiency which they used mostly to update a no. of their plants.

        If Romney is going to rail about anything, he should be railing about Wall St., the megabanks and giant mortgage providers (like Countrywide) which destroyed the economy by bundling mortgages and peddling them as “secure” investments, exacerbated by Wall. St, and the megabanks leveraging themselves to the hilt and placing huge, irresponsible bets using financial derivatives (often betting against the bundled mortgages that they were peddling).

        But no, not a peep about that from Romney.

      • 0 avatar

        bd2, I understand the politics behind foreign governments being so heavily invested in their corporations and financial institutions, but America has not done that until the great bail outs, hand outs and nationalization of 2008/2009.

        I think there are some undercurrents that many domestic aficionados tend to overlook, and that was the mass exodus away from American cars and the defection of Americans to buying the foreign and transplant products.

        Clearly, the customer wanted a better product than they could get from GM, Ford and Chrysler. Without the better foreign products we’d still be driving GM, Ford and Chrysler vehicles of yore.

        And as for Romney, Santorum, Gingrich or even Paul, as an Independent I wouldn’t vote for any one of them. I certainly will not vote for Obama.

        From where I’m standing, Obama has been a disaster for America. Worse even than Carter was. But I’m not on welfare or unemployment compensation. Maybe that’s why I see things the way I do. I learned from my mistake voting for Carter in 1976. I did better under Bush and Clinton. But that’s me.

        So it doesn’t matter what any of these potential nominees say or do, or what Obama would like us to believe this time around. I have zero confidence in the lot! We’re in deep kim-chee up to our eyeballs, and there are no leaders in sight, anywhere.

  • avatar

    Whatever you do….don’t voice an opposing political view other than the UAW on their facebook pages. Obama is their god, and if you criticise him in any way, or, criticise his apostle Bob King…you will be banned from their sites. Censorship and indoctrination are the norm on these union facebook pages.

  • avatar

    I made this little chart (old GM vs New GM) explaining why GM is profitable now. Sources, wikipedia, WSJ, Reuters etc

    Old GM New GM

    Debt: $94.5 B $4.7 B
    Cash on Hand: $14 B $40 B
    Global Employment: 266,000 208,000
    US Employment: 91,000 68,000
    UAW Employment: 62,000 49,000
    Tier 2 workers – making 14$/Hr: 0 6,400
    US Dealers: 5,900 5,000
    US Brands: 8 4
    US Plants: 47 34
    US Models: 86 49
    ATP of vehicle sold in US: $28,000 $32,000
    Cost to sell 2 Million cars: $41 B $31 B
    Global Production (Units): > 8 Million > 9 Million
    Interest Income on cash: 0 500 Million
    Interest paid to service debt > $1 B a year 0
    Loans: Loan from Bush administration written off
    Tax Savings: $ 18 B in future tax write-offs

  • avatar
    bill mcgee

    Of course to me George the younger and Obama are cut out of the same cheap cloth. I voted for Obama thinking he would bring national health and get us out of the stupid Bush wars. They were in my opinion both total disappointing mediocraties and I can’t stand listening to either of them speak because they don’t have anything new to say.Obviously Romney comes off as the clueless rich asshole he is when he backed the bank bailout but not the car bailout. Both bailouts bother me and I think the government should have let Chrysler sink or swim on its own in 1979. As far as the current crop of GOP nominees it is hard to believe that these are the best they could come up with.

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