GM filed for bankruptcy today. From now on, TTAC will chronicle GM’s fortunes under the series name bestowed upon post-C11 Chrysler: Zombie Watch. For there’s no doubt in my mind that GM will not recover from its federal stewardship to emerge, as Dan Neil puts it, “smaller, leaner, smarter and hungrier.” Sure, I’ll spot Dan smaller (obviously). Leaner? An efficient government-funded company is an oxymoron to rival military intelligence. Speaking of which, smarter? GM is as far from smart as Steven Hawking is from professional wresting. In fact, listening to GM CEO Fritz Henderson bleat to the press today, it struck me that the automaker is pulling a Mark Mothersbaugh: it’s de-evolving. Less obscurely, the company is actually getting stupider.
To wit: when Bloomberg asked Fritz whether there would be any changes to post-C11 GM’s corporate culture (i.e., when would someone shit-can the overpaid yes men and women who’d run General Motors into the ground), Henderson said there was no need for an executive cull. “Natural attrition” would ensure fresh blood. Well, he would say that, wouldn’t he? After all, any such overdue housecleaning would start by sweeping Fritz Henderson out with the rest of the garbage hanging around RenCen (e.g., HUMMER).
Even so, it was a stunning admission that all that talk about GM’s preparations for a government-backed renaissance—trimming dealers, reigning-in the United Auto Workers, softening-up bond-holders, etc.— was complete and utter horseshit. More specifically, Henderson was spouting the same crap GM’s been foisting on shareholders since Nikita Khrushchev used shoe-leather to pound home a point.
The truth: GM’s management still doesn’t have the slightest idea how to right the sinking ship—sorry, raise the Titanic. Henderson point blank refused to specify a deadline for a return to profitability. No goals. No timelines. Nada. If I didn’t know better, I’d think Rick Wagoner’s hand-picked clone/successor was trying to give this GM Death Watch series closure, in that “here we are at the beginning again” way. But no; there is no plan.
Now you could say that Henderson can’t formulate a plan. It’s up to the next GM CEO—the one appointed by the same presidential administration that fired the old CEO and swears up, down and sideways it doesn’t want to run GM—to devise a detailed strategy for returning some $50 billion dollars to American taxpayers. And those pesky bondholders. To which I’d reply, sure; what’s the hurry? We’re from the government and we’re here to—say, are those fresh donuts?
More evidence of increasing numb-nuttide: on this historic day, GM signaled recently dismissed dealers that they company will honor their franchise agreements until they expire (Oct. 31, 2010). Huh? If GM doesn’t terminate the franchisees before exiting federal bankruptcy, they’ll lose the chance to do so without legal repercussions. The abandoned dealers will live to fight the “new” GM in all 50 states.
In other words, even Chrysler somehow managed to get it right where GM continues to get it wrong. Of course, both automakers are missing the golden opportunity to tell the United Auto Workers to FO&D. Damn! I forgot! This is a government-sponsored bankruptcy. When the feds pull the strings, the union owns you. Literally.
Meanwhile, and lots of it, the mainstream media seems obsessed with the idea that President Obama’s minions will force the automaker to build shit boxes to appease the environmental wing of the democratic party, and, thus, drive GM into bankruptcy. Oops. I should have said “continue to suck-up taxpayer money until British Leyland looks like a winning lottery ticket.”
It’s a ridiculous concerm. Government Motors has but one goal: nothing. Remember? No deadline. No timeline. Nada. Which makes a mockery of the most important part of Neil’s post C11 prognostication: the hungry bit.
Simply put, governments are not profit-driven. At all. On any level. Ever. So it doesn’t matter what kind of vehicles post-C11 GM manufactures. At all. On any level. Ever. Snap! That makes “new GM” the same as “old GM.” See what I mean about circularity?
OK, time’s almost up. How do I see this playing out?
Either the feds will sell GM to another automaker soon, or the feds will sell GM to another automaker later. By that I mean either Renault Nissan (or someone) will swoop in “to the rescue” (for bupkis), or the public will eventually grow weary of subsidizing Government Motors. At that point, Uncle Sam will jettison the public’s shares in GM for cheap. Some strip and flipper will buy it up and do what they do best.
In other words, one way or another, GM is headed for liquidation.
I’d like to say that this is the bankruptcy I recommended four years ago, which will allow GM to reinvent and reinvigorate itself. But it isn’t. So I won’t. I’ll just say so long and thanks for all the Corvettes. Although the interior still sucks.
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Even ultra liberal Robert Reich agrees that they will not survive.
Actually for someone that has the completely wrong idea as far as solutions, he has a remarkably clear view of what they are doing.
A colossal waste of taxpayer money.
http://www.nakedcapitalism.com/2009/05/robert-reich-gm-bailout-wasteful-way-to.html
The hardest part of the GM Zombie Apocalypse is pretending I’m not excited.
Bless your heart, Robert…but can you please change the title to “General Motors Death Watch 260: Dead!”
God Bless.
My G6 has the same steering wheel as that Corvette (minus the leather wrap). You stay classy, GM!
LOL
Wait till their stock hits .40 a share and GO LONG !
Dear tax payers,
F**k you.
With sincerest love,
GM
Robert,
How can you say Chrysler got it right? They took billions of dollars in tax money, govt protected the UAW bond holders, and are literally giving the assets to a foreign entity, without putting up any capital investment. On a related side note, Fiat is themselves deep in debt, taking bail out money and has a reputation for poor quality product. Chrysler does not have it right. I will concede GM has it wronger [sic].
Well, it’s been a helluva ride, and I’ve been along for, oh, at least half of the time since DW #1 began. It’s been some depressing but informative reading.
As others who have been around as long or longer than me can attest, this has been one daunting but I think worthwhile undertaking by the publisher.
I’m not too proud to admit that as someone who grew up in a part of North America where the domestics still dominate, I might not have learned or heard of their troubles until perhaps a year or so ago had I followed traditional media.
People need to stop hating on my car’s interior! Yeah the wheel is the same as the Cobalt, but it works, and it feels good. I’ve spent almost every day of the past 2 years in that car and I have not had one complaint about the interior. Not that the Vette doesn’t have issues (steering feel, a severe lack of ‘tossability’ considering the car weighs only 3200lbs, a truck-like transmission) but the interior is more than adequate
No Robert!
You are the automotive statesman for the nation! Your work is not done yet. You must follow GM into the evacuated bowels of C7.
C11 is only halfway there.
Don’t abandon the effort now that you are so close!!
I admit that without a plan from Fritz, Vegas will have a hard time laying out the over/under.
Yet, we must be more than halfway there by now.
Look to the Donner Party to gather the strength to go on. Please!!!
Besides, everyone likes a good clown show. A smaller, leaner, more “green” clown show, but still a clown show.
CLAPTRAK just might survive!!!
I see no reason whatsoever that there won’t be a new dealer cull plan issued as part of the C11. the initial cull was some sort of maneuver to put those dealers out first, for whatever cause they used to do the selection. the next/second/(likely not) last wave will be based on whatever new criteria they put together and will let them wipe out all of those that they want out, when they want.
I would assume that they’ll use C11 to write new franchise agreements – sort-lived in the case of those they want out later but not now – such that they get to their desired dealer population down the road.
cdandy
We have a long ways to go. Currently at C11, the administration had to make up the rules for C10. then when that fails, make up the rules for C9… Long ways before we get to C7 :)
Dear tax payers,
F**k you.
With sincerest love,
GM
This pretty much sums it all up.
Funny thing is that I’ve read three or four reasonable scenarios for GM to survive…for example, some thoughts I’ve read here:
- Slim down to Chevy + Caddy, drop the rest
- pick the top 12 or 20 cars out of all the brand lineups and make one GM brand, or just call it Chevrolet. Retreat from the lux market (how many Cadillacs do they sell anyway?) until you’ve reestablished. There are some good GM cars – the question is why they make all the rest.
- Focus on trucks, SUVs, Hummers, and other he-man vehicles – the only competition is Ford.
- Stop the Chevy Volt “we make the cars the government wants the people to want” and make cars people actually want
Etcetera…there are no shortage of good ideas. They’re mostly on the product end – there needs to be a lot of hard work done on factories, labor contracts, etc.
Alas, the government is not doing any of these things. GMC+Buick+Chevy+Cadillac stuffed with Chevy Voltesque cars is going to flop. We’re going to see congressmen pressuring management to keep factories open in their districts, the government mandating cars no one wants, GM coasting along with its sclerotic management, etc.
Bah.
GM is doomed. The government involvement is only going to exasperate the existing problem. The expectation of jobs.
The government only cares about jobs, not the manufacturing of cars people want to buy. For a long time now, GMs main failing is succumbing to pressure to provide jobs. If they said to hell with jobs and focused on making great cars years ago, they could still be alive. Granted, the H2 was not a “people want car”…along with most of their product. But had they been without the pressure to be an economic provider, they would have had a far better chance of trimming the fat and freeing up capital to hire people who knew how to make cars people would buy. The union pressure kept them from making decisions they should have made long ago. The 3 GM dealer lots by my house with the same 80 Vibes sitting in their lot for a year now were perfect indications of waste and unnecessary production. But instead they were challenged at every turn by folks who demanded a guaranteed job with full benefits and more pay than successful automakers gave their workers despite whether the product was selling or not. A luxury not afforded to most these days.
Happy? Now you have no job.
I’ll miss the corvette and hope that the G8 gets a re-incarnation. Other than that, good riddance.
No, you all don’t understand.
Just like Dr. Frankenstein.
President Obama woke from a dream and then…
“I saw the pale student of unhallowed arts kneeling beside the thing he had put together. I saw the hideous phantasm of
a manGeneral Motors stretched out, and then, on the working of some powerful engine, show signs of life, and stir with an uneasy, half vital motion. Frightful must it be; for supremely frightful would be the effect of any human endeavour to mock the stupendous mechanism of the Creator of the world.” The government took all the parts, put them together and declared…….IT’S ALIVE!! IT’S ALIVE!!!
RATTLETRAK LIVES!!!!!!
http://www.foxnews.com/politics/2009/06/01/little-engine-governments-role-gm-bears-resemblance-amtrak-route/
CLAPTRAK…I love it.
GM is the Wigger of the US auto industry.
-Rastus
One thing will accelerate GM’s certain death: a lack of sales.
The 5-15 month inventory just won’t go away, and it will continue to build up as people quietly avoid purchasing from a zombie.
I think that “smaller” GM is about to become ridiculously small.
A local Pontiac/Hummer/Saab/Saturn/Buick/Cadillac/GMC/Hyundai/Kia/Infiniti/Nissan/Subaru dealer says they have $50 million in inventory – a simple check revealed the following NEW cars available from these model years:
2005 (1)
2006 (1)
2007 (8)
2008 (111)
2009 (1327)
2010 (18)
They have six model years sitting on their lot, all NEW. Wait until the government forces them to choke on even more car shipments.
General Motors has been operated for the last fifty years by a group of parasites of common interest, the managements of the company and the UAW. These people have repeatedly sacrificed the interests of the company and union, respectively, to further their own interests – and they’ve been exceptionally successful at it.
Now, having run through the entire assets of the company, they’ve transferred themselves to a new host, the taxpayer. In barely six months, they’ve sucked up over $50 billion.
This is a really remarkable achievement, from any perspective. But, for the folks running GM and the UAW it’s a truly brilliant move, because they’ve managed to make the predator who’d been stalking the industry for decades now a source of lifeblood for them, almost into perpetuity. At least as long as Obama’s around, he’s going to have to keep signing the checks, because each incremental few billions will be much easier to provide than would admitting that all the money that preceded it had been a waste, and that Mr. President had been suckered like a rube.
Polls over the week-end indicated that two-thirds of the country opposes the GM bail out, with only about one-fifth supporting it – which seems a pretty large percentage of both knowledge and opposition. That Obama is, basically, telling that two-thirds that he doesn’t care what they think is probably not politically healthy, at least in the long run.
Obama’s a fool to have been sucked into this. He’s betting a lot of his future on the proposition that a “new GM” can be something different than the old one, and not a money-loosing clone of the present GM, albeit smaller. The chances of that happening are zero, because the new GM will be run by the same people in both management and union as the old one – and they’ve already pretty clearly established where their talents lie. The sooner the “new GM” emerges from bankruptcy, the sooner it becomes apparent that it won’t be successful and will continue to sop up taxpayer money.
Whether he intended it or not – and no one would be stupid enough to actually intend it – Obama has made GM a metaphor by which his success as President is likely to be judged. It’s going to be very easy to view GM in the future as a clear and easy to see example of how Obama’s policies have affected the overall economy.
George Bush, though, gets the last laugh. Had Bush simply refused TARP money to GM and Chrysler, then Obama would have had a basis on which to say he wasn’t able to provide federal assistance. Once Bush provided the initial funding, Obama would have had to exhibit real courage to deny more.
Sneaky old George Bush set him up.
I’d like to say that this is the bankruptcy I recommended four years ago, which will allow GM to reinvent and reinvigorate itself. But it isn’t. So I won’t
Actually it is exactly the bankruptcy which has been called for on this site. Conservatives just won’t admit it because it will completely invalidate their worldview from which their credibility will never recover.
If anything’s wrong, it’s the belief that GM will “re-invent and reinvigorate itself” in any kind of successful fashion given the history of fail, but the current bankruptcy will give the best possible chance given the circumstances.
If you look at the recent auto events, pretty much all the sane advocated policies have been implemented: reduce debt, cut dealers, cut brands, reduce union obligations, cut redundancies where needed. All done with record breaking efficiency and effectiveness, I might add.
All together it still doesn’t create an entity which adds up to the total taxpayer bill, of course, same deal with the banks. So don’t play if you can’t pay (the external costs of capitalism).
Ford and Toyota stock UP. At year highs I believe too.
Maybe that WAS the plan, aside from just sending money into the rust belt to ease the much needed structural change that must arrive, sort-of, soon-ish, sometime.
Anyone know what happens to Daewoo in all of this ? Given they sell as Chevy in Europe and Holden in Australia, more or less developed the Cruze and so on.
Weird scenerio where GM survives in spite of everything. Cast off products of Bad GM are purchased cheap and survive while the government “helps” Good GM and kills it. Bad GM then buys the scraps of Good GM for almost nothing. Don’t think there is enough demand to support this, but remember that William Durant lost and regained GM early in its history.
leaner meaner… and still not able to sell any cars!!
Do these people not realise that the US economy has shed some 6.5 million jobs since dec.’07…and with it a large chunk of the GM car/SUV target market.
I know of NO ONE who has the cash to buy a car outright, and if no one can buy outright and no one wants to be in debt or get auto leasings anymore, who will be buying these leaner meaner cars?
As has now been said 260 times, just let it die… Fisker et al. will snap up the production facilities and workers and the market (or the Chinese…) will find a solution.
RATTLETRAK LIVES!!!!!!
Pretty much all forms of transportation in the US are taxpayer subsidized, from airlines/airports to roads and, yes, rail.
Again, remember where you got the info, since they’re feeding you an incomplete picture (ie half-truth), and learn to be wary of either ignorant or deceptive sources.
GM will survive. They have good trucks, they have good small cars coming, they have good mid-size/large cars. They have Daewoo, and the Koreans can produce for lower cost than American or Japanese factories. Opel being a high cost producer will be cut loose.
GM would do much better though, if they canned Frankenstein Fritz. They do need to be run by someone who knows product, not another Ivy League MBA.
Actually it is exactly the bankruptcy which has been called for on this site.
Well, it isn’t. Brands died, plants closed, but at the end of the day the same executives and the same parasitic union not only persists, but thrives. I get the feeling that the latter two points are the contentious bits around here.
after GM ‘emerges’ as a new company, are people going to want to buy their cars?
same with Chrysler. There’s going to be a hell of a lot of pissed off people that will resent these companies for taking tax payer money & not to mention the thousands of people who have lost their jobs. even if i wasnt directly affected & was non fussed about the tax money, i dont think i would consider either of these brands due to the stigma that will be associated with them. i can just imagine coming back to my car in a carpark and finding spit and key scratches on it
It’s time to find another Alan Mulally for GM: Fritz isn’t the guy to lead GM out of C11. GM needs creativity and Fritz has zilch.
And I think it’s dumb to suggest the # of dealers is the answer to GM and Chrysler’s future (at least for the next 3-4 years they have in purgatory).
Let capitalism deal with the non-performing dealers.
GM and Chrysler will live or die on product. No one is talking product! And forget Buick — sell Caddies to the Chinese instead. Buick should put its cars in mortuaries if Buick was smart about the demographics of its customers.
The “do what you always did, you get what you always got” argument is sound. But, don’t the new owners get to install a new Board? And, thus, doesn’t the government get to call that shot, being the majority owner of New GM? I thought i read in earlier news reports that most of the board will be replaced.
It seems that the brooming the top management of GM by the new board would be a popular move, politically. Why isn’t that a plausible scenario?
We can discuss and analyse this until we’re blue in the face, but the fact remains, gslippy is right. Sales numbers are dreadful and continue to be terrible. As long as the sales numbers are this bad, how is the “new GM” going to fare any better than the “old GM”?
It’s still very tough to get a car loan. The banks are still declining folks with good credit. The American public is still wary about losing their jobs and are not ready right now to take the plunge into a new car loan.
What if the “new GM” emerged, but very few brave souls had the gonads to jump in and take the plunge?
It’s all about sales. It you ain’t sellin’, it doesn’t matter what you do.
I would find this fascinating, except that I’m paying for it without my permission.
The only GM I’d consider is a used Vette, but that’s no help to current GM.
It is not American Leyland…It’s GM-trak.
Amtrak is to the golden age of passenger rail as GM will be to a competitive auto company.
they have good small cars coming,
How do we know? Every new small car GM has produced was predicted to be be good. Yet none of them have been good. Their track record on this is poor, to say the least. So how can anyone predict with a straight face that the next one will be good?
Brilliant!
I had been waiting for this article. Y’know, for four years or so.
About dang time.
Yep, GM is toast. On a local radio show this morning everyone that called in said “I’m a loyal Chevy/GM/Chrysler buyer…but my next vehicle will be a Ford.” Anyone who has been paying attention will not be buying another GM product. GM’s only hope is the American consumer is a bigger zombie than they are. Hmm, this could be interesting.
“…governments are not profit-driven.”
Fantastic! This being the case, every FWD vehicle should be canceled immediately. All trucks should have the Chevy 572 V8, all Corvettes should be ZR1 or Z06 trim only. The Camaro will be available in SS level only, Pontiac G8 GXP will continue, as well as the Cadillac STS and CTS (V series of course).
Your choice, $10k.
What? If we own the company now, lets make some toys! Since Obama is in charge each of these vehicles can get 100mpg.
PeteMoran:
I kept telling all the Detroit apologists crying about American ownership to buy Toyota stock, apparently they should have listened.
This is just the Obama administration paying off the UAW comrades.
Lots of good points of view here. I reckon GM will be around for 24 to 36 months. After that…?
Separating board from executive is obviously the correct action. Buick and GMC will probably sap precious resouces from Chev and Cad.
I find it hard to beleive they won’t beef up a Chinese micro/mini/subcompact and bring it here. I don’t they can support the paper thin margin of building it in NA, even from Mexico or Korea.
@agenthex :
Actually it is exactly the bankruptcy which has been called for on this site. Conservatives just won’t admit it because it will completely invalidate their worldview from which their credibility will never recover.
Uhm, no it’s not. The bankruptcy that conservatives have been calling for had no government money involved, and no intent or desire for extreme measures to try to keep GM alive. If GM died, so be it. The point of calling for bankruptcy years ago was that GM was still healthy enough in those days to have a chance of survival. Now it doesn’t.
We were calling for heart surgery to clear clogged arteries before a heart attack. Now that heart attack has happened, and the patient is on intrusive life support. The patient is finally having surgery but the techniques being used by surgeon Obama are experimental and not in keeping with historical best practice. Even if the patient survives (which is not the most likely outcome) he will be on (government money) life support for a long time.
See the difference? Probably not… sigh.
I was just listening to NPR talking about the GM bankruptcy with a GM spokesman.
Here’s what I heard.
GM is going to 36 (34,32?) models instead of 48. Still way too many, but it saves a lot of union jobs, I bet.
GM is going to manufacture small fuel efficient cars as a priority. Thanks Nancy Pelosi, thanks!
GM is going to build them in the United States with UAW labor. ‘Cause Michigan UAW wages are (politically speaking) just as cheap as Korea or China now.
Yup! No politics here, folks. Just smart business decisions made by the same people who have been making smart business decisions in Washington and Detroit for years.
Yup!
GM is so doomed.
It is now our company. Lets hope it survivies.
GM is still the world’s second largest car company. It would be hard to close down and cause more harm than good.
For better or worse GM is here to stay.
Mr. Farago,
I gotta fess up. I didn’t think GM would file for bankruptcy. I thought your Death Watch series was over the top bluster.
You ended up being 100% correct. I was wrong.
Good work on your part.
Thanks.
I feel like Carmaggedon is like what we’ve all thought it would be like after The Bomb gets dropped.
A small number of cockroaches would survive the blast. They’d still be cockroaches, perhaps mutant cockroaches. But they’d be cockroaches. Eventually the radiation would kill them off.
Could GM and Chrysler cars be those cockroaches?
It’s all about sales.
It isn’t. It’s really about profit and brand.
GM has prioritized market share for decades, and that is what destroyed the company. The old joke about making for losses with volume was supposed to be a joke, but GM believed this to be a legitimate business strategy.
If GM is going to succeed, the management needs to begin by figuring out how to turn a profit on lower volume. Not more sales, but fewer sales with higher transaction prices. Use the cars, brand and service to earn respect and command higher prices, instead of using cash back and red tag sales to give everything away at a loss.
Everyone can complain about the government, but the fact remains is that the feds have done more to address the issues in a short period of time than GM management was willing to do in decades. There’s no assurance that it work, but this is the closest thing that GM has had to a workable plan for a very long time.
I dont understand why everyone is so sure the GM cannot succeed. It is true that they failed to correct some issues in Bankruptcy for political reasons (read UAW, management) but the new company is going to be relatively free from debt. Health Care will no longer be an issue. Dealers and brands will be down significantly. GM still makes great trucks and SUVs that will continue to sell. GM’s newer products that the have launched in the last few years have been pretty competitive. The CTS, Malibu, Lambda CUVs. The new LaCrosse looks great, the Cruze by most accounts is a great car. GM’s 2.0T is a fantastic engine that could find its way into more cars. There is a lot of good product, and hopefully more to come.
I think GM finally gets it that they cannot produce crap anymore, good products will sell even if they are made by GM. I will be the first to admit that I didnt think GM would ever file for bankruptcy, but I dont think a GM is destined to fail. Everyone is patting Robert on the back for calling GM’s demise. But how much of that demise was attributable to the 4.00 gas prices that destroyed truck and SUV sales? How long could GM have lasted if not for the current Recession? How long could GM have lasted if credit had not dried up? All these outside factors contributed to the current situation, and probably moved GM’s demise up by a number of years.
The market will recover and if GM has some appealing cars and trucks on the market, they are bound to make some money if they have no debt to service.
The purpose of Bankrupt 2 was not to save the US auto industry (that’s Ford’s job). The purpose was to slow the destruction down to a manageable level during the greatest economic contraction since the Great Depression.
Basically, you can’t let too many major firms go down at once in such an economically fragile time with out killing the patient. The government is simply providing Hospice care for GM and Chrysler until the economy perks up. If GM and Chrysler manage to succeed during that time, that’s great. If not, the government can say that they were given a fair shot, and let them liquidate safely as much smaller entities in a healthier economy.
I have never really gotten the level of angst on TTAC. Many of the posters seem very personally affronted by the whole thing… Tax dollars, socialism, and such. If we spend $300 billion to clean up the mess and have it collapse in a orderly manner, that works out to about $1k per person. That’s not a big deal kids.
I think the problem is I’m just not a TTAC believer. As they say, “It not you… It’s me”.
agenthex: Actually it is exactly the bankruptcy which has been called for on this site. Conservatives just won’t admit it because it will completely invalidate their worldview from which their credibility will never recover.
Conservatives don’t have to admit it because they can see the difference between the two types of bankruptcy.
The type of bankruptcy advocated by conservatives wouldn’t have involved massive transfers of taxpayer money directly to GM.
agenthex: If anything’s wrong, it’s the belief that GM will “re-invent and reinvigorate itself” in any kind of successful fashion given the history of fail, but the current bankruptcy will give the best possible chance given the circumstances.
Considering that this bankruptcy has left GM lifers still in charge of the company, and only resulted in one executive scalp – Rick Wagoner’s – being demanded as a sacrifice, I fail to see how this bankruptcy will help GM reinvent and reinvigorate itself.
agenthex: Pretty much all forms of transportation in the US are taxpayer subsidized, from airlines/airports to roads and, yes, rail.
Roads are paid for with local, state and federal taxpayer dollars; the car companies, until recently, were not. Big difference.
Mr. Sparky: Many of the posters seem very personally affronted by the whole thing… Tax dollars, socialism, and such. If we spend $300 billion to clean up the mess and have it collapse in a orderly manner, that works out to about $1k per person. That’s not a big deal kids.
If it works out that way, I agree with you.
The fear, though, is that the federal government WON’T back away if GM and Chrysler can’t right their respective ships. Instead, there will be pleas for more money, because they only need a few billion more to really thrive…
Unfortunately, those few billion dollars will function more as a narcotic than as an antibiotic.
But how much of that demise was attributable to the 4.00 gas prices that destroyed truck and SUV sales?
IMHO, not so much. The banking crisis got them more than the gas prices….
Having said that, GM has been a dead man walking long before the financial meltdown and the gas prices.
Remember that they were losing money hand-over-fist even during the boomtimes. They’d already been selling things off…
It’s sort of like an Aids patient catching the flu. Yeah, technically the flu killed him but it wouldn’t have if he hadn’t been in such a weakened state already.
The worry (for me anyhow) is that they haven’t cut back far enough to focus on their core competencies. They’re still trying to save too many models, and do too many new things. They should be building Malibu’s, CTS’, and their popular trucks and SUV’s. Everything else should stop. Now.
That’s the concern