GM: "Have I No Friend Will Rid Me of This Living Fear?"

by Robert Farago

Published: July 18th, 2008

gm have i no friend will rid me of this living fear

Ever since GM CEO Rick Wagoner announced his first turnaround plan (turn around while I pocket $100m), Wall Street and the mainstream media have reacted positively to his cuts. And every single time TTAC's responded with Death Watch warnings that the cuts don't mean jack shit. GM's octo-branded, dealer-bloated, product-lame, legacy-intensive, union-stifled, fiefdom-protecting business model is broken. Last week, Rabid Rick did it again. And once again, the stock emerged, zombie-like from its grave. Only this time, those supposed to be in-the-know are, in fact, in-the-know. CNNMoney [finally] rolls with the changes, proclaiming " GM's Stock Surge May Be Short-Lived; Earnings, Sales Eyed." Hmmm. Could be. "In announcing the liquidity-boosting plan, the company also said that it expects to report significant losses when second-quarter financial results are announced in the next few weeks. GM hasn't announced a date for the release of its quarterly financial report. July sales results, set to be released Aug. 1, could bring more bad news for GM and its Detroit-based counterparts, which continue to lose market share to foreign-based rivals." As sure as eggs are eggs, GM faces yet another credit downgrade. If GM hocks its foreign ops– it's only remaining asset of value– then even Chapter 11 may not save The General.

Robert Farago

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Golden2husky on Jul 20, 2008
I love my country. But why should I buy a car from GM when the union and executives will use that money to support the Democrats in raising my taxes, endangering my health by nationalizing my health care, and risking my job by forcing raises in the minimum wage so they can make even more?.... Now I realize that it really wasn't dangling chads or butterfly ballots or the Supreme Court who got George Bush into office...where's H.W. Bush when you really need him... LenS: Please please please explain to me how raising the minimum wage will result in "they" making more? Assuming from the distaste you spewed regarding the Democrats, I am assuming they are the "they". So how is paying the girl at McDonalds a scrap more going to affect you and enrich the Democratic party? By making sure the "minimum wagers" are more likely to vote Democratic? They already are, if they vote at all. Raising the price of your fries by 10 cents? Fair enough. If paying the very bottom rung of wage earners a bit more raises the cost of these services provided by them I have no problem with that. Waaaaay cheaper than welfare. Either way, we pay. I'd rather get some services out of it. If you are really concerned about pay forcing up the cost of goods and services, why not look through the other end of the telescope? Just look at all the previous posts. Look what Rick and Company make and the quality of the job they do. If they were the ones whipping up the fries, they would have burned the store down years ago. Attack the fat cats, or at least the ineffective ones. Endangering your job? Unless you are in the minimum wage category (which I very much doubt judging from your comments) I don't see how your job is in jeopardy. On the outside chance that you are in that group, here's a nice Republican answer: Tough crap, deal with it. You made your bed, lie in it. Go to school, retrain, night school while working during the day, two jobs, do without. (sarcasm here)

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Andy D on Jul 20, 2008

If ther hadnt been the EPA loopholes allowing light trucks to comply to lower emissions standards, would that have made pickups and SUVs less of a cash cow? Perhaps spurring the then Big 3 to concentrate om developing better cars?

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Windswords on Jul 20, 2008

golden2husky: "LenS: Please please please explain to me how raising the minimum wage will result in “they” making more?" I can't answer for Lens, but I believe he met that in many union contracts the base pay is based off the minmum wage, so when the minimum wage goes up, thier pay rises a proportionate amount, if not immediately then when the next contract takes hold. I don't know if that is the case with the UAW. "If paying the very bottom rung of wage earners a bit more raises the cost of these services provided by them I have no problem with that. Waaaaay cheaper than welfare." Actually government setting the minimum wage instead of the market has kept people out of entry level jobs. If you can't hire labor at market prices then you do with less labor or find other ways to provide services without the labor or unfortunately pay people under the table/hire illegals to do the work. These are not jobs you can outsource overseas so paying market prices is not going to send the work to China. But judging from how long I have had to wait in line at MickyDee's for my lunch tells me they are doing with ess labor then they should. And I realize that that is just an annecdotal observation of mine, but I think it has merit. Working an entry level job does more to keep a young person out of trouble than midnight basketball. "Tough crap, deal with it. You made your bed, lie in it. Go to school, retrain, night school while working during the day, two jobs, do without." It's easier (and seemingly more kind hearted and caring) to forgo short term pain and it's place offer something else. But many of these programs to help instead end up doing more long term damage. Better to endure the short term discomfort in exchange for long term security and prosperity. At least offer programs of temporary help not permanent dependency. You are spot on about Rick and company. But healthcare, daycare, eldercare, mortagagecare, and anything else that government (on all levels) can come up with is not the answer and is often the curse.

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Geeber on Jul 21, 2008
Stein X Leikanger: That argument doesn’t work, Skooter, and here’s why: The only reason you establish a brand presence in the marketplace is because you want people to return and buy more. You originally said that "GM has completely sabotaged their own game, over decades, by stubbornly refusing to accept what the market wants.." Skooter correctly countered that GM built lots of big pickups and SUVs that people DID want. The Silverado, was, until recently, the second-best selling vehicle in the land. So to say that GM completely refused to build what customers wanted is incorrect. His argument does work, to a point. GM builds what one segment of consumers wants. That segment wants large, body-on-frame vehicles powered by smooth, reliable V-8s that are available in a variety of body styles and drivetrain configurations. Up until the late 1970s, this was what the majority of buyers wanted. At that time, the way for buyers to get these attributes was to buy a passenger cars. Now they buy trucks and SUVs. It was a very large and profitable segment. It's still a large, although shrinking, segment. GM's mistake was in ignoring customers who wanted a high-quality subcompact, or a family sedan that didn't look like it was designed primarily for the purchasing managers at Hertz and Alamo. prthug: Where have you EVER seen a GM or Ford leader advocate for socialized health care or raising the minimum wage. A year or two ago William Clay Ford, Jr., said that the auto makers and government needed to find "new solutions" and consider new ways of addressing the auto makers health care costs, which was basically an attempt to have the government take over health care costs. Which sounds suspiciously like socialized medicine to me. Dynamic88: Ruther knew in the late ’40s that this system of employer provided pension and health care was not going to be sustainable. As a labor leader, it was the only option available to him, so he took it. So, in other words, he was as dumb and shortsighted as the executives regularly lambasted on this site. Putting the companies that employ members of your union on the slow path to oblivion isn't the smartest strategy. Incidentally, we already have socialized medicine - it's called Medicare, and it's aimed at senior citizens (also known as retirees). The same group of people who are costing GM the most money. Notice that UAW retirees aren't exactly rushing to dump their company provided plan for Medicare. Notice that even during the last round of contract negotiations, the union wasn't about to tell retirees that they should expect to rely on Medicare instead of the company plan for their benefits. Why? Because Medicare is not nearly as generous as the current GM plan. Which makes one view the union's calls for nationalized health care as disingenuous, at best. Unless the union really believes that a nationalized plan will provide all citizens with the same level of coverage and care as the current GM plan for retirees. In which case, union leadership is delusional. We can't afford it.

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