GM Plays the Patriotism Card. Again. Still.

by Robert Farago

Published: December 18th, 2008

gm plays the patriotism card again still

From GM’s FastLane Blog: “We’ve been very proud of and grateful for the support and encouragement we’ve received from so many in the business community recently, especially locally here in Michigan. Jim Hiller, CEO of Hiller’s Markets, recently wrote this post on his corporate blog in which he explained why he feels it important to buy from American-based vehicle manufacturers and why he supports his community here in Michigan. We thought Mr. Hiller’s comments were worth sharing.” – Christopher Barger, Director Global Communications Technology” Excerpt:”My epiphany came as I stood on slick-top pavement in a moon-lit night, waiting for my car after a fundraiser for the Juvenile Diabetes Research Foundation. I stood with General Motors Vice-Chairman Bob Lutz, watching foreign car after foreign car drive away into the rain-slicked night. He turned to me as those foreign luxury vehicles peeled out of the parking lot and said, ‘How many people realize that when they buy an American luxury vehicle, they’re providing work for a dozen people for at least a week?’ Before then, I hadn’t felt in my bones the direct connection between the car I drive and the people in my hometown being in, or out, of a job. Many of my friends had told me so, but I didn’t listen – friends from other countries, shaking their heads in disbelief at the thought of neglecting one’s homeland… I don’t even remember what kind of car I was driving, but the next day I bought a Cadillac STS and loved it. All of my preconceived notions that foreign cars were better-made and were longer-lasting, well, they proved untrue.”

Robert Farago

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Phil Ressler on Dec 19, 2008
Phil the Northstar in your XLR is not the same as mine or anyone elses production line V8’s. It is a debored example. The modification they made for the supercharger most likely fixed all the nightmare quality issues the rest of us get to deal with. Time will tell though. XLR-V, to be precise. I am fully aware of my supercharged Northstar's differences from the production 4.6L Northstar. I did, after all, refer to it as "Northstar-derived." 70,000 miles is where I have read most engines start failing. Expect to have very expensive repairs over and over again after that. I am not even remotely concerned the problem you fear will materialize. I will say that the few people I know with high-mileage Northstar drivetrains have not experienced an oil consumption problem. Phil did you ever stop to think that maybe we are considerig the community-at-large from the other side of the coin. GM is BAD for this country and keeping them around is BAD for this country. Keeping around failed, corrupt, unaccountable companies that waste resources is bad for the future of the nation regardless of how many people they employ. It’s not a good representation of what America is about. Yes, I thought about the point-of-view you espouse well before you brought it up. I reject it. America is also the land of second chances, where people (and companies) get to re-invent themselves and reform. After decades of sputtering business performance and myriad missteps, GM is and has been on the mend. Its trucks are very well regarded. It has brought heavy, medium and light hybrid technologies to market. Its current vehicle quality, evidenced by STS, CTS, Malibu, Lacrosse, Lucerne, G8, Saturn's current line, etc. was hard to imagine in, say, 2000. GM has whittled down its cost footprint while raising vehicle quality. That kind of reversal of prior neglect is definitely American. Few things would be better for America than seeing through reform of the D3 to completion. Here is some food for thought I refuse to shop at Walmart because I believe they are a bad representation of this country and destructive to all our futures. I think you would agree or maybe not that their business model is rather unsavory. They drive out local businesses with cheaply made Chinese goods and employ at the lowest wages and dump healthcare on the state and federal government. Using your logic I am doing a bad thing because I am not supporting the largest employer in the country and the most profitable retail company in the world. Retail is fungible in all ways. Manufacturing infrastructure tends to stay lost once it's lost, and losing more tends to accelerate decline. Its displacement tends to be a net loss if you're a large, growing country seeking to retain the middle-class-expanding properties of a full-spectrum economy. I have never spent a cent with Wal-Mart, and have no intention to, ever. But we're not doing a bad thing by choosing not to support the country's largest employer. First, the jobs they provide are quite portable. Even within domestically-owned retailers, rise and fall of competitors can be quite rapid, and ascendant players can scale quite quickly as former leaders falter. There is no net loss to us if Target, for example, muscles Wal-Mart down to size. The economic consequences aren't nearly the same in your comparison. Moreover, the community interest you're protecting is also domestic and the value of protecting it is higher. That is, if more of Wal-Mart's business were diverted to local merchants and goods, the net result would be economic gain on Main Street even it Wall Street took it as a loss. Your example is orthogonal to the matter of supporting the D3. Just because some company may be the largest and have the most jobs doesn’t mean it is good for the country to back them. I support companies that I feel have similar values and morals to me. I’m all for local made goods and buying from my neighbor but not out of charity but because they make the best products and bring pride to the country as a whole. Backing the status quo keeps the country from moving forward, keeps the failures failing, sucks up resources and is BAD for the future health of the country. No one is making the argument that GM should be supported only because they employ the most people among the D3. This is a non-sequitur to the topic. America has been built on tolerance for failure. Sure, one must get past failure and overcome it. Use failure as a platform for trying again more successfully. GM is in reform, and with the right changes and support, it could reform more rapidly. It has run into a macroeconomic environment that will push even well-run companies into losses, before its reforms are complete. Rescuing GM or Ford does not "keep failures failing," it preserves the chance for reform already underway to survive a hostile macroeconomic condition and complete a revival. I know I am going to get a lot of flack and hate responses for this but I am actually looking forward to the coming depression. We are not going to have a depression. We as a country need to learn some serious lessons and clean the system out. Why would I ever think a depression is good, no it’s not because I hate this country I love it with all my heart. It’s because I am thinking long term and the Pheonix can’t rise from the ashes until after it’s death. The US and its people have to reset some expectations and alter some behaviors that became ingrained over the last 35 years. But our social, economic and political systems have so much adaptability that nothing so extreme as a "death" or depression is needed to spark reform. The human cost of depression is vast, unnecessary and it is deeply hostile and dysfunctional to "look forward to one." The pain we endure now will make us stronger and smart as a nation, force the failures out and the winners in, create responsibility and accountability, bring about innovation because of adversity, etc. All the things that make Americans and this country so great. I don’t want to see people suffer, but I don’t think they will in the long run. People die in depressions. Many don't make it through to the vaunted sunshine on the other side. We have a solid track record as both a society and nation of out-innovating the rest of the world. There are pauses from time to time, but depression isn't needed for us to prove we can innovate. The rest of the world consistently tries to damp our ability to innovate, because they know it is a key source of our strength. Depressions waste human capital prodigiously. Nothing good comes of economic depression. In retrospect, someone always tries to make the case that what didn't kill us made us stronger. But reality is that like years of war, economic depressions set everyone back from where they could have progressed otherwise. Our leadership, media and money managers seem quite adept at talking us into a steep downturn. That's irresponsible enough. It's socially hostile to actually wish for an economic blood-letting. The country didn’t collapse and vanish during the last depression or the one 100 years before that, no we came out stronger, smarter, more powerful and healthier in the end. And we had 50 years of growth and prosperity. Maybe I am different from everyone else but I look at problems and adversity as oppertunities, I love solving problems and gaining knowledge along the way regardless of how difficult it may be at the time. And no I’m not living in some privilege world, I have had to deal with years of physical and economic pain to get where I am today, and it helped shape me into who I am today. Managing not to collapse is intrinsic to our systems. We are superbly adaptable as a society and political system, even if the daily particulars can be infuriating and nauseating from time to time. I don't have any fear for the country's survival. Of course adversity represents opportunity, and some people get richer in depressions. Nevertheless, as a society we're vastly better off avoiding one. America in depression pulls the rest of the world down with it. The poorest people suffer disproportionately. Environomental damage increases. Opportunity costs spike exponentially. Sure, there is revival after depression. But we'll be so much further ahead if we don't have one. Our systems are adapting across the board to global changes, as I write this. Viewing a depression as the best way to reform the US is shortsighted, hostile and foolish, IMO. Phil

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Redbarchetta on Dec 19, 2008

Hope you don't have a ton of problems with your xlr-Vmaybe you have great luck. I wasn't talking about drinking oil, the engine has many more problems than that for a "100,000 tune up" engine. From all the stuff I have read and had to live through it looks like they designed it to be thrown away at 100,000 miles. I was using Walmart as an example of an American company that doesn't deserve support not their retail chain, I guess I should have used more of an industrial business since you totally missed my point. About the depression comment I knew I was opening a huge can of worms because most people aren't going to understand and then they get all hostile about it like I am attacking them personnally. The problems are deep in our economic system, I wasn't refering to the things on the surface that always make it look like our economy is hopping and strong. I don't expect you to get what I am talking about, sort of like trying to explain to Rick Wagoner that his corp. culture is flaud and needs to be fixed. You just get the deer in the headlights look, and rebutals that miss the point entirely. You already didn't understand where I was going with the Walmart reference. I'm not talking about the little economic things on the surface that need the reset button to be fixed, reinvented, innovated whatever you want to call it. It's the basis of our economic system, a government that constantly meddles and gets in the way "trying to fix an unsustainable system" and government totally run a muck that needs a major overhaul(can't happen until the denial stops). Maybe you wont get what I'm talking about but I'm sure you will debate what I'm saying and I welcome it. An unsustainable economy kept a float by 70% personal over consumption doesn't get fixed easily by making a bunch of new laws or propping up businesses when there too many powerful people that depend on the imbalance. And especially since most everyone is in denial it's part of the problem. A government that thinks it's job is to stop the natural cyclic correction regardless of future damage or expense and a population that supports such an intervetion no matter how much it's true cost might be. The populace is diseased with short term thinking, lack of accountability and the wrong expecations of government. Things are going to collapse, not because I wished it but because it's inevitable, the ball has already been set in motion. I'm not wishing for a depression, I wish things and the country would change without it, but that doesn't seem to happen unless we have some seriously painful lessons, just human nature I think. The government is going to keep trying to fix things by tossing money at it and in the end making it worse. Look at all the housing market fixes, they want it to start going up right now so we can start spending again and they are going to force it. It needs another 24 months to fix itself with lots of losses but that is not acceptable so they will mess with it some more. What do you think is going to happen when the true correction finally happens. Phil people die everyday. They die in recessions, in booms, you name it. Death is something you can't escape. I don't want people to die and government should be there to stop that at the least but not there to protect me from losing some of my net worth, that is my responsibilty, so is basic survival but there has to be a safety net for the worst situations. THat woul be wat welfare is really meant for not this perverted system we have now. Again our fundamental system and thinking are completely screwed up, and it's happened over decades. I love it now I'm short sighted, hostile and foolish because I'm not hiding behind some fantasy of this country and the world as a whole and bowing down to your rhetoric. Depression is just a word that everyone understand, I'm just saying we need to break everything down to it's foundation, a starting point for rebuilding, it could be called a revolution depending on which side looks at it. I just used depression because that is the word our lame media wil most certainly use for it. I'm looking forward to a rebuilding does that sound better, unfortunately we ned to tear it down to rebuild. I wonder Phil would you have been a Loyalist back in 1776, they didn't want things to change either and were pretty happy to keep the status que. I'm not trying to be condesending, seriously look at your point-of-view compared to their's at the time and tell me where you would have stood. I think you will find that lots of American's right now would probably fall into the Loyalist camp because they can't see any good coming from pain right now to get to something new in the future. I'm going to have to continue this in a few hours I need to head out of town before my wife gets any more angry at me. I'm getting to a point. TO BE CONTINUED

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Redbarchetta on Dec 20, 2008

OK I'm finally at the in-laws. This is probably a dead post and wont get read by anyone but I'm only wasting my own time and some bandwidth. We are not going to have a depression. That remains to be seen over the next 12 or more months. Housing is not going to bounce back for a while. And with the recession driving up unemployment it will keep it from bouncing back by feeding a viscious cycle. With easy credit gone and not coming back for a long time there isn't goingot be an easy quick fix to stop it like the government keeps hoping it can do. Managing not to collapse is intrinsic to our systems. We are superbly adaptable as a society and political system, even if the daily particulars can be infuriating and nauseating from time to time. I don’t have any fear for the country’s survival. Of course adversity represents opportunity, and some people get richer in depressions. Nevertheless, as a society we’re vastly better off avoiding one. I don't agree with this. You can't stop the enevitable and a lot of times trying to stop delines makes them worse and last longer. Consumer and government spending has been so unsustainable for such a long time when we are forced to pay for our past and present sins it is going to be really painful, at least economicly. The government is so irrisponsible they keep trying to stop the correction my mortgaging out future. We can't borrow our way to prosperity and then fix the mess we created by more borrowing and shufflng the cards around. The endless avoidance just makes things worse in the long run, driving us to that collapse. I would rather take my lumps and pain now and hit the reset button than keep driving us deeper into this hole. The poorest people suffer disproportionately. Environomental damage increases. Opportunity costs spike exponentially. Sure, there is revival after depression. I hate the fact that that is what come with it, but that is also where some of the lessons will come from. And I would rather have to deal with a mild depression now that corrects thangs than one a 100 times worse later in the future because we avoided deeling with it now. I look forward to fixing it now and accepting it rather than push it of to the future in turn giving us a total catastrophy. I wont keep dwelling on this, since it's a car site. GM is and has been on the mend It's been too little to late and really hasn't even addressed GM's flaud business model. Regardless GM can't be fixed in the time they have left. They lost the American trust with 30 years of bad business and decided to wait until their last dime to start changing(if any change has happened at all, the culture still rules). They need trust to sell their products. It doesn't matter how great you say their products are they have the build trust with those cars and trucks and they just haven't been enough to do that. Wining back the American consumers trust is going to take 10 years or more, about 9 years to long for them. The way I see it they still haven't started down the trust rebuilding road, that wont happen while they still have contempt for the customer. I don't want to prop them up for a decade hoping they figure that out, and it doesn't look like a lot of the buying public wants to either. I was hoping to see them cut up and a new owner(smart and responsible) take some of the parts and reinvent and make it successful. BUT again the government meddled with that and will keep the status quo going, on our dime, without the right kind of changes. And we will keep pouring money into GM's flaud business, slowly destroying what someone else might have been able to make good with, until it is completely burned into the ground and we have nothing left except a lot of jobless people, junk cars and bombed out cities in the midwest, while our kids get the bill. But management will make out like bandits. Again avoidance is not the answer. American Leyland here we come and I really wish we weren't.

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Phil Ressler on Dec 20, 2008
I was using Walmart as an example of an American company that doesn’t deserve support not their retail chain, I guess I should have used more of an industrial business since you totally missed my point. I didn't miss your point. I disagree with it. From corporate to supply chain to distribution to retail, every Wal-Mart job is fungible, and has equivalents in rival companies and their own ecosystems. As with automotive suppliers, there's even duplication. Denial of your revenue to Wal-Mart is consistent with my recommendation that personal buying power should be influenced by social considerations. But in denying Wal-Mart and buying instead locally or with another chain, there is no net cost to the general domestic economy. This is not true when your decision involves domestically-owned manufacturing behind consumer goods. About the depression comment I knew I was opening a huge can of worms because most people aren’t going to understand and then they get all hostile about it like I am attacking them personnally. I did not infer that your depression comment was a personal attack, nor did I respond as though it was. The problems are deep in our economic system, I wasn’t refering to the things on the surface that always make it look like our economy is hopping and strong. I don’t expect you to get what I am talking about, sort of like trying to explain to Rick Wagoner that his corp. culture is flawed and needs to be fixed. You just get the deer in the headlights look, and rebutals that miss the point entirely. You already didn’t understand where I was going with the Walmart reference. I fully understood your Wal-Mart reference. I simply disagree with its relevance and reject it as an invalid analogy. An unsustainable economy kept a float by 70% personal over-consumption doesn’t get fixed easily by making a bunch of new laws or propping up businesses when there too many powerful people that depend on the imbalance. And especially since most everyone is in denial it’s part of the problem. A government that thinks it’s job is to stop the natural cyclic correction regardless of future damage or expense and a population that supports such an intervetion no matter how much it’s true cost might be. The populace is diseased with short term thinking, lack of accountability and the wrong expecations of government. Things are going to collapse, not because I wished it but because it’s inevitable, the ball has already been set in motion. No one knows what constitutes "personal overconsumption." Americans will have to adjust their expectations, but optimum consumption is an elastic notion. Our government (US) does not think its job is to "stop the natural cyclic correction..," it believes it has a responsibility to mitigate market excess. Rightly so. Markets are frequently wrong. They exaggerate boom markets, and they amplify pessimism about plunging fortunes. They fuel irrational bubbles and ratify excessive contraction. Today, a 900 point market dive is viewed as catastrophic and evidence the bottom has fallen out, while a 900 point rise is ignored as irrelevant. Only bad news has value, while good news is dismissed. Collective economic loss of faith is 70% psychological, which is to admit markets are emotional, not rational. Collapse is not inevitable, but risk of it is heightened by the self-referential gloom of a monetary and financial ecosystem disconnected from the real economy and the realities of how business functions. Government has a proper role in mitigating runaway loss of confidence. Market purists always miss the politics of economics in a continental, multi-cultural nation. The government is going to keep trying to fix things by tossing money at it and in the end making it worse. Look at all the housing market fixes, they want it to start going up right now so we can start spending again and they are going to force it. It needs another 24 months to fix itself with lots of losses but that is not acceptable so they will mess with it some more. What do you think is going to happen when the true correction finally happens. The housing market depends upon alignment of costs with incomes, and mortgage availability/affordability. We don't have to return to unrestricted availability of sub-prime negative-equity mortages for housing to stabilize and recover in most urban markets. There will be continuing damage in ex-urban mushroom markets, but the task is to arrest foreclosures, put a ceiling on mortgage rates to release more disposable income into the system, and boost the flow of confidence into badly eroded perceptions. Also to stabilize housing access to the majority qualified buyers. Unmitigated, volume foreclosure is extremely corrosive to societal function. The simple elevation of confidence resulting from keeping most people in their homes puts a floor under much of the rest of the economy, and as we've seen, a value floor most people believe in moves people from the realm of risk-driven to opportunity-driven. Phil people die everyday. They die in recessions, in booms, you name it. Death is something you can’t escape. I don’t want people to die and government should be there to stop that at the least but not there to protect me from losing some of my net worth, that is my responsibilty, so is basic survival but there has to be a safety net for the worst situations. THat woul be wat welfare is really meant for not this perverted system we have now. Again our fundamental system and thinking are completely screwed up, and it’s happened over decades. Yup, no kidding, people die every day. You know what I meant. Depressions kill people prematurely for preventable reasons. They undermine health, divert talent from opportunity, waste human capital, render an environment more favorable to communicable disease, spike mental health problems, and generally set vast numbers of people back unnecessarily. Your words were "....I'm actually looking forward to the coming depression..." Reprehensible. Depression is just a word that everyone understand, I’m just saying we need to break everything down to it’s foundation, a starting point for rebuilding, it could be called a revolution depending on which side looks at it. I just used depression because that is the word our lame media wil most certainly use for it. No, sorry, depression has a specific meaning both denotatively and connotatively. You can't slip out of the knot by claiming you were really referring to a "revolution," or a "rebuilding." Revolutions are not automatically accompanied by depressions nor vice-versa. It is entirely consistent to believe one would have been on the side of breaking away from England in 1775, and also in favor of mitigating depression spiral in 1930 or 2009. Revolutions can be part of a boom, and vice-versa. Consumer and government spending has been so unsustainable for such a long time when we are forced to pay for our past and present sins it is going to be really painful, at least economicly. The government is so irrisponsible they keep trying to stop the correction my mortgaging out future. We can’t borrow our way to prosperity and then fix the mess we created by more borrowing and shufflng the cards around. Yes, in fact, we can. We did exactly this during and after WWII. The key was growth. As a nation we have a long history of growing our way out of our problems, and there is no reason that the combination of innovation engines, capital base, and the return of confidence can't result in same going forward. We don't need restoration of 2004 or 1999 spending mentality to manage a soft landing for economic decline, arrest of the precipitous and unwarranted plunge in investor confidence, and packing around people a sense that bad news will abate so shift to opportunity is safe. Winning back the American consumers trust is going to take 10 years or more, about 9 years to long for them. The way I see it they still haven’t started down the trust rebuilding road, that wont happen while they still have contempt for the customer. I don’t want to prop them up for a decade hoping they figure that out, and it doesn’t look like a lot of the buying public wants to either. There is a minority hard core of skeptics that do not have to be won back anytime soon for the D3 to rebuild their business. They sell millions of cars today amounting to about half the domestic market. Their gains can be incremental and if they are, the rate at which they can erode the stony skepticism or hostility of the core alienated can accelerate. The D3 start their reform with a large footprint of paying customers that can give them traction for renewed viability. Millions of people still trust one or more of the D3 and that's far better than none or just a few. And we will keep pouring money into GM’s flawed business, slowly destroying what someone else might have been able to make good with, until it is completely burned into the ground and we have nothing left except a lot of jobless people, junk cars and bombed out cities in the midwest, while our kids get the bill. But management will make out like bandits. Again avoidance is not the answer. The bailout approved by the administration today is merely a bridge over the political inconvenience of a crisis having arisen during a change-over in administrations and shift in Congressional representation pending. The opportunity to fund restructuring of these companies without carte blanche grants remains in front of us. The incoming team is considerably more sophisticated about managing a crisis of confidence in the economic realm. American Leyland here we come and I really wish we weren’t. There are large differences between British Leyland and the current and contemplated government auto market interventions in the US. BL's bureaucratic rise accompanied a continuing trend to declining product quality. Innovation was absent. Our intervention is undertaken in a period of generally increasing product quality. The Brits at the time viewed nationalized industries as permanent and desirable, while in the US they are temporary and of last resort. All of the technology in BL was old. I know "American Leyland" has become flippant shorthand here for what results from Federal assistance to the D3, but it's a maladroit moniker. We retain many options for punishing management incompetence and rewarding progress. Phil

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