GM Deathwatch Part 1! This Time, It's Forbes Doing The Countdown
“President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again.” Sounds like our august founder, Robert Farago, sounding off about [s]American Leyland[/s] the New GM. Nope, it’s Forbes this time, and they come to bury the General, not to praise him.
Louis Woodhill’s article pulls no punches. Using TTAC’s Winterkorn Meets The i30 article as evidence, combined with Car and Driver‘s decision to rank the 2012 Passat first in a family-sedan test (and the Malibu last), Woodhill states
Uh-oh. While Dan Akerson is busy rearranging the deck chairs on GM’s Titanic, Martin Winterkorn is leading VW to world domination via technical excellence.
Your humble author would suggest that it is Toyota, not Volkswagen, that has its foot on the General’s throat, but that’s a minor point.
The Forbes article rustled enough jimmies on Wednesday that the publication decided to run a counterpoint today, entitled “For GM, Bankruptcy Talk Is Its Own Fault”. The author, Micheline Maynard, argues that GM has a good cash position — sounds familiar — and plenty of ability to borrow more — which they’ve done in the past. When the best argument your defenders can make against bankruptcy is that you can borrow more money, you’re in bad shape. My AMEX is supposedly ready to charge a Lamborghini Aventador but that doesn’t mean I can pay for… hmm. Okay, I’m going to wrap this up. In unrelated news, TTAC may have a review tomorrow of the Lamborghini Aventador.
GM is dead to me because they unapologetically made awful and even dangerous products for decaces, and then they took the bailout. I will never buy another GM car. I believe Obama would bail them out again. And again. And again. It is just part of his philosophy that we cannot take care of ourselves. And there are many willing participants in this philosophy, from the mainstream media to union leaders to congress to school teachers who teach our next generation. This is a losing battle and we are not yet willing to turn it around. Until we do, we're just whizzing into a headwind here.
I'm no fan of GM or the bailout. That said, the company looks financially ok for the next few years. Regarding bankruptcy, there are a lot auto firms / brands worse off than GM. Small-ish firms/brands do not look good. Fiatsler is in trouble given the Euro issues. Mitsubishi in the US is withering away. I like Mazda, but without a partner, they don't look good.
If it should come to it again, don't doubt for a moment that GM will be bailed again. A while back, during the first bailout crisis, there was an illuminating discussion on Autoline Detroit's "Autoline Afterhours", where host John MacElroy interviewed a guest knowledgeable about the supply chain in the industry. The point was that second and third tier suppliers, many of them independent specialty machine shops, also are intergral to the supply chain of military contractors and sub-contractors. Seems that for many of them, upwards of 40% of their business comes from defence work. If their auto industry contracts disappeared, they'd go under. That would put defence contracts to DOD in danger. A little known fact (because the MSM decided to cover the Kardashians instead) is that the White House and auto bailout team were identifying and helping the most critical of these suppliers out at the same time as GM and Chrysler, to avoid a supply chain meltdown that would directly impact mational security. I don't care how much howling you hear from Tea Baggers and their misguided, blinkered fellow travellers: when push comes to shove again, GM will be bailed out - again - because not to do so would risk national security. Seems things really are interconnected in our complex world.
Bailing out GM was not the worst thing this buffoon in White House did during his first 4 years. Horrible healthcare reform, late and unrealistic unrealistic budgets, wasteful and useless stimulus packages, inability to decide with tax code until New Years eve, wasting trillions on implementing European style socialism and same time cutting budgets in areas critical to National security like fundamental scientific and technical projects, nuclear energy and NASA - all it much more damaging to future of United States than bailing out GM. His reforms are basically relegating US to third world banana republic status. Four years of more of him? Yeah right - watch "2016: Obama's America" in theaters near you http://en.wikipedia.org/wiki/2016:_Obama%27s_America. Regarding Forbes - it became Fox news outlet so they will bash GM no matter what only because of Obama's involvement. Many things he write in article do not make sense. He bashes Malibu for wrong reasons. First nobody is going to buy Malibu Eco and Malibu with more modern 2.5 engine is not out yet. Second Malibu is made on smaller short base for reason - it is smaller than Passat and Accord. There is a Malibu with longer wheelbase and it is called Impala. Passat and Accord are pretty big cars - the same size as Impala. And new malibu is worse than previous Malibu. Seriously? Did he even drove Malibu. I drove Buick Regal and it is excellent car and BTW the European car of year which Passat is not. Appliances like Honda Accord or Camry better than Buick Regal - are you kidding?